EuroDry Ltd.

Thank you for standing by, ladies and gentlemen, and welcome to the Eurodry conference call on the first quarter 2021 financial results. We have with us today Mr. Pittis, Chairman and Chief Executive Officer, and Mr. Aslides, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you wish to ask a question, you will need to press star and 1 on your telephone keypad and wait for an automated message stating your line is open. I must advise you that this conference is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed. Before passing the floor to Mr. Peters, I would like to remind everyone that in today's presentation and conference call, Eurodry will be making forward-looking statements. These statements are within the meaning of the federal securities laws. Matters discussed may be forward-looking statements which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to slide two of the webcast presentation, which has the full forward-looking statement. And the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And I would now like to pass the floor over to Mr. Peters. Thank you, sir. Please go ahead.

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Anastasios Sasslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the three-month period ended March 31st, 2021. Please turn to slide three. Our income statement highlights are shown here. For the first quarter of 2021, we reported total net revenues of 8.6 million and a net income of 0.9 million. Adjusted net income attributable to the common shareholders was $1.3 million, or 55 cents per share. Adjusted EBITDA for the period stood at $4 million. In stark contrast to a year ago, it has been a very positive 2021 so far, with dry park rates rebounding significantly as a result of solid trade growth and limited supply growth. The dry park market continues to impress with its strong trajectory since the onset of this year, as during the past week the Baltic Dry Park Index reached its highest level since October 2010. While she afford us as leaders, we'll go over our financial highlights in more detail later on in the presentation. Please turn to slide four for our operational highlights. Motor vessel Pantelis was fixed for a trip of about 80 to 100 days at $10,450 per day that is scheduled to be concluded by the end of the month. and is currently being negotiated for a three to five month charter at a level around $23,000 a day. The DASHOS was fixed in January for about 60 days at $8,750 per day, and thereafter it was fixed for about 50 to 65 days at $19,750 per day. Lastly, The Ecaterini was extended at 106% of the CAMSR Max index for a minimum period until March 2022. Our hedges through FFAs, which were put in place in the last quarter of 2020 and January 21, naturally have been loss-making in such a strong market. In Q1, we settled 120 days, the equivalent of 1.3 Panamax vessels, which were originally sold at a rate of $10,995 per day, with a loss of $724,000. We have also sold 90 days per quarter, Q2, Q3, and Q4 of 2021, the equivalent of one Panamax vessel at $12,550 per day. During Q1, there were no dry dockings or major repairs. A few days ago, we agreed to acquire a motor vessel Blessed Luck, a 76,000 deadweight dry bulk vessel built in 2004 in Japan for $12.12 million. The vessel is majority owned by a third party and has been managed by Eurobulk, also the manager of company's vessels. The vessel is expected to be delivered to the company upon completion of its current voyage within May 2021. The acquisition will be financed partly by a short-term seller's credit of $5 million and a one-year bridge loan of $6 million provided by an entity affiliated with my family. And the remaining funds will come from the company. Both the seller's credit and the short-term loan carry an annual interest rate of 8%. In parallel, the company is in the process of arranging a bank loan with the acquired vessel as collateral, expected to be finalized within approximately three months. This will provide sufficient funds to repay the seller's credit in full and possibly part of the bridge loan. At the same time, The company entered into a charter agreement for the vessel for a period between a minimum of 11 months and a maximum of 13.5 months at a gross rate of $19,500 per day, which will commence upon delivery of the vessel and contribute about $4 million of EBITDA during the minimum period of the charter. The acquisition of the blessed LARC will complement our cluster of medium-age Japanese-built panoramic-sized vessels alongside our cluster of own-built new buildings, increasing our fleet to eight units, thus contributing to a proportional increase in our EBITDA. Please turn to slide 5 for a summary of Eurodry's current fleet. As you can see, it's comprised of seven dry-buck vessels with a fleet average age of 12.6 years and the cargo carrying capacity of about 530,000 deadweight tons. As I mentioned before, following the delivery of the blessed luck, our fleet will increase weight vessels. Henceforth, the fleet average age will slightly increase to 13.1 years and the cargo carrying capacity... will increase to approximately 605,000 deadweight. Slide 6 shows the current vessel employment schedule. As you can see, the effective coverage for the remainder of 2021, without including the blessed luck, stood at about 7% in terms of minimum fixed rate contracts. If we include the vessel that is hatched through FFAs, our coverage increases to 21%. This figure, of course, excludes chips on index charters or in pools that have secured employment but are open to market fluctuations. We are happy with our current positioning of little forward coverage as we are optimistic about the development of the market. Tasos will present you our EBITDA calculator later on, showing how strongly current FFA market predictions can boost our EBITDA and consequently earnings as well. This calculator will enable each one of you to easily use his own charter rate assumptions to determine our approximate expected EBITDA and make their own conclusions at where our stock should be trading at. Now let's turn to slide 7, where we'll go over the market highlights for the quarter ended on March 31, 2021. During the first quarter, dry bulk index increased very strongly, driven by buoyant demand and operational bottlenecks. The trend, after a short dip, is continuing in Q2. The cave-sized freight market, which was the last to react to the improving markets, reached levels not seen in the past decade, prior to slightly correcting during the last few days. According to Clarkson's spot To Clarkson, spot rates for Panamaxes averaged $16,100 a day in the first quarter, and by May 14 they had increased to around $24,700 per day. Meanwhile, one-year time charter rates averaged close to $18,000 per day in Q1, but by last week they had increased to about $22,000 per day. As vaccine production is ramping up and rollouts are gathering pace around the world, a return to more normal levels of social and economic activity looks to be achievable by most developed economies, thus pointing to an improved outlook for global growth. Of course, the situation in in developing and underdeveloped countries is still chaotic, with India affected the most. But overall, global demand seems to continue to rise. In the beginning of April, the IMF projected world GDP growth in 2021 was revised upwards from 5.5% in January to 6% now. Among the developed and developing economies, China and India were expected to grow the strongest in 2021. China's growth was revised upwards to 8.4% compared to 8.1% growth in the previous quarter. India was expected to grow by a very firm 12.5%. I would think that the current pandemic wave may dent this growth a bit, but hopefully not too significantly. Most important economies are expected to see a further growth upturn for this year when compared to the previous quarter estimates. The US economy is estimated to grow at 6.4%, while the Eurozone's GDP is set to rebound to 4.4%. Looking ahead, global growth for 2022, according to the IMF economic outlook, will continue to see above-average increases at 4.4%, with most individual countries continuing to grow above trend, except China and India, which are expected to grow at a still very reasonable 5.6% and 6.9% respectively. Looking at the dry park trade growth, and based on Clarkson's projections for 2021, we expect demand to continue trading upwards at 3.4% for this year. For 2022 and 2023, the dry bulk trade is expected to grow at a moderate pace of 2.6% and 2.5% respectively. Please turn to slide 10. The order book as a percentage of total fleet up until May 2021 stands at 5.6%. This is the lowest level seen in the last 25 plus years. The main reason for the weak performance of dry bulk shipping during the last decade has been the high number of deliveries, which easily outpaced the growth of the trade. With the current order book and continuing demand trends for the coming years, we expect a fundamentally supported and continuous rebound in the dry bulk trade for the next couple of years at least. Please turn to slide 11 to review the dry bulk delivery schedule. For 2021 deliveries, the order book is still dominated by the larger vessels. According to Clarkson's, fleet growth in 2021 will be around 3.8%, taking into account scrapping and other fleet changes that have taken place to date. Less than the demand growth and supporting the case for a strengthening market, which is further enhanced due to the logistical bottlenecks we are experiencing. For 2022 and beyond, the order book is currently around 3.4%, which could imply that through scrapping and slippage, we could see a minimal fleet growth until 2024, when probably new vessels will have to be ordered for. Otherwise, we could see rates and prices surpassing even the previous super cycle rates if demand holds up. Please turn to slide 12. where we summarize our outlook on the dry bulk market. The unknown duration of the pandemic and its financial consequences render any type of modeling very difficult. However, if the distribution of vaccines can help with the containment of COVID-19 in the developed markets by the first half of 2021, as widely anticipated, we can expect significant global demand growth for dry bulk commodities as the world economy will be transitioning towards and countries are planning to spend billions in new infrastructure projects. Furthermore, disruptions related to the pandemic create a favorable environment for ships as many COVID-19-related delays squeeze the available fleet. Ordering of new ships for 2023 and 2024 deliveries is expected to be contained due to the lack of clarity for the fuel of the future, as not knowing the optimal ship for even five years out makes the placing of any new order very speculative and risky. Also, another supporting factor, as mentioned before, is the lack of open slots in 2024, as CPRs have filled their space with container and tanker orders. Therefore, 2021 and onwards indicate a couple of promising years amidst a low order book and even further demand rebound, expectations of further easing in trade tensions between China and the U.S., additional economic stimulus, and most importantly, China and India. China is expected to grow by 8.4%, according to the IMF. When China grew at such levels in the past 20 years, the dry-pelt market experienced extraordinary returns. India's projected growth at 12.5%, if not substantially reduced due to the latest pandemic wave, is bound to increase its overall seabourn trade as well. Let's turn to slide 13. The left side of the slide shows the evolution of one-year time charter rates of Panamax dry bulk vessels since 2000. As of May 14, 2021, the one-year time charter rate for Panamax with capacity of 75,000 deadweight tons stood at around $22,000 per day, the highest it has been during the last years and approaching the levels last seen in 2010. The demand-supply balance, the pace of increases, and the prevailing sentiment all point to the possibility we will be seeing still higher values. As you can see on the right side of the slide, the current price of a 10-year-old Panamax vessel is around $20 million. Kindly note that since January 2021, Clarkson's has Over the past year, dry bulk prices have gradually been increasing, exceeding the historical median levels and reaching towards the historical average prices. With a continuous strengthening freight rate environment, we would expect to see asset values to increase even further. In this environment, we are of course capitalizing on the strong market to strengthen our balance As free liquidity increases from next quarter onwards, we will decide how best to use it for the benefit of our shareholders, be it a reduction in debt, further vessel purchases, share buybacks, reinstitution of dividends, or most probably combinations. We also continuously evaluate opportunities for possible combinations with other fleets, focusing especially on using our status as a public company, which can provide significant advantages and value. Let me now pass the floor over to our CFO, Tassos Aslidis, to go over our various financial highlights in more detail.

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you through our financial highlights for the first quarter of 2021 and compare the figures to the same period of last year. For that, let's turn to slide 15. For the first quarter of 2021, the company reported total net revenues of 8.6 million, representing a 69.3% increase of a total net revenue of 5.1 million during the first quarter of 2020, and that was the result of the higher time shorter rates our vessels earned during the first quarter of this year. The company reported net income for the period of 0.9 million, a net income attributable to common shareholders of 0.4 million, as compared to a net loss and a net loss attributable to common shareholders of 2.3 million and 2.6 million respectively for the same period of last year. Interest and other financing costs for the first quarter of 2021 amounted to 0.6 million, slightly decreased as compared to 0.7 million for the same period of 2020. Recession expenses for the first quarter of this year were $1.7 million compared to $1.6 million for the same period of last year. Adjusted EBITDA for the first quarter of 2021 was $4 million compared to $0.6 million achieved during the first quarter of 2020. Basic and diluted earnings per share attributable to common shareholders for the first quarter of 2020 was $19. calculated on 2.3 million shares basic and 2.32 million shares diluted, compared to basic diluted loss per share of 1.17 million for the first quarter of 2020, again calculated on 2.27 million basic diluted weighted average number of shares outstanding. Excluding the effect of the earnings attributable to common shareholders for the quarter of the unrealized loss of derivatives, the adjusted earnings, again attributable to common shareholders for the first quarter of 2021, would have been 55 cents per share, basically diluted, compared to an adjusted loss of 91 cents per share, basically diluted, for the first quarter of last year, in which the adjustment included also the loss on the write-down of inventory. Usually, security analysts do not include the above items in their published estimates of earnings per se. Let's now turn to slide 16 to review our fleet performance. We will start our review by looking first at our fleet utilization rates for the first quarter of 2021 and 2020. As usual, our fleet utilization rate is broken down into commercial and operational. During the first quarter of 2021, both our commercial and operational utilization rates were 100%, the same levels that happened to be during the first quarter of last year. During both of those quarters, we owned and operated an average of seven vessels. In the first quarter of 2021, our seven vessels earned an average time charter equivalent rate of $14,924 per vessel per day, compared to $7,855 per vessel per day earned during the first quarter of last year. Our total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding trade-off and costs, averaged $6,571 per vessel per day during the first quarter of this year, as compared to $6,055 per vessel per day during the same period of 2020. If we look further down in this table, we can see the cash flow break-even level rate that we had during the first quarter of last year, which takes into account variable expenses, cash interest expenses, loan repayments, and our preferred dividends if paid in cash. For the first quarter of 2021, our daily cash flow break-even rate was about $10,589 per vessel per day, as compared to $11,146 per vessel per day that we had during the first quarter of 2020. Let's now move to slide 17. This is a new slide, and we included it to provide our shareholders and investors a tool to assess the airing potential of our fleet for the rest of 2021. The table shown in this slide has two components. The first refers to our fixed-rate contracts and does include the contribution from the soon-to-be-acquired NV Blessed Luck. It's not worthy that, except for the charter of Blessed Luck, Only two of our vessels have fixed trade contracts for about 90 days in total during the second quarter. We consider this fortuitous as the market is performing very well, producing and being expected to produce significant earnings for us. The rest of our vessels are employed in contracts linked to the relevant to their size Baltic dry index. Our calculator, shown here, indicatively shows the Supermax and Panamax Baltic forward rates as of May 17, 2021, and also shows how these index levels get translated to rates for our ships. We actually show the final blended rate for the open days of our fleet, which you can see right below the Supermax and Panamax forward rates in the table, and which, as you can see, turns out to be very similar to the index levels. Based on these assumptions, and by further assuming, for simplicity, $6500 per vessel per day operating and GNA expenses, and a 5% commission rate, we can estimate the EBITDA contribution of our fleet. The final result, as you can see in the second to the last line of the table, is adjusted for the FFA contract of 90 days per quarter for the rest of the year that we have entered. This overall exercise is meant to provide a tool to calculate our EBITDA for the remaining of 2021, as I mentioned. Obviously, one can render his or her own assumptions about the rate to do that. However, it's hard not to observe that if the market rates for the rest of the year currently indicated by the FFA contracts materialized, our quarterly EBITDA will more than double in the end of 2021. And also please note that since we did this table a couple of days ago, the forward FFA rates have moved up by almost 10%. Let's now move to the next slide, slide 18, to provide some highlights. Slide 19, I'm sorry. to review our debt profile. On this slide, on the top part, we can see our loan repayments as well as our balloon payments. And on the bottom of the slide, we can see a projection for our cash flow break-even level over the following 12 months. As of March 31, 2021, we had an outstanding bank debt of about $56 million. And this does not include the debt we expect to assume for the acquisition of the left lot, which, as explained earlier by our TV, should amount to about $11 million. The chart at the top of the slide shows the debt repayment profile. And in 2021, as you can see, we're going to make about $5 million of debt repayment. And we have an $8 million balloon payment at the end of the year, which is collateralized by three of our Panama expenses. This balloon payment in 2021 is well below the scrap price of the respective assets collateralized. And we anticipate that we'll have no issues in refinancing it when we choose to do so. From this chart, we can see that we have a constant level of loan repayments, roughly constant level over the next four years, with another balloon payment coming due in 2023 of about $11.3 million, which is collateralized by yarn of our ComServ Max assets. As we are in this slide, I would like to make a quick note on our cost of funding. The average margin of our debt as you can see on the right part of the slide in the node, is about 3%. Assuming a LIGO rate of about 0.3% on the top of it, the cost of our senior debt is estimated to be around 3.2%. If we include the cost of the preferred equity that we have, the average blended cost for our non-equity funding would be around 4% as of the end of the last quarter. Regarding our preferred equity, I would like to highlight that following a 3 million net redemption that we made during the first quarter of 2021, we have agreed to reduce the dividend rate on the preferred equity to 8% per annum if paid in cash and 9% if paid in time, the entire option, until January 2023. It is important to note here that this dividend rate was set to increase to 14% last January, And now that increase has been pushed out to 2023. On the bottom chart of this slide, we can see our cash flow break-even estimate for the next 12 months, which is expected to be around $10,573 per vessel per day. That doesn't include the blessed luck, and the addition of the blessed luck and its related loans is expected to increase the break-even level by about $250 per day. Let's now move to the next slide, slide 20, where we can see some highlights from our balance sheet. This slide, as in previous presentation, gives you a snapshot of our assets and liabilities in a compact way. On our asset side first, we can see that we have cash and other assets of about 10.4 million, again, as of the end of March of 2021. Of course, on our asset side, we have Our vessels, the book value of which amounts to 97.7 million, making our total book value to about 108.1 million. On the liability side, our bank debt as of the end of the last quarter stood at 56 million, which approximately represents 52% of the book value of our assets. Our preferred equity stood at about 13.6 million, which represents another 12.6% of our book assets, and other assets liability of about $3.9 million, or 3.6% of our assets. That leaves us with a net book value of $34.6 million, which translates to $14.7%. However, the market value of our fleet has run ahead of its book value. We estimate that the market value of our vessels the seven vessels that we currently own, is about 20% higher than their book value, resulting in an estimate for our net asset value per share of about $22. And although our share price has recently increased, we believe it still trades below that level, and we believe it represents an investment with significant appreciation opportunities. And with that, I would like to turn the floor back to our speaker.

So let me open up the floor now for any questions we may have. Thank you.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star and 1 on your telephone keypad and wait for the automated message advising your line is open. Please then state your first and last name before you ask your question. If you wish to cancel your request, please press star and 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.

Hello, good day. Tate Sullivan from Maxim Group. Just starting on slide 17 with the EBITDA calculator, have you calculated or shown this table before in your company's history? And if not, just why did you think this was a good time to introduce it?

I think it's the first time we provide such a tool. I think it's what prompted us to provide that capability tool Our investors see the significant change we object to in the market and the expected improvement of our outlook. We wanted to highlight and give the investors the opportunity to understand and even play themselves with these assumptions to assess the potential for our company to have this profitability increase.

Yeah, it's great. And I would just, I mean, just with that, a couple questions on the table, too. Does it include the new contract you mentioned, the Pantelis contract? And can you review the details of that contract as well, please?

It does not include the contract that I just mentioned that Pantelis is negotiating.

This contract, no, this is still on subject, so it will probably conclude within today or tomorrow. But it's not 100 percent fixed. We think it will be fixed, but it's not 100 percent fixed.

But, as you can see, it does include the one-year contract that we booked on the vessel that we are acquiring.

Right. Okay. Okay. And then just on the slide 17, the EBITDA calculator as well, it implies that the EBITDA estimates are based on FFA rates you mentioned as of 10 days ago or what was the timing?

May 17, I think it's mentioned. May 17. Okay.

Okay, great. And before turning over on the acquisition for about $12 million, can you give more background, if you can, just on what made you comfortable closing it at that level, and are there other comparative acquisitions that you can highlight, and any background that you can provide, please?

Sure. We saw the market rising and saw that we could fix this ship out at a very decent rate for at least a year. which we did, and which makes us comfortable that, you know, within the first year we will be able to essentially recover approximately $4 million of that total investment. So even though we paid the price which is higher than the historical average prices and the historical median prices for such vessels, After the passing of this year with this extra charter, we will have reduced the price to around 8 million, which is even below the median historical levels. And forecasting a high market going forward, we think it's a very good addition to the company. The problem the company has been facing, of course, is that our liquidity has not built up yet. We can see it building up as time goes by very significantly. We did this EBITDA calculator to help ourselves as well evaluate how much we will be increasing our returns and our liquidity to see how we can grow the company, but very conservatively, in this rising market.

Okay, great. Well, thank you for that background. I'll turn it over. Thank you. Thank you.

Thank you. We will now take our next question. Please go ahead. Your line is now open. Excuse me, caller. Is your line on mute? Your line is now open.

I apologize. Good morning, Aristides. Good morning, Tassos. This is Pope Grant from Noble Cash Markets. Tassos, I just wanted to double-check on just your EBITDA calculator and just ask you, you know, in the first quarter, you had the FFA's adjusted in Section A. Why didn't you do that for the sake of consistency over the rest of the year with your contracted days, just because the FFAs are already locked in.

You mean why it's included in the 4.0, in the 4.0, if it dies, of course, it will be on the online sheet below, right? Is that what you're asking?

Yeah, that's what I'm asking as far as just... You know, just for the sake of comparison, it would have been easier just to sort of look at it.

Maybe it would depress the average TCE rate too much, but... Yeah, I mean, the TCE rate, actually, it's net of the FFA that is shown there, the 14, 9, 24. I debated in my mind where to put the FFA contributions, and I decided I wanted to separate the fixed from the... So that's why I chose to put it in the line of what was supposed to be included in the lower part of the table, where supposedly it's only the open information.

Yes, I understand. No, I think it's very helpful. I mean, there's always a little bit of art to it as opposed to science, but I think it's a helpful way to look at your research. operating leverage as we look through the rest of 2021. And just to highlight, the Pantelis, you know, it's consistent. The potential rate on the Pantelis is consistent with what, you know, the FFA was for on May 17th, you know, in just general terms.

Yeah, I think I already mentioned $23,500, $25,000 a day, which is actually higher than... what would have been the implied trade for Pantelis. So that's going to be contributing to the EBITDA.

Okay. And then when you're looking at the loan that you potentially are signing, you know, lining up for the blessed luck, what should we be thinking about as far as just a leverage percentage? You know, I can probably do the math a little bit. You know, you have... $11 million of either seller credit or bridge loan. So how much of that will be covered? I couldn't really tell exactly how much you, you know... It will be around $8 million, Paul.

It will be around $8 million.

We are in the process of signing up a term sheet with a bank for a loan of about $8 million. So that would allow us to repay... the seller's credit and half of the other loan. And we would have our option, and we still would have $3 million left for short-term liquidity purposes.

Great. And I apologize, you might have mentioned it, but what...can you give us sort of an outlook of...for the TASOs beyond the end of June? Are you...are you Are you in discussions about potentially, you know, a follow-on charter for that? Or can you just give us an idea of what the outlook for TATOS looks like?

Yes. We haven't started discussing a new charter for the TATOS presently. It's still quite a long time till then. Probably... The elder vessels, we will continue trading in trip time charters or small time charters, but we haven't had any discussions yet. We will take whatever the market is. We want to have, as you see, we have about 75 percent experience. including the blessed luck. We like that. We are optimistic about the prospects of the charter market going forward, so we like to be playing the market at this stage with a significant percentage of our fleet. That's why all the other vessels are in index-linked charters.

Okay. And then maybe just to follow on about Erskine's, about the blessed luck, You mentioned your net value is low enough where you think it's worth the risk, but you do highlight that there's uncertainty as far as the compulsion systems going forward. You're buying an older asset. You're increasing your age profile. It seems to be counter to what a lot of other companies are doing there. Can you just maybe even expand a little bit more than the comments you already made on how you looked at that transaction?

Sure. Obviously, a play in the blessed luck is not a play in the long term. of the company. It's a short-term, I would say, rather opportunistic play whereby You know, this year we're going to make $4 million on this ship. We think that next year will also be strong, and therefore even in two years we will have brought the vessel to a very low valuation, below the scrapped value of the ship. So we think that we will have a relatively old vessel. All these vessels built between 2000 and 2013, they are not very different in the consumptions that they have. So it's really after 2013 that they started building more echo vessels, i.e. vessels consuming less fuel. And again, the differences are not huge. We do expect a very significant break from some But till that time, I think this vessel probably can live easily until it's 25 years of age. This is the average scrapping age of ships, and this is a very well-maintained ship. So technically we think that this can live for more than the two years that is required potentially can contribute further for a few more years.

That's helpful. I was going to ask you what you thought the remaining life was. It sounds like that's 9 to 10 years maybe outside.

As I said, 25 years is the average scrapping age for dry bulk vessels currently. Maybe it's gone down by one year at most. This ship, it has to pass its next special survey in, what is it, four years from today. We think it will be able to do that. But it will depend, of course, on the economic considerations at the time. If the market

And then, Tassos, you may have talked about it, but if you would just, I thought I got distracted during the middle of the call, but would you highlight just any dry docking activities that you have over the rest of the year? And then also just talk about, you know, any cost pressures you're seeing, you know, whether the first quarter run rate as far as vessel effects is, you know, roughly $5,700 we should use for the rest of the year or just Any cover on that would be helpful.

We don't have any dry dock schedule for this year. And that obviously helps our 2021 results. In terms of cost pressures, again, I don't see so far anything extraordinary that is worth mentioning. Obviously, the COVID situation has made certain operations in ports a bit more difficult. difficult due to congestion. I think, for example, we have a couple of vessels that are waiting to get into port. Sometimes there are some issues with crew replacement and the like, but nothing really that makes us to flag them as extraordinary risk factors, up to what we know to this point. Great.

And just to clarify, I think you had said this, but The preferred dividend, did you pick in the first quarter? It looked like you did.

Actually, no, we didn't pick. This is because the dividend accrues and is paid the following quarter. I think we're going to pay the Q1 dividend in cash, but it will be in a cash expense in Q2. We did pay the Q4 dividend in kind. That's why we don't have any dividend this quarter on the cash flow very given basis. Okay, great. Thank you so much. Thank you. Thank you.

Thank you. We will now take our next question. Please go ahead. Your line is now open.

Hello, thank you. A follow-up from Nate Tate Sullivan at Maxim. Todd, your comments, well, with the EBITDA calculation, and let's say, I mean, $31 million of EBITDA on 21, and then your comments of potential buybacks, dividend or debt reduction, and then I'm just looking at your slide. You have $8 million of balloon payments due this year. What is your plan with that $8 million? Would you still extend that and then extend that maturity, or can you just give context to what you might do there? Sure.

I think this eight million, this balloon will be extended because it's relatively cheap money. If we decide to repay something, it will be the preferred So the 8 percent money has priority to be repaid. The normal bank debt will be less than 4 percent. So we need to decide, and we have to decide by next quarter what we will be doing with our increasing liquidity, because, okay, this quarter By the end of next quarter, we will. And we always look at the situation at that point in time and decide what is the better use of our liquidity and what would benefit our shareholders most then. Okay.

Thank you. That's it for me. Thank you very much. Thank you.

Thank you. There are no further questions at this time. I would now like to hand back to Mr. Peters for closing remarks.

Thank you all for attending our conference call today under these nice market circumstances. We'll talk to you again in three months' time. Thanks, everybody.

Let us conclude our conference for today. Thank you for participating. You may all now disconnect.