Other Highlights and Developments:
Successful completion of the first investment cycle:
Sale of our remaining LR2 tanker vessel for a gross sale price of $37.5 million, realizing a return on equity of approximately 400%
$48 million combined profit from the sale and purchase transactions of four tanker vessels in less than one year
Expansion through the second investment cycle, focusing on larger size dry bulk vessels:
Agreements to acquire two more Japan built Panamax dry bulk vessels including a bareboat-in charter with purchase option
$143.6 million2 investment for two Capesize, two Kamsarmax and three Panamax vessels with no dilution for our shareholders
Quarterly cash dividend of $0.075 per share for Q2 2023 - total cash dividends of $1.225 per share or $9.4 million declared since November 2022
Executed buybacks of about $0.2 million common shares in Q2 2023 - total repurchases of approximately $3.4 million common shares at an average price of $1.84 during the last 12 months
United Maritime Corporation announced its financial results for the second quarter and six months ended June 30, 2023. The Company also declared a quarterly dividend of $0.075 per common share for the second quarter of 2023.
For the quarter ended June 30, 2023, the Company generated Net Revenues of $10.0 million and recorded an Adjusted EBITDA1 of $2.0 million. Net Loss and Adjusted Net Loss for the quarter were $3.0 million and $2.1 million, respectively. The Time Charter Equivalent rate (“TCE rate”) of the fleet for the second quarter of 2023 was $16,072 per day.
For the six-month period ended June 30, 2023, the Company generated Net Revenues of $12.8 million and recorded an Adjusted EBITDA of $0.5 million . Net Loss and Adjusted Net Loss for the first six-month period were $7.9 million and $5.7 million, respectively. The TCE rate of the fleet for the first six months of 2023 was $14,335 per day.
Cash and cash-equivalents and restricted cash as of June 30, 2023, stood at $7.3 million. Shareholders’ equity at the end of the second quarter was $59.2 million, while long-term debt, finance lease liability and other financial liabilities, net of deferred charges stood at $78.2 million as of June 30, 2023. The book value of our fleet as of June 30, 2023, stood at $138.4 million, including a chartered-in Panamax vessel, the advance paid for the acquisition of one Panamax vessel and the remaining LR2 tanker as held for sale.
Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:
“In the second quarter of 2023, we agreed to sell our remaining tanker vessel, the M/T Epanastasea, completing our first highly profitable investment cycle. The gross sale price of $37.5 million yielded a gain of 88% on the purchase price and approximately 400% on the equity capital employed to acquire the M/T Epanastasea. The accounting profit, estimated at approximately $12 million, will be recorded in the third quarter of 2023. This sale marks the end of a series of successful tanker sale and purchase transactions, resulting in a solid profit of approximately $48 million, less than a year from the delivery of the first vessel to United. The net sales proceeds have been reinvested to regrow our fleet with focus on the larger dry bulk vessels. In addition, we have distributed significant returns to our shareholders through share repurchases and cash dividends. For the second quarter, our board has approved another dividend of $0.075 per share. Since the commencement of our operations, we have declared cash dividends of $1.225 per share, representing 46% of our recent closing price. Moreover, in the last 12 months following the only equity offering, since initial listing, we have bought back $6,194,328 worth of our shares at an average price of $1.84 per share.
“During the second quarter of 2023, we agreed to add another two Japanese built Panamax dry bulk vessels to our fleet. The first vessel, built in 2015, was delivered to us in August and chartered in for 12 months on a bareboat basis with a purchase option. The second vessel, built in 2011, will be purchased outright and is expected to be delivered to us by October 2023. The aggregate acquisition price for both vessels will be approximately $44.8 million, which we expect to fund through a combination of debt and equity. Upon the delivery of the second vessel, our fleet size will increase to eight dry bulk vessels. The aggregate investment of $143.6 million, across two Capesize, three Panamax and two Kamsarmax vessels, has been funded to date through the proceeds from our first investment cycle, without diluting our shareholders, while keeping leverage at reasonable levels. We are driven by our commitment to balance high returns on capital and shareholder distributions, and we are confident that the timing of our dry bulk investments will allow us to achieve both.
“Our results for the second quarter were affected by the transitional growth stage of our fleet, low fleet utilization due to the dry-docking of the M/V Tradership, as well the increased volatility and a lack of clear direction observed in the dry bulk market, as the optimism seen in March and April gave way to lower charter rates in the following months. In the Panamax segment, charter rates are weighed down by the release of vessels from the suspension of the Ukraine grain corridor, while the coal trade slowed down relative to prior months and after peaking in March. Furthermore, as regards to the dry bulk market at-large, improved port efficiencies, mainly in China, have increased effective fleet supply exerting pressure on charter rates. We expect that the strong dry bulk ton-mile demand seen currently will translate into higher charter rates as supply disruptions normalize during the coming quarters.”
Second Quarter and Recent Developments:
Dividend Distribution for Q1 2023 and Declaration of Q2 2023 Dividend
On July 6, 2023, the Company paid the previously announced quarterly dividend of $0.075 per common share, for the first quarter of 2023, to all shareholders of record as of June 22, 2023.
The Company also declared a cash dividend of $0.075 per common share for the second quarter of 2023 payable on or about October 6, 2023 to all shareholders of record as of September 22, 2023.
Buyback of Common Shares – 3rd Repurchase Plan
During the second quarter of 2023, we repurchased 67,231 common shares in open market transactions at an average price of $2.9 per share for an aggregate consideration of $0.2 million pursuant to the $3.0 million share repurchase program commenced in October 2022, as extended to date. Since the beginning of the third repurchase plan, 67,294 common shares have been cancelled and removed from our share capital as of the date of this release.
Vessel transactions and commercial updates
Delivery of M/V Cretansea
In April 2023, the Company took delivery of the 81,508 dwt M/V Cretansea built in 2009 in Japan. The M/V Cretansea was acquired for a gross purchase price of $19.7 million, which was funded by cash on hand and financing through a sale and leaseback transaction. The M/V Cretansea is chartered out to a major European charterer for a period with a minimum redelivery of April 2024 up to maximum redelivery of July 2024, at an index-linked rate.
Bareboat Charter Agreement for a Panamax dry bulk carrier – M/V Synthesea
In April 2023, the Company entered into a bareboat charter agreement for a 78,020 dwt Panamax bulk carrier built in 2015 in Japan, which was renamed Synthesea and delivered to United on August 1, 2023. The vessel is chartered under a 12-month bareboat charter agreement, with a down payment of $7.0 million, a daily charter rate of $8,000 over the period of the bareboat charter and a purchase option of $17.1 million at the end of the bareboat charter. In aggregate, the acquisition cost for the vessel, following exercise of the purchase option, will be approximately $27.0 million.
Acquisition of a Panamax dry bulk carrier - M/V Exelixsea
In June 2023, the Company entered into an agreement to acquire a Panamax dry bulk vessel built in 2011 in Japan, with a cargo carrying capacity of 76,361 dwt, to be renamed Exelixsea. The aggregate purchase price is $17.8 million, and its acquisition is expected to be funded with cash on hand and through the facility agreement with the lender of the M/T Epanastasea. The M/V Exelixsea will substitute M/T Epanastasea as collateral, assuming the $15.0 million outstanding under the respective loan tranche, under similar terms. The vessel is expected to be delivered to the Company between August and October 2023.
Sale of M/T Epanastasea
In May 2023, the Company entered into an agreement with an unaffiliated third party for the sale of its remaining LR2 tanker vessel, the 2008-built M/T Epanastasea. The vessel is scheduled to be delivered to its new owner by mid-August 2023. The vessel’s gross sale price is $37.5 million, and the transaction is subject to customary closing procedures. The accounting profit from the sale of the M/T Epanastasea is expected to be approximately $12.0 million and will be realized in the third quarter of 2023.
Financing Updates
M/V Cretansea Sale and Leaseback
On April 26, 2023, following the delivery of the M/V Cretansea, the Company entered into a $12.25 million sale and leaseback facility provided by a European lessor to finance part of the acquisition cost of the vessel. The charterhire principal bears an interest rate of 4.25% plus 3-month Term SOFR and amortizes over a five-year term, through 60 consecutive monthly instalments of $0.1 million. The Company has the option to repurchase the vessel at any time during the bareboat period and a purchase obligation at a price of $6.4 million at maturity.
Update on Number of Common Shares Issued and Outstanding
As of July 31, 2023, the Company has 8,892,149 common shares issued and outstanding. This includes 1,037,230 shares issued pursuant to exercises of Class A warrants for aggregate proceeds of $2.7 million.
