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Euroseas reports 4Q losses

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Dry Bulk,


Euroseas Ltd. (NASDAQ: ESEA) has announced its results for the three month period and full year ended 31 December 2016.

4Q16 highlights:

  • Total net revenues of US$7.3 million. Net loss attributable to common shareholders of US$18.1 million or US$2.17 loss per share basic and diluted. This loss includes, amongst other items, a US$0.4 million of dividend on Series B Preferred Shares, a US$5.9 million loss on write-down of M/V Eleni which was held for sale, US$3.8 million loss on expected termination of our kamsarmax newbuilding contract and a US$4.7 million impairment loss in our ‘Other investment’ and ‘Investment in joint venture’ (Euromar investments). Adjusted net loss attributable to common shareholders1 for the period was US$3.7 million or US$0.45 loss per share basic and diluted.
  • Adjusted EBITDA1 was US$(0.4) million.
  • An average of 12.1 vessels were owned and operated during the fourth quarter of 2016 earning an average time charter equivalent rate of US$7666 per day.
  • The company declared its twelfth 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.

FY16 highlights:

  • Total net revenues of US$28.4 million. Net loss attributable to common shareholders of US$45.9 million or US$5.63 loss per share basic and diluted. This loss includes, among other items, a US$1.7 million of dividend on Series B Preferred Shares, a US$5.9 million loss on write-down of M/V Eleni which was held for sale, US$7.1 million loss on termination of our ultramax newbuilding contracts and on expected termination of our kamsarmax newbuilding contract and a US$18.7 million impairment loss in our Euromar investments. Adjusted net loss attributable to common shareholders1 for the period was US$14.2 million or US$1.74 loss per share basic and diluted.
  • Adjusted EBITDA1 was US$(1.1) million.
  • An average of 11.52 vessels were owned and operated during the twelve months of 2016 earning an average time charter equivalent rate of US$7331 per day.

As previously announced, the company:

  • Took delivery of its ultramax newbuilding, M/V Alexandros P, and the panamax vessel, M/V Tasos in January 2017; also, completed the sale of M/V Eleni P and, in February 2017, sold M/V RT Dagr.
  • Drew a US$10.9 million loan collateralised by its new vessel, M/V Alexandros P.
  • Sold to date approximately 1.28 million shares raising about US$2.7 million of net proceeds through its at-the-market (ATM) stock offering.
  • Aristides Pittas, Chairman and CEO of Euroseas, commented:

    "During the last quarter of 2016 and the month of January of 2017, we were able to transform the company by resolving its liquidity needs through a combination of equity raisings (through our at-the-market equity programme, the contribution of a vessel that was scrapped and a private placement of our common stock), debt rescheduling and new financings. In addition, we added a further dry bulk newbuilding to our fleet and replaced certain older vessels with slightly younger ones. We believe all of these steps help position Euroseas to benefit from a potential market recovery. Our fleet now includes two dry bulk newbuilding vessels; at the same time, we have no remaining capital commitments since we can opt out of our kamsarmax newbuilding contract by end of March 2017. We also face a low loan repayment burden in 2017."

    "Looking forward, we could see a gradual improvement in the dry bulk market if China's commodity appetite continues as supply pressures are expected to subside in the second half of 2017. We are hopeful to also see an improvement in the containership rates on the back of supply correction (increased scrapping and more slippage in new deliveries)."

    "We now have the financial capacity to pursue selected acquisitions and take advantage of opportunities to invest while the prices of vessels are still relatively low. And we hope we will be able to continue acting as a platform to consolidate other ownership interests using our stock to pay for acquisitions such as the recent acquisition of M/V RT Dagr."

    Tasos Aslidis, Chief Financial Officer of Euroseas, commented:

    "The operating results of the fourth quarter of 2016 reflect the continuing low level of charter rates in the containership market and the modestly improved (especially during November 2016) dry bulk market during the quarter. On average during the fourth quarter of 2016, our vessels earned 0.7% per day per vessel less than in the fourth quarter of 2015."

    "Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding dry docking costs, decreased approximately 3.8% during the fourth quarter of 2016 compared to the same quarter of last year, while for the full year 2016 the decrease was approximately 3.1%. As always, we want to emphasise that cost control remains a key component of our strategy, especially at depressed markets like at present."

    "As of 31 December, 2016, our outstanding debt was US$52.4 million versus restricted and unrestricted cash of approximately US$9.3 million. We complied with all our debt covenants as of 31 December 2016."

    Read the article online at: https://www.drybulkmagazine.com/dry-bulk/17022017/euroseas-reports-4q-losses/


     

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