Euroseas Ltd. (ESEA 2.05 +0.12) reported adjusted fourth quarter
earnings of $0.10/share, which easily came in ahead of expectations.
More specifically, excluding the effect on the income/(loss) attributable to common shareholders for the quarter of the net gain on derivatives, the net gain on sale of a vessel, the loss on termination of a shipbuilding contract, the loss on write-down of vessels held for sale and the impairment loss of other investment and investment in joint venture, the adjusted earnings per share attributable to common shareholders for the quarter ended December 31, 2017 would have been $0.10 per share basic and diluted compared to net loss of $0.47 per share basic and diluted for the quarter ended December 31, 2016.
For the fourth quarter of 2017, the company reported total net revenues of $13.5 million, representing a 85.2% increase over total net revenues of $7.3 million during the fourth quarter of 2016, also beating expectations.
On average, 16.3 vessels were owned and operated during the fourth quarter of 2017 earning an average time charter equivalent rate of $9,083 per day compared to 12.1 vessels in the same period of 2016 earning an average time charter equivalent rate of $7,609 per day.
The operating results of the fourth quarter of 2017 reflect the recovered level of charter rates in both the drybulk and containership markets. On average during the fourth quarter of 2017, the company's vessels earned 19.4% higher time charter equivalent rates than in the fourth quarter of 2016.
Meanwhile, total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, decreased approximately 4.6% during the fourth quarter of 2017 compared to the same quarter of last year, while for the full year 2017 the decrease was approximately 3.8%.
The company also emphasized that cost control remains a key component of its strategy.
Looking at financial health...
As of December 31, 2017, its outstanding debt (excluding the unamortized loan fees) was $74.4 million versus restricted and unrestricted cash of approximately $13.2 million. The company has also complied with all its debt covenants as of December 31, 2017.
Overall, the company has some positive comments to say going forward, saying, "During the last quarter of 2017, Euroseas returned to profitability not only because of the recovery of the drybulk and containership markets but also due to its continuous efforts to control its operating, financial and capital cost structure and cash flows. 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 drybulk 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. "
"At the same time, we are optimistic about the prospects for
both bulkers and containerships as demand for ships is expected by most analysts
to remain strong over the next couple of years on the back of strong worldwide
economic growth and modest supply pressure. As we have stated in the past, we
believe, we can provide a publicly-listed consolidation platform in both
sectors. The latter along with accretive acquisitions remain our main strategy
The company operates in the dry cargo, drybulk and container shipping markets an transports iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.