Castor Maritime Inc., a global shipping company specializing in the ownership of dry bulk vessels, today announced its results for the three months ended March 31, 2020.
Earnings Highlights of the Three Months Ended March 31, 2020:
▪ Revenues, net: $2.7 million for the three months ended March 31, 2020, as compared to $0.9 million for the three months ended March 31, 2019, respectively;
▪ Net (loss)/income: Net loss of $259,868 for the three months ended March 31, 2020, as compared to net income of $55,969 for the three months ended March 31, 2019, respectively;
▪ Loss per share: $0.07 loss per share for the three months ended March 31, 2020, as compared to a loss per share of $0.10 for the three months ended March 31, 2019, respectively;
▪ EBITDA: $0.9 million for the three months ended March 31, 2020, as compared to $0.2 million for the three months ended March 31, 2019, respectively;
▪ Fleet time charter equivalent of $12,008 per day for the three months ended March 31, 2020, as compared to $9,799 for the three months ended March 31, 2019, respectively; and
▪ Cash of $13.4 million as of March 31, 2020.
First Quarter ended March 31, 2020 and 2019 Results
Time charter revenues, net of charterers’ commissions, for the three months ended March 31, 2020, increased to $2.7 million from $0.9 million in the same period of 2019, or a 200.0% increase. This increase reflects the addition of both the Magic Sun and the Magic Moon to our fleet on September 5, 2019 and October 20, 2019, respectively. These additions correspondingly increased our Available Days from 90 in 2019 to 214 in 2020, thus generating additional revenues in the latter period. The daily time charter equivalent (“TCE”) of our fleet for the first quarter of 2020 stood at $12,008, as compared to a daily TCE of $9,799 earned during the same period ended March 31, 2019, or a 22.5% increase, reflecting primarily the higher daily net revenues earned by the Magic Sun and the Magic Moon in the period compared to those generated by the Magic P in the same period of 2019.
Since most of our revenues for the first quarter derived from time charters entered into before the COVID-19 pandemic began to have a significant economic effect, our results for the first quarter were partially insulated from the impact of COVID-19. However, during the three months ended March 31, 2020, we experienced delays due to COVID 19 disruptions at a Chinese shipyard related to the scheduled dry docking repair of the
Magic P and repositioned the vessel for dry dock to South Korea, which resulted in incremental off-hire time and resultant decreased operating revenues for the subject vessel in relation to the revenues earned during the same period of 2019.
Daily vessel operating expenses for the period decreased by $129, or 2.5%, to $5,088 from $5,217 in the respective period of 2019. Daily company administration expenses were $470 in the quarter ended March 31, 2020, compared to $276 in the corresponding period of 2019, with the daily increase of $194, or 70.3%, stemming from additional fees and costs incurred as a result of the continued reporting obligations we incurred as an SEC-registered company as well as other administrative requirements related to being a
publicly listed company on the NASDAQ Capital Market, or the NASDAQ, since February 11, 2019. We incurred no public registration costs in the first quarter of 2020, whereas, during the same period of 2019, we incurred costs amounting to $133,295. Public registration costs relate to the non-recurring administrative costs we incurred in connection with registration and listing of our common shares on the Norwegian OTC
market on December 21, 2018, and the listing of our common shares on the NASDAQ on February 11, 2019.
During the first quarter of 2020, we incurred interest costs in connection with our outstanding indebtedness amounting to $852,807, which also included the non-cash recurring amortization expenses and the non-cash accelerated amortization expenses related to deferred financing costs and to a beneficial conversion feature recognized in connection with our $5.0 Million Senior Unsecured Convertible Debentures or our $5.0 Million Convertible Debentures, aggregating to $519,739, as further discussed below. We had no outstanding indebtedness in the corresponding period of 2019. EBITDA for the three months ended March 31, 2020, was $0.9 million compared to $0.2 million in the same period of 2019, with the increase mainly attributable to the above discussed period-to-period increase in our operating revenues.
Liquidity / Financing / Cash Flow Coverage Commentary:
As of March 31, 2020, total cash amounted to $13.4 million, which included $0.5 million of non legally restricted cash required under a $11.0 million secured term loan financing that we concluded on November 22, 2019. The overall improvement on our consolidated cash position of March 31, 2020, by approximately $8.4 million, in relation to our cash position of December 31, 2019, was mainly the result of our entering into certain financing arrangements within the first quarter of 2020, further discussed below.
As of March 31, 2020, pursuant to the issuance within the first quarter of 2020 of (i) one commercial secured credit facility amounting to $4.5 million and (ii) the $5.0 Million Convertible Debentures, our total debt (including related party debt, gross of unamortized deferred loan fees) was $22.9 million, of which $10.0 million was repayable within one year, as compared to $16.0 million of debt having been incurred as of December 31, 2019. As of the date of this press release, following the conversions under the $5.0 Million
Convertible Debentures subsequent to March 31, 2020, our short-term debt obligations have been reduced by approximately $1.9 million, therefore amounting to $8.1 million.
During the three months ended March 31, 2020, we generated net cash from operating activities of $0.04 million as compared to $0.8 million in the corresponding period of 2019, which represents a decrease of $0.76 million, or 95.0%. This decrease is largely associated with the negative effect of variations in working capital. As of March 31, 2020, we reported working capital surplus of $3.3 million (December 31, 2019: $3.2
Recent Business and Financial Developments Commentary:
Update on Conversion of $5.0 Million Convertible Debentures and Number of Shares Issued and Outstanding Pursuant to the issuances on January 27, 2020, February 10, 2020 and February 19, 2020, to an institutional investor (the “Investor”) of three convertible debentures (each, a “Convertible Debenture”) in original principal amounts of $2.0 million, $1.5 million and $1.5 million each, respectively, as of the date of this press
release, the Investor elected to convert an aggregate $4.2 million of principal and interest of the $5.0 Million Convertible Debentures (which comprises of $4.1 million of principal and $0.1 million of interest) for 6,540,930 common shares (the “Conversion Shares”). As of the same date, the first and second Convertible Debentures have been repaid in full whereas, there remains an outstanding balance of $0.9 million under the third Convertible Debenture. The Convertible Debenture originally matures twelve months from its issuance
date, unless earlier converted at the Investor’s option, at any time after issuance, into common shares of the Company.
Following issuance of the Conversion Shares, we have 9,859,042 common shares issued and outstanding as of the date of this press release.
Mr. Petros Panagiotidis, Chief Executive Officer and Chief Financial Officer of Castor commented:
“We are pleased with our Q1 2020 performance, despite the headwinds experienced, especially during the end of the quarter due to the novel COVID-19 virus. Our chartering strategy has insulated us in the short term from a very weak spot charter market and has allowed us to continue operating on a cash flow positive basis.
In addition, we have placed ourselves in the fortunate position of having significant on balance sheet liquidity, that provides a cushion to withstanding a potentially prolonged weaker market while at the same time also allows us to take advantage of any attractive growth opportunities presented to us.”