EuroDry Ltd.
Q4 2020 Earnings Call Transcript

Published: 17 Feb 2021

[Operator:]

Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry conference call on the fourth quarter 2020 financial results. We have with us today, Mr. Pittas, Chairman and Chief Executive Officer; and Mr. Aslidis, Chief Financial Officer of the company. . I must advice you that this conference 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. Pittas, I would 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.

[Aristides Pittas:]

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Anastasios Aslidis, Chief Financial Officer. The purpose of today's call is to discuss our financial results for the year-end and quarter ended December 31, 2020. Please turn to Slide 3. Our income statement highlights are shown here. For the fourth quarter of 2020, we reported total net revenues of $6.4 million and a net loss of $0.3 million. Adjusted net loss attributable to the common shareholders was $0.8 million or $0.34 per share. Adjusted EBITDA for the period stood at $1.8 million. For the full year of 2020, our net revenues were $22.3 million and we had a net loss of $5.9 million. Adjusted net loss attributable to common shareholders was $6.9 million or $3.04 per share and adjusted EBITDA was $3.7 million. During the fourth quarter of 2020 and the beginning of 2021, the dry bulk market improved gradually and reached levels last seen in the fall of 2019, just before the COVID-19 pandemic took center stage. During the last week, we have really seen the market take off. The Baltic Panamax Index has jumped from $13,300 on February 1 to $18,300 yesterday and $21,300 today, a rise of about 40% in the last 3 weeks and a further rise of more than 20% in just 1 day today. Our CFO, Tasos Aslidis, will go over our financial highlights in more detail later on in the presentation. Please turn to Slide 4 for our chartering and operational highlights. Motor vessel Pantelis was fixed for a trip of about 50 to 55 days at $9,000 per day, thereafter fixed for about 80 to 100 days for $10,450 per day. The Tasos was fixed for about 25 to 30 days at $9,250 per day. And thereafter, it was fixed for about 20 to 25 days at $9,500 per day. And currently, it's fixed for about 45 to 55 days at $8,750 per day. Just so you can appreciate how the market has moved, had this large fixture been done today, this vessel would have been paid $19,000 per day, i.e., $10,000 per day more in just 2, 3 weeks. Lastly, Xenia was fixed at 105% of the Kamsarmax 5-time charter routes index for a period of about 20 months. Based on today's index, this implies about $24,000 for today.

[Anastasios Aslidis:]

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you through our financial results highlights for the fourth quarter and 12-month periods of 2019 and 2020. For that, let's turn to Slide 15. For the fourth quarter of 2020, the company reported total net revenues of $6.4 million, representing a 15.7% decrease over total net revenues of $7.6 million during the fourth quarter of 2019, which was the result of the decreased average time charter equivalent rates our vessels earned during the period as compared to last year. The company reported a net loss for the period of $0.3 million and a net loss attributable to common shareholders of $0.7 million as compared to net income of $1.4 million and net income attributable to common shareholders of $1 million for the same period of 2019. Interest and other financing costs for the fourth quarter of this year -- of last year amounted to $0.5 million as compared to $0.8 million for the same period of 2019. Interest charges during the fourth quarter of 2020 were lower due to lower level of debt during the period and the decreased LIBOR rates that our loans had to pay during the period as well. Depreciation expenses for the fourth quarter of 2020 amounted to about $1.65 million, remaining roughly unchanged compared to the same period of last year. Dry docking expenses of $0.5 million contributed to the result for last quarter as compared to dry docking expenses of $0.7 million during the fourth quarter of 2019. Adjusted EBITDA for the fourth quarter of 2020 was $1.8 million compared to $3.8 million achieved during the same period of 2019. Basic and diluted loss per share attributable to common shareholders for the fourth quarter of 2020 was $0.31, calculated on about 2.3 million basic and diluted weighted average number of shares outstanding compared to earnings of $0.45 per share for the fourth quarter of last year of 2019.

[Aristides Pittas:]

Thank you, Tasos. We are ready to take any questions we may have.

[Operator:]

. And your first question comes from the line of Tate Sullivan from Maxim Group.

[Tate Sullivan:]

To start, just referring to your slide presentation, Slide 4, and thank you for the comments earlier on the Pantelis and Tasos contracts, and just looking sequentially, I mean, you did increase slightly the actual length of each of those contracts. Do you expect that trend can continue, given what you see currently for 2021, when those current contracts expire, please?

[Aristides Pittas:]

I mean today, starting rates, if the ships were open to be chartered today, we would be able to fix 3-month charters at around $19,000 a day. This is the current market. Unfortunately, we fixed about 3 weeks ago when the market hadn't taken off as it has very, very recently. So we'll have to wait for the conclusion of these charters before we're able to refix. But we anticipate that if the market is at similar levels, we will be able to do similar fixes.

[Tate Sullivan:]

And similar terms around three months, you said?

[Aristides Pittas:]

Yes.

[Tate Sullivan:]

Okay. And then related to those two, you mentioned in your prepared -- in the press release and prepared remarks, no scheduled downtime for 2021. Can that change with these two boats based on their future discussions with customers if you have to change your customer? Or what gives you that visibility? With no schedule, can that change...

[Aristides Pittas:]

With the current visibility that we have, firstly, we don't have any dry dockings during 2021, which obviously would be scheduled off-hire and result in the dry docking cost as we had this quarter with Xenia, for example, that stopped for 20 days, the money for that period and cost us $500,000 to pass through the dry dock. So we don't expect these kind of events. With a strong market or even if it's not as strong as this, rechartering the vessels will most probably be quite easy without involving any other additional off-hire time. So yes, we do not expect additional off-hire times.

[Tate Sullivan:]

Okay. And then the last for me is consolidation platform with your public vehicle that you mentioned in the press release, in terms of the scale of opportunity, is it -- are there hundreds of private operators out there? Are you looking at evaluating purchasing new ships every day? Or can you comment on, I mean, the flow of opportunities, please, if you can?

[Aristides Pittas:]

Yes. It's not huge, the flow of opportunities. And in order for us to get into a discussion about some kind of en bloc acquisition or merger, we have to feel a little bit comfortable with our share price. We think our share price has still the chance of appreciating. Because with trading, we calculated the discount to the NAV, which as Tasos said, we calculate around $14, $15. So if we trade at those levels, I think we will become attractive and people will want to get the public listing and be part of a public vehicle. And we can have things happening. But these opportunities, they're not hundreds, of course. They are 2 or 3 that we are have had some preliminary discussions, nothing that is running strongly at this moment. Most probably, we could see a possible further acquisition of a single vessel in the traditional way.

[Operator:]

There are no further questions at this time. . And we seem to have no further questions. I would now like to hand you back to the CEO, Aristides Pittas, for closing remarks.

[Aristides Pittas:]

Thank you. Thank you all, who participated in our today's call. We will come back to you at the end of the next quarter, which promises to be a very exciting quarter. Thank you.

[Anastasios Aslidis:]

Thanks, everybody.

[Operator:]

That does conclude our conference for today. Thank you for participating. You may all disconnect.