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Executives

Aristides Pittas – Chairman

Tasios Aslidis – CFO and Treasurer

Analysts

Mike Webber – Wells Fargo

Thomas Reynolds – GRS Asset Management

Euroseas Ltd. (ESEA) Q4 2012 Earnings Call February 14, 2013 10:00 AM ET

Operator

Thank you for standing by, ladies and gentlemen, and welcome to the Euroseas Conference Call on the fourth quarter and year ended December 31, 2012 financial results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasios Aslidis, 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. (Operator Instructions) I must advise you the conference is being recorded today, Thursday, February 14, 2013.

Please be reminded that the company announced their results this morning with a press release that has been publicly distributed. Before putting the floor to Mr. Pittas, I would like to remind everyone that in today’s presentation and conference call, Euroseas 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 read it.

I would now like to pass the floor to Mr. Aristides Pittas, Chairman and Chief Executive Officer of Euroseas. Please go ahead, sir.

Aristides Pittas

Good morning and thank you for joining Euroseas for our conference call today. Together with me is Tasios Aslidis, our CFO. The purpose of today’s call is to discuss the results for the fourth quarter and year ended December 31, 2012 financial results.

Let us turn to slide 3 for our fourth quarter and year ended December 31, 2012 financial results overview. The fourth quarter of 2012, we reported total net revenues of $12.4 million. Net loss for the period was $2 million or $0.04 loss per share basic and diluted.

The results for the fourth quarter included $0.4 million net unrealized gain on derivatives and the $0.4 million net realized loss on derivatives. Excluding the effect of the earnings for the fourth quarter ended December 31, 2012 of the unrealized gain and the unrealized loss on derivatives, the adjusted net loss for the period will have been unchanged $2 million or $0.04 loss per share basic and diluted.

Adjusted EBITDA for the fourth quarter of 2012 was $2.5 million. We declare the quarterly dividend of $0.015, i.e. $0.015 per share for the fourth quarter of 2012 payable on or about March 9, 2013 towards shareholders of record on March 2, 2013. This is the thirtieth consecutive quarterly dividend declared since the company accessed the capital markets in August 2005.

For the full year of 2012, we reported total net revenues of $52.5 million. Net loss for the period was $13.2 million or $0.34 loss per share basic and diluted. The result for the 12 months of 2012 include a $1.1 million net unrealized gain on derivatives and $1.7 million net realized loss on derivatives and $8.6 million loss on sale of a vessel. Excluding the effect of the losses for 2012 of the net unrealized gain and derivatives on trading securities, the realized loss on derivatives and the loss on the sale of the vessel, the adjusted net loss for the year ended December 31, 2012 would have been $4 million or $0.10 loss per share basic and diluted.

Adjusted EBITDA for the year was $14.9 million. We declared four quarterly dividends for a total of $0.09 per share during the 12 months of 2012.

Please turn to slide 4. For the last seven years, we have been able to declare a dividend which represents a yield of between 5% to 12%. Despite the continued challenges in both the drybulk and container sectors in which we operate, our preference is to continue to reward our shareholders with a quarterly dividend but without at the same time compromising the growth profits of our company.

In this context, our board declared the quarterly dividend of $0.015 per share for Q4 2012 same as the previous quarter. This represents an annual yield of about 6% from the basis of our stock price on February 11, 2013.

Please turn to slide 5 to review our company developments. In regards of fleet developments, all 15 of our vessels are currently employed. Our strategy of chartering our vessels on short period employment during this market downturn will allow us to capture the upside in the freight markets as it occurs and thus positively impact our revenues.

In 2012, the containership market remained depressed for the size of vessels we operate and stayed very close to the low levels last seen in the beginning of 2010. On the other hand, the drybulk market, although also depressed, did not affect our revenues during fourth quarter 2012 as our vessels were all chartered in period employment.

This will change in 2013 as evenly over time these 10 charters will be concluded. We decided to put the first drybulk vessel that concluded its charter just a few days ago, the Eleni P into the Baumarine Panamax bulker pool where we expect her to be earning spot market rates.

During the fourth quarter of 2012, we had two drydockings, our containership vessel, the Aggeliki P and Ninos. Both drydockings were completed and currently the two vessels are on short-term period employments.

In 2013, we expect to have eight of our vessels drydock, the first of which the Aristides NP sometime in March. Our current fleet is shown on slide 6 and remains unchanged at 15 ships, five drybulk vessels, nine containerships and the multipurpose ship.

On slide 7, you will find an overview of Euromar, our joint venture with Eton Park Capital and Rhône Capital. On this slide, we list the Euromar fleet of 10 ships, mostly geared intermediate and handysize containerships with an average age of less than 10 years and the total carrying capacity of 24,000 TEU. We are very pleased with our asset purchases in 2012 as we were able to purchase two containership vessels at very competitive prices. Today, Euroseas has contributed close to $19 million of the $25 million of its commitments. In total, about $131 million has been invested by the partnership leaving about $44 million for further acquisitions and other corporate matters.

Let us move to slide 9 for a brief overview of the market. Despite some positive developments in the economies of the U.S. and Europe there are still a number of uncertainties that clouds the economic picture in 2013. First the U.S. fiscal cliff is still to be conclusively resolved. This may hamper growth of the world’s largest economy. China, the second largest economy has slowdown to a single-digit growth of about 8% and is expected to remain around that level.

In addition, while in previous quarters we look forward to the growth and development of the Greek economies, today, the growth forecast for these economies are revised downwards, in part due to the continued growth sluggishness of the developed world. The worldwide efforts to de-lever the financial system is taking its toll.

As you can see on slide 10, the IMF continues to revise downward its growth projections for almost all countries in 2013. Still though, 2013 is expected to be better than 2012, whilst further out in 2014 and 2015 the global economies projected to be growing at a healthy rate in excess of 4%. The IMF predicts that in 2013, the U.S. will have positive growth on base marginally for the U.S. when measured at historical levels, while the Eurozone is expected to have a negative growth. BRIC and other developing areas are forecasted to grow at a faster pace than in 2012. Overall, a 3.5% global GDP growth is projected for 2013 against 3.2% in 2012. GDP projections are strongly correlated with drybulk and container trades. On the bottom of slide 10, you will find that Clarkson’s projections point the drybulk growth to be at 4% in 2013, revised downwards from the previous estimates of 5%.

On the other hand, Clarkson’s containerized trade growth forecast in 2013 were lowered to 6.1% from the previous estimates of 6.6%. The weakness in the Eurozone economies are clearly impacting container trade growth. The good news is that the 2013 projected containerized growth rate is higher than the 3.7% in 2012, which is mostly a result of the expected improved growth rate in the developing world.

Against this demanding background, we have to also look to supply, so let’s turn to slide 11. The delivery schedule for drybulk vessels at the beginning of 2013 stands at 14.9% of the fleet. This does not take into account cancellations, slippage, and scrapping. It is generally difficult to quantify how much of the order book will finally get delivered this year. A reasonable bet is that it’s going to be around 70% due to the poor market and the lack of financing.

For 2014, the current order book stands at 3.9%, which is a significant improvement over previous years and points to a stabilized drybulk sector. Of course, the 3.9% is not going to be the actual number when you factor in slippage but we still expect the order book in 2013 to be at the slowest growth rate in the number of years.

Please note though on the left hand side that the percentage of the fleet that is older than 20 years is still very high at 12%. Scrapping should enhance the fleet rebalance relatively quickly if rates remain low for the next 12 months.

Let’s turn to slide 12. The containership order book for 2013 deliveries currently stands as 11.3%, but we do expect that there will be at least 20% slippage and cancelations, thus bringing actual 2013 deliveries lower than current forecast.

The 2014 order book at just 5.7% is at historically low levels and points towards a recovering market if significant new orders are not placed in the coming months. Please note that the existing order book is heavily skewed towards the larger ships.

Let’s turn to slide 13 and summarize our views on the markets for the upcoming three years. In the drybulk market, China slowed down especially in infrastructure work. Will negatively affect drybulk trade growth expectations since two-thirds of drybulk demand is generated in Asia while significant deliveries are expected to continue to press out in the market for 2013.

For 2014 onwards, the heavy order cancellations limit the new ordering and record scrapping should work in tandem with a recovering world economy to help gradually lift the drybulk market closer to its historical leverage unless of course unforeseen political or economic events alter the picture.

As for the containership market, economic uncertainty has affected containerized rate quite broadly, as consumers in Europe and North America have remained timid in their spending. Poor demand growth from Europe affects the largest trading route Far East to Europe.

Overall though, fleet growth and demand growth should be fairly balanced in 2013, implying the market hovering around today’s low levels. Small changes in this balance will determine the direction of the market.

As mentioned, supply growth is mainly in large sizes. The cascading effect has demonstrated itself though for the time being, squeezing the large international sector. The dynamics have not completely panned out yet, but we would expect that as things normalize, especially the geared ships of this size would find a better balance.

For 2014, as in the drybulk market, supply and demand forces are projected to work in ship-owners favor to help gradually restore the charter market toward its longer term average, perhaps after a couple more years.

Please turn to slide 15 to discuss our drybulk employment in more detail. Our drybulk coverage for 2013 currently stands at 44%, with ships opening up gradually over time. Having secure and continuous spot market employment for the ELENI P (inaudible) we will probably be looking or fixing the vessels coming up either in similar arrangements or generally short term charters so as to be able to take advantage of the markets when they recover.

Let’s turn to slide 16. As far as our containerships are concerned we currently cover about 17% coverage for 2013. As I mentioned previously we are employing our vessels in short-term charters because of the weakened conditions in the market so that we can be able to take advantage of future upswings. We believe that the remainder of this year will continue to be quite tough without significant time charter rate deviations.

Please turn to slide 17, Through Eurobulk, our manager, we have been able to continue to keep our cost very low. The graph on this page compares our daily costs, excluding dry-dock expenses since 2008. Overall, our costs are amongst the lowest of the public shipping companies. We are very proud of this performance especially as it is in conjunction with our operation and fleet utilization in excess of 98.5% over the last five years.

A level similar to that of peers despite the fact the average age of our fleet is higher than most of the other listed companies. Our daily cost per vessel for the fourth quarter of 2012 is generally in line with the previous three quarters in the fiscal year of 2011 and also our 2012 budget. Let’s now turn to slide 18, the left side of the slide shows the correlation of time charter rates for Panamax drybulk ships and containerships of 1,700 TEUs over the last decade.

Earnings for containerships were moving in parallel with earnings for Panamax ships, with the exception of the peak in 2004, which was the prelude of the super-cycle that followed in drybulk from 2006 to 2008. From 2006 to 2010, containership significantly underperformed the drybulk market due to the Chinese demand boom. But the two markets finally converged again. After a small spike we saw in drybulk rates during the end of the 2011, the two market seem to be converging again.

The right hand side of slide 18 shows current value in relations to historical prices. Drybulk second-hand asset prices have corrected quickly to match what’s happening on charter rates. We are at historical low average values, but we think they may have just a bit further south to go.

Containership values have been weakening over the last few months and they are below historical lows. As explained on numerous occasions, we are generally comfortable investing at levels around historical average or lower. Indeed, our modeling shows us that we can reach significant medium-term returns by investing in either of the two sectors today. The issue, however, in our mind is not if an investment today will prove profitable, but if by waiting a bit further, even more lucrative opportunities may appear.

We are continuously evaluating all opportunities both directly and via our Euromar joint venture with the aim of pulling the trigger at the right time and for the right project.

With that, I will pass the floor over to our CFO, Tasios Aslidis, to take you through our key financials in a bit more detail.

Tasios Aslidis

Thank you very much, Aristides. Good morning, ladies and gentlemen from me as well. I will now provide you with a brief overview of our financial results for the fourth quarter and year ended December 31, 2012 in our usual format.

For that, let’s move to slide 20, which shows our fourth quarter and full year 2012 results in comparison to the same period of 2011. I will go over here some of the same figures which Aristides gave you at the beginning of the presentation. For the fourth quarter of 2012, we reported total net revenues of $12.4 million representing a 19.2% decrease of our total net revenues of $15.3 million during the fourth quarter of 2011. The results for the fourth quarter of 2012 include a $0.4 million net unrealized gain and derivatives and a $0.4 million net realized loss on derivatives. Excluding the effect of the above, the net adjusted loss remained attained at $2 million or $0.04 loss per basic diluted.

Our adjusted EBITDA for the fourth quarter of 2012 was $2.5 million, representing an almost 60% decrease from the $6.2 million achieved during the fourth quarter of last year.

As Aristides mentioned earlier, we declared a quarterly dividend of $1.05 per share, which is the thirtieth consecutive quarterly dividend since the company accessed the capital markets in August 2005.

Let’s now move to the right side of this slide to review these figures for the year ended December 31, 2012. For whole year 2012, we reported total net revenues of $52.5 million representing a 14.5% decrease over total net revenues of $61.4 million during 2011. We reported a net loss for the period of $13.2 million or $0.34 per share basic and diluted. That’s compared net income of $1.1 million or $0.04 per share basic and diluted for 2011.

The results for the 12 months of 2012 include $1.1 million net unrealized gain on derivatives; $0.7 million net realized loss on derivatives and an $8.6 million on sale of a vessel. Excluding the effects of the above from the losses for 2012, the adjusted net loss for the year ended December 31, 2012 would have been $4 million or $0.10 per share basic and diluted compared to net income of $1.5 million for 2011 or $0.05 earnings per share basic and diluted. Adjusted EBITDA for the 12 months 2012 was $14.9 million, a 31% decrease from $21.6 million we achieved during 2011.

Let’s now move to slide 21. This slide shows our fleet performance for the fourth quarter and full year 2012 in comparison with the same numbers for the previous year. We have broken down, as usual, our fleet utilization rate into commercial and operational. For the fourth quarter of last year, we reported 99.8% commercial utilization rate and 99.1% operational utilization rate as compared to 90.5% commercial and 99.6% operational for the same period the fourth quarter of 2011. The utilization rate does not include vessels in drydock or in scheduled repairs during the four periods. In the fourth quarter of 2012 we operated 15 ships earning a time charter equivalent rate of $9,510 per vessel per day which should present a decrease of about 21% compared to the time charter equivalent rate of $12,099 per vessel per day that we achieved during the fourth quarter of 2011, during which we operated 16 ships on average.

In the fourth quarter of 2012, again, our total vessel operating expenses including general and administration expenses averaged about $6,035 per vessel per day compared to $5,766 per vessel per day for the same period of 2011, a 5% increase.

Our dry-docking expenses in the fourth quarter of 2012 were low as only two vessels were drydocked during the period. We believe we can continue to maintain one of the lowest operating structures amongst the public companies, public shipping companies, and we think that this is one of our main competitive advantages in the business.

I would like now to turn your attention to the bottom of the table. Our daily cash flow breakeven level for the quarter presented on a dollar per vessel per day basis. We reported in the fourth quarter of 2012 an operating breakeven level, which includes loan repayments, of approximately $9,480 per vessel per day as compared to approximately $8,727 per vessel per day in the fourth quarter of 2011.

Moving now to the right part of this slide for the 12 months of last year, we reported a 96.2% commercial utilization rate and a 99.4% operational utilization rate, as compared to 96.8% commercial and 99.7% operational for the same period of 2011. Again, the utilization rates recorded here do not include vessels in drydock or in scheduled repairs.

In 2012 as a whole, we operated 15.21 vessels on average earning a time charter equivalent rate of $10,155 per vessel per day, which again represents a decline of about 12% as compared to the $11,525 per vessel per day we said during 2011. For the 12 months of 2012, our total vessel operating expenses, again including general and administration expenses, averaged about $6,058 per vessel per day compared to $6,001 per vessel per day for 2011, a very small increase.

Our drydocking expenses for 2012 were still low as compared to the drydock expenses of the previous year because again we had only three ships undergoing drydock during last year. Our operating cash flow breakeven level, which again includes loan repayments, was approximately $9,098 per vessel per day compared to approximately $9,222 per vessel per day for the year before.

Let’s now move to slide 22, this slide shows the expectation of our cash flow breakeven over the next 12 months on the right side of it. And on the left side of the slide, we show our scheduled debt repayments, including balloon repayments.

As you can see from the chart on the left side of the slide, in 2012 last year we set about $13.4 million of total debt repayments including balloon payments. In 2015, we are scheduled to make about $11 million of loan repayments, and another $9.9 million of balloon repayments. We’re considering discussion with our bank the possibility of exchanging or financing the balloon repayments. But if our balloon repayments are to remain in scheduled, we will set to make about $21 million of loan repayments in 2013.

This figure produces the $3,800 per vessel per day contribution to our cash flow daily breakeven level as you see on the table on the right side of the slide.

After making appropriate assumptions for the other elements contributing to our cash flow breakeven, like operating expenses, G&A cost, drydocking, et cetera, we come to the estimated cash flow breakeven level for the next 12 months of around $11,650 per vessel per day of which about $1,800 relates to balloon repayments. This figure also does not include any credit or gains from interest that we are going to have during the course of the year, which of course will reduce our breakeven level a bit further.

Let’s now move to slide 23, and as usual, let me give you some highlights from our balance sheet. As of September 31, 2012, we have unrestricted cash of about $33.4 million and restricted cash of about $9 million, for a total of about $43.3 million. This cash balance translates to about $0.95 per share, a figure which I would like to compare it to our closing price of our focus of yesterday which was $1.04 per share.

Our debt, including the current portion of it, is about $61.6 million resulting in a debt-to-capitalization ratio of about 23%. The ratio of our debt to the market value of our fleet stands around 70% and our net debt, that is the debt less the cash we have, as a ratio to the overall market value for fleet, is in the range of 22%. We were in compliance with our loan covenants as of the end of last year.

Looking forward, we estimate that we can allocate $25 million of our cash for further expansion of our fleet and renewal of it, and that includes funds that we might invest either directly of our own or through our Euromar joint venture. With that, as usual, let me pass the floor back to Aristides.

Aristides Pittas

Thank you, Tasios. I think it’s time to open the floor up for any questions that we may have.

Question-and-Answer Session

Operator

Thank you very much indeed, sir. (Operator Instructions) From Wells Fargo, your first question comes from Michael Webber. Please go ahead, sir.

Mike Webber – Wells Fargo

Hey. Good morning, guys. How are you?

Aristides Pittas

Fine. How are you?

Mike Webber – Wells Fargo

Hey, I’m good, I’m good. I just wanted to start off with some questions around acquisitions and obviously you got some cash at the European level and then also in Euromar looking at both dry and box ships. Can you talk a little bit about what kind of deals are you seeing in the market right now particularly on the containership side? Are you seeing smaller, i.e. Panamax assets that are, that carry longer term contracts associated with them right now? and just a little bit of color from what your take on that is.

Aristides Pittas

Yes. And on the container side, there is an abundance of elder ships, meaning 15 to 20 year-old ships, all of the size that we are looking at which are trying to get sold at prices which are very low, close to scrap value with no charters attached. This is one category of ships that we are seeing. There is the category of the ships that we are seeing some operators wanting to dispose of which are a little bit larger, as you said, Panamax ships, the old designs, relatively old ships but for which the charters are giving a couple of years of charter back at rates above the base market levels just to reduce the sale of those. And this is about it. We’re not seeing too much modern capacity being circulated for sale.

So that’s where we currently stand. We think that the prices are really at the lowest that they have ever been right now. And it is interesting. As I said during my presentation, I think that this environment may continue for another six, seven months or so. And therefore, we have to use the limited resources that we have in buying the best deals that we can find. So we are not in a tremendous hurry to invest, but we do believe that we will invest both in Euromar and Euromar is mainly looking at containers ships at this point.

Mike Webber – Wells Fargo

Right.

Aristides Pittas

So we think that we will invest within the next six months or so, but we don’t have a purchase imminent this month or something like that.

Mike Webber – Wells Fargo

Okay. That’s fair. I think just maybe thinking about it conceptually and you guys have had a lot of success with Euromar and we talked a bit about potentially Euromar II and other avenues to go out and acquire ships and from our perspective, it seems that there’s a bit of a two tier market developing with the larger asset sinking in higher utilization rates and then a part of that is a function of just the fact that they’re newer and a lot of them haven’t rolled off their initial charters yet, but some of those larger more fuel efficient assets are consistently generating better utilization. Is there any thought that maybe, aside kind of another JV pulling in private equity money, do you guys seek to go after maybe larger containerships that are going to maintain higher utilization rates, what are your thoughts there? Maybe potentially doing something even on spec?

Aristides Pittas

Yes, we are having some discussions to do something on a different scale but these are very preliminary discussions so I can’t say that there is any conclusions there or any agreements there. We are obviously looking at various options available. We do think that it makes sense for people to be buying containerships today, yes the younger ones as well but you need more equity to do that and we don’t currently have it.

Mike Webber – Wells Fargo

Okay. Now that makes. But I mean it sounds like you tend to kind of agree with at least the premise of that in order to make some sense.

Aristides Pittas

Absolutely.

Mike Webber – Wells Fargo

Okay. All right. That’s helpful. In terms of – and again, this is more theoretical but you guys have been successful in partnering with private equity and hedge funds and raising capital and you guys you’re obviously talking about potentially doing more. If I just look at the private vehicle, you’re creating below NAV at a pretty significant discount and it seems like most of the growth focus is via these JVs with more access to capital there. Is there any thoughts potentially taking Euroseas private, just given the fact that you can get one and acquire it cheaper than you could acquire steel?

Aristides Pittas

That’s thought has crossed our minds, but we are not considering that at this point. The decisions that we reached was that the intention is to over time strengthen Euroseas. We believe that the way that Euroseas is standing right now is preparing it for significant improvement once the profitability is restored and this is maybe a year away, maybe six months away, I don’t know. Definitely, the next couple of quarters do not seem very promising. But we believe that we are sitting on a huge option value here with a fleet of Euroseas...

Mike Webber – Wells Fargo

Got it.

Aristides Pittas

Where you know a slight improvement there in the markets will turn it to a profitable company quite soon. Let’s remember that 15-year-old ships technically can go for another 10 years, so there is no technical issue. It’s the issue of – the commercial issue is the important one here. And if one thinks that next year or the year after the market will be starting to approach historical averages, and I’m not talking about extremes, we believe that there is significant value there.

Mike Webber – Wells Fargo

Sure. Sure.

Tasios Aslidis

To complement Aristides’ answer, I mean, the commitment to keeping Euroseas public and using it to grow was the rights offering we did last year, where we there are the sponsors of the company invested the amount of funds in that.

Mike Webber – Wells Fargo

No, that makes sense. And it’s on a historical perspective and I’ve obviously covered the company for a long time. And you go back and you look, you still – you still right around in driving from the pre-crisis shipping companies. And they’re few and far between and you guys are certainly one of them. So, it makes sense to keep that afloat.

Last question remain more to a modeling question and maybe you touched on your remarks, I think in your debt you gave out a drydock schedule for the year. Do you guys happen to have that on a quarterly basis?

Tasios Aslidis

We certainly can, I’ll happy to share with you, after the call, I’ll be there to share it with you.

Mike Webber – Wells Fargo

Okay. Okay. That’s all I’ve got. Thank you for the time, guys. I appreciate it.

Aristides Pittas

Goodbye, Mike.

Mike Webber – Wells Fargo

Bye.

Operator

Thank you, sir. Now from GRS Asset Management you have a question from Thomas Reynolds. Please ask your question, sir.

Thomas Reynolds – GRS Asset Management

Good morning.

Aristides Pittas

Good morning.

Thomas Reynolds – GRS Asset Management

The scheduled to be drydocked in 2013, can you tell us if you plan on scrapping any of your older vessels, to take an advantage of a high steel prices?

Aristides Pittas

I think that if the market deteriorates, we could consider it.

But even at the very low levels where the market currently stands, as I said before, I think we have a significant option value here on our existing ships. So we feel comfortable about the technical situation, they are all well maintained ships. The intention will probably the preference is probably to keep the ships going because once there is a slight recovery we should be able to be making profits out of each one of them. There is only one ship built before 1990, which we might consider placing something else. But this is a decision that will be taken closer to the time when we need to drydock that ship.

Thomas Reynolds – GRS Asset Management

Well, can you update us on Euroseas fleet renewal strategy. I mean other than scrapping older vessels? The option is to sell them require them and acquire a younger fleet?

Aristides Pittas

Well, really as the vessels as the containerships are mostly scrap candidates in today’s market. So that’s why they fall under the category of ships that we would not really want to sell even though their scrap prices are relatively high. The potential that one can make when the market slightly recovers are quite significant. On the other hand, if the opportunity appears for us to maybe sell one of the older ones and replace it with a much younger one with a very small price differential, that is also something that we will be considering during the next six months.

Thomas Reynolds – GRS Asset Management

Okay, thank you.

Aristides Pittas

Thank you.

Operator

Thank you (Operator Instructions) Gentlemen, there appear to be no further questions at this time. So we’ll pass the floor back for closing remarks to Mr. Aristides Pittas.

Aristides Pittas

Thank you, everybody, for listening in to our today’s conference call. We will be here again in three months’ time to update you on how the first quarter of 2013 has gone. Thank you.

Tasios Aslidis

Everybody, bye-bye.

Operator

That does conclude our conference for today. Thank you all for participating. You may now disconnect.

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