Pittas looks to “further develop Euroseas”

Euroseas_Pittas

Euroseas, an owner and operator of container carrier vessels and provider of seaborne transportation for containerized cargoes, announced its results for the three-month period ended March 31, 2019.

The Spin-off
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 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.

First Quarter 2019 Financial Highlights:

  • Total net revenues of $8.34 million. Net loss of $0.02 million; net loss attributable to common shareholders (after a $0.5 million of dividend on Series B Preferred Shares) of $0.49 million or $0.04 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period remained unchanged compared to net loss attributable to common shareholders.
  • Adjusted EBITDA1 was $1.44 million.
  • An average of 11.0 vessels were owned and operated during the first quarter of 2019 earning an average time charter equivalent rate of $9,088 per day.
  • The Company declared its twenty-first in-kind dividend of $0.08 million by issuing additional Series B Preferred Shares. The Company also declared a dividend of $0.39 million to be paid in cash, on its Series B Preferred Shares.

1 Adjusted EBITDA, Adjusted net loss and Adjusted loss per share are not recognized measurements under US GAAP (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 GAAP.

Aristides Pittas, Chairman and CEO of Euroseas commented: “The first quarter of 2019 reflected the weakening of the containership charter rates that started during the last months of 2018. However, during April and May rates improved alongside with the level of inquiries for charters. In this background, all our vessels have largely remained employed having faced little commercial offhire time in 2019. Looking forward, we believe that a supply-demand balance favoring demand will further develop in 2019 and 2020 due to historically low orderbook and effects on the fleet availability of the requirement to comply with low sulfur regulation in 2020 onwards. Subject to uncertainties related to the trade tensions between US and China that have recently taken again center stage, we expect to see an improving market for our ships.

On the investment front, we have strategically positioned Euroseas as the only publicly listed feeder containership company. As we have previously stated, we plan to use this public platform as a means of consolidation of other feeder fleets. At the same time, we are in the process of evaluating both investment and refinancing opportunities that we believe will further develop Euroseas into a larger and more attractive potential partner to access the public markets.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented: “The results of the first quarter of 2019 reflect the better charter rates in the market as compared to the same period of 2018. In addition to our net revenues which increased marginally despite the fact that we operate on average 11.0 vessels during the first quarter of 2019 versus 12.0 vessels during the same period of last year. We also incurred $0.8 million lower vessel operating expenses. On a per-vessel-per-day basis, the sum of vessel operating expenses, management fees and general and administrative expenses decreased by 8.6% during the first quarter of 2019 as compared to the same period in 2018 which was primarily attributable to the different mix of vessels we had in 2018 and costs related to the spin-off of our drybulk fleet incurred in 2018. 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. During the first quarter of 2019, one of our vessels completed its special survey (the vessel started its drydocking in the fourth quarter of 2018) with a total cost of $0.8 million not including time lost due to drydocking.

“Finally, as of March 31, 2019, our outstanding debt (excluding the unamortized loan fees) is about $36.2 million versus restricted and unrestricted cash of about $10.4 million. We also have in place a revolving debt facility with about $15m capacity with one of our banks which we can use to finance new acquisitions or refinance other vessels from our fleet.“
                                    
First Quarter 2019 Results:
For the first quarter of 2019, the Company reported total net revenues of $8.34 million representing a marginal increase over total net revenues of $8.31 million during the first quarter of 2018. The Company reported a net loss for the period of $0.02 million and a net loss attributable to common shareholders of $0.49 million, as compared to a net loss of $1.42 million and a net loss attributable to common shareholders of $1.88 million respectively for the first quarter of 2018. Depreciation expense for the first quarter of 2019 amounts to $0.80 million compared to $0.87 million for the same period of 2018. On average, 11.0 vessels were owned and operated during the first quarter of 2019 earning an average time charter equivalent rate of $9,088 per day compared to 12.0 vessels in the same period of 2018 earning on average $8,441 per day. In the first quarter of 2019 one vessel completed its special survey, which commenced in December 2018, with a total cost of $0.8 million. In the same period of 2018 one vessel completed its special survey with a cost of $0.7 million.

Adjusted EBITDA for the first quarter of 2019 was $1.44 million, compared to $0.03 million achieved for the first quarter of 2018. Please see below for Adjusted EBITDA reconciliation to net loss.

Basic and diluted loss per share for the first quarter of 2019 was $0.04, calculated on 12,340,060 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $0.17 for the first quarter of 2018, calculated on 11,133,764 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss for the quarter of unrealized gain on derivatives, the adjusted loss per share for the quarter ended March 31, 2019 would have remained unchanged compared to net loss attributable to common shareholders. Usually, security analysts do not include the above item in their published estimates of earnings per share.

 

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