EuroDry Q3 Earnings Call Highlights

Key Points

• EuroDry returned to profitability in Q3: Net income was $6.86 million, or $2.39 per diluted share, versus a loss of about $0.7 million a year earlier. Revenue rose 34.9% to $19.4 million as average daily charter rates increased to $20,551.
• The company is expanding and renewing its fleet: Five new vessels are scheduled for delivery in 2027–2029, growing the fleet from 11 ships to 16. EuroDry plans to finance its latest, approximately $37 million Kamsarmax order with debt and equity, subject to a bank refund guarantee.
• Management is balancing market exposure with costs and capital needs: Most vessels remain on index-linked charters, while the company raised $10.7 million through share sales and estimated about $4 million in dry-docking costs for three vessels. EuroDry had about $50 million in unrestricted cash and $105.7 million in debt at quarter-end.

EuroDry NASDAQ: EDRY reported a third-quarter profit as higher charter rates lifted revenue, and management outlined plans to renew its dry bulk fleet while maintaining substantial exposure to the spot market.

The shipping company reported net income attributable to controlling shareholders of $6.86 million, or $2.39 per diluted share, for the three months ended September 30, 2026. That compared with a loss of approximately $0.7 million a year earlier. Net revenue rose 34.9% to $19.4 million from $14.4 million.

Adjusted net income was $6.67 million, or $2.32 per diluted share, while adjusted earnings before interest, taxes, depreciation and amortization rose to $11.34 million from approximately $4.1 million. Chief Financial Officer Tasos Aslidis said higher time charter equivalent rates drove the revenue increase, partly offset by a lower average number of vessels operated.

Higher Rates Lift Results

EuroDry’s fleet of 11 vessels earned an average time charter equivalent rate of $20,551 per day in the third quarter, compared with $13,232 per day for an average fleet of 12 vessels a year earlier. The company’s daily cash flow break-even level fell to $11,984 per vessel from $12,482.

For the first nine months of 2026, net revenue increased 43.1% to $49.9 million, while net income attributable to controlling shareholders was $13.7 million, compared with a $7.45 million loss in the comparable 2025 period. Nine-month adjusted EBITDA rose to $27.9 million from $5 million.

Chairman and Chief Executive Officer Aristides Pittas said most of the fleet was employed on index-linked charters, giving EuroDry exposure to prevailing rates. The exception was the Christos K, which was on a fixed time charter at $15,500 per day through December or January.

Asked about chartering plans for vessels due to be delivered next year, Pittas said EuroDry preferred the spot market but might consider a one-year charter if rates exceeded $20,000 per day.

Fleet Renewal and Capital Raising

EuroDry operates 11 vessels with approximately 766,000 deadweight tons of carrying capacity and has five new vessels on order. Two Ultramax vessels are scheduled for delivery in the second and third quarters of 2027, followed by three Kamsarmax vessels in 2028 and 2029. Once all five are delivered, the fleet would comprise 16 ships with approximately 1.1 million deadweight tons of capacity.

The latest order is for an 82,000-deadweight-ton Kamsarmax from Hengli Shipbuilding, scheduled for delivery in the third quarter of 2029. Pittas said the approximately $37 million contract would be financed with debt and equity and was conditional on an acceptable bank refund guarantee.

Pittas said the first payment on that vessel would probably be made around January, after the company receives the required guarantee. He also said EuroDry did not currently have an option to order a fourth Kamsarmax.

Management has favored newbuildings over secondhand vessels because of elevated used-ship prices, Pittas said. He cited a value of approximately $33.5 million for a 10-year-old Panamax and said new vessels offered better efficiency, environmental performance and lower maintenance requirements.

EuroDry re-established its at-the-market equity program as its shares reached all-time highs in the third quarter and traded at a premium to net asset value, Pittas said. The company raised approximately $10.7 million through the issuance of 164,753 shares at an average price of $67.54.

The board also extended its $10 million share repurchase program for another year in August. Since the program began in 2022, EuroDry has repurchased 358,000 shares for a total of $5.8 million.

Market Outlook and Dry-Docking Costs

Pittas said the dry bulk market appeared broadly balanced on supply and demand, but geopolitical events could push rates higher or lower. He declined to offer a specific long-term rate forecast, noting that the forward freight agreement curve for 2027 was somewhat below current levels.

He said the global dry bulk order book stood at 15.7% of the existing fleet as of November. Although it had grown, shipyard capacity was largely booked, and additional orders would mostly add deliveries from 2030 onward, he said.

Pittas also said strong freight rates had discouraged scrapping of older vessels. EuroDry considered selling one of its three older Panamax ships but decided to keep it and complete its special survey, he said. The vessel, Blessed Luck, was scheduled to enter dry dock in December.

Aslidis estimated that dry docking three vessels would cost approximately $4 million in total. He said the work would affect results over the next couple of quarters, though the timing of the other two dockings would depend on yard availability and vessel schedules.

As of September 30, EuroDry had $105.7 million in outstanding debt and approximately $50 million in unrestricted cash. Aslidis estimated net asset value at $66 to $67 per share after adjusting the book value of its vessels to management’s estimate of their market value.

About EuroDry (NASDAQ:EDRY)

EuroDry Ltd. NASDAQ: EDRY is a dry bulk shipping company that owns and operates vessels used to transport a range of essential commodities. Its cargoes may include iron ore, grain, coal, steel products, forest products and other dry bulk materials. The company's fleet has primarily consisted of smaller dry bulk vessels, including Handy-size and Supramax-class ships. These vessels serve international trade routes and are employed through time charters, voyage charters and other commercial arrangements, depending on market conditions and customer requirements.

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