Eurodry Ltd. Q1 FY2025 earnings call

Share Repurchase

• Since initiating the 10 million share repurchase program in August 2022 (extended twice until August 2025), EuroDry has repurchased 334,000 shares totaling $5.3 million and intends to continue opportunistic purchases at current price levels.

Vessel Delivery

• Delivered the motor vessel Tasos, recording a net book profit of $2.1 million.

Chartering

• Majority of fixes are short-term or longer-term, preferring operational flexibility over low rates offered currently.

Operational Issues

• Motor vessel Blessed Luck was commercially off-hire for approximately 11.6 days, and motor vessel Tasos experienced 6.5 days commercial off-hire during the quarter.

In the first quarter of 2025, EuroDry reported total net revenues of $9.2 million. The net loss attributable to controlling shareholders was $3.7 million or $1.35 loss per basic and diluted share. Adjusted net loss attributable to controlling shareholders was $5.7 million or $2.07 loss per basic and diluted share, and adjusted EBITDA was a negative $1 million. The company's current fleet consists of 12 vessels with an average age of around 13.6 years and a total carrying capacity of approximately 843,000 deadweight tons. Additionally, 2 Ultramax vessels under construction are scheduled for delivery in the second and third quarters of 2027, which will increase the fleet to 14 vessels with a total carrying capacity of approximately 970,000 deadweight tons.

Fleet Modernization

• Intends to sell elder vessels and replace them with younger ones depending on market movement. Expect to take delivery of 2 newbuildings in 2027 and potentially buy more modern vessels if the market allows.

Share Repurchases

• Will continue to execute share repurchases opportunistically at current price levels, reflecting confidence in the company's long-term value.

• Dry bulk market weakness due to low rates.
• Macroeconomic uncertainties including revised global GDP growth forecasts.
• Trade tariffs and geopolitical instability in the Red Sea.
• Slow demand recovery in the dry bulk sector.
• Regulatory uncertainties affecting vessel scrapping and fuel transition.

Q: Vessel operating expenses compared to the prior year period rose, should we expect this level of spending to continue in Q2 and Q3? Or was this front-loaded?

A: Judging from Q1 numbers, it's premature. Budget for OpEx this year was 2% higher than last year's budget, with a 2% overrun in Q1. Wait until first half completed to assess OpEx levels.

Q: What's your forecast for scheduled commercial and operational off-hire days for the remainder of the year, particularly for the dry docking?

A: We just had one dry docking this year, otherwise no other scheduled stoppages. Expect ~1.5 days per quarter on average, with minimal drydocking.

Q: You sold the MV Tasos, can you provide commentary on how you're managing your fleet be it vessel acquisitions, sales, joint ventures or even mergers or acquisitions with other operators?

A: Strategy is to eventually sell other elder vessels and replace them with younger ones. Depending on market movement in the next few months, will look to modernize the fleet. Will take delivery of 2 newbuildings in 2027 and may buy more modern vessels if market allows.

Q: Do you have active opportunities to scrap the other old vessels? Is there a quick negotiation time to decide to scrap and do so?

A: We scrapped Tasos (built 2000). Other vessels built 2004 have passed special survey. No active scrap candidates at this point, but slight pickup in scrap activity possible if market doesn't recover strongly.

Q: Can you talk about the newbuild program? Will there be any newbuild payments in the rest of the year? And plan for 2026?

A: There might be a payment in the fourth quarter for the 2 newbuildings. In 2026, there should be at least another 2 payments per vessel, totaling ~$14.4 million in 2026.

Q: It didn't look like you bought any stock back in the first quarter. Is there anything that prevented you from buying stock back?

A: Two reasons: very limited liquidity in the stock during the last few months and market fluctuations. If liquidity allows and market conditions improve, will opportunistically buy back stock.