EuroDry Ltd.

Thank you for standing by. Ladies and gentlemen, and welcome to the New York Drive Limited conference call on the second quarter of 2024 financial results. We have with us today Mr. Tassos S. Levy, 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 section, at which time, if you wish to ask a question, put your first star 1 on your telephone keypad and wait for your name to be announced. 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 Mrs. Lee, I would like to remind everyone that in today's presentation and conference call, your drive will be making forwarding statements. These statements are within the meaning of the Federal Securities Law. Matters discussed may be forwarding 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 number two of the webcast presentation, which has the full forward-looking statement, and the same statement was also included to the press release. Please take a moment to go through the whole statement and read it. And now, I would like to pass the floor to Mr. S. Leidy. Please go ahead, sir.

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. I'm Tassos S. Leidy, the CFO of EvoDrive. Together with me is Mr. Simos Pariaros, our chief administrative officer, and Ms. Athena Attalioti, our finance manager. Our chairman and CEO, Aristides Peters, who usually hosts this call, will not be able to join this presentation today due to overlapping engagements. The purpose of today's call is to discuss our financial results for the six-month period and quarter ended June 30th, 2024. Please turn to slide three of the presentation to see our financial highlights for the period. For the second quarter of 2024, we reported total net revenues of 17.4 million and a net loss attributable to controlling shareholders of 0.41 million or $0.15 loss per share, basic and diluted. Adjusted net loss attributable to controlling shareholders for the quarter was $2.45 million, or $0.17 loss per share, basic and diluted. Adjusted EBITDA for the quarter was $5 million. Please refer to the press release that was released earlier today for reconciliation of adjusted net loss attributed to controlling shareholders to adjusted EBITDA. We will go over our financial highlights in a bit more detail later in the presentation. As of August 8, 2024, we had repurchased a total of 313,318 shares of our common stock on the open market, for a total of about 5 million, are under our repurchase plan of up to 10 million announced in August 2028. The program, which was renewed in August 2023 for another year, has been further extended for an additional year. We will continue to use our shared purchase program at management discretion, depending on the level of our stock price, to enhance our ability to increase long-term shareholder value. We are also very happy to announce our 2023 Sustainability Report, which was uploaded to our website today. Please now turn to slide 4 for another view of our chartering, operational, and guidebooking highlights. On the chartering side, you can see that most of our charters fixed during last quarter are for short periods, varying from 25 days on the one end to 80 to 100 days on the other end. Even the motor vessels, the Caterini and Xenia, which are in longer term charters until March and May 2025, respectively, have the rate of their charters linked to indices to the Baltic Index, earning 105.5% and 108% respectively above the average Baltic ComSarmax Index, an index based on the five ComSarmax time charter routes. This strategy is consistent with our view to be exposed to the market as we believe the fundamental supply and demand trends present a strong possibility for the market to strengthen in the near and medium term. It is expected that supply growth will be quite limited over the next couple of years due to the low average ordering for new vessels in the recent past, and thus it is likely that any demand growth will be translated in increases to charter rates. We plan to continue trading under short-term charters for the time being until employment rates start firming up and we see the potential positive effect of demand increases. You can see the specifics of the various chart that we fixed in the relevant slide, slide four. During this period, the second quarter of 2024, our motor vessels Starlight, Maria, and Irini-P underwent the scheduled dry dockings and repairs for approximately 23, 26, and 31 days, respectively. Vessels Marias and Irenis dry dock started in June, in the second quarter, and were completed in July, and the related cost would mostly influence our third quarter results. Also, motor vessels Giannis Peters and Christos Hei are currently undergoing their scheduled dry dockings. In fact, we have decided to perform earlier the dry dockings, mostly for commercial reasons related to them being fully available for employment in case the markets meaningfully recover in the near future. Finally, motor vessel Good Heart encountered a commercial off-car last quarter, a waiting time of four and a half days between two charters. Subsequently, the vessel also experienced a technical off-carry for about 10 days due to the required main engine turbocharger repair. Please turn to slide 5. Your dry fleet consists of 13 vessels, including five Panamax carriers, five Ultramaxes, two Camsar Maxes, and one Supermax. We think of our fleet as having two clusters. a modern Eco-1 of eight vessels, all built after 2014. And our vintage five Panamaxes, all built in Japan at the highest standards of their time, having been the workhorses of the sector. Of our 13 tribal carriers, our 13 tribal carriers have a total cargo capacity of about 920,000 deadweight tons, in another stage of about 13 1⁄2 years. At this point, I would like to remind you that, as previously discussed, Uruguay owns 61% of the entities of the ship-holding companies that own motor vessels Christos K and Maria. The remaining 39% is owned by owners represented by LRT Project Finance, to which we refer during the presentation as LRT Investors. Next, please turn to slide six to see a graphical representation of our fleet employment. As you can see, and consistent with my earlier remarks, fixed rate coverage for the remainder of 2024 stands at around 22% for charters. However, this feature excludes ships and index charters, which are open to market fluctuations but nevertheless have secure deployment. At this point, let me pass the floor to our Chief Administrative Officer, Mr. Simos Vargyaras, to go over the recent market developments.

Thank you, Kassos. Good morning from elsewhere, ladies and gentlemen. Together, we will walk through some market highlights today. Turning on the flight date now. we will go over the market highlights for the second quarter of 2024 up until recently. In the second quarter, the average spot market rate for Panamaxers was around $14,500 per day. By August, spot rates had slightly risen to just below $15,000. In the meanwhile, one year-time set of rates stood for Panamaxers at approximately $16,000 per day during the quarter and have shown a slight softening in the past weeks. However, rates still represent a significant improvement from around $10,500 that was during the same period last year, which marks a notable increase This uplift in employment rate was primarily driven by the ongoing Panama and Red Sea disruptions. Excuse me again. Please now turn to slide 9 to see some data from a recent IMF update. The fund sees a global economy to experience modest growth over the next two years, with cooling activity in the U.S., destabilization in Europe, and stronger consumption and exports from China. As a result, the IMF has maintained its 2024 growth forecast at 3.2%, consistent with its April projection, while slightly increasing next year's forecast by 0.1% at point to 3.3%, with China and India bringing the most notable upward revisions. On the other end, Japan's growth has been revised the most downward for this year to 0.7% down from 0.9%, together with Russia in 2025, which is projected to go down from 1.5% to 1.5% from 1.8% in the previous quarter. As the weight of China in dry bulk shipping is the driver of this market, we continue to monitor China's economic growth. Its property and infrastructure sectors, which have played a vital role in shaping this market, over the past two decades are not growing at levels seen in the past anymore. And despite the fact that the real estate sector has been saturated for more than three years now, we see different trades and commodities developing, like Bauxite Imports from Africa, along with others, which have given significant support to the drive-up market and are expected to continue to do so. So the question is, what will drive this market to a more profitable level if its main workforce is getting more and more tired? On this note, let's say a few things about India, which seems to be the next target that would help the world economy to continue growing at health levels and has material effects on the tribal trade as well. In that respect, India's growth is projected to remain robust at about 7% this year. This support revision is attributed to improve private consumption predominantly. However, for next year, the IMF has cautioned that growth is expected to slow down a bit to 6.5%. Meanwhile, the remaining economies in Asia, like the Asian Five Group, still remain the main engine for the global economy, with the forecast remaining broadly unchanged from April. Now, according to Clarkson's 10-mile demand for dryback trade, it's presently expected to grow by about 4.4% in 2024. This includes about 1.6% uplift for the entire year due to the Red Sea and Panama Canal disruptions. A longer duration of these disruptions in these regions could potentially drive demand even higher. Lower speeds and further congestion are other factors that could further boost demand this year. Demand in 2025 is projected to grow exponentially. by about half a percentage point, assuming conditions in the Panama Canal and the Red Sea normalize and the conflicts are resolved in the Red Sea. If the situation in these areas remain unchanged, we could be surprised on the upside, but at the moment any prediction looks very uncertain. Now please turn to slide 10. Uncertainties about the future of fuels and high new building prices have led to the low order book continuing. As of August 2024, the order book as a percentage of the total fleet is only 9.7%, which is near the lowest historical levels. This suggests a low fleet growth over the next couple of two to three years, Complementing this low flip growth, we also have the effect of increased flow steaming and expected scrapping due to the introduction of the new environmental regulations. This could reduce the effective available bulk supply even further. Now turning on to slide 11, let us now look into the supply fundamentals in a bit more detail. According to Claxon's latest report, new deliveries as a percentage of the total fleet are expected to be about 3.6% this year, 3.3% next year, and 4.7% in 2026 and onwards. The actual fleet growth is, of course, expected to be lower than the aforementioned figures due to scrapping and flip-ups. Also note that about 9% of the fleet is older than 20 years old and, therefore, a good candidate for scrapping, especially if the market remains at current or lower levels. Please now turn to slide 12, where we summarize our outlook on drive-back markets. The bulk trade market has been positive so far in 2024, with average trade rates rising by 35% year-over-year. Despite a slight softening during the last few weeks of July, rates remain healthy and above last year's levels. Global demand growth, especially in the Atlantic region, has positively impacted the market, with the global ship and travel trade indicator showing an increase. Additionally, disruptions in the Red Sea and Panama Canal have also contributed positively. Panama's freight rate reached almost $16,000 per day in the second quarter of 2024, reflecting a 35% increase compared to the second quarter last year. The outlook for the second half of 2024 is optimistic as seasonality kicks in. The rerouting of vessels away from the Red Sea remains a key focus, with Suez Canal bulkhead transit staying relatively stable in recent months, leading to an estimated 1.2% increase in bulkhead demand. Restrictions on the Panama Canal have continued to impact the market, with bulkhead transit recently being less than a third of normal levels. additional daily slots through the rest of the year could increase bulk of transit and bring trends back to normal, potentially slightly reducing the demand for ships. Now, looking ahead into next year, again, we have to take under consideration the timing of the return to normality of the two major passages of Suez and Panama, something that is really hard to predict considering the geopolitical second chances in the lead list. In any case, the relatively small and manageable order book, the introduction of further environmental regulations, the rise in operational and dry token costs, which makes the operations of other ships less competitive, creates favorable dynamics which could trigger a very strong market if the world economy grows at a healthy pace and rival trade demand creates the necessary sparks. Electricity demand worldwide is growing at a fast pace, greatly supported by the introduction of artificial intelligence and the electrification of the vehicle fleet, something that provides great support in the dry bulk market. However, as renewables further penetrate the electricity mix, coal trade dynamics and prospects remain to be further evaluated in the immediate future. Let's now turn to slide 13. The left side of the slide shows the evolution of one-year time charter rates of Panama's vessels since 2005. As of August, the one-year time charter rate for Panama's ships with capacity of about 75,000 tons was just below $16,000 per day, which is approximately 16% above the historical median rate, which is in the region of $13,500 per day. Vessel prices, as you can clearly see, are well above average prices seen in previous years. And with that, I will now pass the floor to our CFO to continue with some financial data.