EDRY - Earnings call transcript Q1 2022

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Operator

Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Conference Call on the First Quarter 2021 Financial Results.

We have with us today Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. [Operator Instructions] I must advise you that this conference is being recorded today. the has its been that press with reminded that release publicly be company results announced a Please distributed.

your based risks and that being Before to Mr. moment realized. passing These you. and I involves to forward-looking Mr. federal such to pass whole statement expectation go in today's like go the statements everyone of the it. forward-looking may be of securities can Pittas, to has to management's that Pittas. EuroDry included are Thank presentation forward-looking in uncertainties sir. not that also redraw the the which I webcast would through expectations are I statements, be the statements the like on the to press statements. floor was making full would current read now conference attention and presentation, the may and release. a call, X over laws. the take Please And over statement result same floor meaning discussed will within the Slide remind which Please ahead, Matters in

Aristides Pittas

to Good morning, joining conference today Mr. period March discuss to for for Together X. three you ladies results Thank the Slide scheduled turn The is, Chief XX, our month Tasos ended today's gentlemen. with me our Financial call is all call. Aslidis, XXXX. for Officer. us of and purpose our Please financial

income Our shown are statement highlights here.

million share. for the stood common $XX.X the For income to Adjusted income was million. million. total period revenues $X.X of net first net of $XX.X the of net the or million Adjusted and XXXX, quarter at reported per we attributable EBITDA $X.X shareholders $XX.X

Panamax Slide detail average extended XXX% will charter for financial Baltic Our been X Index. has Ekaterini comes Please go later our until to turn over bulk more at of February the CFO, in the highlights. operational vessel the Tasos Motor presentation. on from in highlights Aslidis, XXXX

While $XX,XXX and at XX day and delivered XX fixed at XX, $XX,XXX it Motor days Vessel months a at of the quarter. 'XX about XX trip Index. per XXX Tasos Vessel also of been Motor extended days from for was about the to of day, per days company XX.X fixed has the was The $XX,XXX which fixed February at March per thereafter, to Baltic motor Panamax Motor vessel Then XX vessel during Motor approximately has trip until XX at day XXX% been fix again for XX for Luck, day. fixed about also at per it next it to to per was was average $XX,XXX days a per XX was $XX,XXX at Alexandros XX XX The thereafter, Xenia $XX,XXX $XX,XXX for a Vessel fixed fixed a charter thereafter, the XX.X day, period Molyvos day days, minimum the to and fixed was XX Pantelis and from it at at for $XX,XXX maximum XX, days day. was XXXX, was for days on day. months.

Finally, minimum until period Motor Panamax Vessel extended the of XXXX. at Starlight Baltic Index for October was XX.X% a

was the a assumes day per for $XX.XX announced, company the XXXX The Motor in XXXX, vessel funds, vessel drybulk $XX,XXX April of acquired until Vessel Japanese also The XXXX. XX, was to July financed the Cruz, on As with of and XX, existing on previously April bill built charter the Santa delivered company XXXX. deadweight the own vessel million. acquisition XX,XXX company

into dry-dock Motor while occurred XX for Vessel drydockings, the Starlight Motor Vessel Pantelis Regarding days. X-day went repair

per increased expression the company's fleet current XX also days the of day. of has of XX forward to freight one Please The was company FFA Panama $XX,XXX turn the X our quarter, operating equivalent of to market see summary to agreements, the a sold the active fleet. units. During on and Slide rate at

about Our terms. deadweight has a current fleet an average of carrying XX.X years, of XXX,XXX range with capacity

Slide move vessel employment to current X, shows which schedule. the Let's

As for XX%. the excludes at have see, index remaining on coverage six about can market rate of you stands to fluctuations. charters, fixed have that the figure XXXX which employment secured ships This opened

X. Moving to Slide

quarter highlights global XXXX, XX, ended We Despite economic will during challenging for and the March drybulk go over geopolitical remain to rates at the healthy the first now. market quarter of up XXXX, environment levels. the

here, sanctions had March rate spot by the were Panamax market to and average Global first its offset, index the of conflict, to growth well X.X% slowdown to remains by store X.X%. the emerging is consequence X.X% decrease by those projected of policy end reduced a [$XX,XXX] course, to to deep the per 'XX quantities X. largely XXXX. and From As due Overall, developed increased contraction emerging the trades which from growth in to the quarter Russia economies, of lower a to depend the economies quarter, Prospects are the seen the miles energy towards $XX,XXX X.X% the XXXX, for the In for for growth from developing areas. in markets and policy noticed started the risk in latest growth further European the ASEAN-X significantly Japan whole also in GDP for as the IMF to to than the shipped BPI and price XX in ton for to stimulus to its better back rates generally China expected and in estimates growth as were Ukraine than do year, increased anticipated U.S. XX, scale approximately and 'XX. but Sharper report, and logged turn the and X.X% spending than IMF this the global its is pandemic in picking day imports. the Russian-Ukraine increased slow markets, for previous coal X day. Slide was Congress, XXXX. grain also in impact as war Please now a an as due drivers has China. of ensuing countries' expected grain from A and its up should focus sales reaction. for Tighter XXXX slowdown key and X.X% for in decision on

at 'XX the expected by for Clarkson's Looking the in is drybulk to and previous according Research, to X.X% X.X% demand trade to year. grow compared

X.X%. trade expect world as fleet up stands in are trade Ukraine until around of XX. Rate total The effects growth levels we XXXX, a May of XX-plus pace book seen on years. being drybulk at we've growth Russia geopolitical a percentage For X.X%, which revised and being moderate as continuously and XXXX of continuously between assessed. and at are last projections tensions grow to Please turn is to Slide lowest the order the the

Whilst deliveries Now expect delivered please removals. to of XXXX the of below possible about expects other XXXX, around X% XXXX overview. and a growth into turn after in be new taking of XXXX, net X% to fleet and slippage X.X% current and account XX drybulk scrapping, Clarksons for we fleet during our Slide fleet also in X.X% in

remain to regulations tight and Slide we be New environmental summarize muted should a over outlook concerns supply XX to result, as the vessel turn future. given drybulk our where Please in for ordering the foreseeable market. continues

China supply aging adds of lockdowns and the war mentioned, supply-demand uncertainty of previously a balances. while and global of causes to widening Ukraine-Russia in in inflation As delay the normalization bottlenecks the

disruptions ever expect high the and volatile positive as lowest a to remain originating resulting short-and and at lower from trade bulk generally book in of the We levels outlook as of one earnings Russia order and has congestion due lately number flows. changing to due from to production demand as by levels reduction are medium-term well Indeed, supported including changes reduced and in Ukraine. exports trade flows affected been in factors, production of China, steel port

coal mile and from are shift for routes as fundamentals drybulk XXXX, immediate ports. trade any other they ton severe Russian alternative away recession. increasing positive commodities However, remain for Overall, barring demand

effect in demand in new introduction of shipyards. play regulations, many supply for to balances. in the for of war slots the dominating be and forward and to of demand While is congestion, like expected ships due deliveries lack factors Ordering creating role nonexistent new the XXXX will available a unknown

an clarity the a addition, a order something a In even lack later for from future the that in new deriving unknown, place fuel makes remains the of very of option. risky

rates easing left On trade congestion routes the point. charter will of effective other dry shows one XXXX. increase time vessels Panamax supply of of bulk evolution side Please and The at some probably slide XX. the normalization hand, of to year Slide since the turn

we year end stood of at with saw last the from deadweight As the week, the charter year. of of big having recovered $XX,XXX, for time of beginning the drop tonnes XX,XXX ships the one capacity at Panamax rate

is which the around for can of XX-year price highest a price a has side of last current slide, Panamax old right-hand On the the million. historical of the the vessel, see This range you decade. $XX

year, the prices Over medium exceeding levels. been past have increasing, the gradually average historical and drybulk

now still continuing charter the for closely value. opportunities more strong that, However, Thank also over any let the to Tasos CFO, Whilst to the developments market, of been from reap we have have are the significantly than beginning XXXX. seen lower in prices monitoring current what benefits we in than floor And over current arise various with pass detail. shareholder Aslidis, further our financial me to you. highlights may that go the market

Tasos Aslidis

me as well, Good and Aristides. much, very you from ladies Thank morning gentlemen.

give you of will year. an first for period our quarter the and last financial of overview the the same compare X Over slides, next to them of I highlights XXXX

year were period costs charter average and XXXX to compared Basic and In to compared quarter XXXX, reported common of common for operated $XX.X as company of of compared compared of and of $X.XX XXX% quarter vessels of of XXXX, net a the amounted year to to of as Adjusted For this million increase. to other of million revenues period net XXX% on to of $X.XX rates XXXX, the XXXX. quarter $X.X to that, million for a a outstanding slightly achieved to let's the was first number the the turn million, per to the attributable to weighted quarter million shares to XXXX. million we diluted Slide the to income was of and X.XX income shares result were first shareholders and this share net calculated of quarter first of the pay reported of higher The first compared total of total attributable quarter to during year. higher vessels share again The first the calculated compared increased representing and the XXXX during $X.X the attributable due outstanding. million of basic quarter first about of the operate basic earnings million the and income first $X.XX X.XX increased owned the EBITDA same the net during for quarter for million, million million common million, that as $X quarter increased year XXXX. the for Interest expenses our diluted of loans weighted $XX.X on first XXXX, of and last shareholders per about and for diluted Interest diluted earnings during number X.X $X.XX, quarter respectively, financing sales time $X.X for LIBOR first net first our respectively, shareholders the of $XX.X quarter representing on quarter of average first of increase. this basic first revenues the primarily both company $X.X number XX. and

have $X.XX of Excluding $X.XX diluted, shareholders estimates the March to their That's shareholders derivatives, for common earnings year. the of earnings the attributable share and do gain the in quarter XX, earnings $X.XX to quarter of the include on basically adjusted per quarter effect do for been respectively, on ended not unrealized to security above Usually, the %. share per which analysts in first why basic compared attributable the we items common XXXX, of earnings last diluted attraction. the published adjusted

Slide to to fleet our XX turn now performance. review Let's

first the our We our review for XXXX. utilization at will and looking first of fleet XXXX quarter start by rates

commercial operational. As broken usual, rate our down utilization and to fleet is

operational of of vessel of another were quarter the first first day the XXX% the XXXX, commercial average, year. per and XXX%, was $XX,XXX owned the X.X utilization compared vessels and last operational for XXX% time period equivalent XXXX, utilization rate per On During vessels was of during quarter while rate XXXX, our rate quarter compared charter XX.X% our to average adding X $XX,XXX of -- day. to in per first an same operated commercial

If which per the in of account drybulk repayments, balloon first for expenses, they total rate $XX,XXX our to XXXX, for the we vessel excluding drybulk, during expenses this $X,XXX last cash. general dividends average XXXX but cash excluded quarter operating vessel first of we move first same day per per see also was can the into Our in if repayments, XXXX, are total and quarter first paid loan XXXX. takes the $X,XXX down cost year. in cash $XX,XXX quarter including expenses, of per the day table, day administrative quarter vessel and flow of rate compared the management breakeven interest flow per and Thus, the for of compared further to day quarter preferred the our period daily per breakeven in of first expenses, fees, per per vessel the during

we this that year, indicated shareholders investors potential in and of slide give two shown We XX. the refers to now to slide, contracts. assess parts. current last our starting enables our in a current and to Let's fixed year this under time our the part The environment. the tool the earnings fleet two table as The rate Slide calculation move you is

for contract -- our chartering fourth to strategy about that in in the rate is of and the -- in XX% the linked will It This XX% is see second to quarter, and are about relative or be quite expectation third the vessels freight the contracted. size fixed year. coverage be Dry declined XX% chartering that yet in The rates. profile market the can to you but is the indicated of index contracts forward As and this reflects by our current quarter. XX% contracts market to employed Baltic strong as are rest our

charters show get actually our operate how of for Supramax for see levels the second shows also rates fleet, ships. XXXX, rates translated the table, index We indicatively of May date Panamax XX, the calculator as Panamax the the can forward Our you which final open Supramax the assuming be of part and and day fixed. below this the additionally overall at expense mentioned, table do is end during their piece to can objective Obviously, the adjusted EBITDA EBITDA obviously the book. FFA the bottom we the the excess of estimate earned for figures, final by XXXX. EBITDA own materializing open is as the would the one of average assumed our our the any rates our of assumption be the annualized tool, days. the similar we rate estimate our of displayed by and to blended right one rate for the as Final a to OpEx the table, to terms that The these day $XX of vessel, to G&A have EBITDA you in and contracted. rights and result exercise rate costs, to from Based this of commission get the further in rates, for preliminary which assumptions estimate possibly debt a over see, and roughly dependence and mentioned, that an I the table of will their contribution the about can simplicity, on XXXX million. per estimate is per Growth I on calculate levels This in X% rest can timing and provide on rate, depend that. year. $X,XXX to year for meant of Baltic [indiscernible]

rate which change a $X,XXX change example, earned, the our of XXXX EBITDA about per $X in day average in in million estimate. For result

Slide Let's to move review profile. now XX debt our to

$XX debt million in and the drop million. then debt years had XX, an As of repayments about at million we $XX next bank chart, million that $XX.X three million By $X.X over can and range roughly looking to we our and XXXX, XXXX. the $X.X May between of XXXX see outstanding and

it, as million, down payment the if to choose end about can for cost rate includes the more of about we which average see about able slide vessel it would can of balloon flow to $XX.X cash $XX,XXX bottom projection a expect of loan flow breakeven XXXX $XX,XXX debt. A also At the is balloon the estimate we so, the day for assuming we Kamsarmax debt sat next quick around debt projection repayments. next and can we per towards in the cost refinance on like cost we one our of vessels. day, no that X.X%. payment, the per that. to of vessel X.XX% of per Our about the The our top for margin bad previously be a say, our of We and also the to be level rate about LIBOR X.X%, this first per of and for note breakeven is of slide, months, that XX on see about numeration is

other $XX and see is to shows where $XXX about This account a liabilities. of of Slide our you assets million, liquid in move about vessels our in assets The our highlights can assets balance $XXX our the now approximately slide are book we Let's have resulting asset our see from some XX, the of total can value our we a for that million. side, sheet cost On value and that assets the simplified of book million. snapshot way.

that $XX $X.X shareholders the of per leaving $XX.X be to million, translates our $XX.X liability I March our of other Accounting at for debt assets. earlier, our to mentioned value book approximately about preferred approximately million, approximately side, of the net which share XX, book the equity, liabilities same value. to about book million, represents essentially as time about X.X% XX% losses, On as to which equals comes of value

of that of about as excess in vessels of higher However, our $XXX we XX% respective adjusting market be to expected around book $XX. March million, value of on of value the estimate their the XXXX, the end

around of share XX% call. levels. the with Our turn consistently or of our And that, appreciation value net the to to were our approach Aristides significantly our for continue like stock, traded $XX to NAD asset about to would it if floor subjecting back I

Aristides Pittas

Tasos. you, Thank

up Let the you me have. open may that for questions any floor

Operator

you. open. line Thank now ask question. will now [Operator and is the the your Instructions] ahead take Please go We first question,

Tate Sullivan

'XX Good from announcement a just and may, day. Yes. with your conversations newbuilds Sullivan Group. shipyards? we you half case? It's 'XX I I've Maxim can are first starting saw for week, And the Last delivery timeline? the Is that Aristides delivery. focusing industry. now And it's Tate If review the some of drybulk on newbuild that conversations a at why in maybe on heard such long

Aristides Pittas

Yes. Tate, are good right. full The are for you shipyards mostly XXXX.

difficult So is within to play themselves XXXX. it

be for So will these delivery looking most XXXX, in you a likely, days.

Of smaller in course, have really vessels, best drybulk China, still for can quite that are but I shipyards deliveries, you full. the think XXXX

Tate Sullivan

-- ship, what in shipyard Or capacity? and to and comment two three you get there then -- industry new delivery any is that expanding of is are doing? Can to about barriers historically, mean, the I a years to conversation the --

Aristides Pittas

It you for takes through was the people suddenly was when, back and time new XXXX ships. years. need wanted especially the there the boom open, done were we them. a were open. in of has and saw, being them by couple shipyards market this a it's And time again, markets shipyard, to no remember, If most the going of build they And corrected, in China,

now increase new to try was people shipyard of that And any movement suffering the right a significantly shipyards. to at capacity all. by there don't I So build see lot

Tate Sullivan

Are I future to Okay. ships you been regulations? to Are starting demand potential newer to if of regulations. what's so? a seeing cleaner right customers potential starting environment newer kind request that Shifting ships, the already -- mean clients enforcement way environmental of of that's overhang, to the the are ownership? for doing future they've you put

Aristides Pittas

vessels I will much quite is live which everybody built. everybody use like more to exists ships being be But fuel-efficient and has else more some and having think what newer efficient. what is exist, see one live it that with would with to until vessels is available, we what to time and

day can we help will I to want the quite as do we conventional to So that have we we the ships for anticipate environment, the such, practicalities so continue whilst what of that some that the all time. with

Tate Sullivan

Thank Aristides. much, very Great. you

Aristides Pittas

Thanks Tate.

Operator

now is will Please question. the you. now your And ahead next line Thank go ask The we and question. take open.

Poe Fratt

the Fratt Poe from the Alliance Partners. Hi, could newbuilds. side talk it's on equation if you Global Aristides, other of about

fairly potentially the might over order would 'XX. confidence short. You What 'XX on to consider visibility contracts next you any you a something couple spec newbuild? that without the years? There's about longer-term see being extended into drive in times Contracts market. talked delivery no still and of building develop Would you is

Aristides Pittas

I you Well, nail think hit there. the

long-term only and taking higher periods, you but seeing the can XX% we XX%, vessels where charters are than not couple are ships charters today people can We newbuilding In reluctant ago. for higher rates have toward that and get that's a at why therefore, is the container drybulk, ships prices everybody were in see investment. do at years orders us, drybulk justify which not of what they longer

reason main this the is and this ordering. think drybulk I between discrepancy ordering container that you So see

Poe Fratt

helpful. new And on That's for you fleet about the to you regulations. and XXXX more can doing your what specific regulations? now prepare you environmental be and then between you're Great. Can talked little a --

Aristides Pittas

a will what of ships, and be speed market. indeed, market will of which, course, it comply comply the new doing regulations at because thing this the with good ships the to that end, that is with They be as in reduces will supply with able we vessels. the of existing obviously, will the house painting effectively, the the fully to the is so help But various be resistance. are is the to of speed a whole most regulations. less thing Even this regulations new maximum for comply going will important reduce there with reduce initiatives vessel, Well, everybody to the

The and are when reduce your more of in small So and little you not efficient, these cut when biggest paint improvement it improvements. drydock in the routes, trying and but small significantly you your done nicely significant things optimizing are course, you to the resistance, ship bit a They make you numbers. comes are very being engines the speed.

Poe Fratt

Okay. I the for you first on day, next the and calculate us And was walk the OpEx correctly months $X,XXX about Tasos guiding your then XX Can to the $X,XXX range a the your roughly in -- if in day. quarter, per bit Is through also, that? prices? the gradual a bunker on the change there a more the step will it higher should drivers sort clearly little -- second fuel of first And Or see increase? quarter? in be we in

Tasos Aslidis

I part think because pay of expensive for inflation, obviously. like works rate, And also that and the for it's like. time the increased and us and the getting pension an management the euros things exchange certain we become in Partly more lubricants the is being cheaper. fees

I positioning right much pretty next and now compared a think to in crew expect challenge, and the increase XXXX. be to in see the safety overall we both them. the higher costs to levels over getting continue quarter So to Cooling

tightness the board, are from there the primarily that increases we in the across and overall coming think market I [indiscernible] inflation see.

Poe Fratt

And broadly if capital could Okay. context. the talk about allocation we in then

through for over assets, talk in might discount said whether a at us walk broadly or for form arguably, you share fairly close your a we dividend? the time discount potentially, continue might to your you you or a to stock assets of paying consider to Can point you're some opportunities but at just find some is trading can wide expect cash what in You to the Or next those be. buyback allocation and implementing companies, reasonable like program about returning NAV NAV what capital standpoint? shareholders you'd XX from months the other from second-hand

Aristides Pittas

in is at good say, level. big trading our you we and as a are what we -- is the discount that's to Board question, at NAV. our -- There this So discussing this Board continuously very a are

you buy and one So your be would investment. a that thus, could back stock good that say would

is to also we a I markets very that we then. size company, as sufficient costs small the as company, are that think have more the an the bigger efficient is especially same are and have operating companies because capital for and that problem Our much be operating

share for becoming of would company reduce So -- stock. the markets and marketing back are buy but are discussing liquidity capital increase is we're will doing do our from better a the of were essentially of price what if the towards I of to to are. NAV what would our what we that hoping and the with the think perspective, we And that and who a we share and which size we -- company smaller, on able the price stock, -- the be we prospects

of yet So or the share follow have paying we this review. to this reason always is under dividends such policy doing but buybacks, is

Poe Fratt

Yes. Understood.

over set the an buyback drawdown? air in or help while, Just were some seems that maybe quarters. volatile, is so than Just pocket. place, a floor stock would couple And a might even last dampen that if there's small stock your seen share higher we've in maybe buyback what the a once thoughts. of It minimize sharp just like every

Aristides Pittas

Appreciate it.

Operator

question Sullivan. And from Tate [Operator a you. have we follow-up Thank Instructions].

Tate Sullivan

you halls there my quarter of an in reported related years costs drydocking they make drydocking taking that to are first you Aristides this to other to Are the costs next the do couple as Is when pushing? mentioned you rather. earlier? expect fuel drydock the them we and see what follow-up. the Hi, in increase thank And you should more well? things the on do for can ships that -- painting made mean you're higher. quarter forecasting, that I Tasos, the

Tasos Aslidis

are to ships fact cost, little like at say fair deal older the the more. three and vessels, the that it's of to for drybulk later or probably, through have that. a a they months drydock Part that the cost this with they with age, deal increase and pass other will issues over aging if our think, a go I to especially XX years the next

Aristides Pittas

in unit shipyards all the cost But have also increased significantly. the

a ton of increased of XX%. replacement the So has steel

So every increasing over year, unit cost in the every shipyard has last been component.

Tasos Aslidis

component. Every

Tate Sullivan

then And up the capital allocation Great. question. following Okay.

debt. secured reduce quarter? almost quarter, in purchases ship finance ship or the financing you mostly and add with last buying the ship cash Are you and stewardship With purchases you're all this financing the expecting to of

Tasos Aslidis

We talk put our which thing the look own to leisure the bank are with were what are funds. finance about have looking of to considering last this to both to best to we market we -- considering acquisitions, bought But are and we terms.

other some need we if we to use, and have funding can find that So embedded capacity we financial vessels.

Tate Sullivan

Okay. you with just have rates you ships period. get buying in for this and how acquisitions can higher your you ships ships just talk stress prices then mean than in paying potential comfortable -- market, you. addressing about And current some this recent test I second-hand for Aristides the

Aristides Pittas

that's Sure. why vessel, and with a been time a time, We brought ship charter a always the by could have not the we ships. down we but was year reasonable level agreed mean end that old very be the fairly one I of the charter. one modern year at last the bought buying to we -- value

just at close we the of these go to charter, have to a make of into price it's even are need of buy. kind year, the high to So thoughts if ships to to able and sure a We the historical the is assumptions end median price price which charter. our that to selecting some process reduce

Tasos Aslidis

market the the amount would couple Tate, next fundamental comfort lows. is, the reason below say, I about all-time a of levels, good years say. almost be ratio, the at target X optimistic in to times think, you so to look XX, provides Slide it's -- I lever, also, And to for definitely of lows when not a at and that It's fair orderbook-to-fleet

Tate Sullivan

for you call. taking Thank my

Aristides Pittas

Thank you.

Operator

further floor I Pittas. to ahead, sir. questions now Thank Aristides the the go as moment. you. will pass Please no And over of

Aristides Pittas

for months' to again be call. taking the three in with all our you time. Thank We'll to listen time Bye. you

Tasos Aslidis

everybody. Thanks,

Operator

conference concludes you our Thank That Thank for you. participating. for today. all

You now may disconnect.

EuroDry (EDRY) 18 May 222022 Q1 Earnings call transcript