Wednesday, September 08, 2021
Euroseas Ltd. (ESEA)
Feeder Acquisition Expands Fleet and Forward Cover
Euroseas Ltd. provides ocean-going transportation services worldwide. The company owns and operates containerships that transport dry and refrigerated containerized cargoes, including manufactured products and perishables; and drybulk carriers that transport iron ore, coal, grains, bauxite, phosphate, and fertilizers. As of March 31, 2017, it had a fleet of seven containerships; and six drybulk carriers, including three Panamax drybulk carriers, one Handymax drybulk carrier, one Kamsarmax drybulk carrier, and one Ultramax drybulk carrier. The company was founded in 2005 and is based in Maroussi, Greece.
Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Acquisition of 2006-built 1,740 TEU feeder for $25.5 million expands the fleet to 15. Attractive time charter limits capital risk. We are assuming financing of 50% debt so forecasted yearend 2021 debt will increase by $12.8 million to $71.3 million. In order to limit capital risk, the Jonathan P will be time chartered out for three years at a net TCE rate of $26.7k/day. The time charter should generate total EBITDA of $22 million, or ~$20.0k/day, and drop the cost basis below the scrap value.
Container market remains firm and upcoming fixtures should be favorable. The Jonathan P three year time charter is another good example of a strong container market. Same with the recent Diamantis P time charter through October 2024 at a TCE rate of $27.0k/day. Four feeders (Corfu/Evridiki G/Astoria/Aegean Express) and one intermediate (Oakland) are available for charter over the next six months …
This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
