Euroseas (NASDAQ:ESEA) reported second-quarter 2026 net income attributable to controlling shareholders of $33.2 million, or $4.74 per diluted share, as the container ship owner benefited from higher charter rates despite operating one fewer vessel on average than a year earlier.
Total net revenues for the quarter ended June 30 were $56.5 million, down 1.3% from $57.2 million in the second quarter of 2025. Adjusted net income was $32.9 million, or $4.70 per diluted share, while adjusted EBITDA reached $40.1 million, up from $39.3 million a year earlier.
Dividend, Buybacks and Fleet Performance
The board declared a quarterly dividend of $0.80 per share for the second quarter under the company’s common-stock dividend plan. Chairman and Chief Executive Officer Aristides Pittas said the dividend represented an annualized yield of roughly 4.2% to 4.5% based on the company’s recent share-price range.
Since beginning a $20 million share-repurchase program in May 2022, Euroseas had repurchased 480,000 shares through Aug. 13, 2026, for approximately $11.4 million. The repurchased shares represent about 6.8% of shares outstanding, according to Pittas.
The company operated an average of 21 vessels in the second quarter, compared with 22 vessels in the prior-year period. Its average time-charter-equivalent rate rose to $30,306 per vessel per day from $29,420 per day. Commercial utilization was 100%, while operational utilization was 99.9%.
- Second-quarter daily operating expenses were $8,036 per vessel, excluding dry-docking costs, compared with $7,694 a year earlier.
- Daily cash-flow break-even declined to $12,233 per vessel from $13,261 in the second quarter of 2025.
- For the first half, the company’s average time-charter-equivalent rate was $30,330 per day, compared with $28,468 per day a year earlier.
Charter Coverage and Newbuilding Program
Euroseas said its charter coverage stood at approximately 96% for the remainder of 2026, 81% for 2027 and 47% for 2028. Average contracted daily rates were about $30,858 for 2026, $31,658 for 2027 and $32,000 for 2028, Chief Financial Officer Anastasios Aslidis said.
Pittas said the company secured charter extensions for the Pepi Star and Stephania K. Each vessel was fixed for a minimum of 24 months and a maximum of 26 months at $25,500 per day, providing employment visibility through at least the first quarter of 2028.
The fleet currently comprises 21 vessels with aggregate capacity of about 61,000 twenty-foot equivalent units, or TEUs. It includes six intermediate container ships and 15 feeder vessels. Euroseas has 12 vessels on order—eight feeder ships and four intermediate container ships—with deliveries scheduled from the third quarter of 2027 through the first quarter of 2029. Upon delivery, the fleet is expected to expand to 33 vessels with capacity of roughly 97,000 TEUs.
During the quarter, Euroseas ordered two additional 1,800-TEU container ships from Nantong CIMC Sinopacific Offshore & Engineering in China for approximately $64.5 million. Deliveries are expected in December 2028 and March 2029. The company expects to finance 60% to 65% of the purchase price with debt and the remainder with equity.
The company also entered a joint venture with NRP Project Finance for its first intermediate newbuilding, the Piraeus, scheduled for delivery in the first quarter of 2028. NRP investors will hold a 49% stake for approximately $12.22 million, assuming at least 60% debt financing.
Aslidis said the total cost of the company’s newbuilding program was about $560 million. Euroseas expects to fund about 60% with debt, implying total equity requirements of roughly $230 million, of which $74 million had been contributed as of June 30.
Market Outlook and Older Vessels
Pittas said container shipping markets continued to strengthen through the second quarter and into the third quarter to date, supported by demand and supply disruptions related to Middle East geopolitical tensions. He said charter rates had reached their highest levels since before the COVID-19 pandemic.
However, management expects some moderation toward the end of 2026 and sees greater supply-related risk in 2027 if Red Sea trade routes normalize and vessel deliveries increase. Pittas said capacity management, scrapping and slower steaming could help absorb additional supply, while geopolitical uncertainty continues to complicate the timing of any market normalization.
The company highlighted lower orderbook levels and aging fleets in the feeder and intermediate vessel segments where it operates, compared with larger container ship classes. Pittas said Euroseas has not seen a material cascading effect from larger ships into smaller-vessel routes so far, though he expects liner companies to optimize routes and increase vessel sizes after market conditions normalize.
On its older vessels, Pittas said Euroseas was not currently planning sales because market conditions remained strong and the ships continued to generate attractive earnings. He said the company was negotiating charter extensions for vessels approaching the end of their contracts, including the EM Corfu, and that a sale could be deferred if an extension is completed.
Balance Sheet and Capital Allocation
As of June 30, Euroseas had approximately $208 million of outstanding bank debt, with a total debt cost of slightly more than 5.75%, based on a three-month SOFR rate of 3.76%. The company reported $226 million in cash and other current assets, $74 million in newbuilding advances and fleet book value of about $453 million.
Management estimated the market value of its existing fleet at approximately $660 million and calculated net asset value at more than $725 million, or about $103 per share.
Pittas said management would continue weighing investments in newbuildings, possible acquisitions, debt repayment, dividends and share repurchases as it allocates capital. “Everything is on the table,” he said, adding that the company reviews its capital deployment options at quarterly board meetings.
About Euroseas (NASDAQ:ESEA)
Euroseas Ltd. (NASDAQ: ESEA) is an international shipping company specializing in seaborne transportation of containerized and drybulk cargoes. Incorporated in Bermuda with its principal operations and management office based in Athens, Greece, the company owns and charters a diversified fleet of containerships, drybulk carriers and multipurpose vessels. Euroseas provides tailored shipping solutions on time-charter and voyage-charter agreements, serving manufacturers, commodity traders and logistics providers across major trade routes.
Euroseas’s fleet comprises both owned and chartered tonnage, enabling the company to adjust capacity to market conditions and customer requirements.
