EuroDry Ltd.

Our income statement highlights are shown here. For the first quarter of 2020, we reported total net revenues of 5.1 million, adjusted EBITDA of 0.6 million dollars, and adjusted net income attributable to common shareholders of minus 2.1 million. Adjusted basic and diluted earnings per share attributable to common shareholders for the first quarter of 2020 was minus 91 cents per share. An average of seven vessels were owned and operated during the first quarter of 2020, earning an average time charter equivalent rate of $7,885 per day. The company declared its fifth cash dividend of $0.4 million approximately on Series B preferred shares, resulting in a net loss attributable to shareholders of $2.6 million or $1.17 loss per share basic and their users. Please turn to slide 4 for our chartering operations and sale and purchase highlights. The Pantelis was fixed for a trip about 45 to 55 days at around $5,000 per day. The Tasos was initially fixed for a trip for about 20-25 days at $2,500 per day, and afterwards it was fixed for a period of 95 to 100 days at $6,875 per day passing Singapore, which including the ballast voyage equates to a time charter equivalent of about $6,000 per day. The Ecaterini was fixed for a period of minimum 12 months at 106% of the CancerMax 5TC index. In the first quarter of 2020 we had no SSA contract. In reference to dry docking costs and repairs in 2020, up to date they are as follows. Vitassos entered the dry dock on 22nd of March 2020 and stayed there for a period of approximately 18 days and a preliminary estimate cost of about $900,000. The Pantelis just entered the dry dock today for the fourth special survey and ballast water tank installation, with an estimated cost of $850,000 for a period of 22 days, plus about $400,000 for the installation of the ballast water treatment plant. No more dry dockings are scheduled for 2020. Please turn to slide 5 to see a current snapshot of Eurodry's fleet. is comprised of seven dry bulk vessels with a fleet average age of 11.8 years and the cargo carrying capacity of 529,000 deadweights. Slide 6 shows the employment schedule. As you can see, effective coverage as of May 15, 2020 for the remainder of the year stands at about 16% in terms of minimum fixed rate contracts and about 50% contracted days based on minimum durations. The latter figure includes chips on index charters, which are open to market fluctuations but have secured employment. Turn to slide 7, where we will go over the market highlights for the first quarter of 2020. Year 2020 to date has been marked by the dramatic effects of the global economy and seaborne trade of the COVID-19 pandemic. Dry bulk seaborne trade in particular declined dramatically, causing charter rates for Panamax vessels to drop to levels of about 50% lower compared to fourth quarter of 2019, a period that already had shown signs of a weakening market. By mid-May 2020, charter rates have dropped even further, with the Cape market experiencing the hardest falls and now earning significantly less than Panamaxes. Port rates for Panamaxes at around $4,500 per day are slightly lower than operating expenses. One-year time charter rates have also dropped. but are nearly double those of current spot rates, indicating that the market participants expect a recovery within the next few months. As a result of the pandemic, the global economy is projected by the IMF to contract sharply by minus 3% in 2020, from 3.3% growth expected in the previous quarter. Among the developed economies, China's performance remarkably contracts to 1.2% from 6% previously, bringing nearly half-century of long-run growth to an end. For the advanced economies, the U.S. economic activity in 2020 plunges to minus 5.9% as the COVID-19 outbreak affects both the economy's supply and demand side when compared to the 2% growth estimated in the previous quarter. In this context, the IMF predictions for Eurozone indicate a huge drop in economic growth there as well, at minus 7.5%, while India's growth forecast was revised downward The IMF estimates that once the pandemic abates in the second half of 2020, and others. The global economy will grow by 5.8% as economic activity normalizes, helped by policy support. In this premise, the growth outlook of both the U.S. and the Euro area are expected to recover to 4.7% growth, whereas the 2021 focus for China is expected to be 9.2%, India 7.4%, Russia 3.5%, and Brazil 2.9%. To the dry bulk trade, according to Flaxus, projected growth in 2020 is now estimated at negative 3.7%, While in tandem with the IMF forecast of a swift recovery in 2021, the outlook for dry bulk trade growth is a strong positive 5.3% growth in that year. Please turn to slide 10. In 2020, the oil trade book, which is dominated by large vessels, currently stands at 6.3%. that scrapping and slippage will eventually result in a fleet growth of around 2.5%. For 2021, the order book is estimated at 3%, which after scrappings and slippage will result in a fleet growth of about 1.9%. The order book for 2022 is currently only 0.6%, which would imply that after scrappings and slippage, We could see a shrinking fleet that year if just a few new orders are placed with 2022 deliveries. Please turn to page 11. The order book as a percentage of total fleet up until May 2020 stands at 8.1%, which equals the lowest level of the last 20 plus years. The root cause for the poor performance of dry bulk shipping during the last decade has been the high number of deliveries, which easily outpaced the growth of the trade. After the peaking in 2008 of the contracting activity at about 50% of the existing fleet, the number of new orders has declined beyond the normal 10% level. With a relatively small order book and realistic demand expectations for the coming years, a fundamentally supported rebound in the dry bulk market should be expected in the near future, bearing in mind that it takes about one and a half to two years for a vessel to be delivered once it is ordered. So please turn to page 12, where we summarize our dry bulk outlook. The unknown duration of the pandemic and its financial consequences render any type of forecasting very difficult, as aforesaid. Initial estimates from Clarksons to quantify the effects of the coronavirus pandemic on dry-pulse trade indicate a sharp drop in demand in 2020, followed by a sharp recovery in 2021, similar to the way economies reacted during the 2009 financial crisis. Hoping that we have been through the toughest part of the pandemic's effects, In the first quarter of 2020, we might not expect to see any significant gains during the summer, but markets could see meaningful improvements by year-end. Parallel, as ordering of new ships is expected to be contained in the midst of the above demand uncertainty and the lack of clarity of the fuel for the future. Not knowing the optimal ships for even five years out, makes the placing of any new order that might require 20 plus years to pay off very speculative and risky. Therefore, 2021 indicates a promising year amidst a low order book and expectations for a strong global recovery which should continue into 2022. Next, please turn to slide 13. The left side of the slide shows the evolution of one-year time shutter rates of Panamax drypult vessels since 2000. Even though drypult vessel rates bounced back from the unsustainable all-time lows in 2016, COVID-19 is now forcing us to revisit these levels. The right-hand side of the slide shows the vessel values in relation to 10-year historical prices. In the last 2-3 years, dry bulk prices have been gradually increasing towards historical average prices above old-time low values that were established at the beginning of 2016 till the outbreak of the COVID, but had still not reached median or average values. After COVID-19, they corrected by about 10-15%, but prices have not fallen as dramatically as at the rate. With a stabilizing and even improving trade rate environment, we would expect asset values to improve as well. Therefore, we try to position ourselves to benefit from such a development, and we continuously evaluate opportunities for investments in vessels or pursue combinations with other fleets, especially focusing on using our status as a public company to provide a consolidation platform. Let me now pass the floor over to our CFO, Tassos Asturidis, to go over our financial highlights in more detail.

Thank you very much, Aristidis. Good morning from me as well, ladies and gentlemen. I will take you over now our financial results highlights for the three months ended March 31st, 2020. For that, please turn now to page 15. For the first quarter of 2020, who reported total net revenues of 5.1 million representing a 12.5% decrease over total net revenues of 5.8 million during the first quarter of 2019 and that was the result, as I have mentioned, of the lower time charter rates our vessels earned during the quarter. The company reported a net loss for the period of 2.3 million and a net loss attributable to common shareholders of 2.6 million as compared to net income attributable to common shareholders of 0.9 million and 0.4 million respectively for the same period first quarter of 2019. Depreciation expenses for the first quarter of 2020 were 1.6 million and remain the same compared to the same period of last year. Adjusted EBITDA for the first quarter of 2020 was $0.6 million compared to EBITDA of $2.5 million during the first quarter of last year. Basic and diluted loss per share attributable to common shareholders for the first quarter of 2020 was $1.17, calculated on $2.3 million basic and diluted weighted average number of shares outstanding, compared to basic diluted earnings of 18 cents for the first quarter of 2019, calculated on approximately 2.2 basic and diluted weighted average number of shares outstanding. Excluding the effect on the loss attributable to common shareholders for the quarter of the unrealized loss or gain on derivatives, and the loss on inventory valuation, the adjusted loss to common shareholders for the quarter ended March 31, 2020 would have been $0.91, basically diluted, compared to adjusted loss of $0.21 for the same period of last year. Usually security analysts do not include the above items in their published estimates of earnings per share. Please now turn to slide 16 to review our fleet performance. We'll start our review by looking first at our fleet utilization rate. As usual, our utilization rate is broken down into commercial and operational. During the first quarter of 2020, we had 100% commercial and operational utilization rate as compared to 100% commercial A 99.7% operational for the first quarter of last year. I would like to remind you here that our utilization rate calculation does not include vessels in scheduled dry docks or scheduled repairs if such events took place during the period. On average, seven vessels were owned and operated during the first quarter of 2020, earning an average time charter equivalent rate of $7,885 per day, compared to also seven vessels incorporated in the same period of last year, earning on average $9,472 per day. Our total daily vessel operating expenses, including management fees, general and administration expenses, but excluding dry dolting costs, averaged for the same quarter of 2019. If we move further down to this table, at the bottom of it, we can see the cash flow break-even rate that we had for the first quarter of 2020, a number which takes into account dry-drying expenses, cash interest expense, Loan repayment and preferred dividend payment. For the first quarter of 2020 then, our daily cash flow break-even rate was about $11,140 per vessel per day, compared to $11,557 per day for the same period of 2019, representing a small reduction. Let's now turn to slide 17 to review our debt profile. On the left part of this slide, You can see our loan repayments for the remaining life of our loans, as well as our balloon repayments. And on the right part of the slide, you can see a projection of our cash flow breakeven level for the following 12 months. As of March 31st, 2020, Eurodry set an outstanding back debt of 54.9 million, with an average margin of about 3%. In the entire year of 2020, we have to make total loan repayments of about 5 million. In 2021, as you can see from the chart, we have a balloon payment of 6.6 million euros, which is supported by three vessels, followed by a balloon payment of 2.1 million in 2022. These balloon payments are less than the scrap price of the respective four vessels, even at today's We anticipate that we'll have no issues with refinancing them when due. We have additional balloon payments in 2023 and 2025. A quick note on the cost of our funding. Assuming a LIBOR rate of 1%, on the top of the approximate 3% average margin I mentioned earlier, our cost of the senior debt would be around 4%. If we included the dividend cost of our preferred equity, which is 9.25% until January 2021, the average blended cost of our non-equity funding would have been around 5% as of the end of last year. Regarding our preferred equity, I would like to remind you again here that in June 2019, we repaid approximately 4.3 million of our Series D preferred shares In exchange of a reduction in our dividend rate from 12% down to 9.25% until January 2021, when our dividend rate is set to increase to 14%. The remaining outstanding amount of our series B preferred share at the end of last quarter was 15.4 million. Our loan repayment for the next 12 months, expressed on a vessel-per-day basis, contribute about $2,700 to our daily cash flow breakeven level per vessel, as you can see at the bottom line of the table on the right part of the slide. If we make assumptions for the remaining items that make up our cash flow breakeven rate, like operating expenses, general and administrative expenses, dry docking interest, etc., We come up with an overall cash flow rate even level per vessel per day for the next 12 months of approximately $10,800. Let's now move to slide 18, where we can see some highlights from our balances. This is indeed a simplified version of our balances, where we see the main groupings of our assets and liabilities. On the asset side first, We have another current assets of about 9 million, and including the book value of our vessels as of March 31st, 2020, our total assets amount to about 113 million. On the liability side, we have bank debt of about 54.9 million, which approximately accounts for 49% of the book value of our assets. Also, we have a preferred equity, as I mentioned, of 15.4 million, which accounts for 14% of our assets, and we have also other liabilities at about 4.5 million, accounting for 4% of our assets. These figures leave our net book value at around 39 million, or $16.8 per share. If we though take into consideration the market value of our vessels, which declined about 10% during the first quarter of 2020, our net asset value per share would be in the range of $11 to $13. Thus, the recent trading range of our shares of between $4 and $5 represents a significant discount to the value of the company. Thank you Tasso. Can we have some questions, if there are any please?

Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad and wait for the automated message of finding your line is open. Please state your first and last name before you ask your question. If you wish to cancel your request, please press star 2. Once again, please press star 1 if you wish to ask a question and star 2 to cancel that request. Thank you. We will now take our first question. Please go ahead. Your line is now open.