Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EuroDry Ltd (EDRY, Financial) reported a 47% increase in total net revenues for the third quarter of 2024 compared to the same period last year, primarily due to an increased average number of vessels operated.
- The company successfully refinanced two loans, releasing $60 million in cash reserves and extending loan maturities to 2029 and 2030, while also lowering loan margins.
- EuroDry Ltd (EDRY) has repurchased 314,000 shares of its common stock for about $5 million, indicating a commitment to shareholder value.
- The company maintains a relatively low debt level, below 45% of its vessels' market environment, which provides financial stability.
- EuroDry Ltd (EDRY) has a flexible chartering strategy, with 63% of its fleet secured under fixed-rate charters for the remainder of 2024, allowing it to capitalize on potential market improvements.
Negative Points
- EuroDry Ltd (EDRY) reported a significant net loss of $4.2 million for the third quarter of 2024, attributed to poor market conditions and the cost of bringing forward dry dockings.
- The average time charter rates for Panamax vessels have decreased, impacting revenue potential.
- The global economic outlook remains uncertain, with mixed growth projections and ongoing geopolitical tensions that could affect the dry bulk sector.
- The company's adjusted EBITDA for the third quarter of 2024 was only $0.5 million, a significant decrease from $3.1 million in the same period last year.
- Dry docking expenses were elevated during the third quarter of 2024, amounting to $4.5 million, which significantly impacted financial results.
Q & A Highlights
Q: With 10 of your 13 vessel time charters expiring soon, what is your renewal strategy and expectations for pricing?
A: We plan to fix our ships on short-term charters, ranging from 15 to 90 days, due to the current low market levels. We believe charter rates will improve in 2025, so we are avoiding long-term commitments at these rates.
Q: Can you provide expectations for voyage expenses in the fourth quarter?
A: Voyage expenses are primarily related to fuel purchase and delivery between charters and can fluctuate. For modeling purposes, it's best to use a percentage of previous results.
Q: What are your dry docking expectations for 2025?
A: In 2025, we have only one scheduled dry dock for Santa Cruiser and a special survey for one of our new buildings, which will be conducted in water. This results in minimal dry docking expenses for the next 12 months.
Q: Can you update us on the joint venture with NRP Project Finance and potential acquisitions?
A: The partnership with NRP is going well, and we are open to exploring other projects together. The joint venture has recorded some losses, but we expect it to become profitable next year.
Q: How does the current weakness in dry bulk trade routes affect your operations?
A: The weakness is relatively uniform across regions, with China being a significant driver of dry bulk trade. Ships will go wherever they can find the best rates, so regional imbalances tend to balance out quickly.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
