EuroDry posts improved quarterly results

EuroDry

EuroDry, an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced its results for the three- and twelve-month periods ended December 31, 2019.

Fourth Quarter 2019 Highlights:

  • Total net revenues of $7.6 million. Net income of $1.4 million; net income attributable to common shareholders (after a $0.4 million dividend on Series B Preferred Shares) of $1.03 million or $0.45 earnings per share basic and diluted. Adjusted net income attributable to common shareholders1 for the period was $0.98 million or $0.43 per share basic and diluted.
  • Adjusted EBITDA1 was $3.8 million.
  • An average of 7.0 vessels were owned and operated during the fourth quarter of 2019 earning an average time charter equivalent rate of $12,439 per day.
  • The Company declared its fourth cash dividend of $0.4 million on its Series B Preferred Shares.

Full Year 2019 Highlights:

  • Total net revenues of $27.2 million. Net income of $0.02 million; net loss attributable to common shareholders (after a $1.7 million dividend on Series B Preferred Shares and a $0.2 million preferred deemed dividend arising out of the redemption of approximately $4.3 million of Series B Preferred Shares in the second quarter of 2019) of $1.9 million or $0.85 loss basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $1.6 million or $0.69 adjusted loss per share basic and diluted.
  • Adjusted EBITDA1 was $10.3 million.
  • An average of 7.0 vessels were owned and operated during the twelve months of 2019 earning an average time charter equivalent rate of $11,190 per day.

The Spin-off
Euroseas Ltd. (“Euroseas”) contributed to the Company seven subsidiaries comprising its drybulk fleet of six vessels, one Ultramax and two Kamsarmax vessels built between 2016 and 2018, and three Japanese-built Panamax vessels built between 2000 and 2004. The Company was spun-off from Euroseas Ltd. on May 30, 2018. Comparative period results for the full year 2018 reflect the results of the carve-out operations of the seven subsidiaries that were contributed to the Company from Euroseas.

Aristides Pittas, Chairman and CEO of EuroDry commented: “During the fourth quarter of 2019, the drybulk market experienced a decline in rates which in some cases exceeded a 20% drop compared to third quarter’s rates. This decline in rates was not fully reflected in the net revenues and time charter equivalent rate of the fourth quarter of 2019, due to the fact that certain vessels were employed under long-term time charters fixed in prior periods and certain vessels were fixed at favourable rates during the third quarter of 2019 running through the fourth quarter of 2019. However, the market continued declining during January and February of 2020 as, on the top of trade uncertainties which by December 2019 seemed to be subsiding, new concerns were added regarding the effects of the coronavirus epidemic on the world growth and trade.

The positive by-product of the uncertainties in the marketplace is the limited numbers of new orders placed and the declining orderbook as a percentage of the fleet. Thus, we continue to believe that drybulk markets could offer significant opportunities for sizable returns in the medium term.

In the capital markets, we continue to pursue opportunities to merge with other fleets to grow the company providing a platform for consolidation. At the same time, we are pursuing initiatives to increase EuroDry’s visibility amongst investors. We believe that such increased visibility with investors will help reduce the significant discount to the NAV our stock trades at, thus, offering additional upside to our shareholders and new investors alike.”

Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The operating results of the fourth quarter of 2019 reflect the average level of charter rates our vessels enjoyed during the quarter which was similar to the average time charter equivalent rate our vessels earned in the fourth quarter of 2018.

Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, increased approximately 2.7% during the fourth quarter of 2019 compared to the same quarter of last year, while for the full year 2019 we had a decrease of approximately 7%. This decrease is mainly due to the lower general and administrative expenses incurred in the twelve months of 2019 compared to the same period of 2018. In the same period of 2018 general and administrative expenses were higher due to expenses incurred for the Spin-off and the operation of the Company as a separate public company. As always, we want to emphasize that cost control remains a key component of our strategy.

Adjusted EBITDA during the fourth quarter of 2019 was $3.8 compared to $3.5 million achieved for the fourth quarter of last year. As of December 31, 2019, our outstanding debt (excluding the unamortized loan fees) was $56.9 million versus restricted and unrestricted cash of approximately $9.1 million.”

Fourth Quarter 2019 Results:
For the fourth quarter of 2019, the Company reported total net revenues of $7.6 million representing a 8.8% increase over total net revenues of $7.0 million during the fourth quarter of 2018 which was the result of the increased average number of vessels in the fourth quarter of 2019 compared to the same period of 2018. The Company reported net income for the period of $1.4 million and net income attributable to common shareholders of $1.0 million, as compared to net income of $0.8 million and net income attributable to common shareholders of $0.6 million for the same period of 2018. Depreciation expenses for the fourth quarter of 2019 amounted to $1.6 million compared to $1.5 million for the same period of 2018.

Interest and other financing costs for the fourth quarter of 2019 amounted to $0.8 million compared to $1.1 million for the same period of 2018. Interest during the fourth quarter of 2019 was lower due to lower debt during the period as compared to the same period of last year.

On average, 7.0 vessels were owned and operated during the fourth quarter of 2019 earning an average time charter equivalent rate of $12,439 per day compared to 6.3 vessels in the same period of 2018 earning on average $12,513 per day.

Adjusted EBITDA for the fourth quarter of 2019 was $3.8 million compared to $3.5 million achieved during the fourth quarter of 2018.

Basic and diluted earnings per share attributable to common shareholders for the fourth quarter of 2019 were $0.45 calculated on 2,261,103 basic and diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $0.25 for the fourth quarter of 2018, calculated on 2,240,794 basic and 2,250,946 diluted weighted average number of shares outstanding.

Excluding the effect on the earnings attributable to common shareholders for the quarter of the unrealized loss / (gain) on derivatives, the adjusted earnings attributable to common shareholders for the quarter ended December 31, 2019 would have been $0.43 per share basic and diluted compared to adjusted earnings of $0.32 per share basic and $0.31 per share diluted for the quarter ended December 31, 2018. Usually, security analysts do not include the above item in their published estimates of earnings per share.

Full Year 2019 Results:
For the full year of 2019, the Company reported total net revenues of $27.2 million representing a 11.0% increase over total net revenues of $24.5 million during the twelve months of 2018, as a result of the increased average number of vessels in the Company’s fleet partly offset by the decrease in the average time charter equivalent rate our vessels earned in the twelve months of 2019 compared to the same period of 2018. The Company reported net income for the period of $0.02 million and a net loss attributable to common shareholders of $1.9 million, as compared to net income of $1.1 million and net income attributable to common shareholders of $0.6 million, for the twelve months of 2018. Vessel operating expenses were $10.8 million for the twelve months of 2019 as compared to $9.2 million for the same period of 2018, mainly due to the increased average number of vessels operated. Depreciation expenses for the twelve months of 2019 were $6.5 million compared to $5.4 million during the same period of 2018. Interest and other financing costs for the twelve months of 2019 amounted to $3.5 million compared to $2.9 million for the same period of 2018. This increase is due to higher average outstanding debt in the twelve months of 2019 compared to 2018 and due to interest capitalized in 2018 during the construction period of m/v Ekaterini.

On average, 7.0 vessels were owned and operated during the twelve months of 2019 earning an average time charter equivalent rate of $11,190 per day compared to 5.7 vessels in the same period of 2018 earning on average $12,484 per day. In the twelve months of 2019, two vessels underwent special survey and one vessel underwent intermediate survey for a total cost of $1.7 million, as compared to two vessels that underwent special survey and one vessel that underwent intermediate survey in the twelve months of 2018 for a total cost of $1.5 million.

Adjusted EBITDA for the twelve months of 2019 was $10.3 million compared to $9.4 million achieved during the twelve months of 2018.

Basic and diluted loss per share attributable to common shareholders for the twelve months of 2019 was $0.85, calculated on 2,251,439 basic and diluted weighted average number of shares outstanding compared to earnings of $0.25 per share basic and diluted for the twelve months of 2018, calculated on 2,232,821 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss attributable to common shareholders for the year of the unrealized (gain) / loss on derivatives, the adjusted loss per share attributable to common shareholders for the year ended December 31, 2019 would have been $0.69 compared to adjusted earnings of $0.25 per share basic and diluted for 2018. As previously mentioned, usually, security analysts do not include the above items in their published estimates of earnings per share.

 

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