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EuroDry Ltd. Reports 113% Higher Net Revenues for the First Quarter

EuroDry Ltd., an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced its results for the three-month period ended March 31, 2022.

First Quarter 2022 Highlights:

Total net revenues of $18.3 million.

Net income attributable to common shareholders of $10.5 million or $3.69 and $3.64 earnings per share basic and diluted, respectively.

Adjusted net income attributable to common shareholders1 for the quarter of $9.5 million or $3.34 and $3.30 earnings per share basic and diluted, respectively, before unrealized gain on derivatives.

Adjusted EBITDA1 was $12.7 million.

An average of 9.54 vessels were owned and operated during the first quarter of 2022 earning an average time charter equivalent rate of $24,636 per day.

Recent developments

In April 2022, the Company acquired M/V Santa Cruz, a 76,440 dwt drybulk vessel built in 2005, for $15.75 million. The vessel was majority owned by a third party with a minority interest held by the Pittas family and has been managed by Eurobulk Ltd., also the manager of the majority of the Company’s vessels. The Company also assumed the existing charter of the vessel at $14,800 per day until July 2022. The acquisition was financed with own funds.

Aristides Pittas, Chairman and CEO of EuroDry commented:
“Despite the challenging global economic and geopolitical environment, during the first quarter of 2022, our vessels were employed at very profitable rates, the highest compared to any period of the last 12 years except the second half of 2021. The significant earnings generated by our vessels have allowed us to exploit investment opportunities and to expand our fleet by 2 units in 2022, building on our two-prong growth strategy that combines modern eco vessels built during the last 8-10 years that have attractive commercial characteristics with high quality older and, thus, lower capital cost vessels that make outsized contribution to our earnings per dollar invested.”

“We continue to remain very optimistic about the prospects of the drybulk market in spite of the global uncertainties which could affect overall economic growth and demand for drybulk shipping. Our optimism is based on the limited supply of vessels which is the result, in the near term, of the continuing inefficiencies in the transportation system from the pandemic and the Ukraine Crisis in the medium term, of the historically low orderbook which is near the lowest levels of the last 25 years expressed as a percentage of the fleet. In addition to the above, the effects of the upcoming application of environmental regulations could further restrict the supply of vessels over the next several years.

“Within this environment, we are pursuing opportunities to grow our fleet in accretive ways and manage our profitability to maximize the rewards to our shareholders.”

Image: EuroDry Ltd.

Tasos Aslidis, Chief Financial Officer of EuroDry commented:
“Our net revenues for the first quarter of 2022 were higher by 113% as compared to the first quarter of 2021. This was the result of higher average charter rates by 65.1% earned during the quarter as compared to the first quarter of 2021 and the increased number of vessels owned and operated in the first quarter of 2022 as compared to the same period of 2021.

Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, during the first quarter of 2022 remained at around the same levels to the same quarter of last year.

Adjusted EBITDA during the first quarter of 2022 was $12.7 million compared to $4.0 million achieved for the first quarter of last year. As of March 31, 2022, our outstanding debt (excluding the unamortized loan fees) was $75.6 million versus restricted and unrestricted cash of approximately $14.2 million.”

First Quarter 2022 Results:
For the first quarter of 2022, the Company reported total net revenues of $18.3 million representing a 113% increase over total net revenues of $8.6 million during the first quarter of 2021, which was the result of the higher time charter rates our vessels earned during the first quarter of 2022 and the increased number of vessels owned and operated in first quarter of 2022 compared to the same period of last year. The Company reported net income and net income attributable to common shareholders for the period of $10.5 million, as compared to a net income and a net income attributable to common shareholders of $0.9 million and $0.4 million, respectively, for the same period of 2021. For the first quarter of 2022, a gain on bunkers resulted in positive voyage expenses of $1.0 million for the period as compared to positive voyage expenses of $0.3 million in the same period of 2021 resulting from gain on bunkers. Depreciation expenses for the first quarter of 2022 were $2.5 million compared to $1.7 million for the same period of 2021 as a result of the higher number of vessels owned and operated in the first quarter of 2022. Vessel operating expenses increased to $4.2 million for the first quarter of 2022 from $3.1 million in the same period of 2021, mainly due to the higher number of vessels owned and operated as well as due to inflationary increases. Management fees for the period were $0.7 million compared to $0.5 million for the same period of 2021, again due to the increased number of vessels owned and operated in the first quarter of 2022, as well as due to the adjustment for inflation in the daily vessel management fee, effective from January 1, 2022, increasing it from 685 Euros to 720 Euros. Similarly, general and administrative expenses were $0.7 million compared to $0.6 million, respectively, for the first quarter of 2022 as compared to the same period of last year. This increase in mainly due to the increased cost of our share-based compensation in the first quarter of 2022 compared to the same period of last year.

Interest and other financing costs for the first quarter of 2022 remained unchanged at $0.6 million compared to the corresponding period of last year. For the three months ended March 31, 2022, the Company recognized a $0.9 million gain on derivatives, comprised of an unrealized gain of $1.0 million and a realized loss of $0.1 million on four interest rate swaps, as compared to a loss on derivatives of $1.6 million for the same period of 2021, comprised of $0.7 million realized loss and $1.1 million unrealized loss of forward freight agreements and $0.2 million gain on three interest rate swaps.

On average, 9.54 vessels were owned and operated during the first quarter of 2022 earning an average time charter equivalent rate of $24,636 per day compared to 7.0 vessels in the same period of 2021 earning on average $14,924 per day.

Adjusted EBITDA for the first quarter of 2022 was $12.7 million compared to $4.0 million achieved during the first quarter of 2021.

Basic and diluted earnings per share attributable to common shareholders for the first quarter of 2022 was $3.69 and $3.64, calculated on 2,847,091 basic and 2,879,436 diluted weighted average number of shares outstanding, respectively, compared to basic and diluted earnings per share of $0.19 for the first quarter of 2021, calculated on 2,291,471 basic and 2,320,577 diluted weighted average number of shares outstanding.

Excluding the effect on the earnings attributable to common shareholders for the quarter of the unrealized (gain) / loss on derivatives, the adjusted earnings attributable to common shareholders for the quarter ended March 31, 2022 would have been $3.34 and $3.30 per share basic and diluted, respectively, compared to adjusted earnings of $0.55 per share basic and diluted for the quarter ended March 31, 2021. Usually, security analysts do not include the above item in their published estimates of earnings per share.
Source: EuroDry Ltd.

 

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