Euroseas Reports First Profit Since 2011, Sets Sights on Consolidation

Mar 7, 2018

Marshall Islands-incorporated shipowner Euroseas returned to profit in the fourth quarter of 2017 for the first time since 2011 amid recovery of the dry bulk and containership markets.

Specifically, net income for the three-month period ending December 2017 was USD 2 million, while the adjusted net income attributable to the common shareholders was USD 1.1 million.

Total net revenues for the quarter were USD 13.5 million representing an 85 pct increase year-on-year.

For the full year, the company managed to shrink its net loss from USD 44.2 million to USD 6.1 million.

Last year was a period of fleet renewal for Euroseas.

During the fourth quarter of 2017, the company took delivery of Akinada Bridge, a 5,600 TEU post-Panamax size container vessel built in 2001, in South Korea. This vessel is the last one bought from Euromar and DvB.

In addition, the 90’s-built container feeder vessel, Aggeliki P, was sold for scrap for USD 4.6 million, while Handymax bulker Monica P is still classified as held for sale.

The ship is currently being inspected by prospective buyers, the company informed.

On the newbuilding side, Euroseas expects to take delivery of a Kamsarmax in May 2018.

“We believe that, over the last couple of years, we have positioned the company to benefit from the unfolding market recovery by renewing and expanding our fleet in both sectors we operate. In the dry bulk sector, after the upcoming delivery of our Kamsarmax newbuilding and the planned sale of our elder handymax unit, we will own a fleet of six vessels from Ultramax to Kamsarmax size, three Chinese-built in the last two years and three Japanese-built of 2000-04 vintage. In the containership sector, we have a fleet of eleven medium age and elder feeder units that produce earnings at present market levels with low capital investment, Aristides Pittas, Chairman and CEO of Euroseas, said.

Pittas added that the company is optimistic about the prospects for both bulkers and containerships as demand for ships is expected to remain strong over the next couple of years on the back of strong worldwide economic growth and modest supply pressure. According to Pittas, consolidation and accretive acquisitions remain the company’s strategy for 2018.

Aside from the potential for consolidation in the container shipping market, Tasos Aslidis, Chief Financial Officer of Euroseas, believes that there are also opportunities for the dry bulk side consolidation.

“We believe that both sectors of our fleet are well-positioned to play their role of public consolidation platforms for other mainly private fleets and vessels. This strategy potentially involving spinning off one of our two fleets in a separate company is what we are pursuing. We are currently discussing with several parties, including the Poseidon Group that we announced back in September 2017,” Aslidis said in a conference call.

“We have been seeing opportunities in the past, but the fact that the market was depressed but did not give any urgency to the discussions in the past. Now, with the market becoming more welcoming to shipping, I think there will be more opportunities for both sectors for us to play out this strategy,” he added.