Euroseas Ltd. Q3 FY2025 earnings call

Dividend and Share Repurchase - Board declared a quarterly dividend of $0.70 per share for the first quarter of 2025, payable on or about December 16. - Since May 2022, the company has repurchased 466,000 shares of common stock for approximately $10.5 million under the 20 million share reverse plan, renewed in May 2025. ### Vessel Transactions - Completed the sale of motor vessel Marcos V for $50 million, recording an estimated gain of $9.3 million. - Extended the charter for motor vessel Jonathan P for a minimum of 11 months and up to 12 months at $25,000 per day, earliest delivery in October 2026. - Extended motor vessel Synergy Oakland for a further 36 months at $33,500 per day. - Chartered 4 new buildings: Motor vessels Elena, Thrylos, Nikitas G, Socrates Ch for 4 years at $35,500 per day or 5-year period at $32,500 per day (declarable by November 2026). ### Operational Highlights - Motor vessel Emmanuel P successfully completed scheduled dry docking, installed energy saving devices expected to deliver fuel savings over 20%. - Low commercial interruption time during Q3.

For the third quarter of 2025, the company reported total net revenues of $56.9 million and net income of $29.7 million, or $4.25 per diluted share. Adjusted net income was $29.6 million, or $4.23 per diluted share, and adjusted EBITDA was $38.8 million. For the first 9 months of 2025, total net revenues were $170.5 million, net income was $96.5 million, adjusted EBITDA was $115.2 million. The current fleet on the water consists of 21 vessels with a total carrying capacity of 61,000 TEU and an average age of about 12 years, including fixed intermediate vessels and feeder vessels. The first quarter of 2025 had total net revenues of $56.9 million, net income of $29.7 million, etc.

Contract Coverage - Current contract coverage is 75% for 2026, 52% for 2027, and 29% for 2028 with average contracted rates of $31,300, $33,500, and $35,500 per day respectively. ### Leverage Strategy - General strategy is to have leverage around 50%, adjusting above or below by 10%-15% depending on market stances and timing.

Market Volatility - Potential market fluctuations affecting charter rates and vessel values. ### New Vessel Delivery Impact - Influx of new vessels may outpace demand growth, affecting market supply and rates. ### Geopolitical Risks - Geopolitical tensions such as Red Sea situation, US-China trade relations can impact trade volumes and rates. ### Old Vessel Aging - Aging of older vessels in smaller segments may lead to potential oversupply issues if not replaced properly.

Q: What are your expectations for the scheduled off-hire days for the fourth quarter and the remainder of 2026?

A: Anastasios Aslidis said there are not many dry dockings over the next 12 months, likely 0 in Q4, and the next scheduled dry dock is in Q3 next year.

Q: Can you talk about the charterers' willingness to book the ships that far forward?

A: Aristides Pittas said the fleet below 6,000 TEU is old, and charterers are competing to secure tonnage for regional trade.

Q: Is there a medium-term leverage target you plan to meet going forward?

A: Aristides Pittas said the general strategy is leverage around 50%, adjusting above or below by 10%-15% depending on market stances.

Q: How did you decide to offer the charter the 1-year option after the fourth year on the new builds?

A: Anastasios Aslidis said discussions with charterers led to the 4-year and 1-year option trade-off, with the implied rate for the fifth year being lower as a result.

Q: Can you talk about selling older assets?

A: Anastasios Aslidis said a conservative approach is taken, and older vessels may be scrapped if the market declines.