Euroseas Ltd. (NASDAQ:ESEA)

Euroseas Ltd. (NASDAQ:ESEA) Expands Fleet

Euroseas Ltd. (NASDAQ:ESEA)

Euroseas Ltd. (NASDAQ:ESEA) plans to expand its fleet of Drybulk vessels after signing an agreement with Euromar LLC. The agreement details the terms of the acquisition of M/V EM Astoria – a feeder size containership vessel built in 2004.

Euroseas Fleet Expansion

Under terms of the agreement, Euroseas Ltd. (NASDAQ:ESEA) is to acquire the vessel utilizing 100% bank financing. As part of the agreement, the bank is entitled to profits generated by the vessel.

“We are very pleased to proceed with the acquisition of EM Astoria which increases our fleet in the containership feeder sector and is accretive to our shareholders. We remain optimistic that both the containership and Drybulk sectors will keep improving in the near and medium term and we continue positioning our assets to take advantage of such developments,” said CEO, Aristides Pittas.

The acquisition of M/V EM Astoria follows the signing of an addendum, with Jiangsu Yangzijiang Shipbuilding Co early in the year, for the construction of a new vessel. The new building contract reduced the price for an eco-design fuel efficient Kamsarmax dry bulk carrier.

A contract price reduction is a welcome relief for Euroseas Ltd. (NASDAQ:ESEA) given that it had contemplated terminating the contract. Delivery of the Kamsarmax dry bulk carrier next year will bolster the company’s fleet even further. The dry bulk carrier is aggressively expanding its fleet in both the dry bulk and containership sector as it looks to generate maximum value at a time of growing rates in the shipping business.

Shipping Industry Recovery

Dry bulk and containership markets have recovered from the historically low levels observed last year. The company’s chief executive expects the rebound to continue as the world economy continues to improve. Employing vessels in short-term charters is one of the strategies that Euroseas Ltd. (NASDAQ:ESEA) is using as it tries to take advantage of the ongoing rebound.

“In addition to the improving market prospects, our strengthened balance sheet, as a result of raising funds via both private placements and our at-the-market offering, has given us the confidence to continue the construction of our second Kamsarmax vessel due to be delivered by June 2018 as we announced last month.,” said Mr. Pittas

Separately, Euroseas plans to hold an annual general meeting of shareholders on June 23, 2017, at the offices of Seward & Kissel LLP.

Euroseas Ltd. (NASDAQ:ESEA) stock was unchanged in Thursday’s trading session ending the day at $1.26 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Euroseas Ltd. (NASDAQ:ESEA) Q1 Net Loss Narrows On Recovering Dry-bulk Market

Euroseas Ltd. (NASDAQ:ESEA)

Recovering Drybulk and containership markets led to increased revenues and better than expected first quarter results for Euroseas Ltd. (NASDAQ:ESEA). Strengthening world economic growth has already reinvigorated hope that the sector’s recovery is back on track which should lead to further improvement going forward.

Improving Fundamentals

Chief Executive officer, Aristides Pittas remains confident that their fleet should be able to take full advantage of the sector’s rebound going forward.

“In addition to the improving market prospects, our strengthened balance sheet, as a result of raising funds via both private placements and our at-the-market offering, has given us the confidence to continue the construction of our second Kamsarmax vessel due to be delivered by June 2018 as we announced last month,” said Mr. Pittas.

Euroseas Ltd. (NASDAQ:ESEA) has also reaffirmed its commitment to looking for new opportunities with the potential of bolstering the current fleet. Last year, the company acquired a new vessel and is now planning to explore similar opportunities with a view to generating more shareholder value.

Q1 Earnings

Euroseas Ltd. (NASDAQ:ESEA) revenue in the quarter totaled $8.3 million representing a 26.6% increase from $6.5 million reported in Q1 OF 2016.  Operating expenses were up by $0.5 million as compared to last year, due to an increase in vessels under operation.

Net loss attributed to shareholders shrunk to $2.6 million compared to a net loss of $3.3 million as of the same period last year. On average the company operated 13.38 vessels in the quarter with a time charter equivalent rate of $7,313 a day compared to 11.54 vessels for the same period last year.

Corporate Highlights

During the quarter the dry-bulk carrier signed an addendum with Jiangsu Yangzijiang for the construction of a new vessel as part of a 2014 contract. The new agreement consequently reduced construction costs by 10% to $22.5 million. The vessel under development is has a fuel efficient design that will have a carrying capacity of 82,000dwt, It is slated for delivery in 2018.

Separately, Mr. George Skarvelis has parted ways with the company for personal reasons having been a director since 2005.

Euroseas Ltd. (NASDAQ:ESEA) was down by 9.59% in Friday trading session ending the week at lows of $1.14 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.