Euroseas Announces Sale of Vessel and Chartering of One of Its Bulkers

Euroseas Ltd. , an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes, announced yesterday its results for the six month period ended June 30, 2013 as well as certain fleet updates.

First Half 2013 Highlights:

•Net loss of $13.5 million or $0.30 loss per share basic and diluted on total net revenues of $20.5 million. Adjusted net loss1 for the period would have been $10.3 million, or $0.23 loss per share basic and diluted.

•Adjusted EBITDA1 was $(1.1) million.

•An average of 14.98 vessels were owned and operated during the first half of 2013 earning an average time charter equivalent rate of $8,256 per day.

•Declared two quarterly dividends for a total of $0.03 per share during the first half of 2013.

Recent Developments

Since the end of the second quarter 2013, the following developments took place:

•M/V Irini, a 69,734 dwt panamax size drybulk carrier built in 1988 was sold for scrap for approximately $3.9 million resulting in approximately $1.3 million gain on the sale. The vessel has been delivered to her new owners.

•M/V Monica P, a 46,667 dwt 1998 built drybulk carrier entered into an approximately one-year charter contract at a gross daily rate of $7,500. The new charter will commence upon completion of its current charter on September 11, 2013.

Aristides Pittas, Chairman and CEO of Euroseas commented: “During the first half of 2013, the containership market was quite volatile with periods and areas of low fixing activity being followed by times of higher fixing activity. The overall result has been a marginally improving market. The drybulk charter markets also slightly recovered from their latest lows but not to levels that would enable us to re-charter our vessels with expiring charters near their previous rate levels and this development is reflected in our quarterly results.

“The general consensus is that both sectors have turned the corner and will continue recovering in tandem to an improving global economy. Consequently, both newbuilding and secondhand prices for both markets showed strength during the second quarter and registered noteworthy increases.

“We also anticipate that the gradual recovery will continue in the remaining of the year and into the next one. We, therefore, continue to position Euroseas to take advantage of investment and fleet replacement opportunities. On this front, we have started taking advantage of the opportunities to renew our fleet, as we did with the sale of one of our oldest vessels, the M/V Anking, which we replaced by a containership, M/V Joanna, which is 9 years younger (’99 built), almost twice the size of M/V Anking and more attractive commercially, for an incremental investment of about $2.2 million. We also have sold our eldest drybulk carrier, M/V Irini, for about $3.9m, and intend to replace it with a younger vessel.

“We remain optimistic about the prospects of Euroseas also because of our low leverage, strong balance sheet and cost efficient operations. In that spirit, our Board decided to continue our quarterly dividend of $0.015 per share which represents an annual yield of about 5.8% on the basis of our stock price on August 7, 2013.”

Tasos Aslidis, Chief Financial Officer of Euroseas commented: “The results of the second quarter of 2013 reflect the depressed level of the containership and drybulk markets compared to the same quarter of 2012, the lower commercial utilization rate of the vessels (both ships we sold were idle for quite some time prior to their sale) and the loss we incurred on the sale of M/V Anking. The gain on the sale of M/V Irini will be booked in the third quarter.

“Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,115 per vessel per day during the second quarter of 2013 as compared to $6,072 per vessel per day for the same quarter of last year, and $6,192 per vessel per day for the first half of 2013 as compared to $6,028 per vessel per day for the same period of 2012, reflecting a 0.7% and 2.7% increase, respectively. As always, we want to emphasize that cost control remains a key component of our strategy.

“As of June 30, 2013, our outstanding debt was $54.1 million versus restricted and unrestricted cash of about $34.1 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $17.6 million, inclusive of about $7.6 million of balloon repayments which may be extended. All our debt covenants are satisfied.”

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Euroseas, August 13, 2013