United Maritime Corporation (USEA) Earnings Call Transcript & Summary

Thank you for standing by, ladies and gentlemen, and welcome to the United Maritime Corporation Conference Call on the second quarter and first half ended June 30, 2026 financial results. We have with us today Mr. Stamatios Tsantanis, Chairman and CEO; and Mr. Stavros Gyftakis, Chief Financial Officer of United Maritime Corporation. [Operator Instructions] Please be advised that this conference call is being recorded today, Thursday, July 30, 2026. The archived webcast of the conference call will soon be made available on the United Maritime website www.unitedmaratime.gr under the Investors section. Many of the remarks today contain forward-looking statements based on current expectations. Actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to differ materially from those in the forward-looking statements is contained in the second quarter and first half ended June 30, 2026 earnings release. which is available on the United Maritime website, again, wwwunitedmaritime.gr. I would now like to turn the conference over to one of your speakers today. the Chairman and CEO of the company, Mr. Stamatios Tsantanis. Please go ahead, sir.

Welcome to United Maritimes conference call to discuss our financial results for the second quarter and 6-month period ended June 30, 2026. The second quarter marked an important milestone for United as a strategic repositioning of our fleet towards the Capesize segment has begun translating into a materially stronger earnings profile. Adjusted EPS of $0.50 this quarter against $0.02 a year ago. that 7x higher, and it's the first evidence of what the repositioning does to our earnings power, given that in Q2, our second Capesize was ours for only 3 weeks. Reflecting our confidence in United's outlook, our board declared a quarterly cash dividend of $0.10 per share at our latest closing price, that's roughly annualized yield. This represents our 15th consecutive quarterly distribution and more than $2.04 per share returned since we started. As regards to our financial results, second quarter net revenues amounted to $10 million compared to $12.4 million last year, primarily reflecting fewer ownership days following our fleet repositioning initiatives. Adjusted EBITDA for the quarter was equal to $5.2 million, while adjusted earnings per share came at $0.15, up from $0.02 in the second quarter of 2025, as we discussed before. During the first 6 months of 2026, stronger freight markets together with strategic repositioning of our fleet towards Capesize vessels resulted in a meaningful improvement in profitability. We achieved adjusted EBITDA and adjusted earnings per share of $8.4 million and $0.18, respectively, compared to an adjusted EBITDA of EUR 6 million and the loss per share of $0.40 in the prior year period. As part of our continued repositioning towards the Capesize segment, we have entered implement to sell the XL 1 of our Panamax vessels. The transaction is expected to generate a gain of approximately $1.8 million upon delivery, which is currently towards the end of the third quarter. This transaction further advances the transformation of United into a company with greater earnings capacity and cash flow generation potential. Goes without saying that we will be on the lookout for additional shape size additions in the near future. In June, we also took delivery of the square ship and we look forward to its first full quarter of contribution beginning in the third quarter. Importantly, the vessels index-linked charter has already been converted to a fixed rate charter at an attractive level, providing additional earnings visibility throughout the remainder of the year. Accordingly, the third quarter, we represent the vessels first full quarter of Eni's contribution. The acquisition of 2 Capesize vessels and the divestment of 2 Panamax Kamsarmax vessels and of course, the United has substantially completed the strategic fleet repositioning announced earlier in the year. Alongside the repositioning of our operating fleet, we also completed the monetization of our participation in the offshore new building project generating approximately $15 million of additional liquidity. This transaction further strengthens our financial flexibility to pursue future investment opportunities while maintaining our commitment to shareholder returns. Turning to our commercial strategy. The improvement in the dry bulk market translated into a meaningful increase in our time charter equivalent performance. During the second quarter, daily times at equivalent reached $18,600 per day compared to $15,400 per day in the same quarter of 2025. In the first 6 months of 2026, we achieved a daily TCE of 17,200, sharply higher than the 12,700 seen in the same period last year. Currently, 3 of our 6 vessels operate under fixed rate charters following conversions from index-linked employment, providing increased revenue visibility over the coming quarters. Looking ahead, based on the current FFA levels. We expect our daily time charter equivalent for the third quarter to be approximately $20,500 per day with around 70% of our operating days are fixed. This would represent another sequential improvement over previous quarters and provides us with increased confidence in our earnings outlook for the remainder of the year. Overall, we're very pleased with the progress achieved during the first half of 2026. The company is entering a period where the benefits of our strategic repositioning will become increasingly evident in earnings and cash flow generation. Before passing the call to Stavros for an overview of our financials, let me briefly comment on the dry bulk market. The market remained particularly constructive through the second quarter of 2026. The Capesize market, in particular, continued the strong momentum established earlier in the year with BCI averaging approximately $36,000 per day, almost double the level recorded during the second quarter of 2025. The Panamax market also strengthened considerably, reflecting favorable fundamentals across the broader dry bulk sector, averaging about 19,200 versus 11,800 in the same period last year. improvement in freight rates has been driven by a healthy balance between supply and demand. On the demand side, and or bauxite continued to underpin capesize employment. Iron ore trade has grown sharply since last year with second quarter China imports, up by 6%. Vale second quarter production was the highest since 2018 and while the Simandou project in Guinea is accelerating its export volumes at a fast rate that exceeds initial expectations. Despite the high inventories in China, demand for high-quality import ban north remains strong driven by environmental regulations as well as still capacity normalization and modernization. Bauxite has emerged as one of the strongest structural demand drivers for Capesize vessels. Exports from Guinea have continued to expand, rising more than 15% in the first 6 months of the year, supported by robust Chinese import demand and sustained activity in the alumina sector. We believe this trade will remain an important structural driver of Capesize demand over the coming years. Coal trade has also been supportive both for the Panamax and the KS market with global seaborne volume up year-on-year during the first half of the year. The crisis Hormuz has brought energy security concerns to the forefront, while warm weather and structurally higher energy demand provide a positive backdrop. Over the next quarters, even as the outlook for seaborne coal is subject to uncertainty, the reduced domestic production in China and any potential relaxation of Indonesia strict export policy could prove important as we enter the period of seasonal strength for restructuring. Lastly, on the Panamaxes, grain trade has also provided support particularly through increased sodium in shipments to China following the trade agreement with the United States. Loadings over the first 4 months grew by double-digit percentages while China imports jumped by nearly 10%. On the supply side, 2026 has seen low newbuilding deliveries in the dry bulk segment, especially in Capesizes, while dry dockings, slower selling speeds and environmental regulations continue to constrain effective fleet growth. The long-term picture also remains favorable as the dry bulk order book is low by historical standards as the world fleet grows order. Stricter environmental regulations and the lower efficiency of older vessels are placing a ceiling on supply over the next years, while limited CPR availability at as a constraint to runway fleet growth. Taken together, we continue to believe that the medium-term supply-demand balance remains favorable for drybulk shipping, particularly in the Capesize segment where United has strategically increased its exposure. On that note, I will turn the call over to Stavros for an overview of our financial performance before returning to me with some concluding remarks. Stavros, please go ahead.

Thank you, Stamatios, and welcome to everyone joining us today. I will now review United financial performance for the second quarter and first half together with the key developments that further strengthen the company's earnings profile, financial flexibility and ability to return capital to shareholders. For the second quarter of 2026, the company generated net revenues of $10 million, slightly lower than the same period of 2025, primarily reflecting fewer ownership days following our fleet repositioning initiatives. Despite lower revenues, stronger freight markets and improved commercial performance enabled us to maintain adjusted EBITDA at $5.2 million, while delivering a significant improvement in profitability. Net income amounted to $1.2 million, while adjusted net income reached $1.5 million compared to $1 million and $0.2 million, respectively, during the second quarter of last year. Our improved profitability was primarily driven by stronger commercial performance with fleet time charter equivalent, increasing by 21% year-over-year to $18,654 per day. These stronger earnings and cash flow generation supported the declaration of our 15th consecutive quarterly cash dividend consistent with our disciplined approach to returning capital to shareholders. The same positive trend was evident during the first half of the year. Net revenues amounted to $17.9 million, while adjusted EBITDA increased by approximately 40% to $8.4 million compared to $6 million during the first 6 months of 2025. Importantly, the company returned to profitability, reporting net income of $1 million and adjusted net income of $1.7 million compared to a net loss of $3.5 million and an adjusted net loss of $4.2 million in the prior year period. Fleet TCE increased by 35% in to $17,200 per day, reflecting both the stronger overall market environment and the initial benefits of our strategic fleet repositioning. At the same time, we maintained a competitive operating cost structure with Abe's daily OpEx at approximately $6,400 per vessel. This continued cost discipline combined with stronger charter rates translated into improved operating leverage, profitability and cash generation during the period. Turning to our balance sheet. We further strengthened our financial flexibility during the quarter through the execution of our capital redeployment strategy, the successful monetization of our investment in the offshore energy construction vessel project generated approximately $15.1 million of liquidity. In addition, the agreed sale of the Accelix is expected to contribute approximately $8.5 million of net cash proceeds upon completion which is currently anticipated towards the end of the third quarter. Geberit's transactions are expected to generate approximately $23.6 million of liquidity materially strengthening our financial flexibility and providing additional capacity, both to pursue future investment opportunities and to continue returning capital to shareholders. As of June 30, 2026, cash, cash equivalents and restricted cash stood at $12.1 million. This balance already reflects the proceeds from the offshore investment but does not yet include pickup expected from the sale of the XL. Shareholders' equity stood at $53.3 million, while total debt, including finance release and other financial liabilities amounted to approximately $95.4 million. The book value of our fleet reached $143.5 million reflecting the successful completion of United strategic expansion into the Capesize segment. Before I conclude, I'd like to briefly step back and put this quarter into perspective. The strategic initiatives we have executed over the past several months have materially strengthened our financial profile. Today, we have a larger proportion of higher earnings assets improved earnings visibility, enhanced free cash flow generation potential and greater financial flexibility. At the same time, we have maintained a disciplined balance sheet and continue returning capital to shareholders through our quarterly dividend. Looking ahead, with our positioned fleet now largely in place and a constructive dry bulk market backdrop United is very well positioned to translate the strategic initiatives into continued earnings and cash flow growth while preserving the flexibility to pursue additional value-enhancing opportunities and continue delivering attractive returns for our shareholders. With that, I will now turn the call back to Stamatios for his concluding remarks. Stamatios, please go ahead.

Thank you, Stavros. The first half of 2026 has been a defining period for United. Over the past several months, we have executed a series of strategic initiatives that have fundamentally strengthened the company's platform, positioning us with a more capable fleet greater exposure to the Capesize market and a stronger foundation for long-term value creation. Perhaps most importantly, we're now beginning to see these strategic decisions translate into improved operating and financial performance. While the full earnings contribution from our recent initiatives will become increasingly evident over the coming quarters, the progress achieved so far reinforces our confidence that we have positioned United for a new phase of sustainable earnings growth. Throughout this transformation, we have remained committed to disciplined capital allocation. Since initiating our dividend, we have returned more than $2 per share to shareholders through cash distributions while also executing repurchases, all without issuing new public equity, no dilution. This balanced approach to growth financial discipline and shareholder returns will continue to differentiate synergy going forward. Looking ahead, [indiscernible] enters the second half of the year from a position of strength with a strategically repositioned fleet, improving commercial coverage and a constructive outlook for the dry bulk market, we are confident in our ability to continue creating long-term value for our shareholders. On behalf of the Board of Directors and the entire United team, I would like to thank you, our shareholders, customers, employees and business partners for the continued trust and support. Thank. Operator, we're now happy to take any questions.

[Operator Instructions] And our first question will come from the line of Tate Sullivan with Maxim Group.

Thank you. And it's good to talk to you today. The press release for Unamera time shows, I think that you fixed a portion of the ships for the rest of the year, not just 3Q at fixed rates, are you considering fixing some rates into 2027 already? Or have you already done that, please?