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Euroseas: Patriotism versus practicality

Athens: Aristides Pittas does not want to leave Greece, and says so emphatically. But like many of his colleagues in the Greek shipping community, Pittas and his company Euroseas, of which he is chairman and CEO, are caught in a conflict of patriotism versus practicality, a debate made all the more topical in the wake of the Greek prime minister’s resignation yesterday.

The Greek economic crisis has pressured the country’s shipping community to contribute further to Greece’s economy through increased taxation. Meanwhile, government-imposed capital controls have complicated cash flows and an atmosphere of uncertainty prevails. Many Greek shipping companies are considering relocating to places such as Cyprus and maritime centres in Asia. Does Euroseas have a plan?

“Ideally, we would like to move nothing out of Greece,” he tells Maritime CEO. Between the NASDAQ-listed shipowning company Euroseas and its ship operator affiliate Eurobulk and related ventures, the group today manages around 30 ships from its base in Maroussi, Athens.

Already we are paying much more by being in Greece than we would if we were somewhere else,” Pittas continues. “We appreciate that we have to pay and contribute as much as we can to the country, but if that goes beyond a certain level – and the threshold is different for different companies – people will start leaving and we will reverse what has been achieved over the past years. Greece has become the biggest shipping entity in the world.”

Pittas has a little more optimism about the dry bulk market cycle than some of his peers, and says it’s a good time to be planning for the future.

“Unfortunately I am old enough to have seen an even worse dry bulk market, which was in the mid-1980s,” he says. “This is the worst dry bulk market since the mid-1980s, for sure.

“It came about because of the overordering of ships and the slowdown of the economy that was not expected, especially in China. Consequently, charter rates are very low and vessel prices are very low, and in a cyclical business like shipping it really makes sense to be buying when you are at the bottom [of the cycle] because the market will correct itself eventually. When that will be is very difficult to call, but these current second-hand prices are so low that they are unsustainable.”

Secondhand vessels would be the way to go, should Euroseas wish to further increase the size of its fleet, Pittas says: “We usually go by the saying ‘When it’s cheap, buy it and the market will correct’.”

For now, the owner is awaiting delivery of two kamsarmax and two ultramax bulk carriers, which were ordered from Chinese shipyards in 2014. Euroseas considered selling the newbuildings at one point, Pittas says, but decided to keep them in order to grow the company.

The two ultramaxes have been delayed slightly by the shipyard, but the kamsarmaxes are on schedule, which has worked out to be quite convenient for Euroseas, which expects a stronger dry market in 2016.

The weak chartering market has impacted Euroseas’ revenues, and the company felt the need to strengthen its balance sheet, Pittas says. In July, Euroseas announced a rights issue through which it hopes to raise up to $20m to fund its newbuilding programme.

“We believe it is the right time to be putting money to work in shipping because we are at a very low point,” Pittas claims.

Pittas believes Euroseas is in a good position to benefit from an upturn in dry cargo shipping markets: “The fact that we do not have long-term employments on our ships, we have been covering ourselves mostly on a short-term basis – shorter charters both in the container sector and the dry bulk sector – gives us a lot of room to improve together with the improving market environment.”



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