Euroseas Ltd. Q1 FY2025 earnings call

• Signed an agreement to sell Motor/Vessel Marcos V for $50 million, expecting a gain over $8.5 million. - Secured multiple long-term high-value charters for vessels, providing strong cash flow visibility. - Successfully completed the spinoff of Euroholdings, with Euroholdings commencing trading on NASDAQ. - Has a fleet of 22 vessels, including 15 feeder containerships and 7 intermediate containerships, with expected delivery of 2 new intermediate containerships in Q4 2027. - 97% of available investment days in 2025 secured at an average rate of $28,250 per day, and 67% of available days in 2026 secured at $31,600 per day.

For the first quarter of 2025, Euroseas reported total net revenues of $56.3 million. Net income was $36.9 million or $5.29 per diluted share. Adjusted net income was $26.2 million or $3.76 per diluted share, and adjusted EBITDA was $37.1 million. The company signed an agreement to sell Motor/Vessel Marcos V for $50 million, expecting a gain exceeding $8.5 million. It secured several long-term charters for vessels like Motor/Vessel Monica, Motor/Vessel Rena P, Motor/Vessel Emmanuel P, and extended Motor/Vessel EM Hydra's charter. The spinoff of Euroholdings was completed, with Euroholdings shares distributed to Euroseas shareholders at a ratio of 1 Euroholdings share for every 2.5 Euroseas shares held.

• Anticipate the market to remain relatively strong and resilient in 2025 due to unresolved geopolitical issues. - Assume rerouting to occur in 2026, Middle East tensions to be alleviated in 2026, and U.S. tariffs to have a less severe impact. - Predict a market correction in the next couple of years because of the high order book, especially in the larger vessel sector. - Continue to secure long-term employment to enhance shareholder value.

• Geopolitical risks such as ongoing wars and political tensions disrupting trade routes. - Uncertainty regarding U.S. trade tariff decisions and their effect on global trade. - Challenges related to energy transition, including slower progress in decarbonization adoption. - Potential downward pressure on charter rates due to factors like rerouting, tariffs, and global economic conditions.

Q: Please provide your latest estimate for scheduled off-hire days for the remainder of the year?

A: The estimated stoppage time for the vessel undergoing survey and retrofits is 25 days.

Q: Which of the three assumptions has the most bearing on the conclusion of downward pressure in charter rates?

A: Rerouting of ships through the Suez, imposition of tariffs, and drop in global trade all have an impact, with rerouting reducing ton mile being a significant negative.

Q: Expectation of further decline in total daily vessel operating expenses?

A: Statistically, operating expenses might come down a bit as more new builds are incorporated.

Q: How much debt will be paid off when Marcos V is delivered?

A: About $8 million already paid, with $7 million scheduled at year end, and Marcos V is debt free.

Q: Looking to sell older vessels?

A: Not planning to sell while on charter, but may consider when charters expire, and currently looking to recycle the Genesis vessel.