20-F: Costamare Inc. 2025 Annual Report: Strategic Shifts & Leasing Growth

Costamare Inc. reports a net income of $369 million for 2025, driven by its containership fleet and expanding Neptune Maritime Leasing business, following the spin-off of its dry bulk operations.

Summary

• Net income for 2025 was $369 million, compared to $316.3 million in 2024 and $381 million in 2023.
• Net income from continuing operations for 2025 was $396.5 million, a slight decrease from $407.3 million in 2024.
• Voyage revenue decreased by 2.1% to $846.7 million in 2025 from $864.5 million in 2024, primarily due to lower accounting revenue from two sale-type lease vessels and net decreased charter rates, partly offset by contractual reimbursements for EUAs and Fuel EU Maritime penalties and revenue from one acquired container vessel.
• Income from investments in leaseback vessels increased by 30.5% to $31.2 million in 2025 from $23.9 million in 2024, reflecting increased volume of Neptune Maritime Leasing's (NML) operations.
• Voyage expenses increased by 101.6% to $52.0 million in 2025 from $25.8 million in 2024, mainly due to costs associated with EUAs and Fuel EU Maritime penalties, though a significant portion is contractually reimbursed by charterers.
• Vessels operating expenses increased by 2.9% to $162.5 million in 2025 from $157.9 million in 2024, with daily operating expenses rising from $6,345 to $6,516.
• Interest and finance costs decreased by 16.6% to $91.4 million in 2025 from $109.6 million in 2024, mainly due to a lower average loan balance and reduced SOFR rates.
• A net gain of $11.4 million from derivative instruments was recorded in 2025, a positive reversal from a $5.9 million net loss in 2024.
• The dry bulk business was spun off into Costamare Bulkers Holdings Limited on May 6, 2025, with its results reported as discontinued operations for all periods presented.
• The company's containership fleet consists of 79 vessels (including 10 under construction) with an aggregate capacity of approximately 551,000 TEU as of February 24, 2026.
• The average remaining time charter duration for the containership fleet was approximately 4.4 years as of February 24, 2026, representing an aggregate of approximately $3.6 billion of contracted revenue.
• Neptune Maritime Leasing (NML) is funding or committed to funding 52 shipping assets, including 22 dry bulk vessels, 3 tanker vessels, 24 offshore vessels, and 3 container vessels, with Costamare's investment commitment increased to $247.8 million.
• The company maintains a total cash liquidity of $570.3 million, consisting of cash, cash equivalents, and restricted cash, as of December 31, 2025.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive report, reflecting strategic restructuring and growth in the leasing segment, alongside effective cost management in finance. However, the slight dip in continuing operations revenue and the substantial increase in voyage expenses (even if reimbursed) warrant careful monitoring.

Positives

• Net income increased to $369 million in 2025 from $316.3 million in 2024.
• Income from investments in leaseback vessels grew significantly by 30.5% to $31.2 million in 2025, indicating strong performance and expansion in the Neptune Maritime Leasing segment.
• Interest and finance costs decreased by 16.6% to $91.4 million in 2025, attributed to a lower average loan balance and reduced SOFR rates.
• A net gain of $11.4 million from derivative instruments was recorded in 2025, a positive reversal from a $5.9 million loss in 2024.
• The containership fleet achieved a high utilization rate of 99.6% in 2025, excluding scheduled dry-dockings, demonstrating operational efficiency.
• The company has a substantial contracted revenue backlog of approximately $3.6 billion from its fixed-term charters as of February 24, 2026, providing revenue visibility.
• All 10 newbuild vessels under construction will be equipped with scrubbers, enhancing environmental compliance and competitiveness in a tightening regulatory environment.
• The company maintains strong liquidity with $570.3 million in cash, cash equivalents, and restricted cash as of December 31, 2025.
• The successful spin-off of the dry bulk business allows for a more focused strategic direction on containerships and leasing operations.

Negatives

• Net income from continuing operations slightly decreased to $396.5 million in 2025 from $407.3 million in 2024.
• Voyage revenue decreased by 2.1% in 2025, primarily due to lower accounting revenue from two sale-type lease vessels and net decreased charter rates for some vessels.
• Voyage expenses increased significantly by 101.6% in 2025 to $52.0 million, mainly due to the recognition of costs associated with EUAs and Fuel EU Maritime penalties, despite contractual reimbursements.
• Daily vessels operating expenses increased to $6,516 in 2025 from $6,345 in 2024.
• Net cash provided by operating activities decreased by $50.0 million to $536.9 million in 2025.
• Net cash used in investing activities increased substantially to $179.0 million in 2025 from $32.8 million in 2024, driven by advance payments for newbuild container vessels and increased payments for NML investments.
• Net cash used in financing activities was $507.6 million in 2025, including a $100.0 million cash contribution to spun-off entities.
• Total current assets decreased from $802.3 million in 2024 to $690.7 million in 2025, indicating a reduction in short-term liquidity.
• Total cash, cash equivalents, and restricted cash decreased by $207.7 million in 2025.

Risks

• Profitability is highly dependent on volatile charter rates in the international shipping industry, influenced by macroeconomic factors outside of the company's control.
• The market value of vessels can fluctuate substantially, potentially leading to losses on disposal or triggering breaches of credit facility covenants.
• Increased trade protectionism, the unraveling of multilateral trade agreements, and geopolitical disruptions (e.g., U.S. port fees, Red Sea crisis, Houthi attacks) could adversely impact charterers' businesses, trade volumes, and the company's financial performance.
• Delays in delivery or cancellation of newbuild vessels (10 containerships on order) or secondhand acquisitions could reduce expected income or lead to charter cancellations.
• The company is dependent on charterers and other counterparties fulfilling their obligations; their inability or unwillingness to honor agreements could materially affect operations and financial condition.
• Investment in the Neptune Maritime Leasing (NML) business exposes the company to financial and counterparty risks, including interest rate risk and potential lessee defaults on bareboat charters.
• Difficulty attracting and retaining qualified, skilled crews or rising crew wages and other vessel operating costs could increase expenses or reduce fleet utilization.
• Unpredictable fuel (bunker) price fluctuations may adversely affect cash flows and liquidity, and vessels not equipped with scrubbers may become less competitive.
• Substantial capital expenditures are required to maintain and grow the fleet, which may reduce cash available for distribution to shareholders.
• The aging of the fleet (average age of 13.9 years for 79 containerships) may result in increased operating costs, longer dry-dockings, and reduced revenue.
• Intense competition from experienced companies, liner companies, state-sponsored entities, and financial organizations could lead to greater price competition for charters and acquisitions.
• Conducting substantial business in China exposes the company to inherent uncertainties in the Chinese legal system, potential litigation, and new regulations (e.g., tax for non-resident international transportation enterprises, U.S. Department of Defense list of Chinese military companies).
• High debt levels (approximately $1.5 billion outstanding as of December 31, 2025) and restrictive covenants in credit facilities may limit liquidity, expansion, and dividend payments, with a risk of default and foreclosure on vessels.
• Derivative contracts used to hedge interest rate and foreign currency exposure may not be effective, or counterparties may default, leading to financial losses or reductions in shareholders' equity.
• Fluctuations in foreign currency exchange rates, particularly between the U.S. dollar and the Euro, could negatively affect results of operations due to a substantial portion of expenses being incurred in non-USD currencies.
• Increased competition in technology and innovation could reduce charter hire income and the value of older, less efficient vessels.
• Extensive environmental and operational safety laws and regulations (IMO, EU ETS, FuelEU Maritime, OPA 90, CERCLA, CWA, CAA, BWM Convention, Hong Kong Convention) require significant expenditures for compliance and may lead to material liabilities or operational restrictions.
• Reliance on information systems makes the business vulnerable to cybersecurity breaches, system failures, and increased operating costs.
• The smuggling of drugs or other contraband onto vessels may lead to governmental claims, fines, or penalties.
• Increased inspection procedures, tighter import/export controls, and new security regulations could increase costs and disrupt business operations.
• Governments could requisition vessels during war or emergency, resulting in loss of earnings and potential breach of credit facility covenants.
• Acts of piracy and attacks on ocean-going vessels (e.g., in the Red Sea, Gulf of Aden) could adversely affect business, increase costs, and lead to vessel seizure or crew imprisonment.
• Insurance coverage may be insufficient to cover all losses, or insurers may be contractually or legally prohibited from honoring policies in sanctioned locations.
• Maritime claimants could arrest vessels for unsatisfied debts, interrupting cash flows and potentially causing defaults.
• Failure to comply with safety and other requirements imposed by classification societies could be costly and adversely affect business.
• The company's future success depends significantly on certain members of senior management, and their departure could have a material adverse effect.
• Affiliations of the chairman and chief executive officer with managers and other entities, and potential competition from Costamare Bulkers, could create conflicts of interest.
• As managers are privately held companies, there is little publicly available information about their financial strength, which could impact the company's operations.
• Being active in two lines of business (containerships and leasing) requires management to allocate significant attention and resources, and inefficient management could harm business results.
• Vessels calling at ports in countries subject to sanctions (e.g., Iran, Syria, Sudan) could lead to fines, trade restrictions, financing limitations, negative publicity, or insurance issues.
• Failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-bribery legislation could result in fines, criminal penalties, and reputational damage.
• As a Marshall Islands corporation, the company's shareholders may have fewer rights and protections compared to those under U.S. jurisdictions due to less developed corporate law and no bankruptcy act.
• It may be difficult or impossible for U.S. investors to enforce service of process and judgments against the company and its officers/directors due to foreign incorporation and residency.
• The price of the company's securities may be volatile due to various factors, including market fluctuations, operating results, and industry trends.
• Future sales of equity securities, including common and preferred stock, could dilute existing shareholders' ownership interests and potentially lower dividend amounts.
• The ability to pay dividends or redeem preferred stock is limited by cash flow, reserves, debt instrument restrictions, and Marshall Islands law.
• Compliance with public company regulations (SEC, NYSE, Sarbanes-Oxley, Dodd-Frank) incurs significant legal, accounting, and other expenses.
• Changes to the definition of 'foreign private issuer' (FPI) under U.S. securities laws could cause the company to lose its FPI status and become subject to increased regulatory and reporting burdens.
• As an FPI, the company is exempt from certain NYSE corporate governance standards, potentially offering fewer protections to shareholders compared to U.S. domestic companies.
• Anti-takeover provisions in organizational documents (blank check preferred stock, classified board, director removal for cause, advance notice requirements, shareholder rights plan) could make it difficult for shareholders to replace management or benefit from a change in control.
• The company may have to pay tax on U.S.-source income if it does not qualify for exemption under Section 883 of the Code, reducing earnings.
• If treated as a passive foreign investment company (PFIC), U.S. shareholders could face adverse U.S. Federal income tax consequences.
• Diverse lines of business may impact tax treatment in various countries, potentially resulting in higher tax expenses or effective tax rates.

Future Outlook

Clarksons Research estimates a 2.5% increase in seaborne container trade for 2026. The significant containership orderbook, representing 33.9% of the existing fleet capacity as of December 2025, could exert negative pressure on charter rates unless demand improves. The company expects to incur additional indebtedness for fleet growth and operational needs. The IMO net-zero framework (NZF) is under discussion for adoption in October 2026, which may require additional capital expenditures for compliance. The company intends to redeem Series F Preferred Stock once the risks associated with special Chinese port fees become obsolete.

Management Comments

• Management believes that having several management companies, both affiliates and third-party, provides a deep pool of operational management with market-specific experience and geographic flexibility.
• Management believes that operations of vessels are in substantial compliance with applicable environmental laws and regulations and that vessels have all material permits, licenses, certificates, and authorizations.
• Management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, but acknowledges such assumptions are highly subjective.
• Management believes that the most recent ten-year historical average rates, after eliminating outliers, provide a fair estimate for long-term forecasts of future charter rates.
• Management believes that the streamlining of crewing arrangements through managers ensures vessels are crewed with experienced personnel meeting international regulations.
• Management believes that the appointment of Blue Net allows the company to improve charter rates for containerships.
• Management believes that the heightened environmental, quality and security concerns of insurance underwriters, regulators and charterers will lead to additional compliance obligations.
• Management believes that the relevant companies are entitled to an exemption under Section 883 of the Internal Revenue Code of 1986, as amended, regarding U.S. source gross transportation income.
• Management does not expect to be classified as a PFIC for 2026 or subsequent years, based on current operations and law.
• Management does not intend to make decisions regarding vessel purchase/sale, financial instrument investment, or sale-leaseback business with the specific purpose of impacting PFIC likelihood.
• Management is not aware of any claims not covered by insurance or contingent liabilities that should be disclosed or for which a provision has not been established.
• Management concluded that, as of December 31, 2025, internal control over financial reporting was effective.

Industry Context

StockSavvy.ai notes that the container shipping industry remains cyclical and volatile, with charter rates influenced by supply and demand dynamics. The reported 4.5% growth in seaborne container trade in 2025, coupled with a 4.7% increase in TEU-miles due to Red Sea rerouting, indicates a resilient demand environment despite global uncertainties. However, the significant containership orderbook (33.9% of existing fleet capacity as of December 2025) poses a substantial supply-side risk, potentially exerting downward pressure on charter rates in the coming years, especially for larger vessels. The company's strategic focus on long-term fixed-rate charters and its expanding leasing business (NML) aims to mitigate this volatility, aligning with a broader industry trend of diversifying revenue streams and asset-light strategies among some players. The increasing regulatory burden from environmental standards (e.g., EU ETS, FuelEU Maritime, IMO GHG strategy) is a key industry driver, pushing operators towards more fuel-efficient and scrubber-equipped vessels, a trend Costamare is addressing with its newbuild program.

Comparison to Industry Standards

• The company's fleet utilization levels of 99.0% (2023), 99.8% (2024), and 99.6% (2025) are indicative of high operational efficiency, generally exceeding industry averages which can fluctuate more widely depending on market conditions and vessel types.
• The average age of the containership fleet (13.9 years as of February 24, 2026) is in line with many established global containership owners, balancing operational efficiency with capital expenditure for newbuilds. For example, some peers like Seaspan Corporation (part of Atlas Corp.) or Global Ship Lease also manage fleets with a mix of ages, often targeting a balance between older, fully depreciated vessels and modern, eco-friendly newbuilds.
• The company's strategy of deploying containerships under long-term, fixed-rate time charters with leading liner companies (A.P. Moller-Maersk, MSC, Evergreen, Hapag Lloyd, ZIM, COSCO) is a common practice among top-tier non-operating owners (NOOs) like Seaspan, which prioritize stable cash flows and reduced exposure to spot market volatility.
• The investment in Neptune Maritime Leasing (NML) to fund 52 shipping assets across diverse vessel types (dry bulk, tanker, offshore, container) represents a diversification strategy, similar to how some larger maritime groups or financial institutions engage in broader asset financing beyond their core shipping operations. This contrasts with pure-play containership owners who might focus solely on their core fleet.
• The containership orderbook representing 33.9% of the existing fleet capacity as of December 2025 is a significant figure, higher than the 27.0% a year prior, and the highest since 2011. This level of ordering is a major industry concern, indicating potential oversupply in the coming years, a trend that affects all market participants, including major liner companies and NOOs.
• The company's proactive approach to environmental compliance, with 15 existing containerships equipped with scrubbers and all 10 newbuilds to be scrubber-equipped, positions it favorably against competitors who may face higher fuel costs or retrofitting expenses under stricter MARPOL Annex VI and EU regulations.

Management Changes

Corporate Governance

Legal Proceedings

• Eight subsidiaries are engaged in litigation concerning the termination in 2022 of certain shipbuilding contracts due to the builder's failure to provide agreed refund guarantees. They are currently challenging a partial arbitral award that dismissed their loss of bargain claims.
• The company is involved in other legal proceedings and claims in the ordinary course of business, principally property damage and personal injury claims, which are expected to be covered by insurance, subject to customary deductibles.

Related Party Transactions

• **Spin-Off of Dry Bulk Business**: On May 6, 2025, the dry bulk business was spun off into Costamare Bulkers Holdings Limited. Costamare contributed $100 million in cash and prepaid $150.2 million in bank loans associated with the Costamare Bulkers business. The Separation and Distribution Agreement restricts Costamare from acquiring dry bulk vessels without first offering Costamare Bulkers the opportunity.
• **Management and Services Agreements**: Costamare Shipping (wholly owned by Chairman and CEO Konstantinos Konstantakopoulos) provides commercial, technical, and other services. Costamare Services (controlled by Chairman and CEO and a family member) provides chartering, sale and purchase, insurance, and administrative services. Navilands, Navilands (Shanghai), and Navilands Maritime (controlled by Chairman and CEO, with a non-independent board member as minority shareholder in Navilands and Navilands (Shanghai)) provide sub-management services. Blue Net and Blue Net Asia (50% owned by Chairman and CEO) provide charter brokerage services. These agreements were not negotiated at arm's length.
• **Management Fees**: Costamare Shipping and Costamare Services charged aggregate fees of $28.9 million in 2025 ($28.6 million in 2024, $27.5 million in 2023), including amounts paid to third-party managers. Voyage expenses related parties were $11.3 million in 2025 ($12.2 million in 2024, $11.9 million in 2023), including 1.25% fees on gross revenues and charter brokerage fees. General and administrative expenses non-cash component included $7.0 million in 2025 ($8.4 million in 2024, $5.8 million in 2023) representing the value of shares issued to Costamare Services.
• **Charges to Privately Owned Vessels**: Costamare Shipping charged $1.9 million in 2025 ($1.7 million in 2024) to vessels privately owned or controlled by the Chairman and CEO.
• **Navilands Maritime Representation Agreement**: On December 30, 2025, Navilands Maritime, controlled by the Chairman and CEO, entered into a Representation Agreement to provide purchasing and support services for a monthly fee and ad hoc fees.
• **Neptune Management Agreement**: Neptune Global Financing Limited (51% owned by Chairman and CEO) provides administrative, strategic, accounting, tax, and insurance services to NML. Fees charged were $3.5 million in 2025 ($3.3 million in 2024, $2.0 million in 2023).
• **NML Debt Financing to Joint Venture**: NML has committed to provide up to $266.5 million in financing to a joint venture and related entities (for 8 vessels) where the Chairman and CEO and a family member indirectly hold approximately 17% equity each.
• **Restrictive Covenant Agreements**: Amended and restated on June 26, 2025, with Konstantinos Konstantakopoulos and Konstantinos Zacharatos, restricting their competitive activities in containership ownership/business, with exceptions for existing interests and a priority chartering obligation for one vessel majority-owned by Mr. Konstantakopoulos.
• **Issuance of Series F Preferred Stock**: On October 15, 2025, Konstantinos Konstantakopoulos purchased 1,200 shares of Series F Preferred Stock for $1,200, granting him 50,000 votes per share, effectively increasing the Konstantakopoulos family's voting power to 75.7%.
• **Other Vessel Ownership**: The Chairman and CEO privately owns one containership and holds passive interests in companies owning five other containerships (comparable to 22 of Costamare's vessels). One non-independent board member also holds a minority interest in a company owning a containership. These vessels may compete with Costamare's fleet.
• **Greek Institute of Maritime Education (GIME)**: Konstantinos Konstantakopoulos owns 47.5% of GIME. The company agreed to offer grants up to $2,000 per seafarer (totaling $150,000 in 2026) for degrees/courses from Business College of Athens, which GIME cooperates with. GIME also provides a 25% discount to the company's seafarers.

Stakeholder Impact

• **Shareholders**: Common shareholders face potential dilution from future equity issuances and the concentrated voting power of the Konstantakopoulos family (75.7% with Series F Preferred Stock). Preferred shareholders have limited voting rights and their dividends are subordinated to debt. The spin-off of the dry bulk business aims to create more focused entities, potentially benefiting shareholders of both companies.
• **Employees/Seafarers**: The company's managers are responsible for recruiting and training crews, and the company offers grants for maritime education through GIME, potentially benefiting seafarers' professional development. However, rising crew wages are a cost factor.
• **Customers (Liner Companies)**: The company aims for long-term, fixed-rate charters with leading liner companies, providing stable transportation services. However, weakness in demand or increased operating costs for liner companies could lead to financial pressure and renegotiations.
• **Suppliers/Creditors**: The company's substantial debt levels and restrictive covenants impact its financial flexibility, which is relevant for creditors. Suppliers of goods and services face counterparty risk.
• **Regulatory Bodies**: The company is subject to extensive international and national environmental and safety regulations, requiring significant compliance efforts and expenditures.

Next Steps

• Deliver 10 newbuild containerships progressively between Q2 2027 and Q4 2028.
• Negotiate financing for the remaining four newbuild vessels.
• Continue to fund 52 shipping assets through Neptune Maritime Leasing (NML).
• Monitor and evaluate new legislation and guidance regarding the implementation of the Global Anti-Base Erosion Rules (GloBE Rules).
• Comply with Section 16(a) of the Securities Exchange Act of 1934 by March 18, 2026, for directors and officers.
• Participate in further discussions and possible adoption of the IMO net-zero framework (NZF) in October 2026.
• Redeem Series F Preferred Stock once risks associated with special Chinese port fees become obsolete.
• Dry-dock 20 containerships in 2026 and 8 vessels in 2027.
• Annually adjust management fees to reflect Euro/U.S. dollar strengthening and/or material unforeseen cost increases.
• Assess the impact of ASU 2024-03 (Income Statement Expense Disaggregation Disclosures) and ASU 2025-05 (Financial Instruments-Credit Losses) on consolidated financial statements.
• Assess the expected impact of adopting ASU 2025-09 (Derivatives and Hedging: Hedge Accounting Improvements).

Key Dates

Recommendation

The company demonstrates a stable core containership business with a strong contracted revenue backlog and high fleet utilization. The strategic spin-off of the dry bulk business and the growth in the Neptune Maritime Leasing segment indicate a proactive approach to portfolio management and diversification. However, the slight decrease in net income from continuing operations, the significant increase in voyage expenses (even if reimbursed), and the substantial capital commitments for newbuilds and NML investments introduce elements of uncertainty. The concentrated voting power of the Konstantakopoulos family and the ongoing litigation regarding shipbuilding contracts are also factors to consider. Given the mixed financial performance, strategic shifts, and inherent industry risks, a 'hold' recommendation is appropriate for seasoned investors to monitor the execution of the new strategy and the impact of market dynamics.

Keywords

Containerships, Shipping, Maritime Leasing, SEC Filing, Financial Results, Fleet Management, Time Charters, Neptune Maritime Leasing, Dry Bulk Spin-Off, Corporate Governance, Risk Factors, Environmental Regulations, Capital Expenditures, Debt Financing, Dividend Policy, Market Risk, Geopolitical Risk, Cybersecurity, Marshall Islands, NYSE