United Maritime Corporation Price & Performance (USEA)

Stamatis Santanes. Please go ahead, sir.

Good afternoon. Welcome to United Maritimes conference call to discuss our Q4 and full year 2024 financial results. During 2024, we made significant progress in executing our strategic plan to build and operate a high quality drybulk fleet reflecting our confidence on the sector particularly in the larger vessel segment. After building up our dry bulk fleet in 2023, primarily through bareboat in structures with favorable purchase options, and other bridge financing structures This year, our focus shifted towards securing long term financing agreements and seamlessly integrating the new vessels into United's fleet and operational framework. I would like to remind to everyone in this call that United has completed the second investment cycle without diluting its shareholders. Through our financing initiatives, we have successfully addressed all upcoming debt maturities until the fourth quarter of twenty twenty six reinforcing our capital position and our ability to generate attractive returns on capital for our shareholders. Following on our commitment to capital returns, United declared a total of $0.02 $35 of dividends per share for 2024 while also repurchased about 2% of the outstanding common shares. However, considering the performance of the Panamax Kamsarmax market in the recent months, our Board has approved the reduced dividend of $0.01 per share for the fourth quarter of twenty twenty four.

That being said, since 2023, we have paid approximately $1.6 per share in dividends a figure not far from our current share price while have also repurchased about 450,000 shares representing approximately 5% of our outstanding common shares. At the same time, due to the current undervaluation of our shares, we have extended our share repurchase program by twelve months. Of the initial $3,000,000 authorized, 1,900,000.0 remains available representing approximately an additional 11% of our outstanding shares based on the closing price as of March 14, 2025. Looking ahead, despite the volatile drybulk market conditions, we remain optimistic in the market's long term fundamentals and our ability to create shareholder value. Turning to fourth quarter results, our performance was impacted by temporary slowdown in coal and iron ore exports which we view as a natural seasonal adjustment following the elevated export levels in the first three quarters of the year. As a result, our net revenue for the fourth quarter of twenty twenty four came in at 10,800,000.0 down from 11,600,000.0 in the same quarter of 2023. The daily time charter equivalent of 14,250 compared to 15,874 the previous year. As Tavros will discuss in more detail, we are comfortable with our leverage levels and balance sheet health we expect to be in good position to execute on our business strategy.

Turning to our strategic fleet developments, we continue to optimize our portfolio of assets in 2024. During the year, we sold the OSE, CamsarMax built in 2010 in China, and reinvested in the 2016 built [indiscernible] Which was delivered in September. Has since been employed on a profitable fixed rate charter. Additionally, we recently announced the sale of the Capesize Gloryship a 02/2004 build ship and the oldest vessel in our fleet. We will continue operating the Glory ship until its anticipated delivery to its new owners in the second quarter of twenty twenty five. We're pleased with our fleet composition, which consists of exclusively high quality Japanese built vessels. Our ongoing investments ensure that our fleet remains compliant with the evolving environmental regulations and possibly the evolving tariff regulations, while maintaining their commercial competitiveness. As regards our fleet's commercial utilization two World Panamax vessels remain fixed rate charters until June and July respectively at an average daily rate of about 14,200 while the Glory Ship will earn a daily TCE of approximately $18,000 until its expected delivery to its new owners in the third quarter. Additionally, one of our Capesize vessels will learn a daily time charter of about $22,000 for the second and third quarters before reverting to index linked daily earnings.

The rest of our fleet currently operates on index linked charters. While we're comfortable with our market exposure, we remain open to securing fixed rates for select vessels at attractive levels. For our first quarter twenty twenty five TC guidance, we expect to be approximately at $10,300 based on prevailing FFA rates with 94% of our operating days already invoiced. We are encouraged to see the drybulk market rebounding from its seasonal slowdown and we expect to see higher TCE rates for the following three quarters of twenty twenty five. Additionally, I would like to take time to discuss our recent entry into the offshore market. In the third quarter of twenty twenty four, we acquired an equity stake in an energy construction vessel new building, with the project having an expected completion in 2027. We're pleased to see this go as planned and the company is actively exploring employment opportunities for the vessel which is designed to serve all major subsea market segments including renewables and oil and gas. Benefiting from a limited vessel order book strong demand for offshore infrastructure are positive we are confident that the vessel will find compelling charter opportunities. Industry overview. On a brief overview of the drybulk market Capesize and Panamax charter rates softened as we entered the first quarter of twenty twenty five.

In line with the regular seasonality around the Chinese New Year. Additionally, dry bulk imports by China in the first nine months of 2024 led to high inventory levels and reduced the urgency of new imports towards the end of the year. Decline was most pronounced the Capesize segment, while Panamax rates were pressured by three key factors. A slowdown in China grain imports and slower pace of Latin grain exports due to floodings. Lower coal imports volumes as China's high activity in the first nine months of 2024 resulted in fuller inventories, and winding of congestion that led to higher vessel availability. In the Capesize market, rates came under pressure as weaker conditions in the Panamax sector made it more economical to split large Cape cargoes into smaller Panamax shipments. This was particularly evident in the rising share of coal cargoes carried on Panamax ships. Furthermore, slower Australian, Brazilian and Colombian Capesize exports the first quarter of twenty twenty five reduced vessel demand as increased rainfall and cyclones affected cargo output. Encouragingly, as weather conditions improved and cargo activity resumed, Capesize rates rebounded swiftly to profitable levels. Looking ahead, we remain very optimistic about Capesize markets long term fundamentals.

Economic trends in China indicate an emerging recovery in steel production while iron ore producers are committed to supply with high quality iron ore volumes. Production originating in the Atlantic Basin is projected to rise by about 170,000,000 tons over the next few years mainly West Africa and Brazil. Which paints a positive picture for Capesize ton mile demand. Additionally, West African bauxite volumes are surging as January and February exports rose by an impressive 41% compared to the first two months of 2024. Bauxite share of total Capesize cargoes is almost as high as coal which has traditionally been the second largest source of Cape demand after iron ore. The current Capesize order book remains at historical low levels. As a rough indication, it is estimated that the total Cape order book is insufficient service the planned expansion of Atlantic based iron ore exports alone, even before factoring in the replacement needs of aging vessels amid tightening environmental regulations. As regards to the Panamaxes, Latin American grain exports look very encouraging for the current year especially as congestion rises back again to levels more consistent with historical averages. As inventory cycle turns, we expect to see higher volume of seaborne coal trading In addition, coal fired power plants under construction in China, points to a 30% rise from existing levels while global coal consumption is not showing any signs of slowdown.

Longer term, large portion the existing fleet is above twenty years old. And likely to see a restricted trading over the next years as environmental regulations make it harder for inefficient ships to compete. Lastly, based on the latest developments, we're pleased to see that the ceasefire in Ukraine seems increasingly likely. Apart from the obvious humanitarian aspect, that is of primary importance of course, such a development could also have a positive impact on cargo demand for all SUBK sectors, including Panamaxes. More broadly, when looking beyond the direct effects in terms of increased grain and iron ore exports, would expect that holding facilities would have several macroeconomic benefits that would ultimately prove to be positive for the vessel demand. As a result, we believe that the drybulk market should remain on a positive trend over the next two years United is very well positioned to capitalize on these I would now like to pass the call to Stavros, who will fill you in with our financial information for the quarter and the full year. As well as discussing our balance sheet and debt refinancings. Stavro, please go ahead. Thank you, Stamatik. Welcome everyone to our earnings call. Let us start by reviewing the main highlights of financial statements for the fourth quarter and the full year ending December 31, 2024.

Our net revenue in the fourth quarter reached 10,800,000.0 slightly below the prior year primarily due to the weaker earnings environment in the Panamax market. However, our adjusted EBITDA for the fourth quarter was 5,100,000.0 an 11% increase compared to 2023 reflecting our continuous efforts to improve our operating leverage. At the same time, we recorded a net loss of 1,800,000.0 compared to a net loss of $700,000 last year. On a full year basis, our net revenues was 45,400,000.0 significantly higher than last year reflecting both the increase in operating days and our improved average time charter equivalent rate. Our adjusted EBITDA also grew to 20,300,000.0 compared to $18,900,000 last year. Net income for the year was a loss of 3,400,000.0 versus a net profit of 200,000 in 2023 noting however that the bottom line of the previous year included $11,800,000 profits from vessel sales versus only $1,400,000 in 2024. On the expense side, we successfully reduced daily operating expense per vessel to $6,600 as well as keeping in check our total general administrative expenses despite inflationary pressures. Overall, while our profitability was impacted this year by the softer Panamax market, we continue to optimize our fleet on the back of very well timed sale purchase activities.

As Tomathis reiterated earlier, we remain confident in our outlook both for drybulk and our offshore investment. Turning to our balance sheet, our cash position at year end stood at $6,800,000 reflecting the significant CapEx program undertaking throughout 2024, particularly in the first half as well as the payments towards our participation in the offshore project. In the fourth quarter, we agreed to sell our oldest vessel, the Glory Ship for a net sale price of 15,000,000 This is expected to have a minimal impact on our P and L the time of her delivery to the buyers which is estimated towards the end of the second quarter of twenty twenty five. That being said, the cash flow effect will be positive enhancing our cash position by approximately $7,000,000 for the year. Our total assets at the end of twenty twenty four reached $153,000,000 while stockholder equity stood at 60,100,000.0 Outstanding debt, which includes liabilities from our barebooting transactions stood at 99,400,000.0 implying a loan to fleet value ratio of approximately 60%. During the year, we successfully secured $48,300,000 in debt financing. Briefly, I would like to remind you that we completed two sale and leaseback agreements of $31,800,000 in aggregate.

The proceeds from these agreements were utilized for the exercise of the purchase option of the Synthesi and the refinancing of previous indebtedness over the Excel XE on overall improved terms. Additionally, we secured a $16,500,000 loan facility with a prominent Taiwanese lender to finance the $12,400,000 purchase option for Xisin. As a result, we entered 2025 with a solid capital structure and no immediate debt maturities. In terms of our investment in the offshore sector, United has already deployed approximately $3,500,000 with another $4,500,000 committed and expected to be called in two separate installments within 2025. This schedule aligns with the vessel's construction milestones. Now before returning the call to Stamatis, I would like to reiterate our optimism about the company's future profitability. United in its short three year history has created a strong track record of well timed shipping investments and remained true in its commitment to prioritize shareholder rewards in any market environment. I will now turn the call back to Samathis for his concluding remarks. Samathis, Thank you, Safro. Following our successful tanker investment cycle that was concluded in Q3 twenty twenty three, which delivered strong returns for our shareholders, we now operate an exclusively Japanese built travel fleet.

We're very proud of our progress so far being successful in building a quality fleet with strong prospects without resorting in any dilution of the shareholders that have supported us at our last and only capitalizing years ago. On top of that, since 2023, we have paid total cash dividends of about $1.6 per share representing a very significant portion of our current share price. Additionally, we have engaged in extensive share repurchases amounting to $7,100,000 at an average price of $1.9 dollars United Maritime is well positioned to benefit from positive drybulk market trends due to index linked time charters that provide direct exposure to Capesize and Panamax market upside potential. A healthy balance sheet that allows for leveraged exposure to the sector and the potential for high returns on capital. A proven commitment to rewarding our shareholders through substantial capital returns resulting in a high dividend yield. Lastly, I'm confident in our recent offshore sector investment which I believe will also generate high returns for our company and shareholders. On that note, I would like to pass the call back to the operator and respond to any questions you may have. So operator, please take the call. Thank you.

Thank you. Thank you. We'll now take our first question. This is from Kate Sullivan from Maxim Group. Please go ahead.

Thank you, and good day. Great to hear from you. And Stavros, you ended your comments talking about offshore market. Can you review when is the scheduled delivery of the offshore vessel? And and what are the remaining capital commitments on that investment, please?

Yeah.

The scheduled delivery is in the first quarter of twenty twenty seven, although there are discussions that might bring the vessel a bit forward like the fourth quarter of twenty twenty six. But for the time being, in the first quarter, of twenty twenty seven. From United's part, which is around 20%, 24% of the total project. There is a $3.53500000.0 euros have been already paid, and this another 4,500,000.0 committed and that will be called in two separate [indiscernible] in within 2025. After that, we are done with the equity installments. And then there is also debt, which has been negotiated but has not been finalized as of now. So but the equity commitment for the project, it's two more installments of €4,500,000 in total due within this year.

Okay. Thank you. And then Stamatis, mentioned, can you review your comments on The U. S. Missile strike on the Houthi? What is the potential link to the drybulk market? [indiscernible] Well, the Red Sea remains closed and I don't the Red Sea opening, reopening anytime soon. I believe that there will be continuous disruption on that trade route. One of the positive things that I want to mention is that assuming there's going to be some sort of a ceasefire, in Ukraine and Russia, that could reopen, the grain corridor and could have more ships waiting to load cargos back and forth to the Ukrainian port. So that could be super positive, for the Panamax Kamsarmac segment. But that remains to be seen. I don't really believe that anything is going to happen within Q2 of twenty twenty five. But the positive effects will likely take place from the second half of the year.

Thank you. And one more for me on the Capesize sale, did you mention a $15,000,000 sales price, just to make sure have it right, with does it imply a gain on that sale of $7,000,000 based on the increase in cash? Or is that correct?

Sorry, Tate, can you repeat? You said You said it will the sale of the Cape size, the older Cape size ship will enhance cash by $7,000,000 So is that the implied gain on the sale?

Yeah. The the outstanding loan is around 7 and a half, and as you know, United is paying 1% of its sale price to Synergy based on the management agreements between the two companies. So basically, the net amount after the sale for United on a free cash flow base will be around $7,000,000 Okay, great. Thank you very much. Great to hear from you.

Excellent, Tate. Have a great day. Thank you. You too. Bye.

Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.