Euroseas, an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced its results for the three month period ended March 31, 2017.
First Quarter 2017 Highlights:
- Total net revenues of $8.3 million. Net loss of $2.2 million; net loss attributable to common shareholders (after a $0.4 million of dividend on Series B Preferred Shares) of $2.6 million or $0.24 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $3.1 million or $0.29 loss per share basic and diluted.
- Adjusted EBITDA(1) was $0.2 million.
- An average of 13.38 vessels were owned and operated during the first quarter of 2017 earning an average time charter equivalent rate of $7,313 per day.
- The Company declared its thirteenth dividend of $0.4 million on its Series B Preferred shares; the dividend was paid in-kind by issuing additional Series B Preferred Shares.
The Company also announced yesterday the resignation of Mr. George Skarvelis as director of the Company for personal reasons. Mr. Skarvelis served as a director since 2005 and the Company would like to thank him for his contributions during his tenure.
Aristides Pittas, Chairman and CEO of Euroseas commented: “The beginning of 2017 found both the drybulk and containership markets recovering from the historical low levels observed during 2016. The drybulk market improved rapidly during the last two months of 2016 and throughout the first quarter, although it has recently lost some of the gains achieved. The containership market improved more gradually starting in February 2017, and has maintained its level, still low compared to historical standards, despite a slowdown in chartering activity lately. The reduced levels of orderbook for both sectors as compared to the recent past as well as the strengthening of world economic growth are giving us hope that the rebound will continue even at a modest pace.
“Our fleet should be able to take full advantage of such a rebound as during the last quarter of 2016 and the first quarter of 2017 we have generally been employing our vessels in short term charters and have further renewed our drybulk fleet, which now includes two newbuild vessels and four well-maintained Japanese built secondhand ones. In addition to the improving market prospects, our strengthened balance sheet, as a result of raising funds via both private placements and our at-the-market offering, has given us the confidence to continue the construction of our second Kamsarmax vessel due to be delivered by June 2018 as we announced last month.
“We continue looking for opportunities to expand our fleet with well-priced well-maintained vessels. We believe that a company like Euroseas with access to the public markets and a cost-effective operating platform provides an ideal “home” for other small or large private fleets to pursue capital raising options and offer their shareholders additional exit options. We completed such a transaction in which we acquired a vessel for shares at the end of 2016 and we continue exploring similar opportunities as we believe our shareholders will be able to achieve significant value gains.”
1 Adjusted EBITDA, Adjusted net loss and Adjusted loss per share are not recognized measurements under GAAP. Refer to a subsequent section of the Press Release for the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.
Tasos Aslidis, Chief Financial Officer of Euroseas commented: “The results of the first quarter of 2017 reflect the improved rates most of our vessels earned as a result of the recovering state of the drybulk and container markets. Comparing our results for the first quarter of 2017 with the same period of 2016, our net revenues increased by about $1.7 million but we incurred $0.8 million higher voyage expenses. Operating expenses, including management fees and general and administrative expenses increased by approximately $0.5 million as compared to the first quarter of 2016. This was mainly due to the operation of 13.38 vessels during the first quarter of 2017 versus 11.54 vessels during the same period of last year; on a per-vessel-per-day basis, operating expenses, including management fees and general and administrative expenses declined by 7.4% during the first quarter of 2017 as compared to the same period in 2016. We believe that we continue to maintain one of the lowest operating cost structures amongst the public shipping companies which is one of our competitive advantages.
“Adjusted EBITDA during the first quarter of 2017 was $0.2 million versus $(0.1) million in the first quarter of last year. Finally, as of March 31, 2017, our outstanding debt (excluding the unamortized loan fees) is about $60.3 million versus restricted and unrestricted cash of about $18.4 million.”
First Quarter 2017 Results:
For the first quarter of 2017, the Company reported total net revenues of $8.3 million representing a 26.6% increase over total net revenues of $6.5 million during the first quarter of 2016. The Company reported a net loss for the period of $2.2 million and a net loss attributable to common shareholders of $2.6 million, as compared to a net loss of $2.8 million and a net loss attributable to common shareholders of $3.3 million respectively for the first quarter of 2016. The results for the first quarter of 2017 include a $0.5 million of gain on sale of vessel. Depreciation expense for the first quarter of 2017 amounts to $2.1 million remaining unchanged compared to the same period of 2016. On average, 13.38 vessels were owned and operated during the first quarter of 2017 earning an average time charter equivalent rate of $7,313 per day compared to 11.54 vessels in the same period of 2016 earning on average $6,565 per day.
Adjusted EBITDA for the first quarter of 2017 was $0.2 million up from $(0.1) million achieved during the first quarter of 2016. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.
Basic and diluted loss per share for the first quarter of 2017 was $0.24, calculated on 10,999,554 weighted average number of shares outstanding compared to basic and diluted loss per share of $0.40 for the first quarter of 2016, calculated on 8,104,860 weighted average number of shares outstanding.
Excluding the effect on the loss for the quarter of the gain on sale of vessel, the unrealized gain on derivatives and the realized loss on derivatives the adjusted loss per share for the quarter ended March 31, 2017 would have been $0.29 per share basic and diluted, compared to the loss, for the quarter ended March 31, 2016 of $0.38 per share basic and diluted. Usually, security analysts do not include the above items in their published estimates of earnings per share.