EuroDry Ltd.

Thank you for standing by, ladies and gentlemen, and welcome to the Eurodrive Limited conference call on the first quarter of 2025 financial results. We have with us today Mr. Aristides Pidas, Chairman and Chief Executive Officer, and Mr. Tasos Aslides, Chief Financial Officer of the company. At this time, all participants are in 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, please press 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 for the press release and has been publicly distributed. Before passing the floor to Mr. Pitas, I would like to remind everyone that in today's presentation and conference call, Eurodrive 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 number 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 now I would like to pass the floor over to Mr. Pitas. Please go ahead, sir. Thank you.

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Mr. Tasos Asli, the Chief Financial Officer. The purpose of today's call is to discuss our financial results for the three-month period ended March 31, 2025. Please turn to slide three of the presentation for our quarterly financial highlights. In the first quarter of 2025, we reported total net revenues of $9.2 million and a net loss attributable to controlling shareholders of $3.7 million, or $1.35 loss per basic and diluted share. Adjusted net loss attributable to controlling shareholders for the quarter was $5.7 million, or $2.5 Adjusted EBITDA for the period stood at the negative $1 million. Please refer to the press release for the reconciliation of adjusted net loss and adjusted EBITDA. Our CFO, Tasos Aslidis, will anyway go over our financial highlights in more detail later in the presentation. Since initiating our 10 million share repurchase program in August 2022, We have repurchased 334,000 shares of our common stock in the open market, totaling $5.3 million. We intend to continue executing the purchases opportunistically at current price levels, reflecting our confidence in the company's long-term value. Please turn to slide 4 to view our recent chartering and operational developments. Firstly, please note that we delivered the motor vessel tachos to her buyers, as had been arranged during the previous quarter. The company recorded a net book profit of $2.1 million. On the chartering front, the majority of our fixtures are short-term or longer-term betting decks-based. We do not wish to commit our vessels to the current low rates offered and prefer to be able to maintain operational flexibility and fix longer term when the market recovers. There were no scheduled dry dockings or repair activities during the quarter. However, motor vessel Blessed Luck was commercially off-hire for approximately 11.6 days during the quarter, and whilst arranging the sale and delivery of motor vessel Tassos, it also experienced a total of 6.5 days of commercial off-hire. You can see the specifics of the various charters we fixed during the period in the accompanying presentation. Please turn to slide 5. Eurodrive's current fleet consists of 12 vessels with an average age of around 13.6 years and a total carrying capacity of approximately 843,000 deadweight tons. In addition, we have two Ultramax vessels under construction with capacities of 63,500 deadweight tons each, scheduled for delivery in the second and third quarters of 2027. Upon delivery, our fleet will grow to 14 vessels with a total carrying capacity of approximately 970,000 dead wheat tons. At this point, I'd like to remind you that Eurodry owns 61% of the entities that own Motovessels Christos K and Maria. The remaining 39% is owned by owners represented by NRP Project Finance, otherwise referred to as the NRP Investors. Next, please turn to slide 6 for a further update on our fleet employment. As of March 31st, our fixed rate covers for the remainder of the year standard approximately 22% based on existing time charter agreements. This figure excludes our five vessels operating under index-linked charters, which are subject to market fluctuations but have secured employment. an overview of the market on slide A, we will go over the dry bulk market highlights for the first quarter of 2025 up until recently. The market has been softer in Q1 2025, with average spot rates at less than $8,000 per day for Panamax vessels, and average one-year time charter rates standing at a little less than $12,000 per day for the same type of vessel. March 30th, both spot and one-year time charter rates appeared to be higher across all segments, as shown on the slide. However, by the end of last week, spot rates had dropped across the board. In the Panamax segment, rates have dropped as much as 28 percent, while one-year time charter rates in the same segment have dropped as much as 12 percent, from $13,125 per day to $11,500 per day. Both the Baltic Panamax Index and the Baltic Dry Index experienced notable contractions during the first quarter, declining by approximately 27% and 16% year-on-year. Please now turn to slide nine. The IMF's April 2025 update presents a more cautious global economic outlook, revising its global GDP growth forecast for 2025 downward to 2.8% from 3.3% projected in January. Global growth in 2026 is expected to edge up modestly to 3%, but still lower than the 3.3% expected previously. The revision reflects mounting downside risks. Many European countries continue to face subdued domestic demand, manufacturing weakness, and the lingering effects of the energy shock. U.S. government policy remains largely in focus these days Global inflation continues to trend downwards, but at a pace that is slightly slower than what was expected in January, with headline inflation reaching 4.3% in 2025 and 3.6% in 2026, with notable upward revisions for advanced economies and slight downward revisions for emerging markets and developing markets in 2025. However, the near-term path to price stability remains uneven. rising protectionism and demographic headwinds may delay full convergence to target inflation levels. As a result, central banks are expected to maintain a more cautious approach to monetary easing than had previously been thought. Emerging markets remain the primary drivers of global growth. India is forecast to expand by 6.2 percent In China, growth has been revised downward to 4% in both 2025 and 2026. As in addition to the Trump-induced effects, structural challenges persist, particularly around weak domestic consumption, deflationary pressures, and instability in the property sector. Turning to the dry bulk sector specifically, EXPECTED TO REMAIN. constraints and environmental regulations may offer some relief, geopolitical risks in the Red Sea persist and will likely continue across 2025, but will probably end by 2026. In light of these projections, we still remain cautious of the outlook for the dry bark sector. Please turn to slide 10. Let's review now the current Moving to slide 11, Shipping activity through the Red Sea remains disrupted, and while any de-escalation could support operational stability, a reduction in rerouting may also temper ton-mile demand, thereby easing pressure on rates. On the supply side, new building activity remains constrained. capacity remains tight and many owners are hesitant to place orders amid continued uncertainty surrounding the industry's long-term fuel transition. Although methanol and LNG fuel orders have increased, the lack of clarity around the fuel of the future has contributed to a relatively low order-book-to-fleet ratio. That said, the order is trending towards historical median levels of 17.5%. Still low, but not that low. For 2026, we still do not expect a strong recovery unless demand growth and ton-mile growth surprise positively and exceed the historically low expected supply growth of below 2% after adjusting for scrap. What could influence the measures, EXI, CII, EUETS, and fuel EU maritime, could lead to increased vessel scrapping and lower operating speeds, particularly among all the less efficient ships. These developments may tighten effective supply over time, setting the stage for a supportive demand stabilisation. Let's turn to slide 13. As of May 30th, 2025, the one-year time shorter rate for Panamax vessels with a capacity of 75,000 tons, deadweights, stands at approximately $11,500 per day, which remains below the historical median of $13,500 per day. At the same time, however, the market for 10-year-old Panamax bulk carriers This is significantly above both the historical 10-year median of $15 million and the 10-year average of $17.5 million, reflecting residuals Although current pricing marks a clear decline from the mid-2024 peak of $29.5 million, we believe values can drop further in the next few months unless we witness an unexpected market recovery. We are closely monitoring the developments. We intend to use the market moves and financial tools available to us in such a way as to optimize the modernization of our fleet. to our CFO, Tasosos Livis, to go over various financial highlights in more detail.

Thank you very much, David. Good morning from me as well, ladies and gentlemen. Over the next four slides, I will give you the usual overview of our financial highlights for the first quarter of 2025 and compare those results to the same period of last year. For that, let's turn to slide 15. For the first quarter of 2025, the company reported total net revenues of $9.2 million, representing a 36.2% decrease of a total net revenues of $14.4 million during the first quarter of 2024, which was the result of the decreased time charter rates our vessels earned during the first quarter of this year, and also the decreased number compared to the same period of last year. The company reported a net loss for the period of 4 million and a net loss attributable to controlling shareholders of 3.7 million as compared to a net loss of 1.9 million and a net loss attributable to controlling shareholders of 1.8 million for the same period the first quarter of 2024. The net loss attributable to non-controlling interest of 0.3 million in the first quarter of this year represents the loss associated with the 39% ownership of the entities owning our vessels, Christos K and Maria. Interest and other financial costs net of a small amount of interest income for the first quarter of 2025 decreased 1.8 million as compared to 2 million for the same period of 2024. Interest expense during the first quarter of 2025 was lower, mainly due to the decreased benchmark rates, our loans were charged, partially offset by the increased average debt we carried during the quarter as compared to the same quarter of last year. Adapted EBITDA for the first quarter of 2025 was a negative 1 million compared to 2.1 million achieved during the first quarter of 2024. Basic and derivative loss per share attributable to controlling shareholders for the first quarter of 2025 was $1.35, calculated on about 2.7 million compared to basic diluted loss per share of 65 cents for the first quarter of last year, calculated again on about 2.7 million basic diluted weighted average number of shares outstanding. Excluding the effect on the net loss attributable to controlling shareholders for the quarter, of the unrealized gain or loss on derivatives, and excluding the net gain on sale of vessels, the adjusted loss for the quarter ended March 31st, 2025 would have been $2.07 per share, basically diluted, compared to an adjusted loss of $1.18 per share, basically diluted, for the quarter ended March 31st, 2024. Let's now turn to slide 16 to review our flitch performance. As a user, we will start our review by first examining the utilization rates for the first quarter of this year and comparing them to the same period of the previous year. Our fleet utilization rate as user is broken down into commercial and operational. During the first quarter of 2025, our commercial utilization rate was 98.4%, while our operational utilization rate was 99% compared to 100% commercial and 98.1% operational for the same period of last year. Our overall utilization rate was in the first quarter of this year 97.4% compared to 98.1% in the respective quarter of 2024. Our total daily operation expenses, including management fees, general and administrative expenses, but excluding direct working costs, were $7,304 per vessel per day during the first quarter of this year, compared to $6,867 per vessel per day for the first quarter of 2024. If we move further down on this table, we can see the cash flow break-even levels, which takes into account, in addition to the above, the direct working expenses, interest expenses, and loan repayments. Thus, for the first quarter of 2025, our daily cash flow rate even levels was $11,528 per vessel per day, compared to $12,962 per vessel per day for the same period of last year, primarily because of minimal dry-drying expenses this period. Let's now turn our attention to slide 17 to review our debt profile. As of March 31st, 2025, Eurotribe's outstanding debt stood at 105.2 million. Total loan repayments during 2025 are expected to amount to approximately 12.1 million, including the 3 million paid already during the first quarter. And in 2026, we expect to have loan repayments of $13.3 million, including a payment of the $2 million balloon. In 2027, repayments amount to about $10 million, but there is also a balloon of $10.2 million related to the loan for our vessel Ekaterini, which would mature at the time and would very likely refinance. An important point to highlight in this slide is the average margin of our debt, which, as of March 31, 2025, stood at approximately 2.07% over software. Assuming a three-month software rate of 4.32%, the estimated cost of our senior debt was around 6.4%. In reality, our cost is slightly lower, as we can swap a portion of our debt into a lower fixed rate. And as a result of that, our effective cost of our senior debt would be approximately 6.3%. At the bottom of this slide, we can see our projected cash flow rate even level for the next 12 months, broken down again into its various components. Our EBITDA rate even level is projected to be over the next 12 months, while our overall cash flow break-even level, we expect it to be approximately $11,935 per day. Taking into account commissions and possible off-hire days, we need to earn a gross average time-chartered equivalent rate of around $13,000 to cash flow break-even. Let's now conclude our presentation. by moving to slide 18, where we can see some highlights from our balance sheet in a simplified way. This slide offers a quick snapshot of our assets and liabilities. As of March 31st of this year, trust and other assets stood at about $21.5 million in our balance sheet, while we also had made advances for the new buildings of about $7.2 million. The book value of our vessels was approximately 182 million, resulting in total book value of assets of about 211 million. On our liability side, our debt, again as of March 31st, 2025, as I previously mentioned, stood at about 105.2 million, amounting to about value for our assets, while other liabilities amounted to about $4 million or almost 2% of our total assets, resulting in turn into a book shareholder's equity of $93.3 million, which in turn translates to a net book value of $33 per cent. However, according to market reports and our estimates, our vessels as of March 31, 2025, were worth $32 million more than their book value, approximately $214 million. Thus resulting in net asset value per share of more than $43, almost $44 per share. In comparison to that, our current share price, trading between $8 and $9, highlights a big discount to NAV, and the potential appreciation should market conditions and rates improve. As Warren Buffett once said, a tide lifts all boats, and certainly in this case it will lift our boat more than others, since we start from a lower base. And with that I will turn our floor back to our speakers to proceed with the comments.

Thank you very much, Tarso, and let me now open up the floor for any questions you may have.

Thank you, sir. If you'd like to ask a question at this time, you may press star 1 from your telephone keypad, and the confirmation tone to indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Once again, that's star one. Thank you. Thank you. Our first question today is from the line of Mark Reichman with Noble Capital Markets. Please receive your questions.

Thank you for taking my questions. Bessel operating expenses compared to the prior year period rose. level of spending to continue in Q2 and Q3, or was this front-loaded?

I think, judging from the first quarter numbers, it's a little bit premature. Our budget for OPEC this year was 2 percent higher than our last year's budget. And during the first quarter, we had 2 percent overrun of our budget. until the first half is completed to make a statement about the OPEX levels. Certainly we expect to meet our budget, which was 2 percent higher than last year's results.

And then what's your forecast for scheduled, you know, commercial and operational off-hire days for the remainder of the year, particularly for the dry docking?

I mean, I think we have one dry docking.

We just had one dry docking during this year, which is going to happen soon. Otherwise we don't have any other scheduled stoppages. We will have to see how the charter market plays out. If the market is very poor, we might have some increased commercial or higher. But we wouldn't expect, and we're not budgeting, really anything more than one day per month. One and a half day per quarter. One and a half day per quarter.

It's our... running assumption, generic assumption about .

Okay. And then just the last question is, you know, you sold the MB Tassos, and I was just wondering if you could provide some commentary on how you're managing your fleet via vessel acquisitions, sales, joint ventures, or even mergers or acquisitions with other operators.

Well, as you said, we sold our eldest vessel. Our strategy is to eventually sell the other four elder vessels and replace them with younger vessels. So this is going to happen, depending on how the markets move during the next few months. But, yes, the modernization of the fleet is, you know, what we're looking at. And especially if the market remains low, as is possible, that would probably allow us to buy a couple more modern vessels. Thank you very much.

Thank you, Mark.

The next question comes from the line of Tate Sullivan with Maxim Group. Please proceed with your questions.

Hello. Thank you. Good day. And from your comments on the scrapping of the vessel in the first quarter, do you have active opportunities to scrap the other old vessels? Is there a quick negotiation time to decide to scrap and do so, please?

We scrapped the Tassos, which was built in 2000, right? The blessed luck... which is known as the Santa Cruz, which has a right of due as well. In a few months, we've decided to pass that. The other vessels that are built in 2004, they've passed the special survey. Usually that's when we consider if we're going to pass a

we feel that they can continue trading in today's market. Have you seen a pickup and scrap activity besides your vessel in the first quarter, in the drop-down?

I would say very slight pickup. There's been a pickup, a very slight pickup. Let's see how the market develops within the next, you know, three to six months. If it does not recover strongly, I think we will see more scrapping coming in.

And then for your fleet, have you seen the average voyage length in terms of the distances increase or decrease from last year in general?

No, that is steady. It's pretty steady because the vessels are usually on time-charted trips, i.e. one trip, one business per time-charter. Recently we've added a few ships on index-based charters, so we have employment guaranteed for longer-term periods, for a year, most of them. But there it's for the charterer to decide how the vessel will trade, and we will get we are indeed dependent on where the index trades at.

Yes, I was just wondering with all the news of trade negotiations and tariffs, if there's any sign of changes in trade patterns to...

Yes, the only trade pattern that we've seen is that we haven't passed Suez for quite some time and we've gone around the Cape, which increases distances a bit.

But, you know, that's on the occasional business from the Far East to the Med. And any anecdotal evidence? taking longer due to any inspections or tariff levies or anything like that? I haven't heard any, but I would be interested in your comments.

No, we haven't really seen that effect yet.

Okay. And last, thank you. And then you mentioned you solve high stockpiles in China. What specifically? Is it coal, iron ore, and grain? All the dry bulk goods or something specifically that you've seen?

I have in mind more the coal and the iron ore. I don't have the numbers for grain. Okay. Wonderful.

Okay.

Thank you very much. Have a good day. Thank you. Thank you, Dave. Mr. Poggi, may I go ahead?

Your line is live for questions. Oh, I apologize. I missed the call. Hello, Tassos. Hello, Aristides. Can you just talk about the new build program? I'd like to lobby that you rename or you name one of the new builds Tassos so that you have a Tassos in the fleet. But can you just talk about the...it didn't look like you spent much in the new builds in the quarter. Will there be any new build payments in the rest of the year? And then maybe if you could remind me how much you plan to spend on new builds in 2026.

I think we have one more payment to make, possibly towards the end of this year. In the fourth quarter, there might need to be 10% installment for each of the two vessels. It might not happen. The contract says not before that date, but we count on having to make a payment 3.6 seats, 7.2 in total for the two ships.

And then do you have a figure for 2026?

I think we're making five payments of 10% and then 50% of delivery. So there should be at least another two payments per vessel in 2026. So a total of 14.4 million in 2026. And then a 10% payment and the final payment in 2027.

Great. That's helpful. And then it didn't look like you bought any stock back in the first quarter. Is there anything that prevented you from buying stock back? Can you just comment on, you know, buyback activity and why there wasn't any in the first quarter?

Two reasons. One reason is the very, very limited liquidity that we see in the stock during, you know, the last few months. So that is one thing. And the second thing is, you know, the market was improving up till the end of March, and the truth is we felt that it would improve further. But, you know, it did improve, but the last month in May it dropped again. So probably we are at levels where if the liquidity allows us, we will be buying some more stock. Great.

Thank you, Eric Stapis.

Thank you. Thank you. At this time, we've reached the end of our question and answer session. And I'll turn the floor back to Mr. Aristides-Pedis for closing remarks.

Thank you, everybody, for standing by. We will be back to you at the end of the beginning of next quarter.

will conclude today's conference. May this connect your lines at this time. Thank you for your participation. Have a wonderful day.