Euroseas Announces 3Q, 9 Month Results

Euroseas Ltd. (NASDAQ: ESEA), an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced today its results for the three and nine month periods ended September 30, 2011.
For the 3Q 2011, net income of $0.6 million or $0.02 earnings per share basic and diluted on total net revenues of $16.2 million. Excluding the effect of unrealized and realized loss on derivatives and unrealized loss on trading securities, the net income for the period would have been $1.7 million or $0.06 earnings per share basic and diluted.
An average of 16.00 vessels were owned and operated during the third quarter of 2011 earning an average time charter equivalent rate of $11,633 per day.
For the first 9 months, the company reported net income of $0.01 million or $0.00 net income per share basic and diluted on total net revenues of $46.0 million. Excluding the effect of unrealized and realized loss on derivatives, unrealized loss on trading securities and amortization of fair value of time charter contracts acquired, the net income for the period would have been $0.4 million, or $0.01 net income per share basic and diluted.
An average of 16.00 vessels were owned and operated during the first nine months of 2011 earning an average time charter equivalent rate of $11,356 per day.
Commenting on the company and market conditions, Aristides Pittas, Chairman and CEO of Euroseas said: "During the third quarter of 2011, the containership market recovery stopped and charter rates declined, influenced by lower trade volumes very likely due to the uncertainty regarding how the Eurozone countries and the United States will deal with the sovereign debt issue. Further developments in Europe in October and November did not reduce the economic uncertainties and we expect a similar market environment until, at least, the first quarter of 2012 when traditionally container trade volumes pick up. In parallel, we took advantage of the recently stronger drybulk market to increase the cover of our drybulk fleet which is now fully chartered for 2011, more than 80% chartered in 2012 and more than 40% in 2013.
"On the investment front, while we continue to pursue investments in the containership sector through our Euromar joint venture (where we took delivery of the seventh and acquired our eighth vessel), we have continued to review opportunities in the drybulk sector in which we soon expect to see attractive investments as prices and rates should come under further pressure from the high level of vessel deliveries and resulting supply growth.
"Our strong balance sheet and, especially, our low leverage cushions us from the market pressures that other companies might be feeling and allows us to continue our policy of steadily growing the Company whilst rewarding our shareholders with dividends. In that context, our Board decided to declare a quarterly dividend of $0.07 per share which represents an annual yield of about 8.8% on the basis of our stock price on November 8, 2011."
Tasos Aslidis, Chief Financial Officer of Euroseas commented: "The results of the third quarter of 2011 reflect the better rates our vessels earned as compared to the first and second quarters of 2011. Additionally, our lower drydocking expenses and lower derivative losses compared to the third quarter of 2010 resulted in turning a $3.2 million loss in the third quarter of 2010 to a $0.6 million gain during the third quarter of 2011.
"Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, registered an increase of about 33.8% during the third quarter of 2011 compared to the same quarter of last year and an increase of about 21.6% for the nine month periods ended September 30, 2011 over the same period of 2010; these increases are primarily due to the fact that in the same periods of 2010 we had two laid-up vessels (out of a total of about 15.37 vessels on average for the nine month period and 16 for the third quarter) that incurred much lower daily running expenses and management fees, and secondly due to the higher U.S. dollar / euro exchange rate. Drydocking expenses expressed on per vessel per day basis were lower by 23.6% in the nine month period and 67.5% lower for the third quarter of 2011 as compared to the same periods in 2010. As always, we want to emphasize that cost control remains a key component of our strategy.
"As of September 30, 2011, our outstanding debt was $78.4 million versus restricted and unrestricted cash of about $36.0 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $13.4 million a number low enough to provide us with significant operational cash flow comfort. All our debt covenants were satisfied as of September 30, 2011."
or the same period of 2010.