EuroDry Ltd. (NASDAQ: NASDAQ:EDRY), a dry bulk shipping company, announced its financial results for the fourth quarter of 2023 during a conference call with Chairman and CEO Aristides Pittas and CFO Tasos Aslidis. The company reported total net revenues of $15.9 million and a net income of $0.3 million for the quarter. Adjusted net income reached $1.9 million, and adjusted EBITDA stood at $6.6 million. Despite the modest net income, the company repurchased 273,120 shares of common stock for $4.1 million. Looking ahead, EuroDry expects market rates to strengthen in 2024, supported by minimal fleet growth and potential spikes in freight markets.
Key Takeaways
- Q4 2023 total net revenues were $15.9 million, with a net income of $0.3 million.
- Adjusted net income for the quarter was $1.9 million, and adjusted EBITDA was $6.6 million.
- The company repurchased 273,120 shares for $4.1 million.
- EuroDry's fleet consists of 13 vessels, all under short-term charters.
- Market rates are anticipated to improve in 2024.
- The company's focus will be on share repurchases and monitoring the market for investment opportunities.
Company Outlook
- Market rates expected to be above $10,000 per vessel per day.
- Average margin of debt reported at 2.46%, with a total senior debt cost of 7.8%.
- Cash and asset balance stands at $27.5 million, against liabilities of $104.8 million.
- The market value of the fleet is estimated at $239 million, with a NAV per share exceeding $51.
- Plans to sell older vessels if prices are favorable.
Bearish Highlights
- For the full year 2023, the company reported a net loss of $2.9 million.
- Total debt repayments are set to decrease to $9.7 million in 2025 and 2026.
Bullish Highlights
- The company's stock buybacks continue, with purchases at an average price of $15, while the stock trades over $20, indicating potential shareholder value appreciation.
- Cash flow breakeven level is projected at $12,378 per vessel per day, with an EBITDA breakeven rate of $8,000 per vessel per day.
Misses
- Despite the positive outlook for 2024, the company expects losses to be reflected in adjusted numbers next quarter.
Q&A Highlights
- Discussed the impact of disruptions in the Red Sea on shipping.
- Addressed constraints in shipyard availability affecting new ship orders.
- Reviewed potential recovery in charter rates and factors influencing demand, including China's economy and global economic conditions.
- Noted the impact of the Panama Canal drought on trade routes.
EuroDry Ltd. remains cautiously optimistic about the future, with strategic plans to enhance shareholder value through share repurchases and prudent market investments. The company is set to discuss its first-quarter results in the next three months, providing further insights into its performance and strategic direction.
InvestingPro Insights
EuroDry Ltd. (NASDAQ: EDRY) has shown a notable performance with several key metrics and InvestingPro Tips that investors may find valuable. According to the latest data from InvestingPro, the company's Market Cap stands at $59.7 million, indicating a relatively small-cap player in the shipping industry. Despite a challenging year with a net loss reported for the full year 2023, the company's stock has experienced a significant price uptick, trading near its 52-week high with a Price % of 52-week High at 97.54%.
InvestingPro Tips suggest that EuroDry operates with a significant debt burden and may face difficulties making interest payments on its debt, which aligns with the company's reported total liabilities of $104.8 million against a cash and asset balance of $27.5 million. On the upside, analysts predict that the company will be profitable this year, and net income is expected to grow. These forecasts may be reflected in the company's strategic focus on share repurchases and market investments.
Furthermore, the company's P/E Ratio stands at -20.22, with an adjusted figure for the last twelve months as of Q4 2023 at -20.83, reflecting investor skepticism about the company's earnings potential. However, the PEG Ratio for the same period is at 0.19, which could suggest that the company's growth prospects might be undervalued if it can achieve the anticipated earnings growth.
Investors interested in a deeper analysis can explore more InvestingPro Tips for EuroDry Ltd. at https://www.investing.com/pro/EDRY, with a total of 14 additional tips available. For those considering an InvestingPro subscription, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - EuroDry (EDRY) Q4 2023:
Operator: 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. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session [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. Before passing the floor over to Mr. Pittas, I would also like to remind everybody that in today's presentation and conference call, EuroDry will be making forward-looking statements. 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. I kindly draw your attention to Slide Number 2, of the webcast presentation, which has full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And now I would like to pass the floor over to Mr. Pittas. Please go ahead, sir.
Aristides Pittas: Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me, I have Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the three and 12 months period ended 31st December, 2023. Please turn to Slide 3 of the presentation. Our financial results are shown here. For the fourth quarter of 2023, we reported total net revenues of $15.9 million, and net income attributable, to controlling shareholders of $0.3 million or $0.13 per basic and diluted share. Adjusted net income for the quarter was $1.9 million, or $0.70 per diluted share, mainly reflecting the contribution of FFA. Adjusted EBITDA for the period was $6.6 million. Please turn to the press release, for a full reconciliation of adjusted net income and adjusted EBITDA. Our CFO, Tasos Aslidis, will go over our financial highlights in more detail, later on in the presentation. As of February 15, 2024, we had repurchased a total 273,120 shares of our common stock in the open market, for about $4.1 million, under our share repurchase plan of up to $10 million announced in August 2022, and extended for another year. Please turn to Slide 4, for an overview of our sales and purchase chartering and operational highlights. On the chartering side, 11 of our 13 vessels are employed in short-term charters, whilst two vessels continue, to be employed under index-linked charters, until March 2024 and 2025, respectively, at 105.5% of the Average Baltic Kamsarmax five times charter index. You can see the specifics of the various charters, we fixed in the accompanying presentation. There were no dry dockings repairs, or commercial off-hire time during the quarter. Our chartering strategy is largely driven by the market. We plan to continue with the same short-term charter strategy, until rates climb to levels that induce us to take more time charter cover, or hedged through FFAs. Please turn to Slide 5. EuroDry's fleet consists of 13 vessels, including five Panamax, five Ultramax, two Kamsarmax and one Supramax drybulk carrier. EuroDry 13 drybulk carriers have a total current capacity, of approximately 920,000 deadweight, and an average age of 13.5 years. I'd like to remind you that during the quarter, as previously announced and mentioned in our last earnings call, EuroDry has a 61% ownership of the entities that own Motor versus Christos K, and Maria K. The remaining 39% being owned, by owners represented by NRP Project Finance. Otherwise, refers to as the NRP investors. Please turn to Slide 6, which depicts our fleet employment graphically. As you can see, we practically have no cover after the current quarter. In Q1, we are very little exposed to the market, especially if we factor in FFAs. We have sold 90 days of FFA contracts for the equivalent of one Supramax vessel, and the 180 days of FFA contracts were the equivalent of two Panamax vessels, three ships equivalent in total. In the first quarter of 2024, at $10,000, $10,100 and $10,675 per day, respectively. Overall, we expect to be around breakeven rates in Q1. Turning on to Slide 7. We go over the market highlights for the fourth quarter ended December 31, 2023, and up until recently. The average spot market rates for Panamaxes was hovering at around $15,000 per day in the fourth quarter of 2023. By year-end, spot rates rose to approximately $16,200 per day, reflecting amongst others, the effect of the Panama Canal drought. Despite the Red Sea disruptions that ensued, they have since dropped, reflecting seasonal trends, the Chinese New Year, and the software activity in the Pacific. The one-year time charter rate, for Panamaxes averaged around $13,400 per day during the fourth quarter, rising to $14,350 by year-end. Contrary to spot rates, though one-year time charter rates have increased to $15,275 per day as of February 9, reflecting the rising confidence that, the market is bound to strengthen, as the global growth gains, steam ahead, and the effects of the Red Sea disruptions, become not pronounced. Please now turn to Slide 9. With its latest update in January 2024, the IMF raised its forecast for global growth, compared to October 2023 outlook, from 2.9% to 3.1% for 2024 and 3.2% for 2025. As a result of greater-than-expected resilience in the United States and fiscal support of China. We expect to see this recovery, although the ITF also warns of risks from wars and inflation. The forecast for 2024 and 2025 is, however, still below the historical average of the last 10 years of 3.8%. With elevated strength Central Bank policy rates, to fight inflation, a withdrawal of fiscal support amid high debt weighing on economy activity, and low underlying productivity growth. Inflation is falling faster than expected, in most regions. In the midst of unwinding supply side issues, and restrictive monetary policy. Global headline inflation is expected to fall to 5.8% in 2024, and to 4.4% in 2025, with the 2025 forecast having been revised down. With this inflation on steady growth, the likelihood of a hard landing has receded and risks to global growth are broadly balanced. However, new commodity price spikes from geopolitical shocks, including continued attacks in the Red Sea and supply disruptions, or more persistent underlying inflation, could perhaps prolong tight monetary conditions. For shipping, we continue to monitor China, India and the ASEAN-5, which according to the IMF, will continue to grow quite strongly in the next couple of years. China having had major headwinds, due to lower confidence and underwhelming boost, to economic activity following its reopening up the COVID-19, as well as its persistent property sector issues, is still set to grow by another 4.6% in 2024, and 4.1% in 2025. India's growth is expected to be 6.5% in both 2024 and 2025. Drybulk trade demand is, therefore, focused presently to grow at 1.6% in 2024 and 2025, which is below historical average growth rate of 4.9%. Despite the improvement in demand in 2023, primarily fueled by China, and escalating geopolitical tensions, it is expected that rising trade distortions and geoeconomic fragmentation, will continue to weigh on the level of global trade. Please turn to Slide 10. Uncertainty about the future of fuels and high newbuilding prices have led to the low order book continuing. As of February 2024, the order book as a percentage of total fleet, is at only 8.5%, near the lowest historical levels. This suggests minimal fleet growth, over the next two to three years. Complementing this low fleet growth, we also have the effect of increased slow steaming and expected scrapping, due to the introduction of new environmental regulations. This could reduce the effective available bulk supply even further. Turning to Slide 11. Let us now look into the supply fundamentals in a bit more detail. As of February 2024, the total drybulk vessel operating fleet was 13,600 vessels. According to Clarkson's latest report, new deliveries as a percentage of total fleet, are expected to be 3.6% in 2024, 2.9% in 2025 and 2.4% in 2026 onwards. The actual fleet growth is expected to be lower than the aforementioned figures, of course, due to scrapping and slippage. Also note that 8% 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 turn to Slide 12, where we summarize our outlook for the drybulk market. Drybulk markets - drybulk shipping saw strong gains throughout the fourth quarter of 2023 marked by the Panamax Freight Index hitting $17,000 per day in December '23, reaching its highest level since mid-2022. Despite this, 2023 proved to be a comparatively moderate year for bulker's earnings, due to decreased fleet inefficiencies and the cumulative expansion of the fleet in the preceding years, which counteracted the robust freight recovery. The uptick in the earnings, during Q4 is largely attributed, to the Panama Canal drought, leading to a reduction in-transit from approximately 10 per day to zero. 2024 is poised to be a stronger year for the drybulk sector, particularly if vessel supply continues to tighten, potentially leading, to spikes in freight markets. Historically, the first quarter of the year has always been the weakest for the drybulk, largely owing to the Chinese New Year, which dampens economic activity. Contrary to prior expectations, it is proven to be stronger than anticipated, mainly due to the Red Sea disruptions. Regarding the supply side, as discussed, there has been minimal ordering of new ships, due to constraints in shipyard's availability, and the uncertainty surrounding the choice of the future fuel, despite there being some not insignificant orders for methanol-fueled vessels. The ratio of the order book to the existing fleet, as discussed, remains close to historically low levels, setting the stage for a potential recovery in charter rates, if demand returns to more typical levels. Additionally, the implementation of emissions regulations such as EEXI and CII could further restrict supply, through increased scrapping, or reduced operational speeds, for certain vessels. On the demand side, China is important to monitor, it's potential to simulate demand, growth and sentiment will be critical, particularly considering challenges in the property sector, and sensitivity to government policies regarding coal. Additionally, GDP growth in developed economies, and unforeseen developments could also contribute to demand growth. The timing of interest rate cuts by Central Banks as well as inflation easing, will also make way on global growth. The drought in the Panama Canal, which has caused prolonged waiting times, capacity limitations and increased pressure on shipping schedules continues. As a result, trade has been redirected from the region, and has led to a rise in ton-mile demand, and a noticeable surge in freight rates. Furthermore, disruptions in the Red Sea have reduced dry cargo ship traffic along this route, compelling shipping companies, to either suspend voyages, or reroute to the Cape of Good Hope, consequently increasing vessel demand. Let's turn to Slide 13. The left side of the slide shows the evolution of one-year time charter rates of Panamax drybulk vessels since 2002. As of February 9, 2024, the one-year time charter rate for Panamax ships, with a capacity of 75,000 deadweight tons stood at $15,275 per day, which is slightly above the historical medium of around $13,500 per day. On the other hand, as can be seen in the right graph, the historical price range for a 10-year old Japanese Kamsarmax vessel, which has a current price of around $26 million is significantly higher than the 10-year historical average on median price. Given the high vessel values, and the acquisition of the three Ultras in Q4, which have reduced our liquidity, we are currently reluctant to invest further in new vessels. We prefer to spend some of our liquidity, to continue executing on our share repurchase program, as our share price trades, considerably below our net asset value. Further, as our liquidity builds up organically, we will continue monitoring the markets, for investment opportunities, which we can always further finance, either by levering up, through partnerships and/or disposal of older assets. Let me now pass the floor over to our CFO, Tasos Aslidis, to go over our various financial highlights in more details.
Tasos Aslidis: Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. Over the next four slides, I will give you an overview of our financial highlights, for the fourth quarter and full year of 2023, and compare those to the same periods of last year. For that, let's turn to Slide 15. For the fourth quarter of 2023, the company reported total net revenues of $15.9 million, representing a 5.2% increase, over total net revenues, of $15.1 million, during the fourth quarter of last year of 2022. This was the result of the higher number of vessels we owned and operated in the fourth quarter of 2023, compared to the same period of 2022, offset by the lower time charter rates, our vessels earned in the fourth quarter of last year, compared to 2022. We reported a net income for the period of $0.3 million, compared to a net income of $6.3 million, for the same period, the fourth quarter of 2022. It should be noted that the results for the fourth quarter of 2023, exclude a $0.37 million loss, attributable to minority interest, deriving from the 39% ownership of the NRP investors on vessels, Christos K and Maria. Interest and other financing costs for the fourth quarter of 2023 increased to $2 million, compared to $1.5 million for the same period of 2022. Interest expense during the fourth quarter of last year was higher, mainly due to the increased amount of debt we carried, and the increased benchmark rates, of our loans during the period, as compared - to the same one in 2022. Adjusted EBITDA for the fourth quarter of 2023, was $6.6 million, compared to $7.3 million, for the same period of 2022. Basic and diluted earnings per share, attributable to controlling shareholders, for the fourth quarter of 2023, was $0.13, calculated on 2.7 million - approximately 2.7 million basic diluted weighted average number of shares outstanding, compared to $5.38 basic and $5.32 diluted for 2022, calculated on 2.8 million and 2.9 million basically diluted weighted average number of shares outstanding. Excluding the effect of the unrealized loss on derivatives on the earnings, for the fourth quarter of last year, the adjusted earnings per share, attributable to controlling shareholders, for the fourth quarter of 2023, would have been $0.71 basic and diluted, compared to adjusted earnings of $1.19 and $1.17 per share basic diluted, for the same period, the fourth quarter of 2022. Typically, as we said in previous presentations, security analysts do not include the above items like unrealized loss and derivatives in the published estimates - of earnings per share and - that's why we're making this adjustment. Let us now look at the numbers for the corresponding 12-month period 2023 versus 2022. For the whole year of 2023, the company reported total net revenues of $47.6 million, representing a 32.2% decrease over total net revenues of $70.2 million during 2022, mainly the result of the lower time charter rates our vessels earned. We reported a net loss for the period of $2.9 million, as compared to a net income of $33.5 million for 2022. Again, the results for the full year of 2023, exclude $0.37 million loss attributable to minority interests. Interest and other financing costs, for the 12 months of 2023, amounted to about $6.5 million, compared to $3.9 million during the same period of 2022. The reason being higher, again, is the higher level of debt we carried and the higher average benchmark rates that our loans had to pay. Adjusted EBITDA for 2023 was $14.6 million, compared to $43.2 million during 2022. Finally, basic and diluted loss per share attributable, to controlling shareholders for 2023, was $1.05, calculated on 2.7 million basic and diluted weighted average number of shares outstanding, compared to basic - diluted earnings per share of $11.66 and $11.61, respectively, for the whole year of 2022. The final adjustment related, to excluding the unrealized loss of derivatives on the loss for the year, after we do that, the adjusted earnings for 2023 attributable to controlling shareholders, would have been $0.13, basic and diluted, compared to adjusted earnings per share of $9.90 and $9.85 basic and diluted respectively for 2022. Let's now turn to Slide 16, to review our fleet performance. We will start our review, by looking at our fleet utilization rates, for the fourth quarter and full year of both 2023 and 2022. First, during the fourth quarter of 2023, our commercial utilization rate was 100%, while our operational utilization rate was 99.5%, compared to 100% commercial and 99.7% operational for the fourth quarter of 2022. On average, 12.2 vessels were owned and operated during the fourth quarter of 2023, earning another time charter equivalent rate of $14,570 per day, compared to 10.1 vessels in the same period of 2022, earning on average $16,689 per day. Our total daily operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs were $7,340 per vessel per day, during the fourth quarter of 2023, compared to $7,035 per vessel per day, for the fourth quarter of 2022. I'd like to note here that the figure for the fourth quarter of 2023 includes certain set-up expenses for our joint venture with NRP investors. If we move further down on this table, we can see the cash flow breakeven rate, which takes also into account drydocking expenses, interest expenses and loan repayments. Thus, for the fourth quarter of 2023, our daily customer breakeven rate was $11,895 per vessel per day, compared to $13,089 per vessel per day, for the same period of 2022. Let's now look on the right part of the slide, to review the same figures for the full year. During the entire 2023, our commercial utilization rate, was 99.4%, while our operational utilization rate was 98.5%, compared to 99.8% commercial and 99.3% operational for 2022. On average, 10.6 vessels were owned and operated during 2023, earning an average time charter equivalent rate of $12,528 per day, compared to 10.4 vessels for 2022, earning on average $21,304 per day. Our total operating expenses for the year, again, including management fees, G&A expenses, but excluding drydocking cost, averaged $7,106 per vessel per day in 2023, compared to $6,698 per day per vessel for 2022. At the bottom of the table, we can again see here the cash flow breakeven rate for the year, which in 2023 amounted to $12,944 per vessel per day, compared to $12,991 for 2022. Let's now turn to Slide 17 to review our debt profile. As of December 31, 2023, our outstanding bank debt was approximately $104.8 million, and in 2024 - it is about $87 million. In 2024, our total debt repayments, including balloon payments, amount to about $18 million, while they are set to decrease, to about $9.7 million approximately, both in 2025 and 2026. It is worth mentioning in this slide, that the average margin of our debt, which is about 2.46% and assuming a SOFR rate of about 5.6% as of earlier this month. And including the cost of the portion of the debt we have - for which we have interest rate swaps. We estimate our total cost of our senior debt, as of the end of last year was around 7.8%. At the bottom of this slide, we can see our projected cash flow breakeven level for the next 12 months, breaking down into its various components. Overall, we expect our cash flow breakeven level to be around $12,378 per vessel per day, and our EBITDA breakeven rate, to be around $8,000 per vessel per day. In that rate, our EBITDA breakeven rate includes operating expenses, G&A expenses and drydocking costs. I'm almost concluding my presentation. And for that, let's move to the next slide, Slide 18, where we can see some highlights from our balance sheet in a simplified way. We offer a snapshot of our assets and liabilities in this slide. As of December 31, 2023, cash and other assets stood on our balance sheet at about $27.5 million. The book value of our vessels was approximately $203.6 million, resulting in total book value for our assets of about $231 million. On our liability side, our main liabilities are our debt, which as mentioned previously, spend - stood at about $104.8 million as of December 31, representing about 45.4% of the book value of our assets, and we had additional liabilities of about $6.8 million. That means that the book value of our shareholders' equity was about $110 million, translating to about $39 book value per share, and this figure excludes the book value of the minority interest that we have. However, the market value of our fleet is higher in our book value. And we estimate, based on our own estimates and other market transactions that the market value of our fleet spend at about $239 million. We suggest that our NAV per share is in excess of $51. Our shares recently trade at around $21, thus at a substantial discount compared to our net asset value. This discount represents a significant opportunity for appreciation for our shareholders and investors. And with that, I would like to end my brief financial presentation and turn the floor back to Aristides.
Aristides Pittas: Thank you, Tasos. Let me now open up the floor for any questions we may have.
Operator: Thank you. [Operator Instructions] Our first question is from Tate Sullivan with Maxim Group. Please proceed.
Tate Sullivan: Hello. Good day. Thank you. Can you - can we talk a little bit, about the FFA hedges that you put in place in October and November? I mean you indicated that, it's for three vessels equivalent, but then in your table, you have two vessels on index-linked charters. So do one of those FFA hedges last, for almost half a year? Can you talk more about that, please?
Aristides Pittas: So when you have vessels that are not fixed, which was the situation back in October, the hedge also works, for the unfixed vessels that you will fix, within the first quarter of the year. It isn't 100% correlated with the FFA, but the correlation is still very, very significant. So at the time that we did it, we had really nothing fixed. So, we covered the three vessels for around $10,000 a day. We thought that the market was going to be lower, $10,000 was for Q1, a number that we felt comfortable with. And that's why we did it. It turns around that, the market has been stronger. So all these three FFAs will result in a slight loss. But that's fine. It's equivalent to having fixed three ships for $10,000 a day. The remaining will be somehow higher figure as Q1 is tending to be.
Tate Sullivan: Okay. And this was a similar strategy, I recall, and you said as well to most of the first quarters in previous years?
Aristides Pittas: Whenever we feel that the market will be significantly lower, than where it is at the current stage, and where the FFAs predicted will be, we might hedge a percentage of our fleet through FFAs. It's equivalent as if we had taken let's say, charter on three ships, $10,000 a day at that time, for three months.
Tate Sullivan: Okay. Thank you. And a bit – follow-up, another question on the joint venture with NRP investors. Did you - the chartering since you took delivery of those ships were they already fixed? Did they already have fixed charters in place? Or have you contracted those ships since acquiring in the JV as well?
Aristides Pittas: Yes. They didn't have any charter. One of them was finishing up one of its charter. So I think it had about 1.5 months left. But since then, we have been fixing all the ships on short-term charters in anticipation of a better market in Q2.
Tate Sullivan: And Tasos, will the - will next quarter or this current quarter not have the roughly $400,000 of costs to form the JV? Is that...
Tasos Aslidis: That's correct.
Tate Sullivan: That's correct. Okay.
Tasos Aslidis: That's correct. A portion of the set-up fees that shared to be expensed and we - rather was reflected in our G&A number this quarter.
Tate Sullivan: Okay. And last for me. As you mentioned, any changes in China's coal policy, are you referring to the headlines that have been out there? Maybe Chinese will increase industrial output, with some stimulus measures, and - do you have any - is it a meaningful portion of your fleet, currently carrying coal, or has in the past?
Aristides Pittas: Indeed, we have quite a few vessels that regularly pick up coal in that area. So, we are affected, by whatever China decides, that can move both ways. So, we really don't know what their policy, is going to be.
Tate Sullivan: Thank you very much. Have a good day.
Aristides Pittas: Thank you. Dave.
Operator: Our next question is from Kristoffer Skeie with Arctic Securities. Please proceed.
Kristoffer Skeie: Hello, and good afternoon. Thank you for, and good morning. Thank you for the good presentation. It seems like your timing on the vessel acquisition in Q4, was very good. And given that the asset prices have continued, to appreciate in value. Would you sort of consider selling some of the older vessels in your fleet now? Or sort, of how do you see that going forward?
Aristides Pittas: Yes, that's a possibility, as you say, not currently. We're not currently considering a sale. But we do have in mind that if prices improve further, which we think will happen, we think that the market, is going to be stronger in Q2 and Q3, than what it is now. And that will result in higher earnings for the ships. But also higher prices, and we might take that opportunity, to sell one or two of the older vessels. But no decision has been taken along those lines yet.
Kristoffer Skeie: Okay. Okay. Great. Thanks. That's it from me.
Aristides Pittas: Thank you.
Tasos Aslidis: Thank you, Kristoffer.
Operator: Our next question is from Poe Fratt with Alliance Global Partners (NYSE:GLP). Please proceed.
Poe Fratt: Hi, Aristides. Hi, Tassos. I just had a couple of - questions about clarifications. Aristides, you were talking about coal in China. Are you talking about met or thermal?
Aristides Pittas: Both, actually.
Poe Fratt: Okay. And then when you talk about the first quarter FFAs being out of the money, or underwater when I look at Page 6, though, there are a couple of your vessels that, are trading at TC rates that - or spot rates that, are well under the FFAs. Are they still underwater, you think, for the full quarter? Or do you think they'll level out, over the course of the quarter?
Aristides Pittas: Yes. I think these vessels - these levels where you see below $10,000 are mainly small positional voyages that, is that the ships will end up in areas, where we expect they make higher - take a higher charter afterwards. So combining both of these, I think the average for every vessel, is going to be above $10,000 a day. Therefore, that's why we say that the hedge as well, negatively, let's say, during this quarter.
Poe Fratt: Okay. That's helpful. And then...
Aristides Pittas: Although, if I understand correctly, Tasos can correct me. The loss has really been taken in Q4, because we have to account for that. Tasos?
Tasos Aslidis: Yes, that's correct on the GAAP numbers. On the GAAP number the unrealized loss we don't take it into this quarter, we'll take it when it actually occurs during the first quarter of next year. So, the unadjusted numbers, the loss is there. But when we adjust them, we exclude the unrealized losses. These losses so far are unrealized. So, they will be reflected in our adjusted numbers, next quarter.
Poe Fratt: Yes, they'll essentially shift from unrealized to realized either, maybe in the gain, because of where you marked it at the end of the year?
Tasos Aslidis: Correct. Yes.
Aristides Pittas: Correct.
Tasos Aslidis: If - during the first quarter, the market is lower than it was at the end of last year, the losses would be less. And they might turn to gains. But we - since we have more vessels open in the market, we prefer the market to be stronger overall.
Poe Fratt: Yes. Understood. And you don't have any FFAs that, extend into the second quarter, or the rest of the year, correct?
Tasos Aslidis: That's correct.
Poe Fratt: Okay. And then Aristides, I think in your formal presentation or your comments, you said that this quarter, you're going to be close to breakeven, you think. Is that the total breakeven, including debt amortization? So like $12,000 and change? Or is it that closer to that EBITDA breakeven?
Aristides Pittas: No. I think around that $12,000 level.
Poe Fratt: Okay. And then with your stock buyback program, it seems like you're buying stock at roughly an average price of around $15. Stock is good 30% above that, what's your stance on stock buybacks, as we stand right now, with the stock over $20?
Aristides Pittas: We will continue buying back stock, because still the price is extremely low. We would have been doing it more aggressively, if the liquidity in the stock was high. But unfortunately, the liquidity within the company, the trading liquidity within the company's stock is very low, which doesn't allow us to be very aggressive, on our repurchase program. Yes...
Tasos Aslidis: There are certain guidelines on how much you can buy based on the trading volume. So - and we are trying to use - to exhaust the allowance - the trading allowance, but it is more given our trading liquidity.
Poe Fratt: Great. Understood. Thank you so much.
Aristides Pittas: Thank you, Poe.
Tasos Aslidis: Thank you, Poe.
Operator: With no further questions, I would like to turn the conference back over to Mr. Pittas for closing comments.
Aristides Pittas: Thank you all for participating in today's call. We will be back with you in three months' time to discuss the results of the first quarter.
Tasos Aslidis: Thank you.
Aristides Pittas: Have a good day and a good weekend.
Tasos Aslidis: Thank you. Bye.
Operator: Thank you. This will conclude the conference. You may disconnect your lines at this time.
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