Euroseas Ltd.

Thank you for standing by, ladies and gentlemen, and welcome to the Eurosea's conference call on the third quarter 2023 financial results. We have with us Mr. Aristides Pitas, Chairman and Chief Executive Officer, and Mr. Tasos Thessalides, Chief Financial Officer of the company. 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, then 1 on your telephone keypad, and wait for your name to be announced. 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. Pitas... I would like to remind everyone that in today's presentation and conference call, EROCs 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. And now, I would like to pass the floor to Mr. Pitas. Please go ahead, sir.

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Tassosas Livis, 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, 2023. Let's turn to slide three of the presentation to go over our income statement highlights. We are very pleased with our third quarter results, having reported total net revenues of $50.7 million and a net income of $32.2 million, of $4.65 per diluted share. Adjusted net income for the period was $28.2 million, of $4.07 per diluted share. Adjusted EBITDA for the period was $34.5 million. Please refer to the press release for a reconciliation of the adjusted net income and EBITDA. As part of the company's common stock dividend plan, our board of directors declared a quarterly dividend of 50 cents per common share for the third quarter of 2023, which will be payable on or about December 16th to shareholders of record on December 9th. The annualized dividend yield, based on the current share price, is about 8%. This is the seventh consecutive quarter of paying substantial dividends since we reinstituted Paying Them, and something that we believe we will be able to continue for the quarters and years ahead. As part of our share repurchase program of up to $20 million, which was announced in May 2022 and extended for another year, we have repurchased a total of for about $8.2 million. This represents about 6% of our total outstanding shares. Our CFO, Tasos, will go over the financial highlights in more detail later on in the presentation. Please now turn to slide 4, where we discuss our recent sale and purchase chartering and operational developments. As previously announced, on July 6, 2023, we took delivery of our second new building vessel, MV Terrataki, an ECO EDI Phase III 2800 TEU feeder container ship new building from Hyundai Miipo Dokia, On the chartering side, Motor Vessel Aegean Express was fixed for a minimum of three to four months until December 2023 at $9,000 per day. Additionally, Motor Vessel Synergy Anvert was fixed for approximately 40 to 60 days at $18,250 per day. And thereafter, there was an option which was declared by the charters for another 40 to 60 days As previously announced, also, the EPL and ARENA-E commenced their new charters in August 2023 at a daily rate of $21,000 per day for a minimum of 20 to a maximum of 24 months, following the mutually agreed termination of their previously existing charters. We had no idle or commercial of higher vessels during this quarter. Please turn to slide 5 for an update on our current fleet profile. Eurosea's current fleet is comprised of 19 vessels in the water, which includes 12 feeder container ships and 7 intermediate container carriers, with a total carrying capacity of just under 60,000 TEU, and a TEU adjusted average age of just below 16 years. Turning to slide 6. After taking delivery of the first two of the nine new Ecofeeder container ships, we show our now seven vessels under construction with a total carrying capacity of 16,600 TEU and expected to be delivered within 2024. Four of these new buildings have a carrying capacity of 2,800 TEU each and three have a carrying capacity of 1,800 TEU each. After the delivery of the seven FIDE container ship new buildings in 2024, our fleet will consist of 26 vessels and the total carrying capacity will be in excess of 75,000 TEUs. Let's now turn to slide 7 for a graphic depiction of our vessels' employments. As you may see, we have very strong charter coverage throughout the next two years, rates for the remainder of the year, but also for 2024, suggests that we should continue recording profitable quarters regardless of charter rate environment. Let's turn to slide 9 now to review how the 6 to 12 month time charter rates have developed over the last 10 years. During the first quarter of 2023, container ship markets were down across all segments compared to June 2023. For the sector we primarily operate in, charters rates are about 28% lower year-to-date. However, they are still significantly higher than their pre-pandemic levels. As of November 3rd, The 6-12 month charter rate for a 2,500 TEU container ship stood at $12,500 per day, which is higher than the historical median of $9,500 per day, but lower than the 10-year average rate of $15,500 per day. The comparisons to median and average rates are similar across the smaller and larger container ship sizes. The low charter rates are driven by a progressively large number of deliveries, a reduction of inefficiencies caused during the pandemic, and a considerable drop in demand growth. Moving on to slide 10, we go over some further market highlights. During the third quarter of 2023, one-year time chart rates saw declines across all segments and have further declined since by approximately 20% in November 2023 alone. Other rates during the third quarter were down by about 18% compared to the previous quarter, as shown on the table. The average second-hand container ship index has decreased in line with the market decline. Second-hand container ship prices have been gradually dropping throughout the first 11 months of 2023, but are still high nevertheless. The new building price index remained roughly unchanged in the third quarter of 2023 over the previous quarter, whilst new building prices generally stayed at elevated levels due to cost inflation and extended yard forward cover. While new building contracting has eased from the aggressive level seen during COVID-19, it still remains fairly strong historically, with a large line of operators continuing to place orders for large The idle container ship fleet, excluding vessels under repair, stood at about 1.6% of the fleet as of October 23, or 0.45 million TEU. The idle fleet peaked in February 2023 at 0.8 million TEU and was trending downwards until July, but has increased again since September. 68 vessels having been scrapped year-to-date, accounting for about 130,000 TEUs. Demolition remains at low levels compared to historical standards due to the stronger markets earlier in the year and the good charter coverage across the sectors. The figure is anticipated to increase for the remainder of 2020. as it is driven by weaker markets and increasing environmental regulations. Scrapping prices have softened during the third quarter to about $550 per lightweight ton, which is still about 33% above the 2019 average. Overall, the container ship fleet has grown by approximately 6%. With its latest update in October 2023, the IMF forecasts show that the global economy is still slow and uneven, remaining well below the historic average of 3.8% growth between 2000 and 2019. 2.9% in 2024. Global inflation is forecast to decline steadily starting from 2024 due to tighter monetary policy aided by lower international commodity prices. Slow economic recovery has been dominated by post-pandemic geopolitical shocks, including the war in Ukraine, the latest Israeli-Hamas conflict, US-China relations and the Chinese property sector crisis, as well as the effects of monetary policy tightening to reduce inflation. However, important divergences are appearing. The slowdown is more pronounced in advanced economies than in emerging markets and developing economies. Among advanced economies, the US has been revised up due to resilient consumption and investment while the euro area has been revised down as tighter monetary policy and the energy crisis have taken a toll. Divergence is also evident among emerging markets and developing economies, with China facing growing headwinds and now expected to grow only by 4.2% in 2024, while Brazil, India and Russia have been revised up recently by the IMF. According to Clarkson's estimates, container trade will continue to experience subdued demand for the remainder of the year due to slow global economic growth, combined with geopolitical events that are creating new challenges to an already fragile economic recovery. As such, container trade growth is expected to grow by upwards from the 0.9% growth predicted only a month ago. For 2024, demand is expected by klaxons to return to a decent trade growth level of about 3.8%. Now listen to slide 12, where you can see the total fleet age profile and containers reported. and only 10% of the fleet over 20 years old, the largest percentage of which, though, lies within feeder vessels, suggesting high potential recycling for this type of ships. The order book as a percentage of total fleet stands at a high of 26.6% as of November 2023. Blackshaws expects new deliveries of about 3% to be delivered Turning on to slide 13, we also go over the fleet age profile and order book for ships in the 1,000 to 3,000 TEU range, which is where our new building program is focused. The order book here stands at 10.8% as of November 2023. According to Plaxon's new deliveries, including what has already been delivered for 2023, are estimated at 9.4%, 6.2% in 2024, and just 1.8% in 2025. Additionally, over 50% of the fleet is over 15 years old, indicating good fundamental As we said, charter rates continue to face renewed pressure due to weak demand, leading to the 20% decrease in higher rates since the third quarter. The substantial accumulation of available tonnage in smaller feeder sizes is notably contributing to the downward trend in the charter rates for the smaller vessels. While the Container Freight Index has seen some improvements since July, it remains and has roughly returned to about the pre-COVID 10-year average. Container trade volumes grew by 6.6% year-on-year in September and are still above pre-pandemic levels. For the remainder of 2023, there are still considerable challenges ahead. Downward pressure has re-emerged in the fourth quarter as supply growth Slow speeds are expected to play a key role going forward in absorbing some of the excess tonnage. Economic developments amidst the two wars remain very uncertain. Therefore, 2024 will probably be quite a difficult year as well. Market conditions will remain challenging as the rates may decline even further towards the lowest point of the cycle due to the second consecutive year of substantial fleet expansion. Market performance will remain sensitive to capacity management, vessel speed and a range of other inefficiencies like congestion that could alleviate pressure to some extent. The energy transition also has continued to gain traction in the container ship sector. While it's evident that a shift is taking place, the long-term outcome is still very uncertain. One thing is obvious, though, that the spread between charter rates achieved by echo vessels compared to conventional ones is expected to further increase as charters become even more sensitive to greener transport. For 2025, supply and demand fundamentals seem to suggest that we could see a leveling off in the market and some stabilization. If enough scrapping materializes within the next two years, demand remains relatively resilient, and new orders are disciplined, we could possibly see a turning point sometime then. Moving on to slide 15. The left chart shows the evolution of one-year time-charter rates to containers with a capacity of 2,500 TEUs since 2010. One-year time-charter rates are far below their peak in early 2022, and as I previously mentioned, the current one-year time-charter rate stands at $12,500 per day, which is still at a high enough and profitable level, higher than the historical median. At the same time, the right-hand chart shows the historical range for new building and 10-year-old container ships with a capacity of 2,500 EU. Prices are still significantly higher than the 10-year median, despite the severe drop. Despite our expectations for a poorer market I believe that we are largely insulated from developments in the chartered market during 2024 due to our contracted revenue backlog of more than $400 million which we have developed during 2021 and 2022. Our liquidity build-up will allow us to take delivery of the seven remaining container ship new buildings while keeping leverage low at around 60%. It will also allow us to continue paying a substantial dividend and executing on our stock repurchase program as our price continues to hover at levels below 50% of our NAV. At the same time, we will be left with ample free cash to acquire further vessels when we deem the timing appropriate. And with that, I will pass the floor to Tasos to go over the financial highlights in further

Over the next four slides, I will give you an overview of our financial highlights for the third quarter and nine months of 2023 and compare them to the same period of last year. For that, let's turn to slide 17. For the third quarter of 2023, the company reported total net revenues of 50.7 million, representing a 10.3% increase over total net revenues of $46 million during the third quarter of last year, which was mainly the result of the higher average shorter rates of reversal share in the third quarter of 2023 compared to last year. The company reported a net income for the period of $32.2 million as compared to a net income of $25.2 million for the third quarter of 2022, a 27.7% increase. This quarter, there are two points that I would like to make regarding entries that affect our financials. The first relates to the termination of the charters of Emmanuel P. and Rena P. that were reported during the last earnings call, and R. Steve has mentioned earlier. Those charters came with the vessels when we bought them, and because at the time they were below market, we recorded the vessels with increased book value, corresponding to the below-market value of the charters, and at the same time, we started recognizing the below-market charter value over the life of the charters, as per US GAAP guidelines. As these charters were terminated, we had to recognize the remaining unrecognized portion of them. Thus, the $16 million gain on charter termination that you see in our income statement. Incidentally, these charters were terminated with mutual agreement with the Charter and replaced by charters with higher rates. The second point that I would like to make relates to recording and impairment charts for our vessel MV Jonathan P. Based on our impairment test results, it was determined that its carrying amount was not recoverable, consequently, we booked an impairment charge of $13.8 million to reduce the vessel's book value to its market value. I would like to stress that the vessel has been a great contributor to our bottom line. Since we bought it in October 2021, the vessel has been charted on a highly profitable charter of $26,667 per day net of commissions for three years until September 2024, And it has already contributed, up to the end of last quarter, 14.4 million of EBITDA. In the remaining year of its order, it is expected to contribute about another 7 million of EBITDA. Thus, the impairment source is a mere accounting requirement rather than a commercial result. In any event, both of the above items are not included in the adjusted earnings percentage I will refer to a little later in my presentation. Interest and other financing costs for the third quarter of 2023 amounted to 1.8 million after deducting capitalized imputed interest of 0.9 million, which relates to the self-financing of the pre-delivery cost of our new building program, for a total interest and other financing cost of 2.7 million, compared to 1.6 million for the same period of 2022, the period during which the imputed interest was only 0.2 million. This increase is due to the increased amount of debt that we carry during the third quarter of this year, and increased benchmark rates, LIBOR and SOFR, that our loans had to pay compared to the same period of 2022. Adjusted EBITDA for the third quarter of 2023 increased to 34.5 million compared to 26.2 million achieved during the third quarter of last year, an increase of about 32%. Basic and diluted earnings per share for the third quarter of 2023 were $4.67 and $4.65 respectively, calculated on about 6.9 million basic diluted weighted average number of shares outstanding, compared to basic diluted earnings per share of $3.50 for the third quarter of 2022, calculated on about 7.2 million basic diluted weighted average number of shares outstanding. Excluding the effect on the income for the quarter of the unrealized gain on derivatives, the amortization of the fair value of below-market charters acquired, the vessel depreciation on the portion of the consideration of the vessels acquired with attached time charters allocated to the below-market charters, the gain from the termination of the below-market charters in the impairment charge, the adjusted earnings attributable to common shareholders for the quarter ended September 30, 2023, which have been $4.08 basic and $4.07 diluted, compared to $2.90 basic diluted for the same quarter of last year. The Curriculum typically does not include the above items in the public estimates of earnings per share. That's why we're making the adjustments ourselves. Let us now look to the right part of the slide and review the numbers for the corresponding nine-month period ending September 30, 2023 and compare it with the same period of last year. So for the first nine months of this year, the company reported total net revenues of 140.3 million, representing a 0.4% increase of a total net revenues of 139.8 million during the first nine months of 2022. We reported a net income for the period of 89.8 million as compared to a net income of 85.9 million for the first nine months of last year, an increase of 4.6%. I will not repeat here the same points I made earlier regarding the entries that were in our income statement, but they apply for the nine-month period as well. Interest and other financing costs for the first nine months of 2023 amounted to 3.9 million, after deducting capitalized interest of 3.2 million related to the self-financing of the pre-delivery cost of our new building resulting in a total interest and other financing cost net of the imputed interest of 7.1 million, compared to 3.8 million for the same period of 2022, a period during which we had a capitalized interest of only 0.2 million. Again, this increase is mainly due to the higher interest rates, benchmark interest rates we paid, and the higher level of debt we carried. Adjusted EBITDA for the first nine months of 2023 was $91.1 million, compared to $91.5 million for the first nine months of 2022. Basic and diluted earnings per share for the first nine months of 2023 were $12.95 basic and $12.90 diluted, calculated on $6.9 and $7 million basic. respectively, basically diluted shares, basically diluted weighted average number of successors. Compared to $11.91 basic and $11.86 diluted for the first nine months of 2022. Again, excluding the effect on the income statement of the items that I mentioned before, the adjusted income for the nine months ended September 30, 2023, would have been $11.37 basic and $11.33 diluted compared to adjusted earnings of $10.71 basic and $10.67 diluted for the same nine-month period of last year. Let's now turn to slide 18 to review our fleet performance. As usual, we will start our review by looking at our fleet utilization rates for the third quarter of 2023 and compare them to the same period, the third quarter of 2022. Our fleet utilization rate is broken down to commercial and operational. During the third quarter of 2023, our commercial utilization rate was 100%, while our operational utilization rate was 99.2%, compared to 100% commercial utilization and 99.5% operational for the third quarter of 2022. On average, we own and operated 19 vessels during the third quarter, earning an average time charter equivalent rate of $30,074 per vessel per day, compared to owning and operating 18 vessels in the same period of last year, earning an average time charter equivalent rate of $30,893 per vessel per day. Our vessel daily operating expenses, including management fees, were $7,192 per vessel per day for the third quarter of this year compared to $6,601 per day during the same period of 2022. General and administrative expenses amounted to $500 during the third quarter of this year compared to $579 for the same period of 2022. If we move further down on this table, we can see the cash flow breakeven rate for the third quarter of this year, which also takes into account dry banking expenses, interest costs, and loan repayments. Thus, for the third quarter of 2023, Our cash flow break-even rate was $13,594 per vessel per day, compared to $14,466 per vessel per day during the third quarter of 2022. In the last line of this table, we can see the common dividend rate expressed in per vessel per day units. In the third quarter of 2023, the dividend we paid amounted to $2,012 per vessel per day compared to $2,177 per vessel per day for the same period of last year. Let's now look at the right part of this table and review the figures for the first nine months of 2023. During the first nine months of 2023, Our commercial utilization rate was 99.4%, and our operational utilization rate was 98.9%, compared to 99.9% commercial and 99.6% operational for the same period the first nine months of last year. On average, we owned and operated 18 vessels during the first nine months of 2023, earning an average fine charter equivalent rate of $29,000. $843 per day, compared to 16.8 vessels in the same period of 2022, earning an average of $32,814 per day. Our vessel operating expenses, again including management fees, were $7,210 per vessel per day in the first nine months of this year, compared to $6,771 per vessel per day for the same period of last year. General and administrative expenses for the two periods amounted to $648 and $635, respectively. Let us again move further down on this table, where we can see the cash flow break-even rate for the first nine months of this year, taking into account dry docking, interest, and loan repayments. Thus, for the first nine months of 2023, our cash flow break-even rate was $13,852 as compared to $14,052 per vessel per day during the same nine-month period of 2022. At the bottom of the table, again, we can see the contribution to the cash flow rate given from our dividend payments, and for the nine months of 2023, that amounted to $2,134 per vessel per day, and in the corresponding nine-month period, which includes one dividend payment less, that amount contributed, added $1,530 to our cash flow break-even rate for the period. Let's now move to slide 19 to review our debt profile and our forward cash flow break-even level. As of September 30th, our total debt stood at about 138.4 million. On the top of the slide, you can see a snapshot of our current debt repayment profile over the next several years. We have already made 61.6 million of loan repayments in 2023. In the remaining of the year, we have to make another 7.4 million in loan repayments. For 2024 and 2025, our loan repayments dropped to about 31 and 35 million respectively, including balloon payments, which the latter should be able to refinance if we choose to do so, as we did in the past. The debt levels that I mentioned earlier refers to the debt that is on our fleet in the water. As previously stated, we intend to partly finance the remaining of our rebuilding program with debt, and thus we expect to assume an additional approximately $165 million of debt over 2024 and early 2025. A quick point on the cost of our debt. The average margin of our current debt stands at about 2.32%, And assuming a software rate of about 5.41%, the cost of our senior debt is approximately 7.73%. This figure, if we include in that figure the cost of our interest rate swaps, it is brought down to about 7.44%, as about 15% of our current debt is hedged at a soft rate of around 3.4%. I would like to draw your attention now at the bottom of this slide, where we present the level and components of our expected cash flow breakeven for the next 12 months. And we saw a couple of levels of cash flow breakeven. First, for the EBITDA breakeven level is around $9,260 per vessel per day. You can see that in the middle of the bars. And in total, including interest and loan repayments, our cash flow break-even level over the next 12 months is expected to be around $15,100 per vessel per day. This level reflects the number of vessels planned to be dry docked next year and the work that is expected to be done on them. To sum up our presentation, let's move to slide 20 to review our balance sheet. In this slide, we provide a simplified snapshot of our assets and liabilities. As of September 30th, our assets include costs and other current assets amounting to about 69 million, also include advances that we paid for our new building program amounting to about 67.8 million, and the book value of our vessels, which is around $276.6 million, resulting in total book value for our assets of about $408.9 million. On the liability side, our debt as of September 30, as previously mentioned, stood at about $138.4 million, representing amounting about 33.8% of the book value for our assets. The fair value of our remaining below-market targets acquired is about 8.4 million, or about 2.1% of our assets. And other liabilities of about 9.3 million amounting to about 2.3% of the book value for our assets. However, it should be noted that the market value of our fleet is much higher than its book value. Based on our own internal valuations and comparable market transactions, the charter adjusted values for our fleet and new building contracts are about $396 million, which translates to a net parcel value for our company of about $385.3 million, or a bit more than $55 per share. Recently, our shares have been trading around $25 per share. Thus, in that level, it represents a significant discount to our net asset value and suggests that there is a good appreciation potential for our shareholders and investors. With that, I would like to turn the floor back to Aristides to continue the call.

Thank you, Justice. Let's now open up the floor for any questions you may have.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If at any time you wish to remove your question from the queue, please press star 2. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Tate Sullivan with Maxim Group. Hello.

Good day. Thank you. Tassos, can you start by just a little more detail on the impairment of the Jonathan P.? Was that impairment triggered based on the

in terms of testing for impairment? We continuously do a test to see whether the book value of the vessels is recoverable based on certain assumptions about the future rates. When we bought Jonathan P., the market was pretty healthy, but also we got a very healthy shorter rate attached to it. We recognized significant profits over the last two years from the charter aid. But the book value has been depreciated down over the remaining of the life of the vessel, so it was depreciated much less than the earnings contribution that Jonathan provided to us. And if you do the test using historical average rates for the period after the charter, you get an indication that the vessel needs to be impaired. As you know, these are really accounting requirements, and the fundamental business evaluation of the investment remains as it was when we decided to pursue it.

And did you say, do you every quarter test all your vessels for impairments, or periodically do so? Okay.

Every quarter we test all our vessels, whether they need to be impaired or not.

Thank you. And then on the new builds, can you comment on the new builds coming to market, coming to your fleet for next year, it appears, or on schedule with your previous timelines? Can you get an update on, are you looking at, are there other new companies getting intermediate-sized new builds delivered here in the near term that you're really looking at, or what's the contract outlook for the 2024 delivery? Our own new building program is going according to schedule, so we do expect to get the ships in 2024.

The last few months we haven't seen new orders being placed, but there exist other orders being built right now. I think that the order book for the ships between 1,000 to 3,000 TEU that will be delivered next year is around 6 percent. Of course, the average age of the fleet is extremely high, with 52, 53 percent of the than 15 years old. So we expect that if in 2024 the market is poor, which is highly likely, we will see ships in that size that are being delivered by the charters, at the end of the charter, and will be scrapped. So that's why we say that overall we think that in this size bracket we will probably see a declining market, a declining number of vessels available within the next two to three years.

In fact, if I can add, the order percent of the fleet for the feeder sector has come down for about 18% a year earlier, down to less than 11% now. So there is less new ordering being placed for that segment, as opposed to the overall fleet where the ordering sort of continues.

Not to get too up top, but with the larger ships away from the feeders, the larger container ships, and Maersk's announcement in the last couple weeks of cutting 10% of its workforce, is there any, I mean, is this more reflective of a weakness in China that your feeder sector could benefit from working at smaller ports outside of China, or is there any, can you comment on the Maersk announcement, too?

Maersk. I'd leave Merck to comment on their own announcements. But I think that the market generally believes that, you know, the next couple of years are going to be softer. Of course, let us not forget the huge profits that all these liners have been making during the last year. So they are all extremely wealthy companies. they are not worrying us at all about, you know, their status. It's just that when the need was huge, they grew. Now they need to downsize a little bit.

Thank you for coming. Thank you. Thank you.

As a reminder, to ask a question, please press star one. Our next question is from Christopher with Arctic Securities.

Hello, gentlemen. Congrats on another great quarter. Thank you. I was just wondering, can you comment a bit on how the negotiations are going for the best-sold, scheduled for delivery in 2024. What levels are being discussed? Can you give some time around duration here? Are you seeing any interest from the liners? Yeah. Thanks. Yes.

We are talking with the major liners who all say we like the ships, they are interesting, but let's discuss closer to the time of delivery about any opportunities to charter, because the market right now is generally rather weak. We'd rather wait to discuss later. If we had the ships today... We would probably be able to fix the 2,800s at the level of around, say, $17,000, $18,000 a day for a year, and the 1,800s at around something between $11,000 and $13,000 for a year. But since the vessels are not scheduled for delivery till one. People are waiting to see how the market develops before we have discussions. We also don't want to press the liners for something today, because today if they see somebody trying to cover now for three or five months down the road, they will try to impose a much lower rate. So we are not pressing them to come up with a proposal until they feel comfortable about it.

Thank you. appreciate it. And in terms of capital allocation, I mean, it's positive to see that you're still accumulating shares, which is at a significant discount still to underlying values. But should you be able to contract these open vessels at the levels that you described and How would you consider capital allocation beyond that? Are you willing to increase dividends compared to buybacks? I mean, liquidity after a while will also be then an issue.

Well, liquidity is currently not an issue, obviously, and we don't expect it to become any issue within the next, say, five, six quarters, at least, based on our contracted revenues. We estimate that we will have a big enough liquidity bucket to allow us to complete the seven acquisitions.

I didn't mean liquidity in terms of cash balance. I just meant in terms of share, the liquidity in the stock. Sorry. Please, go ahead.

Okay. The liquidity in the stock. Yes, the liquidity in the stock has been decreasing. You are right, I think, on that. As it has been decreasing for most shipping companies, we see shipping has been reduced during the last six months or so. This is something, of course, we follow and may affect our buyback program and how aggressive we are with that, because we do want to continue having high liquidity. The insiders and the family control more than 50 percent of the company stock right now, so that reduces liquidity, obviously, since nobody is a seller. But it's something that we monitor continuously, and all I can say is that we won't be very aggressive on the buyback, but it will continue to an extent. Dividends will, of course, continue. And they will continue to be of significance. We want to be giving a dividend yield which is in the area of 7 to 8, 9 percent. So these are the policy things that right now we are following.

Thank you very much. And again, congrats on the quarter. Thank you.

As a reminder, it's Star 1 to ask a question. We have a follow-up from Tate Sullivan with Maxim Group.

Thank you for taking my follow-up. And also, it's on the below-market charters website. of $8.4 million of assets remaining and other liabilities of $9.3 million, would the same event trigger a gain on those time charter agreement terminations if you entered new agreements?

For a different vessel, the third vessel, Marcos V, that was bought with a below-market charter, that below-market charter value is being amortized, is being credited to our earnings during the duration of the charter. And the 8.4, I believe that I mentioned in slide 20, refers to the remaining unamortized below-market charter value related to Marcosville. The vessel is earning $40,000 in time charter, but of course, because of that, we recognize the higher amount, which we subtract out when we do our adjusted earnings.

Once again, ladies and gentlemen, if you do have a question, please press star 1 at this time. We're now receiving further questions at this time, and I'll turn the floor back to Mr. Pitas for closing remarks.

Thank you, everybody, for listening to our today's call. We'll be back in three months' time. Thanks, everybody. Thanks.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.