Euroseas Ltd. Announces Time Charter Contract for its Fuel-Efficient 2,800 teu Feeder Containership, M/V Tender Soul, to be delivered in February 2024
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Insights
The entry of Euroseas Ltd.'s new vessel, M/V TENDER SOUL, into the shipping market through a time charter contract is a strategic move, especially during a period of high new vessel deliveries which typically depresses the market rates. The fixed daily rate of $17,000 for a feeder containership provides a stable income stream and mitigates the risk of fluctuating spot market rates. However, the rate must be contextualized within the current market conditions, including supply and demand dynamics, fuel costs and global trade patterns.
It is important to consider the implications of the charter's duration. The flexibility of an eight to ten-month period at the charterer's option could be advantageous for Euroseas if the market rates increase post-charter. Conversely, if the market rates decline, the charterer may opt for the full ten-month period, securing a higher rate than the market average. This contract reflects a balance between securing immediate revenue and hedging against future market uncertainties.
From a financial perspective, the time charter contract for M/V TENDER SOUL offers Euroseas a predictable revenue stream which can be factored into cash flow projections and earnings forecasts. At a gross daily rate of $17,000, the contract could potentially contribute between $4.08 million to $5.1 million in gross revenue, excluding operational expenses, over the duration of the charter. This revenue must be weighed against the capital expenditure of constructing the new vessel and the ongoing operational costs.
Investors should note the company's ability to secure a profitable rate amidst market pressures, which may signal strong management and operational efficiency. Additionally, the impact on Euroseas' stock could be positive if the market perceives this deal as a sign of robust demand for the company's services and an indicator of future profitability.
The mention of 'fuel-efficient' in relation to the 2,800 teu feeder containership is significant in the shipping industry. Fuel efficiency is increasingly important due to environmental regulations and the rising cost of bunker fuel. A fuel-efficient vessel can reduce operational costs and enhance competitiveness. Furthermore, the size of the vessel, typically referred to as 'teu' which stands for 'twenty-foot equivalent unit', positions the M/V TENDER SOUL within the feeder class of containerships. These vessels are crucial for transporting goods from smaller ports to larger hub ports for transshipment.
The partnership with one of the largest liner companies is also noteworthy, as it suggests a level of confidence in Euroseas' ability to deliver reliable service. The long-term impact of such alliances can lead to more stable and potentially more lucrative charter contracts in the future, provided Euroseas maintains its service standards and operational efficiency.
ATHENS, Greece, Jan. 11, 2024 (GLOBE NEWSWIRE) -- Euroseas Ltd. (NASDAQ: ESEA, the “Company” or “Euroseas”), an owner and operator of container carrier vessels and provider of seaborne transportation for containerized cargoes, announced today it has entered into a time charter contract for M/V TENDER SOUL, a newbuilding fuel-efficient 2,800 teu feeder containership currently under construction, for a minimum period of eight to a maximum period of ten months at the option of the charterer, at a gross daily rate of
Aristides Pittas, Chairman and CEO of Euroseas commented: “We are pleased to announce that we have chartered our upcoming newbuilding vessel, the third in a series of nine, with one of the largest liner companies, at a profitable rate level in a period when new vessel deliveries are at a historical high and, as a result, containership rates are under pressure. This charter is expected to contribute about
“We continue working in chartering out the remaining of our newbuildings and completing their debt financing arrangements. Our strong cash position and contracted cash flow provide us with comfort and flexibility in not only funding the equity portion of our newbuilding program but also continuing to return funds to our shareholders via dividends and share buybacks.”
Fleet Profile:
The Euroseas Ltd. fleet profile is as follows:
| Name | Type | Dwt | TEU | Year Built | Employment(*) | TCE Rate ($/day) | |
Container Carriers | |||||||
| MARCOS V(*) | Intermediate | 72,968 | 6,350 | 2005 | TC until Dec-24 TC until Aug-25 | ||
| SYNERGY BUSAN(*) | Intermediate | 50,726 | 4,253 | 2009 | TC until Aug-24 | ||
| SYNERGY ANTWERP | Intermediate | 50,726 | 4,253 | 2008 | TC until Feb-24 | ||
| SYNERGY OAKLAND(*) | Intermediate | 50,787 | 4,253 | 2009 | TC until May-26 | ||
| SYNERGY KEELUNG(*) | Intermediate | 50,969 | 4,253 | 2009 | TC until Apr-25 | ||
| EMMANUEL P(*) | Intermediate | 50,796 | 4,250 | 2005 | TC until Apr-25 | ||
| RENA P(*) | Intermediate | 50,796 | 4,250 | 2007 | TC until Apr-25 | ||
| EM KEA(*) | Feeder | 42,165 | 3,100 | 2007 | TC until May-26 | ||
| GREGOS(*) | Feeder | 37,237 | 2,800 | 2023 | TC until Apr-26 | ||
| TERATAKI(*) | Feeder | 37,237 | 2,800 | 2023 | TC until Jul-26 | ||
| EM ASTORIA (+) | Feeder | 35,600 | 2,788 | 2004 | TC until Feb-24 then until Feb-25 | ||
| EVRIDIKI G(*) | Feeder | 34,677 | 2,556 | 2001 | TC until Feb-25 | ||
| EM CORFU(*) | Feeder | 34,654 | 2,556 | 2001 | TC until Feb-25 | ||
| DIAMANTIS P(*) | Feeder | 30,360 | 2,008 | 1998 | TC until Oct-24 | ||
| EM SPETSES(*) | Feeder | 23,224 | 1,740 | 2007 | TC until Jul-24 | ||
| JONATHAN P(*) | Feeder | 23,357 | 1,740 | 2006 | TC until Sep-24 | ||
| EM HYDRA(*) | Feeder | 23,351 | 1,740 | 2005 | TC until May-24 | ||
| JOANNA(*) | Feeder | 22,301 | 1,732 | 1999 | TC until May-24 | ||
| AEGEAN EXPRESS(*) | Feeder | 18,581 | 1,439 | 1997 | TC until Jan-24 | ||
Total Container Carriers on the Water | 19 | 740,512 | 58,861 | ||||
| Vessels under construction | Type | Dwt | TEU | To be delivered | Employment | TCE Rate ($/day) | |
| TENDER SOUL (H4236) | Feeder | 37,237 | 2,800 | Feb- 2024 | TC until Oct-24 | ||
| LEONIDAS Z (H4237) | Feeder | 37,237 | 2,800 | Q2 2024 | |||
| MONICA (H4248) | Feeder | 22,262 | 1,800 | Q2 2024 | |||
| STEPHANIA K (H4249) | Feeder | 22,262 | 1,800 | Q2 2024 | |||
| PEPI STAR (H4250) | Feeder | 22,262 | 1,800 | Q2 2024 | |||
| DEAR PANEL (H4251) | Feeder | 37,237 | 2,800 | Q4 2024 | |||
| SYMEON P (H4252) | Feeder | 37,237 | 2,800 | Q4 2024 | |||
| Total under construction | 7 | 215,734 | 16,600 | ||||
Notes:
(*) TC denotes time charter. Charter duration indicates the earliest redelivery date; all dates listed are the earliest redelivery dates under each TC unless the contract rate is lower than the current market rate in which cases the latest redelivery date is assumed; vessels with the latest redelivery date shown are marked by (+).
(**) Rate is net of commissions (which are typically 5
About Euroseas Ltd.
Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the ship owning interests of the Pittas family of Athens, Greece, which has been in the shipping business over the past 140 years. Euroseas trades on the NASDAQ Capital Market under the ticker ESEA.
Euroseas operates in the container shipping market. Euroseas' operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company, which is responsible for the day-to-day commercial and technical management and operations of the vessels. Euroseas employs its vessels on spot and period charters and through pool arrangements.
The Company has a fleet of 19 vessels, including 12 Feeder containerships and 7 Intermediate containerships. Euroseas 19 containerships have a cargo capacity of 58,861 teu. After the delivery of seven feeder containership newbuildings in 2024, Euroseas’ fleet will consist of 26 vessels with a total carrying capacity of 75,461 teu.
Forward Looking Statement
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for containerships, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
Visit our website www.euroseas.gr
| Company Contact | Investor Relations / Financial Media |
| Tasos Aslidis Chief Financial Officer Euroseas Ltd. 11 Canterbury Lane, Watchung, NJ 07069 Tel. (908) 301-9091 E-mail: aha@euroseas.gr | Nicolas Bornozis Markella Kara Capital Link, Inc. 230 Park Avenue, Suite 1540 New York, NY 10169 Tel. (212) 661-7566 E-mail: euroseas@capitallink.com |
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