Our fleet consists of: (i) drybulk carriers that transport iron ore, coal,
grain and other dry cargoes along worldwide shipping routes; (ii) containerships
that transport container boxes providing scheduled service between ports.
Our business strategy is focused on providing consistent shareholder returns
by carefully selecting the timing and the structure of our investments in drybulk
and containership vessels and by reliably, safely and competitively operating
the vessels we own, through our affiliate, Eurobulk. Representing a continuous
shipowning and management history that dates back to the 19th century, we believe
that one of our advantages in the industry is our ability to select and safely
operate drybulk and containership vessels of any age.
We believe that we possess the following competitive strengths:
Experienced Management Team. Our management team has significant experience
in all aspects of commercial, technical, operational and financial areas of
our business. Aristides J. Pittas, our Chairman and Chief Executive Officer,
holds a dual graduate degree in Naval Architecture and Marine Engineering and
Ocean Systems Management from the Massachusetts Institute of Technology. He
has worked in various technical, shipyard and ship management capacities and
since 1991 has focused on the ownership and operation of vessels carrying dry
cargoes. Dr. Anastasios Aslidis, our Chief Financial Officer, holds a Ph.D.
in Ocean Systems Management also from Massachusetts Institute of Technology
and has over 20 years of experience, primarily as a partner at a Boston based
international consulting firm focusing on investment and risk management in
the maritime industry.
Cost Effective Vessel Operations. We believe that because of the efficiencies
afforded to us through Eurobulk, the strength of our management team and the
quality of our fleet, we are, and will continue to be, a reliable, low cost
vessel operator, without compromising our high standards of performance, reliability
and safety. Despite the average age of our fleet being approximately 18.5 years
during 2014, our total vessel operating expenses, including management fees
and general and administrative expenses but excluding drydocking expenses were
$6,320 per day for the year ended December 31, 2014. We consider this amount
to be among the lowest of the publicly listed drybulk or containerships shipping
companies in the United States. Our technical and operating expertise allows
us to efficiently manage and transport a wide range of cargoes with a flexible
trade route profile, which helps reduce ballast time between voyages and minimize
off-hire days. Our professional, well-trained masters, officers and on board
crews further help us to control costs and ensure consistent vessel operating
performance. We actively manage our fleet and strive to maximize utilization
and minimize maintenance expenditures for operational and commercial utilization.
Strong Relationships with Customers and Financial Institutions. We believe ourselves
as well as Eurobulk and the Pittas family have developed strong industry relationships
and have gained acceptance with charterers, lenders and insurers because of
their long-standing reputation for safe and reliable service and financial responsibility
through various shipping cycles. Through Eurobulk, we offer reliable service
and cargo carrying flexibility that enables us to attract customers and obtain
repeat business. We also believe that the established customer base and reputation
of ourselves, Eurobulk and the Pittas family help us to secure favorable employment
for our vessels with well-known charterers.
Our business strategy is focused on providing consistent shareholder returns
by carefully timing and structuring acquisitions of drybulk carriers and containerships
and by reliably, safely and competitively operating our vessels through Eurobulk.
We continuously evaluate purchase and sale opportunities, as well as long term
employment opportunities for our vessels.
Renew and Expand our Fleet. We expect to grow our fleet in a disciplined
manner through timely and selective acquisitions of quality vessels. We perform
in-depth technical review and financial analysis of each potential acquisition
and only purchase vessels as market conditions and developments present themselves.
We focus on purchasing well-maintained secondhand vessels, newbuildings or newbuilding
resales based on the evaluation of each investment option at the time it is
made. During 2014, we ordered or acquired the contracts of four drybulk carrier
newbuildings and acquired one secondhand drybulk carrier.
Maintain Balanced Employment. We intend to employ our fleet between
longer term time charters, i.e. charters with duration of more than a year,
and shorter term time or spot charters, if possible. We actively pursue longer
term time charters to obtain adequate cash flow to cover as much as possible
of our fleets fixed costs, consisting of vessel operating expenses, management
fees, general and administrative expenses, interest expense and drydocking costs
for the upcoming 12-month period. We also may use forward freight agreements
(to which we will refer as "FFA" or "FFAs") – as a
substitute for time charter employment – to partly provide coverage for
our drybulk vessels in order to increase the predictability of our revenues.
We look to deploy the remainder of our fleet through spot charters, shipping
pools or contracts of affreightment depending on our view of the direction of
the markets and other tactical or strategic considerations. Our mix of short-
and long-term charters is also based on our expectations about future market
prospects; when we expect charter rates to improve we try to increase the percentage
of our fleet employed in shorter term contracts (allowing us to take advantage
of higher rates in the future), while when we expect the market to weaken we
try to increase the percentage of our fleet employed in longer term contracts
(allowing us to take advantage of higher current rates). We believe this balanced
employment strategy will provide us with more predictable operating cash flows
and sufficient downside protection, while allowing us to participate in the
potential upside of the spot market during periods of rising charter rates.
Operate a Fleet in Two Sectors. While remaining focused on the dry
cargo segment of the shipping industry, we intend to continue to develop a diversified
fleet of drybulk carriers and containerships of up to Panamax size including
Kamsarmax vessels. A diversified drybulk fleet profile will allow us to better
serve our customers in both major and minor drybulk trades, as well as to reduce
any dependency on any one cargo, trade route or customer. We will remain focused
on the smaller size ship segment of the container market, which has not experienced
the same level of expansion in vessel supply that has occurred with larger containerships.
A diversified fleet, in addition to enhancing the stability of our cash flows,
will also help us to reduce our exposure to unfavorable developments in any
one shipping sector and to benefit from upswings in any one shipping sector
experiencing rising charter rates.
Optimize Use of Financial Leverage. We will use bank debt to partly
fund our vessel acquisitions and increase financial returns for our shareholders.
We actively assess the level of debt we incur in light of our ability to repay
that debt based on the level of cash flow generated from our balanced chartering
strategy and efficient operating cost structure. Our debt repayment schedule
as of December 31, 2014 calls for a reduction of more than 36% of our debt by
the end of 2015 and an additional reduction of more than 36% by the end of 2016
for a total of more than 72% reduction over the two years, excluding any new
debt that we assumed or may assume. As our debt is being repaid we expect that
our ability to raise or borrow additional funds more cheaply in order to grow
our fleet and generate better returns for our shareholders will increase.
2.24%