Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference Call on the Third Quarter 2023 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the Company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today. Please be reminded that the Company announced their results with a press release that has been publicly distributed. Before passing the floor with Mr. Pittas, I would like to remind everyone that in today’s presentation and conference call, Euroseas will be making forward-looking statements. These statements are within the meaning of the federal securities laws. Matters discussed may be forward-looking statements, which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to Slide number 2 of the webcast presentation, which has the full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And now, I would like to pass the floor to Mr. Pittas. Please go ahead, sir.

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me Tasos Aslidis, our Chief Financial Officer. The purpose of today’s call is to discuss our financial results for the three and nine-month period ended September 30 2023. Let’s turn to Slide 3 of the presentation to go over our income statement highlights. We are very pleased with our third quarter results, having reported total net revenues of $50.7 million and a net income of $32.2 million or $4.65 per diluted share. Adjusted net income for the period was $28.2 million, or $4.07 per diluted share. Adjusted EBITDA for the period was $34.5 million. Please refer to the press release for reconciliation of the adjusted net income and EBITDA. As part of the company’s common stock dividend plan, our Board of Directors declared a quarterly dividend of $0.50 per common share for the third quarter of 2023, which will be payable on or about December 16 to shareholders of record on December 9. The annualized dividend yield based on the current share price is above 8%. This is the seventh consecutive quarter of paying substantial dividends since we reinstituted paying them and something that we believe will be able to continue for the quarters and years ahead. As part of our share repurchase program of up to $20 million, which was announced in May 2022 and extended for another year, we have repurchased a total of 410,000 shares of our common stock in the open market for about $8.2 million. This represents about 6% of our total outstanding sales. Our CFO, Tasos will go over the financial highlights in more detail later on in the presentation. Please now turn to Slide 4 where we discuss our recent sale and purchase,…

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. Over the next four slides, I will give you an overview of our financial highlights for the third quarter and nine months of 2023 and compare them to the same period of last year. For that, let's turn to Slide 17. For the third quarter of 2023, the company reported total net revenues of $50.7 million, representing a 10.3% increase over total net revenues of $46 million during the third quarter of last year, which was mainly the result of the higher average charter rates our vessels earned in the third quarter of 2023 compared to last year. The company reported a net income for the period of $32.2 million as compared to a net income of $25.2 million for the third quarter of 2022 at 27.7% increase. This quarter, there are two points that I would like to make regarding entries that affect our financials. The first relates the termination of the charters of Emmanuel P and Rena P that were reported during the last earnings call and Aristides mentioned earlier. Those charters came with the vessels when we bought them and because at the time, they were below market, we recorded the vessels with increased book value corresponding to the below market value of the charters. At the same time, we started recognizing the below market charter value over the life of the charters as per U.S. GAAP guidelines. As these charters were terminated, we had to recognize the remaining a recognized portion of them. Thus, the $16 million gain on charter termination that you see in our income statement. Incidentally, these charters were terminated with mutual agreement with the charter and replaced by charters with higher rate. The second point that I would…

Thank you, Tasos. Let's now open up the floor for any questions you may have.

Thank you. [Operator Instructions] Our first question is from Tate Sullivan with Maxim Group.

Hello. Good day. Thank you. Tasos, can you start by just a little more detail on the impairment of the Jonathan P. Was that impairment triggered based on the timing of the acquisition of Jonathan P and what might it imply for the rest of your vessels in terms of testing for impairment?

We continuously do a test to see whether the book value of the vessels is recoverable based on certain assumptions about the future rates. We did – when we bought Jonathan P we said the vessel was at the – the market was pretty healthy, but also we got a very healthy charter rate attached to it. We recognized significant profits over the last two years from the charter rate, but the book value has been depreciated down over the remaining of the life of the vessel. So it was depreciated much less than the earnings contribution that Jonathan provided to us. And if you do the test using historical average rates for the period after the charter, you get an indication that the vessel needs to be impaired. As these are really accounting requirements, and the fundamental business evaluation of the investment remains as it was when we decided to pursue it.

And did you say, do you every quarter test all your vessels for impairments? Or periodically you do so?

Yeah.

Okay, okay.

Every quarter we test all our vessels whether they need to be impaired or not.

Thank you. And then on the new builds, can you comment on the new builds coming to market, coming to your fleet for next year, it appears or on schedule with your previous timelines? Can you give an update on are you looking at other new companies getting intermediate size new builds delivered here in the near-term that you're really looking at, or what's the contract outlook for the 2024 deliveries at this point?

Our own new building program is going according to schedule, so we do expect to get the ships in 2024. The last few months, we haven't seen new orders being placed, but there exists other orders that are being built right now. I think that the order book for the ships between 1,000 to 3,000 TEU that will be delivered next year is around 6%. Of course, the average age of the fleet is extremely high, with 52%, 53% of the fleet being older than 15 years old. So we expect that if in 2024 the market is poor, which is highly likely, we will see ships in that size that are being redelivered by the charters, at the end of the charter and will be scrapped. So that's why we say that overall, we think that in this size bracket we will probably see a declining market, a declining number of vessels available within the next two to three years. In fact, if I can add the order book as percent of the fleet for the feeder sector has come down for about 18% a year earlier, down to less than 11% now. So there is less new order being placed for that segment, as opposed to the overall fleet where the ordering sort of continues.

Not to get too up top, but with the larger ships away from the [indiscernible] larger container ships and Maersk's announcement in the last couple of weeks of cutting 10% of its workforce, is there any – I mean is this more reflective of a weakness in China that your feeder sector could benefit from working at smaller ports outside of China? Or is there any – can you comment on the Maersk announcement, too?

Well, I’d leave Maersk to comments on their own announcements, but I think that the market generally believes that the next couple of years are going to be softer. Of course, let us not forget the huge profits that all these liners have been making during the last year. So they are all extremely wealthy companies. They are not worrying us at all about their status. It’s just that when the need was huge, they grew. Now they need to downsize a little bit.

Thank you for commenting and yes, that’s it for me. Thank you.

Thank you.

[Operator Instructions] Our next question is from Kristoffer Barth Skeie with Arctic Securities.

Hello, gentlemen. Congrats on another great quarter.

Thank you.

I was just wondering, can you comment a bit on how the negotiations are going for the vessel schedule for delivery in 2024? What levels are being discussed? And can you give some flavor on duration here? Are you seeing any interest from the liners? And yes, thanks.

Yes. We are talking with the major liners who all say we like the ships. They are interesting. But let’s discuss closer to the time of delivery about any opportunities to charter. Because the market right now is generally rather weak. We’d rather wait to discuss later. If we had the ships today, we would probably be able to fix the 2,800 at a level of around, say, $17,000, $18,000 a day for a year. And the 1,800 at around something between $11,000 and $13,000 for a year. But since the vessels are not scheduled for delivery field for at least three months, the first one, and five months the second one. People are waiting to see how the market develops before we have discussions. We also don’t want to press the liners for something today, because today, if they see somebody being trying to cover now for three or five months down the road, they will try to impose a much lower rate. So we are not pressing them to come up with a proposal until they feel comfortable about it.

Okay. Appreciate it. And in terms of capital allocation, I mean positive to see that you’re still accumulating shares, which is at a significant discount still to online values. But should you sort of be able to contract these open vessels at the levels that you describe? And how would you sort of consider capital allocation beyond that? Are you willing to increase dividends compared to sort of buybacks? I mean, liquidity after a while will also be then an issue.

Well, liquidity is currently not an issue obviously, and we don’t expect it to become any issue within the next say, five, six quarters at least based on our contracted revenues, we estimate that we will have a big enough liquidity bucket to allow us to complete the seven acquisitions. We are in discussion. Let me finish. Let me finish. Sorry.

I didn’t mean liquidity in terms of cash balance. I just meant in terms of share, the liquidity in the stock, but, sorry, please go ahead.

Okay. The liquidity in the stock, yes, the liquidity in the stock has been decreasing. You are right I think on that, as it has been decreasing for most shipping companies. We see that generally the interest in shipping has been reduced during the last six months or so. This is something of course, we follow and may affect the – our buyback program and how aggressive we are with that, because we do want to continue having high liquidity. The insiders and the family control more than 50% of the company stock right now. So that reduces liquidity, obviously, since nobody is a seller. But it’s something that we monitor continuously. And all I can say is that we won’t be very aggressive on the buyback, but it will continue to an extent. Dividends will, of course, continue, and they will continue to be at a significant – of significance. We want to be giving a dividend yield, which is in the area of 7% to 8%, 9%. So these are the policy things that right now we are following.

Okay. Thank you very much. And again, congrats on the quarter.

Thank you.

[Operator Instructions] We have a follow-up from Tate Sullivan with Maxim Group.

Thank you for taking my follow-up. And Tasos, it’s on the below market charters, and I think you gave some figures of $8.4 million of assets remaining and other liabilities, and $9.3 million. Is it – would the same event trigger a gain on those time charter agreement terminations if you entered new agreements? And what’s…

For a different vessel, the third vessel, Marcos V that was bought with a below market charter, that below market charter value is being amortized, is being credited to our earnings during the duration of the charter. And the $8.4 million, I believe that I mentioned in Slide 20 refers to the remaining unamortized below market charter value related to Marcos V. The vessel is earning $40,000 in time charter, but of course, because of that, we recognize a higher amount, which we subtract out when we do our adjusted earnings.

Okay. All right. Thank you. That’s it.

[Operator Instructions] We’re not receiving further questions at this time. I’ll turn the floor back to Mr. Pittas for closing remarks.

Thank you, everybody, for listening to our today’s call. We’ll be back in three months time. Bye.

Thanks, everybody. Thanks.

This concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time.