- As of the date of this press release, Globus’ subsidiaries own and operate nine dry bulk carriers, consisting of four Supramax, one Panamax and four Kamsarmax.
- A lower supply of vessels that could result from a lower orderbook along with the required compliance of new regulations and environmental targets.
- The conflict between Russia and Ukraine, has disrupted supply chains and caused instability and significant volatility in the global economy.
Globus Maritime Limited, a dry bulk shipping company, today reported its unaudited consolidated operating and financial results for the quarter ended March 31, 2023.
Financial results
Revenue
$8.6 million in Q1 2023 compared to $18.4 million in Q1 2022
Net income
$2.6 million in Q1 2023 compared to $12.1 million in Q1 2022
Adjusted EBITDA
$1.3 million in Q1 2023 compared to $13.8 million in Q1 2022
Time Charter Equivalent
$8,780 per day in Q1 2023 compared to $23,643 per day in Q1 2022
Current Fleet Profile
As of the date of this press release, Globus’ subsidiaries own and operate nine dry bulk carriers, consisting of four Supramax, one Panamax and four Kamsarmax.
Current Fleet Deployment
All our vessels are currently operating on short-term time charters, we generally consider as spot charters, the charters that are below one year in duration and/or are chartered on index linked basis (“on spot”).
Management Commentary
“The market was generally weak during the first quarter of 2023 with some improvement in the beginning of the second quarter.
Recently the market has weakened again, but our view on the dry bulk prospects remains positive in the medium and longer term. We believe that positions in the industry should be taken with a long-term view.
Our optimism is primarily derived from the supply side of the dry bulk industry; with the order book being historically at relatively low levels, which coupled with the environmental regulations regarding emissions and fuel consumption could constrain the supply further.
A lower supply of vessels that could result from a lower orderbook along with the required compliance of new regulations and environmental targets, should have a positive effect on the market, assuming there are no unforeseen demand shocks.
At present we are working with various financial institutions on exploring financing and refinancing transactions with better terms and conditions in order to expand and modernize our fleet.
We are always keen on accretive deals that would allow us not only to modernize our fleet and make it more efficient but also to maximize value for our shareholders.”
Contract for new building vessels
On April 29, 2022, the Company signed a contract for the construction and purchase of one fuel-efficient bulk carrier of about 64,000 dwt.
The vessel will be built at Nihon Shipyard Co. in Japan and is scheduled to be delivered during the first half of 2024.
The total consideration for the construction of the vessel is approximately $37.5 million, which the Company intends to finance with a combination of debt and equity.
In May 2022 the Company paid the 1st instalment of $7.4 million and in March 2023 paid the 2nd instalment of $3.7 million.
On May 13, 2022, the Company signed two contracts for the construction and purchase of two fuel-efficient bulk carriers of about 64,000 dwt each.
The sister vessels will be built at Nantong COSCO KHI Ship Engineering Co. in China with the first one scheduled to be delivered during the third quarter of 2024 and the second one scheduled during the fourth quarter of 2024.
The total consideration for the construction of both vessels is approximately $70.3 million, which the Company intends to finance with a combination of debt and equity.
In May 2022 the Company paid the 1st installment of $13.8 million and in November 2022 paid the 2nd installment of $6.9 million for both vessels under construction.
Debt financing
In August 2022, the Company reached an agreement with First Citizens Bank & Trust Company (formerly known as CIT Bank N.A.) for a deed of accession, amendment and restatement of the “CIT loan facility” (as referred at 2021 Annual Report) by the accession of an additional borrower in order to increase the loan facility from a total of $34.25 million to $52.25 million, by a top up loan amount of $18 million for the purpose of financing vessel Orion Globe and for general corporate and working capital purposes of all the borrowers and Globus.
The CIT loan facility (including the new top up loan amount) is now further secured by a first preferred mortgage over the vessel Orion Globe.
Furthermore, the benchmark rate was amended from LIBOR to SOFR and the applicable margin from 3.75% to 3.35% for the whole CIT loan facility.
The Company also entered into a new swap agreement in order for the additional borrower to enter into hedging transactions (separately from those entered by the other borrowers) with First Citizens Bank & Trust Company (formerly known as CIT Bank N.A.).
Sale of vessel
On March 6, 2023, the Company, through a wholly owned subsidiary, entered into an agreement to sell the 2007-built Sun Globe for a gross price of $14.1 million (absolute amount), before commissions, to an unaffiliated third party, which sale is subject to standard closing conditions. The vessel is expected to be delivered to its new owners in June 2023.
Conflicts
The conflict between Russia and Ukraine, which commenced in February 2022, has disrupted supply chains and caused instability and significant volatility in the global economy.
Much uncertainty remains regarding the global impact of the conflict in Ukraine, and it is possible that such instability, uncertainty and resulting volatility could significantly increase the costs of the Company and adversely affect its business, including the ability to secure charters and financing on attractive terms, and as a result, adversely affect the Company’s business, financial condition, results of operation and cash flows. Currently there is no direct effect on the Company’s operations.
First Quarter of the Year 2023 Vs 2022
Net income for the three-month period ended March 2023 amounted to $2.6 million or $0.13 basic and diluted income per share based on 20,582,301 weighted average number of shares, compared to $12.1 million for the same period last year or $0.59 basic and diluted income per share based on 20,582,301 weighted average number of shares.
Revenue
During the three-month period ended March 31, 2023, and 2022, our Voyage revenues reached $8.5 million and $18.4 million respectively.
The 54% decrease in Voyage revenues was mainly attributed to the decrease in the average time charter rates achieved by our vessels during the three-month period ended March 31, 2023, compared to the same period in 2022.
Daily Time Charter Equivalent rate (TCE) for the three-month period of 2023 was $8,780 per vessel per day against $23,643 per vessel per day during the same period in 2022 corresponding to a decrease of 63%, which is attributed to the worse conditions throughout the bulk market for the first quarter of 2023.
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Source: Hellenic Shipping News
