Euroseas Ltd. (ESEA) Tops Q1 EPS by 53c, Revenues Beat

Euroseas Ltd. (NASDAQ: ESEA) reported Q1 EPS of $0.17, $0.53 better than the analyst estimate of ($0.36). Revenue for the quarter came in at $15.94 million versus the consensus estimate of $13.93 million.

First Quarter 2020 Financial Highlights:

• Total net revenues of $15.4 million. Net income of $2.0 million; net income attributable to common shareholders (after a $0.2 million of dividend on Series B Preferred Shares) of $1.8 million or $0.32 per share basic and diluted. Adjusted net income attributable to common shareholders¹ for the period was $1.0 million or $0.17 per share basic and diluted.
• Adjusted EBITDA¹ was $4.1 million.
• An average of 19.0 vessels were owned and operated during the first quarter of 2020 earning an average time charter equivalent rate of $9,615 per day.
• Finally, the Company declared its fifth cash dividend of $0.2 million on its Series B Preferred Shares

Aristides Pittas, Chairman and CEO of Euroseas commented: “During the first quarter of 2020, containership markets were affected by the COVID-19 pandemic and declined throughout the quarter. The decline continued during April and May 2020 as regions which typically drive containerized trade, like Europe and North America, locked down their economies to control the spread of the pandemic, negatively affecting trade growth. Indeed, it is expected that 2020 will register a significant shrinkage of containerized trade although some recovery should start taking place by the fourth quarter as the world economy is gradually exiting from the lock down.”

“Within this very challenging environment, almost all of our vessels have remained employed at profitable rates during the first quarter except for Manolis P and EM Oinousses which are in the process of being scrapped and, since early May 2020, EM Spetses which is searching for employment.”

“Looking forward, we believe that there will remain a challenging market environment in 2020 with our contract renewals expected to be at lower charter rate levels; but a supply-demand balance favoring demand should develop in 2021 not only due to containerized trade and demand for vessels strongly rebounding but also due to limited supply growth as a result of one of the lowest orderbooks in the last 20 years. There are still significant uncertainties remaining regarding the timing and strength of recovery after the pandemic and risks related to a potential revival of the trade tensions between US and China.”

“On the investment front, our strategy remains to take advantage of our status as the only publicly listed feeder and intermediate-size containership company and use it as a means of consolidation of other vessels or fleets as we have done in the second half of 2019.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented: “The results of the first quarter of 2020 reflect the better charter rates our vessels earned compared to the market because of their existing charter contracts not yet fully affected by the results of the COVID-19 pandemic. Our net revenues increased significantly as we operated on average 19.0 vessels during the first quarter of 2020 versus 11.0 vessels during the same period of last year.”

“On a per-vessel-per-day basis, our vessels earned a higher average charter rate in the first quarter of 2020 as compared to the same period of 2019, as a result of their existing charters, and different composition of the fleet which now contains larger and younger vessels on average. Again, on a per-vessel-per-day basis, the sum of vessel operating expenses, management fees and general and administrative expenses decreased by 5.5% during the first quarter of 2020 as compared to the same period in 2019 which was primarily attributable to the different mix and allocation of general administrative expenses to a greater number of vessels we had in 2020. 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 2020 was $4.1 million compared to $1.5 million achieved for the first quarter of 2019.”

“Finally, as of March 31, 2020, our outstanding debt (excluding the unamortized loan fees) is about $86.9 million versus restricted and unrestricted cash of about $5.5 million.”

For earnings history and earnings-related data on Euroseas Ltd. (ESEA) click here.

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