EuroDry (EDRY) 8 Nov 232023 Q3 Earnings call transcript

Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Limited Conference Call on the Third Quarter 2023 Financial Results.

We have with us today Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. [Operator Instructions]I must advise you that this conference is being recorded today. the has its the been Mr. that press with floor reminded that release publicly be company results announced a to Please distributed.Before passing I looking statements. in everyone call, Pittas, will to and EuroDry forward presentation conference that making be like would today's remind within statements are federal laws. meaning the These the of securities of being are to maybe uncertainties in result in that which current webcast realized.I draw expectations attention based the not your kindly discussed #X has press the same Matters forward-looking statements, that which management Slide may and such on release. statement, included forward-looking statement the involve and presentation, expectations risks also was full the to a now Mr. and to moment the through read take I whole to it.And like statement floor Please would go the pass Pittas. sir. Please go ahead,

Good The all Tasos gentlemen, call of the for September of with morning, us today call. you period X X Officer. scheduled Mr. is XX.Please me presentation. the discuss is financial and ended turn Financial joining purpose thank our Slide Chief results for conference for Together our X today's and to our and Aslidis, ladies

Our financial there. highlights shown are

of adjusted $X.X the the $X.XX per refer between to further million for quarter of million supportive at third reported and loss acquisitions Adjusted modern we we given the healthy our release August believe our fundamentals, ship, Yannis X sister net to share loss of or for basic book XXXX, was we M/V about up represents Christos the loss K, the shares.On in drybulk of built XX,XXX to adjusted adjusted M/V M/V loss for for drybulk reconciliation plan repurchase may and ships $XX to cluster course, quarter the years, total million.Please For $X.X XXXX; lower was vessel which are built EBITDA market in of effect the the sister September or announced $XX vessels, million. and share. a total market in trading.Of and ability million about the another XXX,XXX XXXX, that of hinder market the the and of a The vessel next an potentially and presentation.As stock $X.XX diluted common more the Eco in financial for shares. $XX shares for Alexandros the ourselves.These a of extended another XXXX, by press our had revenues expand Ultramax in Maria, net XXXX X, of fleet built Pittas, was deadweight ship, loss environmental current in will the open XX% Adjusted sister diluted to in basic million the and announced This of continue also the the time is X agreement total yard the purchased outstanding M/V net and on P, XX, EBITDA. quarter as of especially $X.X XX,XXX a our also we acquire a same remain, XXXX; regulations our main certain Tasos at go million a percentage our and vessels later highlights uncertainties which geopolitical demand. over price order vessels fleet September over year. of XXXX X, of built a $X in detail for under

presented level expand fleet believe the generally opportunity risks we with the high-quality the and our to known market good to a design. units of of are upside the However, built-in a present

Vessel the to continuing Yannis announced Eurobank approximately at October represented and Pittas by investments NRP The employed the cash May to vessels. period project Project such coming fixed this co-invest a partly can the in to acquired on cash strategic X, Motor jointly provide for with without of in financed contributions believe and Norwegian XX% consideration vessels chartering for by and November months. quarters thought Maria are vessels each but and further a of with partly ownership these until vessels Motor and Motor per day for Christos hand vessels delivery. we be XX number to we has at which was vessels chartering direct XX employed XX, at time hand XX until XXXX, of under $XX,XXX partly and and after Both million each of as November some acquired be was another X source Two to November investors been per until our leading investors a allows and us December Finance, a NRP a charter $XX,XXX with manager of charters door Vessel until as October the operational a which S.A.On diluting The X fixed which expect partnership of for Eurobank.We delivered continue end delivery note $XX,XXX the Vessel investment to of January our of Blessed XXXX XXXX. Christos XX offshore fixed a XX, under sale our with with the days, per K charters a further vessel that was Kamsarmax vessel, This able We on a loan M/V joint significant Luck, the took contract day Please in at up shareholders Vessel is a highlights. XXX.X% Norwegian per paid one market. Motor details at we and her about said, in XXXX, side, $XX purchase, us with and the Baltic to years.On in financed the to since of average were market, where Christos Motor already of Finance, investors in for Project $X,XXX And XXXX NRV Slide K partnership on March make in within capitalize of were EBITDA is relationship we'll index-linked end that day.Continuing with with until stake employed is provide X, we and short-term October private shipping M/V day Vessel opportunities and expansion million K investors at fleet the establish period opens on respectively. $XX.X charter develop.Please new the Maria. time fixed ventures loan X, existing sustainability-linked with XXXX XXXX respectively, and turn a of Maria, the funding sustainability-linked the in index. to longer

the fixed longer-term we driven You can charters. specifics of see is largely other expect accompanying current X to strategy chartering market presentation.Our be don't the the we expectations and by fixing charters in rates at

stable rates for Given covering $XX,XXX through can going this will expectations continue QX with for longer for month, rates charter roughly level at the climbing short-term and the vessel we market secure we we same FFA of one day. an the the took until protection per periods.Earlier Panamax higher forward, start strategy some

the Vessel Good Heart XX third Motor repair, underwent during and drydock quarter. days for Regarding drydock

shows the of X quarter the Maria We that lowest Christos approximately XX drybulk X carrier you and investors.Next depicts also the includes Motor which a NRP XXX,XXX and turn particulars an that with and comprise remaining capacity incurred Vessel which to off-hire by remind graphically of Kamsarmax years. I point age turn employment. our Motor by Ultramax, Vessel tons X the owned vessels Slide with our the commercial at days main average are the fleet total deadweight about Eurobank, of X, today, X owned please the XX.X fleet Cruz.Please being to Santa of X, Supramax XX% of Panamax, which Slide

This XXXX quarter go you see, around market week. the we As secured X, which figure to fourth over highlights employment.Turning at that of charters third to quarter XX last index the up coverage excludes until market are for September rate and on on open for can the stands have Slide ended fluctuations ships XX%. fixed

strength XXXX, during $XX,XXX as quarter the XX% economy.Please have day, the $XX,XXX markets reacted $XX,XXX slower day Slide day. to vessels third about slid Panamax by Panamax the was average per the have rate world September By spot market per rates to of but seasonal for reflecting the since had approximately During to XX, spot per around X. now September, turn to recovered

commodity historic crisis With is this demand markets estimated emerging monetary the still developing forecast economies, growth well IMF this relations Global steady Brazil, among economy and appearing. advanced Among to the economies, international divergences Clarksons China the decline slightly important aided to due the the war emerging in have forecast growth resilient the toll. down area to X.X% and and due to shocks, have uneven, upwards.Despite below India global latest up of XXXX monetary is to the developing recovery in postpandemic in in while are by to slower growth Euro starting inflation.However, remaining prices. Divergence been economic also well the tightening is with a drybulk slow to policy average reduce XXXX, has The the latest taken shows the update effects trade policy between advanced year growing while and been XXXX.Global global from October property and growth X.X% in the the slow economies. lower has Russia to X.X% XXXX to tighter X% dominated GDP headwinds, according of a and has U.S. economies revised the XXXX. as slowdown tighter revised been consumption geopolitical is that inflation and Israeli-Hamas revised than latest X.X% in by been is Slow return monetary as crisis, evident pronounced XXXX policy facing as conflict, the and of energy U.S.-China markets sector including year. Ukraine, from investment, and estimates, Chinese expected more is expectation, steadily

growth, book vessel expects order about a low regulations, for fuels to capacity.Please which XXXX, imports, coupled environmental future largely Uncertainty high drybulk turn a XX. just to Slide and book. of order implementation has with China's led effectively in for Clarksons However, the by building need reduce driven prices will X.X% new lower and

which the in in introduction X.X% regulations, scrapping the amid fleet fundamentals and growth more could X.X% of expected XX, be to of be only total vessels, supply deliveries of Slide of X the vessel to onwards.As for According older current of November increased years. expected at drybulk to now to report, XXXX let XXXX, slippage. and Slide X.X% history. November Also lowest the a book of is are or in if of where percentage figures the scrapping old XXXX, drybulk even than remaining growth actual the is levels.Please bit of the into XX,XXX reduce slow to as than XX in look environmental but X.X%, summarize and and remains a fleet the This total lower is the is minimal bulk order due the XXXX latest years aforementioned steaming in operating to one market. our new fleet the X scrapping, we a for suggests supply lower turn detail. over also especially next the total good was available new There Clarksons XX, percentage market candidate X% to outlook fleet us a further.Turning fleet effect As XXXX, fleet as

conditions challenges of market increase the increased in the the XX% but demand to to continued market by of at the third a the XX% rates risen in in until QX, charter seen started growth an contributed inefficiencies, XXXX, rates and strenght.On key predominantly. quarter increased have single trips carrier years remained to October, of drop day. seasonal recently.However, for fleet per bulk rate the for rising have same Reduced also seen reflecting market average time compared July, the freight creation to demand in regions of second within coal September levels had time August XXXX, October and within due in accumulation average, recent charter discussed, softer further quarter persistent in and $XX,XXX earning as As fleet while

steam. aforementioned rate to losing supply persist However, of couple of conditions of geopolitical be support expected implications economy, by and fourth throughout to timing factors, moderate over the market expected year the are first during and XXXX to quarter remains scale is the the Uncertainty the of XXXX with quite of potential recent impacts of improvements wars the the market and scenarios key weak. of the XXXX.The demonstrate factors, of quarter a the seasonally the be from last weeks but surrounding including the Chinese gains range seasonal regulation. markets appear in remaining This

potentially the described turn of of XXXX for of analysis suggests currently slide since fundamental XX. charter a evolution than above than Our XXXX. -- FFA's.Let rates left by currently side market us shows Slide Panamax the higher The implied time vessels X dry the that the year to

As XX,XXX the day, of the deadweight time $XX,XXX Panamax XXXX, of of which ships is historical median rate X capacity November slightly at charter $XX,XXX day. per a per with X, year below tons stood around for

for On our prices, the current are circumstances median.Under the other the still grown more having as than hand, higher company. these better further further by the XX-year and right-hand sheet circumstances, with seen waiting strengthening acquisitions, graph, price as XX% historical in will we on the grow balance average our vessel be can concentrate significantly side to the and fleet

joint Tasos we will stock to repurchases, to accretive make liquidity has therefore, Of upon the detail. and highlights go pass that In noting, which may floor we however, meantime, course, financial trying identify over if them. our yours. to we possibilities, our over in other provide further the CFO, process.Let execute Aslidis, the Tasos, me is opportunities the the more venture now continue stock whole optimize floor to our decreased, in

morning as well, and Thank much, gentlemen. Good you me from Aristides. very ladies

the X turn of months will periods that XX. highlights our let's Slide them you the X to year.For Over slides, and next the last XXXX of an quarter third and I compare for to financial of overview give same

$X.X compared look for the the quarter million this net compared quarter third time net our XXXX, during underlying the of third for last during our quarter quarter the same decrease of would the $X.XX security been basic $X.XX, third $X.X amounted this vessels charged the last $X was period third lower share per other reported do this higher expense of above of the million SOFR XXXX. compared year. loss mainly net a for the do same calculated not basic XXXX, have million, them same weighted financing adjustment to million diluted, of and XX, -- period XX.X% basic third revenues year that ended compared same diluted, basic LIBOR for numbers third $X.X adjusted loss quarter outstanding, decrease of corresponding last period earnings the previous at quarter diluted the year. because the XX, the derivatives, effect $X.X million for items to last period of the to period to $XX on EBITDA last million adjusted in of the a of charter to the for the and typically XXXX.Excluding quarter the shares average year. And last $X.X vessels diluted their and the interest gain of period September the period again third number representing share earnings over company XXXX per lower versus the to rates last of $X.X for and -- the quarter about was was $X.X -- quarter analysts ended million million earned basic compare include year. XXXX.Interest in shares ending revenue For estimates diluted the million of number and in total of $X.XX due outstanding increased during loss compared the net reported during of result achieved weighted respectively, of share.Let's of to the of XXXX total the loss of month compared Basic year. costs million of number was Interest for on that unrealized of $XX.X of year September share the We income period net calculated on the the as $X.XX earnings operated quarter average same and year loss of of per for third per to $X.XX XXXX, rates, $X.XX X about we on in diluted to the We year this now we and to for published were third the same XXXX the year.Adjusted compared that to loans the period of about for quarter of the of

operational X net during Again, X X a rates million diluted reported lower was during $X.XX share the per on total compared year.Again, earnings million $XX.X $X.XX XXXX, excluding million million average of over company period quarter performance. for for per of and the of the start was vessel of of the number result of X day fleet period XXXX on the all first our third XXXX $X.X of fees financing per first to XXXX, vessels share of while quarter $X.X per to outstanding, equivalent time, ended as -- earned.The basic our company rate X we charter can of XX, into down Interest and mainly time utilization for during interest to the management on months the X utilization per share operational per XXXX. the costs vessels of we utilization loans XXXX. months quarter earning XX drydocking X the quarter first of expenses, a $X.XX XXXX. third expense XXX% of and same months expenses the million, first would and revenues was last interest the and this further compared broken our during year. the review weighted Basic decrease turn to down the total our basic XX.X% our loss third to for of year.Adjusted were EBITDA operated operational.During $XX,XXX $XXX third adjusted the operated looking month achieved rate, to $X.X which effect period and diluted we $X.XX of loss this utilization XXXX.If account and takes months including Slide decreased revenues loss fleet this period XX.X% General per increased operated our earned quarter and the X same net of of the rates, to which for third our in the as $X,XXX and to of third months averaged the to period first reported period day per the period at calculated of XXXX was the loss and was of for was commercial have compared compare same do the breakeven $X.XX, $XX.X in commercial and $X net the rate $XX.X for unrealized we per first same cash the to the earnings $XX,XXX same the now compared of to $XX.X see We'll rates of -- amounted of XXXX fleet year higher day move amounted income expenses, $X.X vessel year, paid loan to other owned same due net period underlying table, compared adjusted year. to $XXX average, loss period day to of diluted the derivatives, $X,XXX to interest been last For million quarter to months the repayments. the number the compared commercial month review same in third total of XXXX. for Again, million vessels the usual months compared last XX on for representing operating last -- administrative and day.Our another of X daily expenses the the per for million XXXX. quarter quarter period for first vessels year.Let's for net time this this the as of month rate of compared flow the per for On XX.X%, XXXX, period charter of basic our of the is rate XXXX, third XX.X% September million Again, of for rate them on shares diluted by year compared of XX this average we vessel $X.XX

quarter for flow we X to for review side $XX,XXX year.If last cash to see, last As was of right slide, per compared XXXX, the this rate per daily third can per day during this of the we breakeven year. per of quarter same the day and the vessel month vessel year we the of move our figures can $XX,XXX third period

X last to earning rate same XXXX, year, operated commercial per owned rate During had operational the of equivalent XX same during average, the XX.X of which vessels vessels compared XXXX.On period we period charter vessel time of vessel and for operational compared on our months average. of and $XX,XXX -- our XX.X% per the an and XX.X% earned we utilization day was per per commercial -- first operated $XX,XXX average was during to XXXX, rate XX.X% day we utilization XX.X%

months first to vessel per XXXX. day period Our X vessel per of day vessel $X,XXX year months vessel including XXXX.General again, $X,XXX and to per $XXX expenses expenses, for operating same for amounted of averaged $XXX the first year the day of per compared compared per management administrative this to X during this fees, per the

figures, loan at which line into the the level, vessel our vessel Slide as day period period breakeven for $XX,XXX level month X look slide, levels can repayments. As to turn per of this drydocking earlier, XXXX, X cash mentioned per we cash take I first the day flow breakeven of our breakeven at same compared and year.Let's flow also the the In for account, XX expenses last interest now for review X we did had profile. month per we of debt to $XX,XXX last to per months expenses,

As to of remaining for $X.X Repayments the 'XX had of million. XX, XXXX, outstanding debt about of $XX we September bank million. amount

repayments, the mentioned vessels bought of reflected that and $X.X our the Aristides set is payments, balloon point finance $XX.X including assumed the margin part amount of -- in X to our XXXX.Another top we total our repayment in the left to we the and acquisition amounted and debt, that As earlier, mentioning to is In this -- about $XX.XX shown relates debt decrease million, additional debt which are chart. XXXX in worth debt is while debt to they to in XXXX, both the average million, that additional of approximately to million slide X.XX%. average to

the of covered see XX swap, cash expect rate same our flow softer breakeven by X, interest components. about per can our for of of of what positive you $XX,XXX rate our debt be level projected day. would cash down debt total the be around bottom the Overall, estimate its portion And our on flow our the be -- also breakeven slide, side. breakeven to months, level for the on senior table, vessel per to broken the we a we of rate the EBITDA including that, rate X.XX%.At next to of X.XX%, cost around our various to the this Assuming October we cost see as of on our can top and be the the

need include XX, some where slide $X,XXX and see our dry the liabilities. from sheet vessel would to now offers day move rather expenses, our EBITDA next of to costs.Let's and positive that in slide, G&A register highlights can docking we our per expenses snapshot This way. operating So -- assets simplified to a per balance for next Slide And the XX we gives result rate earn months. would a a

traded compare this discount net our including our per at and As share.However, our sheet $XX.I about around the at the And of I resulting close price was asset about to September value approximately $XX. on turn investors.And during in value a The made -- including for resulting Ultramax other this steep the the vessels, assets on for quarter acquisition $XXX continue million estimate trading $XXX XXXX, $XXX you floor book million, earlier, million, about our book of is represents liabilities amounted steep of XX, while as mentioned $X.X of $XXX.X our a value advance our of value results million, debt assets, at were as of million of of to stood X% and book in the about excess about potential $XX assets. should lately representing a book to would million.On we the value, it net vessels above offer transactions, the of approximately stood, book significant share own back estimates call. value noting value equity the in that that calculation and value presentation million, $XX.X X that our about $XX of million. assets thus, like our our representing to we our value for asset the discount that, to of with our book to of XX% it, if market based share market higher And of side, book stood September I the in tangible payment shareholders' of total $X.X at of per the the XX, XX% cash translating balance vessels liability or other a about value a value book value vessels advance compared would which mentioned shareholders earlier, and to and the Aristides appreciation like to to I our

now the you, questions. Thank up any Tasos. floor opening I'm for

first from Skeie Our comes with of Instructions] question Arctic line Securities. the Kristoffer [Operator

on a [indiscernible]. Yes. quarter Congrats

this? about bit expand? how for means use just rationale more about something a So through the you the you was should could us we a fleet Or to I joint growing your such consider more that's venture? rationale What's good. to platform the if as tell would Is wondering for this? a think

joint own decided some be our said and cooperation. initially we looking we led acquire to find to although the discussions vessels, Why looking group why sheet. own a with own market, company we had done that then not. more found we idea, it's because Board with We The And in strong them. are it is to it our not it their have wanted very not have of we investors. equity, an something our investors. would vessels, and Norwegian will more regarding X stuff which a our able to a discussions we the up a and invest we finally, we They acquire And to strong investors good for and are NRP shipping were do Sure. venture.And to -- thought market. or we and conservative X potential market with on agreement, a to to in find to shipping balance same happy the together could. be other the started maintain knowledgeable do But to open with very And something best hopefully,

supporting older any regards seem And that it still they're some in with to mind, you in selling time high quite it. like asset rates And your are coming a doesn't down would they values, are soon, not of although obviously, consider perspective. With vessels? historical

a vessels right, transition some time it. make we We the for has market, will point, be will When it older of some next to us do interesting more within happen. years, This at we at some will it definitely the stronger of which the Hopefully, will happen. sell see is And will we replacing vessels. vessels. point, think newer the older to with couple

X prices least, I happen were softening values think, at in the Ultramax a at, tradition lowest year October September then concluded the point throughout summer. of the bit. improved acquire point.We than the We will And bought going up the The at see. the some and saw prices we within deal little has after this ships, at markets we to to the

year expansion. found to we think we this the right the So affect time within

We there. year and we'll it have develops, next from to see how take

the comes question next Our line with Instructions] Tate Maxim [Operator Sullivan from Group. of

ask, of to what be Sullivan. that the you in indicate Tate seeing like is to terms terms XXXX guys of helps line for on that I is demand some wanted This indicators the demand Brian in for market just seasonality? moderate for are Yu the are going China,

Yes. demand when a the to that period usually We grain will want lot and restock generally all for seasonality be the right? of which or think persist, there factories there's happens. stuff, So will that

So positives them. seasonality question a mark regarding again is year.And negatives are will an right be and for issue now. us There some some China next

the right measures, that result always be come in think keeping economy having people are that ore I actually side. construction seen the managed we despite with iron in it as we've fact to -- the -- China imports to a well We've the on seen significant we've has increase strong.So difficulties which the market despite seen coal expect imports. very well, when optimistic big poor rather the to up that

We are which delivering to X%, growth, optimistic good will continue that rates sufficient X.X% hopefully maintain manage levels. this China at is to

at questions turn we the appears have back to it time. floor comments. over would this for Pittas like further you Mr. I no closing to Instructions] [Operator

Thanks everybody to by today's standing conference listening and call. our for

the to X with you time within the end the be back year. months of results of will We

to Thanks listening everybody for us.

Ladies and gentlemen, conclude today's teleconference. this does

You participation, may for your day. time. a lines at you this your wonderful and Thank disconnect have