Euroseas Ltd (ESEA) 2011 Q2 法說會逐字稿

Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas conference call on the second-quarter 2011 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. (Operator Instructions). I must advise you that this conference is being recorded today on Wednesday, August 10, 2011.

Please be reminded that the company announced their results before the market opened today with a press release that has been publicly distributed. If you have not received the press release, you may log on to the Euroseas website at www.Euroseas.GR and navigate to the Investor Relations page. Or you can call Capital Link at 212-661-7566, or the Chief Financial Officer of Euroseas, Mr. Tasos Aslidis, and they'll be happy to send it to you.

For those of you who want to follow the audio webcast, please log onto your computer to the homepage of the Euroseas website, as I mentioned, www.Euroseas.GR. Once again, the participants of the webcast can download the PDF from the website. Kindly note that the slides are user controlled.

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 number 2 of the webcast presentation, which has the full forward-looking statement, and the same statement was also included in the press release. I kindly suggest that you take a minute to go through the whole statement and read it.

Without taking any more of your time, I would now like to pass the floor to Mr. Aristides Pittas, Chairman and Chief Executive Officer of Euroseas. Please go ahead, Mr. Pittas.

Good morning, and thank you for joining Euroseas for our conference call. Together with me today is Tasos Aslidis, our CFO. The purpose of today's call is to discuss the results for the three- and six-month period ended June 30, 2011. Let us turn to slide 3 and review our 2011 second-quarter and first-half financial highlights.

In the second quarter of 2011, we reported total net revenues of $15.6 million. Net income for the period was $0.3 million and $0.00 earnings per share basic and diluted.

Excluding the effect of unrealized and realized loss on derivatives and unrealized loss on trading securities and amortization of the fair value of charters acquired, the net earnings per share for the period have remained unchanged at zero.

Adjusted EBITDA for the second quarter 2011 was $5 million. Was also declared a quarterly dividend of $0.07 per share. For the first half of 2011, we reported total net revenues of $29.8 million. Net loss for the period was $0.6 million or $0.02 per share, basic and diluted.

Excluding the effect of unrealized and realized loss on derivatives and unrealized loss on trading securities and amortization of the fair value of charters acquired, the net loss for the period would have been $1.3 million or $0.04 per share basic and diluted.

Adjusted EBITDA for the first half of 2011 was $8.7 million, and we declared two quarterly dividends for a total of $0.14 per share during the first half of 2011.

Please turn to slide 4. Our comfortable balance sheet enables our board to continue paying meaningful dividends to our shareholders, even though we are still at the low end of the market cycle and increasing container charter rates have not filtered down yet to the bigger parts of our fleet.

As I mentioned in the previous slide, we declared a quarterly dividend of $0.07 per share for the second quarter of 2011. This is payable on or about September 9, 2011, to shareholders of record on September 2. This is the 24th consecutive quarterly dividend declared since we accessed the capital markets in August 2005, and it represents an annual yield of about 6.9% on the basis of our stock price on August 2.

Throughout the last six years, our dividend yields have always ranged between 5% to 12%, excluding an exceptional quarter of 20%. This proves our ability to implement on our stated strategy of revising empty dividends throughout market cycles without compromising growth opportunities.

Please turn to slide 5 to look at our operational highlights. In the second quarter of 2011, we drydocked 1 vessel, the Maersk Noumea, and as a result, the drydockings year to date have increased to 4.

In the third quarter, the Kuo Hsiung will also be drydocked.

No other drydockings are scheduled in 2011. In fact, our next drydock is scheduled for the second half of 2012.

When you factor in the 10 drydockings of 2010, all but two ships were drydocked in the last 18 months.

All our vessels are currently employed at rates that are contributing positively to our cash flow. Up to now, in 2011, we have renewed the charters of eight containerships at rates substantially higher than previously.

For the drybulk front, we have chartered out very recently our panamax vessel, Pantelis, for two years following the expiration of its current charter in Q1 2012 at $11,200 per day, plus a 50-50 profit sale with a charter absorption for a further year of $14,000 per day.

Additional developments during the second quarter of 2011 includes the Euromar acquisition of its seventh vessel, the M/V Mate, a geared containership of 36,500 deadweight and 2,780, 20-foot equivalent units built in 2004 in Poland.

The vessel is expected to be delivered to Euromar in mid August, and it will be renamed EM Astoria. Vessels through the terms of the joint venture of a total $175 million agreed to be invested by Euroseas, [between] part capital and their own capital. $90 million has been committed with another $85 million remaining to be invested. Euroseas has thus contributed $15 million of its agreed $25 million commitment.

Please turn to slide 6 to discuss the Euroseas market position.

During the first half of 2011, we continued executing our strategy of positioning Euroseas to benefit from the market trends. Our cautious approach towards the drybulk markets that led to having full coverage of our drybulk fleet with charters that earned well into 2012 appears to have been justified as the market continues to weaken during the first half of 2011.

Unlike the drybulk sector that is experiencing a heavy supply of newbuildings and that is keeping rates weak despite strong demand from the Far East, containership feeders don't have the same newbuilding supply problems. Despite the recent weakness in the containership sector, and unless we see a significant decline in global growth, we expect rates to rebound because of the favorable supply and demand fundamentals.

Our strong balance sheet continues to position Euroseas in a favorable position for investment opportunities in both the drybulk and containership sectors, supported by our excellent relationship with our lenders, a strong cash position, and our debt-to-market value of our fleet at below 40%.

We have continued focusing on identifying accretive investment opportunities. The current drop in container charter rates may present us with opportunities to acquire further vessels at lower prices than those still expected for by sellers, but most likely, these will be taken into our Euromar joint venture, which is still now a pure container player.

It is also likely, though, the decline in drybulk vessels by use will present us with accretive opportunities for investment there sooner rather than later.

In planning our expansion on growth, we are not neglecting the cost side of our operations, which is one of our competitive advantages. We believe that we continue to maintain one of the lowest operating cost structures amongst public shipping companies.

Our current fleet is shown on slide 7 and consists of 5 drybulk vessels, 10 containerships and [1] multi-purpose ships. On the following slide, slide 8, we list the Euromar fleet of seven modern container vessels.

Let us move to slide 10 for just a brief overview of the market. The June IMF predictions point to a 4.3% world GDP growth in 2011, a small decrease from the previous quarter, and 4.5% in 2012, the same as the previous quarter. The estimate for the US was then revised downwards to 2.5% from 2.8% projected in April.

The latest turmoil in the markets will possibly lead to still lower revisions, both for the US and globally. And this is something we will continue to monitor closely as drybulk and container trades closely follow GDP developments.

To the extent that future GDP growth is going to be dependent more on developing countries than the developed ones, one may expect drybulk trade to grow at a slightly faster pace than historically for similar GDP growth rates.

For containers it is the opposite, but we still expect container trades to be growing at about 50% faster pace from drybulk.

Clarksons is still predicting a 6% drybulk trade growth in 2011, and for containerized trade, the growth of 9.4%, slightly lower than the earlier 9.7% focus.

Let's turn to slide 11. Against this demand background, we have to also look at ship supply. The original delivery schedule for drybulk vessels in 2011 stood at 25.2% at the beginning of the year. This does not take into account cancellation, slippage and scrapping. It's very difficult to quantify how much of the order book will finally get delivered in 2011 and 2012, but it is going to be much less, possibly around 60%, as seems to be the average of the various forecasters, and is in sync with the trend of the first six months and the 38% slippage observed in 2010.

Please note, though, on the left-hand side, the percentage of the fleet that is older than 20 years. It is an impressive 20%, which will no doubt help the fleet rebalance by being scrapped quickly if rates drop further and stay low for a sufficient period of time.

Let's turn to slide 12. The containership order book for 2011 and 2012 deliveries is about half of that of drybulk, and much lower than what it has been historically. The significant number of recently placed orders are nearly all for bigger ships and will be delivered in 2013 onwards.

If further significant new orders are not placed, the markets should be in a position to absorb them. But if this ordering trend continues, it will put the brake on the prospects for the market a few years down the line. However, this current slowdown in the container charter market will probably result in a significant decrease in new orders, thus assisting the longer-term prospects of the market.

The delivery schedule for 2011 stands at around 11.7%, and just as in the supply of drybulk vessels, the large vessels dominate the order book. While the smaller ships where we are active are more in line with expected trade [cove].

Cancellation, slippage, conversions and scrapping will affect the balance. We expect slippage and cancellations to be meaningful this year as the market is overall in a much better state. This is also confirmed by the trend of deliveries thus far.

Let's now turn to slide 13 to briefly summarize how our demand and supply analysis balanced out, and former views of the drybulk and containership markets.

On the drybulk market, we expect the low market environment in 2011 and 2012, driven by the excess number of deliveries, not because of a lack of demand.

Far too many deliveries need to be canceled or postponed, and/or drybulk trade to grow a significantly faster pace than in [visits] in order to balance the market.

The solution will eventually come through scrapping, which we expect to continue at its current high pace for the next 18 months, and lead to a more balanced market sometime in 2013. For the containership market, the outlook is still more positive than for drybulk, despite the recent spike in ordering. For the next 2.5 years, supply and demand should remain balanced unless we see further heavy ordering or a global growth significant slowdown.

As I mentioned in the previous slide, supply growth in the container market is mainly in the larger size segment. The smaller feeder size ships in which we operate have a small order book. In addition, slow steaming had and is still becoming a bigger positive factor as fuel prices remain high. We expect charter rates to rebound from their current dip with the attributes mostly to the [faster than] (inaudible) expansion of the liner services, and to continue moving gradually higher in the short to medium term.

Let's turn to slide 15 to discuss our drybulk employment situation in a bit more detail.

Our drybulk fleet is fully covered for the remainder of 2011 either by physical charters or via FFA contracts. A zero cost FFA contract, which essentially provides for earnings within $16,500 and $23,500 a day for a standard bulker panamax is providing downward cover for our Monica P, which is trading in the Klaveness spot pool. We expect to see close to no influence in our earnings from the developments in this market in this year.

The decision to charter the Pantelis forward was taken so as to increase our cover in 2012, which we view as potentially at the bottom here, and also start increasing our 2013 cargo at a rate which comfortably covers our average cash breakeven requirements, and allows us 50% profit participation if the market proves us wrong. Thus, for 2012, our coverage has increased to 67% and for 2013, to 29% with ships opening up gradually over time.

Let's turn to slide 16. As far as our containerships are concerned, we currently have 88% covered for 2011. We believe we will continue to capitalize on the strengthening of the containership market and we will be able to recharter with the three ships coming off charter this year at on average slightly higher levels.

Our belief is that the market has at least two more years of upwards potential if the global environment has not deteriorated substantially, and global GDP remains around 4.5% as currently forecasted. We will, therefore, generally be renewing expiring charters for periods of up to a year. Over the next few quarters, we expect to see significant contribution to our earnings via our container fleet.

Please turn to slide 17. Through Eurobulk, our manager, we have been able to reduce our daily costs in both 2009 and 2010. The graph and the chart compares our daily costs, excluding only drybulk with our peers. Overall costs achieved are amongst the lowest of the public shipping companies. We're really proud of this performance, especially as it is in conjunction with operational fleet utilization in excess of 98.5% over the last five years, a level similar to that of our peers, despite the fact that the average age of our fleet is higher than most of the other listed companies.

Our Q2 costs are slightly up from last year, but in line with our budget, mainly reflecting dollar weakness, higher price of spares and lubes and increased provision costs. We would expect the average of our peers to also show similar increases.

Let's turn to slide 18. The left side of the slide shows the correlation of time charter rates for panamax drybulk ships and containerships of 1700 TEU ships over the last decade. Earnings for containerships were moving in parallel with earnings for panamax ships after 2006, with the exception of the peak in 2004, which was the prelude of the super cycle that was to follow in the drybulk sector between 2006 and 2008.

From 2006 to 2010, drybulk significantly outperformed the containership market due to the Chinese demand boom. But the two markets finally converged again.

The right-hand side of this slide shows currency values in relation to historical prices. Drybulk asset prices have been quickly correcting to match what is happening in charter rates. They are now below their historical [level] values for drybulk ships, whilst containership values have been steadily over the last few months at around historical levels. We are very, very comfortable at investing at levels around historical levels or lower, and we expect to continue growing our fleet as we already mentioned.

With that, I will pass the floor over to Tasos to take you through our Q2 financials in a bit more detail.

Thank you very much. Good morning, ladies and gentlemen.

I will provide you with a brief overview of our financial results for the second quarter and first half ended June 30, 2011 in a similar format that we did in previous presentations.

Slide 20 shows our second-quarter results in comparison to the same period of 2010. I will repeat here are some of the figures that Aristides gave at the beginning of the presentation.

In the second quarter of 2011, we reported net revenues of $15.6 million, representing a 14% increase over total net revenues of $13.7 million during the second quarter of last year.

We reported net income for the period of $0.03 million as compared to income of $0.5 million for the second quarter of 2010.

Basic and diluted earnings per share for the second quarter of 2011 was $0.00 per share compared to basic and diluted earnings per share of $0.02 per share for the second quarter of 2010.

The results for the second quarter of 2011 include a $0.6 million net unrealized loss on derivative participating securities, and a $0.2 million net realized loss on derivatives as compared to $3.3 million net unrealized gain on derivatives and trading securities and $3.7 million realized loss on derivatives for the same period of 2010.

Excluding the effect on the earnings for the quarter of the realized and unrealized loss or gain on derivatives and trading securities and the amortization of the fair value of time charter contracts acquired, the gain per share of the quarter ended June 30, 2011, remains unchanged at $0.00 per share, basic and diluted, compared to earnings of $0.02 per share for the quarter ended June 30, 2010.

Adjusted EBITDA for the second quarter of 2011 was $5 million, practically unchanged compared to $5 million achieved during the second quarter of last year.

As Aristides mentioned earlier, we declared a quarterly dividend of $0.07 per share for the second quarter of 2011, payable on or about September 9, 2011, to shareholders on record on September 2, 2011.

This is the 24th consecutive quarterly dividend declared since we accessed the public markets.

Turning our attention now to the first half of 2011, we reported net revenues of $29.8 million, representing a 10.6% increase over total net revenues of $27.5 million during the first half of last year.

We reported a net loss for the period of $0.6 million as compared to net loss of $2.5 million for the first half of 2010.

Basic and diluted loss per share for the first half of 2011 was $0.02 compared to basic and diluted loss per share of $0.08 for the first half of 2010.

The results for the first half of 2011 include a $0.1 million net unrealized loss on derivatives and trading securities, and a $0.4 million net realized loss on derivatives as compared to a $4 million net unrealized gain on derivatives and trading securities, and $8.4 million of realized loss on derivatives for the same period of 2010.

Excluding the effect on the losses for the first half of this year of the realized and unrealized gain or loss on derivatives and trading securities and the amortization of the fair value of time charter contracts acquired, the loss per sale in the six-month period ended June 30, 2011, would have been $0.04 basic and diluted compared to earnings of $0.03 per share basic and diluted for the same period of last year.

Adjusted EBITDA for the first half of 2011 was $8.7 million, representing a 12.3% decrease from the $10 million achieved during the same period of last year.

As Aristides mentioned, we declared this year two quarterly dividends for a total of $0.14 per share.

Let's now move to slide 21. This slide shows our fleet performance for the second quarter and first half of this year and compares it to the same period of 2010.

We have broken down our fleet utilization rate into commercial and operational. Thus, during the second quarter of 2010, we reported a 98.6% commercial utilization rate and a 99.9% operational acquisition rate compared to 100% commercial and 99.3% operational for the second quarter of 2010. The utilization rate does not include vessels in layups or scheduled repairs during the reported periods.

The first quarter of 2011, we operate at an average of 16 ships, earning a time charter equivalent rate of $11,300 per vessel per day, a decrease compared to the time charter equivalent rate we had during the same period of last year, which is primarily due to the lower earnings generated by our bulk affiliate.

This is on a vessel per day basis because, as we discussed earlier, our total revenues are up, and that is due to the fact that all of our container ships are now employed at rates that are 50% to 70% higher on average than the rates we get in the same period of last year.

In the first quarter of 2011, our 16 vessels had operating expenses averaging about $6,066 per vessel per day compared to the $5010 per vessel per day for the same quarter in 2010, a number which though it has been adjusted to include only vessels from operations. I will remind you that we had last year two vessels in layup, which are now operating.

I would like to draw your attention to the bottom of this table to our daily cash flow operating level, expressed on a dollar per day, per vessel basis.

We reported in the second quarter of 2011 a daily cash flow operating level, which includes loan repayments of approximately $10,250 per vessel per day compared to approximately $8,204 per vessel per day in the same period of 2010, again, adjusted for vessels in layup.

The reason for this increase is, as you can see, the break even is significantly high. The reason for that is the loan repayments which in turn are due to the balloon payment for one of our loans to our vessels, Ninos and Kuo Hsiung. After the repayment of this loan, five of our vessels are unencumbered.

On the right hand side of slide 21, we have our first-half 2011 fleet statistics, and to us again, which have broken down our fleet utilization rate into commercial and operational. Thus, during the first half of 2011, we reported a 98.3% commercial utilization rate and a 99.7% operational utilization rate compared to 100% commercial and 99.6% operational for the same period of last year.

Again, this utilization rate does not include vessels in layup or scheduled for repairs during the reported periods.

In the first half of 2011, we operated an average of 16 ships carrying the time charter equivalent rate of $11,198 per vessel per day, a decrease compared to the time charter equivalent rate that we achieved the same period of last year, again, due to the lower earnings generated by our bulk [activity].

The same comments for total revenues I made for the quarter apply to the six-month period as well.

In the first half of 2011, our 16 vessels can operate and expenses are moderate of about $6,000 per vessel per day compared to $5,677 per vessel per day for the same period in 2010, which again is adjusted to exclude vessels in layup.

We reported in the first half 2011 a daily cash flow operating level which includes loan repayments of approximately $9,797 per vessel per day compared to approximately $8,741 per vessel per day in the same period of 2010. Again, the increase is partly due to the loan balloon payments made during this year.

Let's now move to slide 22. This slide shows the expectation of our cash flow breakeven level over the next 12 months, including our debt repayments, and also shows our debt repayment profile. As you can see from the chart on the left part of the slide, in 2011, we had a relatively low level of debt repayments, the same or similar to what we had in the previous years.

In 2011 and 2012, we are scheduled to make total repayments, including balloon repayments of about $13.5 million per year, which results in about $2,350 per vessel per day contribution to our cash flow breakeven level.

After making appropriate assumptions for the other elements of our cash flow breakeven, like the operating costs, general administrative expense etc., as you can see on the right part of the slide, we estimate that our cash flow breakeven level for the next 12 months is expected to be around $9,600 per vessel per day on a fully operational basis.

I would like to remind you that these figures did not give any credit to any interest income we might have over the next 12 months, which hopefully will reduce the breakeven level farther.

I would like to conclude my remarks as always by proceeding to slide 23 and giving you some highlights from our balance sheet.

As of June 30, 2011, we had unrestricted cash of about $29.5 million and restricted cash of another $6 million. Our debt, including the current portion of it, was about $80.8 million, resulting in a debt to capitalization ratio of about 27%.

As a result of this, we are in full compliance for our debt covenants. We estimate that we can comfortably allocate $30 million of our cash for farther expansion, for which, after allowing for the remaining commitment of $10 million to our joint venture, Euromar, we'll be able to designate about $20 million to our additional investments over and above what we can do through Euromar, which translates to us being capable of acquiring approximately one or two additional ships.

And with that, I would like to pass the floor back to our CEO, Aristides Pittas.

Thank you, Tasos. Let me take the opportunity to open up the table for any questions.

(Operator Instructions). Justin Yagerman, Deutsche Bank.

Good morning. This is Joshua Katzeff on for Justin; I mean good afternoon, excuse me.

Just wanted to start off -- wondering if you could expand a bit on your potential drybulk opportunities, and maybe how much more downside you expect and what your thoughts are for kind of maybe a drybulk trough in asset values.

We think that a drop in prices from the current prices that we are seeing of anything between 10% and 20% is probable. And we have already started at looking selectively at some drybulk ships, but we know we are still not competitive on the prices that we are offering. We need some more time. We think we will see it happening.

Got it. And have you had any initial discussions with your Euromar JV partners regarding the drybulk sector? And could any acquisition that you might complete with them be done under the Euromar umbrella or will this have to be under a separate JV?

All options are still open. We are looking at a couple of projects in the containership market right now with Euromar, and we will be able to provide more color soon, but we're not ready yet.

Got it. And with regard to your current cash on hand, that $20 million for the one to two vessels, is there any kind of preference right now on container or drybulk for actually -- for Euroseas itself?

The question we are facing, Josh, is really do we wait a little bit because we see softening prices on the drybulk market to invest it; by a little bit, I mean a couple of months? Or do we do something quicker?

If we were to buy something today, it would still be a containership, but in a couple of months, we think that drybulk might be even more interesting.

We are following the container space closely as well right now because you've obviously seen there's been a dip in the charter market. It has not yet translated into seeing lower containership prices, so we are following that market as well.

The truth is that there are very few deals happening if any. And the market is extremely thin right now.

On the containership market, it looks like you guys were able to fix some short-term time charter renewals on a couple of ships and push your kind of rechartering exposure out to Q4 and into Q1. Was this maybe because there was a lack of longer-term attractive time charters? Or are you just expecting a big pickup in rates later this year and into next year?

Yes, the latter. We've been trying to keep the exposure short -- for a short period because we still feel that the markets will strengthen, and it doesn't make sense to commit at these levels for long periods.

Great. Thanks for the time this morning.

Ross Briggs, Wells Fargo.

Good afternoon. Just to follow up on joint venture questions, in previous calls, I know there had been some discussion about maybe extending or in some way expanding the JV process. That I -- if I remember correctly, the original investment term was through March 2012. And just wanted to ask if there's been any progress on that or any update that you could provide.

Hopefully we will have invested by that time that full amount. And hopefully, we will -- the relationship is going great. These funds have money to invest. If we find the right opportunities, we can do bigger deal than what has been committed up to now. And this has not been put down in any contract, but this is the understanding of all of us that there is the capacity within the group here to do bigger deals if and when they present themselves.

Okay. All right. Thanks.

And then, I guess second, on both the dry and container side, particularly the dry, we've seen some reports of charterers looking to renegotiate or people having payment issues. And just wanted to ask, one, have you guys seen any of that? Or what's your -- if you have any insight or observations on payment issues or renegotiations of charters.

We haven't faced such issues ourselves for two reasons, I would say.

Firstly, because we don't have very high charters, so we're not creating a big problem to the charterers.

And secondly because we do not have long periods going forward. We have always been afraid of fixing our ships at very high levels for long periods, especially as far as drybulk ships are concerned, where, in bad times, you may see charterers renegotiate quite easily.

In the container sector, I feel that renegotiation of charterers is much more difficult. They are much more substantial outfits. And it's very seldom that we see it, especially from charter with the best names.

But, in short, the answer is that ourselves we have not faced any such issues, neither in the drybulk, neither in the containers sector.

Okay. And does -- remind me -- I don't know if I know this, but do you have a kind of stated policy on renegotiation? Or is -- how would you approach something like that?

We would not have a stated policy. I think we do not have. And this is usually a case-by-case thing.

Got it. That makes sense. That's all I have. Thank you.

(Operator Instructions). Megan Repine, FBR Capital Markets.

I wanted to ask, given what your outlook is for the containership market, how we should think about the dividend going forward, and whether or not you are targeting a specific payout ratio?

We are not targeting a specific payout ratio. We have always been targeting a dividend, which is meaningful, ranging between 5% and 15% of our current stock value. So, this has been our target, which we have been able to achieve for the last six years, so you should continue to think that we will be able to do that and continue doing that.

And obviously, this implies that as our stock price rises, the dividend will also rise. So, we think that we will be able to do that.

The next few quarters seem better than what they were. We managed to stop a long line of losing quarters this quarter by going to zero earnings. And the prospects for the next couple of quarters are more promising, as the charters of the containers, which were fixed lately, start to fill -- go through the filter to drive the bottom line.

At the same time also, we have exhausted our drydocking. At least we have drydocked almost all of our fleet over the last 18 months. And we seem to be having a little bit of a break over the next two or three quarters, so that would help our bottom line as well.

Okay, that's helpful. And then, just to follow up, can you compare the level of urgency between adding vessels to Euromar and then adding vessels outside of Euromar? I'm just trying to see where you are spending most of your time and if we should expect an acquisition for Euromar sooner than outside, and kind of just the timing there.

Well, we're spending our time in identifying opportunities. And they could fill -- they could fall under the Euromar or Euroseas. Euromar has a first priority, so every deal that we see, we show it first to Euromar. If Euromar wants to do it, they do it. If they don't, we do it into Euroseas.

We are comfortable that we will proceed with investments within the second half of the year that will nearly exhaust Euromar. Plus we are comfortable that we will be able to invest Euroseas funds.

Okay, thank you. That's all I have.

Thank you. I would now like to pass the floor back to the speaker today for any closing comments. Thank you.

Thank you, everybody, for attending this conference call. We hope to be with you again in three months to discuss Q3.

Thank you. Ladies and gentlemen, that does conclude the conference for today. Thank you all for participating and you may now disconnect.