Euroseas Ltd. Reports Results for the Quarter Ended March 31, 2012
Wednesday, 16 May 2012 | 00:00
Euroseas Ltd., an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced yesterday its results for the three month period ended March 31, 2012. First Quarter 2012 Highlights: • Net loss of $9.0 million or $0.29 loss per share basic and diluted on total net revenues of $13.9 million. Excluding the effect of unrealized gain and realized losses on derivatives, unrealized gain on trading securities and loss on sale of vessel, the loss for the period would have been $0.1 million, or $0.00 loss per share.
• Adjusted EBITDA was $4.9 million. Please refer to a subsequent section of the Press Release for a reconciliation of adjusted EBITDA to net loss.
• An average of 15.92 vessels were owned and operated during the first quarter of 2012 earning an average time charter equivalent rate of $11,258 per day.
• Declared a quarterly dividend of $0.04 per share for the first quarter of 2012 payable on June 13, 2012 to shareholders of record on June 4, 2012. This is the twenty-seventh consecutive quarterly dividend declared.
Aristides Pittas, Chairman and CEO of Euroseas commented: "The first quarter of 2012 proved to be a quite challenging one as the containership market remained low throughout the quarter resulting in lower renewal rates for those of our vessels which had their charters expire and delays in finding employment. On the other hand, the drybulk market, although also depressed, did not affect our revenues during the first quarter as our vessels are chartered well into 2013. While we remain concerned about the near term prospects of the drybulk market, we believe the container ship market may have bottomed and even commenced to turn as indicated by the increase in the freight indices and the reduction of the number of vessels laid-up, of course, depending on the overall economic developments.
On the investment front, we believe that the depressed charter markets will result in very attractive investment opportunities, especially, in the drybulk sector in which the supply of vessels is set to grow throughout the year; but also, in the containership sector. In fact, we took advantage of two such opportunities in the containership sector by acquiring one and agreeing to acquire one more containership through our joint venture with two private equity firms, Euromar LLC, which now owns 10 vessels.
To increase our funds available to acquire additional and younger tonnage at the present depressed market conditions, we sold one of our older containerships, and furthermore, our Board decided to raise additional funds via a rights offering to our shareholders, the specific terms of which will be announced shortly. We believe that the latter is the most effective way for us to access additional funds without dilution to our shareholders.
In view of the above plans, our Board decided to decrease our quarterly dividend to $0.04 per share which represents a yield of about 11% on the basis of our stock price on May 14, 2012."
Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the first quarter of 2012 primarily reflect the loss we incurred from the sale of M/V Jonathan P; in addition to this loss, the quarter's result was influenced by the poor containership market which, in turn, resulted in idle days for two of our ships. During the first quarter of 2012, we had significant contributions to our revenues from our drybulk fleet which is chartered at above current market rate levels. Our results for the quarter were also negatively influenced by losses on our interest rate swap contracts.
Total daily vessel operating expenses, including management fees and general and administrative expenses, during the first quarter of 2012 increased by less than 1% on a per vessel per day basis compared to the first quarter of 2011. This increase mainly reflects higher general and administrative expenses. Our drydocking expenses in the first quarter of 2012 were minimal on a per vessel per day basis as compared to the first quarter of 2011. 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.
As of March 31, 2012, our outstanding debt is about $70.4 million versus restricted and unrestricted cash of about $35.7 million. We were in compliance with all our loan covenants."
First Quarter 2012 Results:
For the first quarter of 2012, the Company reported total net revenues of $13.9 million representing a 2.1% decrease over total net revenues of $14.2 million during the first quarter of 2011. The Company reported losses for the period of $9.0 million as compared to a net loss of $0.6 million for the first quarter of 2011. The results for the first quarter of 2012 include a $0.2 million unrealized gain on derivatives and trading securities as compared to $0.5 million net unrealized gain on derivatives and trading securities for the same period of 2011; and, a $0.4 million realized loss on derivatives versus a $0.2 million realized loss in the same period of 2011. Drydocking expenses of $0.03 million during the quarter were lower than the $1.5 million incurred in the first quarter of 2011 and refer to expenses for our last vessel drydocked in the fourth quarter of 2011. Depreciation expense for the first quarter of 2012 was $4.5 million compared to $4.6 million during the same period of 2011. On average, 15.92 vessels were owned and operated during the first quarter of 2012 earning an average time charter equivalent rate of $11,258 per day compared to 16 vessels in the same period of 2011 earning on average $11,088 per day.
Adjusted EBITDA for the first quarter of 2012 was $4.9 million, a 31.8% increase from $3.7 million achieved during the first quarter of 2011. Please see below for Adjusted EBITDA reconciliation to net loss and cash flow provided by operating activities.
Basic and diluted loss per share for the first quarter of 2012 was $0.29, calculated on 31,167,211 weighted average number of shares outstanding compared to basic and diluted loss per share of $0.02 for the first quarter of 2011, calculated on 31,002,211 weighted average number of shares outstanding.
Excluding the effect on the loss for the quarter of the unrealized gain and realized losses on derivatives, unrealized gain on trading securities and the loss on sale of vessel, the loss per share for the quarter ended March 31, 2012 would have been $0.00 per share basic and diluted, compared to the loss, for the quarter ended March 31, 2011 of $0.04 per share basic and diluted. Usually, security analysts do not include the above items in their published estimates of earnings per share.
Source: Euroseas Ltd.