Euroseas(US:ESEA)2022-05-24 16:50Financial Data and Key Metrics Changes - For Q1 2022, Euroseas reported total net revenues of $45.4 million, a 217% increase from $14.3 million in Q1 2021 [48] - Net income for the period was $29.9 million compared to $3.8 million in the same period last year [48] - Adjusted EBITDA for Q1 2022 was $31.1 million, representing a 455% increase from $5.6 million in Q1 2021 [50] - Basic and diluted earnings per share were $4.15 and $4.13, respectively, compared to $0.53 for the same period last year [51] Business Line Data and Key Metrics Changes - The fleet utilization rate for Q1 2022 was 99.6% for commercial and 99.5% for operational, compared to 100% and 96.7% in Q1 2021 [54] - Average time charter equivalent rate increased to $33,996 per day in Q1 2022 from $12,134 per day in the same period last year [54] Market Data and Key Metrics Changes - Time charter rates across all segments have reached all-time highs, with the average secondhand price index up about 17% in Q1 2022 over Q4 2021 [26] - The idle containership fleet as of May 9 stood at about 270,000 TEU, or 0.7% of the fleet, remaining at the lowest levels in the last year [29] - Global growth is expected to slow significantly in 2022, with the IMF lowering its global GDP estimates from 4.4% to 3.6% [32] Company Strategy and Development Direction - The company plans to continue its growth strategy in the feeder containership market while maintaining a strong balance sheet [46] - A share repurchase program for up to $20 million was approved to enhance shareholder value [7] - The company has reinstated its common stock dividend plan, declaring a quarterly dividend of $0.50 per share [11] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in earnings visibility well into 2024, despite potential market corrections [7] - The ongoing conflict between Ukraine and Russia, along with inflation pressures and lockdowns in China, pose risks to growth [32] - The company is prepared for potential downturns while seeking opportunities for growth [46] Other Important Information - The company has placed orders for new eco-designed fuel-efficient vessels, with expected deliveries between late 2023 and 2024 [18][19] - The current fleet consists of 18 vessels with a total carrying capacity of about 59,000 TEU [23] Q&A Session Summary Question: Can you provide more details on your newbuild chartering strategy? - Management indicated that future contracts will depend on market conditions, and they aim to avoid having all ships open at the same time [73][75] Question: What is the target capital ratio for the company? - Management confirmed they are repaying debt continuously and maintaining leverage, with visibility on earnings for the next three years [74] Question: How much was spent on the newbuild program in Q1? - The company made 10% payments for the first two vessels ordered, with further payments to be made as construction begins [77] Question: Is the dividend level expected to remain consistent? - Management stated that while they aim to maintain dividends, future levels will be decided on a case-by-case basis [78] Question: What is the target financing level for new builds? - The company aims to finance about 60% of the contract price for new builds, subject to market conditions [80] Question: How is the company preparing for potential supply-side expansion? - Management noted that discussions on renewals are currently on hold, with a wait-and-see approach being adopted [81] Question: What drove the decision to add dual fuel capability to new builds? - The decision was primarily defensive, preparing for potential future fuel standards [83]