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Wednesday, May 20, 2020
EuroDry Ltd. (EDRY)
Fine-tuning 2020 EBITDA Estimate. Challenges Ahead, But Outlook Positive.
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.
Adjusted 1Q2020 EBITDA of $0.8 million was weaker than expected due to lower TCE rates of $7,885/day. 1Q2020 TCE revenue of $4.9 million was below expectations by $1.6million, as TCE rates tied to indices were lower than expected and more than offset higher shipping days.
Fine-tuning 2020 estimate. Following the management call, we are moving adjusted 2020 EBITDA estimate lower to $5.7 million based on TCE rates of $8,684/day, down from $6.3 million based on TCE rates of $8,909/day. Given the current weakness in the dry bulk market environment and COVID-19 uncertainty, we are forecasting that weak TCE rates linger into next quarter before recovering in late 3Q2020. There were limited changes in the contract status update, with…
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This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
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certification and important disclosures included in the full report.
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