United Maritime Corporation, announced its financial results for the first quarter ended March 31, 2023 and declared a quarterly dividend of $0.075 per share for the first quarter of 2023.
For the quarter ended March 31, 2023, the Company generated net revenues of $2.8 million and recorded a negative Adjusted EBITDA1 of $1.5 million. Net Loss and Adjusted Net Loss for the quarter were $4.9 million and $3.7 million, respectively. The Time Charter Equivalent rate (“TCE rate”) of the fleet for the first quarter of 2023 was $10,294 per day.
Cash and cash-equivalents as of March 31, 2023 stood at $20.0 million. Shareholders’ equity at the end of the first quarter was $61.9 million, while long-term debt, lease liability and other financial liabilities net of deferred charges stood at $69.5 million as of March 31, 2023. The book value of our fleet as of March 31, 2023, stood at $117.0 million, including a chartered-in Panamax vessel and the advance paid for the acquisition of one Kamsarmax vessel
Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:
“Following the highly profitable sales of three of our tankers by the end of 2022, our average fleet size in Q1 2023 was reduced to less than 3 ships including our remaining tanker vessel which was drydocked for its special survey for most of the first quarter. Our profitable ship disposals affected our quarterly operating results, recording an average daily TCE of $10,294. However, we swiftly executed transactions to re-grow our fleet through the acquisition of six dry bulk vessels for approximately $126 million. We have fully funded the acquisition of these two Capesize and two Kamsarmax vessels and the down payments on the two chartered-in Panamax vessels without diluting our shareholders.
“Within February and March, we took delivery of four dry bulk vessels, two Capesize, one Panamax and one Kamsarmax, with an additional Kamsarmax delivered in April and one more Panamax expected to be delivered in the third quarter of the year. In addition, our tanker has been operational since the beginning of Q2, following the completion of her special survey.
“In the second quarter to date, we have covered 71% of our ownership days at an average TCE of $18,856 per day2 and we estimate our daily net TCE to average at approximately $18,000. This will exceed by 75% the average of the first quarter, over a fleet that will be double in size and operating days.
“Looking forward, on a fully-delivered basis, we will operate a fleet of seven dry bulk vessels and one tanker vessel, with moderate levels of leverage and satisfactory levels of liquidity, allowing us to focus on further growth opportunities as well as shareholder rewards.
“In this context, we are pleased to announce another regular cash dividend distribution for the first quarter, bringing the total cash dividends that have been declared in the last six months to $1.15 per share, which represents a cash yield of about 40% compared to the recent closing price of our stock. The cash dividend amounts of $8.7 million, combined with approximately $6 million in buybacks of common shares completed in 2022, aggregate to shareholder rewards of $14.7 million, or 62% of our market cap as of May 16, 2023, within the past nine months. Considering the favorable fundamentals of the dry bulk market and the solid financial and commercial standing of United, we remain optimistic that the quarterly cash dividend we have paid for the previous two quarters can be sustained or increased during the rest of the year.”
Vessel transactions and commercial updates
Delivery of M/V Goodship and M/V Tradership
In February 2023, the Company took delivery of the 177,536 dwt M/V Goodship built in 2005 in Japan and the 176,925 dwt M/V Tradership built in 2006 in Japan. The two Capesize vessels were acquired for an aggregate price of $36.25 million, which was funded by the Company’s cash reserves, including a cash-collateralized $15.2 million loan previously secured by the LR2 tanker that was sold in December 2022. The M/V Goodship is chartered by an international charterer for a period until minimum June 2023 up to maximum December 2023, at an index-linked rate. The M/V Tradership is chartered by a major European charterer for a period until minimum August 2024 up to maximum January 2025, at an index-linked rate.
Delivery of M/V Oasea and M/V Cretansea
In March 2023, the Company took delivery of the 82,217 dwt M/V Oasea built in 2010 in China. The M/V Oasea was acquired for a gross purchased price of $19.5 million, which was funded by cash on hand and through the March 2023 Sale and Leaseback. The M/V Oasea is chartered by a major European charterer for a period until minimum March 2024 up to maximum July 2024, at an index-linked rate.
In April 2023, the Company took delivery of the 81,508 dwt M/V Cretansea built in 2009 in Japan. The M/V Cretansea was acquired for a gross purchased price of $19.7 million, which was funded by cash on hand and through the March 2023 Sale and Leaseback. The M/V Cretansea is chartered by a major European charterer for a period until minimum April 2024 up to maximum July 2024, at an index-linked rate.
Bareboat Agreement for a Panamax bulk carrier – M/V Chrisea
In February 2023, the Company entered into a bareboat charter agreement for the 2013 Japanese-built Panamax bulk carrier, which was renamed M/V Chrisea. The vessel is chartered by the Company under an 18-month bareboat charter agreement, with a down payment of $7.0 million, a daily charter rate of $7,300 over the period of the bareboat charter and a purchase option of $12.4 million at the end of the bareboat charter. In aggregate, the acquisition cost for the vessel, following exercise of the purchase option, will be approximately $23.4 million.
Bareboat Agreement for a Panamax bulk carrier – M/V Synthesea
In April 2023, the Company entered into a bareboat charter agreement for the 78,020 dwt Panamax bulk carrier built in 2015 in Japan Panamax bulk carrier, which will be renamed M/V Synthesea. The vessel will be chartered by the Company under a 12-month bareboat charter agreement, with a down payment of $3.5 million (already paid), a further down payment of $3.5 million due at vessel’s delivery, expected between July and October 2023, a daily charter rate of $8,000 over the period of the bareboat charter and a purchase option of $17.1 million at the end of the bareboat charter. In aggregate, the acquisition cost for the vessel, following exercise of the purchase option, will be approximately $27.0 million.
M/T Epanastasea Employment Update
From February 6 until April 7, 2023, the Epanastasea underwent its scheduled dry-docking survey in China. Upon completion the vessel resumed its employment under its current time charter contract with Abu Dhabi National Oil Company earning a fixed daily rate of $40,000.
In view of the continued strength of vessel values in the tanker market, the Company is actively considering selling the vessel and is currently in advanced discussions with prospective buyers.
March 2023 Sale and Leaseback
On each of March 31 and April 26, 2023, following the deliveries of the M/V Oasea and the M/V Cretansea, the Company entered into a $24.5 million sale-and leaseback facility provided by a European lessor to finance part of the acquisition cost of the vessels. The financing amount for each vessel is $12.25 million bearing an interest rate of 4.25% plus 3-month Term SOFR. The charterhire principal for each vessel amortizes over a five-year term, through sixty consecutive monthly instalments of $0.1 million. The Company has the option to repurchase the vessels at any time during their respective bareboat periods and a purchase obligation at a price of $6.4 million per vessel at maturity.