Euroseas Ltd. (NASDAQ: ESEA), a prominent player in the container shipping industry, has inked a lucrative time charter contract for its new fuel-efficient feeder containership, M/V Stephania K. This 1,800 teu vessel, still under construction, is set to embark on its charter journey between June 28, 2024, and will operate for a minimum of 23 months, potentially extending to 25 months based on the charterer’s discretion. The contract stipulates a gross daily rate of $22,000, marking a substantial gain for Euroseas.
The funding for this acquisition was meticulously arranged through a blend of Euroseas’ own resources and a substantial US$22.5 million loan from the National Bank of Fujairah. This financial strategy underscores Euroseas’ commitment to expanding its fleet with modern, fuel-efficient vessels, thereby enhancing its operational efficiency and profitability.
Aristides Pittas, Chairman and CEO of Euroseas, expressed his satisfaction with this development: “We are pleased to announce that we have chartered our upcoming newbuilding vessel, the sixth in a series of nine and second of our three 1,800 teu units, with one of the largest liner companies, at a profitable rate level of $22,000/day for a period of two years.” This statement highlights the strategic significance of this charter, especially in comparison to recent fixtures. For instance, the sister vessel, M/V Monica, secured a rate of $16,000 per day for a shorter duration of 12 months just last month.
The M/V Stephania K’s charter is projected to generate approximately $11.0 million in EBITDA for the minimum contracted period. This deal not only strengthens Euroseas’ financial outlook but also boosts its charter coverage for the remaining part of 2024 to an impressive 90%. Such a high coverage rate provides stability and predictability in an often volatile market, positioning Euroseas advantageously for the foreseeable future.
Euroseas’ continuous efforts to modernize its fleet with energy-efficient vessels reflect its proactive approach to addressing both market demands and environmental considerations. The successful charter of M/V Stephania K at a competitive rate is a testament to the company’s robust operational capabilities and strategic foresight.
Source:Euroseas Ltd
