Euroholdings Q3 2025 Earnings Call - Strategic Shift to Tankers Initiated with First Medium-Range Product Tanker Acquisition

Conference Moderator: Thank you for standing by, ladies and gentlemen, and welcome to the Euroholdings Conference call on the third quarter 2025 financial results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; Ms. Athena Atalioti, Chief Financial Officer; and Mr. Tazos Aslidis, Chief Strategy Officer. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you wish to ask a question, please press star one on your telephone keypad and wait for a message that your line is open. 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 over 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 two 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 read it. I would like to pass the floor over to Mr. Pittas. Please go ahead.

Aristides 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 Tazos Aslidis, our Chief Strategy Officer, and Athena Atalioti, our Chief Financial Officer. The purpose of today’s call is to discuss our financial results for the three and nine-month period ended September 30, 2025. Please go to slide three. I remind you that on March 17, Euroholdings was spun off Eurosys and has since operated as an independent company. As part of the transaction, Eurosys contributed three subsidiaries to Euroholdings, which own the now debt-free vessels Aegean Express and Joanna, along with $14 million in cash generated from the sale of the motor vessel Diamantis. On June 23, Marla Investments, a company affiliated with the Lattice family, acquired 51% of the company from the Pittas family.

Following the transaction, members of the Pittas family retained approximately 8% ownership in the company. The change in our shareholding structure has provided Euroholdings with a solid and sustainable foundation thanks to the gravitas and expertise of the Lattice family. Our first and major transformation was to gradually shift the company from container ships into tankers. Our first step is an investment in a modern medium-range product tanker, funded entirely with our own resources and bank debt, reflecting both our confidence in the sector’s fundamentals and our prudent approach to capital management. At the same time, we continue to operate our two feeder container ships, which remain under profitable charters. These vessels will remain in service until the expiration of the current employment or their next special service should their charters be renewed.

This balanced approach provides operational continuity while positioning Euroholdings to capitalize on new opportunities in the tanker market. Please turn to slide four of the presentation. Our financial highlights are shown here. For the third quarter of 2025, we reported total net revenues of $2.96 million and net income of $1.5 million, or $0.55 earnings per basic and diluted share. Adjusted EBITDA for the quarter was $1.44 million. Please refer to the press release for a reconciliation of adjusted EBITDA. We declared another quarterly dividend of $0.14 per share for the third quarter of 2025, in line with previous distributions as part of the company’s common stock dividend plan. The dividend will be payable on or about December 16 to shareholders of record as of December 9, 2025. This marks our third consecutive $0.14 quarterly dividend, representing an annualized yield of approximately 8%.

Please turn to slide five. As already mentioned, on November 5, 2025, we announced the signing of a memorandum of agreement to acquire our first medium-range product tanker from LATCO, an affiliated party, for $31.83 million. Motor vessel Hellas Avatar, as the vessel is named, was built in 2015 in South Korea, has a carrying capacity of 49,997 deadweight, and is expected to be delivered by the end of this week. The acquisition is financed through a combination of debt and equity. The company has signed a term sheet with Piraeus Bank S.A. for $20 million to partly finance the acquisition. An independent committee of disinterested directors was formed to evaluate and approve the transaction, ensuring full transparency and alignment with shareholder interests.

Looking ahead, we plan to pursue further fleet expansion, supported by cash flows generated from our existing assets and, where appropriate, additional capital raised in the financial markets. Let’s now turn to slide six to review our current fleet composition, which consists of two feeder container ships with a combined carrying capacity of 3,170 TEU and an average age of just below 27 years. After the delivery of the Hellas Avatar, which has a carrying capacity of about 50,000 deadweight, the fleet will have a grand total carrying capacity of about 91,000 deadweight and an average age of 17.6 years. Turning to slide seven, we outline our current employment profile of our fleet.

Our two feeder container ships, MV Aegean Express and MV Joanna, remain fully utilized under profitable time charters, delivering consistent cash flow and operational reliability that directly support our growth initiatives and provide a solid platform as we expand into new markets. The container ship market continues to perform well, particularly in the feeder segment, supported by steady demand and limited supply growth. These conditions position our vessels to sustain compelling earnings performance even beyond their current contracts, despite their age. The Aegean Express is employed on a short-term time charter at a daily rate of $16,700 a day, which runs through mid-December 2025. Motor vessel Joanna is fixed on a medium-term charter at $19,000 per day through March 2026, followed by $9,500 per day until September 2026, with an optional two-month extension at $16,500 per day through November 2026.

Despite their age, both vessels continue to perform efficiently and may be rechartered beyond their current contracts. In fact, we are currently negotiating to potentially recharter the Aegean Express at the end of its current charter. The cash flows generated from the container ship charters continue to support our growth initiatives, ensuring a steady foundation as we expand into the tanker market. Please turn on to slide eight, which provides an overview of the feeder container ship segment in which we operate. The slide highlights the dynamics of the smaller container ship market where both our vessels are positioned. As shown by data from Clarksons Research, the global order book is heavily concentrated in larger container ships operating on the main trade lanes. In contrast, the feeder segment, which includes ships in the 1,000-2,000 TEU range, remains significantly undersupplied.

Only around 10% of the current feeder fleet is on order, while roughly 20% of existing vessels are already older than 20 years. This creates an imbalance between limited new building activity on one side and an aging fleet on the other. Many of these older vessels are likely to head toward retirement or scrapping, especially as environmental regulations continue to tighten. At the same time, main lane capacity is growing. The more cargo moves through these major routes, the more feeder ships are needed to distribute it regionally. While rising fast, the order book for feeder and intermediate-sized vessels remains relatively small. Please turn to slide nine, where we can see the six- to twelve-month time charter rate for feeder container ships with a capacity of 1,700 TEU over the past 10 years.

As of November 14, the time charter rate for such vessels stands at $28,700 per day, well above the 10-year average of $16,800 per day and the median of $10,100 per day. Let me pass now the floor over to our Chief Strategy Officer, Tazos Aslidis, to provide us some highlights of the product tanker market.

Tazos Aslidis, Chief Strategy Officer, Euroholdings: Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. Over the next few slides, I will provide you with some highlights, as Aristides mentioned, for the product tanker market. Please turn to slide 11 to review the development of one- and three-year charter rates for medium-range product tankers over the past decade. As shown here, as of November 14, 2025, the one-year medium-range MR time charter rate stood at approximately $23,750 per day, broadly in line with the five-year average of $23,870 and the median of $23,500 per day for this size class. Rates, as you can see, have been largely stable during 2025, before rebounding in the recent weeks. Similarly, the three-year MR charter rate is currently at around $21,000 per day, slightly below the five-year average, just around the five-year average of $20,910 per vessel per day and the median of $20,750.

Although these rates are a bit lower than the rates observed during the period of 2022 to 2024, they still remain healthy by historical standards and highlight the fundamentally strong and well-supported MR tanker market. Please turn to slide 12 to review the medium-range tanker new building and second-hand prices over the past five and 10 years. As shown here, the medium-range tanker values, both new building and second-hand, remain above their five and 10-year medians and averages, even after, in 2025, vessel prices have corrected by about 10% compared to their 2024 decade-long peaks, with second-hand prices registering small increases over the recent weeks. Currently, values are about 17%-24% below those peak levels for five and 10-year second-hand vessels, respectively, reflecting potentially a healthy entry point in the sector as compared to asset values observed over the last three years.

As of the end of last week, new building prices were valued at around $48.5 million, five-year-old vessel prices at around $43 million, and 10-year-old units were priced at around $33 million, according to Clarksons Research, all reflecting the continued market confidence in the medium-range product tanker sector and providing a supportive pricing backdrop for us as we evaluate acquisition opportunities. Please turn to slide 13, which highlights the medium-range tanker fleet age profile and order book. As shown on the top left of the slide, the global medium-range tanker fleet profile is roughly uniformly spread over the vessel ages, with nearly half, 46%, of all vessels now over 15 years of age and only about 13% under five years of age.

This age profile supports at least a normal scrapping rate and consequently provides supply support as older vessels reach their next special surveys and thus become less competitive under the new environmental rules and regulatory environment. On the top right, we can see that the medium-range product tanker market deliveries have remained relatively moderate over the past several years as a result of the limited ordering, as shown on the chart in the bottom of the slide, averaging about 3 million deadweight annually, while scrapping has also been limited, especially during the 2022 to 2024 period when market rates were very strong. Combining these two developments, they reflect a fleet that is growing only modestly in net capacity, even during record rate-level years.

With rates in 2025 being lower as compared to the rates during the three-year period before that, 2022 to 2024, scrapping is starting to pick up while deliveries are expected to reflect the relatively modest order book levels. In fact, the sector was under-ordered for quite some time, as shown again in the chart at the bottom of this page. In summary, the average order book coupled with the aging fleet underpin a constructive medium-term supply outlook. To complete the top-level overview of the product tanker sector, we need also to review demand for such vessels. For that, let’s turn to slide 14, where we go over the trade demand outlook for tankers.

As shown on the top part of the chart of the slide, global oil products trade was quite strong during the period 2022 to 2024, while experiencing a decline so far this year in 2025, according to Clarksons, a development fully consistent with the rate picture we reviewed earlier, where rates were very strong during 2022 to 2024 and corrected in the first nine months of this year. Current forecasts by leading market analysts point to an increase in trade in 2026 and thus demand for ships. While the global oil demand, as shown in the bottom left chart, grows in general in synchronization with the overall world economic growth, both in terms of tons and ton miles, demand for oil products is also affected by the geographical profile of the refinery capacity.

With new refineries increasingly being built away from areas where demand for products develops and built typically nearer to where crude oil is produced, the ton mile effect on the oil products trade is expected to be higher, suggesting increasing demand for product tankers. In the bottom right of this slide, you can see a chart of the total refinery capacity development. Global refinery capacity has expanded steadily since 2010, rising from the low 90 million barrels per day to about 102 million barrels per day in 2024, in parallel broadly to demand for oil. It is noteworthy that although capacity remained about the same in 2025, there is expectation, based on announced plans, that it will grow by about 1.5% each of 2026 and 2027, providing further support to the product market outlook. Slide 15 that follows summarizes what we have already discussed.

I will only highlight and close with that the last bullet of the slide that states the somewhat obvious point that if anything is high these days, these are uncertainty and risks and consequently opportunities. We live in a world with uncertainties that range from economic and geopolitical developments, including the still unfolding effects from the tariff wars and other protectionist measures, to sanction-related inefficiencies, which could reduce further effective fleet supply, and of course, the opposite effect if they get removed, to regional developments that affect the trade routes traveled and consequently the pattern of trade, things like the crossings of Suez Canal, to competition for crude product tankers into clean trades, to climate change-related policies and the timing of decarbonization targets. The recent IMO net zero timeframe delays are an example, and the list does not stop here.

With that, let me now pass the floor to our CFO, Athena Atalioti, to go over the financial highlights in a little more detail.

Athena Atalioti, Chief Financial Officer, Euroholdings: Thank you very much, Tazos. Let’s turn to slide 17. We will go over the financial highlights for the third quarter and nine-month period of 2025. For the three months ended September 3, 2025, the company reported total net revenues of $2.96 million and net income of $1.54 million. Adjusted EBITDA for the third quarter of 2025 was $1.44 million. Basic and diluted earnings per share for the third quarter of 2025 was $0.55, calculated on 2,816,615 basic and diluted weighted average number of shares outstanding. For the first nine months of 2025, the company reported total net revenues of $8.75 million and net income of $13.4 million. Adjusted EBITDA was $3.1 million. Basic and diluted earnings per share for the first nine months of 2025 was $4.81, calculated on 2,793,954 basic and diluted weighted average number of shares outstanding.

Excluding the net gain from the sale of motor vessel Diamantis, adjusted net earnings for the nine-month period ended September 3, 2025, would have been $1.15 per basic and diluted share. Usually, security analysts do not include the above item in their published estimates of earnings per share. Turning to slide 18, let’s review our cash loan break-even profile for the next 12 months across each of our operating segments, broken down by key components. Starting with our container ship fleet, the cash break-even stands at approximately $9,500 per day. This means that any recycling above $10,000 per day generates positive cash flow. Given that current market rates for comparable feeder vessels remain well above this level, this fleet continues to make a solid and consistent contribution to our operating performance. Moving to our newly acquired medium-range product tankers, the EBITDA break-even level is approximately now $9,316 per day.

This captures the vessel’s running costs, OPEX, and DNA expenses. When we include interest expenses and scheduled loyalty payments, our total cash flow break-even comes to about $14,600 per day. At rates exceeding approximately $15,400 per day, the vessel begins to generate incremental positive cash flow. With one-year medium-range time charter currently sitting comfortably above this threshold, we see ample potential for solid cash generation from this vessel as well. Overall, the break-even levels highlight Euroholdings’ capacity to maintain healthy operating cash flow even in a more normalized rate environment. Let us now conclude our presentation with slide 19, which summarizes our balance sheet. As of September 30, 2025, we held cash and other assets of $17.5 million. The book value of our vessel was $3.6 million, bringing our total assets to $21.1 million.

On the liability side, we had about $0.4 million in trade accounts payable and roughly $1.5 million in other liabilities, resulting in a book equity position of roughly $19 million. It’s important to highlight that the market value of our fleet is significantly higher than its book value. Based on the most recent charter-adjusted valuation, our vessels are valued at approximately $13.8 million. This implies a net asset value of around $30.2 million, or about $10.73 per share. Our financial results this quarter underscored the strength of our discipline strategy and resilient business plan. We continue to deliver accredited growth driven by strong revenues and the competitive advantages of our market position. Equally important, our robust cash generation from operating activities provides us the confidence to invest in and successfully scale our presence in the tanker sector. Thank you for your time and attention.

I would like to pass the floor back to Aristides to continue our call.

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

Conference Moderator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star, then one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Poe Fratt with Alliance Global Partners. Please proceed with your question.

Poe Fratt, Analyst, Alliance Global Partners: Good morning, Aristides, Tazos, and Athena. I have a couple of questions, the first of which is a technical question. Aristides, are you considered an associated person? Were you excluded from the review of the acquisition?

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: No, I wasn’t excluded. In fact, I was heading this committee myself because we have no interest in the vessel that we are buying from LATCO. As you know, our family has an 8% interest in the company. I was not within the interested parties.

Poe Fratt, Analyst, Alliance Global Partners: Okay. Great. Thank you for clarifying that. Then secondly, you’ve said a couple of times on the Joanna, and there’s a footnote on page 18. When is the dry dock scheduled? Also, can you sort of just discuss the prospects for a longer-term charter on the Joanna?

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: We are negotiating a charter of the vessel as we speak. We might even have news towards the end of the week. We are in discussions to extend the charter for another year. We will need to stop the vessel for a few days to do some maintenance work. That should allow the vessel to then trade till its next scheduled special service, which is sometime in 2027.

Poe Fratt, Analyst, Alliance Global Partners: Oh, great. We should assume that it’s still in the fleet. I just have to ask, any ballpark number as far as the time charter that you’re looking at, or is that too sensitive since you’re in discussions?

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: I would tell you that we’re talking about the levels where we are currently trading, just for your modeling.

Poe Fratt, Analyst, Alliance Global Partners: Okay. So sort of high teens?

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: Yeah.

Poe Fratt, Analyst, Alliance Global Partners: Okay. On the MR, you’ll have it at the end of the week. It’s working in the spot market. Can you just talk about the chartering strategy on the MR? Would you look to lock in a one- or two-year time charter at some point in time, or would you just keep that playing in the spot market?

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: We may in the future. At this point, the market is quite high, and we are taking advantage of the spot market. We will see depending on our overall expansion plans. We will consider also potentially a longer charter. For now, spot.

Poe Fratt, Analyst, Alliance Global Partners: Okay. Great. Thank you so much.

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: Thank you, Poe.

Conference Moderator: Mr. Pittas, we have no further questions at this time. Oh, I’m sorry. We did get a follow-up from Poe Fratt. Just one moment. You may be receiving a question.

Poe Fratt, Analyst, Alliance Global Partners: Sorry. Sorry. I wanted to see if anyone else had a question. You just talked about your growth plans. Can you just highlight sort of what you see in the S&P market right now for the target of acquiring additional MRs?

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: I think prices are relatively stable at this point, at a level where they’re not too high and they’re not too low. It is difficult to say how they will develop going forward. They are definitely softer than where they were a year ago, but that was quite high. Yeah, we’ll see.

Poe Fratt, Analyst, Alliance Global Partners: Yeah. I guess stay tuned, right?

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: Stay tuned. Exactly.

Poe Fratt, Analyst, Alliance Global Partners: Great. Thank you so much.

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: Thank you. Bye-bye.

Conference Moderator: Thank you. Mr. Pittas, I’d like to turn the floor back over to you for closing comments.

Aristides Pittas, Chairman and Chief Executive Officer, Euroholdings: Thank you all for listening in today in our results. We will be back again at the beginning of next year with the whole-year results and the prospects for the coming year. Goodbye.

Poe Fratt, Analyst, Alliance Global Partners: Thanks, everybody.

Conference Moderator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.