Fourth quarter loss at Euroseas quadruples

Vessel impairments drag down results at Aristides Pittas-led bulker and containership owner.

Euroseas has seen its fourth quarter loss more than quadruple compared to a year ago, figures released late Thursday show.

The Aristides Pittas-led bulker and containership owner said it lost $17.6m in the last three months of 2016 against a loss of just under $4m a year ago.

The US-listed company was hit by a triple whammy of vessel impairments of $4.4m as well as lower revenues and higher operating costs.

Revenues declined 17.5% to $7.6m, while its total operating costs posted a year-on-year increase of 55.5% to $18.8m.

Operating costs were hit by a $3.8m loss on the termination of newbuilding contracts and a $5.9m loss on the write-down of a vessel held for sale.

Euroseas said it owned an average of 12.1 vessels during the fourth quarter of 2016 earning an average time charter equivalent rate of $7,666 per day.

“During the last quarter of 2016 and the month of January of 2017, we were able to transform the company by resolving its liquidity needs through a combination of equity raisings, debt rescheduling and new financings,” said Euroseas chief executive Aristides Pittas.

“In addition, we added a further dry bulk newbuilding to our fleet and replaced certain older vessels with slightly younger ones.

“We have no remaining capital commitments since we can opt out of our kamsarmax newbuilding contract by end of March 2017.”

Pittas said he can see a gradual improvement in the dry bulk market if China’s commodity appetite continues as supply pressures are expected to subside in the second half of 2017.

“We are hopeful to also see an improvement in the containership rates on the back of supply correction from increased scrapping and more slippage in new deliveries.”

Tasos Aslidis, chief financial officer of Euroseas, said: “The operating results of the fourth quarter of 2016 reflect the continuing low level of charter rates in the containership market and the modestly improved dry bulk market during the quarter.

“On average during the fourth quarter of 2016, our vessels earned 0.7% per day per vessel less than in the fourth quarter of 2015.

“As of December 31, 2016, our outstanding debt was $52.4m versus restricted and unrestricted cash of about $9.3m. We complied with all our debt covenants as of the end of 2016.”