The management of major US-listed boxship owner Costamare said on Thursday that newbuilding prices are too high to consider placing orders.
“We don’t like ordering at the peak of the market … we try to be countercyclical,” the company’s chief financial officer Gregory Zikos told analysts on a conference call after the owner of 121 boxships and bulk carriers reported bumper quarterly profits.
From the company’s point of view, even newbuildings backed by secured, long-term employment do not make sense at current asset values.
Costamare would only entertain such a step if it sees some softening in newbuilding prices — “again on the back of a time charter good enough to amortise our investment,” Zikos said.
Costamare announced late last year that it had ordered eight newbuildings in China with a capacity between 12,690 teu and 15,000 teu. The ships would be employed on delivery for 15 years with a major liner operator.
Between March and May, however, Costamare ditched all of them, citing a “default” by the shipyard.
Zikos declined to elaborate on the matter, citing legal reasons.
According to market sources in Athens, however, the yard was no longer in a position to build the vessels at the prices initially agreed, which reflected levels superseded by market developments.
As TradeWinds reported earlier this month, a frantic rush to contract container ship newbuildings appears to be running out of steam as yards report a drop in fresh enquiries amid soaring yard prices.
Speaking of the company’s fleet of 45 dry bulk ships, Zikos reiterated that Costamare assembled it from scratch last year out of strategic choice and that it is in the sector for the long haul.
“We’re here to stay in the dry bulk business,” Zikos said.
Even though its bulkers have increased considerably in value since Costamare bought them for hundreds of millions of dollars in 2021, it has made an asset play on just one single vessel so far.
Rumours that it sold a second bulker earlier this month, the 56,700-dwt Merida (built 2012), proved incorrect, as TradeWinds reported.
Costamare’s dry bulk fleet complements its boxships well, Zikos said. Investing in bulkers proved to be a good call last year when the company refrained from buying container ships amid soaring prices.
“Depending on market conditions … we would examine to grow the dry bulk business,” Zikos said.
Costamare is sitting on an ample liquidity buffer of $854m, the overwhelming part of which is in cash
