Euroseas Q1 Earnings Call Highlights

Key Points

• Euroseas posted stronger profitability despite lower revenue in Q1 2026, with net revenues of $55.84 million, net income of $32.52 million and adjusted EBITDA of about $40.9 million. Revenue slipped 1% year over year mainly because the company operated three fewer vessels.
• Shareholders got a higher dividend and an extended buyback plan, as the board raised the quarterly payout to $0.80 per share from $0.75 and renewed the $20 million repurchase program for a fourth straight year. The company has already bought back 480,500 shares, or about 6.8% of outstanding stock.
• Euroseas is expanding its fleet while locking in long-term charter coverage, with 10 newbuilds on order that would lift capacity to about 94,000 TEUs and with roughly 92% to 96% of 2026 voyage days already covered at rates above $30,000 per day. Management said the feeder and intermediate containership markets remain tight, supporting attractive rates and utilization.

Euroseas NASDAQ: ESEA reported lower first-quarter revenue but higher adjusted profitability as the container ship owner highlighted strong fleet utilization, substantial forward charter coverage and an expanded newbuilding program.

Chairman and Chief Executive Officer Aristidis Pittas said the company generated total net revenues of $55.84 million for the first quarter of 2026, with net income of $32.52 million, or $4.65 per diluted share. Adjusted net income was $32.87 million, or $4.70 per diluted share, while adjusted EBITDA was close to $41 million.

Chief Financial Officer Anastasios Aslidis said net revenues declined 1% from $56.4 million in the first quarter of 2025, primarily because Euroseas operated three fewer vessels than in the prior-year period. Net income compared with $36.9 million in the first quarter of 2025. Adjusted EBITDA rose to $40.9 million from $37.1 million a year earlier.

Dividend Increased, Buyback Program Renewed

Pittas said Euroseas’ board approved a quarterly dividend of $0.80 per share for the first quarter, up 6.7% from the $0.75 per share paid for the fourth quarter of 2025. The dividend is payable on or about June 16 to shareholders of record as of June 9. Based on the company’s current share price, Pittas said the payout represents an annualized yield of close to 5%.

The company also said it has repurchased 480,500 shares since launching its $20 million share repurchase program in May 2022, representing about 6.8% of outstanding shares, for aggregate consideration of approximately $11.4 million. Pittas said the program was renewed for a fourth consecutive year in May 2026 and that Euroseas intends to continue executing it “in a disciplined and opportunistic manner.”

Fleet Expansion Continues Through Newbuild Orders

Euroseas currently operates 21 vessels with combined capacity of about 61,000 TEUs and an average age of roughly 13 years. The fleet includes six intermediate containerships and 15 feeder containerships.

The company has 10 newbuilding vessels on order, ranging from 1,780 TEU to 4,480 TEU, with expected deliveries between the third quarter of 2027 and the first quarter of 2029. Pittas said the full program would expand the fleet to 31 vessels with total capacity of about 94,000 TEUs.

Recent orders include two additional methanol-ready 2,800 TEU containerships at Pang Hai Shipbuilding in China, with deliveries scheduled for November 2028 and February 2029. The two ships are sister vessels to ships ordered in March 2026, bringing that series to four units. Pittas said the aggregate consideration is approximately $93 million and is expected to be financed with equity and debt, targeting about 65% leverage.

Euroseas also entered an agreement with Nantong CIMC Sinopacific Offshore & Engineering in China for two 1,800 TEU reefer containerships, expected for delivery in June 2028 and September 2028. Total consideration for those vessels is approximately $64.5 million, also to be financed with equity and debt.

The company separately entered a joint venture with NRP Project Finance and related investors for ownership of the 4,480 TEU vessel Thrillos, which is scheduled for delivery in the first quarter of 2028. NRP investors will acquire a 49% stake for approximately $12.2 million, including transaction costs.

Charter Coverage Provides Revenue Visibility

Pittas said Euroseas secured multi-year employment for two vessels during the period. The EM Kea was fixed for 36 to 38 months at $30,000 per day, while the EM Spetses was fixed for 22 to 24 months at $21,500 per day. He said the company had no idle or commercial off-hire days during the quarter.

For 2026, Pittas said approximately 96% of available voyage days have been secured at an average daily rate of about $30,150. For 2027, 86% of available voyage days are covered at an average rate of about $31,000 per day, while approximately half of 2028 available voyage days are covered at about $31,500 per day.

Aslidis presented slightly different internal modeling figures, saying contract coverage stood at about 92% for 2026, more than 75% for 2027 and about 43% for 2028, with average contracted rates above $30,000 for each year. He said those figures include assumptions regarding newbuilding delivery dates, older vessel scrapping, drydocking and redelivery timing.

The company’s total utilization rate was 100% in the first quarter, compared with 99.2% a year earlier. Euroseas earned an average time charter equivalent rate of $30,354 per day, up from $27,563 per day in the first quarter of 2025.

Management Points to Tight Feeder and Intermediate Markets

Pittas said one-year time charter rates remained firm at elevated levels during the quarter, supported by liner operators fixing tonnage forward amid supply chain disruptions and network imbalances. He said idle fleet capacity, excluding vessels under repair, stood at 240,000 TEU, or 0.7% of the global fleet, as of early May.

Management emphasized the supply outlook for feeder and intermediate containerships, the segments in which Euroseas operates. Pittas said approximately 28% of the 1,000 to 3,000 TEU feeder fleet is more than 20 years old, while another 25% is 15 to 19 years old. In the intermediate segment, he said about 29% of vessels are more than 20 years old and another 38% are 15 to 19 years old.

By contrast, he said orderbook activity is more concentrated in larger vessel classes. Pittas said the feeder and intermediate orderbooks range from approximately 12% to 21% of the existing fleet, compared with much larger orderbooks in Neopanamax and Post-Panamax vessel classes.

Balance Sheet and Q&A Highlights

As of the end of March, Aslidis said Euroseas had total debt of about $213.3 million, with an average interest rate margin of roughly 2%. Assuming a SOFR rate of 3.65%, he said the company’s total cost of debt would be about 5.65%.

Aslidis said current assets, including cash and other current assets, were approximately $218 million, or $31 per share. Book shareholders’ equity was just above $490 million. He estimated the current fleet was valued at approximately $675 million and said Euroseas’ net asset value was more than $700 million, or around $100 per share. Based on a share price just above $71, he said the stock was trading at an almost 30% discount to estimated net asset value.

During the question-and-answer session, Pittas said newbuild vessels would likely command significantly higher rates than older ships if they were available today, citing roughly 20% better fuel consumption. He said current charter rates for newbuilds reflect their delivery being two years out and the longer duration of the charters.

Asked about the NRP joint venture, Pittas said Euroseas viewed the transaction as a strategic investment rather than a financing necessity, noting that Norwegian investors are active in shipping markets. He said the company may consider one or two additional similar transactions but has not made a decision.

Pittas also said Euroseas had decided to pass the older Evridiki G through its special survey, despite previously budgeting for retirement at the end of its current charter. He said the company is seeing chartering interest at levels that “really make sense” for keeping the vessel in service.

About Euroseas NASDAQ: ESEA

Euroseas Ltd. NASDAQ: ESEA is an international shipping company specializing in seaborne transportation of containerized and drybulk cargoes. Incorporated in Bermuda with its principal operations and management office based in Athens, Greece, the company owns and charters a diversified fleet of containerships, drybulk carriers and multipurpose vessels. Euroseas provides tailored shipping solutions on time-charter and voyage-charter agreements, serving manufacturers, commodity traders and logistics providers across major trade routes.

Euroseas’s fleet comprises both owned and chartered tonnage, enabling the company to adjust capacity to market conditions and customer requirements.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.