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Euroseas Ltd. Says Feeder And Intermediate Containership Markets Have Increased Further In The Third Quarter

28 Νοεμβρίου 2019.

aristidpittas17Euroseas Ltd., an owner and operator of container carrier vessels and provider of seaborne transportation for containerized cargoes, announced its results for the three and nine month period ended September 30, 2019.

Third Quarter 2019 Highlights:

Total net revenues of $10.3 million. Net loss of $0.2 million; net loss attributable to common shareholders (after a $0.2 million dividend on Series B Preferred Shares) of $0.3 million or $0.01 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $0.5 million or $0.021 per share basic and diluted.

Adjusted EBITDA1 was $1.6 million.

An average of 13.5 vessels were owned and operated during the third quarter of 2019 earning an average time charter equivalent rate of $8,554 per day.

During the third quarter, the Company took delivery of four feeder containerships, owned by affiliates of the Pittas family controlled by the Company’s CEO, agreed to be acquired in May 2019. The consideration for the acquisition included a cash payment of $15 million and the issuance of approximately 22.5 million shares of common stock to the sellers at a share price of $0.71. The four vessels, one with capacity 3,100 teu vessel built in 2007, two with capacity 1,740 teu vessels built in 2005 and 2007 and one with capacity 2008 teu vessel built in 1998, represent a significant expansion of Euroseas’ fleet both in terms of units and value.

Finally, the Company declared its third cash dividend of $0.16 million on its Series B Preferred Shares.

Other Developments:

As previously announced, the Company acquired, and took delivery, from companies controlled by Synergy Holdings Limited (from November 18, 2019 to November 21, 2019), for approximately $40 million, four container carrier vessels of intermediate size of 4,253 teu, all built in South Korea, three in 2009 and the other in 2008.

The acquisition of the four vessels was financed by bank debt of $32 million, existing funds of the Company and a private placement of $6 million at a share price of $0.71 subscribed equally by an entity affiliated to the Company’s CEO and an entity controlled by the seller of the four vessels.

Nine Months 2019 Highlights:

Total net revenues of $26.7 million. Net loss of $0.9 million; net loss attributable to common shareholders (after a $1.1 million dividend on Series B Preferred Shares and a $0.5 million preferred deemed dividend arising out of the redemption of approximately $11.7 million of Series B Preferred Shares in the second quarter of 2019) of $2.5 million or $0.15 loss per share basic and diluted. Adjusted net loss per share attributable to common shareholders1 for the period was $2.8 million or $0.161 per share basic and diluted.

Adjusted EBITDA1 was $4.1 million.

An average of 11.83 vessels were owned and operated during the first nine months of 2019 earning an average time charter equivalent rate of $8,638 per day.

Aristides Pittas, Chairman and CEO of Euroseas commented:

“The feeder and intermediate containership markets have increased further in the third quarter as compared to the first half of 2019, while for the last several weeks have largely maintained the levels reached during the month of September. In August 2019, we added four feeder containerships to our fleet, two built in 2007, one in 2005 and one in 1998, while last week, we added four additional vessels of intermediate size (“panamax”) built in 2008 and 2009 increasing our fleet to 19 vessels. Thus, over the last four months our fleet has increased by more than 70% in terms of units and about 100% in terms of carrying capacity.

The expansion of our fleet since August, paid partly in shares, has validated our strategy of pursuing the consolidation of the feeder and intermediate containership sectors in our publicly listed platform. We expect to continue to build on this growth path at a time during which the market fundamentals on the supply side indicate a small – by historical standards – fleet growth over the next couple of years. We believe that containerized trade growth will positively contribute to the level of rates and values over the next couple of years assuming that trade tensions further subside and economic growth returns to 2018 levels as expected by the IMF.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented:

“The results of the third quarter of 2019 reflect the decreased levels of the containership market compared to the same period of 2018. At the same time, total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, remained at the same levels for the nine month period as compared to the same period of last year and increased by about 6.6% for the three month period ended September 30, 2019 over the same period of 2018.

Adjusted EBITDA during the third quarter of 2019 was $1.6 million versus $0.6 million in the third quarter of last year, and it reached $4.1 million versus $3.1 million for the respective nine-month periods of 2019 and 2018.

As of September 30, 2019, our outstanding debt (excluding the unamortized loan fees) was $57.6 million versus restricted and unrestricted cash of $7.4 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $9.7 million (excluding the unamortized loan fees).”

Presentation of results due to the spin-off of May 2018

On May 30, 2018, the Company spun-off its drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier, which was agreed to be sold) into EuroDry Ltd., a separate publicly listed company also listed on the 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 below refer to Euroseas Ltd. “continuing operations” excluding the contribution from Euroseas Ltd. of vessels spun-off into EuroDry Ltd. in May 2018 (“discontinued operations”) from historical comparative periods which have been adjusted accordingly.

Third Quarter 2019 Results:

For the third quarter of 2019, the Company reported total net revenues of $10.3 million representing a 23.4% increase over total net revenues of $8.3 million during the third quarter of 2018 which was the result of the increased average number of vessels operating in the third quarter of 2019 partly offset by the decrease in the average time charter equivalent rate our vessels earned in the third quarter of 2019 compared to the corresponding period of 2018. The Company reported net loss for the period of $0.2 million and a net loss attributable to common shareholders of $0.3 million, as compared to a net loss of $0.9 million and a net loss attributable to common shareholders of $1.1 million respectively, for the third quarter of 2018. The results for the third quarter of 2019 include a $0.2 million amortization of below market time charters acquired. Drydocking expenses amounted to $0.4 million during the third quarter of 2019 comprising the drydocking cost of one vessel that entered into drydocking in the third quarter of 2019 and completed its special survey in the fourth quarter of 2019. Depreciation expense for the third quarter of 2019 was $1.1 million, higher compared to $0.8 million for the same period of 2018 due to the increased number of vessels operated by the Company.

Vessel operating expenses for the same period of 2019 amounted to $6.3 million as compared to $4.6 million for the same period of 2018. The increased amount is mainly due to the higher number of vessels owned and operated in the three months of 2019 compared to the same period of 2018. Additionally some of our vessels incurred unexpected spare parts maintenance costs in the third quarter of 2019 compared to the same period of 2018.

On average, 13.5 vessels were owned and operated during the third quarter of 2019 earning an average time charter equivalent rate of $8,554 per day compared to 11.00 vessels in the same period of 2018 earning on average $9,704 per day.

Adjusted EBITDA1 for the third quarter of 2019 was $1.6 million compared to $0.6 million achieved during the third quarter of 2018.

Basic and diluted loss per share attributable to common shareholders for the third quarter of 2019 was $0.01 calculated on 26,268,409 basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.10 for the third quarter of 2018, calculated on 11,183,899 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss attributable to common shareholders for the quarter of the amortization of below market time charters acquired and of the unrealized gain on derivative, the adjusted loss attributable to common shareholders for the quarter ended September 30, 2019 would have been $0.02 per share basic and diluted compared to an adjusted loss of $0.10 per share basic and diluted for the quarter ended September 30, 2018. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Full Report: Euroseas Ltd.

 

 

 

 

 

 

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