Earnings call transcript: EuroDry Q4 2024 reports revenue decline

EuroDry Ltd. (NASDAQ:EDRY) reported a net revenue of $14.5 million for Q4 2024, marking an 8.7% decrease from Q4 2023. The company also disclosed a net loss of $3.3 million, or $1.20 per share, impacted by a $2.8 million impairment loss on a vessel. These results were below market expectations, with an EPS forecast of $2.12, leading to a pre-market stock price increase of 3.19%. According to InvestingPro data, the company faces significant financial challenges with a total debt burden of $94M and a concerning current ratio of 0.84, indicating potential liquidity constraints. InvestingPro analysis reveals 16 additional key insights about EDRY’s financial health and future prospects.

Key Takeaways

• Q4 2024 revenue decreased by 8.7% year-over-year.
• Full-year 2024 revenue increased by 28.3% compared to 2023.
• The company reported a net loss of $3.3 million for Q4 2024.
• EuroDry’s stock price increased by 3.19% in pre-market trading.
• Signed a contract for two new eco-design vessels.

Company Performance

EuroDry’s performance in Q4 2024 was characterized by a decline in quarterly revenue compared to the same period last year, although the full-year revenue saw a significant increase. The company faced challenges, including a substantial impairment loss, which contributed to its quarterly net loss. Despite these setbacks, EuroDry continues to expand its fleet with new eco-design vessels, aiming for future growth. With a market capitalization of just $30.7M and trading at a low Price/Book ratio of 0.3x, the company’s valuation metrics present an interesting picture. Subscribers to InvestingPro can access a comprehensive analysis of EDRY’s valuation metrics and growth potential through the exclusive Pro Research Report.

Financial Highlights

• Revenue: $14.5 million, down 8.7% from Q4 2023.
• Full-year revenue: $61.1 million, up 28.3% from 2023.
• Net loss: $3.3 million for Q4 2024.
• Adjusted EBITDA: $4.8 million, compared to $6.6 million in Q4 2023.

Earnings vs. Forecast

EuroDry reported an EPS of -$0.25, significantly missing the forecast of $2.12. This represents a notable deviation from expectations, reflecting challenges in the quarter. Revenue also fell short of the projected $21.8 million, highlighting a difficult operating environment.

Market Reaction

Despite the earnings miss, EuroDry’s stock price rose by 3.19% in pre-market trading, possibly driven by optimism surrounding future fleet expansions and strategic initiatives. The stock’s last close was $10.5, with a 52-week range between $10.04 and $24.84. InvestingPro analysis shows the stock has a beta of 0.76, indicating lower volatility compared to the broader market, while maintaining strong revenue growth of 39% over the last twelve months. The complete financial health assessment and detailed valuation analysis are available in the Pro Research Report, along with expert insights on the shipping sector.

Outlook & Guidance

EuroDry remains cautiously optimistic about market recovery, expecting potential improvements in charter rates by Q2 2025. The company plans to finance newbuilds with a mix of debt and equity, maintaining flexibility for potential acquisitions if asset prices decrease.

Executive Commentary

CEO Aristides Pitas emphasized a strategic wait-and-see approach, stating, "We are keeping our ammunition right now and waiting to see how the market develops within the next three months." CFO Tasos Aslidis expressed hope for market improvement, while Pitas highlighted the focus on acquiring modern, eco-friendly vessels.

Risks and Challenges

• Impairment losses impacting financial results.
• Uncertain charter rate recovery.
• Potential market volatility affecting asset prices.
• Fleet expansion and financing risks.
• Global economic conditions influencing demand for drybulk trade.

Q&A

During the earnings call, analysts inquired about the specifications of newbuild vessels and the company’s charter strategies. Executives discussed potential vessel acquisitions and analyzed market rate expectations, highlighting the company’s focus on maintaining a flexible charter strategy.

Full transcript - EuroDry Ltd (EDRY) Q4 2024:

Conference Moderator: Thank you for standing by, ladies and gentlemen. Welcome to the EuroDry Limited Conference Call on the Fourth Quarter twenty twenty four Financial Results. We have with us today Mr. Aristides Pitas, Chairman and Chief Executive Officer and Mr. Tazos Aristides, 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. I must advise you that this conference call 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.

Pitas, I’d like to remind everyone 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 two of the webcast presentation, which has the full forward looking statement and the same statement, which also included in the press release. Please take a moment to go through the whole statement and read it.

And now I’d like to pass the floor over to Mr. Pitas. Please go ahead, sir.

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Mr. Tasos Aslidis, our Chief Financial Officer. The purpose of today’s call is to discuss our financial results for the three and twelve months period ended 12/31/2024. Please turn to Slide three of the presentation.

Our financial highlights are shown here. For the fourth quarter of twenty twenty four, we reported total net revenues of $14,500,000 and a net loss attributable to controlling shareholders of $3,300,000 or $1.2 loss per basic and diluted share. Adjusted net loss attributable to controlling shareholders for the quarter was $700,000 or $0.25 per basic and diluted share. Adjusted EBITDA for the period was $4,800,000 The single biggest loss for the quarter was the $2,800,000 paper loss, which we incurred by recognizing an impairment on one elder vessel, which we had purchased at a relatively high price. Please refer to the press release for the detailed reconciliation of adjusted net loss and adjusted EBITDA.

Our CFO, Tasos Aslidis, will go over the financial highlights in more detail later on in the presentation. Since the initiation of our repurchase plan of up to $10,000,000 announced in August 2022 and extended twice until August 2025, to date, we have repurchased 334,000 shares of our common stock in the open market for a total of $5,300,000 in proceeds. We will continue to execute the share repurchase program around current share price levels. During this quarter, we successfully completed the refinancing of two of our vessels through a $30,000,000 loan, which further increased our cash reserves by about $11,000,000 Please turn to Slide four for our recent developments. In November 2024, we signed a contract with Nantong Xianzhu Shipbuilding for the construction of two sixty three thousand deadweight Ultramax bulk carriers.

Both vessels are geared, echo of course, and are built to EDI Phase III design standard. The two new buildings are scheduled to be delivered during the second and third quarters of twenty twenty seven. The consideration for each vessel is about $36,000,000 and will be financed by a combination of debt and equity. Additionally, we sold motor vessel Tasos, the eldest vessel in our fleet built in February for demolition for approximately $5,000,000 in cash. Motor vessel Tasos is a 75,000 deadweight Panamax drybulk vessel and is expected to be delivered to its buyers and an affiliated third party by early March twenty twenty five upon completion of the present charter.

The gain on the sale of the vessel is expected to be approximately $2,100,000 On the chartering front, the duration of the majority of our fixtures is short term, ranging between twenty to sixty five days according to their minimum duration, providing us flexibility for future employment. You can see the specifics of the various charters in the accompanying presentation. Throughout the quarter, there were no scheduled drydockings or repairs, allowing us to maintain full operational efficiency. While we experienced no commercial off hire during the quarter, motor vessel, Bleslak, had a seven day committed commercial off hire in January 2025. Please turn to Slide five.

DuraDrive’s fleet currently consists of 13 vessels, including five Panamax drybulk carriers, five Ultramax, two Kansarmax and the Supramax drybulk carrier. Our 13 drybulk carriers have a total cargo capacity of approximately 920,000 deadweight tons. After the sale of motor vessel Tasos, which is expected by early March twenty twenty five, EuroDry’s fleet will consist of 12 vessels. Not including the Tashos, the average age will drop to 13.6 from fourteen point five years currently. As a reminder, EuroDry owns 61% of the entities that own MOTO versus Christos and Maria.

The remaining 39% is owned by owners represented by NRP Project Finance, otherwise referred to as NRP investors. Upon the delivery of the 263,500 tons deadweight new buildings, which is set to take place in the second and third quarters of twenty twenty seven, the company’s fleet will increase to 14 drybulk vessels and with a carrying capacity of just under 1,000,000 deadweight. Please turn to Slide six for the further update on our fleet employment. Fixed rate coverage for 2025 is approximately 18% through existing charters. This percentage excludes ships on index charters, which are open to market fluctuations, but have secured employment.

Our vessels are chartered under short term charters until rates rise enough for long term charters to be deemed beneficial. Turning to Slide eight, we go over the market highlights for the fourth quarter ended 12/31/2024, up until recently. In Q4 twenty twenty four, Panamax vessels experienced a decline in both one year time charter and spot rates. The average one year time charter rate for Panamax vessels stood at $12,700 per day for the quarter, dropping to $11,250 per day by the December. Similarly, the average one year spot rate for Panamaxes during the quarter was $9,250 per day with a decline to about $7,700 per day in the last day of Q4.

Both the Baltic Panamax Index and the Baltic Dry Index saw sharp contractions during the period, dropping by 3028% respectively. However, from year end twenty twenty four to 02/21/2025, ’1 year time charter rates for Panamax vessels have rebounded by 12% and similarly spot rates have increased by 14% in the same time period. On the Supramax side, we saw less violent drops in Q1. Currently, spot rates are about $1,000 or $2,000 per day higher than Panamax’s, but one year charters are about $500 less than the corresponding Panamax rates. Please turn to Slide nine.

The IMF’s latest update from January 2025 projects stable yet somewhat underwhelming global economic forecasts, showing only a slight improvement to 3.3% of GDP growth from 3.2% predicted in October 24. This 3.3% GDP growth is also their estimate for 2026. While The U. S. Has seen an upward revision with growth now forecast to grow 2.7% in 2025, This stands in stark contrast to other advanced economies, particularly in Europe, which have seen either downgrades or stable growth outlooks at around 1% only.

Adding to this uncertainty, the new U. S. Administration’s rapid policy changes and reversals, particularly concerning trade policies and geopolitical conflicts, collectively pose risks to the medium term growth prospects. Local inflation is still expected to decline. However, the near term trajectory to price stability may still be challenged with persistent services and wages inflation in several parts of the world, leading to the synchronized monetary policy responses.

Risks to the global inflation outlook will be tilted to the upside given the prospects of increased protectionism, geopolitical tensions and demographic constraints. Emerging markets continue to drive global growth led by India, the Asian five countries and China. China’s growth appears to be slightly revised upwards, but in the lopsided fashion with projections of 4.6% this year and 4.5% next year as the country continues to fade tepid domestic demand, persistent deflationary pressures and falling property markets. India is projected to maintain steady economic growth of 6.5% in both 2025 and 2026, driven by strong investment activity, robust agricultural performance and continued expansion in the services sector, which remains a key engine of economic growth. Southeast Asian countries are also positioned for solid growth, benefiting from regional demand and investment momentum.

Entirely to global GDP issues, Clarkson’s forecast indicate a more challenging period ahead for the drybulk trade, with demand growth sharply decelerating from 5% in 2024 to just 0.9 in 2025, followed by stagnant trade levels in 2026. While supply constraints constraints and environmental regulations may offer some rate support, geopolitical risks in the Red Sea persist and despite the Gaza ceasefire, a swift return to normal shipping operations remain unlikely. In light of these projections, we remain cautious of the outlook for the drybulk sector given key microeconomic risks and evolving geopolitical tensions, which could impact medium growth prospects. Please turn to Slide 10, where we review the current state of the order book in the drybulk sector. As you can see, as of February 25, the order book is currently at just 10.5% of the fleet, still standing among the lowest historical levels.

Turning to Slide 11, let us look into the supply fundamentals in a bit more detail. As of February 2025, the total drybulk vessel operating fleet was 14,150 vessels. According to Clarkson’s latest report, new deliveries as a percentage of total fleet are expected to be 3.7% in 2025, ’3 point ’5 percent in 2026 and three percent in 2027 onwards. The actual fleet growth is of course expected to be lower than the aforementioned figures due to scrapping and slippage. If the 10% of the fleet that is older than twenty years were to be scrapped within the next three years, we would then up with a fleet that has zero growth.

Factors such as increased slow steaming, slow steaming, higher scrapping rates and the tightening of environmental regulations could further constrain the available bulk of fleet, whilst of course the reopening of Sways works in the opposite direction. Please turn to Slide 12, where we summarize our outlook for the drybulk market. As already said, in 2024, the bulk carrier charter market experienced mixed results with the Capesize segment experiencing gains, while smaller vessel categories such as Ultomax and Kamsomax faced significant declines. The reopening of the Panama Canal and the easing of post congestion placed additional pressure on the drybulk market contributing to decline in freight rates, some of which reached multi year lows. The fourth quarter underperformed expectations with average street charter rates for Ultramax and Kamsa McQuests falling by 25% year over year, reflecting the broader market weakness.

Looking ahead, the 2025 bulk carrier demand outlook suggests a softer market compared to 2024. A key factor in China’s slowing dry bulk imports, which are not expected to match the robust growth seen in 2023 and 2024. While the recent government stimulus measures have supported sentiment, they are unlikely to feed to substantial structural improvements in demand, especially given the persistently high stockpiles. Additionally, U. S.

Trade policy is emerging as a critical factor for the drybulk sector under the new Trump administration. Tires from China, Mexico and Canada could disrupt grain and minor bulk trade, particularly if escalating trade tensions lead to retaliatory measures. My initial reaction to the measures Trump announced yesterday regarding Chinese vessel penalties and extra fees when calling The U. S. Means that they will not pass as the main and perhaps only consequence will be to make products imported to The U.

S. More expensive to The U. S. Consumer. Meanwhile, however, geopolitical risks in the Red Sea remain unresolved.

Despite the Gaza ceasefire, shipping in the region is unlikely to return to normalcy in the near term, and any easing of Red Sea disruptions could further constrain drybulk demand growth adding to the challenges faced in the market. However, on the supply side, vessel ordering has remained relatively limited, primarily due to shipyard capacity constraints and uncertainty surrounding the fuel of the future amid a growing number of methanol and LNG fueled orders. The order book to fleet ratio remains at historically low levels, which could create a backdrop for a potential charter rate recovery if demand strengthens. However, trends differ across vessel classes. While Panamax and Ultramax order books are returned to historical medium levels, the Capesize fleet remains near historical lows, but is comparatively younger, meaning fleet renewal pressures may be less immediate.

Furthermore, the new environmental regulations excluding EXI, CII, EU ETS and fuel EU are expected to further constrain vessel supply through increased scrapping and slower operational speeds. These regulatory measures could help mitigate excess fleet capacity, supporting the market by reducing effective tonnage availability. Let’s turn to Slide 13. As of 02/21/2025, the one year time charter rate for Panamax ships with a capacity of 75,000 deadweight tons is at $12,625 per day, slightly higher than a week ago, but below the historical median of $13,560 per day. Meanwhile, the market for ten year old Panamax bulk carriers remains relatively strong with current prices at $24,500,000 well above the historical median of $14,800,000 and the average of $17,400,000 However, as of the fourth quarter of twenty twenty four, asset values have experienced a notable decline for their mid-twenty twenty four peak of $29,500,000 reflecting broader market softening.

We are closely monitoring the developments. If the markets drop further and consequently vessel prices also drop, we will be able to acquire one or two more vessels. If the charter market improves, our current fleet will become profitable again. And with that, let me pass the floor over to our CFO, Tasos Aslidis, to go over various financial highlights in more detail.

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: 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 2024 and compare to the same periods of last year. For that, let’s turn to Slide 15. For the fourth quarter of twenty twenty four, we reported total net revenues of $14,500,000 representing an 8.7% decrease over total net revenues of $15,900,000 during the fourth quarter of last year.

And this was the result of the lower time charter rate our vessels earned in the fourth quarter of this year as compared to the last. Interest and other financing costs for the fourth quarter of twenty twenty four, including interest income, remained at about $1,900,000 the same level as in the same period of 2023. Adjusted EBITDA for the fourth quarter of twenty twenty four was $4,800,000 compared to $6,600,000 achieved during the fourth quarter of last year. Basic and diluted loss per share attributable to controlling shareholders for the fourth quarter of twenty twenty four was $1.2 calculated on about 2,700,000.0 basic and diluted weighted average number of sales outstanding, compared to earnings of $0.13 per share attributable to controlling shareholders, calculated an approximately $2,700,000 basic and $2,800,000 diluted weighted average number of shares outstanding in the fourth quarter of last year. Excluding the effect on the loss attributable to the controlling shareholders for the quarter of the unrealized gain on derivatives and the impairment on a vessel, the adjusted loss per share for the quarter ended 12/31/2024, which has been $0.25 basically diluted compared to adjusted earnings per share in the fourth quarter of twenty twenty three of $0.71 and $0.7 per share base cataylut.

Let’s now look at the numbers for the corresponding full years, 2024 and 2023. For the full year of 2024, the company reported total net revenues of $61,100,000 representing a 28.3% increase over total net revenues of $47,600,000 during the twelve months of 2023 and that was the result of the increased number of vessels operated during 2024 and the slightly higher time charter rates earned by our vessels on average in 2024 compared to 2023. Interest and other financing costs, again, including interest income for the twelve months of 2024, amounted to $7,900,000 compared to $5,600,000 for the same period of 2023. Interest income was about $900,000 in 2023 versus $100,000 in 2024. Interest expense for the period or year was higher due to the increased amount of debt during the year as compared to the previous one.

Adjusted EBITDA for the twelve months of 2024 was $12,400,000 compared to $14,600,000 during 2023. ’2. Basic and diluted loss per share attributable to controlling shareholders for 2024 was 3.54 calculated on about $2,700,000 basically diluted weighted average number of shares outstanding compared to basic diluted loss per share attributable to controlled shareholders for 2023 of $1.05 calculated on about $2,800,000 base the diluted share weighted average number of shares for the previous year. Again, excluding the effect on the net loss attributable to controlling shareholders for the year, the unrealized gain on derivatives and the permanent loss on the vessel, the adjusted loss for the year 2024, which has been $3.02 per share, basically diluted, compared to adjusted earnings per share of about $0.12 basically diluted for the same period of 2023. Let’s now move to Slide 16 to review our fleet performance.

As usual, we will start our review by looking at fleet utilization rates for the fourth quarter and full year for both 2024 and 2023. Let’s first look at twenty twenty four’s fourth quarter. Our commercial utilization rate during that quarter was 100%, while our operational utilization rate was 99.4 compared to 100% commercial and 99.5% operational for the same period of 2023. On average, 13 vessels were owned and operated during the fourth quarter of twenty twenty four, earning another refined charter equivalent rate of $12,200 per vessel per day compared to 12.2 vessels in the same period in the fourth quarter of twenty twenty three, earning another time charter equivalent rate of $14,570 per day. Our total operating expenses, including management fees, general and administrative expenses, but excluding diluting costs, were $7,087 per vessel per day during the fourth quarter of twenty twenty four compared to $7,340 per vessel per day during the fourth quarter of last year of twenty twenty three.

If we move further down on this table, we can see the cash flow breakeven rate, which takes wholesale into account, direct working expenses, interest expenses and loan repayments. Thus in total, for the fourth quarter of twenty twenty four, our daily cash flow breakeven rate was $11,529 per vessel per day as compared to $12,263 per vessel per day for the same period of 2023. Let’s now look at the right part of the table to review the same figures for the full year. During the full year of 2024, our commercial utilization rate was 99.9%, our operational utilization rate 98.9% compared to 99.4% commercial and 98.5% operational in 2023. On average, we own and operated 13 vessels during 2024, earning another time charter rate of about $13,039 per vessel per day compared to 10.6 vessels for the whole of 2023, earning $12,528 per vessel per day.

Our total operating expenses for the year, including management fees, G and A expenses, but excluding the inventory costs, averaged $6,967 per vessel per day in 2024 compared to $7,131 per vessel per day in 2023. Again, at the bottom of this table, we can see the cash flow breakeven rate for the entire year, which for 2024 amounted $13,221 per vessel per day compared to $13,041 for 2023. The increase being primarily due to the higher debt reduction expenses we incurred in 2024 compared to the year before. Please now turn to Slide 17 to review our debt profile. As of 12/31/2024, our static debt stood at about $180,000,000 Total (EPA:TTEF) repayments for 2025 and 2026 are $12,100,000 and $11,300,000 respectively, with a small dollar payment due in 2026 of $2,000,000 and a bigger dollar payment due in 2027 of about $10,000,000 with an additional approximately $10,000,000 of repayments scheduled to be made in 2027.

An important point to highlight in this slide is the average margin of our debt, which as of 12/31/2024 stood at around 2.08% over sulphur. Assuming a three month sulphur rate of 4.31%. The estimated cost of our senior debt is approximately 6.39% and actually a little lower because it has swapped some of our debt for a lower rate. So our effective the effective cost of our senior debt is about 6.3%. At the bottom of the slide, we can see our projected cash flow breakeven level for the next twelve months, essentially 2025, broken down into its various components.

Overall, we expect to have a lower cash flow breakeven level in 2025 of around $11,600 per vessel per day, while our EBITDA breakeven level is about $7,526 per vessel per day. We’re almost done and to be done, let’s move to Slide 18, where we can see as usual some highlights from our balance sheet. This slide offers a snapshot of our assets and liabilities. On our asset side, first, our balance sheet is very similar. It includes the book value of our vessels, which as of the end of twenty twenty four, amounted to about 500,000.0.

We had also advancements made for our newbuildings of DKK 7,200,000.0 and also had cash and some other assets of about $29,200,000 resulting in a total book value of assets of about $222,000,000 On liability side, as I mentioned earlier, our debt stood at $108,000,000 representing about 4.9% of total book value of our assets. And we had other liabilities and minority interest of about 4,500,000 other liabilities and about almost 9,000,000 of minority interest, the share of our partners in those two vessels, resulting in the book value of shareholders equity of just above CAD 100,000,000 or 35.5 per share. Our estimated market value of our vessel as of the end of last year was $222,000,000 approximately 20% higher than their respective book value, suggesting an NAV per se in Nexus of $45 Given that our share plays lately between $10 and $11 you can appreciate the potential for appreciation that our stock has should market conditions or other factors lead to a reduction of these discounts. And with that, I’d like to pass the floor back to Aristides to continue the call.

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: Thank you, Dansos. Let me open up the floor for any questions we may have.

: Thank you.

Conference Moderator: We will now be conducting a question and answer session. Our first question today is coming from Tate Sullivan from Maxim Group. Your line is now live.

Tate Sullivan, Analyst, Maxim Group: Thank you. My first question please on for the 4Q impairment of $2,800,000 Was that related to Tasos and then reversed in the current quarter?

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: No. On Tasos, we recorded capital gain. We will report a gain on sale, as Steve has mentioned in the number around 2,000,000. That was on another vessel, the Santa Cruz, that was the last one that we bought. We bought one of the last ones that we bought that was bought on a higher point in the cycle and our tests indicated we should incur impairment.

Pophrat, Analyst, Alliance Global Partners (NYSE:GLP): Okay. Thank you. And then can you

Tate Sullivan, Analyst, Maxim Group: talk about the newbuild negotiations with any of your organizations? Have you worked with a specific shipyard before and did their newbuild price decrease in the last couple of months or how did the price negotiations work?

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: Well, we haven’t built anything at that shipyard in the past, but we did a lot of research and talked to a lot of shipyards before we finally concluded with these guys. We got a lot of information from other owners that we know that have also ordered ships at those shipyards maybe the last few years and have had a good cooperation and are seeing quality results. So, this obviously played a major impact in us selecting that shipyard. Having said that, okay, to the tough negotiation, as always on price and as on the equipment that will be put on board and all that stuff. And I feel we got a good price.

Today prices may be slightly softening, but not with the deliveries in 2027. We’re talking about deliveries in 2028 these days mostly. So, I think prices are probably around the same levels that we secured.

Tate Sullivan, Analyst, Maxim Group: Okay. But for later delivery.

Pophrat, Analyst, Alliance Global Partners: Okay. And then the specs on the

Tate Sullivan, Analyst, Maxim Group: new build you mentioned. So, ECO, I imagine that describing means with scrubbers. Did you consider

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: No, ECO does not mean with scrubbers. ECO does not mean with scrubbers. It means the most modern electronic engine practically and the lower consumption that these ships have relevant even to the previous CECO vessels. So the vessels are very economic in their fuel consumption.

Tate Sullivan, Analyst, Maxim Group: And then did it did that did that shipyard or did you consider shipyards with dual LNG engines or is that not realistic for drybulk right now?

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: No, no, we did look at that and we did consider that and it is quite more expensive to provide for LNG, especially the LNG tanks that are needed. And we don’t think that LNG will be a long term solution. We want to have the most modern up to date and economic ships with today’s technology.

Tate Sullivan, Analyst, Maxim Group: Thank you very much.

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: Thanks. Thank

Conference Moderator: you. Our next question is coming from Mark Reichman from NOBLE Capital Markets. Your line is now live.

: On Page eight of your presentation, one can see the difference between the spot and the one year TC rates. So at what point would you begin locking in one year charters? And what might you expect the average to be for the last three quarters of the year?

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: Very difficult to make projections, right, about what the average will be for the next three quarters of the year. Extremely difficult. I will not risk it. However, Tasos showed that our breakeven levels are around $11,500 per day. If we go up to time charters for the more modern ships of $15,000 16 thousand dollars a day, we might consider it for one or two of our ships.

Otherwise, we will probably continue to play the spot market. The spot market is improving. The traditional lull over the first two months, We’ve experienced it and we are hoping that we will see a further improvement in rates within the next two, three months.

: So it sounds like you’re pretty confident that the spot rates are going to continue their trajectory that there’s not there’s more upside than there is downside. In other words, you don’t you proceed you think it’s still beneficial to keep those positions open with the hope that the rates keep going up versus ending up with lower spot rates?

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: Correct. Downside there is downside risk, obviously, but it is not huge. But upside, you never know how high it can go. So balancing risk reward, we are keeping our ammunition right now and waiting to see how the market develops within the next three months.

: Okay. And then the second question is really for Tasos. Looking at Page 17 and your breakevens, but I was just wondering if you might just elaborate a little bit on the vessel expense expectations for 2025 relative to 2024 given that you’ll have lower or fewer drydock days and also you’ve got the sale of the MV Tasos?

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: I think the chart I put on Slide 17 reflects the removal of the sale of Tasos and the scheduled dry dockings. On the OpEx side, we haven’t finalized our budgets for 2025, but as a preliminary budget, we are using a 3% increase over the budget of last year. I think we the year ended just below last year’s budget for the operating expenses. And we are budgeting conservatively 3% over last year’s budget. I think all the details of the various components is shown on the bottom part of Slide 17.

: Okay. And then the last question is just I know it’s a ways away, the two vessels that will be delivered in 2027. Just how do you kind of think about financing that? I mean, I know you’ve talked about debt and equity will be weighted towards debt or the equity portion, will that be cash generated internally? Or just how are you kind of thinking about that currently?

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: It would definitely be we have a good part of it financed with debt. I think judging from our previous financings, 55% to 60% of that was financed by debt. We might write a little higher percentage in this case. The equity portion, we have obviously paid the first installment of 10% and we have to make another three or such installments before the delivery of the vessels, so another 22,000,000 that we would need to pay to the yard in 2026 and 2027 before the vessels are delivered. So we haven’t really finalized our plans how to finance that.

We have hopefully, we’ll generate that organically, but at the present market, it will be tough, but hopefully, the market will improve. Saying that, we can look for alternative ways to finance the equity portion.

: That’s great. Thank you very much.

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: Thank you, Mark. Thanks for the interest.

Conference Moderator: Thank you. Our next question is coming from Pophrat from Alliance Global Partners. Your line is now live.

Pophrat, Analyst, Alliance Global Partners: Hi. Hello. Aristides, hello, Tamsos. Can you just go over the newbuild payments? It sounds like you’re not going to have any newbuild payments in 2025.

Can you quantify how much of the new build costs will land in 2026 and then 2027?

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: I think in 2026, we will have to pay $14,400,000 2 times 10% per vessel and another 10% that is another $7,200,000 in 2027 as a pre delivered payment. And then finally, the final 60%, I guess, will be paid with the delivery of the vessels. I think, as Steve has mentioned, the second and the third quarter of twenty twenty seven.

Pophrat, Analyst, Alliance Global Partners: Great. That’s really helpful. And then just to clarify, it doesn’t make sense to put scrubbers on newbuilds at this point in time, correct?

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: This is not something which is certain, but some owners are putting on scrubbers on the smaller vessels, some are not. Whilst I think that the Verdict is out there for the very big vessels that have high consumptions that you should put a scrubber on, for Ultramax vessels that consume so little, I am not sure that it is worth it. I also have some reservations against the whole concept of scrubbers and how much they are and if at all, they are polluting the sea. But we are not putting them on. It also depends of course on how the price differential between heavy fuel oil and the low sulfur fuel oil develops.

Right now, it is quite low. So there is no huge advantage of having a scrubber. It might become even lower. So then there is definitely no advantage of having a scrubber. It might pick up again and you might recover the reinvestment of the scrubber in a small period of time.

It’s a different kind of investment really.

Pophrat, Analyst, Alliance Global Partners: Understood. And then Aristides, I think you mentioned that if asset values soften, you potentially might look at making acquisitions. Is how much how can you give us an idea of sort of the current activity in the S and P market? Are you seeing a lot more potential transactions? Are asset values close to where you might pull the trigger on acquisitions?

Can you just give us a flavor for your current assessment of the S and P market?

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: I can tell you that prices have been dropping ever since October, November last year. Until the February, they had corrected, I would say, on the ten year old ships that we traditionally are looking at. They had dropped by about 15%. We thought that if they were to drop by about 30% from those highs, they could become an interesting proposition. And a couple of deals were done last two weeks.

In fact, we bid on one of those ships. But the prices rather than continuing, they are softening, were elevated for these vessels. So they rose a little bit again. And now with the charter market improving, I don’t think that we will see imminently lower prices. So, we would like to see prices drop by another 15% to consider buying something.

I think I couldn’t have been more clear.

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: Sorry, Tassos. We’re always on the look for interesting transactions. We keep it my group keeps busy evaluating deals all the time, although they don’t pass the threshold yet.

Pophrat, Analyst, Alliance Global Partners: And then, Tazos, how current is that NAV that you talked about in the mid-40s? Does that fully incorporate the 15% drop in asset values? Or is that 15% sort of a lagging or I’m sorry, is that $45 sort of a lagging is there a lag between which you see the softness hit the NAV?

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: It’s already I mean, if I recall on the top of my head that our previous end September valuation was around $250,000,000, if I’m not mistaken, million. So by the year end, the market set dropped by essentially 15%. Maybe by the mid January, late January, it might have dropped a little bit more, but it sounds like it has rebounded a bit more recently. So I mean, it’s on the ballpark. It is to be more accurate, it’s for the end of the year.

Remember, I quoted you in the presentation. But if we were to recalculate it pro form a today’s value, it should be most powerful for me.

Pophrat, Analyst, Alliance Global Partners: Okay. And I know, Aristides, you’re hesitant to put out your crystal ball on what the rest of the year is going to look like from a TCE standpoint. But can you many other companies talk about what they booked in the quarter so far, a percentage that’s already booked for the quarter and a rate that’s associated with those bookings. Do you have a similar metric available for us? Sort of where do we stand at this point in the quarter as far as the first quarter?

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: I think Tasos can tell you after the call where we are based on our existing charters because now we are at the February. So, obviously, I would think 80% of what we are going to make is already booked. So, there is we have an idea about it, but I don’t have it offhand.

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: On slide four, you get a flavor of the charters we concluded recently and they really cover the quarter to date pretty much. And I think on average, I can ballpark I bought them to be below $10,000 the average.

Pophrat, Analyst, Alliance Global Partners: Okay, that’s great. But improving, firming up. And so the second quarter potentially would be will look a little bit better than the first quarter?

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: Hopefully, March will be a little better. The vessels that would the condo rollover in March will be better. And I would dare to say, in most certainly, Q2 will be a little better because it’s also

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: a seasonally better quarter. But also already, I mean, the last fixer we did, I think, was the Janus P test, which was fixed for $12,000 which is higher than the levels we were seeing even one month ago.

Pophrat, Analyst, Alliance Global Partners: Great. Very helpful. Thank you.

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: Thanks, guys. Thanks, Paul.

Conference Moderator: Thank you. We reached the end of our question and answer session. I’d like to turn the floor back over for any further or closing comments.

Aristides Pitas, Chairman and Chief Executive Officer, EuroDry Limited: Thank you all for listening in today. We’ll be back to you at the beginning of what is it? May. Middle of May. Yes.

With the Q1 results.

Tasos Aslidis, Chief Financial Officer, EuroDry Limited: And hopefully, it will be better. Midyear market helps us. Exactly. Thanks all again.

Conference Moderator: Thank you. And that concludes today’s teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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