EuroDry (EDRY) 16 Feb 242023 Q4 Earnings call transcript

Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Ltd. Conference Call on the fourth quarter of 2023 financial results.

We have with us today 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 call is being recorded today, and please be reminded that the company announced its results with a press release that has been publicly distributed.

over floor the passing to Mr. Before I in today's Pittas, making statements. would EuroDry also that everybody forward-looking remind to presentation be like will and call, conference laws. the the These meaning are within federal statements securities of and current full Matters discussed may expectations same may the that of forward-looking the to statements, not that webcast forward-looking being risks uncertainties which in draw the management your Slide also based and attention was which involve result included expectations release. are press be statement, on has such realized. I presentation, statement kindly #X in the Please would statement take a floor moment to pass to read go over I through now Mr. whole it. And the to and like Pittas. Please go sir. ahead,

conference our thank have gentlemen, ladies Good call. all Chief morning, with scheduled and you Tasos me, Financial I joining us Officer. Aslidis, for and Together today our for

of for results XXst X The our is period the XXXX. Please X call of turn purpose discuss ended XX to Slide months presentation. December to financial today's the and

results financial shown here. are Our

fourth share, the or $X.XX period million controlling share. million contribution was $X.XX was reported $X.X quarter $X.X the revenues attributable of for FFA. basic for the diluted shareholders million net For and income EBITDA net we income Adjusted per the and diluted per of mainly quarter to $XX.X reflecting of XXXX, net of or total Adjusted million. $X.X

reconciliation net income adjusted of and the full to a turn EBITDA. for Please release press adjusted

in financial CFO, detail Our go highlights on more in will our over presentation. Tasos later the Aslidis,

repurchase to million August extended had the share plan for and market purchase, $XX our another shares XXXX our in sales of overview of XXXX, X our open up in and As year. Please chartering, XXX,XXX for announced to of $X.X common about February repurchased turn an and a highlights. of operational we of Slide total million XX, for stock under

XXXX and index-linked employed vessels March Baltic XXXX, charters, Xx Average continue vessels XXX.X% of side, employed the be under XX chartering our at of charters in the to On are short-term Kamsarmax XX index. until X whilst charter respectively,

specifics accompanying the charters during the commercial were see the off-hire various can no fixed in we quarter. There You the of drydockings, repairs time or presentation.

is charter the to Slide rates XX.X owners refers turn of XXX,XXX has age The / that a Kamsarmax earnings average Panamax, have which X years. our remind the of Our cover NRP and and entities X Otherwise, EuroDry's I'd XX% more FFAs. Please vessels, Supramax presented in Finance. until last as mentioned by being and turn ownership Project EuroDry quarter, you fleet that driven K carrier. Motor previously time EuroDry's market. X. the Maria an announced the of capacity drybulk climbed fleet a owned continue consists to deadweight of short-term our induces graphically. XX% to Christos Ultramax, same carrying that strategy own Slide NRP X, depicts largely employment including X X or We XX like during by Vessel investors. Please approximately hedged with remaining strategy to as drybulk and to K. levels by to plan chartering take call, the charter through XX carriers total

the quarter. see, exposed cover current if little no the you FFAs. we market, in have are In As QX, factor very practically can after we to we especially

QX. breakeven vessel $XX,XXX, XXXX ships and FFA be expect first contracts X vessels, of at rates of X were sold and to quarter equivalent FFA of equivalent XXX for Overall, in days total. the contracts Supramax XX per have We day, respectively. $XX,XXX the $XX,XXX of days In we the of equivalent in X around the Panamax

at Panama market of for over around rates the $XX,XXX seasonal The ] to XXXX, XX, and was effect trends, day approximately December recently. New Slide We the Despite per Turning Year X. others, fourth and the spot up [ the year-end, hovering By fourth Canal Chinese amongst Sea until ended quarter XXXX. go ensued, in of on reflecting per market average rose to highlights rates for the in reflecting quarter the day, $XX,XXX spot the activity the drought. soccer have dropped, that Pacific. Red they the since disruptions Panamaxes

Red ahead and gains raised growth to The to though, day by turn X.X% outlook, day $XX,XXX spot its $XX,XXX for one fourth for one-year the IMF of January the February $XX,XXX X, the as have Panamaxes year is reflecting per to With time its forecast to to XXXX, X. rising are and rising the become X.X% strengthen the more growth confidence global the of as time in disruptions XXXX charter charter latest October from XXXX. around effects bound steam Sea compared for global XXXX X.X% rates, the to Contrary to Slide pronounced. Please rates for year-end. during now rates quarter increased update that market per

the withdrawal greater-than-expected high of in ITF productivity activity the reign warns is, central result ] [ see below growth. a and of X.X%. expect historical average elevated the fiscal however, risks underlying on XXXX last China, although fiscal inflation, States of still wars As of from The XXXX support and inflation. and bank amid of United and policy years to recovery, economy the for of a to rates we also resilience XX this fight debt With low support forecast

unwinding down. side forecast headline in faster having the the midst supply and regions is X.X% is receded and XXXX of are has on Inflation Global policy. in growth, to landing in monetary hard With inflation growth risks this to expected broadly balanced. expected global X.X% XXXX been than to fall a to likelihood and in most restrictive issues XXXX inflation steady falling revised of the with

shocks, or prolong Sea However, Red inflation disruptions, persistent new commodity supply spikes conditions. including continued tight underlying in could geopolitical attacks from and price more the perhaps monetary

which next of in having years. China ASEAN-X, and India the issues X.X% to headwinds activity, according is sector major following its we lower its confidence had in shipping, to by set IMF, in grow XXXX due strongly continue persistent to another For continue and the to couple the boost underwhelming China, property to will X.X% XXXX. and to quite COVID-XX of the still as as economic reopening monitor well grow

the be in both is is by Despite geopolitical rate and prices expected in high in X.X%. the trade. Please Uncertainty X.X% XXXX. continuing. global grow have XXXX which to China level trade is the and growth of new to presently trade at growth X.X% weigh distortions it Drybulk primarily and average and therefore, in XXXX, low on continue that India's turn future improvement rising led fueled to of is, fuels escalating demand building geoeconomic demand of Slide XX. tensions, about XXXX, the to will focused expected fragmentation below historical and orderbook to XXXX

expected available As have near increased reduce new further. introduction only X XXXX, regulations. low orderbook the steaming the to growth, bulk the fleet and minimal a of of of effect due scrapping fleet of February the to historical years. supply next the the X.X% this levels. suggests also This could slow effective even we growth environmental This fleet is X as percentage lowest at total over Complementing

Turning XX. to Slide

a in now supply us fundamentals Let into more bit the look detail.

are According Clarksons was vessel in XX,XXX XXXX; of expected onwards. report, a be XXXX; fleet XXXX As vessels. and new XXXX, X.X% latest in the February operating to to total total in X.X% as percentage deliveries drybulk X.X% fleet of

the candidate lower is aforementioned XX outlook good market. comparatively the for which be proved tighten, course, potentially always slippage. $XX,XXX Panama fourth Panamax and, throughout vessel mid-XXXX. fleet this, growth the a be per stronger note decreased the Freight of has Sea fleet year scrapping fleet from spikes drought, Index markets. to to Drybulk 'XX, is old robust Historically, been the fleet X. XXXX particularly, therefore, activity. freight in expectations, supply of actual especially, to since the is recovery. its is -- strong of day a stronger Slide which the remains is XX earnings QX markets approximately Year, marked quarter disruptions. transit drybulk, the it that of levels. Please drybulk counteracted proving current highest to year economic gains for largely than continues in figures, by to if due the be reduction Contrary years, all expansion uptick a lower XXXX and the to The mainly proceeding dampens be the The to a leading and we due if earnings Red XX, inefficiencies the for years of Canal expected to poised cumulative during market per largely leading due to Despite in shipping to summarize the anticipated, in for to XXXX day the bulker's to New sector, drybulk than moderate in December the to rate than the level Also reaching saw the drybulk at first attributed Chinese the year our hitting to where X% for owing to the turn prior older weakest scrapping, quarter

despite ordering side, of supply future uncertainty there shipyard's choice orders new constraints the methanol-fueled some has surrounding Regarding ships vessels. ] as [ for fuel, discussed, of there to in minimal availability the the been the insignificant not being due and

demand potential to the rates historically discussed, recovery setting returns the The to fleet, ratio orderbook low levels, of more remains charter a typical close for to existing if levels. as the stage in

and EEXI or further as CII such scrapping regulations increased operational emissions of restrict could for reduced implementation the through speeds certain vessels. Additionally, supply

growth to regarding considering coal. demand is government to the important to side, sentiment the potential China in be Its challenges monitor. critical, and On will and policies property sensitivity sector particularly, simulate demand

may easing and cuts as banks demand GDP contribute could on timing growth. rate by Additionally, also weigh inflation economies global of also growth well The will as developed central in developments to growth. unforeseen interest

The has continues. [indiscernible] caused waiting Panama and which Canal, limitations the times, capacity prolonged shipping increased drought in schedules

and As noticeable led redirected ] the rise freight in result, ton-mile from surge and region freights a in been demand to has a rates. a [ has

Red suspend the along Sea disruptions route, Cape cargo this voyages either dry to Good them consequently vessel companies to have the shipping in reroute increasing Furthermore, or ship compelling Hope, of reduced traffic demand.

side XX. left shows charter of The since the vessels Panamax of time evolution Slide drybulk slide of to XXXX. X turn year rates the Let's

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

the million range has vessel On in which higher around can than as $XX price a seen with average [ be for the graph, XX-year median the of current old historical right significantly a price. price hand, and XX-year is other ], Kamsarmax historical the

the currently vessels. reluctant X Ultras have reduced and the values we which vessel liquidity, in to high our of new QX, further in Given acquisition are the invest

asset net executing our repurchase some spend considerably our of to share to as trades prefer our liquidity We price program continue value. on share below our

we opportunities, our organically, as the which markets of can always older up levering we partnerships disposal liquidity further Further, for builds by up investment continue will assets. and/or through either monitoring finance

now pass go floor to Let CFO, our Tasos Aslidis, details. various over in to our more the financial me highlights over

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

highlights overview and of next an periods X last compare you I year. of of year the and to give slides, our the XXXX Over same fourth full the will quarter financial those for

For that, let's turn to Slide XX.

interest offset XXXX charter the income attributable of to company XXXX. income net quarter to that representing a be the the we should revenues the investors of year of $X.X XXXX, year time of of by XXXX quarter to of the results X.X% the $XX.X and last million the operated last fourth of compared ownership of higher the XX% a revenues result $X.X for reported of total Christos and the fourth same of quarter period the the K a quarter in Maria. a quarter For compared net earned on vessels the was in XXXX. $XX.X fourth This total lower of million, loss million period, minority during net of XXXX increase deriving from our same net million the for the vessels, rates of exclude the $X.X the reported compared owned NRP quarter million noted of period of fourth over fourth number to fourth for It XXXX. We

share $X.X was financing costs the of fourth same to $X.XX fourth during attributable quarter expense increased of XXXX quarter period other for of million period on of the to EBITDA X.X and diluted loans earnings weighted $X.XX the shares of to average fourth and last Interest average to XXXX, XXXX one period the basic diluted fourth amount basic basic million quarter same shares controlling for year compared shareholders the X.X to was calculated $X.X our number the of XXXX. $X.XX, million million X.X outstanding, higher, XXXX million compared during weighted the increased the for X.X to same -- and compared million million XXXX. Adjusted $X and quarter compared carried of on for million number XXXX. for we of $X.X per and Basic as diluted calculated due approximately debt mainly benchmark of to the of rates outstanding. increased was the for Interest in diluted

same the for effect $X.XX compared unrealized attributable of Excluding basically on the to per period, XXXX. earnings the the XXXX, last quarter fourth basic of fourth been share quarter to of adjusted derivatives quarter ] of per have the on year, the adjusted diluted the and controlling earnings fourth of diluted loss shareholders for share [ would the $X.XX $X.XX for earnings

said the estimates we per like of on why in the unrealized in security that's loss adjustment. items previous presentations, not share, analysts earnings we're above making do this include public as derivatives and Typically,

now the XX for us the Let corresponding periods XXXX. at XXXX month numbers look versus

time XXXX reason total the For launched -- revenues to year-to-date. and about of year the income of the higher the months result to net rates level and of whole XXXX, million exclude we to for interests. Interest of for $XX.X during reported vessels We Again, full costs XXXX, $X.XX being carried million the again, earned. $XX.X attributable financing the same $XX.X The the debt decrease of amounted a a a for compared higher that average of mainly over net XX net of XXXX. loss million our of -- for revenues reported million million compared the $X.X of as of $X.X higher, XXXX. rates XXXX charter period loss minority total during is company the we representing the million XX.X% that $X.X lower are benchmark other million results net the to period year

XXXX compared $XX.X for to XXXX. during EBITDA Adjusted was million $XX.X million

the Finally, whole XXXX diluted per adjustment for million X.X per and year of outstanding calculated controlling for weighted $XX.XX compared loss respectively, diluted basic diluted on the basic $XX.XX, share final attributable of to related and earnings share shareholders of to $X.XX, was average XXXX we number shares basically of compared to would XXXX. The basic of excluding earnings per basic to attributable to unrealized after the diluted, controlling respectively, shareholders that, on loss for share been the $X.XX $X.XX adjusted have XXXX. loss earnings for for do derivatives diluted $X.XX year, and the adjusted

Let's now turn to Slide XX to review our fleet performance.

the our of start for at utilization quarter looking by year We will and review our fleet XXXX full rates both and fourth XXXX.

First, our for operational XXX%, commercial utilization rate average, operational On at rate vessels utilization compared the XXX% XX.X fourth quarter to of was of XX.X% was our during XXXX. commercial the fourth XX.X% XXXX, and $XX,XXX on quarter compared day. charter per during XXXX operated XXXX, period to day of of and an equivalent average fourth XX.X owned average of in were earning per same $XX,XXX the the quarter time earning vessels rate while

breakeven into day can we drydocking excluding on repayments. day period flow investors. If customer $XX,XXX compared operating loan costs setup vessel per per management vessel further vessel expenses per the day fourth table, day our and of quarter for account NRP vessel here same interest per fees, the fourth that figure rate, the to during quarter I'd was to $X,XXX with of see we includes daily note Thus, XXXX, fourth including down per for like venture but XXXX were total takes XXXX. per this of administrative the expenses, to of breakeven rate general per quarter $X,XXX for drydocking expenses for quarter of fourth move cash $XX,XXX certain and our for which the the also XXXX compared expenses, daily joint the expenses, Our XXXX. per

of now the the full Let's to year. same figures part look for on right the the review slide

XX.X% compared XX.X% per commercial, during average XXXX of XX.X utilization for for equivalent entire charter the and compared vessels XXXX, average, $XX,XXX During day. operational an while was vessels On per were day to to $XX,XXX owned XX.X%, rate commercial XXXX, was utilization rate operational average an our time earning earning our XX.X and XXXX. operated XX.X% rate

of year, table, G&A to bottom $XX,XXX expenses, XXXX XXXX. the cash $XX,XXX day per the per operating averaged compared Our the see we drydocking this At XXXX. total can cost, again, for here again excluding per $X,XXX the day in $X,XXX for year expenses vessel XXXX management vessel but fees, per rate for day which including vessel compared to flow for to per in breakeven amounted per

debt XX Let's now to Slide profile. review our turn to

XXXX, $XX $XXX.X they of while XXXX. million total approximately to XX, As million, million, it XXXX, $XX was bank XXXX, to approximately, including set and to about $X.X balloon debt our in amount stands XXXX about decrease repayments, in outstanding payments, debt December and both In about for million. are our

It per Overall, to which that In around debt, includes rate the that expenses, day. and cash cost we day breakeven broken vessel see where which around down to assuming cost next of rate for of G&A a senior the balance X.XX% move sheet our of simplified this operating into our estimate be end per XX We slide, of of we of next we of was month about per a is projected let's as SOFR our And and debt worth some the our my including highlights $XX,XXX our the the flow assets of mentioning EBITDA our a -- rate, X.X%. At components. rate slide earlier breakeven drydocking XX, and X.X% bottom swaps. is our on this as vessel and liabilities have of level concluding its offer our expect slide. for We in can see cash various about to interest this total average months, margin in rate snapshot we last of level breakeven the Slide this year breakeven flow have can the that, debt the around our way. and EBITDA we expenses be per costs. I'm $X,XXX almost from presentation. for slide, portion

as value main other million, total sheet vessels XX, The million approximately assets million. spend for our our $XXX.X $XXX of million, in $XX.X we are XX, had as our that about $XX stood of book million. the at have. December previously, value that book we and $X.X liability XXXX, That the which liabilities representing our the balance side, December shareholders' cash our of our our mentioned about book XX.X% $XXX stood means this translating was book about to $XXX.X -- about the per interest about on minority resulting As assets, million. On figure value of at equity liabilities of about excludes was and and assets about value of value of book our of value book of additional share, debt,

And estimates We transactions at of value value about our other that our based suggest $XX. spend $XXX market the is market share is our and in million. of on estimate, the fleet that higher our of market NAV fleet However, book own excess we per value. in our

and to This shareholders trade back opportunity a around and that, Aristides. with recently a significant end floor substantial would my to I our net asset value. turn discount at compared at discount shares Our our for to presentation the like appreciation for investors. And thus represents $XX,

Tasos. you, Thank

open up now me may we floor for questions the have. Let any

with Tate from Maxim Group. is question Sullivan first Our Instructions] [Operator

put vessels can your that but X for you Can you in the index-linked you indicated and equivalent, you October little vessels that bit X charters. it's mean on a then I we have November? FFA talk about table, place -- in in hedges

year? hedges more So please? last about talk do one that, FFA of almost a you half for Can those

FFA, the that are vessels the still have vessels is also not fixed, situation isn't It for back you within correlation the the works was will very, when in So fix hedge but you the of which correlated XXX% October, the quarter very significant. with that first the year. unfixed

had it, at we nothing we did the So that time really fixed.

market QX, we was thought around comfortable market with. a stronger. turns We why X lower, number that that the it. the $XX,XXX did the felt It going vessels a to be has that's was we been And for covered around for we So $XX,XXX that day.

ships X figure these remaining be. will It's a all equivalent is But X QX as fix in result So The that's will FFA fine. to to $XX,XXX to higher day. tending loss. be a slight somehow

as I previous a to And Okay. said similar this was years? in and most the well quarters recall, strategy, first of you

significantly the charter fleet ships, be as months. our Whenever through we predicted it where feel taken percentage a day FFAs. and FFAs if on hedge will at stage we that equivalent current is the be, a It's the for where $XX,XXX lower say, time, might of X market will than X we had let's at that

investors. the on fixed? another they joint up, in Did Okay. those bit contracted took those since -- venture JV were place? well? have you And a question you delivery with already you -- follow Did already ships chartering ships charters as the the NRP of Or fixed since acquiring in they have

charter. any didn't have They Yes.

of of One up was its them finishing charter. one

months I X.X But we it all ships charters of fixing then, in about have QX. the had since market anticipation short-term on better a So think in been left.

JV? of And Is Tasos, or quarter will to current the that... roughly not $XXX,XXX the the will form next this costs have quarter --

That's correct. .

That's correct.

Okay.

setup our number reflected and this quarter. -- we portion the that in fees of correct. be A That's rather shared expensed to G&A was

And for Okay. last me.

will you are you output -- increase to China's policy, mentioned, measures a your carrying portion referring is in any been As and that coal fleet industrial -- have you Chinese there? coal currently changes in do meaningful stimulus with past? out it the or the has Maybe have of some headlines any

that area. in few Indeed, up regularly we have quite that pick a vessels coal

affected move ways. are can decides, So by both China that we whatever

really know be. is going their to we what policy don't So

question Securities. Arctic is with next Our Skeie from Kristoffer

you that QX you older now? your sort the have going timing your of of fleet consider the prices good. do asset some It value. seems Would given very And that selling vessel Or see forward? on vessels of was the how in acquisition sort continue to in like in appreciate

We're higher now. that's we mind do to improve that QX and think prices not say, currently. we as it X we to in take prices, will market QX X sale. in opportunity considering not and that has But the you result happen, if decision a a than is currently will earnings lines what be going older for Yes, might But the have think that possibility, that we further, stronger which been vessels. no is yet. sell the higher And or along in ships. of taken those also But

Our next question Global is from Alliance Poe Fratt with Partners.

couple just you or talking had about were I about clarifications. Are a about of you in -- coal thermal? Aristides, China. met talking questions

Both, actually.

rates still or X, Okay. the And the there course underwater, are at you money when quarter? -- spot out of level the that that then the a you quarter over Are being that under the when you or the look full Page out about trading vessels first they they'll couple rates quarter? think, well TC for your of underwater do FFAs. Or think are are talk I at FFAs of though,

Yes.

I ships think levels are up charter higher areas these positional small -- they that that the make -- afterwards. expect mainly these vessels higher $XX,XXX in take a see below will we end voyages where is where you

hedge think say why to I let's day. vessel these, above of we that's say, well, the both the that be quarter. this average is combining negatively, $XX,XXX during every for So a going as Therefore,

That's And Okay. helpful. then...

that. really taken QX have we has been Although, in Tasos understand for The me. account because if I correct Tasos? correctly, loss to can

the on numbers. correct GAAP that's Yes,

next we'll we -- don't into it number take take we loss the the of during actually unrealized GAAP this it year. occurs quarter On the first when it quarter,

So so are we losses unrealized the These numbers, the there. when is them, unrealized. adjust exclude unadjusted loss far the losses. we But

adjusted our they reflected So will in quarter. next be numbers

unrealized shift where realized either, the marked essentially end of you of it the they'll to from in year. the because maybe gain Yes, at

Yes. Correct.

Correct.

the -- open was losses vessels turn the be first we less. more And have we it than gains. lower end be the they market since might during the would the market, last year, to to the if market we at stronger quarter, -- in But of overall. is prefer If the

second extend Understood. year, any quarter you Yes. And have the FFAs correct? rest the that of don't the into or

That's correct.

presentation that going including I quarter, Okay. amortization. the that think. in this total think comments, be said your And to breakeven, close then breakeven, you Is formal Aristides, you're you or your debt to

$XX,XXX and that is EBITDA change? So like Or breakeven? that it to closer

No.

I that $XX,XXX think around level.

then is stance at an average program, Stock with And $XX? Okay. like good seems buying stock roughly it that, stock around on price XX% your $XX. over stand as above the buybacks buyback you're stock right with of what's your now stock we

doesn't Yes... We if the the the stock doing the within the But will trading been within very continue company's program. would repurchase aggressively liquidity was stock more be buying is because still aggressive which liquidity We price is the low. company, stock have it in extremely us high. back allow unfortunately, low, to liquidity the very on our

the much trading on are how you can on There based volume. buy certain guidelines

we -- liquidity. allowance -- trading but exhaust trying use allowance, to is more given it the to trading and are -- So the our

With Mr. would for back Pittas over to conference questions, no I like to the further turn comments. closing

participating for in today's Thank you call. all

quarter. We you months' first in X discuss of will results the to time the be back with

everyone. you, Thank

good a good Have weekend. and a day

Thank Bye. you.

This Thank conclude the will you. conference.

lines You at disconnect this your time. may