Globus Maritime Limited Reports Financial Results for the Third Quarter and Nine-month period ended September 30, 2023

Globus Maritime Limited, a dry bulk shipping company, today reported its unaudited consolidated financial results for the third quarter and nine-month period ended September 30, 2023.

Revenue

• $7.7 million in Q3 2023
• $24.1 million in 9M 2023

Net income

• $3.5 million net income in Q3 2023
• $4.9 million net income in 9M 2023

Adjusted EBITDA

• $2.0 million in Q3 2023
• $4.2 million in 9M 2023

Time Charter Equivalent

• $9,994 per day in Q3 2023
• $8,979 per day in 9M 2023

Current Fleet Profile

As of the date of this press release, Globus’ subsidiaries own and operate six dry bulk carriers, consisting of one Supramax, one Panamax and four Kamsarmax.

Current Fleet Deployment

All our vessels are currently operating on short-term time charters (“on spot”).

Management Commentary

“During the third quarter we saw a weak market in the first half but significantly stronger in comparison to the second half. Seasonal factors as well as geopolitical ones played a role in the movement of the market. We are pleased that today it stands at a much healthier level, and we hope the upward trend continues.

As the supply and demand fundamentals remain constant, we expect the market to improve gradually going forward. We still prefer to maintain our spot exposure on the hiring of the fleet and continue to take full advantage of any potential market upswings; by employing our vessels with short period TC’s and even longer periods of employment we undertake in their majority exposure to the spot market through index-linked rates.
This is an exciting time for the Company as we are looking forward to the delivery of the first of our new building vessels in January of 2024. We are confident that the high quality of these vessels will be appreciated by a healthy market and that they will enjoy decent employment. The company is always looking for ways to expand its fleet, especially focusing on modern or ‘eco’ vessels taking into account current as well as historical market conditions.

On the financing side we keep seeking deals that will fit the fleet’s and Company’s profile as well as its plans for careful expansion; Our priority is to ensure the health of the Company by maintaining a conservative approach but at the same time without sacrificing our presence in the market. We are working on expanding our current relationships with financiers worldwide.

We remain relentless in our focus to maximize shareholder value without hurting the Company’s long-term ability to grow.”

Recent Developments

Contract for new building vessels

On August 18, 2023, the Company signed two contracts for the construction and purchase of two fuel efficient bulk carrier of about 64,000 dwt each. The two vessels will be built at a reputable shipyard in Japan and are scheduled to be delivered during the second half of 2026. The total consideration for the construction of both vessels is approximately $75.5 million, which the Company intends to finance with a combination of debt and equity. In August 2023 the Company paid the 1st instalment of $7.5 million for both vessels under construction.

Debt financing

In August 2023, the Company reached an agreement with First Citizens Bank & Trust Company (formerly known as CIT Bank N.A.) for a deed of accession, amendment and restatement of the CIT loan facility by the accession of an additional borrower in order to increase the loan facility from a total of $52.25 million to $77.25 million, by a top up loan amount of $25 million for the purpose of financing vessels Diamond Globe and Power Globe and for general corporate and working capital purposes of all the borrowers and Globus. The CIT loan facility (including the new top up loan amount) is now further secured by a first preferred mortgage over the vessels Diamond Globe and Power Globe. Furthermore, the applicable margin was amended from 3.35% to 2.70% for the whole CIT loan facility. On August 10, 2023, the Company drew down $25 million.

The Company, through a wholly owned subsidiary Daxos Maritime Limited, is currently negotiating a sale and leaseback financing transaction for a vessel under construction at Nantong Cosco KHI Ship Engineering Co., Ltd. That we previously disclosed have agreed to purchase. DAXOS Maritime Ltd would sell the vessel for a purchase price of $28 million on or about September 30, 2024 (subject to delays during construction of the Vessel) to an unaffiliated third party. Daxos Maritime Ltd would bareboat charter the vessel from the new owner for period of 10 years, with hire payable monthly in advance at (A) a fixed rate of (i) $3,000 per day for the first 3 years, (ii) $3,200 per day for the 4th and 5th years, (iii) $3,300 per day for the 6th and 7th years, and (iv) $3,800 per days for the 8th, 9th and 10th years, and (B) a floating rate calculated on the amount of the outstanding lease obligation on the relevant hire payment date of (1) CME SOFR plus 2.1% per annum for the first 3 years, (2) CME SOFR plus 2.45% per annum for the next 4th, 5th, 6th and 7th years, and (3) CME SOFR plus 2.35% per annum for the remaining 8th, 9th and 10th years. Daxos Maritime Ltd will have the right under the Charter to purchase the Vessel during the charter period at various purchase prices, and an obligation to purchase the Vessel at the end of the Charter Period for a purchase price of $15.81 million. Globus maritime would guarantee the payments. The transaction is subject to a number of conditions, including negotiating and agreeing and approval by all parties of the final documentation for the transaction.

Sale of vessel

On March 6, 2023, the Company, through a wholly owned subsidiary, entered into an agreement to sell the 2007-built Sun Globe for a gross price of $14.1 million (absolute amount), before commissions, to an unaffiliated third party. The vessel was delivered to its new owners on June 5, 2023.

On August 11, 2023, the Company, through a wholly owned subsidiary, entered into an agreement to sell the 2009-built Sky Globe for a gross price of $10.7 million (absolute amount), before commissions, to an unaffiliated third party. The vessel was delivered to its new owners on September 7, 2023.

On August 16, 2023, the Company, through a wholly owned subsidiary, entered into an agreement to sell the 2010-built Star Globe for a gross price of $11.2 million (absolute amount), before commissions, to an unaffiliated third party. The vessel was delivered to its new owners on September 13, 2023.

Policy for the Recovery of Erroneously Awarded Compensation

Clawback Policy. On November 8, 2023, the Board of Directors of the Company approved the adoption of a Policy for the Recovery of Erroneously Awarded Incentive Based Compensation (the “Clawback Policy”), with an effective date of October 2, 2023, in order to comply with the final clawback rules adopted by the Securities and Exchange Commission under Section 10D and Rule 10D-1 of the Securities Exchange Act of 1934, as amended (“Rule 10D-1”), and the listing standards, as set forth in the Nasdaq Listing Rule 5608 (the “Final Clawback Rules”).

The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from current and former executive officers as defined in Rule 10D-1 (“Covered Officers”) of the Company in the event that the Company is required to prepare an accounting restatement, in accordance with the Final Clawback Rules. The recovery of such compensation applies regardless of whether a Covered Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. Under the Clawback Policy, the Board of Directors may recoup from the Covered Officers erroneously awarded incentive compensation received within a lookback period of the three completed fiscal years preceding the date on which the Company is required to prepare an accounting restatement.

Conflicts

The conflict between Russia and Ukraine, which commenced in February 2022, has disrupted supply chains and caused instability and significant volatility in the global economy. Much uncertainty remains regarding the global impact of the conflict in Ukraine, and it is possible that such instability, uncertainty and resulting volatility could significantly increase the costs of the Company and adversely affect its business, including the ability to secure charters and financing on attractive terms, and as a result, adversely affect the Company’s business, financial condition, results of operation and cash flows. Currently there is no direct effect on the Company’s operations.

Third quarter of the year 2023 compared to the third quarter of the year 2022

Net income for the third quarter of the year 2023 amounted to $3.5 million or $0.17 basic income per share based on 20,582,301 weighted average number of shares compared to net income of $4.3 million or $0.21 basic income per share based on 20,582,301 weighted average number of shares for the same period last year.

Revenue

During the three-month period ended September 30, 2023, and 2022, our Revenues reached $7.7 million and $15.9 million, respectively. The 52% decrease in Revenues was mainly attributed to the decrease in the average time charter rates achieved by our vessels during the third quarter of 2023 compared to the same period in 2022. Daily Time Charter Equivalent rate (TCE) for the third quarter of 2023 was $9,994 per vessel per day against $15,865 per vessel per day during the same period in 2022 corresponding to a decrease of 37%.

First nine months of the year 2023 compared to the first nine months of the year 2022

Net income for the nine-month period ended September 30, 2023 amounted to $4.9 million or $0.24 basic income per share based on 20,582,301 weighted average number of shares, compared to $27.4 million for the same period last year or $1.33 basic income per share based on 20,582,301 weighted average number of shares.

Revenue

During the nine-month period ended September 30, 2023 and 2022, our Revenues reached $24.1 million and $53.5 million, respectively. The 55% decrease in Revenues was mainly attributed to the decrease in the average time charter rates achieved by our vessels during the nine-month period ended September 30, 2023, compared to the same period in 2022. Daily Time Charter Equivalent rate (TCE) for the nine-month period of 2023 was $8,979 per vessel per day against $20,840 per vessel per day during the same period in 2022, corresponding to a decrease of 57%, which is attributed to the worse conditions throughout the bulk market for the first nine months of 2023.
Source: Globus Maritime Limited