Euroseas announced its results for the three-month period and full year ended December 31, 2022.
Fourth Quarter 2022 Financial Highlights:
- Total net revenues of $42.9 million.
- Net income and net income attributable to common shareholders of $20.3 million or $2.87 and $2.86 earnings per share basic and diluted, respectively.
- Adjusted net income attributable to common shareholders1 for the period was $17.7 million or $2.50 per share basic and diluted.
- Adjusted EBITDA1 was $22.9 million.
- An average of 18.0 vessels were owned and operated during the fourth quarter of 2022 earning an average time charter equivalent rate of $29,399 per day. Refer to a subsequent section of the Press Release for the definition and method of calculation of time charter equivalent rate.
- Declared a quarterly dividend of $0.50 per share for the fourth quarter of 2022 payable on or about March 16, 2023 to shareholders of record on March 9, 2023 as part of the Company’s common stock dividend plan.
- As of February 14, 2023 we had repurchased 251,685 of our common stock in the open market for a total of about $5.3 million, under our share repurchase plan of up to $20 million announced in May 2022.
- On December 29, 2022 we announced the sale of M/V Akinada Bridge, a 5,610 teu intermediate containership vessel built in 2001, at a gross price of $14.2 million. The vessel was delivered to its buyers on January 9, 2023.
Full Year 2022 Highlights:
- Total net revenues of $182.7 million.
- Net income and net income attributable to common shareholders of $106.2 million or $14.79 and $14.78 earnings per share basic and diluted, respectively.
- Adjusted net income attributable to common shareholders1 for the period was $95.0 million or $13.23 and $13.21 per share basic and diluted, respectively.
- Adjusted EBITDA1 was $114.4 million.
- An average of 17.12 vessels were owned and operated during 2022, earning an average time charter equivalent rate of $31,964 per day. Refer to a subsequent section of the Press Release for the definition and method of calculation of time charter equivalent rate.
Recent developments
- Continental Shipping Line, Singapore (CSL), the charterers of M/V Aegean Express, in January 2023 repudiated its charter as the vessel was completing its scheduled drydock. The Company is pursuing legal action and entered into negotiations seeking a replacement charter.
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1 Adjusted EBITDA, Adjusted net income and Adjusted earnings per share are not recognized measurements under U.S. GAAP (GAAP) and should not be used in isolation or as a substitute for Euroseas financial results presented in accordance with 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:
“During the fourth quarter of 2022, containership markets dropped more than 80% from their end-September levels as a result of reduced demand for trade and the reversal of port congestion and other transportation system inefficiencies. In early 2023, market rates gave up a bit more ground and they seem to have stabilized, for now, at levels still better than their levels before the COVID pandemic. However, with a large orderbook, at 29% of the existing fleet looming, we expect the markets to remain at low levels over the next couple of years. Fortunately for Euroseas, the majority of our vessels are fixed through 2024. Also most of the orderbook is for larger vessels not competing directly with our ships. The orderbook for the feeder and intermediate size classes which we compete in is notably smaller, at around 15%, which coupled with the higher average age of ships in these size segments could even result in supply decreases. Yet, it is undeniable that the larger vessels set the tone of the markets.
“Our focus over the next two years remains on ensuring smooth operations of our existing fleet to serve our current charter contracts with contracted revenues in excess of $425 million over the next three years. We are also focused on the prompt delivery of our nine-vessel orderbook program and, of course, the chartering of the newbuild vessels. The first of our newbuilds is to be delivered towards the end of next month and it is scheduled to immediately commence its $48,000/day three-year charter while its sistership is expected to be delivered in June of 2023 commencing a similar $48,000/day three-year long charter.
“In parallel, we intend to continue rewarding our shareholders with our quarterly dividend and share repurchase program. We also continuously evaluate investment opportunities as our balance sheet strength allows us to pursue those accretive to our earnings and beneficial to our shareholders.”
Tasos Aslidis, Chief Financial Officer of Euroseas commented: “Our revenues for the fourth quarter of 2022 are comparable to the same period of 2021 as a result of the Company’s action to charter all of its vessels, at the very profitable rates of last year, for periods extending up to three years or more. Net revenues amounted to $42.9 million for the fourth quarter of 2022 compared to $38.3 million for the fourth quarter of 2021. The Company operated an average of 18.00 vessels, versus 15.01 vessels during the same period last year. On average, during the fourth quarter of 2022, our vessels earned approximately the same time charter equivalent rates compared to the fourth quarter of 2021.
“Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, were higher by 3.0% during the fourth quarter of 2022 compared to the same quarter of last year. The increased operating expenses for the fourth quarter of 2022 are mainly attributable to the increase in hull and machinery insurance premiums and the higher prices paid for the supply of lubricants, spare parts and stores for our vessels, as a result of the war in Ukraine.
“Adjusted EBITDA during the fourth quarter of 2022 was $22.9 million compared to $26.2 million achieved in the fourth quarter of last year, reaching $114.4 million versus $52.7 million in the respective twelve-month periods of 2022 and 2021.
“As of December 31, 2022, our outstanding bank debt (excluding the unamortized loan fees) was $108.0 million, versus restricted and unrestricted cash of approximately $31.4 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $56.0 million (excluding the unamortized loan fees). The working capital deficit of the Company as of December 31, 2022, is $26.8 million. We intend to fund this deficit from cash flows from operations, debt refinancing and equity offerings, among other options.”
