ESEA Q1 2023 earnings

Container shipping company Euroseas (ESEA) reported Q1 2023 on 05/16/23.

  • Net revenue of $41.9M
  • Net income of $28.8M
  • Declared a dividend of 50c/sh for Q1 2023
  • Average time charter of $29,231 (quite impressive given the age and size of some of ESEA’s fleet)
  • Took delivery of its first EEDI compliant vessel

esea051623.pdf (euroseas.gr)

In the past 3 years, the company has had a period where its stock price increased 12-fold. ESEA has traditionally focused on older, 2nd hand tonnage. In 2021, pent up demand for any size container vessel forced ESEA mgmt to go the newbuild route. ESEA ordered a pair of vessels, then added additional vessels. Then more, and ended up with 9 newbuilds. To put their newbuild program in perspective. The first newbuild delivered in March 2023 and brought their fleet size to 18. So, the newbuild program represents a fleet growth of 50% on the ESEA fleet from the start of the year (BTW, there was an existing 18th vessel, but it got sold in Jan 2023 - so 9 newbuilds represents 50%).

The first newbuild has a very nice 3-year charter for its size @ $48K daily. Even with the uncertain container shipping market, I think vessels with EEDI specs should have little problem obtaining medium term charters (at least 3 years). The only blip I see with ESEA is its current ratio is less than 1. Something to monitor. However, I think it might be due to their newbuild program. Once the vessels start delivering, some of the current debt can be converted to long term debt.

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