Euroseas Ltd. Conference Call Summary Company Overview - Euroseas Ltd. operates in the container shipping industry, focusing on the feeder segment with a fleet of 22 vessels, including 15 feeder container ships and 7 intermediate-sized container ships, totaling over 67,000 TEU capacity [2][3] - The company has four vessels under construction, each with a capacity of 4,300 TEU, scheduled for delivery in late 2027 and early 2028 [3] Industry Context - The container shipping market has experienced significant fluctuations over the past 20 years, influenced by events such as China's WTO entry, the financial crisis, and the COVID-19 pandemic, which led to unprecedented shipping rates [9][10] - Recent geopolitical events, such as the situation in the Red Sea, have further impacted shipping dynamics, creating additional demand for feeder services [10][11] Fleet and Operational Strategy - Euroseas is modernizing its fleet through a new building program and retrofitting older vessels to improve fuel efficiency, achieving fuel savings of approximately 25% [5][6] - The company emphasizes the importance of the feeder sector, which plays a critical role in distributing containers from major hubs to final destinations [7][15] Financial Performance - Euroseas reported $114 million in net revenue and an EBITDA of $76 million in the first half of the year, with average charter rates of $28,500 per day [18] - The company has 100% fleet employment for 2025 and 70% for 2026, with contracted rates exceeding $30,000 per day [17][18] - A dividend of $0.70 per quarter has been established, translating to a 5% annualized yield [19] Market Outlook and Challenges - The company faces uncertainties related to tariffs, the resolution of the Red Sea situation, and environmental regulations that may impact the shipping industry [11][12] - The supply of container ships is high, with a significant number of vessels under construction, which could affect future rates and demand [12][13] Investment Thesis - Euroseas believes that the feeder segment will experience different supply dynamics compared to the overall container ship market, with a low order book and a high percentage of older vessels likely to be removed from service [14][15] - The company maintains a strong balance sheet with low leverage, a market value of the fleet significantly above debt levels, and a net asset value estimated at $80 per share, compared to a recent trading price of around $56 [20][21] Conclusion - Euroseas presents a compelling investment opportunity in the container shipping market, particularly in the feeder segment, with strong earnings visibility, a solid dividend yield, and potential for stock price appreciation [30]

Financial Data and Key Metrics Changes - Revenues for Q2 2025 were $87.1 million, with operating income at $22.2 million and net income at $6.8 million, while adjusted EBITDA was $51.6 million [3][11] - Available liquidity as of June 30, 2025, was $104 million, consisting of $66.3 million in cash and cash equivalents and $38.5 million in undrawn credit facilities, which is $4 million higher than at the end of Q1 [3][11] Business Line Data and Key Metrics Changes - The company achieved full utilization of its fleet, with an overall utilization rate of 96.8%, despite the start of two dry dockings [3] - The backlog of fixed contracts increased to $895 million, averaging 2.6 years, with potential for more if all options are exercised [9] Market Data and Key Metrics Changes - The shuttle tanker market is tightening in both Brazil and the North Sea, driven by Floating Production Storage and Offloading (FPSO) startups and ramp-ups [8][9] - The average age of the fleet was reduced from 10.1 years to 9.7 years with the addition of a new vessel [9][28] Company Strategy and Development Direction - The company is focused on fleet growth through acquisitions and maintaining high operational utilization, while also planning to increase distributions to unitholders [17][27] - The strategy includes a combination of accretive growth and returns of capital to unit holders, with a $10 million unit buyback program initiated [6][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial outlook, citing positive momentum in the shuttle tanker market and the company's ability to address debt maturities [12][16] - The company is optimistic about the demand for shuttle tankers, anticipating a medium-term shortage against forthcoming production [16] Other Important Information - The company declared a cash distribution of $0.026 per common unit, paid in August [4] - The Dakin Connexion was purchased for $95 million, with a cash component of approximately $25 million, and is on time charter with PetroChina until July 2027 [5][6] Q&A Session Summary Question: Delivery timeline for Dakin Connexion - Management confirmed that the Dakin Connexion was delivered on July 2, 2025, the same day it was announced [19][20] Question: Future dropdowns and fleet growth - Management indicated that they do not have a specific timing for future dropdowns but will respond to opportunities as they arise, emphasizing the importance of financial capacity [20][22] Question: Contracting discussions for older vessels - Management stated that their business model focuses on operating vessels rather than trading them, and they are actively discussing contracts for older vessels with clients [26] Question: Balancing fleet growth and distribution increases - Management explained that fleet growth and returns to unit holders are both important and can be pursued simultaneously, with the buyback program being a smaller component compared to fleet acquisitions [27][28]

Group 1 - CMB.TECH announced the sale of the Suezmax tanker Sofia, built in 2010, for $40.1 million, expected to deliver in Q4 2025, generating approximately $20.4 million in profit [1] - This sale is part of a fleet renewal strategy led by the Saverys family, which previously disposed of five older Suezmax tankers built between 2006 and 2008 [3] - CMB.TECH's subsidiary Euronav has also been active in tanker disposals, achieving $57.1 million from the sale of the VLCC Iris in Q2 and approximately $39.3 million from two VLCCs in Q3, totaling an expected $117 million from four tanker sales this year [3] Group 2 - Following the recent merger with Golden Ocean, CMB.TECH's fleet expanded to 251 vessels, valued over $11.1 billion, with an average age of 6.1 years, making it one of the largest diversified shipping companies globally [5] - The merger added 89 bulk carriers to CMB.TECH's fleet, reinforcing its position as one of Europe's most diversified shipowners [5] - Analysts predict a potential $1.08 billion asset sale plan post-merger, involving the sale of 34 non-core and older vessels, including 7 Suezmax tankers valued at $303 million, with the Sofia sale possibly being the first step in this strategy [5]

Core Viewpoint - The dry bulk shipping industry is witnessing a trend of fleet optimization and capacity upgrades as several companies listed on the NYSE report their Q2 earnings, indicating a strategic shift towards modernizing their fleets and divesting older vessels [1][3]. Group 1: Star Bulk Carriers - Star Bulk Carriers, led by Petros Pappas, has sold 9 vessels that do not align with the company's commercial strategy, including the "Puffin Bulker" and "Star Canary" [1]. - The company has also agreed to sell an additional 6 vessels built between 2006 and 2011, expecting total proceeds of approximately $104 million, with plans to use about $19 million for early debt repayment by Q3 2025 [3]. - Star Bulk is modernizing its fleet with 5 new Kamsarmax vessels currently under construction in China, expected to be delivered in 2026, and operates a total of 142 vessels with a deadweight tonnage of 14.2 million tons [3]. Group 2: Genco Shipping and Trading - Genco Shipping and Trading is also updating its fleet, having announced the acquisition of a 2020-built Capesize bulk carrier, which is expected to be delivered between September and October [3]. - The company has invested approximately $200 million in modern, energy-efficient Capesize vessels since October 2023, with the latest acquisition believed to be related to the sale of the "Bulk Ginza" [5]. - Genco's CEO, John C Wobensmith, emphasized the strategy of selling older, less efficient vessels to invest in environmentally friendly ships, supported by a favorable supply-demand outlook for the Capesize market [6]. Group 3: Safe Bulkers and United Maritime - Safe Bulkers, led by Polys V Hajioannou, has sold the 2007-built Kamsarmax vessel "Pedhoulas Leader" for approximately $13 million as part of its fleet renewal strategy [8]. - The company has invested heavily in newbuilds, with 12 out of 18 vessels ordered delivered as of July 18, and currently operates 47 vessels with a deadweight tonnage of about 4.7 million tons [8]. - United Maritime, led by Stamatis Tsantanis, has confirmed the sale of the 2004-built Capesize vessel "Gloriuship" for about $15 million and is also selling the 2006-built "Tradership" for a net price of approximately $18 million [9]. - These transactions are expected to enhance United Maritime's financial position and enable the company to seize new growth opportunities, managing a fleet of 7 bulk carriers with a total deadweight tonnage of around 750,000 tons [9].

Financial Data and Key Metrics Changes - Genco recorded a net loss of $6.8 million or $0.17 per share for Q2 2025, with an adjusted net loss of $0.14 per share excluding a non-cash impairment charge of $700,000 [14] - Adjusted EBITDA for Q2 totaled $14.3 million, with a cash position of $35.8 million as of June 30, 2025, and $100 million of debt outstanding, resulting in a net loan to value of 7% [14][15] - The company declared a dividend of $0.15 per share, marking 24 consecutive quarters of dividends, representing 41% of the current share price [6][17] Business Line Data and Key Metrics Changes - Genco's fleet composition includes 17 Capesize vessels and 26 Ultramax and Supramax vessels, with a 40% ownership in Capesize and 60% in Ultramax/Supramax on a vessel basis [10] - The Baltic Capesize Index has averaged over $20,000 per day in 17 of the last 22 months, indicating strong performance in the Capesize sector [11] Market Data and Key Metrics Changes - The drybulk freight rate environment improved significantly in June, crossing the $30,000 per day level, driven by record port headland iron ore shipments [19] - Brazilian iron ore exports increased by 20% from April to June, absorbing approximately 100 Capesize vessels, which is nearly 5% of the Capesize fleet [19] - The Capesize segment has the smallest order book among dry bulk sectors at 9% of the fleet, with only 20 Capesize vessels delivered in the first half of the year, the least in over 15 years [25] Company Strategy and Development Direction - Genco's strategy focuses on dividends, deleveraging, and growth, with a commitment to returning cash to shareholders while expanding earnings power [5][12] - The company aims to modernize its asset base and has increased its borrowing capacity by 50% with a new $600 million revolving credit facility [7][15] - Genco plans to capitalize on improving drybulk fundamentals and has front-loaded the majority of its dry dockings for 2025 [7][18] Management's Comments on Operating Environment and Future Outlook - Management expressed a favorable view of the long-term fundamentals of the drybulk industry, anticipating a stronger freight rate environment in the second half of the year [6][12] - The company expects its cash flow breakeven rate to revert to approximately $9,800 per day by Q4 2025, with Q3 TCE estimates currently 17% higher than Q2 [17][71] - Management noted that while volatility in the freight market is expected, the low supply growth picture provides a solid basis for a constructive view of the drybulk market moving forward [25][26] Other Important Information - Genco has been recognized for strong corporate governance, being the only listed drybulk company with no related party transactions and ranked number one in the Weber Research ESG scorecard for four consecutive years [13] - The company has completed 90% of its full-year 2025 drydockings by the end of Q3, with only two remaining for Q4 [18] Q&A Session Summary Question: Can you discuss the attractiveness of the newly acquired vessel and appetite for more? - Management highlighted the vessel's high quality, fuel efficiency, and scrubber installation, indicating a strong appetite for further acquisitions in the Capesize sector due to compelling supply and demand fundamentals [28][30] Question: Will the company consider selling older vessels to fund new acquisitions? - Management indicated a focus on divesting older vessels, particularly two that are 20 years old, while timing sales to maximize price [32][33] Question: What is driving the growth in non-Capesize rates? - Management attributed the growth to robust corn and soybean crops from Brazil, along with a resurgence in coal shipments [39] Question: What is the outlook for TCE rates in Q4? - Management noted that while predicting exact rates is difficult, the forward curve indicates a strong Q4, with high fleet utilization expected due to completed drydockings [71] Question: How will the stock buyback program be utilized? - Management clarified that the buyback program is supplemental to dividends and will be used if market conditions warrant it [59][60]

Core Viewpoint - Teekay Tankers has actively executed its fleet renewal plan, acquiring modern vessels while selling older ones to capitalize on high asset prices, despite experiencing a decline in financial performance in Q2 2025 compared to the previous year [3][5]. Financial Performance - In Q2 2025, Teekay Tankers reported revenue of $232.9 million, a decrease of 29.1% year-over-year but a slight increase of 0.5% quarter-over-quarter [4]. - Adjusted EBITDA for the same period was $62.0 million, down 50.2% year-over-year but up 4.4% from the previous quarter [4]. - Operating profit reached $54.9 million, reflecting a 48.5% decline year-over-year and a 26.1% decrease from the previous quarter [4]. - Net profit was $62.6 million, or $1.81 per share, marking a 44.0% decrease year-over-year and a 17.7% decline quarter-over-quarter [4]. Fleet Update and Strategy - Teekay Tankers invested $64.3 million to purchase a Suezmax tanker, "Nordic Thunder," and agreed to acquire 50% ownership of a VLCC for $63.0 million [3]. - The company has sold five vessels since May, totaling approximately $158.5 million, which is expected to generate about $46.0 million in book gains [3]. - The average TCE for the Suezmax fleet was $33,089 per day, up 23.6% quarter-over-quarter but down 25.8% year-over-year [4]. - The average TCE for the Aframax/LR2 fleet was $32,101 per day, reflecting an 11.0% increase quarter-over-quarter but a 26.5% decrease year-over-year [4]. Market Outlook - The CEO indicated that the second quarter saw strong spot tanker rates, which were above historical averages, and anticipates a potential increase in seasonal tanker demand later in the year due to OPEC+ production adjustments and low global oil inventories [5][7]. - For Q3 2025, the expected TCE for the Suezmax fleet is projected at $31,400 per day, with 44% of operational day rates locked in, while the Aframax/LR2 fleet is expected to reach $28,200 per day with 42% of operational day rates secured [7]. - Teekay Tankers operates 44 tankers, primarily in the spot market, with a cash flow breakeven point of approximately $13,000 per day [7].

Financial Performance - Gross revenue was $193 million[4] - Adjusted EBITDA was $116 million[4] - Net loss was $32 million, or $0.24 per share[4, 17] Dividend and Share Repurchase - Quarterly dividend of $0.27 per share[4, 25] - Share buy-back of approximately $10 million at an average price of $7.98[4] Contracted Revenue and Backlog - Contracted backlog of $4.2 billion[4, 6, 25] - 68% of the contracted revenue is with investment grade counterparties[6] Portfolio Composition - Container vessels account for 68% of the contracted revenue[6] - Energy sector accounts for 12% of the contracted revenue[6] - Dry bulk accounts for 11% of the contracted revenue[6] - Tanker sector accounts for 8% of the contracted revenue[6] Operational Performance - Overall fleet utilization was 99.2%[11] - Container vessel utilization was 91%[11] - Car carrier utilization was 100%[11] - Tanker utilization was 100%[11] - Dry bulk utilization was 100%[11] - Energy sector utilization was 48.3%[11] Balance Sheet - Cash and cash equivalents totaled $174 million[23, 25] - Book equity ratio of 26%[21]