EuroDry Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2024

There are 7 speakers on the call.

Operator

by. Ladies and gentlemen, and welcome to the EuroDry Limited Conference Call on the Q2 2024 Financial Results. We have with us today, Mr. Athos Aslidis, Chief Financial Officer of the company. At this time, all participants are in a listen only mode.

Operator

There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed. Before passing the floor to Mr. Vee, I would like to remind everyone that in today's presentation and conference call, EuroDry will be making forward looking statements.

Operator

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. 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 to the press release. Please take a moment to go through the whole statement and read it.

Operator

And now, I would like to pass the floor to Mr. Asides. Please go ahead, sir.

Speaker 1

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. I'm Tasos Aslidis, the CFO of EuroDry. Together with me is Mr. Simos Parriaros, our Chief Administrative Officer and Ms. Athena Ataloti, our Finance Manager.

Speaker 1

Our Chairman and CEO, Arti Despitos, who usually hosts this call, will not be able to join this presentation today due to overlapping engagements. The purpose of today's call is to discuss our financial results for the 6 month period and quarter ended June 30, 2024. Please turn to Slide 3 of the presentation to see our financial highlights for the period. For the Q2 of 2024, we reported total net revenues of $17,400,000 and a net loss attributable to controlling shareholders of $410,000 or $0.15 loss per share basic and diluted. Adjusted net loss attributable to controlling shareholders for the quarter was $450,000 or $0.17 loss per share basic and diluted.

Speaker 1

Adjusted EBITDA for the quarter was 5,000,000 dollars Please refer to the press release that was released earlier today for a reconciliation of adjusted net loss attributable to controlling shareholders to adjusted EBITDA. We will go over our financial highlights in a bit more detail later in the presentation. As of August 8, 2024, we had repurchased a total of 313,318 shares of our common stock on the open market for a total of about 5,000,000 dollars are under our repurchase plan of up to $10,000,000 announced in August 2028. The program, which was renewed in August 2023 for another year, has been further extended for an additional year. We will continue to use our share repurchase program at management discretion depending on the level of our stock price to enhance our ability to increase long term shareholder value.

Speaker 1

We're also very happy to announce our 2023 Sustainability Report, which was uploaded to our website today. Please now turn to Slide 4 for an overview of our chartering, operational and dry docking highlights. On the chartering side, you can see that most of our charters fixed during last quarter are for short periods that range from 20, 25 days on the one end to 80 to 100 days on the other end. Even the motor vessels, Ekaterini and Xenia, which are in longer term charters until March May 2025 respectively, have the rate of their charters linked to indices to the Baltic Index earning 105.5% and 108% respectively above the average Baltic Kamsarmax Index, an index based on the 5 Kamsarmax time charter routes. This strategy is consistent with our view to be exposed to the market as we believe the fundamental supply and demand trends present a strong possibility for the market to strengthen in the near and medium term.

Speaker 1

It is expected that supply growth will be quite limited over the next couple of years due to the low average ordering for new vessels in the recent past, and thus it is likely that any demand growth to be translated in increases to charter rates. We plan to continue trading under short term charters for the time being until employment rates start firming up and we see the potential positive effect of demand increases. You can see the specifics of the various charter we fixed in the relevant slides, Slide 4. During this period, Q2 of 2024, our motor vessels, Starlight, Marea and Irini P underwent their scheduled dry dockings and repairs from approximately 23, 26 and 31 days respectively. Vessels Marias and Irini's dry docks started in June in the second quarter and was completed in July and the related cost would mostly influence our Q3 results.

Speaker 1

Also, motor vessels, Giannis Pitas and Christos K are currently undergoing their scheduled dry dockings. In fact, we have decided to perform earlier the dry dockings, mostly for commercial reasons related to them being fully available for employment in case the markets meaningfully recover in the near future. Finally, motor vessel Goodharp encountered a commercial off hire last quarter, a waiting time of 4.5 days between 2 charters. Subsequently, the vessel also experienced a technical off hire for about 10 days due to a required main engine turbocharger repair. Please turn to Slide 5.

Speaker 1

EuroDry's fleet consists of 13 vessels, including 5 Panamax Carriers, 5 Ultramaxes, 2 Kamsarmaxes and 10 Supramax. We think of our fleet as having 2 clusters, a modern Eco 1 of 8 vessels, all built after 2014. And our Vintage 5 Panamaxes, all built in Japan at the highest standards of their time, having been the workhorses of the sector. Of our 13 drybulk carriers, our 13 drybulk carriers have a total cargo capacity of about 920,000 deadweight tons and an average age of about 13.5 years. At this point, I would like to remind you that as previously discussed, EuroDry owns 61 percent of the entities of the ship owning companies that own motor vessels, CHRISTOS K and MARIA.

Speaker 1

The remaining 39% is owned by owners represented by NRP Projects Finance, which to which we refer elsewhere in the presentation as NRP investors. Next, please turn to Slide 6. To see a graphical representation of our fleet employment. As you can see and consistent with my earlier remarks, fixed rate coverage for the remainder of 2024 stands at around 22% through charters. However, this feature excludes ships on index charters, which are open to market fluctuations, but nevertheless have secured deployment.

Speaker 1

At this point, let me pass the floor to our Chief Administrative Officer, Mr. Simos Pagiaros, to go over the recent market developments.

Speaker 2

Thank you, Tasos. Good morning from me as well, ladies and gentlemen. Together, we will walk through some market highlights today. Turning on to Slide 8 now, we will go over the market highlights for the Q2 of 2024 up until recently. In the Q2, the average spot market rate for Panamaxes was around $14,500 per day.

Speaker 2

By August, spot rates have slightly risen to just below $15,000 In the meanwhile, one year time charter rates stood for Panamax's at approximately $16,000 per day during the quarter and have shown a slight softening in the past weeks. However, rates still represent a significant improvement from around $10,500 that was during the same period last year, which marks a notable increase of nearly 50%. This uplift in employment rate was primarily driven by the ongoing Panama and Red Sea disruptions. Please now turn to Slide 9 to see some data from a recent IMF update. The Fund sees the global economy to experience modest growth over the next 2 years with cooling activity in the U.

Speaker 2

S, stabilization in Europe and stronger consumption and exports from China. As a result, the IMF have maintained its 2024 growth forecast up 3.2%, consistent with its April projection, while slightly increasing next year forecast by 0.1 percentage points to 3.3 percent with China and India bringing the most notable upward revisions. On the other end, Japan's growth has been revised the most downward for this year to 0.7%, down from 0.9%, together with Russia in 2025, which is projected to go down from 1.5% up to 1.5% from 1.8% in the previous quarter. As the weight of China in drybulk shipping is the driver of this market, we continue to monitor China's economy closing. Its property and infrastructure sectors, which have played a vital role in shaping this market over the past 2 decades are not growing at levels seen in the past anymore, and despite the fact that the real estate has been saturated for more than 3 years now, we see different trades and commodities developing like bauxite imports from Africa along with others which have given significant support to the drybulk market and are expected to continue to do so.

Speaker 2

So the question is what will drive this market to more profitable level if its main work cost is getting more and more tired? On this note, let's say a few things about India, which seems to be the next tiger that will help the world economy to continue growing at healthy levels and has material effects on the tribal trade as well. In that respect, India's growth is projected to remain robust at about 7% this year. This upward revision is attributed to improved private consumption predominantly. However, for next year, the IMF has cautioned that growth is expected to slow down a bit to 6.5%.

Speaker 2

Meanwhile, the remaining economies in Asia like the Asian Pipe Group, still remain the main engine for the global economy with the forecast remaining broadly unchanged from April. Now according to Clarkson, Stonemaier demand for drybulk trade is presently expected to grow by about 4.4% in 2024. This includes about 1.6% uplift for the entire year due to the Red Sea and Panama Canal disruptions. A longer duration of these disruptions in these regions could potentially drive demand even higher. Lower speeds and further congestion are other factors that could further boost demand this year.

Speaker 2

Demand in 2025 is projected to grow by about 0.5 percentage point, assuming conditions in the Panama Canal and the Red Sea normalize and the conflicts are resolved in the Red Sea. If the situation in these areas remain unchanged, we could be surprised on the upside, but at the moment any prediction looks very uncertain. Now please turn to Slide 10. Unfortunate about the future renewals and high newbuilding prices have led to the low order book continuing. Of August 2024, the order book as a percentage of the total fleet is only 9.7%, which is near the lowest historical levels.

Speaker 2

This suggests a low fleet growth over the next couple of 2 to 3 years. Complementing this low fleet growth, we also have the effect of increased flow steaming and expected scrapping due to the introduction of the new environmental regulations. This could reduce the effective available bulk supply even further. Now turning on to Slide 11, let us now look into the supply fundamentals in a bit more detail. According to Clarksons' latest report, new deliveries as a percentage of the total fleet are expected to be about 3.6 percent this year, 3.3 percent next year, and 4.7% in 2026 and onwards.

Speaker 2

The actual fleet growth is of course expected to be lower than the aforementioned figures due to scrapping and slippage. Also note that about 9% of the fleet is older than 20 years old and therefore a good candidate for scrapping, especially if the market remains at current or lower levels. Please now turn to Slide 12, where we summarize our outlook for the drybulk market. The bulk iron market has been positive so far in 2024 with average freight rate rising by 35 percent year over year. Despite a slight softening during the last few weeks of July, rates remained healthy and above last year's levels.

Speaker 2

Overall demand growth, especially in the Atlantic region, have positively impacted the market with the global seaborne travel trade indicator showing an increase. Additionally, disruptions in the Red Sea and Panama Canal have also contributed positively. Panamax freight rates reached almost $16,000 per day in the Q2 of 2024, reflecting a 35% increase compared to the Q2 last year. The outlook for the second half of twenty twenty four is optimistic as seasonality kicks in. The rerouting of vessels away from the Red Sea remains a key focus with Suez Canal Bulkhead transit staying relatively stable in recent months, leading to an estimated 1.2% increase in bulk of demand.

Speaker 2

Restrictions on the Panama Canal have continued to impact the market with bulk of transits recently being less than a third of normal levels. However, additional daily slots through the rest of the year could increase bulk of projects and break trends back to normal, potentially slightly reducing the demand for ships. Now looking ahead into next year, again, we have to take under consideration the timing of the return to normality of the 2 major passages of Suez and Panama, something that is really hard to predict considering the geopolitical circumstances in the Middle East. In any case, the relatively small and manageable order book, the introduction of further environmental regulations, the rise in operational dry docking costs, which makes the operations of other ships less competitive, creates favorable dynamics, which could trigger a very strong market if the world economy grows at a healthy pace and drybulk trade demand creates the necessary spikes. Electricity demand worldwide is growing at a fast pace, greatly supported by the introduction of artificial intelligence and the electrification of the vehicle fleet, something that provides great support in the drybulk market.

Speaker 2

However, as renewables further penetrate the electricity mix, coal trade dynamics and prospects remain to be further evaluated in the immediate future. Let's now turn to Slide 13. The left side of the slide shows the evolution of 1 year time charter rates of Panamax vessels since 2,005. As of August, the 1 year time charter rate for Panamax ships with capacity of about 75,000 tons was just below $16,000 per day, which is approximately 16 percent above the historical median rate, which is in the region of $13,500 a day. Vessel prices, as you can clearly see, are well above average prices seen in previous years.

Speaker 2

And with that, I will now pass the floor to our CFO, Capo Castillo, to continue with some financial data.

Speaker 1

Thank you very much, Timo. As mentioned in the beginning of the presentation, together with Athena, we will give you an overview of our financial highlights for the Q2 and first half of twenty twenty four and compare them to the same periods of last year. I will now pass the floor to Athena first to start our review. Athena, please go ahead.

Speaker 3

Thank you very much, Tato. Good morning for me as well, ladies and gentlemen. Let's turn to slide 15. For the Q2 of 2024, the company reported total net revenues of $17,400,000 representing 68.7% increase over total net revenues of $10,300,000 during the Q2 of 20 23, which was the result of the higher time charter rate our vessels earned and the increased average number of vessels operated during the Q2 of 2024 compared to the same period of 2023. The company reported net loss attributable to controlling shareholders for the period of $400,000 as compared to net loss attributable to controlling shareholders of $1,200,000 for the same period of 2023.

Speaker 3

The net gain attributable to the non controlling interest of about 80,000 dollars in the Q2 of 2024, representing gain attributable to the 39% ownership by the NRC investors. Interest and other financing costs including interest income for the Q2 of 2024 amounted to $2,000,000 compared to $1,250,000 for the same period of 2023. Interest expense during the Q2 of 2020 4 was higher mainly due to the increased amount of debt and the increased benchmark rate of our loan, while interest income was lower due to lower cash balances during this period as compared to the same period of last year. Adjusted EBITDA for the Q2 of 2024 was $5,000,000 compared to $2,500,000 achieved during the Q2 of 2023. Basic and diluted loss per share attributable to the company for the Q2 of 2024 was 0 point 15 dollars calculated on about 2,700,000 basic and diluted weighted average number of shares outstanding compared to a loss per share of $0.43 calculated on about 2,800,000 basic and diluted weighted average number of shares outstanding for the Q2 of 2023.

Speaker 3

Excluding the effect on the loss attributable to controlling shareholders for the quarter of the unrealized gain on derivatives, the adjusted loss for the quarter ended June 30, 2024 would have been $0.17 per share, loss of $0.48 per share, basic and diluted, respectively, for the quarter ended June 30, 23. Usually, security analysts do not include the above item in their public estimate of earnings per share. Let's now look at the numbers for the corresponding 6 month period ended June 30, 2024 and compare it to last year. For the first half of this year, the company reported total net revenues of $31,900,000 representing a 47% increase over total net revenues of $21,700,000 during the first half of twenty twenty three, which was a result of the increase in time charter rates of our vessels spent and the increased average number of vessels operating during the first half of twenty twenty four compared to the same period of 2023. The company reported a net loss attributable to controlling shareholders of $2,200,000 as compared to a net loss attributable to controlling shareholders of $2,700,000 for the first half of twenty twenty three.

Speaker 3

The net loss attributable to the non controlling interest of about $50,000 in the first half of twenty twenty four represents a loss attributable to the 39% ownership of the Enax investors. Interest and other financing costs including interest income for the first half of twenty twenty four amounted to $4,100,000 compared to $2,900,000 for the same period of 2023. This increase is mainly due to the increased amount of debt in the current period as well as the increase in the benchmark rate of our loan while interest income was lower due to lower cash balances compared to the same period of 2023. Adjusted EBITDA for the first half of twenty twenty four was $7,100,000 compared to $48,000,000 achieved during the first half of twenty twenty three. Basic and diluted loss per share as applicable to the company for the first half of twenty twenty four was $0.81 calculated on about 2,200,000 basic and diluted weighted average number of shares outstanding compared to a loss per share of $0.98 calculated on about 2,900,000 basic and diluted weighted average number of shares outstanding.

Speaker 3

Excluding the effect on the net loss attributable to controlling shareholders for the first half of the year of the unrealized gain on derivatives, the adjusted loss for the 6 months period ended June 30, 2024 would have been $1.35 per share basing and diluted compared to adjusted loss of $0.33 per share basing and diluted respectively for the 6 months period ended June 30, 23, excluding the unrealized loss on derivatives. As previously mentioned, usually security analysts do not include the above items in their published estimates of earnings per share. Let's now turn to Slide 16 to review our fleet performance. We will start our review by looking at our fleet utilization rate for the Q2 of 20242023. As usual, our fleet utilization rate is broken down into commercial and operational components.

Speaker 3

During the Q2 of 2024, our commercial utilization rate was 99.6 percent while our operational utilization rate was 99.4% compared to 98.3% commercial and 95% operational for the Q2 of last year. On average, 13 vessels were owned and operated during the Q2 of 2020 4 earning an average time charter equivalent rate of $14,427 per day compared to 10 vessels in the same period of 2023 earning on average $12,100 and $79 per day. Our total daily operating expenses including management fees, general and administrative expenses, but excluding dry and dry and dry costs were $7,062 per vessel per day during the Q2 of 2024 compared to $7,656 per vessel per day for the Q2 of 2023. If we move forward down on this table, we can see the cash flow breakeven levels, which takes into account in addition to the above the drydocking expenses, interest expenses and lower expense. For the Q2 of 20 4, our daily cash flow breakeven levels were $13,214 per vessel per day compared to $14,128 per vessel per day for the same period of 20.28.

Speaker 3

Let us now go over the same figures for the 6 month period of 2024 and compare them to the same period of last year. During the first half of twenty twenty four, our commercial and operational rate was 99.8% 98.7% respectively compared to 99% commercial and 97.4% operational for the same period of last year. On average, 13 vessels were owned and operated during the first half of twenty twenty four, earning another time charter equivalent rate of $13,452 per day compared to 10 vessels in the same period of 2023 earning on average $11,393 per day. Our vessel operating expenses again including management fees and general and administrative expenses were 6,900 and $64 per vessel per day in the first half of this year compared to $7,306 per vessel per day for the same period of last year. Again, if we look further down in the table, we can see the custom breakeven rate for the 36 months of 2024, which is $13,101 per vessel per day compared to the $13,167 per vessel per day for the first half of twenty twenty three.

Speaker 3

Let's turn our attention to Slide 17 to review our debt profile. As of June 30, 2024, our outstanding tax debt stood at $98,100,000 and is expected to decline to about $67,500,000 by the end of 2026. In the remainder of 2024, our debt repayment amounts about $8,500,000 then in both 20252026, loan repayments are due to decrease about $10,500,000 $11,600,000 thus significantly reducing our cash flow breakeven level. It is worth mentioning on this table that the total cost of our senior debt with an average margin of about 2.39% and assuming a 3 month top rate of 5.25 percent is 7.64%. Including the swap portion of debt, the cost of our senior debt stands at around 7.43%.

Speaker 3

At the bottom of this slide, you can see our projected cash flow breakeven level for the next 12 months, broken down into its various components. Overall, we expect our overall cash flow breakeven level to be around $12,659 per vessel per day and our EBITDA breakeven levels to be around $8,745 per vessel per day. And with that, I will pass the floor back to our CFO, Tadeus Aslidis.

Speaker 1

Thank you very much, Athena. Let's now conclude our presentation by moving to Slide 18, where we can see some highlights from our balance sheet. This slide offers a snapshot of our assets and liabilities. As of June 30, 2024, cash and other current assets stood at about $22,800,000 in our balance sheet. The other major component, the book value of our vessels was approximately $197,200,000 resulting in total book value of our assets of about $220,000,000 On the liability side, our debt as of the end of June, as Athena previously mentioned, stood at about 98,000,000 dollars representing around 44.6 percent of the book value of our assets, while other liabilities amounted to about $5,200,000 or about 2.4 percent of our total assets.

Speaker 1

The remaining book value of $116,700,000 inclusive of the book value of our minority circle interest, the NRP investors, of about $9,700,000 If we subtract the minority shareholders' book value, $107,000,000 of book value attributed to our controlling shareholders and resulting in a book value per share of about $38 However, based on market transaction and other market reports, we can value our fleet as of June 30, way above our boarder book value And we estimate that to be $270,000,000 worth, more than $70,000,000 or approximately 30% to 7% higher than the respective book values, thus suggesting an NAV per share in excess of $63 Our share price trading around or between $20 $24 recently trades at a substantial discount compared to our net asset value and thus represents a significant opportunity for appreciation potential for our shareholders and investors. At this point, our presentation is concluded and I would like to open the floor for questions if there are any.

Operator

Thank you. At this time, we will be conducting a question and answer Our first question comes from the line of Mark Reinsman with Noble Capital Markets. Please proceed with your question.

Speaker 4

Good morning. It seems like the net revenue, our estimates were pretty much in line with the actuals this quarter. Where we were off were the voyage expenses and the dry docking expenses. And so I was kind of wondering if you could just kind of provide a little more color on those two line items for the quarter and expectations for the remainder of the year?

Speaker 1

Yes, I think hi, Mark, sorry, Kavolt. The dry docking expenses first depend on when drydockings happen. We have 13 vessels, they drydock twice every 5 years. So about one vessel on average should be drydock every quarter. Last quarter, we had more than 1 drydock.

Speaker 1

We had 1 drydock completed during the quarter and we had a couple of drydocks starting in the quarter, which got some costs attributed to them. So that resulted in the higher drydocking costs. On the same note, as I mentioned already, we have 2 drydocks scheduled for next quarter and 2 drydocks being are being performed at the turn of the quarter. So we should expect a little higher drydock expenses next quarter as well. On the revenue side, the voyage expenses have to do with the type of contract the vessels enter when they are booked.

Speaker 1

If we have to travel to get to the area that we load the cargo, we incur we get paid the ballast bond, but at the same time, we pay for the mortgage expenses. And depending whether we have only time charter contracts or mortgage contracts that include the ballast leg, we might have more or less mortgage expenses.

Speaker 4

That's helpful. And then the second part of my question is, we've been in kind of a favorable charter rate environment and that looks to kind of continue at least to stabilize maybe for the remainder of the year with a little more uncertainty in 2025. And I guess my question is, even though we produce positive EBITDA, I mean, we've had 2 consecutive quarters of negative EPS. And so what I guess what will be the variable to move EPS into the positive category or would you kind of expect positive EBITDA and negative EPS in the Q3? I guess I'm just kind of looking for, I mean, we're in kind of a favorable environment yet.

Speaker 4

We've had 2 consecutive quarters of loss on a per share basis. And so what dynamic changes that looking ahead?

Speaker 1

I think it's a combination, of course, of the market, but also on the on how many vessels in our case have to go through drydock. As you can see Slide 16, we give you there the breakeven level per day. So to cover our expenses, we have in the past, in the 1st 6 months of this year, we had a breakeven cost of $13,000 per day. That is if you convert this to a gross time charter equivalent rate, probably our vessels needed to earn around $14,500 to $15,000 a day to breakeven in the 1st 6 months. They earned, as you can see on Slide 16, dollars 13,450.

Speaker 1

So that is the metric that we should follow. If you look again on Slide 17, going and this is for the next 12 months, so it's not broken down by quarter, we expect to have a breakeven level of $12,000 on a cash flow basis, of course, dollars 600 So we should be able to earn in excess of $14,000 to have cash flow positive balance, but also earnings because loan repayments roughly are equivalent to our depreciation.

Speaker 4

Okay. And so that's kind of sensitive to what the time charter rates will look like. But I mean, as long as the over the next 12 months, if the time charter equivalent rates hold, you should be maybe you have a little wider spread or you'll need to kind of get your expenses down, which would be maybe mean fewer dry docking expenses. So but there's still a fairly, I guess, it's not a real wide margin between breakeven and the Chime Charter equivalent rate. So, okay.

Speaker 4

No, that's very helpful. I appreciate that. Is there any additional color on that or

Speaker 1

I think the only additional color I would say is that we as Simos analyzed, supply in the drybulk market is very tight in the sense that the order book, the orders that have been placed over the last of the previous 3 years were low. That creates very low supply growth over the next couple of years. So really, we are waiting to see whether demand will return to average historical average of higher levels for that and that would be translated directly to rate increases. That's why we are keeping most of our fleet exposed to the market because we anticipate and we hope that there would be a situation where the market will perform better.

Operator

Our next question comes from the line of Lars Heide with Arctic Securities. Please proceed with your question.

Speaker 5

Just a quick one from me. I think you mentioned it for good heart for this quarter, but just in general, how should we think about half hour days for a vessel with multiple charters within the same quarter? Is there like a general rule of thumb or will it vary from a case to case?

Speaker 1

I mean, the commercial charter. Of course, any technical of cars are a matter of incidents that happen on operations. The rates we typically report include any ballast leg that is part of the charter. So if there is a ballast leg in the charter, we include the ballast bonus minus the voyage expenses to provide the time charter equivalent for the whole period. So I would say for our own modeling purposes, we use an average of 1 to 1.5 days of off hire per quarter as a capsule average outside drydocking.

Operator

Thank you. Our next question comes from the line of Paul Fratt with AAGP. Please proceed with your question.

Speaker 1

Good afternoon, Tassos. Hi, Paul.

Speaker 6

I was just wondering if you did sort of the math following on the last question, if you sort of do the math on what's in dry dock and what you've highlighted, I'm sort of coming up with an idle day number in the Q3 150 days.

Speaker 1

Does that In the Q3, we would have 2 full drydocks, so that's roughly 50 days plus 2 continuing drydocks another, let's say, 35 days. So I would say around 85 days, give or take, would be the off hire days due to drydock in the Q3. That is the order of magnitude. Now they can play up or down a bit, but I assume 25 days for the 2 full drydocks. And because 2 are at the turn of the quarter, I assume something like 35 days.

Speaker 6

Yes, I guess I was looking at the Maria and the Rini that was still on dry dock in July, that added about it looks like about 50 days and then you have the 2 other ones. So I mean, shouldn't it be over 100?

Speaker 1

Yes, it could be, yes, I didn't have in front of me the in Q3 of Maria and Nerini, but if it's 50, then copper would be a little more than 100, yes.

Speaker 3

Okay. And then

Speaker 1

I think here is 43 days that we have that were in Q3 plus roughly 50 give or take for the other 2, yes. A couple of days comes right.

Speaker 6

And then do you have any drydocks currently scheduled for the Q4? Or should it be a pretty quiet quarter from a drydocking perspective?

Speaker 1

I think to the best of my recollection, I think it's a pretty quiet quarter. It's a pretty dry quarter, drydocking wise.

Speaker 6

I like the pun. When you look at the stock buyback program, it seemed to slow down a little bit in the Q2. Is that a function of the stock price? And correspondingly, how sensitive is the stock buyback program to the stock price?

Speaker 1

The stock buyback program has to comply with certain limits that are imposed by the SEC. We cannot buy back more than a certain percentage of the daily volume and we cannot trade during the whole day. So we're utilizing in full to the full extent that we can, but because of the lower volume and the other limits, we have to buy back fewer shares. What, Timo? Yes, exactly.

Speaker 1

And further to what Asus mentioned, it's not only

Speaker 2

a matter of volume. When you buy back shares on behalf of your company, you cannot buy from the offer. So it has to be a match on our bid. So otherwise, we cannot go aggressive. As you know, buyback rules are extremely restrictive and they are there to protect the participants of the market.

Speaker 2

So we have to follow them and respect them. So it is not up to us to increase the liquidity and try to buy more stock. We are doing the best we can and we will possibly continue to do so, but we have to follow the rules.

Speaker 1

And we're doing the best we can because we think it's a great opportunity to buy back our stock. It creates such a big discount. So it's a great opportunity. We want to be the 1st to exploit it to the maximum extent.

Speaker 6

That's really helpful. Yes, it wasn't an intentional slowdown. It was just a technical one. That's great. Thank you so much, Tassos and Timos.

Speaker 1

You're welcome, Pompeo. Welcome, Bert.

Operator

Thank you. So we have reached the end of the question and answer session. I'll turn the call back over to Mr. Tapos, CFO, for closing remarks.

Speaker 1

Thank you very much for attending. I would like to wish everybody a good remaining of the summer, and we look forward to seeing all of you again in our Q3 earnings call sometime in November. Bye bye, everybody.

Operator

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

Powered by Quartr

Key Takeaways

  • Net revenues increased 68.7% year-over-year to $17.4 M in Q2 2024, and adjusted EBITDA reached $5.0 M despite a net loss of $0.15 per share.
  • The company repurchased 313,318 shares for $5 M under its renewed $10 M buyback plan, highlighting a >30% discount of the share price to NAV as a buying opportunity.
  • Most charters remain short-term or index-linked at premiums of 105.5–108% to the Baltic Kamsarmax Index, positioning the fleet to benefit from anticipated market strengthening amid constrained supply growth.
  • Several vessels underwent scheduled dry dockings and a technical off-hire of 10 days last quarter, driving up voyage and repair expenses and reducing utilization in Q2 and Q3.
  • With the order book at just 9.7% of the total fleet and environmental regulations spurring scrappage, supply growth is poised to remain limited, supporting future freight rate upside.
AI Generated. May Contain Errors.
Earnings Conference Call
EuroDry Q2 2024
00:00 / 00:00