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HomeEditor’s Picks2021 a transformational year for Castor

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2021 a transformational year for Castor

Castor Maritime Inc., a diversified global shipping company, announced its results for the three months and year ended December 31, 2021.

Highlights of the Fourth Quarter Ended December 31, 2021:

• Revenues, net: $60.0 million for the three months ended December 31, 2021, as compared to $4.4 million for the three months ended December 31, 2020;
• Net income/loss: Net income of $29.2 million for the three months ended December 31, 2021, as compared to net loss of $0.8 million for the three months ended December 31, 2020;
• Earnings/Loss per common share(1): $0.18 earnings per share for the three months ended December 31, 2021, as compared to loss per share of $0.06 for the three months ended December 31, 2020;
• EBITDA(2): $36.1 million for the three months ended December 31, 2021, as compared to $0.3 million for the three months ended December 31, 2020;
• Cash and restricted cash of $43.4 million as of December 31, 2021, as compared to $9.4 million as of December 31, 2020;
• On December 8, 2021, we redeemed all of the Series A preferred shares at a cash redemption price of $30 per preferred share as per the Company’s amended and restated statement of designations; and
• During the fourth quarter of 2021 and as of the date of this press release, we have taken successful delivery of three vessels consisting of two Panamax dry bulk carriers and one Aframax /LR2 tanker. As a result, Castor currently owns a diversified fleet of 29 vessels with an aggregate capacity of 2.5 million dwt, having more than quadrupled the number of the vessels it owns since December 31, 2020.

Earnings Highlights of the Year Ended December 31, 2021:

• Revenues, net: $132.0 million for the year ended December 31, 2021, as compared to $12.5 million for the year ended December 31, 2020;
• Net income/loss: Net income of $52.3 million for the year ended December 31, 2021, as compared to net loss of $1.8 million for the year ended December 31, 2020;
• Earnings/Loss per common share : $0.48 earnings per share for the year ended December 31, 2021, as compared to loss per share of $0.26 for the year ended December 31, 2020; and
• EBITDA: $69.9 million for the year ended December 31, 2021, as compared to $2.3 million for the year ended December 31, 2020.

Management Commentary:
Mr. Petros Panagiotidis, Chief Executive Officer of Castor commented:
“2021 was a transformational year for Castor. We have grown exponentially ending the year with 29 vessels, on a fully delivered basis, and we have enjoyed strong operating cash flow especially in the second half of the year. We benefit from a healthy liquidity position and low leverage and in January 2022 we signed and drew down a new credit facility. We did not sell any common shares under the ATM Program during the fourth quarter and up to the date of this release. We will continue to seek attractive acquisition opportunities to further pursue Castor’s growth trajectory.”

Earnings Commentary:

Fourth Quarter ended December 31, 2021, and 2020 Results

Vessel revenues, net of charterers’ commissions, for the three months ended December 31, 2021, increased to $60.0 million from $4.4 million in the same period of 2020. This increase was largely driven by the increase in our Available Days (defined below) from 449 in the three months ended December 31, 2020, to 2,433 in the three months ended December 31, 2021, following the acquisition and delivery to our fleet of 22 vessels since December 31, 2020. The increase in vessel revenues during the three months ended December 31, 2021, as compared with the same period of 2020 was further underpinned by the healthy dry bulk shipping market resulting in a Daily TCE Rate (1) (as defined below) for the vessels of our fleet of more than double as compared to the same period a year ago.

The increase in voyage expenses, from $0.1 million in the three months ended December 31, 2020, to $5.8 million in the same period of 2021, is mainly associated with (i) increased port expenses and bunkers consumption expenses as a result of having certain of our tanker vessels operating under voyage charters in the fourth quarter of 2021, and (ii) increased brokerage commission expenses, commensurate with the increase in vessel revenues discussed above.

The increase in vessel operating expenses by $11.7 million, from $3.1 million in the three months ended December 31, 2020 to $14.8 million in the same period of 2021, as well as the increase in vessels’ depreciation and amortization costs by $4.7 million, from $0.8 million in the three months ended December 31, 2020 to 5.5 million in the same period of 2021, mainly reflect the increase in our Ownership Days following the expansion of our fleet.

General and administrative expenses in the three months ended December 31, 2021, amounted to $1.2 million, whereas, in the same period of 2020 general and administrative expenses totalled $0.6 million. This increase stemmed from higher corporate fees primarily due to the growth of our company and our shareholder base.

Management fees in the three months ended December 31, 2021, amounted to $2.2 million, whereas, in the same period of 2020 management fees totalled $0.5 million. This increase in management fees is due to the substantial increase in our Ownership Days for which our managers charge us with a daily management fee, following the acquisitions discussed above.

During the three months ended December 31, 2021, we incurred net interest costs and finance costs amounting to $1.1 million compared to $0.3 million during the same period in 2020. The increase is mainly due to our higher level of weighted average indebtedness during the three months ended December 31, 2021, as compared with the same period of 2020.

(1) Daily TCE Rate is not a recognized measure under U.S. GAAP. Please refer to Appendix B of this press release for the definition and reconciliation of this measure to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.

Recent Financial and Business Developments Commentary:

Vessel acquisitions update

During the fourth quarter of 2021 and as of the date of this earnings press release, we have taken delivery of three vessels, aggregating to 23 completed vessel acquisitions since the beginning of 2021.

Details and delivery information of our completed acquisitions within the fourth quarter of 2021 and as of the date of this press release are as follows:

Table

Equity update

In connection with our ongoing at-the-market common stock offering program (“ATM Program”), from June 15, 2021, and as of December 31, 2021, we had raised net proceeds of $12.4 million by issuing and selling 4,654,240 common shares, after sales commissions and other offering expenses paid of $0.5 million, at an average price per share of $2.76.

From October 1, 2021 to date, no sales of common shares have taken place under the ATM Program, and there have been no subsequent warrant exercises under our currently effective warrant schemes.

As of February 4, 2022, we had issued and outstanding 94,610,088 common shares.

On December 8, 2021, pursuant to a decision approved by our Board of Directors on November 8, 2021, we redeemed all of the issued and outstanding Series A preferred shares. Based on the amended and restated statement of designations of Castor dated October 10, 2019, the holders of the Series A preferred shares received a cash redemption of $30.00 per Series A Preferred Share.

New Financings update

On November 24, 2021, we drew down, in two tranches, our previously announced $23.15 million term loan facility, through and secured by two of the Company’s dry bulk vessel ship-owning subsidiaries, those owning the Magic Rainbow and Magic Phoenix, and guaranteed by the Company. This facility has a tenor of five years and bears interest at a margin over LIBOR per annum.

Further, on January 12, 2022, we entered into a $55.0 million senior secured term loan facility with a major European bank, through and secured by five of the Company’s dry bulk vessel ship-owning subsidiaries, those owning the Magic Starlight, Magic Mars, Magic Pluto, Magic Perseus and the Magic Vela, and guaranteed by the Company. This facility has a tenor of five years from the drawdown date and bears interest at a margin over adjusted SOFR per annum. The loan was drawn down in full on January 13, 2022.

The Company has used and intends to use the net proceeds from these facilities for general corporate purposes, including supporting the Company’s growth plans.

Cash Flow update

Our consolidated cash position as of December 31, 2021, increased by $34.0 million, to $43.4 million, as compared with our cash position on December 31, 2020. During the year ended December 31, 2021, our cash position improved mainly as a result of: (i) $60.8 million of net operating cash flows generated during the year ended December 31, 2021, (ii) $156.9 million of net cash proceeds pursuant to the three registered direct offerings of an aggregate 42,405,770 common shares and the concurrent private placement of an equivalent aggregate number of warrants on January 5, January 12 and April 7, 2021, (iii) net cash proceeds of approximately $83.4 million resulting from subsequent exercises of approximately 34.4 million warrants pursuant to the June 2020, July 2020 and the January 2021 equity offerings, that resulted in the issuance of an equal number of common shares, (iv) net cash inflows of approximately $95.3 million following our entry into four secured loan facilities in January, April, July and November of 2021, and (v) $12.5 million of net cash proceeds pursuant to common stock sales under our ATM Program. From these amounts, during the year ended December 31, 2021, we used $348.6 million to fund the growth and related capital expenditures of our fleet, whereas, $14.4 million were used for the redemption of our Series A Preferred Shares and $11.9 million were used for scheduled principal repayments of our debt.

As of December 31, 2021, our total debt, gross of unamortized deferred loan fees, was $103.8 million of which $16.7 million is repayable within one year, as compared to $18.5 million of gross total debt as of December 31, 2020.

New employment agreements

On January 16, 2022, the Magic Twilight commenced a time charter contract at a gross daily charter rate of $16,500. The charter has a duration of about 60 days.

On January 26, 2022, the Magic Argo commenced a time charter contract at a gross daily charter rate of $16,600. The charter has a duration of about 60 days.

On January 28, 2022, the Magic Sun was fixed on a time charter contract at a gross daily charter rate of $17,500 plus a one-time gross ballast bonus of $750,000. The charter is expected to commence on or around February 27, 2022 and will have a duration of about 60 days.

On February 1, 2022, the Magic Venus was fixed on a time charter contract at a gross daily charter rate of $16,300 plus a one-time gross ballast bonus of $630,000. The charter is expected to commence on or around February 15, 2022 and will have a duration of about 40 days.

On February 3, 2022, the Magic Rainbow was fixed on a time charter contract at a gross daily charter rate of $16,000. The charter is expected to commence upon expiration of the vessel’s current contract, on or around February 13, 2022 and will have a duration of about 60 days.

On February 3, 2022, the Magic Vela was fixed on a time charter contract at a gross daily charter rate of $16,000 plus a one-time gross ballast bonus of $550,000. The charter is expected to commence on or around February 17, 2022 and will have a duration of about 70 days.

On February 3, 2022, the Magic Nebula was fixed on a time charter contract at a gross daily charter rate of $23,500. The charter is expected to commence on or around February 28, 2022 and will have a duration of about 7 to about 9 months (about means +/- 15 days) at the option of the Charterer.

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