Euroseas Ltd. Q3 FY2024 earnings call

• Financial results: Third quarter 2024 net revenues $54.1M, net income $27.6M. Nine-month net revenues $159.6M. - Dividend: Board declared $0.60 per common share dividend for Q3 2024, payable Dec 16. - Share repurchase: Repurchased 414,000 shares for ~$8.8M since May 2022, repurchase plan extended. - New ship construction: Signed contract for 2 LNG-ready eco design containerships (4,300 TEU each) to be built in China, delivered Q4 2027. - Vessel deliveries: Motor Vessel Dear Panel and Symeon P to join fleet Jan 7 and 8, 2025, with charters up to 36 months at $32,000 per day. - Chartering: Vessels like Synergy Busan, Tender Soul fixed in time charters; smaller/older vessels chartered for 11-12 months. - Fleet profile: Current fleet 23 vessels, total carrying capacity ~67,000 TEU, average age 14 years; 4 vessels under construction, fleet to grow to 27 vessels post-delivery. - Market review: Container ship charter rates recovered, secondhand prices up 2%, newbuilding prices up 2.6%, idle fleet low, recycling activity slight.

For the third quarter of 2024, Euroseas reported total net revenues of $54.1 million, a net income of $27.6 million or $3.95 per diluted share, and adjusted EBITDA of $36.1 million. For the nine months ended September 30, 2024, total net revenues were $159.6 million. There are no distinct product segments detailed in the transcript, so overall financial performance is presented.

• Charter coverage: ~70% of fleet fixed for 2025, ~35% for 2026. - Market outlook: Container shipping markets likely face headwinds from easing Red Sea disruptions, geopolitical uncertainties, but growing demand for eco-friendly vessels. - 2025 and beyond: Vessel supplies to remain above demand, environmental regulations may affect dynamics, energy transition progress slow but demand for eco vessels to drive charter rate premiums.

• Geopolitical uncertainties in the Middle East affecting Suez Canal operations. - Easing of Red Sea disruptions could shift market dynamics. - Vessel supplies projected to remain above demand, leading to slight market correction. - Environmental regulations and sustainability initiatives may impact market dynamics, including reduced vessel speeds to lower emissions.

Q: About the two fuel efficient container vessels to be delivered in Q4 2027, what rates needed for breakeven and financing implications?

A: Assuming 20-year life, below $20,000 per day could be profitable; paid 15% down payment, next installments in 2026, debt 60-65%, equity remaining.

Q: Expectations for Diamantis and Aegean Express time-charters expiring in Nov and Dec 2024?

A: Vessels will be fixed within weeks, interest at $13,000-$20,000 for 1-1.5 years.

Q: Decision to build vs buy second-hand vessels?

A: Second-hand prices risen, but new vessels more eco-friendly; couldn't find financially viable second-hand, newbuilds have better eco characteristics and future fleet needs.

Q: Rate expectations for Monica and intermediates coming up in 2025?

A: Too early to say for Monica; intermediates in discussions, interest in ships, may announce rates soon.

Q: Capital allocation priorities for 2025?

A: Decisions to be taken at next Board meeting, balancing dividend, share repurchase, and business investment