Euroseas Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2025

Key Takeaways

  • Positive Sentiment: Company declared a 7.7% dividend increase to $0.70 per share, implying an annualized yield of about 5.5%, highlighting management’s confidence in cash flow stability.
  • Positive Sentiment: Nearly 100% of available 2025 vessel days are fixed at an average rate of ~$28,000/day and ~67% of 2026 days are secured at $31,600/day, demonstrating strong forward coverage.
  • Negative Sentiment: Second quarter net revenues fell 2.5% year-over-year to $57.2 million and adjusted EBITDA declined from $42.3 million to $39.3 million, reflecting softer charter rates.
  • Neutral Sentiment: Agreed to sell M/V Maktos V for $50 million with delivery in October, with proceeds planned for reinvesting in younger vessels to modernize the fleet.
  • Positive Sentiment: Since May 2022, repurchased 463,000 shares for $10.5 million under the $20 million buyback program, with management signaling disciplined continuation to enhance shareholder value.
AI Generated. May Contain Errors.
Earnings Conference Call
Euroseas Q2 2025
00:00 / 00:00

There are 6 speakers on the call.

Operator

Thank you for standing by, ladies and gentlemen, and welcome to the UOCs Conference Call on the Second Quarter twenty twenty five Financial Results. We have with us Mr. Aristides Pietas, Chairman and Chief Executive Officer and Mr. Tasos Aslidis, Chief Financial Officer of the company. At this time, there will be a presentation followed by a question and answer session.

Operator

I must advise you that this conference is being recorded today. Please be reminded that the company announced their results with a press release that has been publicly distributed. Before passing the floor to Mr. Pitas, I would like to remind everyone that in today's presentation and conference call, UOCs will be making forward looking statements. These statements are within the meaning of the federal securities laws.

Operator

Matters discussed may be forward looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to Slide number two of the webcast presentation, which has the full forward looking statement and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And now I would like to pass the floor to Mr. Piras.

Operator

Please go ahead, sir.

Speaker 1

Thank you. Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Stansos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the three and six month period ended 06/30/2025. Please turn to Slide three of the presentation for our quarterly financial highlights.

Speaker 1

For the 2025, we reported total net revenues of $57,200,000 and a net income of $29,900,000 or $4.29 per diluted share. Adjusted net income for the quarter was $29,200,000 or $4.2 per diluted share. Adjusted EBITDA for the period stood at $39,300,000 Please refer to the press release for a reconciliation of adjusted net income and adjusted EBITDA. Our CFO, Tasha Slidis, will go over our financial highlights in more detail later on in the presentation. The company has declared a quarterly dividend of $0.7 per share for the 2025, which will be payable on or about 09/16/2025 to shareholders of record as of September 9.

Speaker 1

This reflects a $05 increase or approximately 7.7% growth in the quarterly dividend payout compared to the $0.65 per share distributed in the first quarter. This highlights our confidence in DuoC's operating strength and sustained cash flow generation. At the current rate, the increase to $0.70 per share corresponds to an annualized dividend yield of about 5.5%, which we believe is attractive and competitive within the container subsector, reflecting our ongoing commitment to deliver value to our shareholders. Based on our charter coverage, we are very confident that our current dividend yield may be maintained comfortably for the next couple of years at least. Since initiating our share repurchase plan of up to $20,000,000 in May 2022, we have repurchased 463,000 shares of our common stock in the open market for a total of about $10,500,000 as of 08/13/2025.

Speaker 1

We will continue to utilize our repurchase program in a disciplined manner as our management team may decide that enhances our long term shareholder value. Moreover, we are excited to announce the publishing of our 2024 ESG report, which is available on our website under the Sustainability section. This is the fifth consecutive year that we published such a report. We are pleased to say that we feel the whole office is taking pride in our developments on all aspects of ESG and that the various KPIs we use to monitor our performance are mostly showing positive signs. Please turn to Slide four, where we discuss our recent developments, including an update on our sales and purchase, chartering and operational highlights.

Speaker 1

During the quarter, as already announced in May, we agreed to sell our motor vessel, Maktos V, for $50,000,000 with delivery within October. Whilst we continue to have faith in the market, the price offered was simply too good to resist. The proceeds from the sale will thus eventually be used to further renew the fleet with younger vessels. Also at the June, we were able to charter our motor vessel Emmanuel P for three years at a highly tracked profitable level of $38,000 per day. On the operations side, there were certain planned repairs for motor vessel Evraviki G and motor vessel EM Koku, which resulted in not higher periods of approximately 12.5 and ten days respectively.

Speaker 1

This upgrading work was deemed necessary for our two Elder vessels to be able to seamlessly perform the very lucrative charters that we agreed upon during Q1. The fleet experienced no other idle periods or commercial uphires during the quarter. Please turn to Slide five. Here, you can see that the company has a fleet of 22 vessels, including 15 feeder container ships and seven intermediate container ships with a cargo capacity of approximately 67,000 TEU and another days below thirteen years. As already disclosed, we expect the delivery of our two intermediate containership new buildings in the 2027, each with a capacity of 4,300 TEU, which will further increase the size and reduce the average age of our fleet.

Speaker 1

Please turn to Slide six for a further update on our fleet employment. We continue to benefit from the strong forward coverage we have achieved. For 2025, very close to 100% of the company's available days have already been secured at an average rate of approximately $28,000 per day. Looking ahead into 2026, approximately 67% of our available days have been fixed at an even higher average rate of $31,600 per day. As can be seen on the chart, we only have one vessel opening up for the charter within the year, and we are optimistic that this will be affected at a very satisfactory rate.

Speaker 1

Moving on to Slide eight, we go over the market highlights in general for the 2025. In the 2025, one year time charter rates continued to strengthen during the quarter, supported by limited vessel availability and sustained demand, particularly in the smaller segments. In the feeder segment, rates rose by 8% in the 2025 compared to the first. Market activity was primarily concentrated on concrete extensions that were concluded at or above prior benchmarks, a trend that carried over into July and has continued through the August. New contracts remained fairly limited, primarily due to lack of vessels.

Speaker 1

As we move through the 2025, the operating environment remains complex and volatile. Geopolitical tensions and ongoing conflicts continue to disrupt trade patterns, while protectionist measures may create further inefficiencies. These dynamics have saved global flows and the level of uncertainty remains elevated. Consequently, forecasting the market is indeed particularly challenging. The average secondhand price index rose by about 4% in the 2025 compared to the first, supported by limited vessel supply and ongoing competition among buyers looking to expand their fleets.

Speaker 1

The newbuilding price index remained stable in the second quarter. Demand for new buildings remains firm despite heightened market uncertainty stemming from the geopolitical tensions and the threat of even more tariffs. Notably, Korean and Japanese shipyards have begun to command higher pricing relative to their Chinese counterparts, probably due to U. S. Trade measures and fees recently imposed on Chinese shipyards.

Speaker 1

Meanwhile, the idle fleet, excluding vessels under repair, has continued to shrink, standing now at a negligible 150,000 TEU as of the July, representing just 0.5% of the global fleet. This marks a significant decline from the peak of 850,000 TEU that was observed in February 2023. In parallel with the strong market, recycling activity also remains subdued with just eight vessels totaling 4,000 TEU sent for demolition here today. Scrap prices have reached slightly to $430 per light weight ton as of 08/08/2025, in parallel with lower steel prices generally. And last, the global containership fleet has already expanded by 4.1% year to date.

Speaker 1

Please turn to Slide nine for our broader market overview focusing on the development of six to twelve month time charter rates over the past ten years. As illustrated in the graphs on this slide, containership charter rates extended their upward trajectory through the 2025, standing comfortably above the ten year average and median rates, underpinned by constrained vessel availability and sustained demand strength across all segments. Please turn to Slide 10. The IMF July 2025 update presents a slightly more resilient global economic outlook than the previous report in April, with global trade developments continuing to dominate the forecast development. The global economy continues to exhibit stable yet underwhelming growth.

Speaker 1

Global growth, GDP growth is projected at 3% for 2025 and three point one percent for 2026, with the 2025 and 2026 projections revised upwards by 0.20.1%, respectively, compared to the April 2025 reference forecast. At these levels, the forecasts are below the 2024 outcome of 3.3 global GDP growth and the pre pandemic historical average of 3.7%. Global policy remains highly uncertain. Transmit tariffs took effect on Tuesday August 7 with higher rates for most used trading partners, but some are still to be decided upon. Taken altogether, these tariffs have pushed the average U.

Speaker 1

S. Tariff rate to 15.2% according to Bloomberg economics, well above the 2.3% last year and this is the highest level since World War II. The short term impact of this change, however, will probably not be huge. The United States economy is projected to grow by 1.9% in 2025 and accelerate slightly to 2% in 2026 according to the IMF. U.

Speaker 1

S. Growth forecasts were revised upwards due to the easing trade tensions, the improved financial conditions, the weaker dollar and the recent tax incentives aimed at stimulated business investment in consumer spending. In Europe, GDP accelerated, driven by investment in net exports. Growth in the area is now predicted at 1% for 2025, up 0.2 percentage points from April's projections. However, many European countries continue to face subdued domestic demand, manufacturing weakness

Speaker 2

and

Speaker 1

the lingering effects of the energy shock. Local inflation is expected to continue declining with headline inflation projected to fall to 4.2% in 2025 and three point six percent in 2026. In the Euro Area, inflation has gone down significantly. But in The U. S, it is still elevated as unemployment rate remains low.

Speaker 1

Emerging markets remain the primary drivers of global growth. India, for example, is focused to expand by 6.4% in both 2025 and 2026, fueled by strong investment, robust agriculture and a dynamic services sector. The ASEAN five countries are also projected to post healthy gains. Also in China, growth has been revised upwards, driven by stronger than expected economic performance in the first half of the year, lower than anticipated tariffs between The U. S.

Speaker 1

And China, at least today, and the positive impact of fiscal stimulus and reforms aimed at clearing local government arrears, which have all boosted domestic demand. Turning to the containership demand outlook. Clarkson's latest estimates as of July 2025 project containment rate to grow by 2.7 in 2025. This upward revision reflects the assumption that the Red Sea disruptions will persist in the near term, resulting in longer mortgage distances and increased ton mile demand. For 2026, Clarkson assumes gradual unwinding of these effects, projecting a contraction of 3%.

Speaker 1

Sudra routed volumes returned to the Suez Canal, voyage differences will shorten despite underlying cargo volumes remaining relatively stable. Turning on to Slide 11, you can see the total fleet age profile and containership order book. The containership fleet is relatively young with most vessels under 15 years old and only 12% of the fleet over 20 years old. Deliveries as a percentage of total fleet stands at 7% for 2025, 5% for 2026, 7.5% for 2027 and thirteen percent for 2028 onwards. As of 08/08/2025, the order book stands at 30.7% of the existing fleet, reflecting the ongoing wave of new business activity across the sector.

Speaker 1

Turning on Slide 12, however, we take a look over the fleet age profile and order book for ships in the 1,000 to 3,000 TEU range only, the sizes we mostly operate in. The order book here stands at just 5.4% out of August 2025, a completely different picture as you can see than the overall order book. According to Clarksons, newbuilding deliveries for fitted containerships are expected to remain limited over the coming years. In TransCon five, deliveries in this segment are projected to amount to 2.1% of the total fleet owned. This already modest delivery schedule is expected to slow further to 1.5% in 2026, followed by 2.5% in 2027.

Speaker 1

The similar positive pattern also holds for vessels in the 3,000 to 6,000 TEU range. Now let's move to Slide 13, which shows the different supply fundamentals across the various containership sizes. As you can clearly see, the global order book remains heavily concentrated on the large vessels servicing main lane routes with significant capacity growth expected there. However, feeder and intermediate vessels, which are essential for regional distribution, face a very different supply outlook. Their order books are extremely limited and the existing fleet is relatively old with a large percentage of vessels over 20 years of age.

Speaker 1

These aging units are prime scrapping candidates in the softening market, particularly as environmental regulations tighten. As a result, it is quite possible that the fleet capacity for feeder and intermediate containerships may actually decline even as the overall containership fleet continues to grow. This evolving supply backdrop supports a structurally tight market in our operating segments with favorable implications for vessel utilization and charter rates. Please move to Slide 14. We can for the remainder of 2025, rerouting away from the Red Sea is the major factor affecting the market.

Speaker 1

The other factor that may also have a significant impact, as already said, during the year is, of course, the U. S. Administration's packages that mostly took effect last week, but we still have things to see there. Following a neutral tax on the cargo ships in the Red Sea in early July by Yemen's Houthi rebels, fears of further escalation have delayed any meaningful return to the Suez route. As a result, our revised assumption is that the routing will persist through the 2025 with the best possible reversal sometime in 2026.

Speaker 1

With the implementation of the new U. S. Tariffs, following further negotiations with key trading partners, ranging from 10% to 50% depending on products and origin, trade flows could be disrupted further. At the moment, we expect the impact of global GDP and demand to remain relatively muted. Against this backdrop, we therefore anticipate time charter rates to remain exceptionally strong for the remainder of 2025.

Speaker 1

Looking into 2026, market conditions will hinge primarily on the status of geopolitical and economic events. Should the passage through the Suez Canal remain restrictive, we expect the market to hold firm with only a modest decline. However, a faster than expected reopening could prompt a more pronounced market correction. Meanwhile, containership ordering activity continues to accelerate, further inflating an already elevated order book and posing longer term supply challenges from 2027 onwards. Energy transition is gaining more and more traction in the sector with a clear industry shift towards alternative fuels and, in particular, the medium term solution of LNG.

Speaker 1

Most newbuilding orders encompass at least an LNG ready option. That said, technical and economic headwinds are expected to keep the pace of adoption slow. Eco efficient vessels are, of course, increasingly commanding a charter rate premium as charters and regulators intensify the focus on emissions compliance and sustainable transfer solutions. The recent shift in U. S.

Speaker 1

Energy policy under the current administration marked by a more fossil fuel preventive terms is likely to delay but definitely not derail the overall transition. Now please turn to Slide 15. The left hand side slide graph shows the one year time charter rate for 2,500 TEU containerships over the past ten years. As of August 8, the one year time charter rate for these containerships stood at just above $35,000 a day. While below its recent peak, this level remains exceptionally high and is well above both the historical average and medium.

Speaker 1

In parallel, new bidding and secondhand vessel prices have also risen over the past year and remain significantly above their long term historical averages too. We have a significant amount of free liquidity, which we are constantly evaluating how to best use. We are returning part of this to our shareholders through our dividend and our stock repurchase plan. We are committed to offering our shareholders a good dividend in both good and bad times. And therefore, we are maintaining necessary reserves to cater for the possible downturn.

Speaker 1

At the same time, we are keeping most of our costs available to help grow the company further. In this environment of extremely high prices and similarly tight charter rates, we are not thinking of buying secondhand vessels unless we can simultaneously secure charter rates that will bring the residual value of the vessel at the end of the charter to a median level. This is proving difficult to find though. New betting prices have also increased substantially during the last five years. However, we feel this is a structural increase that will be very difficult to reverse.

Speaker 1

Prices will probably not drop at least significantly. We are therefore seriously considering options along this front. And with that, I will pass the floor to our CFO, Tasos Espridis to go over our financial highlights in further detail. Thank you, Articles. Good morning from you as well, ladies

Speaker 2

and gentlemen. As usual, I will use the next four slides to give you an overview of our financial highlights for the second quarter and 2025 and again compare them to the same period of 2024. For that, let's turn to slide 17 to review our results for the 2025. During the third quarter, the company reported total net revenues of 57,200,000.0 representing a small decrease of 2.5% over total net revenues of $58,700,000 during the 2024. The company reported a net income for the period of 29,900,000.0 as compared to a net income of $4,750,000 for the same period of 2024.

Speaker 2

This was a result of a gain on the sale of a vessel recorded during the same period of last year and the lower time charter rates of vessels earned in the 2025 compared to the previous year, the same quarter the previous year, partly offset by the increase in the average number of vessels owned and operated during the second quarter of this year compared to last. Total interest and other financing costs for the 2025 amounts to $4,000,000 compared to $2,100,000 for the 2024. Capitalized interest charge on the cost of our newbuilding program was $1,400,000 for the 2024. And that was the reason that we recorded lower interest expense taking into account the interest income. This increase, part of the increase in addition to that is due to the increased amount of debt we carry in the current period over the same period of last year.

Speaker 2

Adjusted EBITDA for the 2025 was $39,300,000 compared to $42,300,000 achieved during the 2024. Basic and diluted earnings per share for the second quarter of this year was $4.32 and $4.29 calculated on about $6,900,000 and $7,000,000 diluted weighted average number of shares outstanding compared to basic and diluted earnings per share of $5.89 and $5.84 respectively for the 2024. Again, calculated on $6,970,000 well covered number of shares outstanding. Excluding the effect of the income of the unrealized loss on derivatives, the amortization of below market time charters acquired and the portion of the vessel depreciation allocated to the below market time charters, the adjusted earnings per share for the quarter ended 06/30/2025, which has been $4.23 basic and $4.2 diluted compared to adjusted earnings of $4.95 and $4.92 basic and diluted respectively from the same quarter of last year. With the later figure still including the recording of deferred revenues that we had to record due to rate averaging.

Speaker 2

And so we had to recognize the sales of the charters of the relevant vessels being free. Let's now look at the numbers for the corresponding six month period ended 06/30/2025 and compare it to the same period of last year. For the 2025, we reported total net revenues of $113,600,000 representing a 7.7% increase over total net revenues of $105,400,000 during the 2024. We reported a net income for the period of $66,800,000 a difference of an increase over the $60,800,000 for the 2024. Total interest and other financing costs for the 2025 amounted to $7,900,000 Capitalized interest charges on the cost of our newbuilding program was $100,000 for the first June of twenty twenty five.

Speaker 2

For the same period of 2024, interest and other financing costs amounted to total $900,000 which was inclusive of capitalized interest charge on the new the final new building program that was recorded as interest income of $2,700,000 for the same period of 2024. Adjusted EBITDA for the 2025 was $76,400,000 compared to $66,900,000 achieved during the first half of last year. Basic and diluted earnings per share for the 2025 were $9.63 and $9.6 respectively, calculated on again 6,900,000.0 and $7,000,000 this figure is around the diluted weighted average number of shares outstanding compared to basic and diluted earnings per share of 8.77 and $8.71 respectively for the same period of last year. Again, excluding the effect on free income for the first half of the year of the unrealized loss of gain on derivatives, the gain on sale of vessels and the amortization of below market time charters acquired and the portion of the depreciation allocated to the below market charters, The adjusted earnings per share for the first six months of this year would have been $7.99 basic and $7.97 diluted compared to adjusted earnings per share of $7.63 basic and $7.57 diluted for the same period of 2024.

Speaker 2

Now, let's turn to slide 18 to review again as usual our fleet performance. We'll start our review by looking at our fleet utilization rate for the second quarter of twenty twenty five and 2024. Our fleet utilization rate is broken down into commercial and operational components. During the second quarter of both years, our commercial utilization rate stood at 100% while our operational utilization rate also was similar in both quarters and stood at 99.9%. On average, 22 vessels were owned and operated during the 2025 and another time charter equivalent rate of $29,420 per day compared to 21.6 vessels for the same period of last year, earning another $31,639 per day.

Speaker 2

Our total operating expenses including management and G and A expenses, but excluding the operating costs, were for the 2025, dollars 7,694 per vessel per day compared to $7,193 per vessel per day for the same period of last year. If we move further down on this table, we can see the cash flow breakeven rate, which also takes into account dry docking expenses, interest expenses and loan repayments. That's in total for the 2025, our daily cash flow breakeven level was $13,262 per vessel per day compared to $13,698 per vessel per day for the second quarter of the year before. Let us now review the same figures for the six month periods for both years. During the 2025, our commercial utilization rate was 100%.

Speaker 2

Our operational utilization rate stood at 99.6% compared to 99.9% commercial and also 99.9% operational for the same period, the 2024. During this period, the six month period of 2025, we operated 22.83 vessels, earning another time charter equivalent rate of $28,468 per day. While for the same period, the first six months of 2024, we own and operated 20.43 vessels, earning on average $29,836 per day. Again, our operating expenses including management fees and G and A expenses, but not dry docking, were $7,454 per day in the first half of this year compared to $7,563 for the same period of 2024. And again, the looking further down on the table, our cash flow breakeven level for the first six months of twenty twenty five was $13,164 per vessel per day compared to $15,372 per vessel per day, mainly the result of lower loan repayments that we had during this year.

Speaker 2

At the bottom of this table, we can also see how our common dividend translates on a dollar per vessel per day basis. And you can see that during the 2025 that amounted to $2,275 per vessel per day, while for the first June of twenty twenty five that amounted to $2,196 per vessel per day for the dividend payments. Moving on to Slide 19 to review our debt profile. As of June 30, our total outstanding debt stood at $229,400,000 with an average margin of approximately 2%, obviously you had a three month soft rate of about 4.23%. The overall cost of our senior debt is around 6.24%.

Speaker 2

And in fact, it's a bit lower because part of our debt is cost of part of our debt is swapped at the lower corporate rate. So the overall cost of our debt on average is below 6.2%. The remaining loan repayments for 2025 amount to about $10,800,000 on the top of loan repayments of almost $30,000,000 already made in the first half of the year, during which we actually repaid the balloon of a loan that matures. With these repayments, our debt at the end of the year will be $218,600,000 In 2026, we have scheduled loan repayments of about $19,500,000 with no balloon payments due, while in 2027, we anticipate to make $16,900,000 in loan repayments alongside about $20,000,000 of balloon payments resulting in total payments in 2027 of $36,900,000 You can see the loan repayments for the for the outer years in this chart that we have on the slide. I would like to draw your attention to the bottom of this table of this slide, where we present our cash flow breakeven level for the next twelve months broken down by its components.

Speaker 2

Overall, we expect a cash flow breakeven level of approximately 12,300 per vessel per day, a level meaningful below the current daily earnings of our fleet. Any information on our balance sheet and asset values you saw on slide 20, the last slide of my brief presentation of the financial results. As of June 30, our cash and other current assets in our balance sheet amounted to $126,800,000 while we have made advances for the new building vessels of 18,100,000.0 and set as a book value of our fleet on our books May including in this figure the vessel that we have agreed to sell at the end of its current charter. Our overall book value of our assets stands or stood at the June at $662,100,000 On our liability side, our debt as I mentioned stood at $229,400,000 as of June 30, representing about 35% of the book value for our assets. We have other liabilities amounting to about $30,000,000 but leaving us with a book record of equity of a little more than $400,000,000 or about $57.5 per share.

Speaker 2

It's also important to mention here as I do in every earnings result that the market value for our fleet adjusted for the charters currently in place is significantly higher than its book value and is in the range of $680,000,000 based on our own estimates. If you recall, the book value was $517,000,000 Thus, as of the June, we estimate the charter adjusted net asset value of our company to be around $565,000,000 resulting in a net asset value per share in excess of $80 Despite our stock trading at higher levels during the last several weeks of around $50 per share, This level still represents a significant discount of the order of 35 percent to 40% to our net asset value and that setting despite despite our revenue and earnings visibility, making it evident that our focus still offers further upside potential and prospective gains for our shareholders and investors. With that, I'd like to turn the floor back to Arakidis to continue the call. Thank you, Itaso. Let

Speaker 1

me open up the floor for any questions you may have.

Operator

Thank you. We will now be conducting a question and answer session. Our first question comes from the line of Tate Sullivan with Maxim Group. Please proceed with your question.

Speaker 3

With most of your days contracted for a year, more than a year, I'm looking at the potential variability in the results. Do any of your containership contracts have different rates based on the voyage? Or are they all fixed regardless, please?

Speaker 2

I think they're all fixed. All our contracts are fixed rate contracts.

Speaker 3

Okay. All right. And no dependability on the voyage. And then on the planned sale of one of your ships and if you do decide to sell other ships in a good market, are there any trends in terms of the potential buyers? Are they from specific countries or specific entities?

Speaker 3

And how do you disclose the buyer of the ship, please?

Speaker 1

The buyer of the ship is MSC. They are, as you know, the biggest buyer around over the last few years buying elder ships. I don't anticipate that we will be selling anything else within this year. You never know, obviously. But we have fixed all the vessels.

Speaker 1

And I don't know.

Operator

Our next question comes from the line of Mark Reisman with Noble Capital Markets. Please proceed with your question.

Speaker 4

Always nice to see another strong quarter. I just had a few questions. The feeder and intermediate containership segments have small order books. You've mentioned the fleet is relatively old and the shift towards adopting new fuels remains slow. So how are you thinking about your fleet in terms of growth in the number of intermediates versus feeders and new builds versus secondhand?

Speaker 4

I think you'd mentioned you're not really interested in secondhand, but just kind of interested in your thoughts there.

Speaker 2

Yes. So we don't I mean,

Speaker 1

we would buy ten, fifteen year old vessels if we could find a suitable charter that would bring the residual value down at the end of the charter. But this is something that we have been trying to do and without much success because the asking prices of the ships are too high. So I think it's rather difficult that we invest now in ships that are in the water currently. And we like both sectors, the feeder sector and the intermediate sector. Their dynamics are very, very similar.

Speaker 1

Order books of below 7%, eight percent and six over 20 years old in excess of twenty years of 10%. So the dynamic is very nice over there. We look at potential projects and we will see how we will move ahead.

Speaker 4

Do you think the supply demand characteristics for these segments provide a relatively high level of durability to the rate outlook despite the uncertainties that you mentioned?

Speaker 1

It provides some durability. I mean, we all know that the cascading effect is quite significant with containerships, which means that if the rates for the bigger ships drop substantially, we will naturally expect to see a drop in the smaller vessels as well. However, we do feel that the supply demand fundamentals offer some significant protection against as severe drops as may happen.

Speaker 4

Okay. And then just the last question was the drydocking expenses were $3,500,000 for the first six months of 2025. But based on the information on Slide 19, is it fair to say that drydocking activity will be light over the next twelve months?

Speaker 2

Yes. I think so. I think we had two vessels that died off in the first part of the year. I think our schedule is lighter

Speaker 1

for the next six or twelve months.

Speaker 4

Okay. Thank you very much. I appreciate it.

Speaker 1

Thanks, Thank

Operator

you. Our next question comes from Clement Valdens with Value Investor's Edge.

Speaker 5

Most has already Most has already been been But I wanted to ask whether you have any plans on what to do with the proceeds of the sale of the Marcos V or Marcos V. Could you comment on potential avenues to allocate that capital? Could special dividends be in the cards? Or would you prefer to make a debt prepayment or allocate it towards new built on order?

Speaker 1

We are considering the various options. The vessel will be delivered within October. And we are looking at various options. We will let you know more when we next talk.

Speaker 2

Yes, I think our Board will meet sometime early November and we'll make a decision on how those proceeds will be best utilized or along the options we mentioned.

Speaker 5

All right. Makes sense. That's all from me. Thank you for taking my questions.

Speaker 2

Thank

Speaker 1

you. Thank you.

Operator

And we have reached the end of the question and answer session. I would like to turn the floor back to Mr. Pitaz for closing remarks.

Speaker 1

Thank you very much all for attending the our today's call, and we will be back with you in three months' time. Thank you very similarly for the results. Thank you.

Operator

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Powered by Quartr