Pittas explores asset prices

Asset values have plummeted significantly in certain segments of the dry-bulk market but newbuildings prices appear to be holding steady, the CEO of Euroseas told investors Friday.
Aristides-J-Pittas, chief executive of Euroseas.

Pittas said Euroseas does not intend to scrap ageing tonnage in the near-term.

In a conference call that followed the Greek owner’s second-quarter earnings report Aristides Pittas pointed out that secondhand values have fallen by nearly 20% in recent months and noted the price tags tied to ten-year-old panamaxes are closing in on lows seen at the start of 2013.

The executive blamed the decline on what he described as an “unexpected drop” in freight rates for tonnage trading in the spot market in the first-half of 2014.

While secondhand values have eroded in recent months Pittas claims newbuilding prices at top tier Asian shipyards are holding firm, which he believes to be one of the reasons why ordering tapered off towards the end of the second quarter.

“Newbuilding prices held as most decent yards are covered for the next couple of years and they’re reluctant to accept lower prices,” he said, adding: “Consequently, there was little ordering over the last three months.”

On the containership front Pittas claims secondhand prices have fallen by approximately 15% on average in recent months, a trend he attributed to “a lack of buyers” and the belief that a number of banks may be on the brink of offloading assets on the cheap.

“Containership values are still very weak and hovering around their all-time lows,” the executive continued. “We would expect prices to revert closer to historical levels by 2016 if the global economy improves as the IMF predicts.”

Pittas said that he and his management team believe both the drybulk and containership markets will experience a “gradual improvement” in the coming years but admitted they don’t expect to see what he described as “spectacular returns” in either sector.

Euroseas is based in Athens where it oversees a fleet of nine bulkers and ten boxships. VesselsValue.com believes the stable, which includes four newbuildings, is worth around $206m. The total is roughly 10% lower than an estimate issued back in February.

Euroseas Ltd.
Last+/- %+/-High

Eric Mindich, founder, Eton Park

Erich Mindich secured celebrity status in 1994 at the age of 27 when he was the youngest person in history to make partner at Goldman Sachs...

» More
  • Euroseas misses mark

    Diversified Greek operator Euroseas reported a second-quarter deficit Thursday that was deeper than many investors had expected.
  • Pittas gets ‘Modi-fied’

    The appointment of India’s new Prime Minister, Narendra Modi, bodes well for both the dry-bulk and containership markets, a leading shipowner told investors this week.
  • Euroseas halves losses

    Euroseas has seen a major improvement in its financial performance, but remained heavily in the red in the first quarter.
  • Euroseas inks YZJ duo

    Euroseas has swooped for a pair of eco kamsarmax bulkers at Jiangsu Yangzijiang Shipbuilding and delved into the second hand market for a boxship.
  • Euroseas equity issue proves size is not everything

    Greek owner’s $29m fund-raiser shows smaller companies can compete with the capital markets’ big guns — but experts argue that size can help tip the scales