Euroseas in Pursuit of Younger Tonnage

Aristides Pittas, Chairman and CEO of Euroseas; Image Courtesy: Nasdaq

Euroseas, owner and operator of drybulk and container carrier vessels, is looking to avail of the low ship prices to replace some of its older vessels with younger tonnage.

These in particular relate to continerships as prices for vessels older than 15-years have been squeezed around scrap prices.

“In that context, we sold in May our vessel M/V Captain Costas, one of our eldest containerships; we intend to replace it with a vessel several years younger and looking for opportunities to that respect,Aristides Pittas, Chairman and CEO of Euroseas said.

“We have been focusing in managing our cash flow and liquidity due to the dire markets but at the same time trying to take advantage of this very market to renew our fleet most optimally.”

In February, Euroseas refinanced part of its indebtedness extending the maturity and reducing debt repayments. The ship owner added that its efforts in this front are continuing and promising.

The company managed to reduce its net loss from USD 5.4 million in the first quarter of 2015 to USD 2.8 million in Q1, 2016. Net loss attributable to common shareholders of USD 3.3 million also down from USD 5.8 million.

Euroseas’ adjusted EBITDA was USD 0.1 million versus USD 1.8 million in the first quarter of last year, with total net revenues reaching USD 6.5 million.

Also, in February, the company took delivery of its first Kamsarmax newbuilding, M/V Xenia, which commenced a four-year charter at a daily rate significantly above the present market levels. Two Ultramaxes remain to be delivered in 2016 according to the schedule provided by the yard, with the remaining third vessel, a Kamsarmax, slated for delivery in 2018.

“The beginning of 2016 found both the drybulk and containership markets at historical low levels with drybulk rates in particular staying below operating cost levels. While the drybulk market improved in April, it has given up some of the gains in May with rates currently hovering around operating cost levels. Containership rates for our vessels are just above operating cost levels having not recovered after the Chinese New Year as it was expected,” Pittas noted.

“In the absence of a meaningful recovery of demand, which depends mainly on developments in China for the drybulk market and Europe for the containership one, we expect both segments to struggle to find a clear direction in the remaining of the year,” he went on to say.

An average of 11.54 vessels were owned and operated during the first quarter of 2016 earning an average time charter equivalent rate of USD 6,565 per day.

As of March 31, 2016, the company’s outstanding debt is about USD 55 million versus restricted and unrestricted cash of about USD 12.6 million.

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