EUROSEAS has ordered two intermediate-sized containerships, as cash piles up from a stronger than expected boxship market.

At 4,200 teu, the modern fuel-efficient vessels to be constructed by Jiangsu Yangzi Xinfu Shipbuilding are the largest ordered new by Euroseas.

The Nasdaq-listed owner said the vessels are scheduled for delivery in the fourth quarter of 2027 and will cost about $60m each, to be funded with a combination of debt and equity.

Euroseas has six vessels of around this size, all more than 15 years old, in its fleet of 23 ships on the water — a majority of which are feeders.

It has a newbuilding programme that has seen it take delivery of three new vessels of 1,800 teu and another four of 2,800 teu, with a final 2,800 teu pair expected in 2025.

Company chief executive Aristides Pittas said a large orderbook presented “the main challenge” for the containership sector, but this did not apply in Euroseas’ segment of the market.

“On the contrary, the orderbook for the feeder and intermediate segments... is very modest against a fleet age profile that includes a high percentage of vessels older than 20 years,” he said.

This was projected to result in minimal fleet growth or even fleet shrinkage, Pittas added.

Given the healthy dynamics of these sectors and that cash reserves were “over and above our dividend distribution and share repurchase programme needs”, Euroseas had decided to extend its newbuilding investments to strength its position in the intermediate vessel segment.

“Within a market that continues to be strong and has a significant charter backlog, we expect our earnings to continue to be strong and our cash reserves to continue increasing as indicated by our results for the third quarter of 2024,” Pittas said.

Third-quarter net revenues increased by 5.6% to $54.1m and Euroseas posted adjusted net income of $27.4m versus $28.2m in the same quarter last year.

Total daily operating expenses, excluding drydocking costs, averaged $7,249 per vessel, compared with an average of $7,692 in the third quarter of 2023.

The company attributed the decrease to the “significantly” lower operating costs of the seven newbuildings that have joined the fleet in the past 17 months.

Net profits for the first nine months of the year came to $88.4m, close to matching last year’s results at the same stage.

“During the third quarter of 2024, the containership markets remained around the levels reached during the first half of the year, although chartering activity slowed down,” said Pittas.

“However, in October and through mid-November 2024, the market has strengthened and charterers’ interest in concluding charters, many of them with forward fixings, increased.”

In recent weeks, the Greece-based owner has not only managed to fix three of its newbuildings at high rates, but also clinch healthily paid 14- to 18-month charter extensions for two 23-year-old ships.

The company has declared a dividend of $0.60 per share for the third quarter.

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