Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference Call on the Third Quarter 2024 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. [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 to 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 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 is Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the quarter and nine months period that ended on September 30 2024. Let us turn to Slide 3 of the presentation to go over our income statement highlights. For the third quarter of 2024, we reported total net revenues of $54.1 million and a net income of $27.6 million or $3.95 per diluted share. Adjusted net income for the quarter was $27.4 million or $3.92 per diluted share. Adjusted EBITDA for the period was $36.1 million. A reconciliation of adjusted EBITDA to net income is presented in the press release that was released earlier today. Tasos Aslidis will go over our financial highlights in more detail later on in the presentation. As part of the company's common stock dividend policy, our Board of Directors declared a quarterly dividend of $0.60per common share for the third quarter of 2024, which will be payable on or about December 16 to shareholders of record on December 9. The annualized dividend yield of our stock remains at around 5.7% based on our current share price. As of November 20, 2024, and since the initiation of our repurchase program in May 2022, we have repurchased 414,000 shares of our common stock in the open market for a total of about $8.8 million. Our share repurchase plan of up to $20 million was extended for another year in May 2024 and we will continue to make measured use of it at management discretion depending on the level of our stock price aiming to enhance long-term shareholder values. Please turn to Slide 4, where we discuss our…

Thank you very much, Aristides. Good morning, ladies and gentlemen. Over the next four slides, I will give you an overview of our financial highlights for the third quarter and nine month period ended September 30 2024, and compare them as usual to the same periods of last year. I will not go through every number in the slides that follow but rather focus on the most important points. Let's indeed start and turn for that to Slide 18. For the third quarter of 2024, we reported total net revenues of $54.1 million, representing a 6.9% increase over total net revenues of $50.7 million during the third quarter of 2023, a result which was mainly due to the higher number of vessels we operated in the third quarter of this year, partly offset by lower other charter earnings our vessels earned. Interest and other financing costs for the third quarter of 2024 amounted to $3.2 million after detecting capitalized interest of $0.9 million charged on the cost of our new building program, for total interest and other financing cost of $4.1 million compared to 1 point million for the same period of 2023 after again deducting the imputed -- the capitalized interest of $0.9 million charged for the cost of our newbuilding program and this happens because we are self-financing the pre-delivery installments. The increase of interest expenses in 2024 is due to the increased amount of debt that we had in our books during the period as compared to last year. Interest income for the third quarter of 2024 was $0.7 million compared to $0.4 million for the same period of last year. Adjusted EBITDA for the third quarter of 2024 increased to $36.1 million compared to $34.5 million during the third quarter of 2023, primarily due to the…

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

[Operator Instructions] Our first question comes from the line of Mark Reichman with Noble Capital Markets. Please proceed with your questions.

Hi, Mark.

Thank you. Good morning. I have a question about the two fuel efficient container vessels that will be delivered in the fourth quarter of 2027. What rates would be required for those vessels to achieve breakeven? And also if you could provide maybe a little more detail on the financing plans and what are the implications for the remainder of your fleet?

I think that yes Mark I think that assuming a 20 year life for the vessels you could assume -- if we had something below $20,000 per day for the whole duration that would be profitable. But obviously, we are hoping to achieve better rates than that. We did pay the down payment 15% on each of the two vessels just last week. The next installments come with steel cutting, which starts in 2026 and the ships will be delivered in 2027. We anticipate that at the end of the day, we will end up paying for the ships with debt of 60%, 65% and equity of the remaining.

Okay, thank you. And Euroseas has done a great job keeping its fleet employed at profitable rates. And I was just wondering what are your expectations for and Diamantis and the Aegean Express whose time-charters expire at the end of November and December, respectively?

Well, both of these ships obviously will be fixed within the next couple of weeks. We are seeing interest in the vessels at levels, I would say, between $13,000 and $20,000 for a year or a year and a half, things like that. We are still not in play -- ready to announce something because we are negotiating, but they will be fixed. The market is positive and is helping us, right? So, we've achieved great rates, thank you very much, into the market as they say.

That's great. Thank you very much.

Thanks, Mark.

Our next question is from the line of Tate Sullivan with Maxim Group. Please proceed with your questions.

Hi, thank you. Can you expand on the decision to go and expand a new-build effort to larger class ships with about TEUs of about 4,000? Did you mention it was based on your analysis of that size ship having an older age in the global fleet?

Absolutely. I mean, we have seen that feeder and intermediate vessels up to 6,000 TEU vessels, the order book in all those sectors is between 4% to 5% and between 50% to 60% of the existing fleet is over 15 years old. So, these newer ships are much more economical, much more environmentally friendly. They have a lot of much nicer attributes than the older ships. We are very confident that there will be the need for these types of vessels and we thought that we have six 4,500 TEU vessels in our fleet, which are all between 10 and 15 years old. And we think that we should order a couple of replacements for them.

And did you say this order is with a new shipyard in China and how did you evaluate its capability and did it have available slots versus South Korea? How did you look at sort of…

The shipyard is called the New Yangzi, Jiangsu, but it is right now the best, I would say, private shipyard in China. It's been established for quite a few years. We actually built -- well, EuroDry built some Kamsarmaxes there 10 years ago. This is one of the best Chinese shipyards. It's not new despite the fact that the name says New Yangzi Shipyard.

Thank you. And then to confirm, you said the delivery of the two newbuilds in the first quarter, did you say January 7th and January 8th? I mean, you've been on time for all the other ships, it seems like or can you talk -- can you confirm those dates?

Yes, I can confirm early January. In fact, the ships could have been delivered in November and December, but it was our choice to ask the shipyard to go a bit slower so that when they are delivered, they are delivered with a 2025 notation rather than a 2024 notation.

Good. Thank you.

Thank you, both.

Our next questions are from the line of Poe Fratt with Alliance Global Partners. Please proceed with your questions.

Good afternoon, Aristides. Good afternoon, Tasios. You've covered a lot, but I just wanted to sort of get if you wouldn't mind giving your rate expectations for the Monica which is what 2024 new build that's up for -- it's open and starting in either March or May of next year?

Correct. It's a bit too early to say for this ship what we will do because you've seen these ships get anything from $16,000 to $24,000 a day for a couple of years. So, it really will depend on the rates we see starting next year, except if we were to see something very good being offered to us before the end of the year, which makes us to fix it already, but it's really difficult to say at this point.

Okay. And I assume it's the same thing with the three intermediates that are coming up in the first quarter of next year?

Which ones? The...

The three intermediates, the Antwerp, the Rena P and the Emmanuel P?

Yes, we are in discussions trying to see if we can achieve good rates for big enough periods and there is interest on the ships and we might be able to announce something this side of the year. We will see.

Okay, so there's more...

They don't come through in Q1, I think, because the optional periods are touched. Very likely, the charters will keep them until the outer part of the optional delivery period.

Okay, Tasios. And then you're seeing more interest -- just to sort of paraphrase, you're seeing more interest in the intermediates that are coming up than the speeders, it sounds like. And then Tasios, following up on your comment that they'll keep the option period, that would imply that the current rates in the low to mid 20s are attractive for charters and they would hold on to them as long as possible because the renewal rates would probably be higher.

That's right.

Okay. And then if we can flip over to the deliveries in the first quarter, you're financing $52 million it sounds like. Are those -- is that -- and it sounds like you've lined up the financing. What's the tenure of that debt? Is it five years? Should we assume five years?

I think it's -- in one case it's 10 years because in one case we're doing or we're in the process of arranging a sale lease-back style financing. In another case, it's about six years, I think.

Six years, okay. And it sounded like Tasios, I heard you say that it would add about $4 million to amortization looking at '25 and beyond and that includes the lease pay down too?

Yes.

Okay, great. And then relative to what you're spending, the new build delivery, payments upon delivery, what -- that $52 million, will that finance all that or will that create a little bit of extra cash or can you give me, I guess, a short way of saying what's the new build delivery payments that are due in the first quarter of '25?

I don't think we have, I think we -- that would pretty much finance the remaining amount for the newbuilds.

Okay. And then could we just go over the decision to build versus buying if you could just sort of talk about what you -- whether you assessed what was out there as far as second-hand tonnage, you have a chart in the presentation with 10-year-old assets that are I think pretty attractive relative to new build prices, it depends on your outlook for rates. But can you just talk about whether you assess buying something in the secondhand market versus committing to a new-build?

We are only looking at second-hand opportunities, but recently prices for second time vessels have risen substantially. But, of course, charter rates have also risen. So, we are trying to see if we can find something that we can charter straight along as when we buy it for a significant period of time. We haven't been able to find something that makes sense financially at this -- in the second front market here at this stage. And, of course, the new vessels, they come with many more echo characteristics than the elder vessels. So, there are significantly better vessels and more fleet for the future and the immediate future. So that's the reason we are buying the newbuilds. Also, we don't think that newbuilding prices can drop significantly from where they are because the cost of building ships has increased. Indeed, the yards are making profits, but not substantial profits, not huge profits. There's not much room for them to lower prices. And of course, they won't for the next couple of years because all the yards have a huge order book, they are sitting on orders. So they will not be inclined to take business at a discount. Therefore, we feel that new building prices will not get much better and the future for these ships seems extremely attractive.

Hi, thank you very, Aristides. Can you -- just to clarify, do you buy these out of -- are these resales or are these new orders?

No, these are orders that we are placing ourselves.

Okay, great. So it doesn't -- the order book goes up just slightly. And then I think I heard that you paid a 50% deposit in the fourth quarter -- this quarter, $18 million. And I thought I heard that you didn't have any progressive payments in 2025, but you'll have progressive payments in '26. Can you -- do you have a handy the amount of progressive payments that are due in '26? And then also if you wouldn't mind what will be due in '27?

Yes. I'll be happy to provide you with our schedule. I think usually we'll start making -- a second payment is when the steel cutting starts and when they actually start building the ship that will be something that happens late in 2026.

Late in '26 or late in '25, Tasos?

Late in '26 because it takes about less than a year to actually build the ship. The ships are to be delivered in Q4 '27 or sometime late in '26 we should have the next payment due.

Okay but nothing, you won't have any project payments in 2025?

No.

Okay and so it's 50 -- roughly, I was estimating five projects payments to 10% and the 50% payment upon delivery. Clearly, I was wrong on the deposit level, it's 15%, but can you give me the rest of the sort of timeline for how the payments are spread-out and what's due upon delivery?

It's 15% advanced payments, then it's three installments of 10% and the remaining is paid upon delivery. So starting from Q4 '26, you can say the next payment and then put in another three 10% -- another two 10% in the first-half of next year and the repayment at the beginning of the fourth quarter of 2027.

Okay, that's good. So 45% upon delivery. That's very helpful. And then, Tasos, can you just go -- you drydock Joanna with third quarter, more in the fourth quarter. Can you just give us an upcoming schedule on drydock that you plan for '25.

I think there is very little that is due in 2025. Let me just see if I can pull it up quickly.

Thank you.

So we have -- I think a couple of vessels. We have definitely one vessel in the third quarter and we have some a bunch of in-water surveys. So there isn't really -- we have, as I see here on a draft schedule I have in front of me, we have one drydock and a bunch of in-waters. I can give you a more detailed schedule offline if you want.

Okay. Is that in the year Tasos? Or for '25?

The drydock that I see, we have it in the third quarter of 2025. The in-waters are various quarters.

Okay, great. And then I know I have one other question that has just flipped my mind. I apologize. Okay, so, if you look at the Aegean Express, it's a '97 built. It sounds like you have interest, but is that a potential sale candidate along Diamantis P?

We can always sell for the right price an old ship or a new ship -- or a newer ship. But generally as you've seen, we feel very comfortable in operating also the elder ships. We think this is one of the advantages of Eurobulk, our manager, that they can handle elder ships. I know they are not extremely popular to the investment community, but we can do a good job with them and in times like this where the markets are strong, it makes sense to generally keep these vessels, usually you can make more than what you would if you sold them.

Okay. But at some point in time, probably over the next two years, those are sale candidates or retirement candidates....

Of course. If the market corrects and the drydock becomes due, it might not make sense to pass another drydock. So that's really when you -- when we sell a ship.

Okay. And then Tasos, you talked about the forward looking OpEx and breakeven levels. Are you seeing any major changes in any of the cost categories? Is there any inflation, whether it's insurance or any other areas, looking into 2025?

Nothing, not worth that I can report. I mean, there is some cost inflation obviously in every aspect of our lives, including in maintaining the ships. But to the best of my understanding, nothing sticks out, as we prepare our analysis. Certain insurance cost, although not vessel related like D&O Insurance fluctuates and lately has been trading down, for example, but I mean these things could change.

Thank you. Our next questions are from the line of Climent Molins with Value Investor's Edge. Please proceed with your questions.

Hi, good afternoon. Most has already been covered, but I wanted to follow-up on the recent new build additions. Could you talk a bit about how you expect to market the vessels? Do you expect to secure a contract in the near term or are you comfortable waiting until closer to delivery?

We are very comfortable waiting until closer to delivery. If, however, we are offered a good rate for a big period, we would proceed with such a charter. But we are very, very comfortable waiting closer to delivery. It's still quite far away the delivery.

Makes sense. Yes, that's helpful. And after recent contract additions, you have solid earnings visibility throughout 2025 and even into 2026. Could you talk a bit about how you think about your dividend? Is there any appetite to potentially raise it going forward?

Yes. We will -- we discuss dividends regularly in our Board meetings and we will have a discussion on that again during our next Board meeting when we look at the final results of the year. And we will decide at the time. Generally, we always want to give a good dividend, a good dividend yield to our shareholders. We think it's important. So as long as our financials allow that, we do that. Of course, you have to always balance the growth of the company, the new acquisitions, the share repurchase program, which we have in-place because we feel that we are trading at a discount. So there are quite a few things that one can do with the liquidity and we will discuss again next quarter.

Makes sense. Yes. Thanks for the color. That's all from me. Thank you for taking my questions.

Thank you.

Thank you. Our next question is a follow-up from Mark Reichman with Noble Capital Markets.

Think you, you may have just answered it, but with the rate environment remaining positive, so should Euroseas' cash-flow outlook. So I was just going to ask Tasos if he could maybe discuss the capital allocation priorities for 2025. Like you mentioned that balancing between investing in the business, paying out dividends, funding buybacks, et cetera.

I think Aristides answered that question, I think we always look at all of these components of our distribution and capital allocation policy and we try to provide, as Aristides said, a good yield for our dividend. Of course, chartering more ships at attractive rates would be positive in deciding to look more positively at growing the dividend. But it's decisions to be taken at the next Board meeting. And I refer to what Aristides described earlier.

Thank you very much.

Thank you guys.

Thank you. At this time, I'll pass the floor back to Mr. Aristides Pittas for closing remarks.

Thank you everybody for listening-in and we'll be together with you in three months' time to discuss how this is very good year for Euroseas ended-up finally.

Thanks, everybody.

Thank you to everyone who joined us today. This does conclude today's teleconference. We thank you for your participation. You may now disconnect your lines at this time.