Home / Shipping News / Hellenic Shipping News / Euroseas Ltd. Says Third Quarter Net Loss Down to Ships’ Repairs and Idle Time

Euroseas Ltd. Says Third Quarter Net Loss Down to Ships’ Repairs and Idle Time

Euroseas Ltd., an owner and operator of container carrier vessels and provider of seaborne transportation for containerized cargoes, announced its results for the three and nine month period ended September 30, 2018.

The Spin-off

On May 30, 2018, the Company spun-off its drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier, which was agreed to be sold) into EuroDry Ltd., a separate publicly listed company also listed on the Nasdaq Capital Market. Shareholders of the Company received one EuroDry Ltd. share for every five shares of the Company they held. As a result of the spin-off and the subsequent sale of M/V Monica P, the Company has become a pure containership company and the only publicly listed company concentrating on the feeder containership sector.

The results below refer to Euroseas Ltd. “continuing operations” excluding the contribution from Euroseas Ltd. of vessels spun-off into EuroDry Ltd. in May 2018 (“discontinued operations”); historical comparative periods have been adjusted accordingly.

Third Quarter 2018 Highlights:

Total net revenues of $8.3 million. Net loss of $0.9 million; net loss attributable to common shareholders (after a $0.2 million dividend on Series B Preferred Shares) of $1.1 million or $0.10 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $1.1 million or $0.101 per share basic and diluted.
Adjusted EBITDA1 was $0.6 million.
An average of 11.0 vessels were owned and operated during the third quarter of 2018 earning an average time charter equivalent rate of $9,704 per day.
The Company declared its nineteenth dividend of $0.2 million on its Series B Preferred Shares; the dividend was paid in-kind by issuing additional Series B Preferred Shares.
First Nine Months 2018 Highlights:

Total net revenues of $26.4 million. Net loss of $0.1 million; net loss attributable to common shareholders (after a $1.1 million dividend on Series B Preferred Shares) of $1.2 million or $0.11 loss per share basic and diluted. Adjusted net loss per share attributable to common shareholders1 for the period was $2.5 million or $0.231 per share basic and diluted.
Adjusted EBITDA1 was $3.1 million.
An average of 11.64 vessels were owned and operated during the first nine months of 2018 earning an average time charter equivalent rate of $9,371 per day.

Aristides Pittas, Chairman and CEO of Euroseas commented:
“The feeder containership markets have softened since July with rates declining gradually and with chartering activity levels dropping notably, especially, for larger vessels. As a result of this slowdown, our largest containership, M/V Akinada Bridge, also experienced some idle time during the quarter. Despite the slowdown, which we expect to continue through the upcoming holiday period, near and medium term market prospects appear positive assuming that trade tensions do not escalate further. With orderbook-to-fleet ratio still at historically low levels and the implementation of emissions and water ballast treatment regulations looming, we expect that supply pressures over the next couple of years will be minimal; thus, trade growth will shape demand for ships and market rate levels. Within this framework, we have tried to position Euroseas – the only publicly listed company focused on the feeder sector – to be ready to take advantage of any investment opportunities either in the form of single vessel acquisitions, or, by exploiting our public platform to consolidate other fleets and taking advantage of our efficient operating cost structure.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented:
“The results of the third quarter of 2018 reflect the state of the containership market and the fact that one of our vessels was undergoing repairs while another one was partly idle. Our vessels earned during the quarter rates that on average were approximately 22% higher than the daily rates earned during the same period of 2017 and did we not have the vessel under repair and idle time mentioned above we would likely have turned a positive result for the period.

“Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, remained at the same levels for the third quarter as compared to the same period of last year and increased by about 5.1% for the nine month period ended September 30, 2018 over the same period of 2017. Adjusted EBITDA during the third quarter of 2018 was $0.6 million versus $0.5 million in the third quarter of last year, and it reached $3.1 million versus $0.4 million for the respective nine-month periods of 2018 and 2017.

“As of September 30, 2018, our outstanding debt (excluding the unamortized loan fees) was $31.8 million versus restricted and unrestricted cash of $4.6 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $4.3 million (excluding the unamortized loan fees).”

Third Quarter 2018 Results:
For the third quarter of 2018, the Company reported total net revenues of $8.3 million representing a 45.7% increase over total net revenues of $5.7 million during the third quarter of 2017. The Company reported net loss for the period of $0.9 million and a net loss attributable to common shareholders of $1.1 million, as compared to a net loss of $5.5 million and a net loss attributable to common shareholders of $5.9 million respectively, for the third quarter of 2017. The results for the third quarter of 2018 include a $0.02 million of unrealized gain on derivative and a $0.08 million realized loss on derivative. The results for the third quarter of 2017 include a $4.6 million loss on the write-down of two vessels classified as held for sale. Drydocking expenses amounted to $1.3 million during the third quarter of 2018 comprising the drydocking cost of one vessel that underwent drydocking. Depreciation expense for the third quarter of 2018 was $0.8 million slightly lower compared to the same period of 2017. Although the average number of vessels increased the new vessels acquired have a lower average daily depreciation charge as a result of their lower acquisition cost and greater remaining useful life compared to the remaining vessels.

On average, 11.0 vessels were owned and operated during the third quarter of 2018 earning an average time charter equivalent rate of $9,704 per day compared to 9.02 vessels in the same period of 2017 earning on average $7,094 per day.

Adjusted EBITDA1 for the third quarter of 2018 was $0.6 million compared to $0.5 million achieved during the third quarter of 2017. Please see below for Adjusted EBITDA reconciliation to net loss.

Basic and diluted loss per share attributable to common shareholders for the third quarter of 2018 was $0.10 calculated on 11,183,899 basic and diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $0.53 for the third quarter of 2017, calculated on 11,093,672 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss attributable to common shareholders for the quarter of the gain /loss on derivative, the adjusted net loss per share attributable to common shareholders for the quarter ended September 30, 2018 would have been $0.10 per share basic and diluted compared to adjusted net loss of $0.12 per share basic and diluted for the quarter ended September 30, 2017. Usually, security analysts do not include the above items in their published estimates of earnings per share.

First Nine Months 2018 Results:
For the first nine months of 2018, the Company reported total net revenues of $26.4 million representing a 65.4% increase over total net revenues of $16.0 million during the first nine months of 2017. The Company reported a net loss for the period of $0.1 million and a net loss attributable to common shareholders of $1.2 million, as compared to net loss of $7.6 million and a net loss attributable to common shareholders of $9.0 million, respectively, for the first nine months of 2017. The results for the first nine months of 2018 include a $1.3 million gain on sale of a vessel, $0.1 million of unrealized gain on derivative and a $0.2 million of realized loss on derivative. The results for the first nine months of 2017 include a $0.02 million loss on derivative, a $0.5 million gain on sale of a vessel, and a $4.6 million loss on write-down on two vessels held for sale. Depreciation expense for the first nine months of 2018 was $2.5 million compared to $2.9 million during the same period of 2017. Although the average number of vessels increased, one vessel which was held for sale during the second semester of 2018 did not contribute to the depreciation charge and the new vessels acquired have a lower average daily depreciation charge as a result of their lower acquisition cost and greater remaining useful life compared to the remaining vessels.

Vessel operating expenses for the same period of 2018 amounted to $15.4 million as compared to $10.5 million for the same period of 2017. The increased amount is mainly due to the higher number of vessels owned and operated in the nine months of 2018 compared to the same period of 2017.

Drydocking expenses amounted to $2.4 million for the nine months of 2018 (three of our vessels completed their special surveys with drydocks and another two completed their intermediate surveys in-water), compared to $0.1 million for the same period of 2017 where one of our vessels completed its intermediate survey.

On average, 11.64 vessels were owned and operated during the first nine months of 2018 earning an average time charter equivalent rate of $9,371 per day compared to 8.58 vessels in the same period of 2017 earning on average $6,993 per day.

Interest and other financing costs for the first nine months of 2018 amounted to $2.1 million compared to $1.1 million for the same period of 2017. This increase is due to the increased amount of debt and increased LIBOR in the current period compared to the same period of 2017.

Adjusted EBITDA1 for the first nine months of 2018 was $3.1 million compared to $0.4 million during the first nine months of 2017. Please see below for Adjusted EBITDA reconciliation to net loss.

Basic and diluted loss per share attributable to common shareholders for the first nine months of 2018 was $0.11, calculated on 11,150,659 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $0.81 for the first nine months of 2017, calculated on 11,051,957 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss attributable to common shareholders for the first nine months of 2018 of the net loss on derivative, the gain on sale of a vessel and the loss on write down of vessels held for sale, the adjusted net loss per share attributable to common shareholders for the nine-month period ended September 30, 2018 would have been $0.23 compared to adjusted net loss of $0.44 per share basic and diluted for the same period in 2017. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Full Report

Source: Euroseas

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping