Euroseas’s Pittas Says That US Measures on Chinese Ships, If Implemented, Have The Potential To Fundamentally Change Trade Both In Terms Of Pattern And Volume

Euroseas Ltd., an owner and operator of container carrier vessels and provider of seaborne transportation for containerized cargoes, reported the following results for the three-month period and full year ended December 31, 2024.

Fourth Quarter 2024 Financial Highlights:

Total net revenues of $53.3 million. Net income of $24.4 million or $3.51 and $3.49 earnings per share basic and diluted, respectively. Adjusted net income1 for the period was $23.3 million or $3.35 and $3.33 per share basic and diluted.
An average of 23.0 vessels were owned and operated during the fourth quarter of 2024 earning an average time charter equivalent rate of $26,479 per day.
Declared a quarterly dividend of $0.65 per share for the fourth quarter of 2024 payable on or about March 18, 2024 to shareholders of record on March 11, 2025 as part of the Company’s common stock dividend plan.
As of February 27, 2025, the Company has repurchased 425,449 of our common stock in the open market, representing about 6% of the outstanding shares, for a total of about $9.24 million, under the share repurchase plan of up to $20 million announced in May 2022.
Full Year 2024 Highlights:

Total net revenues of $212.9 million. Net income of $112.8 million or $16.25 and $16.20 earnings per share basic and diluted, respectively. Adjusted net income1 for the period was $103.5 million or $14.92 and $14.87 per share basic and diluted, respectively.
Adjusted EBITDA1 was $135.8 million.
An average of 21.73 vessels were owned and operated during 2024, earning an average time charter equivalent rate of $28,054 per day.
Recent developments

On January 3, 2025, the Company announced its intent to spin-off the Company’s older three vessels, M/V Aegean Express, M/V Diamantis P and M/V Joanna, into a separate company, Euroholdings Ltd. (“Euroholdings”), which has applied for listing on the NASDAQ Capital Market. The Company contributed the three vessel owning companies to Euroholdings on January 8, 2025 in exchange for 100% of the shares of Euroholdings. The company, as the sole shareholder of Euroholdings, intends to distribute to its shareholders of record date March 7, 2025 all its Euroholdings shares. Shareholders of the Company will receive on March 17, 2025 one common share of Euroholdings for every 2.5 shares of the Company’s common stock owned on the record date. Although the regulatory clearance and exchange listing processes are nearly finalized, there can be no assurance that the spin-off transaction will ultimately occur or, if it does occur, what its structure, terms or timing will be.

On January 7 and 8, 2025, the Company took delivery of M/V Dear Panel and M/V Symeon P, respectively, two Eco EEDI Phase 3, 2,800 teu feeder containership newbuildings from Hyundai Mipo Dockyard Co. in South Korea. The vessels are equipped with a Tier III engine and other sustainability linked features including installation of AMP (alternative maritime power). The vessels were financed with a combination of bank debt and own funds. Following their delivery, both vessels commenced a thirty-four to thirty-six months charter at a rate of $32,000/day.

On January 16, 2025, the Company announced that its wholly owned subsidiary, Euroholdings Ltd. (“Euroholdings”) has sold M/V Diamantis P, a 2,008 teu feeder containership vessel, built in 1998, for approximately $13.15 million. The vessel was delivered to its new owners, an unaffiliated third party, on January 15, 2025. As a result of the sale, we recorded a gain of approximately $10.2 million.

Aristides Pittas, Chairman and CEO of Euroseas commented:

“During the fourth quarter of 2024, the containership markets broadly maintained their levels with the larger feeders noticeably increasing. Similarly firm levels for containership rates have prevailed so far in 2025 with rates in all feeder and intermediate sectors inching up. This strength in rates is evident in our own fixtures as well, where we managed to book two of our intermediate containerships for three-year contracts at very profitable rates following the spade of fixings we did late last year for three of our newbuilding vessels and two oldest ones.

“Looking at the containership sector one can see challenges ahead due to the high overall orderbook and the prospect of liner companies reverting to using the Suez Canal for their crossings. However, the elevated geopolitical uncertainty which is further augmented by the actions of the new US Administration may not prove negative factors for our industry. Usually shipping thrives on uncertainties and inefficiencies. Against that backdrop, the new US Administration has introduced or is in the process of introducing tariffs on imports from many of its trading partners and, lately, there is talk about fees being placed on Chinese built or operated ships when calling on US ports. Whilst we believe that it will be difficult for these measures to pass, at least in their currently envisaged form, these changes, if implemented, have the potential to fundamentally change trade both in terms of pattern and volume. Also if we look at the orderbook in more detail, we can see that it is concentrated on the larger containership sizes with the feeder and intermediate sizes, where our fleet is concentrated, having not only historically low orderbook levels but also a much higher percentage of older ships which are “vulnerable” to the increasingly stricter environmental regulations. This realization that feeder and intermediate containership fleet will rather decline should provide significant support for rates for our ships despite a possible cascade effect of capacity from larger size ships.

“As we have previously explained, we have built and continue to build a strong charterbook. At the same time we are modernizing our fleet having placed an order for 2 more 4,300teu ships and having decided to spin off our 3 oldest vessels into Euroholdings. We expect our earnings to continue being strong and our cash reserves to continue increasing. Given the increased liquidity, our Board decided to increase our quarterly dividend to $0.65 per share. We also continue our share repurchase program as despite our revenue and earnings visibility our share price trades at a large discount to our net asse value. And, as always, we remain diligent in identifying accretive investment opportunities and committed to generating further returns to our shareholders.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented:

“Our revenues for the fourth quarter of 2024 are increased by approximately 8% compared to the same period of 2023. This was the result of the increased average number of vessels owned and operated in the fourth quarter of 2024, compared to the corresponding period of 2023. The Company operated an average of 23.0 vessels, versus 19.0 vessels during the same period last year. Net revenues amounted to $53.3 million for the fourth quarter of 2024 compared to $49.1 million for the fourth quarter of 2023.

“Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, were slightly lower, a decrease of approximately 2.6%, during the fourth quarter of 2024 compared to the same quarter of last year.

“Adjusted EBITDA1 during the fourth quarter of 2024 was $32.8 million compared to $32.4 million achieved in the fourth quarter of last year, reaching $135.8 million versus $123.6 million in the respective twelve-month periods of 2024 and 2023.

“As of December 31, 2024, our outstanding bank debt (excluding the unamortized loan fees) was $207.3 million, versus restricted and unrestricted cash of approximately $80.7 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $37.3 million (excluding the unamortized loan fees).”

Fourth Quarter 2024 Results:
For the fourth quarter of 2024, the Company reported total net revenues of $53.3 million representing a 8.7% increase over total net revenues of $49.1 million during the fourth quarter of 2023, which was mainly the result of the increased average number of vessels operating in the fourth quarter of 2024 compared to the corresponding period of 2023, partly offset by the lower time charter rates earned in the fourth quarter of 2024. The Company reported a net income for the period of $24.4 million, as compared to a net income of $24.7 million for the fourth quarter of 2023. On average, 23.0 vessels were owned and operated during the fourth quarter of 2024 earning an average time charter equivalent rate of $26,479 per day compared to 19.0 vessels in the same period of 2023 earning on average $29,266 per day.

For the fourth quarter of 2024, voyage expenses amounted to $0.4 million as compared to voyage expenses of $0.3 million for the same period of 2023. Voyage expenses for both periods related to expenses for repositioning vessels between time charter contracts and owners expenses at certain ports. The increased amount of 2024 is mainly attributable to the higher number of vessels owned and operated in the last three months of 2024 compared to the same period of 2023.

Vessel operating expenses for the same period of 2024 amounted to $12.4 million as compared to $10.8 million for the same period of 2023. The increased amount is mainly due to the higher number of vessels owned and operated in the last three months of 2024 compared to the same period of 2023 partly offset by the lower daily vessel operating expenses, mainly attributable to the significantly lower daily operating costs of the seven new building vessels delivered to the Company gradually within the past twenty months.

Vessel depreciation for the fourth quarter of 2024 increased to $7.4 million from $6.0 million in the fourth quarter of 2023, as a result of the increased number of vessels in the Company’s fleet and the fact that the new-building vessels delivered in 2024, have a higher average daily depreciation charge as a result of their higher acquisition price compared to the remaining vessels.

Related party management fees for the three months ended December 31, 2024 were $1.8 million compared to $1.5 million for the same period of 2023, as a result of the higher number of vessels in our fleet and the adjustment for inflation in the daily vessel management fee, effective from January 1, 2024, increasing it from 775 Euros to 810 Euros.

Drydocking expenses amounted to $2.5 million during the fourth quarter of 2024 comprising the cost of one vessel passing its special survey with drydock and another one passing its intermediate survey in water. For the same period of 2023 drydocking expenses amounted to $2.3 million comprising the cost of one vessel passing its special survey with drydock, another one passing its intermediate survey in water and a vessel entering into drydocking for its special survey that was completed in January 2024.

General and administrative expenses increased to $2.2 million in the fourth quarter of 2024, as compared to $1.6 million in the fourth quarter of 2023, due to increased professional fees and increased cost for our stock incentive plan.

In the fourth quarter of 2023, we had other operating income of $1.1 million relating to loss of hire insurance for one of our vessels. No such case existed in the fourth quarter of 2024.

Interest and other financing costs for the fourth quarter of 2024 amounted to $4.1 million, of which $0.6 million interest costs were capitalized in relation to our newbuilding program, compared to $2.8 million, of which $0.3 million interest costs were capitalized in relation to our newbuilding program for the same period of 2023. This increase is mainly due to the increased amount of debt of our bank loans in the current period compared to the same period of 2023.

For the three months ended December 31, 2024 the Company recognized a $0.5 million gain on its interest rate swap contract, comprising a $0.4 million unrealized gain from the mark-to-market valuation of our outstanding interest rate swap and a $0.1 million of realized gain. For the three months ended December 31, 2023 the Company recognized a $1.0 million loss on its interest rate swap contract, comprising a $1.1 million unrealized loss from the mark-to-market valuation of our outstanding interest rate swaps and a $0.1 million of realized gain.

Adjusted EBITDA1 for the fourth quarter of 2024 increased to $32.8 million compared to $32.4 million for the corresponding period in 2023.

Basic and diluted earnings per share for the fourth quarter of 2024 were $3.51 and $3.49 calculated on 6,952,001 and 6,989,333 basic and diluted weighted average number of shares outstanding, respectively, compared to basic and diluted earnings per share of $3.58 and $3.56, respectively, for the fourth quarter of 2023, calculated on 6,908,581 basic and 6,943,912 diluted weighted average number of shares outstanding.

The adjusted earnings for the quarter ended December 31, 2024 would have been $3.35 and $3.33 per share basic and diluted, respectively, compared to adjusted earnings of $3.62 and $3.61 per share basic and diluted, respectively, for the quarter ended December 31, 2023. Usually, security analysts include Adjusted Net Income in their determination of published estimates of earnings per share.

Full Year 2024 Results:
For the full year of 2024, the Company reported total net revenues of $212.9 million, representing a 12.4% increase, over total net revenues of $189.4 million during the twelve months of 2023, mainly as a result of the increased number of vessels owned and operated in the twelve months of 2024 compared to the corresponding period of 2023, partly offset by the lower average time charter equivalent rates earned in 2024. The Company reported a net income for the year of $112.8 million, as compared to a net income of $114.5 million for the twelve months of 2023. On average, 21.73 vessels were owned and operated during the twelve months of 2024 earning an average time charter equivalent rate of $28,054 per day compared to 18.25 vessels in the same period of 2023 earning on average $29,714 per day.

For the twelve months of 2024, voyage expenses amounted to $2.0 million, as compared to voyage expenses of $1.3 million in the same period of 2023. Voyage expenses for the twelve months of 2024 mainly related to expenses incurred by one of our vessels while employed under a voyage charter, vessels repositioning between charters and owners expenses at certain ports, while for the corresponding period in 2023 related to expenses for vessels repositioning between charters and owners expenses at certain ports. The increased amount of 2024 is mainly attributable due to the higher number of vessels owned and operated within the year compared to the same period of 2023.

Vessel operating expenses for the twelve months of 2024 amounted to $46.7 million as compared to $42.0 million for the same period of 2023. This increase in vessel operating expenses is due to the higher average number of vessels operated by the Company in the twelve months of 2024 as compared to the same period of 2023, partly offset by the lower daily vessel operating expenses, mainly attributable to the significantly lower daily operating costs of the seven new building vessels delivered to the Company gradually within the past twenty months.

Vessel depreciation for the twelve months of 2024 was $26.4 million compared to $22.8 million during the same period of 2023, due to the increased average number of vessels operating in 2024 as compared to the same period of 2023 and the fact that the new-building vessels delivered in 2024, have a higher average daily depreciation charge as a result of their higher acquisition price compared to the remaining vessels.

For the twelve months of 2023, the Company recorded an impairment charge of $13.8 million. The impairment was booked to reduce the carrying amount of a containership (M/V “Jonathan P”) to its estimated market value, since based on the Company’s impairment test results as of September 30, 2023 it was determined that its carrying amount was not recoverable.

Related party management fees for the twelve months of 2024 were $7.1 million compared to $5.7 million for the same period of 2023 as a result of the higher number of vessels in our fleet and the adjustment for inflation in the daily vessel management fee, effective from January 1, 2024, increasing it from 775 Euros to 810 Euros.

General and administrative expenses amounted to $5.9 million during the twelve months of 2024 as compared to $4.7 million in the last year. This increase is mainly attributable to the increased cost of our stock incentive plan and increased professional fees during 2024.

Drydocking expenses amounted to $10.5 million (five vessels passed their special survey with drydock, three vessels passed their intermediate survey in water), compared to $3.4 million (two vessels passed their special survey with drydock, one vessel passed its intermediate survey in water and another one entered into drydock for its special survey, that was completed within January 2024).

In the twelve months of 2023, a gain on time charter agreements termination of $16.0 million was recognized in connection with the write-off of the outstanding balance of the attached time charter liability recognized as part of the acquisitions of two of our vessels in 2022, which was fully amortized in August 2023 due to the early termination of the respective attached time charter agreements. No such case existed in 2024.

The results of the Company for 2024 include a $5.7 million gain on sale of M/V “EM Astoria” that was completed in June 2024. The results of the Company for 2023 include a $5.2 million gain on sale of M/V “Akinada Bridge” that was completed in January 2023.

Finally, during the twelve months of 2023, we had other operating income of $2.7 million. The operating income for the year 2023 relates to loss of hire insurance payments received for two of our vessels. No such case existed in 2024.

Total interest and other financing costs for the twelve months of 2024 amount to $14.8 million, of which $4.2 million interest costs were capitalized in relation to our newbuilding program, compared to $9.8 million, of which $3.4 million interest costs were capitalized in relation to our newbuilding program for the same period of 2023. This increase is mainly due to the increased amount of debt in the current period compared to the same period of 2023.

For the twelve months ended December 31, 2024 the Company recognized a $1.0 million gain on its interest rate swap contracts, comprising a $0.6 million unrealized gain from the mark-to-market valuation of its outstanding interest rate swap and a $0.4 million realized gain. For the twelve months ended December 31, 2023 the Company recognized a $0.2 million gain on its interest rate swap contracts, comprising a $4.0 million unrealized loss from the mark-to-market valuation of its outstanding interest rate swap and a $4.2 million realized gain on three interest rate swaps, two of which were terminated early in the second quarter of 2023.

Adjusted EBITDA1 for the twelve months of 2024 increased to $135.8 million compared to $123.6 million during the twelve months of 2023, primarily as a result of higher revenues.

Basic and diluted earnings per share for the twelve months of 2024 were $16.25 and $16.20, calculated on 6,938,204 and 6,961,266 basic and diluted weighted average number of shares outstanding, respectively, compared to basic and diluted earnings per share of $16.53 and $16.52 for the twelve months of 2023, respectively, calculated on 6,931,280 basic and 6,936,060 diluted weighted average number of shares outstanding.

The adjusted earnings per share for the year ended December 31, 2024 would have been $14.92 and $14.87 basic and diluted, respectively, compared to adjusted earnings of $14.99 and $14.98 per share basic and diluted, respectively, for the year ended December 31, 2023. As mentioned above, security analysts include Adjusted Net Income in their determination of published estimates of earnings per share.
Source: Euroseas Ltd.