Euroholdings Q1 2026 Earnings Call - Geopolitical Tailwinds Fuel Tanker Pivot Amid Aging Fleet

Conference Operator, Call Moderator, Conference Services: Thank you for standing by, ladies and gentlemen, and welcome to the Euroholdings conference call on the first quarter of 2026 financial results. We have with us today Mr. Aristides J. Pittas, Chairman and Chief Executive Officer, Ms. Athina Athanasiadi, Chief Financial Officer, and Mr. Anastasios Aslidis, Chief Financial Officer. At this time, all participants are on a listen-only mode. There will be a presentation followed by a question-and-answer session. If you’d like to ask a question, please press star one on your telephone keypad. 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, Euroholdings 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. Please take a moment to go through the whole statement and please read it. Now I’d like to pass the floor over to Mr. Pittas. Please go ahead, sir.

Aristides J. Pittas, Chairman and Chief Executive Officer, Euroholdings: Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Anastasios Aslidis, our Chief Strategy Officer and Treasurer, and Athina Athanasiadi, our Chief Financial Officer. The purpose of today’s call is to discuss our financial results for the three-month period ended March 31st, 2026. Please turn to slide 3, which provides an overview of the company outlining our business model, operational strengths, and the key competitive advantages that underpin our strategy for sustainable performance and long-term growth. As a reminder, on March 17, 2025, Euroholdings was spun off from Euroseas and has since operated as an independent, publicly listed company. Furthermore, on June 23rd, 2025, Marla Investments, an affiliated of the Latsis family company, acquired a 51% controlling stake in the company from the Pittas family.

Following the completion of the transaction, my broader family retains an approximately 7% ownership interest. Since our listing, our share price has been slightly improving, though admittedly with low liquidity and currently stands at about $8.65. Now it’s closer to $10 as I see it today. Since listing, we have paid four quarterly dividends of $0.14 per share. On August 12th, 2025, we announced the strategic decision to reposition the company’s focus towards the tanker sector. Following the successful acquisition of our first medium-range product tanker in November 2025, motor tanker Hellas Avatar, we agreed to acquire a sister vessel, motor tanker Hellas Fighter, to be delivered between mid-June and mid-August 2026 upon completion of her current employment. The acquisition price is $39.25 million. We plan to further expand our fleet through the acquisition of additional tankers when the appropriate opportunity arises.

At the same time, we will continue to operate our two legacy feeder container ships through the remainder of their current contracts or until their next scheduled dry dock in the event that any charters are renewed. This balanced strategy enhances our EBITDA and reflects our commitment to disciplined capital allocation as we strategically position Euroholdings towards a tanker-focused operating model. Please turn to slide four of the presentation, which presents our financial highlights during the first quarter of 2026. For the first quarter of 2026, we reported total net revenues of $7.64 million, a net income of $2.38 million, or $0.84 earnings per basic and diluted share. Adjusted EBITDA for the quarter amounted to $3.14 million. Please refer to the press release for a reconciliation between the income and adjusted EBITDA.

Our board of directors declared a quarterly dividend of $0.14 per share for the first quarter of 2026, consistent with previous distributions. The dividend is payable on or about June 16th, 2026 to shareholders of record as of June 9th, 2026. This marks our fifth consecutive quarterly dividend since listing and represents an annualized yield of approximately 6% based on recent trading levels. As illustrated in the previous slide, we also agreed to acquire motor tanker Hellas Fighter with a capacity of 49,997 deadweight tons, which was built in 2015 in South Korea from an affiliated party for $39.25 million. Motor tanker Hellas Fighter is expected to be delivered to us between mid-June and mid-August 2026, after completion of her current employment. The acquisition was approved by a special committee of its disinterested directors and will be financed with a combination of debt and equity.

Please turn to slide 5 for an overview of our fleet profile. After the delivery of motor vessel Hellas Fighter, our fleet will comprise of 2 containers and 2 product tankers with a combined carrying capacity of about 140,000 deadweight tons. Our container ship segment consists of 2 older feeder container ships, motor vessel Joanna and motor vessel Aegean Express, with a combined carrying capacity of 3,200 TEU and an average age of approximately 28 years. Our product tanker segment will be represented by 2 MR tankers built in 2015 with a carrying capacity of approximately 100,000 deadweight tons. Let’s turn to slide 6. Our 2 feeder container ships, MV Joanna and MV Aegean Express, remain fully employed under profitable time charters, generating stable and predictable cash flows that support our ongoing growth initiatives and strategic expansion into the tanker market. The existing charters run through November and mid-December 2026.

Athina Athanasiadi, Chief Financial Officer, Euroholdings: Our speaker is back. You’re live now.

Aristides J. Pittas, Chairman and Chief Executive Officer, Euroholdings: Okay. I don’t know exactly at what time we were cut off. Let’s start again from slide 6. Our two feeder container ships, MV Joanna and MV Aegean Express, remain fully employed under profitable time charters, generating stable and predictable cash flows that support our ongoing growth initiatives and strategic expansion into the tanker market. The existing charters run through November and mid-December 2026 respectively. Despite the age of these vessels, both MV Joanna and MV Aegean Express remain well-positioned to secure continued deployment beyond the expiration of the current charter periods if the market holds at current levels for the next few months, in which case we would expect them to continue contributing meaningful cash flow. Meanwhile, motor vessel Hellas Avatar was employed on a short-term voyage charter earning $70,000 per day.

We are actively pursuing follow-on employment for the vessel and remain confident in our ability to secure charter rates at attractive levels despite a near-term softening observed in the market in the past few weeks. We believe the product tanker market is supported by the continuous lack of oil products and rerouting of cargoes as a consequence of the Iran war and the current supply-demand dynamics since the onset of the war. Looking further ahead, we believe the medium to long-term supply and demand fundamentals for the MR tanker sector remain favorable. Please now turn to slide seven, which illustrates the six to 12-month time charter rates for 1,700 TEU feeder container ships over the past decade.

As of May 15th, the prevailing market rate stands at $29,250 per day, well above the 10-year average of about $18,000 per day, and nearly three times above the median rate of about $11,000 per day, underscoring the strength of the prevailing chartering environment relative to historical levels. As mentioned previously, we would expect to be able to re-charter our container ships despite their age at highly profitable levels, unless we unexpectedly see a dramatic rate correction in the ensuing few months. I will now turn the floor over to our Chief Financial Officer, Anastasios Aslidis, who will provide an overview of the key market dynamics and opportunities in the product tanker sector.

Anastasios Aslidis, Chief Strategy Officer and Treasurer, Euroholdings: Thank you very much, Aristidis. Good morning from me, ladies and gentlemen. Let’s turn to slide nine. As Aristidis mentioned, over the next few slides, I will walk you through several key developments shaping the product tanker market. I will begin with this slide, which illustrates the evolution of 1 and 3-year time charter rates for the medium-range product tankers over the past 10 years. Data is taken from the Clarksons Research as of May 2015. From these graphs, we can confirm that the product tanker market has enjoyed in the recent months a quite profitable period and rate levels approaching the peaks last observed during 2023 and 2024. If we move to slide 10, similarly, we can see the development of secondhand and new building price. The secondhand prices reflect in a straightforward fashion the development of rates.

New building prices seem to be less volatile because very likely they capture and they are influenced by other structural factors like the higher shipyard costs, inflation across materials, labor, equipment, and even yard availability. These factors continue to underpin both new building and asset values across the sector. As of May 15, 2026, based on Clarksons Research, as I mentioned earlier, the new building prices for medium-range tankers stood at about $50.5 million. At the same time, five-year-old secondhand prices stood at about $51 million, about the same level as new buildings, supported by the strength of the near-term market, while 10-year-old secondhand prices stood at approximately $41 million. Let’s move now to slide 11, which presents the medium-range product tanker fleet, age profile, and order book. Starting with the chart on the top left of the slide, the global medium-range product fleet shows a relatively aging fleet profile.

Nearly half of the fleet, approximately 48% of it, is now over 15 years old, while only 14% of the vessels are under 5 years of age. As vessels approach special surveys in the latter part of their life, when they are over 15 years of age, they face rising maintenance costs and stricter compliance costs, particularly in light of the ever-increasing environmental regulations. These factors could reduce the competitiveness of the older units and incentivize the owners to retire their vessels. Thus, the age profile of the fleet, along with these factors, could justify the relatively high order book levels that we see in the sector.

Talking about order book and deliveries of new vessels, let’s turn to the top right section of this slide, where we can see scheduled deliveries for 2026 that are projected to approximately 2 million deadweight tons, significantly lower than the deliveries that we saw during 2025. The chart at the bottom of the slide illustrates the development of the medium-range tanker order book as a percentage of the fleet, and that remains below prior cyclical peaks and currently stands at around 18.5%. Overall, the combination of an aging fleet, a historically moderate order book, provides a supportive medium-term supply backdrop for the medium product tanker market. Let’s now turn to slide 12 to go over some highlights regarding the trade demand for tankers and more specifically, product tankers.

Starting with the top chart, global seaborne oil product trades strengthened significantly during 2022-2024, driven by refinery dislocations and shifting trading patterns following the pandemic, the war in Ukraine, and disruptions around the Suez Canal. Trade volumes softened a bit in 2025, but are showing signs of recovery so far in 2026, broadly in line, at least in the first part of the year, with the refinery utilization and global oil demand trends. At the same time, though, recent geopolitical developments in the Middle East, particularly involving the war in Iran and the restriction of traffic through the Strait of Hormuz, are adding a degree of uncertainty to trade flows and routing.

In shipping, it is not news for me to state that any disturbance of prevailing trade routes creates inefficiencies that disturb trade flows and require more ships. Looking at the bottom left chart of this slide, global oil demand has shown steady growth despite its quarterly seasonality and volatility during the past decade, recovering from the pandemic lows in the mid-90 million barrels per day levels to over 105 million barrels per day in 2025. Finally, on this slide, the bottom right chart shows the global refinery capacity has broadly kept pace with demand over the past 15 years. Although capacity growth appears relatively flat in 2025, further capacity additions of around 2% were expected in 2026, followed by continuing growth of about 1% over the next 2 years, 2027, 2028, providing further support for a positive medium-term outlook for the product tanker market.

Of course, the sector will need to take stock of where the global refinery capacity stands after the Iran war fizzles out and any damage on the facilities in the area is assessed. Let’s now turn to slide 13, which summarizes the current product tanker market trends and our outlook for the sector. Product tanker earnings strengthened significantly during the first quarter of 2026, driven primarily by market dislocations. This strength was supported by constrained Middle East Gulf exports, tight vessel availability, and robust Atlantic basin demand as charters increasingly sought alternative supply routes. At the same time, refinery activity has softened in other regions, particularly in Asia, where feedstock shortages and geopolitical disruptions have constrained output. As a result, regional market dynamics have become increasingly uneven.

The Atlantic basin has outperformed as Europe continues to replace disrupted Middle East supply, while Asian markets remain comparatively weaker due to feedstock constraints and softer petrochemical margins. Consequently, clean tanker demand has increasingly shifted toward West of Suez markets. Naturally, ton-mile demand continues to provide the key underlying support for tanker utilization. Despite an estimated decline in global product trade volumes of approximately 3%-4% year-over-year, longer haul dislocations and rerouting of trade flows have sustained vessel demand and supported earnings even in a softer underlying volume environment. Looking ahead, supply-side dynamics introduce a more balanced outlook. The medium-range fleet is expected to grow by approximately 5% year-over-year, which may lay some pressure on fundamentals as trade flows gradually normalize.

However, this is partly offset by the large long-range LR2 vessels increasingly switching into dirty trades, as well as the aging medium-range fleet profile that we talked about earlier. By 2028, approximately 30% of the medium-range fleet is expected to be over 20 years old, creating an ongoing structural replacement requirement that may help limit effective fleet growth and provide a supportive environment for rates. Overall, while the market remains fundamentally constructive, it is becoming increasingly uneven and increasingly sensitive to geopolitical developments. Strength continues to be driven more by logistical dislocations and regional imbalances than by broad-based demand growth, suggesting a more volatile yet still supportive environment for medium-range product tankers. With that, it’s my turn to pass the floor to our CFO, Athina Athanasiadi, to walk us through the financial highlights in a bit more detail.

Athina Athanasiadi, Chief Financial Officer, Euroholdings: Thank you very much, Tassos. Let’s turn to slide 15 to review our financial highlights for the first quarter of 2026. For the first quarter of 2026, the company reported total net revenues of $7.64 million and a net income of $2.38 million. Adjusted EBITDA for the first quarter of 2026 was $3.14 million. Basic and diluted earnings per share for the first quarter of 2026 was $0.84, calculated on 2,816,615 basic and diluted weighted average number of shares outstanding. Looking at the corresponding figures for the first quarter of 2025, we reported total net revenues of $2.87 million and a net income of $11.08 million. Adjusted EBITDA was $0.86 million. A $10.23 million gain was recorded on the sale of motor vessel Diamantis P in the first quarter of 2025. Basic and diluted earnings per share was $3.99, calculated on 2,557,502780,855 basic and diluted weighted average number of shares outstanding.

Excluding the net gain on sale of motor vessel Diamantis P, adjusted net earnings for Q1 2025 would have been $0.31 per share basic and diluted. Usually, security analysts do not include the above item in their published estimates of earnings per share. Turning to slide 16, we review our fleet operating metrics for Q1 2026. During the first quarter, we maintained 100% utilization across our fleet, consistent with the corresponding period of 2025.

Conference Operator, Call Moderator, Conference Services: Please be patient. Our speaker disconnected again. I will get him back on. Thank you.

Athina Athanasiadi, Chief Financial Officer, Euroholdings: During the first quarter, we maintained 100% utilization across our fleet, consistent with the corresponding period of 2025. On average, 3 vessels were owned and operated during the first quarter of 2026, earning on average time charter equivalent rate of $28,388 per day compared to 2.1 vessels in the same period of 2025, earning an average TC rate of $15,798 per day. Our total operating expenses amounted to $9,175 per vessel per day during the first quarter of 2026 and $8,511 per vessel per day during the first quarter of 2025. Our break-even rate was $14,712 as compared to $10,198 for the first quarter of 2025. In the first quarter of 2026, we also paid dividends equivalent to $1,460 per vessel per day. Turning on to slide 17.

Let’s review our cash flow break-even profile for the next 12 months across each of our operating segments, broken down by key components. Starting with our containership fleet, the cash break even stands at approximately $8,200 per day. This implies that any chartering at rates above $8,900 per day generates positive cash flow. Given current market levels for comparable fitted vessels, this segment continues to deliver stable and predictable cash generation. Our MR product tankers carries an EBITDA break even of approximately $9,600 per day. When interest expense and scheduled debt repayments are factored in, the total cash break even rises to approximately $16,600 per day. Collectively, these figures demonstrate the resilient Euroholdings business model and its ability to sustain positive cash flow generation across all operating segments, even in a more normalized market environment.

We conclude our presentation with slide 18 and the review of our balance sheet highlights as of March 31st, 2026. Total assets stood at $45.9 million, comprising $9.2 million in cash and other assets at a book value of $34.7 million. On the liability side, bank debt inclusive of deferred charges totaled $19.6 million, or about 42.8% of total book value of assets. Trade accounts payable of around $1.8 million and other liabilities of about $1.2 million accounted for a further 4% and 2.6%, respectively, of total book value of assets. It is important to highlight that the market value of our fleet is substantially above book value. Based on company estimates as of March 31st, 2026, the charter attached market value of our vessels is estimated at around $47 million, implying a net asset value of around $35.6 million or about $12.62 per share.

In summary, our first quarter results reflect the early stages of our tanker sector expansion, with Hellas Avatar beginning to enhance our earnings profile while our containership fleet continues to deliver stable cash flow and operational visibility. We remain disciplined as we evaluate opportunities to grow and create long-term shareholder value. With that, I will send the call back to Aristidis to continue.

Aristides J. Pittas, Chairman and Chief Executive Officer, Euroholdings: Thank you, Athina. Let me now open up the floor for any questions we may have.

Conference Operator, Call Moderator, Conference Services: Thank you. At this time, we’ll be conducting a question and answer session. Our first question comes from Felix Henninger, a private investor.

Aristides J. Pittas, Chairman and Chief Executive Officer, Euroholdings: Hi, Felix. We can’t hear anything.

Conference Operator, Call Moderator, Conference Services: Okay, that’s because he disconnected.

Aristides J. Pittas, Chairman and Chief Executive Officer, Euroholdings: Okay.

Conference Operator, Call Moderator, Conference Services: Okay. As a reminder, if you’d like to ask a question, please press star one on your telephone keypad. One moment while we poll for questions. We have reached the end of the question and answer session. I’d now like to turn the call back over to management for closing comments.

Aristides J. Pittas, Chairman and Chief Executive Officer, Euroholdings: Thank you all for listening in today’s call. We will be back to you in three months’ time. Thank you.

Athina Athanasiadi, Chief Financial Officer, Euroholdings: Thank you, operator. Bye.

Conference Operator, Call Moderator, Conference Services: This concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.