The Greek boxship owner and operator Euroseas has announced a charter of its feedermax container vessel EM Astoria, which will commence in February 2022, after the completion of the present charter of the vessel.
Built-in 2004, the 2,788 TEU container ship entered into a new time charter contract for a period of between 36 and 38 months, at the option of the charterer, at a daily rate of US$65,000 for the first 12 months.
This price will be followed by a daily rate of US$50,000 for the subsequent 12 months and followed by a daily rate of US$20,000 for the remaining 12 to a 14-month period of the charter, resulting in an average daily rate of about US$45,000 for the duration of the chartering agreement.
“The rate of this new charter is on average about 2.5 times higher than the present charter rate of the vessel while the charter payments are heavily front-loaded,” commented Aristides Pittas, chairman and CEO of Euroseas.
Moreover, the new charter secures the company with a minimum of US$47 million of contracted revenues and is expected to make a total earnings before interest, taxes, depreciation, and amortisation (EBITDA) contribution in excess of US$36 million over the three years of the contract.
This is more than US$19 million of the EBITDA contribution which is expected during the first 12 months, according to the chief executive officer of Euroseas.
Furthermore, the charter increases the company’s charter coverage to about 92% for 2022, more than 60% for 2023 and about 45% for 2024.
Aristides Pittas estimates that “continuing healthy container ship markets and high contract coverage are to generate significant cash flow for us over the next two to three years.”
Euroseas plans to use this cash flow for investments to grow and modernise the company or reward shareholders, either through dividends or share buybacks, according to a statement.