Monday, February 14, 2022

EuroDry (EDRY)
Looking Beyond Seasonal Volatility

EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands and trades on the NASDAQ Capital Market under the ticker EDRY. EDRY is the product of a spin-off of the dry bulk fleet by Euroseas (ESEA) completed in May 2018. For every five ESEA shares, ESEA shareholders received one EDRY share. There are currently ~2.2 million EDRY shares outstanding. EuroDry operates in the dry bulk shipping markets. EuroDry’s operations are managed by Eurobulk Ltd., an affiliated ship management company, and Eurobulk FE (Far East) Ltd, which are responsible for the day-to-day commercial and technical management and operation of the fleet. EuroDry employs the fleet on spot and period charters and through pool arrangements.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

A solid quarter caps a strong year. Reported adjusted 4Q2021 EBITDA of $16.0 million included minimal dry dock expenses, which was ~$3.0 million higher than 3Q2021. TCE rates averaged $29,157/day. Reported adjusted 2021 EBITDA of $42.3 million included minimal dry dock expenses, which was well above 2020 adjusted EBITDA of $6.2 million. TCE rates averaged $24,222/day.


Adjusting 2022 EBITDA estimate to $59.4 million based on TCE rates of $25.8k/day.  Visibility is limited with forward cover of 19% and seasonality is expected, but acquisitions and a well balanced dry bulk market set a good tone for this year. While visibility is low, operating leverage is very high; each $1.0k/day change in the BKI/BPI/BSI indices impacts cash flow by +/- $1.4 million, or …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.