Evangelos Marinakis-backed Capital Product Partners has slashed its payout to shareholders in a bid to build a "war chest" to grow its boxship fleet in the post-coronavirus environment.
The Nasdaq-listed containership owner plans to shore up its capital base by about $19m per year with the cut.
This would provide "a strong buffer" against adverse developments its boxship charter markets, chief executive Jerry Kalogiratos said.
The cash would also provide additional liquidity for potential acquisitions when markets improve.
The funds will be raised by reducing the dividend to shareholders to $0.10 per quarter, from $0.35.
That would provide a "war chest" that could be used "to replenish and grow its asset base, once the uncertainty around the Covid-19 abates", Kalogiratos said.
His company is "closely monitoring potential asset acquisitions so that it may avail itself of expansion opportunities in the right market conditions".
"Our preference is in the post-panamax sector," Kalogiratos told a conference call to accompany the company's quarterly results.
"There is definitely less on offer, but we follow the opportunities."
Steady results
Capital Product reported quarterly revenues of $36.6m for the second quarter, up from $27.4m in the same period last year.
The increase is largely due to the addition of three 10,000-teu containerships at the start of the year.
Net income for the three months from April to June was $8.7m, up from $7.8m in the same period in 2019.
The pandemic has resulted in weaker container charter markets than expected at the start of the year.
Charter rates for post-panamax containerships of between 5,000 teu and 11,000 teu are more than 35% lower than expected, Kalogiratos said.
At the beginning of the year, the company had been looking at fixing post-panamax boxships for five years at $40,000 per day.
Today, rates were closer to $16,000 per day for two-year period.
Fresh fixtures
Capital Product has been able to fix one of two post-panamax boxships on long-term charter to a major liner operator.
The Greek company has agreed to charter either the 9,288-teu Akadimos or Adonis (both built 2015) to an unnamed liner operator for up to two years at $29,800 per day.
The charter will run for 20 to 24 months with an option for a further six months at $35,000 per day.
Recent weeks have seen some improvement in the appetite of liners to charter larger post-panamax container vessels at increased rates, Kalogiratos said.
But he added that uncertainty around Covid-19 signalled "increased volatility ahead for the world economy and uncertain prospects for our underlying markets and customers".
