Euroseas issues 2Q18 results

The spin-off

On 30 May 2018, the company spun-off its dry bulk fleet (excluding M/V Monica P, a handymax dry bulk carrier, which was agreed to be sold) into EuroDry Ltd., a separate publicly listed company also listed on NASDAQ Capital Market. Shareholders of the company received one EuroDry Ltd. share for every five shares of the company they held. As a result of the spin-off and the subsequent sale of M/V Monica P, the company has become a pure containership company and the only publicly listed company concentrating on the feeder containership sector.

The results refer to Euroseas Ltd. ‘continuing operations’ excluding the contribution from Euroseas Ltd.’s vessels spun-off into EuroDry Ltd. in May 2018 (‘discontinued operations’) unless otherwise noted; historical comparative periods have been adjusted accordingly.

Second quarter 2018 highlights

Total net revenues of US$9.8 million. Net income of US$2.1 million and net income attributable to common shareholders (after a US$0.39 million dividend on Series B preferred shares) of US$1.8 million or US$0.16 earnings per share basic and diluted. Adjusted net income attributable to common shareholders for the period was $0.5 million or $0.04 per share basic and diluted.

Adjusted EBITDA was US$2.4 million.

An average of 11.95 vessels were owned and operated during the second quarter of 2018 earning an average time charter equivalent rate of US$10 028/d.

The company declared its eighteenth dividend of US$0.4 million on its Series B preferred shares; the dividend was paid in-kind by issuing additional Series B preferred shares. On 30 May 2018 Euroseas redeemed 50% of its Series B preferred stock using shares of EuroDry Ltd.’s Series B preferred stock alongside the spin-off of the latter. The dividend paid for the second quarter reflects dividend on the all the shares of its Series B preferred stock up to 30 May 2018 and on the shares that remained after the redemption since 30 May 2018 to the end of the quarter.

First half 2018 highlights

Total net revenues of US$18.1 million. Net income of US$0.7 million; net loss attributable to common shareholders (after a US$0.85 million of dividend on Series B preferred shares) of US$0.1 million or US$0.01 loss per share basic and diluted. Adjusted net loss per share attributable to common shareholders for the period was US$1.4 million or US$0.13 per share basic and diluted.

Adjusted EBITDA was US$2.4 million.

An average of 11.97 vessels were owned and operated during the first half of 2018 earning an average time charter equivalent rate of US$9228/d.

Aristides Pittas, Chairman and CEO of Euroseas commented: “In the second quarter of 2018, we achieved a significant milestone in executing our strategy by completing the spin-off of six of our dry bulk vessels into EuroDry Ltd., a shipping company also listed on NASDAQ. We are pleased to see that our shareholders benefited by having the market value of their combined EuroDry Ltd. and Euroseas holdings increase by more than 40% as a result of the spin-off. Separately, we sold the only remaining dry bulk vessel we owned and, thus, Euroseas has become the only publicly listed company focused on the feeder containership sector.

“During the second quarter, the containership market continued its recovery. Although charter rates peaked in early May and have softened since, they remain at levels noticeably higher than their respective periods of last year. Expectations for continued economic growth across many developed and developing countries and low levels of orderbook support our guarded optimism that charter rates, especially for feeder vessels, will further improve in the latter part of the year and in 2019, provided that US induced trade wars do not escalate significantly. Thus, we have been fixing our vessels that open up for recharter for periods between 3 - 12 months at profitable levels but also aiming to have staggered renewal periods to be able to participate further in the strengthening market which we anticipate.

“We remain focused at growing Euroseas to a significant publicly listed consolidating platform for the feeder containership sector. We continuously evaluate investment opportunities of either individual vessels or fleets that could be accretive to our shareholders.”

Tasos Aslidis, Chief Financial Officer of Euroseas, commented: “The results of the second quarter of 2018 reflect the improving levels of the containership markets compared to the same period of 2017.

“Adjusted EBITDA during the second quarter of 2018 was US$2.4 million vs US$0.6 million in the second quarter of last year. As of 30 June 2018, our outstanding debt (excluding the unamortised loan fees) was US$32.7 million versus restricted and unrestricted cash of US$13.6 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about US$11.8 million (excluding the unamortised loan fees) of which US$7.9 million is a balloon payment for one of our loans which we expect to be able to refinance.

“Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding dry docking costs, averaged US$6278 per vessel per day during the second quarter of 2018 as compared to US$6220 per vessel per day for the same quarter of last year, and US$6543 per vessel per day for the first half of 2018 as compared to US$6055 per vessel per day for the same period of 2017, reflecting a 0.9% and 6.4% increase, respectively, which is attributed to the different composition our fleet during the periods. As always, we want to emphasise that cost control remains a key component of our strategy. We are in compliance with all our loan covenants.”

View the full financial results here.

Read the article online at: https://www.drybulkmagazine.com/dry-bulk/13082018/euroseas-issues-2q18-results/