EuroDry Ltd. Reports Net Revenues of $17.4 Million, 68.6% Higher Than Last Year

EuroDry Ltd., an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced yesterday its results for the three and six month periods ended June 30, 2024.

Second Quarter 2024 Highlights:

Total net revenues for the quarter of $17.4 million.

Net loss attributable to controlling shareholders, of $0.41 million or $0.15 loss per share basic and diluted, respectively.

Adjusted net loss1 attributable to controlling shareholders for the quarter of $0.45 million or $0.17 loss per share basic and diluted, respectively, before unrealized gain on derivatives.

Adjusted EBITDA for the quarter was $5.0 million.

An average of 13.0 vessels were owned and operated during the second quarter of 2024 earning an average time charter equivalent rate of $14,427 per day.

The original share repurchase program of $10 million approved by the Board in August 2022 and already extended for a year has been extended for another year. To-date, about $5.0 million have been used to repurchase 313,318 shares of the Company.

First Half 2024 Highlights:

Total net revenues of $31.9 million.

Net loss attributable to controlling shareholders was $2.2 million or $0.81 loss per share basic and diluted.

Adjusted net loss1 attributable to controlling shareholders for the period was $3.7 million or $1.35 adjusted loss per share basic and diluted1, respectively, before unrealized gain on derivatives.

Adjusted EBITDA of $7.1 million.

An average of 13.0 vessels were owned and operated during the first half of 2024 earning an average time charter equivalent rate of $13,452 per day.

Aristides Pittas, Chairman and CEO of EuroDry commented:
“During the second quarter of 2024, the drybulk market fluctuated at levels 5-10% higher than the previous quarter showing some signs of seasonal slowdown by the end of June. Earnings for eco-Kamsarmax vessels averaged about $17,800 during the second quarter and around $15,900 in July while earnings for eco-Ultramax vessels averaged $3-4,000 thousand dollars per day higher than Kamsarmaxes throughout 2024. Our fleet, which includes five older Panamaxes that typically trade at 3-4,000/day below eco-Kamsarmax vessels, earned a blended rate of $14,427/day as a result of some legacy charters. Our results for the quarter were influenced by various scheduled drydockings.

“Overall, the market environment remains volatile with increased geopolitical uncertainty and an increasing orderbook. Still though, any new orders placed will not affect the supply of vessels before 2027 at the earliest. Thus, in the near and medium term, the market fundamentals remain unchanged with a low supply growth providing support for any increases in demand to be converted to higher rates for our ships. Global economic growth is the main driver for the drybulk trade demand, and especially, economic developments in China. The expected interest rates cuts in the remaining of 2024 should contribute to higher economic activity in that respect as well as measures taken by the Chinese government to address domestic investment. On the opposite side, any protectionist measures taken would negatively influence trade growth.

“Our strategy remains to position our fleet to take advantage of any rate increases having the majority of our fleet employed in short term or index-linked charters. At the same time, we are evaluating fleet renewal and investment opportunities. We are also continuing our share repurchase program as our shares continue to trade significantly below our net asset value. Last but not least, I am pleased to announce the publication of our 2023 Sustainability Report which summarizes our progress in and underlines our commitment to the environmental, social responsibility and governance aspects of our business.”

Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The net revenues of the second quarter of 2024 increased significantly compared to the second quarter of 2023 as a result of the increased time charter equivalent rates our vessels earned and the increased average number of vessels operated during the second quarter of 2024 compared to the same period of 2023. The time charter equivalent rates for the second quarter of 2024 were higher by 18.5% on average compared to the time charter equivalent rates our vessels earned in the second quarter of 2023.

“Daily vessel operating expenses, including management fees, but excluding dry-docking costs, averaged $6,396 per vessel per day during the second quarter of 2024 as compared to $6,780 per vessel per day for the same quarter of last year, and $6,289 per vessel per day for the first half of 2024 as compared to $6,424 per vessel per day for the same period of 2023. General and administrative expenses averaged $666 per vessel per day during the second quarter of 2024 as compared to $876 per vessel per day for the same quarter of last year, and $675 per vessel per day for the first half of 2024 as compared to $882 per vessel per day for the same period of 2023. This decrease is explained by the allocation of General and administrative expenses of approximately the same levels in the respective three-month and six-month periods, to an increased number of vessels in the three months and six months ended June 30, 2024.

“Adjusted EBITDA during the second quarter of 2024 was $5.0 million versus $2.5 million in the second quarter of last year.

“As of June 30, 2024, our outstanding debt (excluding the unamortized loan fees) was $98.1 million, while unrestricted and restricted cash was $9.5 million. As of the same date, our scheduled debt repayments including balloon payments over the next 12 months amounted to about $13.8 million.”

Second Quarter 2024 Results:
For the second quarter of 2024, the Company reported total net revenues of $17.4 million representing a 68.6% increase over total net revenues of $10.3 million during the second quarter of 2023 which was the result of the higher time charter rates our vessels earned and the increased average number of vessels operated during the second quarter of 2024 compared to the same period of 2023. On average, 13.0 vessels were owned and operated during the second quarter of 2024 earning an average time charter equivalent rate of $14,427 per day compared to 10.0 vessels in the same period of 2023 earning on average $12,179 per day.

For the second quarter of 2024, voyage expenses, net amounted to $2.2 million and mainly relate to vessels repositioning between charters and expenses during operational off-hire time, as compared to $1.1 million in the same period of 2023. Vessel operating expenses increased to $6.6 million for the second quarter of 2024 from $5.4 million in the same period of 2023. The increase is mainly attributable to the increased number of vessels operating in the second quarter of 2024 compared to the corresponding period in 2023.

Depreciation expense for the second quarter of 2024 was $3.5 million compared to $2.6 million for the same period of 2023 as a result of the higher number of vessels owned and operated in the second quarter of 2024.

Related party management fees for the period were $1.0 million compared to $0.8 million for the same period of 2023, again due to the increased number of vessels owned and operated in the second quarter of 2024, as well as due to the adjustment for inflation in the daily vessel management fee, effective from January 1, 2024, increasing it from 775 Euros to 810 Euros and the unfavorable movement of the euro/dollar exchange rate.

General and administrative expenses for the second quarter of 2024 was at $0.8 million remaining at the same levels as compared to the second quarter of 2023. During the second quarter of 2023, we recorded a provision of $0.5 million related to the detention of one of our vessels as other operating loss. In the same period of 2024, the Company did not have any such costs.

During the second quarter of 2024, one vessel completed its special survey and another two entered into dry-dock in order complete their special survey, for a total cost of $1.9 million, while there were two vessels that completed their special survey, during the second quarter of 2023 for a cost of $1.6 million.

Interest and other financing costs for the second quarter of 2024 amounted to $2.0 million compared to $1.4 million for the same period of 2023. Interest expense during the second quarter of 2024 was higher mainly due to the increased amount of debt and the increased benchmark rates of our loans during the period as compared to the same period of last year.

For the three months ended June 30, 2024, the Company recognized a $0.04 million unrealized gain and a $0.05 million realized gain on one interest rate swap. The results for the second quarter of 2023 include an unrealized gain of $0.23 million and a realized gain of $0.03 million on an interest rate swap contract and an unrealized loss of $0.08 million and a realized gain of $2.28 million on forward freight agreement (“FFA”) contracts.

The Company reported net loss for the period of $0.3 million and a net loss attributable to controlling shareholders of $0.4 million, as compared to a net loss and a net loss attributable to controlling shareholders of $1.2 million for the same period of 2023. The net gain attributable to the non-controlling interest of $0.08 million in the second quarter of 2024 represents the gain attributable to the 39% ownership of the entities owning the M/V Christos K and M/V Maria represented by NRP Project Finance AS (“NRP investors”) (the “Partnership”).

Adjusted EBITDA for the second quarter of 2024 was $5.0 million compared to $2.5 million achieved during the second quarter of 2023.

Basic and diluted loss per share attributable to the Company for the second quarter of 2024 was $0.15 calculated on 2,710,413 basic and diluted weighted average number of shares outstanding, compared to loss per share of $0.43 calculated on 2,761,182 basic and diluted weighted average number of shares outstanding for the second quarter of 2023.

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 basic and diluted, compared to adjusted loss of $0.48 per share basic and diluted, respectively for the quarter ended June 30, 2023. Usually, security analysts do not include the above item in their published estimates of earnings per share.

First Half 2024 Results:
For the first half of 2024, the Company reported total net revenues of $31.9 million representing a 46.9% increase over total net revenues of $21.7 million during the first half of 2023, which was the result of the increased time charter rates our vessels earned and the increased average numbers of vessels operated during the first half of 2024 compared to the same period of 2023. On average, 13.0 vessels were owned and operated during the first half of 2024 earning an average time charter equivalent rate of $13,452 per day compared to 10.0 vessels in the same period of 2023 earning on average $11,393 per day.

For the first half of 2024, Voyage expenses, net, were $3.7 million and mainly relate to vessels repositioning between charters and expenses during operational off-hire time. For the same period of 2023, voyage expenses, net were $3.5 million and relate to expenses incurred by one of our vessels while employed under a voyage charter.

Vessel operating expenses were $12.8 million for the first half of 2024 as compared to $10.1 million for the first half of 2023. The increase is mainly attributable to the increased number of vessels operating in the first half of 2024 compared to the corresponding period in 2023.

Depreciation expense for the first half of 2024 was $6.9 million compared to $5.1 million during the same period of 2023, mainly due to the higher number of vessels operating in the same period.

Related party management fees for the first half of 2024 were slightly increased to $2.1 million from $1.5 million for the same period of 2023 due to the increased amounts of vessels operating in 2024 and the adjustment for inflation in the daily vessel management fee, effective from January 1, 2024, increasing it from 775 Euros to 810 Euros, and the unfavorable movement of the euro/dollar exchange rate during the period.

General and administrative expenses for the first half of 2024, remained at the same levels of $1.6 million as compared to the corresponding period in 2023.

During the first half of 2024 three of our vessels completed their special survey with drydocking and another two entered dry-docks in order to complete their special surveys, for a total cost of $3.7 million. During the first half of 2023 two of our vessels completed their special survey with drydocking for a total cost of $2.1 million.

Interest and other financing costs for the first half of 2024 amounted to $4.1 million compared to $2.9 million 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 rates of our loans compared to the same period of 2023.

For the six months ended June 30, 2024, the Company recognized a $0.1 million realized gain and a $0.2 million unrealized gain on one interest rate swap and a $0.3 million gain on FFA contracts. Compared to the six months ended June 30, 2023, the Company recognized a $1.8 million realized gain and a $1.8 million unrealized loss on interest rate swaps. Additionally a $2.5 million gain on FFA contracts was recognized in the same period of 2023.

The Company reported net loss for the period of $2.2 million and a net loss attributable to controlling shareholders of $2.2 million, as compared to net loss and net loss attributable to controlling shareholders of $2.7 million, for the first half of 2023. The net loss attributable to the non-controlling interest of $0.05 million in the first half of 2024 represents the loss attributable to the 39% ownership of the entities owning the M/V Christos K and M/V Maria represented by NRP Project Finance AS (“NRP investors”) (the “Partnership”).

Adjusted EBITDA for the first half of 2024 was $7.1 million compared to $4.8 million achieved during the first half of 2023.

Basic and diluted loss per share attributable to the Company for the first half of 2024 was $0.81, calculated on 2,721,952 basic and diluted weighted average number of shares outstanding compared to loss per share of $0.98, calculated on 2,782,000 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the net loss attributable to controlling shareholders for the first half of the year of the unrealized (gain) / loss on derivatives, the adjusted loss for the six-month period ended June 30, 2024, would have been $1.35 per share basic and diluted, compared to adjusted loss of $0.33 per share basic and diluted, respectively, for the six-month period ended June 30, 2023. As previously mentioned, usually, security analysts do not include the above item in their published estimates of earnings per share.
Source: EuroDry Ltd.