Thursday, August 05, 2021

Genco Shipping & Trading Limited (GNK)
In Line Quarter and New Acquisitions Have Positive Impact

Genco Shipping & Trading Limited, incorporated on September 27, 2004, transports iron ore, coal, grain, steel products and other drybulk cargoes along shipping routes through the ownership and operation of drybulk carrier vessels. The Company is engaged in the ocean transportation of drybulk cargoes around the world through the ownership and operation of drybulk carrier vessels. As of December 31, 2016, its fleet consisted of 61 drybulk carriers, including 13 Capesize, six Panamax, four Ultramax, 21 Supramax, two Handymax and 15 Handysize drybulk carriers, with an aggregate carrying capacity of approximately 4,735,000 deadweight tons (dwt). Of the vessels in its fleet, 15 are on spot market-related time charters, and 27 are on fixed-rate time charter contracts. As of December 31, 2016, additionally, 19 of the vessels in its fleet were operating in vessel pools.

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

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

2Q2021 EBITDA of $50.6 million and TCE rates of $21.1k/day in line with estimates. Call with management today at 8:30am EST and number is 323-289-6581. Three new Ultra acquisitions and another Supra sale were announced. Also, a new $450 million credit facility (term loan of $150 million and revolver of $300 million) has been lined up. We expect the call will highlight solid 3Q2021 forward cover and good progress on shifting toward the new capital allocation strategy that includes paying variable dividends in 1Q2022.


Increasing 2021 EBITDA estimate to $203 million based on TCE rates of $20.7k/day from $200 million and TCE rates of $20.2k/day.  3Q2021 forward cover is high with Capes 66% booked at $31.3k/day and Ultras/Supras 75% booked at $25.3k/day. Three new time charters signed, but visibility is limited beyond one quarter out …

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. 

Thursday, August 05, 2021

Grindrod Shipping (GRIN)
Webcast With CEO Reinforces Positive Stance

Grindrod Shipping, originated in South Africa with roots dating back to 1910. The company is based in Singapore, with offices around the world including, London, Durban, Cape Town, Tokyo and Rotterdam. Its primary listing is on Nasdaq and secondary listing on the JSE.

Grindrod Shipping owns and operates a diversified fleet of owned, long-term chartered and joint-venture dry-bulk and liquid-bulk vessels across the globe.

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

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

Capital Link sponsored web cast reinforced our positive stance on GRIN and the dry bulk market. In yesterday’s presentation, CEO Martyn Wade stated again that dry market fundamentals are staying better than expected and shippers remain focused on “just in case” instead of “just in time”. Supply/demand fundamentals remain favorable and TCE rate performance was solid in 1H2021. 2H2021 is off to a good start and the dry bulk market remains firm. Demand has rebounded on the back of global stimulus packages and solid secular minor bulk trends.


IVS Bulk joint venture interest of 31.1% acquisition for $46.3 million was very attractive move.  The move effectively expands the fleet by ~3.7 vessels and eliminates the last jv interest. Pricing based on May 13th appraisal and April 30th financials, and interim improvement captured by GRIN. Combo of IVS Bulk cash, a new credit line of $23 million to redeem IVS Bulk preferred and GRIN cash after …

This Company Sponsored 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. 

Genco Shipping & Trading Limited Announces Second Quarter Financial Results

 

New Credit Facility for Global Refinancing Marks a Key Milestone Towards Implementation of Genco’s Comprehensive Value Strategy

Genco Agrees to Acquire Three Modern, Fuel Efficient Ultramax Vessels

Reports Highest Quarterly Earnings Per Share Since 2010

NEW YORK, Aug. 04, 2021 (GLOBE NEWSWIRE) — Genco Shipping & Trading Limited (NYSE:GNK) (“Genco” or the “Company”), the largest U.S. headquartered drybulk shipowner focused on the global transportation of commodities, today reported its financial results for the three months and six months ended June 30, 2021.

The following financial review discusses the results for the three months and six months ended June 30, 2021 and June 30, 2020.

Second Quarter 2021 and Year-to-Date Highlights

• As part of Genco’s comprehensive value strategy announced in April 2021, we have taken the following steps in the year-to-date:
  • Entered into an agreement for a new $450 million credit facility (the “$450 Million Credit Facility”) to refinance our existing $495 Million Credit Facility and $133 Million Credit Facility, which provides additional flexibility for capital allocation, lowers our cash flow breakeven rate, and improves key terms
  • New facility consists of a $150 million term loan and a revolving line of up to $300 million that can be used for acquisitions and general corporate purposes
  • Agreed to acquire an additional three modern, fuel efficient Ultramax vessels in July 2021, bringing our total to six Ultramaxes we have agreed to acquire since April 2021
  • Repaid $82.2 million of debt during the first half of 2021, or 18% of the beginning year debt balance
    • Expect to close the refinancing of our credit facilities by the end of August and continue to pay down debt under the new facility’s revolver through the end of the year, advancing towards our goal of 20% net LTV by year end
  • Fixed three Ultramax vessels on period time charters for approximately two years each at rates between $23,375 and $25,500 per day
• Genco increased its regular quarterly cash dividend to $0.10 per share for the second quarter of 2021
  • Payable on or about August 25, 2021 to all shareholders of record as of August 17, 2021
  • We have now declared cumulative dividends totaling $0.905 per share over the last eight quarters
  • Genco is targeting Q4 2021 results for its anticipated first dividend under its new corporate strategy, which would be payable in Q1 2022
• We recorded net income of $32.0 million for the second quarter of 2021
  • Basic and diluted earnings per share of $0.76 and $0.75, respectively
  • Represents our highest quarterly earnings per share result since 2010
• Voyage revenues totaled $121.0 million and net revenue¹ (voyage revenues minus voyage expenses and charter hire expenses) totaled $76.0 million during Q2 2021
  • Our average daily fleet-wide time charter equivalent, or TCE¹, for Q2 2021 was $21,137, marking our highest quarterly TCE since Q4 2010
  • We estimate our TCE to date for Q3 2021 to be $27,599 for 71% owned fleet available days, based on current fixtures
• Recorded adjusted EBITDA of $50.2 million during Q2 2021¹
  • During the first half of 2021, adjusted EBITDA totaled $70.9 million nearly identical to our full year 2020 adjusted EBITDA of $71.8 million
• Maintained a strong financial position with $161.2 million of cash, including $44.9 million of restricted cash, as of June 30, 2021
• During the third quarter, we plan to establish a new joint venture, GS Shipmanagement Pte. Ltd., with The Synergy Group (“Synergy”) for the technical management of our fleet, which aims to unlock further value for shareholders through its differentiated approach to ship management
• Entered into an initial framework to jointly study the feasibility of ammonia as an alternative marine fuel alongside various participants across the maritime value chain
• Ranked #1 out of 52 other public shipping companies in the Webber Research 2021 ESG scorecard
• We have agreed to sell our oldest vessel, the Genco Provence (2004-built Supramax) which we expect to deliver to the buyer by October 2021

John C. Wobensmith, Chief Executive Officer, commented, “The second quarter of 2021 was a transformative period for Genco, highlighted by the execution of several key initiatives under our comprehensive value strategy, focused on dividends, deleveraging and growth. We are pleased with the significant progress we are making working towards paying the first dividend under this strategy, while continuing to pay dividends to shareholders under our current policy.”

Mr. Wobensmith continued, “The foundation of our value strategy, which was announced in April, is our strong balance sheet and capital structure. Our recently agreed upon global credit facility refinancing further enhances Genco’s capital structure, providing additional flexibility, reducing our cash flow breakeven rates to industry lows, and supporting sustainability of quarterly dividends through diverse market environments. Additionally, we continued to opportunistically expand our fleet at a unique point in the cycle, seeking to capture the disconnect between decade high freight rates and asset values that have yet to catch up, which has resulted in compelling return on capital opportunities. In terms of our operating performance, our second quarter results represent our highest EPS and TCE since 2010, while our current fixtures for the third quarter to date point to further improvements. Looking ahead, the near-term market dynamics are highly supportive, and we continue to believe that the constrained overall supply picture for the next several years will provide a low baseline for demand growth to have to exceed in order to move freight rates higher.”

¹ We believe the non-GAAP measure presented provides investors with a means of better evaluating and understanding the Company’s operating performance. Please see Summary Consolidated Financial and Other Data below for a further reconciliation.

Credit Facility Refinancing

On August 3, 2021, as a key step of our comprehensive value strategy, we entered into the $450 Million Credit Facility, which consists of a 5-year term loan portion together with a sizeable revolver that can be used for growth. We intend to use the $450 Million Credit Facility for a global refinancing of our previous two credit facilities. This new debt structure will provide improved capital allocation flexibility and significantly reduce our cash flow breakeven rate, which, combined with the strength of our balance sheet provides a solid foundation for the implementation of our value strategy. The $450 Million Credit Facility provides for a revolving line of up to $300 million which can be used for acquisitions and general corporate purposes. Based on current market conditions and management’s estimates, we are targeting debt outstanding at December 31, 2021 to be approximately $250 million following targeted voluntary debt paydowns totaling approximately $117 million in the second half of this year.² Importantly, if we make these targeted paydowns, we will have no mandatory debt amortization payments until December 2025, or later if we make additional voluntary paydowns. Regardless of this favorable mandatory amortization schedule, we plan to continue to voluntarily pay down our debt with the medium term objective of reducing our net debt to zero.

Key terms of the $450 Million Credit Facility are as follows:

• Competitive pricing of LIBOR+ 2.15% to LIBOR+ 2.75% basis a net debt to EBITDA measurement which may be further decreased or increased based on our performance regarding emissions targets
• Quarterly revolver commitment reductions of $11.7 million per quarter followed by a balloon of $215.6 million
• Favorable covenant package including a minimum liquidity covenant requiring our unrestricted cash and cash equivalents to be the greater of $500,000 per vessel or 5% of total indebtedness, while unused revolver commitments can be used against this measurement
• Other customary financial covenants, including a minimum collateral maintenance covenant at 140%, a minimum working capital covenant of not less than zero, and a debt to capitalization covenant of no more than 70%
• Vessel replacement feature whereby collateral vessels can be sold or disposed of without prepayment of the loan if a replacement vessel or vessels meeting certain requirements are included as collateral within 360 days of such sale or disposition
• No restrictions on dividends other than customary event of default and pro forma financial covenant compliance provisions

Importantly, five of our vessels to be acquired will remain unencumbered and not pledged as collateral for this new facility. This will provide Genco with further flexibility and optionality on a go-forward basis.

As of June 30, 2021, Genco had $367.0 million of debt outstanding, gross of unamortized deferred financing costs. During the first half of 2021, Genco paid down a total of $82.2 million of debt including a prepayment of its scrubber and revolving credit facilities. In July 2021, we paid down an additional $9.4 million of debt. Borrowings under the new credit facility are subject to customary closing conditions.

² Target paydown is based on management’s estimate of expenses and capital expenditures through the end of the year and net revenues based on current fixtures to date, rates under the current forward freight agreement (FFA) curve less 10% and adjusted for the size and specifications of the vessels in our fleet, including vessels under contract from their expected delivery dates, as well as assumed premiums for our scrubber-fitted vessels. We have applied sensitivity to the current FFA curve in using it as an illustrative assumed rate as more conservative than using the unmodified rate. This is not a prediction of rates. Actual rates will vary.

Comprehensive Value Strategy Update

Genco’s comprehensive value strategy is centered on low financial leverage, paying quarterly cash dividends to shareholders based on cash flows after debt service less a reserve, and growth of the Company’s asset base. We believe this strategy will be a key differentiator for the Company and drive shareholder value over the long-term.

Drawing on one of the strongest balance sheets in the industry, Genco has utilized a phased in approach to further reduce its debt and refinance its current credit facilities in order to lower its cash flow breakeven levels and position the Company to pay a sizeable quarterly dividend across diverse market environments. We maintain significant flexibility to grow the fleet through accretive vessel acquisitions. Genco is targeting Q4 2021 results for its anticipated first dividend under its new corporate strategy, which would be payable in Q1 2022.

In implementing this strategy, the Company has taken the following measures to date:

• Deleveraging: paid down $82.2 million of debt during the first six months of 2021, or approximately 18% of our outstanding debt
• Refinancing: entered into a new global credit facility to increase flexibility, improve key terms and lower cash flow breakeven rates
• Growth: agreed to acquire six modern, fuel efficient Ultramaxes since April 2021
• Securing revenue: opportunistically fixed various period time charterers to secure cash flows and de-risk recent acquisitions

For the second quarter of 2021, Genco declared a cash dividend of $0.10 per share. This represents an increase of $0.05 per share compared to the previous quarter. Our quarterly dividend policy and declaration and payment of dividends are subject to legally available funds, compliance with applicable law and contractual obligations (including our credit facilities) and the Board of Directors’ determination that each declaration and payment is at the time in the best interests of the Company and its shareholders after its review of our financial performance.

Technical Management Joint Venture

During the third quarter, we plan to establish a new joint venture, GS Shipmanagement Pte. Ltd., owned 50% by Genco and 50% by The Synergy Group to be the new technical manager of our fleet. We expect the creation of this newly formed joint venture will accomplish the following:

• Increase visibility and control over vessel operations
• Increase fleet-wide fuel efficiency to lower our carbon footprint through an advanced data platform
• Unlock potential vessel operating expense savings
• Provide a unique and differentiated service to the management of our vessels

Genco currently has eight vessels under the technical management of Synergy, all of which will be transferred to the joint venture in the near term. For the balance of the fleet, notice of withdrawal has been provided to our two other existing ship managers Anglo-Eastern and Wallem Shipmanagement, and we plan to transition technical management of all of our vessels to the joint venture during the next three to five months. Synergy, headquartered in Singapore, provides technical management services to over 375 vessels of all vessel types including drybulk vessels, tankers, LNG vessels, container ships and car carriers with offices in 12 countries and ship routes all over the globe. Synergy’s vast experience across different sectors of shipping, reputation for excellence in all areas of ship management, and focus on innovation as well as sustainability provide strong building blocks for a mutually beneficial partnership.

Genco’s active commercial operating platform and fleet deployment strategy

Overall, we utilize a portfolio approach towards revenue generation through a combination of short-term, spot market employment as well as opportunistically booking longer term coverage. Our fleet deployment strategy currently remains weighted towards short-term fixtures, which provide us with optionality on our sizeable fleet. Our barbell approach towards fleet composition enables Genco to gain exposure to both the major and minor bulk commodities with a fleet whose cargoes carried align with global commodity trade flows. This approach continues to serve us well given the upside experienced in major bulk rates together with the continued improvement and relative stability of minor bulk rates.

Based on current fixtures to date, we estimate the following to be our TCE to date for the third quarter of 2021 on a load-to-discharge basis. Actual rates for the third quarter will vary based upon future fixtures. We have approximately ten Capesize vessels coming open in the coming weeks during this strong market, of which we plan to ballast select vessels to the Atlantic basin.

• Capesize: $31,304 for 66% of the owned available Q3 2021 days
• Ultramax and Supramax: $25,273 for 75% of the owned available Q3 2021 days
• Fleet average: $27,599 for 71% of the owned available Q3 2021 days

Our second quarter of 2021 TCE results by class are listed below.

• Capesize: $23,760
• Ultramax and Supramax: $19,215
• Fleet average: $21,137

Our second quarter TCE represents a 73% increase relative to Q1 2021. Furthermore, our estimated Q3 TCE based on current fixtures is 31% higher than Q2, highlighting our opportunistic and mostly spot oriented approach to fixture activity to capture a rising market. During the second and third quarters, we have selectively booked period time charter coverage for approximately one to two years on two Capesizes and four Ultramax vessels. We view these fixtures as part of our portfolio approach to fixture activity and prudent to take advantage of in the current firm freight rate environment. Specifically, the three Ultramax time charters for two years each were booked to de-risk the purchase of the three Ultramax vessels we agreed to purchase in July 2021 and are expected to result in an unlevered cash-on-cash return of approximately 50% over the two year period.

Fleet Update

Since April 2021, the Company has entered agreements to purchase six modern, fuel efficient Ultramax vessels including our most recent acquisition of three vessels agreed upon in July 2021. We expect to take delivery of these vessels between August 2021 and January 2022. Since December 2020, we have grown our core Ultramax fleet by nine vessels to a total of 15 vessels as we continue to modernize and expand our fleet at an attractive point in the drybulk cycle. A summary of our Ultramax acquisitions since Q2 2021 is below:

During the second quarter of 2021, we paid $21.6 million in advances for certain agreed upon vessels. For the third quarter of 2021, we anticipate paying $87.2 million to complete the acquisition of four vessels. Furthermore, in the first quarter of 2022, we expect to pay the remaining $40.8 million to acquire the two DACKS vessels above.

Regarding vessel divestitures, in July 2021 we delivered the Genco Lorraine, a 2009-built 53,000 dwt Supramax, to the new owner. We have also agreed to sell the Genco Provence, the oldest vessel in our fleet, for gross proceeds of $13.25 million. With this sale, we will also avoid drydocking capex scheduled for 2022 of approximately $0.8 million. We expect delivery to occur in the fourth quarter of 2021.

Financial Review: 2021 Second Quarter

The Company recorded net income for the second quarter of 2021 of $32.0 million, or $0.76 and $0.75 basic and diluted earnings per share, respectively. Comparatively, for the three months ended June 30, 2020, the Company recorded a net loss of $18.2 million, or $0.43 basic and diluted net loss per share. Net income for the three months ended June 30, 2021, includes a loss on sale of vessels of $0.02 million.

The Company’s revenues increased to $121.0 million for the three months ended June 30, 2021, as compared to $74.2 million recorded for the three months ended June 30, 2020, primarily due higher rates achieved by both our major and minor bulk vessels, as well as our third party time chartered-in vessels, which was partially offset by the operation of fewer vessels in our fleet. The average daily time charter equivalent, or TCE, rates obtained by the Company’s fleet was $21,137 per day for the three months ended June 30, 2021 as compared to $6,693 per day for the three months ended June 30, 2020. During the second quarter of 2021, drybulk freight rates reached multi-year highs led by increased global economic activity, recovering steel production and augmented demand for drybulk commodities in China as well as the rest of the world. These demand catalysts have been met by limited net fleet growth due to the historically low orderbook as a percentage of the fleet.

Voyage expenses were $36.7 million for the three months ended June 30, 2021 compared to $41.7 million during the prior year period. This decrease was primarily attributable to the operation of fewer vessels in our fleet, partially offset by an increase in bunker consumption. Vessel operating expenses decreased to $18.8 million for the three months ended June 30, 2021 from $21.1 million for the three months ended June 30, 2020, primarily due to fewer owned vessels during the second quarter of 2021 as compared to the second quarter of 2020, partially offset by COVID-19 related expenditures and higher crew related and spare expenses. General and administrative expenses increased to $5.9 million for the second quarter of 2021 compared to $5.5 million for the second quarter of 2020, primarily due to higher legal and professional fees. Depreciation and amortization expenses decreased to $13.8 million for the three months ended June 30, 2021 from $15.9 million for the three months ended June 30, 2020, primarily due to a decrease in depreciation for vessels that were sold during the second half of 2020 and the first half of 2021, as well as a decrease in depreciation for certain vessels in our fleet that were impaired during 2020. These decreases were partially offset by an increase in depreciation expense for the three vessels acquired during Q4 2020 and Q1 2021.

Daily vessel operating expenses, or DVOE, amounted to $5,151 per vessel per day for the second quarter of 2021 compared to $4,366 per vessel per day for the second quarter of 2020. This increase is primarily attributable to COVID-19 related expenditures and higher crew related expenses, as well as higher spares and stores related expenditures. We believe daily vessel operating expenses are best measured for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Based on estimates provided by our technical managers, our DVOE budget for 2021 is $5,000 per vessel per day on a fleet-wide basis reflecting the larger weighting of our fleet towards Capesize vessels following the sales of smaller Supramax and Handysize vessels as well as an anticipated increase in COVID-19 related expenses. The potential impacts of COVID-19 are beyond our control and are difficult to predict due to uncertainties surrounding the pandemic.

Apostolos Zafolias, Chief Financial Officer, commented, “We are pleased to have entered into a new credit agreement for the global refinancing of our previous credit facilities on favorable terms and appreciate the strong support of our leading bank group. By further strengthening our capital structure, we expect to significantly increase our flexibility for both paying sizeable dividends to shareholders and opportunistically growing our fleet through accretive vessel acquisitions, consistent with our track record. Moreover, we expect our new credit facility to markedly reduce our cash flow breakeven rate, which will further strengthen our industry leading balance sheet. Going forward, we will remain focused on ensuring the strength of our balance sheet through continuing to pay down debt with a medium-term objective of reducing our net debt to zero.”

Financial Review: Six Months 2021

The Company recorded net income of $34.0 million or $0.81 and $0.80 basic and diluted net earnings per share for the six months ended June 30, 2021, respectively. This compares to a net loss of $138.6 million or $3.31 basic and diluted net loss per share for the six months ended June 30, 2020. Net income for the six months ended June 30, 2021 includes a $0.7 million loss on sale of vessels. Net loss for the six months ended June 30, 2020 includes $112.8 million in non-cash vessel impairment charges and a $0.5 million loss on sale of vessels. Revenues increased to $208.6 million for the six months ended June 30, 2021 compared to $172.5 million for the six months ended June 30, 2020, primarily due to higher rates achieved by our fleet as well as our third party time chartered-on vessels, which was partially offset by the operation of fewer vessels in our fleet. Voyage expenses decreased to $71.8 million for the six months ended June 30, 2021 from $90.1 million for the same period in 2020. TCE rates obtained by the Company increased to $16,508 per day for the six months ended June 30, 2021 from $8,251 per day for the six months ended June 30, 2020. Total operating expenses for the six months ended June 30, 2021 and 2020 were $166.0 million and $299.1 million, respectively. Total operating expenses include a loss on sale of vessels of $0.7 million for the six months ending June 30, 2021. For the six months ended June 30, 2020, total operating expenses include $112.8 million in non-cash vessel impairment charges, as well as a loss on sale of vessels of $0.5 million for the six months ending June 30, 2020. General and administrative expenses for the six months ended June 30, 2021 increased to $12.0 million as compared to the $11.2 million in the same period of 2020, due to higher legal and professional fees. DVOE was $5,015 for the year-to-date period in 2021 versus $4,390 in 2020. The increase in daily vessel operating expense was predominantly due to COVID-19 related expenditures and higher crew related expenses, as well higher spares related expenditures. Due to COVID-19 restrictions last year, we were unable to perform our regularly scheduled crew changes, resulting in an abnormally low DVOE for the first half of 2020. EBITDA for the six months ended June 30, 2021 amounted to $70.1 million compared to $(93.5) million during the prior period. During the six months of 2021 and 2020, EBITDA included non-cash impairment charges and gains and losses on sale of vessels as mentioned above. Excluding these items, our adjusted EBITDA would have amounted to $70.9 million and $19.8 million, for the respective periods.

Liquidity and Capital Resources

Cash Flow

Net cash provided by operating activities for the six months ended June 30, 2021 was $62.6 million as compared to net cash used in operating activities of $9.0 million for the six months ended June 30, 2020. This increase in cash provided by operating activities was primarily due to higher rates achieved by our major and minor bulk vessels, changes in working capital, as well as a decrease in drydocking related expenditures and interest expense.

Net cash provided by investing activities for the six months ended June 30, 2021 was $4.2 million as compared to net cash used in investing activities of $0.6 million for the six months ended June 30, 2020.  This fluctuation was primarily due to an increase in net proceeds from the sale of vessels during the first half of 2021 as compared to the first half of 2020, as well as a decrease in scrubber related expenditures.  These fluctuations were partially offset by an increase in deposits made on three Ultramax vessels that we entered into agreements to purchase during the second quarter of 2021.

Net cash used in financing activities during the six months ended June 30, 2021 and 2020 was $85.2 million and $9.8 million, respectively.  The increase was primarily due to an increase in repayments of $45.6 million under the $495 Million Credit Facility and the $133 Million Credit Facility.  During the first half of 2021, we made a $21.2 million repayment of the revolver under the $133 Million Credit Facility, and we made a $20.0 million repayment of the scrubber tranche under the $495 Million Credit Facility. Additionally, this increase in net cash used in financing activities was due to the $24.0 million drawdown and $11.3 million drawdown on the $133 Million Credit Facility and the $495 Million Credit Facility, respectively, during the first half of 2020.  These increases were partially offset by a $5.1 million decrease in the payment of dividends during the first half of 2021 as compared to the first half of 2020.

Capital Expenditures

We make capital expenditures from time to time in connection with vessel acquisitions. As of August 4, 2021, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, nine Ultramax and 13 Supramax vessels with an aggregate capacity of approximately 4,314,000 dwt and an average age of 10.6 years.

In addition to acquisitions that we may undertake, we will incur additional capital expenditures due to special surveys and drydockings. Furthermore, we plan to upgrade a portion of our fleet with energy saving devices and apply high performance paint systems to our vessels in order to reduce fuel consumption and emissions. We estimate our capital expenditures related to drydocking, including capitalized costs incurred during drydocking related to vessel assets and vessel equipment, ballast water treatment system costs, fuel efficiency upgrades and scheduled off-hire days for our fleet for the balance of 2021 and 2022 to be:

(1) Estimates are based on our budgeted cost of drydocking our vessels in China. Actual costs will vary based on various factors, including where the drydockings are actually performed. We expect to fund these costs with cash on hand. These costs do not include drydock expense items that are reflected in vessel operating expenses. Estimated drydocking costs for 2022 exclude the $0.8 million in relation to the agreed upon sale of the Genco Provence.

(2) Estimated costs associated with the installation of ballast water treatment systems is expected to be funded with cash on hand.

(3) Estimated costs associated with the installation of fuel efficiency upgrades are expected to be funded with cash on hand.

(4) Actual length will vary based on the condition of the vessel, yard schedules and other factors. The estimated offhire days per sector scheduled for Q3 2021 consists of 20 days for Ultramaxes and 20 days for Supramaxes. Estimated offhire days for 2022 exclude days related to the Genco Provence due to the vessel’s agreed upon sale.

Summary Consolidated Financial and Other Data

The following table summarizes Genco Shipping & Trading Limited’s selected consolidated financial and other data for the periods indicated below.

1) EBITDA represents net income (loss) plus net interest expense, taxes, and depreciation and amortization. EBITDA is included because it is used by management and certain investors as a measure of operating performance. EBITDA is used by analysts in the shipping industry as a common performance measure to compare results across peers. Our management uses EBITDA as a performance measure in consolidating internal financial statements and it is presented for review at our board meetings. We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often results in significant depreciation and cost of financing. EBITDA presents investors with a measure in addition to net income to evaluate our performance prior to these costs. EBITDA is not an item recognized by U.S. GAAP (i.e. non-GAAP measure) and should not be considered as an alternative to net income, operating income or any other indicator of a company’s operating performance required by U.S. GAAP. EBITDA is not a measure of liquidity or cash flows as shown in our consolidated statement of cash flows. The definition of EBITDA used here may not be comparable to that used by other companies.
2) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was part of our fleet during the period divided by the number of calendar days in that period.
3) We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
4) We define chartered-in days as the aggregate number of days in a period during which we chartered-in third-party vessels.
5) We define available days as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to familiarization upon acquisition, repairs or repairs under guarantee, vessel upgrades or special surveys. Companies in the shipping industry generally use available days to measure the number of days in a period during which vessels should be capable of generating revenues.
6) We define available days for the owned fleet as available days less chartered-in days.
7) We define operating days as the number of our total available days in a period less the aggregate number of days that the vessels are off-hire due to unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
8) We calculate fleet utilization as the number of our operating days during a period divided by the number of ownership days plus chartered-in days less drydocking days.
9) We define TCE rates as our voyage revenues less voyage expenses and charter hire expenses, divided by the number of the available days of our owned fleet during the period. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charterhire rates for vessels on voyage charters are generally not expressed in per-day amounts while charterhire rates for vessels on time charters generally are expressed in such amounts. Our estimated TCE for the third quarter of 2021 is based on fixtures booked to date. Actual results may vary based on the actual duration of voyages and other factors. Accordingly, we are unable to provide, without unreasonable efforts, a reconciliation of estimated TCE for the third quarter to the most comparable financial measures presented in accordance with GAAP.

10) We define daily vessel operating expenses to include crew wages and related costs, the cost of insurance expenses relating to repairs and maintenance (excluding drydocking), the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Daily vessel operating expenses are calculated by dividing vessel operating expenses by ownership days for the relevant period.

About Genco Shipping & Trading Limited

Genco Shipping & Trading Limited is a U.S. based drybulk ship owning company focused on the seaborne transportation of commodities globally. We provide a full-service logistics solution to our customers utilizing our in-house commercial operating platform, as we transport key cargoes such as iron ore, grain, steel products, bauxite, cement, nickel ore among other commodities along worldwide shipping routes. Our wholly owned high quality, modern fleet of dry cargo vessels consists of the larger Capesize (major bulk) and the medium-sized Ultramax and Supramax vessels (minor bulk) enabling us to carry a wide range of cargoes. As of August 4, 2021, Genco Shipping & Trading Limited’s fleet consists of 17 Capesize, nine Ultramax and 13 Supramax vessels with an aggregate capacity of approximately 4,314,000 dwt and an average age of 10.6 years.

The following table reflects Genco’s fleet list as of August 4, 2021:

Conference Call Announcement

Genco Shipping & Trading Limited will hold a conference call on Thursday,
August 5, 2021 at 8:30 a.m. Eastern Time to discuss its 2021 second quarter financial results. The conference call and a presentation will be simultaneously webcast and will be available on the Company’s website, www.GencoShipping.com. To access the conference call, dial (323) 289-6581 or (800) 430-8332 and enter passcode 8885406. A replay of the conference call can also be accessed for two weeks by dialing (888) 203-1112 or (719) 457-0820 and entering the passcode 8885406. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call.

Website Information

We intend to use our website, www.GencoShipping.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in our website’s Investor Relations section. Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings, public conference calls, and webcasts. To subscribe to our e-mail alert service, please click the “Receive E-mail Alerts” link in the Investor Relations section of our website and submit your email address. The information contained in, or that may be accessed through, our website is not incorporated by reference into or a part of this document or any other report or document we file with or furnish to the SEC, and any references to our website are intended to be inactive textual references only.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements use words such as “anticipate,” “budget,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a discussion of potential future events, circumstances or future operating or financial performance.  These forward-looking statements are based on our management’s current expectations and observations. Included among the factors that, in our view, could cause actual results to differ materially from the forward looking statements contained in this report are the following: (i) declines or sustained weakness in demand in the drybulk shipping industry; (ii) continuation of weakness or declines in drybulk shipping rates; (iii) changes in the supply of or demand for drybulk products, generally or in particular regions; (iv) changes in the supply of drybulk carriers including newbuilding of vessels or lower than anticipated scrapping of older vessels; (v) changes in rules and regulations applicable to the cargo industry, including, without limitation, legislation adopted by international organizations or by individual countries and actions taken by regulatory authorities; (vi) increases in costs and expenses including but not limited to: crew wages, insurance, provisions, lube oil, bunkers, repairs, maintenance, general and administrative expenses, and management fee expenses; (vii) whether our insurance arrangements are adequate; (viii) changes in general domestic and international political conditions; (ix) acts of war, terrorism, or piracy; (x) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking or maintenance and repair costs) and unanticipated drydock expenditures; (xi) the Company’s acquisition or disposition of vessels; (xii) the amount of offhire time needed to complete maintenance, repairs, and installation of equipment to comply with applicable regulations on vessels and the timing and amount of any reimbursement by our insurance carriers for insurance claims, including offhire days; (xiii) the completion of definitive documentation with respect to charters; (xiv) charterers’ compliance with the terms of their charters in the current market environment; (xv) the extent to which our operating results continue to be affected by weakness in market conditions and freight and charter rates; (xvi) our ability to maintain contracts that are critical to our operation, to obtain and maintain acceptable terms with our vendors, customers and service providers and to retain key executives, managers and employees; (xvii) completion of documentation for vessel transactions and the performance of the terms thereof by buyers or sellers of vessels and us; (xviii) the relative cost and availability of low sulfur and high sulfur fuel, worldwide compliance with sulfur emissions regulations that took effect on January 1, 2020 and our ability to realize the economic benefits or recover the cost of the scrubbers we have installed.; (xix) our financial results for the year ending December 31, 2021 and other factors relating to determination of the tax treatment of dividends we have declared; (xx) the financial results we achieve for each quarter that apply to the formula under our new dividend policy, including without limitation the actual amounts earned by our vessels and the amounts of various expenses we incur, as a significant decrease in such earnings or a significant increase in such expenses may affect our ability to carry out our new value strategy; (xxi) the exercise of the discretion of our Board regarding the declaration of dividends, including without limitation the amount that our Board determines to set aside for reserves under our dividend policy; (xxii) our ability to fulfill conditions for borrowings under the $450 Million Credit Facility in order to refinance our $495 Million Credit Facility and our $133 Million Credit Facility; (xxiii) the duration and impact of the COVID-19 novel coronavirus epidemic, which may negatively affect general global and regional economic conditions; our ability to charter our vessels at all and the rates at which are able to do so; our ability to call on or depart from ports on a timely basis or at all; our ability to crew, maintain, and repair our vessels, including without limitation the impact diversion of our vessels to perform crew rotations may have on our revenues, expenses, and ability to consummate vessel sales, expense and disruption to our operations that may arise from the inability to rotate crews on schedule, and delay and added expense we may incur in rotating crews in the current environment; our ability to staff and maintain our headquarters and administrative operations; sources of cash and liquidity; our ability to sell vessels in the secondary market, including without limitation the compliance of purchasers and us with the terms of vessel sale contracts, and the prices at which vessels are sold; and other factors relevant to our business described from time to time in our filings with the Securities and Exchange Commission; (xxiv) completion of definitive documentation for the technical management joint venture we plan to enter into; and (xxv) other factors listed from time to time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent reports on Form 8-K and Form 10-Q. Our ability to pay dividends in any period will depend upon various factors, including the limitations under any credit agreements to which we may be a party, applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of our financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves. As a result, the amount of dividends actually paid may vary. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:
Apostolos Zafolias
Chief Financial Officer
Genco Shipping & Trading Limited
(646) 443-8550

Source: Genco Shipping & Trading Limited

EuroDry Ltd. Reports Results for the Six-Month Period and Quarter Ended June 30, 2021

 

ATHENS, Greece, Aug. 04, 2021 (GLOBE NEWSWIRE) — EuroDry Ltd. (NASDAQ: EDRY, the “Company” or “EuroDry”), an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced today its results for the three and six month periods ended June 30, 2021.

Second Quarter 2021 Highlights:

• Total net revenues for the quarter of $14.1 million.
  
  
• Net income attributable to common shareholders of $1.9 million, or, $0.83 and $0.81 per share basic and diluted, respectively, inclusive of unrealized losses on derivatives and a loss on debt extinguishment.
  
  
• Adjusted net income attributable to common shareholders¹ for the quarter of $6.6 million, or, $2.81 and $2.76 per share basic and diluted, respectively.
  
  
• Adjusted EBITDA¹ for the quarter was $9.2 million
  
  
• An average of 7.37 vessels were owned and operated during the second quarter of 2021 earning an average time charter equivalent rate of $22,614 per day.
  
  
• The Company declared a dividend of $0.3 million on its Series B Preferred Shares. The dividend will be paid in cash.
  

_______________
¹Adjusted EBITDA, Adjusted net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under US GAAP (GAAP) and should not be used in isolation or as a substitute for EuroDry’s financial results presented in accordance with GAAP. Refer to a subsequent section of the Press Release for the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with GAAP.

First Half 2021 Highlights:

• Total net revenues of $22.7 million.
  
  
• Net income attributable to common shareholders was $2.4 million, or, $1.03 and $1.01 per share basic and diluted, respectively, inclusive unrealized FFA contract losses and a loss on debt extinguishment.  
  
  
• Adjusted net income attributable to common shareholders¹ for the period was $7.9 million, or, $3.40 and $3.33 per share basic and diluted, respectively, inclusive of unrealized losses on derivatives and a loss on debt extinguishment
  
  
• Adjusted EBITDA¹ of $13.2 million
  
  
• An average of 7.19 vessels were owned and operated during the first half of 2021 earning an average time charter equivalent rate of $18,879 per day.
  

Recent developments

As previously announced, in May 2021, the Company acquired M/V Blessed Luck, a 76,704 dwt drybulk vessel built in 2004 in Japan, for $12.12 million. The acquisition was initially partly financed by a short term sellers’ credit of $5 million and a one year bridge loan of $6 million provided by an entity affiliated with the Company’s Chief Executive Officer until the Company arranged a bank loan. In July 2021, the Company repaid the sellers’ credit and signed a term sheet with a bank to draw a loan of $8.0 million with M/V Blessed Luck as collateral which is expected to be drawn in August 2021. In addition, as disclosed in June 2021, an amount of $3.3 million of the bridge loan was converted into common stock as per the terms of the loan, leaving $2.7 million outstanding.

Aristides Pittas, Chairman and CEO of EuroDry commented: “During the second quarter of 2021, the drybulk market resumed its upward trend reaching levels last seen eleven years ago. Although the market corrected a bit in July, it still remains near its highest levels of the last decade. We believe that the near and medium term prospects of the market continue to be very promising in spite of lingering uncertainties due to the COVID-19 pandemic. Strong industrial demand for steel from infrastructure projects and resumption of growth of the rest of the drybulk commodities are painting a healthy overall drybulk trade outlook, despite the medium and longer term challenges of the coal trades. At the same time, the record low level of the orderbook as percentage of the fleet suggests a very modest fleet growth for the next two to three years. These two trends, taken together, are likely to result in a very tight market balance supporting the recent levels of charter rates and, possibly, improving them.

“Within this market environment, we continue to look for ways to grow our company in accretive ways, as we did with our recent acquisition of M/V Blessed Luck. The continuous improvement of our balance sheet as vessel earnings accumulate affords us with the capacity to pursue additional vessel acquisitions. Moreover, we believe, even more so now, that our public listing could provide an ideal platform for consolidation for other fleets and exit options for financial investors offering us additional growth opportunities.”

Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The net revenues of the second quarter of 2021 increased significantly compared to the second quarter of 2020 as a result of the time charter equivalent rates our vessels earned during the quarter which were higher by 210% compared to the average time charter equivalent rates our vessels earned in the second quarter of 2020.

“Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,467 per vessel per day during the second quarter of 2021 as compared to $6,131 per vessel per day for the same quarter of last year, and $6,518 per vessel per day for the first half of 2021 as compared to $6,093 per vessel per day for the same period of 2020. This increase is mainly due to increased crewing costs in 2021 compared to 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions.  

“Adjusted EBITDA during the second quarter of 2021 was $9.2 million versus $(1.3) million in the second quarter of last year. As of June 30, 2021, our outstanding debt (excluding the unamortized loan fees) was $62.0 million, while unrestricted and restricted cash was $15.9 million. As of the same date, our scheduled debt repayments including balloon payments over the next 12 months amounted to about $21.2 million (excluding the unamortized loan fees) and all our loan covenants are satisfied.”

Second Quarter 2021 Results:
For the second quarter of 2021, the Company reported total net revenues of $14.1 million representing a 250.7% increase over total net revenues of $4.0 million during the second quarter of 2020 which was the result of the higher time charter rates our vessels earned during the second quarter of 2021 compared to the same period of 2020. The Company reported net income for the period of $2.2 million and net income attributable to common shareholders of $1.9 million, as compared to net loss and net loss attributable to common shareholders of $3.8 million and $4.2 million respectively, for the same period of 2020. For the second quarter of 2021, voyage expenses, net amount to income of $0.1 million resulting from gain on bunkers as compared to a gain of $0.1 million in the same period of 2020. The results for the second quarter of 2021 include an unrealized gain of $0.03 million on three interest rate swap contracts and an unrealized loss of $3.1 million on forward freight agreement (“FFA”) contracts as compared to an unrealized loss of $0.2 million on three interest rate swap contracts and an unrealized loss of $0.1 million on FFA contracts during the second quarter of 2020. Depreciation expenses for the second quarter of 2021 amounted to $1.8 million, as compared to $1.6 million for the same period of 2020. This increase is due to the higher number of vessels operating in the second quarter of 2021 as compared to the same period of 2020. General and administrative expenses amounting to $0.6 million, remained at the same level compared to the second quarter of 2020. During the second quarter of 2020, two of our vessels completed their special survey for a total cost of $1.5 million, one of which had commenced during the first quarter of 2020, while there were no vessels undergoing drydocking during the second quarter of 2021.

Interest and other financing costs for the second quarter of 2021 amounted to $0.5 million compared to $0.6 million for the same period of 2020. Interest expense during the second quarter of 2021 was lower mainly due to the decreased Libor rates of our loans during the period as compared to the same period of last year.

On average, 7.37 vessels were owned and operated during the second quarter of 2021 earning an average time charter equivalent rate of $22,614 per day compared to 7.0 vessels in the same period of 2020 earning on average $7,297 per day.  

Adjusted EBITDA for the second quarter of 2021 was $9.2 million compared to $(1.3) million achieved during the second quarter of 2020.

Basic and diluted earnings per share attributable to common shareholders for the second quarter of 2021 was $0.83 calculated on 2,353,364 basic and $0.81 calculated on 2,401,192 diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $1.86 for the second quarter of 2020, calculated on 2,267,375 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income attributable to common shareholders for the quarter of the unrealized loss on derivatives and the loss on debt extinguishment, the adjusted earnings attributable to common shareholders for the quarter ended June 30, 2021 would have been $2.81 and $2.76 per share basic and diluted, respectively, compared to an adjusted loss of $1.73 per share basic and diluted for the quarter ended June 30, 2020. Usually, security analysts do not include the above items in their published estimates of earnings per share.

First Half 2021 Results:
For the first half of 2021, the Company reported total net revenues of $22.7 million representing an 149.5% increase over total net revenues of $9.1 million during the first half of 2020, which was the result of the higher time charter rates our vessels earned during the first half of 2021 compared to the same period of 2020. The Company reported net income for the period of $3.1 million and net income attributable to common shareholders of $2.4 million, as compared to net loss of $6.1 million and net loss attributable to common shareholders of $6.9 million, for the first half of 2020. For the first half of 2021, voyage expenses, net amount to income of $0.4 million resulting from gain on bunkers as compared to voyage expenses of $0.6 million in the same period of 2020. Vessel operating expenses were $6.2 million for the first half of 2021 as compared to $5.6 million for the first half of 2020. The increase is attributable to increased crewing costs in the first half of 2021 compared to the corresponding period in 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions and the higher number of vessels operating in the first half of 2021 as compared to the same period of 2020. Depreciation expenses for the first half of 2021 were $3.4 million compared to $3.3 million during the same period of 2020, mainly due to the increase in the cost base of certain of our vessels due to the recent installation of ballast water management systems and the higher number of vessels operating in the same period. On average, 7.19 vessels were owned and operated during the first half of 2021 earning an average time charter equivalent rate of $18,879 per day compared to 7.0 vessels in the same period of 2020 earning on average $7,390 per day. General and administrative expenses remained unchanged at $1.2 million during the first half of 2021 as compared to the same period of last year. In the first half of 2020, two vessels underwent special survey for a total cost of $1.7 million, while there were no vessels undergoing drydocking during the first half of 2021.

Interest and other financing costs for the first half of 2021 amounted to $1.1 million compared to $1.2 million for the same period of 2020. This decrease is mainly due to the decreased Libor rates of our loans in the current period compared to the same period of 2020. For the six months ended June 30, 2021, the Company recognized a $0.1 million gain on three interest rate swaps and a $4.1 million unrealized loss and $1.3 million realized loss on FFA contracts entered into during the second quarter of 2021 as compared to a loss on derivatives of $0.6 million for the same period of 2020, comprising of a $0.1 million unrealized loss on FFA contracts and a $0.5 million loss on three interest rate swaps.  

Adjusted EBITDA for the first half of 2021 was $13.2 million compared to $(1.0) million achieved during the first half of 2020.

Basic and diluted earnings per share attributable to common shareholders for the first half of 2021 was $1.03, calculated on 2,322,588 basic and $1.01, calculated on 2,364,879 diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $3.03 for the first half of 2020, calculated on 2,267,375 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the earnings attributable to common shareholders for the first half of the year of the unrealized loss on derivatives and the loss on debt extinguishment, the adjusted earnings attributable to common shareholders for the six-month period ended June 30, 2021 would have been $3.40 and $3.33 per share basic and diluted, respectively, compared to a loss of $2.76 per share basic and diluted for the same period in 2020. As previously mentioned, usually, security analysts do not include the above items in their published estimates of earnings per share.

Fleet Profile:

The EuroDry Ltd. fleet profile is as follows:

Note:  
(*) Represents the earliest redelivery date
(**) BPI stands for the Baltic Panamax Index; the average BPI 4TC is an index based on four time charter routes. 
(***) The average Baltic Kamsarmax P5TC Index is an index based on five Panamax time charter routes.

Summary Fleet Data:

(1) Average number of vessels is the number of vessels that constituted the Company’s fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of the Company’s fleet during the period divided by the number of calendar days in that period.

(2) Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was owned by us including off-hire days associated with major repairs, drydockings or special or intermediate surveys or days of vessels in lay-up. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during that period.

(3) The scheduled off-hire days including vessels laid-up are days associated with scheduled repairs, drydockings or special or intermediate surveys or days of vessels in lay-up.

(4) Available days. We define available days as the total number of Calendar days in a period net of scheduled off-hire days incl. laid up. We use available days to measure the number of days in a period during which vessels were available to generate revenues.

(5) Commercial off-hire days. We define commercial off-hire days as days a vessel is idle without employment.

(6) Operational off-hire days. We define operational off-hire days as days associated with unscheduled repairs or other off-hire time related to the operation of the vessels.

(7) Voyage days. We define voyage days as the total number of days in a period during which each vessel in our fleet was in our possession net of commercial and operational off-hire days. We use voyage days to measure the number of days in a period during which vessels actually generate revenues or are sailing for repositioning purposes.

(8) Fleet utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our available days during that period. We use fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons such as unscheduled repairs or days waiting to find employment.

(9) Fleet utilization, commercial. We calculate commercial fleet utilization by dividing our available days net of commercial off-hire days during a period by our available days during that period.

(10) Fleet utilization, operational. We calculate operational fleet utilization by dividing our available days net of operational off-hire days during a period by our available days during that period.

(11) Time charter equivalent rate, or TCE, is a measure of the average daily net revenue performance of our vessels. Our method of calculating TCE is determined by dividing time charter revenue and voyage charter revenue net of voyage expenses by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, or are related to repositioning the vessel for the next charter. TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., spot voyage charters, time charters, pool agreements and bareboat charters) under which the vessels may be employed between the periods. Our definition of TCE may not be comparable to that used by other companies in the shipping industry.

(12) Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and management fees are calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. Drydocking expenses are reported separately.

(13) Daily general and administrative expense is calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period.

(14) Total vessel operating expenses, or TVOE, is a measure of our total expenses associated with operating our vessels. TVOE is the sum of vessel operating expenses, management fees and general and administrative expenses; drydocking expenses are not included. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.

(15) Drydocking expenses include expenses during drydockings that would have been capitalized and amortized under the deferral method divided by the fleet calendar days for the relevant period. Drydocking expenses could vary substantially from period to period depending on how many vessels underwent drydocking during the period. The Company expenses drydocking expenses as incurred.

Conference Call and Webcast:
Tomorrow, August 5, 2021 at 9:30 a.m. Eastern Time, the Company’s management will host a conference call and webcast to discuss the results. 

Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (from the US), 0(808) 2380-669 (from the UK) or (+44) (0) 2071 928 592 (from outside the US). Please quote “EuroDry” to the operator. 

To listen to the archived audio file, visit our website http://www.eurodry.gr and click on Company Presentations under our Investor Relations page. The audio replay of the conference call will remain available until Wednesday, August 11, 2021.

Audio webcast – Slides Presentation:
There will be a live and then archived audio webcast of the conference call, via the internet through the EuroDry website (www.eurodry.gr). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. A slide presentation on the Second Quarter 2021 results in PDF format will also be available 10 minutes prior to the conference call and webcast accessible on the company’s website (www.eurodry.gr) on the webcast page. Participants to the webcast can download the PDF presentation. 

EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Operations
(All amounts expressed in U.S. Dollars – except number of shares)

EuroDry Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)

EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)

 

EuroDry Ltd.
Reconciliation of Adjusted EBITDA to
Net (loss) / income
(All amounts expressed in U.S. Dollars)

Adjusted EBITDA Reconciliation:
EuroDry Ltd. considers Adjusted EBITDA to represent net (loss) / income before interest, income taxes, depreciation, loss on debt extinguishment and unrealized loss on Forward Freight Agreement derivatives (“FFAs”) and loss / (gain) on interest rate swap derivatives. Adjusted EBITDA does not represent and should not be considered as an alternative to net (loss) / income, as determined by United States generally accepted accounting principles, or GAAP. Adjusted EBITDA is included herein because it is a basis upon which the Company assesses its financial performance because the Company believes that this non-GAAP financial measure assists our management and investors by increasing the comparability of our performance from period to period by excluding the potentially disparate effects between periods of, financial costs, loss on debt extinguishment, unrealized loss on FFAs, loss / (gain) on interest rate swap derivatives, and depreciation. The Company’s definition of Adjusted EBITDA may not be the same as that used by other companies in the shipping or other industries. 

EuroDry Ltd.
Reconciliation of Net (loss) / income to Adjusted net (loss) / income
(All amounts expressed in U.S. Dollars – except share data and number of shares)

Adjusted net (loss) / income and Adjusted (loss) / earnings per share Reconciliation:
EuroDry Ltd. considers Adjusted net (loss) / income to represent net (loss) / income before unrealized loss on derivatives, which includes FFAs and interest rate swaps, and loss on debt extinguishment. Adjusted net (loss) / income and Adjusted (loss) / earnings per share is included herein because we believe it assists our management and investors by increasing the comparability of the Company’s fundamental performance from period to period by excluding the potentially disparate effects between periods of unrealized loss on derivatives and loss on debt extinguishment, which may significantly affect results of operations between periods. Adjusted net (loss) / income and Adjusted (loss) / earnings per share do not represent and should not be considered as an alternative to net (loss) / income or (loss) / earnings per share, as determined by GAAP. The Company’s definition of Adjusted net (loss) / income and Adjusted (loss) / earnings per share may not be the same as that used by other companies in the shipping or other industries.

About EuroDry Ltd.
EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands to consolidate the drybulk fleet of Euroseas Ltd. into a separate listed public company. EuroDry was spun-off from Euroseas Ltd on May 30, 2018; it trades on the NASDAQ Capital Market under the ticker EDRY. 

EuroDry operates in the dry cargo, drybulk shipping market. EuroDry’s operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company and Eurobulk (Far East) Ltd. Inc., which are responsible for the day-to-day commercial and technical management and operations of the vessels. EuroDry employs its vessels on spot and period charters and under pool agreements.

The Company has a fleet of 8 vessels, including 5 Panamax drybulk carriers, 1 Ultramax drybulk carrier and 2 Kamsarmax drybulk carriers. EuroDry’s 8 drybulk carriers have a total cargo capacity of 605,635 dwt.

Forward Looking Statement
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company’s growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forwardlooking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. 

Visit our website www.eurodry.gr

EuroDry Ltd. Reports Results for the Six-Month Period and Quarter Ended June 30, 2021

 

ATHENS, Greece, Aug. 04, 2021 (GLOBE NEWSWIRE) — EuroDry Ltd. (NASDAQ: EDRY, the “Company” or “EuroDry”), an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced today its results for the three and six month periods ended June 30, 2021.

Second Quarter 2021 Highlights:

• Total net revenues for the quarter of $14.1 million.
  
  
• Net income attributable to common shareholders of $1.9 million, or, $0.83 and $0.81 per share basic and diluted, respectively, inclusive of unrealized losses on derivatives and a loss on debt extinguishment.
  
  
• Adjusted net income attributable to common shareholders¹ for the quarter of $6.6 million, or, $2.81 and $2.76 per share basic and diluted, respectively.
  
  
• Adjusted EBITDA¹ for the quarter was $9.2 million
  
  
• An average of 7.37 vessels were owned and operated during the second quarter of 2021 earning an average time charter equivalent rate of $22,614 per day.
  
  
• The Company declared a dividend of $0.3 million on its Series B Preferred Shares. The dividend will be paid in cash.
  

_______________
¹Adjusted EBITDA, Adjusted net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under US GAAP (GAAP) and should not be used in isolation or as a substitute for EuroDry’s financial results presented in accordance with GAAP. Refer to a subsequent section of the Press Release for the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with GAAP.

First Half 2021 Highlights:

• Total net revenues of $22.7 million.
  
  
• Net income attributable to common shareholders was $2.4 million, or, $1.03 and $1.01 per share basic and diluted, respectively, inclusive unrealized FFA contract losses and a loss on debt extinguishment.  
  
  
• Adjusted net income attributable to common shareholders¹ for the period was $7.9 million, or, $3.40 and $3.33 per share basic and diluted, respectively, inclusive of unrealized losses on derivatives and a loss on debt extinguishment
  
  
• Adjusted EBITDA¹ of $13.2 million
  
  
• An average of 7.19 vessels were owned and operated during the first half of 2021 earning an average time charter equivalent rate of $18,879 per day.
  

Recent developments

As previously announced, in May 2021, the Company acquired M/V Blessed Luck, a 76,704 dwt drybulk vessel built in 2004 in Japan, for $12.12 million. The acquisition was initially partly financed by a short term sellers’ credit of $5 million and a one year bridge loan of $6 million provided by an entity affiliated with the Company’s Chief Executive Officer until the Company arranged a bank loan. In July 2021, the Company repaid the sellers’ credit and signed a term sheet with a bank to draw a loan of $8.0 million with M/V Blessed Luck as collateral which is expected to be drawn in August 2021. In addition, as disclosed in June 2021, an amount of $3.3 million of the bridge loan was converted into common stock as per the terms of the loan, leaving $2.7 million outstanding.

Aristides Pittas, Chairman and CEO of EuroDry commented: “During the second quarter of 2021, the drybulk market resumed its upward trend reaching levels last seen eleven years ago. Although the market corrected a bit in July, it still remains near its highest levels of the last decade. We believe that the near and medium term prospects of the market continue to be very promising in spite of lingering uncertainties due to the COVID-19 pandemic. Strong industrial demand for steel from infrastructure projects and resumption of growth of the rest of the drybulk commodities are painting a healthy overall drybulk trade outlook, despite the medium and longer term challenges of the coal trades. At the same time, the record low level of the orderbook as percentage of the fleet suggests a very modest fleet growth for the next two to three years. These two trends, taken together, are likely to result in a very tight market balance supporting the recent levels of charter rates and, possibly, improving them.

“Within this market environment, we continue to look for ways to grow our company in accretive ways, as we did with our recent acquisition of M/V Blessed Luck. The continuous improvement of our balance sheet as vessel earnings accumulate affords us with the capacity to pursue additional vessel acquisitions. Moreover, we believe, even more so now, that our public listing could provide an ideal platform for consolidation for other fleets and exit options for financial investors offering us additional growth opportunities.”

Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The net revenues of the second quarter of 2021 increased significantly compared to the second quarter of 2020 as a result of the time charter equivalent rates our vessels earned during the quarter which were higher by 210% compared to the average time charter equivalent rates our vessels earned in the second quarter of 2020.

“Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,467 per vessel per day during the second quarter of 2021 as compared to $6,131 per vessel per day for the same quarter of last year, and $6,518 per vessel per day for the first half of 2021 as compared to $6,093 per vessel per day for the same period of 2020. This increase is mainly due to increased crewing costs in 2021 compared to 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions.  

“Adjusted EBITDA during the second quarter of 2021 was $9.2 million versus $(1.3) million in the second quarter of last year. As of June 30, 2021, our outstanding debt (excluding the unamortized loan fees) was $62.0 million, while unrestricted and restricted cash was $15.9 million. As of the same date, our scheduled debt repayments including balloon payments over the next 12 months amounted to about $21.2 million (excluding the unamortized loan fees) and all our loan covenants are satisfied.”

Second Quarter 2021 Results:
For the second quarter of 2021, the Company reported total net revenues of $14.1 million representing a 250.7% increase over total net revenues of $4.0 million during the second quarter of 2020 which was the result of the higher time charter rates our vessels earned during the second quarter of 2021 compared to the same period of 2020. The Company reported net income for the period of $2.2 million and net income attributable to common shareholders of $1.9 million, as compared to net loss and net loss attributable to common shareholders of $3.8 million and $4.2 million respectively, for the same period of 2020. For the second quarter of 2021, voyage expenses, net amount to income of $0.1 million resulting from gain on bunkers as compared to a gain of $0.1 million in the same period of 2020. The results for the second quarter of 2021 include an unrealized gain of $0.03 million on three interest rate swap contracts and an unrealized loss of $3.1 million on forward freight agreement (“FFA”) contracts as compared to an unrealized loss of $0.2 million on three interest rate swap contracts and an unrealized loss of $0.1 million on FFA contracts during the second quarter of 2020. Depreciation expenses for the second quarter of 2021 amounted to $1.8 million, as compared to $1.6 million for the same period of 2020. This increase is due to the higher number of vessels operating in the second quarter of 2021 as compared to the same period of 2020. General and administrative expenses amounting to $0.6 million, remained at the same level compared to the second quarter of 2020. During the second quarter of 2020, two of our vessels completed their special survey for a total cost of $1.5 million, one of which had commenced during the first quarter of 2020, while there were no vessels undergoing drydocking during the second quarter of 2021.

Interest and other financing costs for the second quarter of 2021 amounted to $0.5 million compared to $0.6 million for the same period of 2020. Interest expense during the second quarter of 2021 was lower mainly due to the decreased Libor rates of our loans during the period as compared to the same period of last year.

On average, 7.37 vessels were owned and operated during the second quarter of 2021 earning an average time charter equivalent rate of $22,614 per day compared to 7.0 vessels in the same period of 2020 earning on average $7,297 per day.  

Adjusted EBITDA for the second quarter of 2021 was $9.2 million compared to $(1.3) million achieved during the second quarter of 2020.

Basic and diluted earnings per share attributable to common shareholders for the second quarter of 2021 was $0.83 calculated on 2,353,364 basic and $0.81 calculated on 2,401,192 diluted weighted average number of shares outstanding, compared to basic and diluted loss per share of $1.86 for the second quarter of 2020, calculated on 2,267,375 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income attributable to common shareholders for the quarter of the unrealized loss on derivatives and the loss on debt extinguishment, the adjusted earnings attributable to common shareholders for the quarter ended June 30, 2021 would have been $2.81 and $2.76 per share basic and diluted, respectively, compared to an adjusted loss of $1.73 per share basic and diluted for the quarter ended June 30, 2020. Usually, security analysts do not include the above items in their published estimates of earnings per share.

First Half 2021 Results:
For the first half of 2021, the Company reported total net revenues of $22.7 million representing an 149.5% increase over total net revenues of $9.1 million during the first half of 2020, which was the result of the higher time charter rates our vessels earned during the first half of 2021 compared to the same period of 2020. The Company reported net income for the period of $3.1 million and net income attributable to common shareholders of $2.4 million, as compared to net loss of $6.1 million and net loss attributable to common shareholders of $6.9 million, for the first half of 2020. For the first half of 2021, voyage expenses, net amount to income of $0.4 million resulting from gain on bunkers as compared to voyage expenses of $0.6 million in the same period of 2020. Vessel operating expenses were $6.2 million for the first half of 2021 as compared to $5.6 million for the first half of 2020. The increase is attributable to increased crewing costs in the first half of 2021 compared to the corresponding period in 2020, resulting from difficulties in crew rotation due to COVID-19 related restrictions and the higher number of vessels operating in the first half of 2021 as compared to the same period of 2020. Depreciation expenses for the first half of 2021 were $3.4 million compared to $3.3 million during the same period of 2020, mainly due to the increase in the cost base of certain of our vessels due to the recent installation of ballast water management systems and the higher number of vessels operating in the same period. On average, 7.19 vessels were owned and operated during the first half of 2021 earning an average time charter equivalent rate of $18,879 per day compared to 7.0 vessels in the same period of 2020 earning on average $7,390 per day. General and administrative expenses remained unchanged at $1.2 million during the first half of 2021 as compared to the same period of last year. In the first half of 2020, two vessels underwent special survey for a total cost of $1.7 million, while there were no vessels undergoing drydocking during the first half of 2021.

Interest and other financing costs for the first half of 2021 amounted to $1.1 million compared to $1.2 million for the same period of 2020. This decrease is mainly due to the decreased Libor rates of our loans in the current period compared to the same period of 2020. For the six months ended June 30, 2021, the Company recognized a $0.1 million gain on three interest rate swaps and a $4.1 million unrealized loss and $1.3 million realized loss on FFA contracts entered into during the second quarter of 2021 as compared to a loss on derivatives of $0.6 million for the same period of 2020, comprising of a $0.1 million unrealized loss on FFA contracts and a $0.5 million loss on three interest rate swaps.  

Adjusted EBITDA for the first half of 2021 was $13.2 million compared to $(1.0) million achieved during the first half of 2020.

Basic and diluted earnings per share attributable to common shareholders for the first half of 2021 was $1.03, calculated on 2,322,588 basic and $1.01, calculated on 2,364,879 diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $3.03 for the first half of 2020, calculated on 2,267,375 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the earnings attributable to common shareholders for the first half of the year of the unrealized loss on derivatives and the loss on debt extinguishment, the adjusted earnings attributable to common shareholders for the six-month period ended June 30, 2021 would have been $3.40 and $3.33 per share basic and diluted, respectively, compared to a loss of $2.76 per share basic and diluted for the same period in 2020. As previously mentioned, usually, security analysts do not include the above items in their published estimates of earnings per share.

Fleet Profile:

The EuroDry Ltd. fleet profile is as follows:

Note:  
(*) Represents the earliest redelivery date
(**) BPI stands for the Baltic Panamax Index; the average BPI 4TC is an index based on four time charter routes. 
(***) The average Baltic Kamsarmax P5TC Index is an index based on five Panamax time charter routes.

Summary Fleet Data:

(1) Average number of vessels is the number of vessels that constituted the Company’s fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was a part of the Company’s fleet during the period divided by the number of calendar days in that period.

(2) Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was owned by us including off-hire days associated with major repairs, drydockings or special or intermediate surveys or days of vessels in lay-up. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during that period.

(3) The scheduled off-hire days including vessels laid-up are days associated with scheduled repairs, drydockings or special or intermediate surveys or days of vessels in lay-up.

(4) Available days. We define available days as the total number of Calendar days in a period net of scheduled off-hire days incl. laid up. We use available days to measure the number of days in a period during which vessels were available to generate revenues.

(5) Commercial off-hire days. We define commercial off-hire days as days a vessel is idle without employment.

(6) Operational off-hire days. We define operational off-hire days as days associated with unscheduled repairs or other off-hire time related to the operation of the vessels.

(7) Voyage days. We define voyage days as the total number of days in a period during which each vessel in our fleet was in our possession net of commercial and operational off-hire days. We use voyage days to measure the number of days in a period during which vessels actually generate revenues or are sailing for repositioning purposes.

(8) Fleet utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our available days during that period. We use fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons such as unscheduled repairs or days waiting to find employment.

(9) Fleet utilization, commercial. We calculate commercial fleet utilization by dividing our available days net of commercial off-hire days during a period by our available days during that period.

(10) Fleet utilization, operational. We calculate operational fleet utilization by dividing our available days net of operational off-hire days during a period by our available days during that period.

(11) Time charter equivalent rate, or TCE, is a measure of the average daily net revenue performance of our vessels. Our method of calculating TCE is determined by dividing time charter revenue and voyage charter revenue net of voyage expenses by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, or are related to repositioning the vessel for the next charter. TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., spot voyage charters, time charters, pool agreements and bareboat charters) under which the vessels may be employed between the periods. Our definition of TCE may not be comparable to that used by other companies in the shipping industry.

(12) Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and management fees are calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. Drydocking expenses are reported separately.

(13) Daily general and administrative expense is calculated by dividing general and administrative expenses by fleet calendar days for the relevant time period.

(14) Total vessel operating expenses, or TVOE, is a measure of our total expenses associated with operating our vessels. TVOE is the sum of vessel operating expenses, management fees and general and administrative expenses; drydocking expenses are not included. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.

(15) Drydocking expenses include expenses during drydockings that would have been capitalized and amortized under the deferral method divided by the fleet calendar days for the relevant period. Drydocking expenses could vary substantially from period to period depending on how many vessels underwent drydocking during the period. The Company expenses drydocking expenses as incurred.

Conference Call and Webcast:
Tomorrow, August 5, 2021 at 9:30 a.m. Eastern Time, the Company’s management will host a conference call and webcast to discuss the results. 

Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (from the US), 0(808) 2380-669 (from the UK) or (+44) (0) 2071 928 592 (from outside the US). Please quote “EuroDry” to the operator. 

To listen to the archived audio file, visit our website http://www.eurodry.gr and click on Company Presentations under our Investor Relations page. The audio replay of the conference call will remain available until Wednesday, August 11, 2021.

Audio webcast – Slides Presentation:
There will be a live and then archived audio webcast of the conference call, via the internet through the EuroDry website (www.eurodry.gr). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast. A slide presentation on the Second Quarter 2021 results in PDF format will also be available 10 minutes prior to the conference call and webcast accessible on the company’s website (www.eurodry.gr) on the webcast page. Participants to the webcast can download the PDF presentation. 

EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Operations
(All amounts expressed in U.S. Dollars – except number of shares)

EuroDry Ltd.
Unaudited Consolidated Condensed Balance Sheets
(All amounts expressed in U.S. Dollars – except number of shares)

EuroDry Ltd.
Unaudited Consolidated Condensed Statements of Cash Flows
(All amounts expressed in U.S. Dollars)

 

EuroDry Ltd.
Reconciliation of Adjusted EBITDA to
Net (loss) / income
(All amounts expressed in U.S. Dollars)

Adjusted EBITDA Reconciliation:
EuroDry Ltd. considers Adjusted EBITDA to represent net (loss) / income before interest, income taxes, depreciation, loss on debt extinguishment and unrealized loss on Forward Freight Agreement derivatives (“FFAs”) and loss / (gain) on interest rate swap derivatives. Adjusted EBITDA does not represent and should not be considered as an alternative to net (loss) / income, as determined by United States generally accepted accounting principles, or GAAP. Adjusted EBITDA is included herein because it is a basis upon which the Company assesses its financial performance because the Company believes that this non-GAAP financial measure assists our management and investors by increasing the comparability of our performance from period to period by excluding the potentially disparate effects between periods of, financial costs, loss on debt extinguishment, unrealized loss on FFAs, loss / (gain) on interest rate swap derivatives, and depreciation. The Company’s definition of Adjusted EBITDA may not be the same as that used by other companies in the shipping or other industries. 

EuroDry Ltd.
Reconciliation of Net (loss) / income to Adjusted net (loss) / income
(All amounts expressed in U.S. Dollars – except share data and number of shares)

Adjusted net (loss) / income and Adjusted (loss) / earnings per share Reconciliation:
EuroDry Ltd. considers Adjusted net (loss) / income to represent net (loss) / income before unrealized loss on derivatives, which includes FFAs and interest rate swaps, and loss on debt extinguishment. Adjusted net (loss) / income and Adjusted (loss) / earnings per share is included herein because we believe it assists our management and investors by increasing the comparability of the Company’s fundamental performance from period to period by excluding the potentially disparate effects between periods of unrealized loss on derivatives and loss on debt extinguishment, which may significantly affect results of operations between periods. Adjusted net (loss) / income and Adjusted (loss) / earnings per share do not represent and should not be considered as an alternative to net (loss) / income or (loss) / earnings per share, as determined by GAAP. The Company’s definition of Adjusted net (loss) / income and Adjusted (loss) / earnings per share may not be the same as that used by other companies in the shipping or other industries.

About EuroDry Ltd.
EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands to consolidate the drybulk fleet of Euroseas Ltd. into a separate listed public company. EuroDry was spun-off from Euroseas Ltd on May 30, 2018; it trades on the NASDAQ Capital Market under the ticker EDRY. 

EuroDry operates in the dry cargo, drybulk shipping market. EuroDry’s operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company and Eurobulk (Far East) Ltd. Inc., which are responsible for the day-to-day commercial and technical management and operations of the vessels. EuroDry employs its vessels on spot and period charters and under pool agreements.

The Company has a fleet of 8 vessels, including 5 Panamax drybulk carriers, 1 Ultramax drybulk carrier and 2 Kamsarmax drybulk carriers. EuroDry’s 8 drybulk carriers have a total cargo capacity of 605,635 dwt.

Forward Looking Statement
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company’s growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forwardlooking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for dry bulk vessels, competitive factors in the market in which the Company operates; risks associated with operations outside the United States; and other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. 

Visit our website www.eurodry.gr