Euroseas Ltd. · NASDAQ:ESEA
Euroseas — Morgan Stanley Commodities & Shipping Conference 2009
28 slides from Euroseas's conference presentation, June 2009
Slide 1: Company Presentation – Morgan Stanley Commodities & Shipping Conference
Company Presentation Morgan Stanley Commodities & Shipping Conference June 2009
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation may be "forward-looking statements" within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may re
Slide 3: Introduction & Milestones
Introduction & Milestones » Euroseas is a provider of worldwide dry cargo transportation services and owner of ships • Drybulk carriers – transporting iron ore, coal and grains and minor bulks • Container and multipurpose ships – transporting dry and refrigerated cargoes • Formed by industry veteran
Slide 4: Current Fleet
Current Fleet Name Type DWT TEU Built Irini Panamax 69,734 - 1988 Aristides N.P. Panamax 69,268 - 1993 Eleni P Panamax 72,119 - 1997 Monica P Handysize 46,667 - 1998 Gregos Handysize 38,691 - 1984 Maersk Noumea Intermediate 34,677 2,556 2001 Tiger Bridge Intermediate 31,627 2,228 1990 Artemis Interm
Slide 5: Euroseas Strategy
Euroseas Strategy • Selectively acquire vessels • Started renewal of fleet (average age reduced by 1.5 years) • Bought Monica P 46,667dwt / ’98, Eleni P 72,119 dwt / ’97 • Sold Ioanna P 64,863 dwt / ’84, Nikolaos P 34,750 dwt / ’84 • About $30m incremental capital expenditure (of which about $20 deb
Slide 6: Vessel Acquisitions
Vessel Acquisitions » Focus on segments with less supply growth and flexible trading patterns • Generally, handysize to panamax bulkers and up to 2,500 teu containerships • Evaluate each project on its own merits and risks » Consistent evaluation framework to identify entry points • At least 10% p.a
Slide 7: Acquisitions 2005-2009
Acquisitions 2005-2009 Euroseas avoided investing at the peak of the market except for Ioanna P Ioanna P Gregos Artemis Aristides NP Tiger Bridge Maersk Noumea Clan Gladiator Xingang Manolis P Despina/Jonathan Tasman Monica P Trader Eleni P Page 7
Slide 8: Fleet Management & Operational Performance
Fleet Management & Operational Performance » Management is performed by Eurobulk Ltd., an Daily costs per vessel affiliate 10,000 • Top management – 100+ years of industry shipping experience 8,000 $ / day • 4th generation of Pittas’ family managing 6,000 secondhand dry-cargo ships 4,000 » Fleet uti
Slide 9: Vessels Employment Chart - Bulkers
Vessels Employment Chart - Bulkers Coverage: about 95% in 2009 / 82% and 2010 NIKOLAOS P. Spot Sold ELENI P Spot $15,350 Spot Spot GREGOS / 67% FFA @ 7,000 / 80% FFA @ 7,450 MONICA P. Spot pool / 100% FFA @ 10,250 Spot / 100% FFA @ 10,950 IRINI Spot pool / 100% FFA @ 10,250 Spot / 100% FFA @ 10,950
Slide 10: Vessels Employment Chart - Containerships
Vessels Employment Chart - Containerships 65% coverage in 2009 / 29% coverage in 2010 ARTEMIS laid-up DESPINA P 15k laid-up Container Ship Vessels JONATHAN P $16,500 laid-up Multi-purpose Vessel KUO HSIUNG 11k 6k $4,100 YM XINGANG I $26,650 MANOLIS P $15,800 TIGER BRIDGE 16.5k $7,500 NINOS $8,060 OE
Slide 11: Rapid Debt Repayment
Rapid Debt Repayment Debt Repayment Schedule – As of 5/21/2009 Cash Flow Breakeven $30 » $12.3 m less debt repayments in 2009 • $2,100 / day / vessel lower cash $25 $12.3m lower debt flow breakeven payments in 2009 $20 » Cash Flow Breakeven rough estimate for next 12 months: million $15 $25.6 $4.8 $
Slide 12: Dividend Policy
Dividend Policy $0.5 25% • We are continuing our dividend policy annualized yield at declaration • One of the very few companies still paying $0.4 20% dividend quarterly dividend $0.3 15% • Declared dividend of $0.10 per share for fourth quarter $0.2 10% • Annualized yield of 7.2% (1) $0.1 5% • Inte
Slide 13: Market Overview
Market Overview
Slide 14: Rate & Price Development: 2000 - Present
Rate & Price Development: 2000 - Present 1-Year TC Rate Secondhand Price, 10-Year Old 90,000 90 80,000 80 Panamax 72-75,000 dwt Panamax 72-75,000 dwt Containership 1700 teu 70,000 Containership 1700 teu 70 60,000 60 million USD 50,000 50 $ / day 40,000 40 30,000 30 20,000 20 10,000 10 0 0 2000-01 20
Slide 15: 2009 Market Update
2009 Market Update » Dry Bulk: Strong Rebound But Is It Sustainable? • Baltic Dry Index rose from 650’s in Jan ’09 to 4,290 or so by early June ’09 but has come down a bit since • Key reasons for market strength so far in 2009: – Record purchases of iron ore by China (responsible for 52% of seaborne
Slide 16: Should We Revise Our Investment Thesis
Should We Revise Our Investment Thesis Are we “out-of-the-woods”, or, not as yet? » Unexpected strength in the dry bulk market in the second quarter • April and May are seasonally strong months due to grain trade • Record levels of Chinese iron imports unsustainable » Containership demand linked to
Slide 17: Dry Bulk & Containerized Trade Growth, 1987-2008
Dry Bulk & Containerized Trade Growth, 1987-2008 Source: Clarksons Page 17
Slide 18: World GDP & Shipping Demand Growth
World GDP & Shipping Demand Growth Real GDP (% p.a.) 2006 2007 2008E 2009 2010 2011-13 USA 3.3 2.5 1.1 -2.7 (-1.6) 1.4 (1.6) 1.8 (2.5) Eurozone 3.0 2.7 0.8 -3.4 (-2.0) 0.2 (0.2) 1.8 (2.0) Japan 2.8 1.9 -0.7 -6.5 (-2.6) 0.3 (0.6) 1.2 (2.0) China 10.5 11.2 9.0 6.0 (6.7) 7.0 (8.0) 8.6 (8.5) India 9.5 9
Slide 19: Drybulk Fleet Age Profile & Orderbook Delivery Schedule
Drybulk Fleet Age Profile & Orderbook Delivery Schedule Dry Bulk Age Profile Dry Bulk Orderbook (1) m dwt m dwt 130.0 29.2% 120 23.3% 120.0 110 110.0 100 100.0 48.2 90 90.0 60.40 13.3% 80 80.0 17.8% 17.1% 70 15.0% 70.0 60 39.40 60.0 23.4 27.1 12.7% 13.0% 36.3 50 50.0 10.2% 7.5 29.40 15.7 40 7.2% 23.
Slide 20: Containership Fleet Age Profile & Orderbook Delivery Schedule
Containership Fleet Age Profile & Orderbook Delivery Schedule Containership Age Profile(1) Container Orderbook (1) m TEU m TEU 6.4 48.0 % 2.0 15.2% 6.0 12.7% 16.0% 5.6 10.3% 5.2 1.6 4.8 2.94 13 .8% 0.92 4.4 0.79 4.0 1.2 3.6 1.31 3.2 0.6 20.9% 1.5 2.8 16.4% 0.8 2.4 1.60 0.44 0.56 2.0 1.18 0.44 0.40 1
Slide 21: Outlook Summary
Outlook Summary » 2009 is going to be a challenging year • Trade growth is expected to be negative – H1 drybulk market strength based on Chinese ore imports, congestion, piracy effect and limited (only 1%) net fleet growth • Scheduled deliveries increase during the rest of 2009 – Cancellations / del
Slide 22: Euroseas Cash Position
Euroseas Cash Position » Cash @ March 31, 2009: $ 64.9m • Includes restricted cash of about $8.6m » Debt: $62.8 m as of March 31, 2009 • Debt to Capitalization ratio about 19.6% • Covenants fully satisfied • After $10 m loan for Eleni P in April ‘09: $74.9m cash / $72.8m debt » About $40-50 m equity
Slide 23: Euroseas Market Position
Euroseas Market Position We have what it takes … » Strong Balance Sheet: $40-50 m equity available for investments » One of the lowest cost operating structures » Team and experience … to take advantage of the opportunities ahead and provide superior returns to our shareholders Page 23
Slide 24: Euroseas Contacts
Euroseas Contacts Euroseas Ltd. Aethrion Center 40, Ag. Konstantinou Street 151 24 Maroussi, Greece www.euroseas.gr euroseas@euroseas.gr Tel. +30-211-1804005 Fax.+30-211-1804097 or, Tasos Aslidis Nicolas Bornozis Chief Financial Officer Investor Relations Euroseas Ltd. Capital Link, Inc. 2692 Far Vi
Slide 25: Appendix: Selected Financial Information
Appendix: Selected Financial Information – 2006, 2007, 2008, 2008Q1 & 2009Q1 (please refer to the Company’s 20-F and 6-K filings with SEC) Page 25
Slide 26: Income Statement - 2006, 2007 & 2008
Income Statement - 2006, 2007 & 2008 INCOME STATEMENT Year ended December 31, in '000 USD except per share 2006 2007 2008 amounts and number of vessels (audited) (audited) (audited) Voyage revenue 42,143 86,104 132,244 Voyage expenses (1,155) (897) (3,092) TC Equivalent revenue 40,989 85,207 129,152
Slide 27: Income Statement - First Quarter 2008 & 2009
Income Statement - First Quarter 2008 & 2009 Three months ended INCOME STATEMENT March 31, in '000 USD except per share 2008 (*) 2009 amounts and number of vessels (unaudited) (unaudited) Voyage revenue 34,471 15,921 Voyage expenses (1,215) (577) TC Equivalent revenue 33,255 15,344 Commissions (1,64
Slide 28: Fleet Data for 2006, 2007 and 2008 and Q1 2008 & 2009
Fleet Data for 2006, 2007 and 2008 and Q1 2008 & 2009 Average Per Vessel Per Day Statistics Three Months Ended March Year Ended December 31, 31, 2006 2007 2008 2008 2009 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Number of vessels 8.09 11.48 15.61 15.00 15.70 Utilization Rate % 98.9
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