EuroDry Ltd.

Thank you for standing by, ladies and gentlemen, and welcome to the Eurodrive Limited Conference Call for the second quarter of 2025 financial results. We have today here with us Mr. Esquitas Pitas, Chairman and Chief Executive Officer, and Mr. Tassos Esquitas, Chief Executive Officer. 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, 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 announces results for the press release that has been publicly distributed. Before passing the floor over to Mr. Pitas, I would like to remind everybody that in today's presentation and conference call, your ODI will be making forward-looking statements. These statements are within the meanings of the federal security 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 on the webcast presentation, which has the full forward-looking statement. The same statement was also included in the press release, Please take a moment to go through the whole statement and read it. I would now like to turn the floor over to Mr. Pivas. Please go ahead, sir.

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Mr. Tatos of Lewis, our chief financial officer. The purpose of today's call is to discuss our financial results for the same six-month period ended June 30, 2025. Please turn to slide 3 of the presentation. Our financial highlights are shown here. For the second quarter of 2025, we reported total net revenues of $11.3 million, and the net loss attributable to controlling shareholders of $3.1 million, or 1.12 pence loss per basic and diluted share. Adjusted net loss attributable to controlling shareholders for the quarter was $3 million, or $1.1 loss per basic and diluted share. The adjusted EBITDA for the quarter was $1.9 million. We've referred to the press release for the reconciliation of adjusted net loss and adjusted EBITDA. Also, I see a forecast as needed. We'll go over our financial highlights in more detail later on in the presentation. As of today, we have repurchased 334,000 shares of our common stock in the open market for a total of $5.3 million under our $10 million share repurchase plan announced in August 2022. Our Board of Directors has approved an extension of the program for an additional year. We intend to continue executing the purchases up to the originally approved amount of $10 million at a disciplined rate taking into account the company's liquidity needs and relatively small free flows. We are also pleased to announce that tomorrow our 2024 Environmental, Social and Government report will become available on our website. This is the fifth year we are providing such reports. The report outlines our ongoing initiatives and progress across all key ESG pillars, reflecting our continuous commitments to sustainable and responsible operations. Please turn to slide 4 to view our recent developments. In the chartering front, all our recent fixes have been either short-term or on index-linked charters. While the Houthi attacks and rival carriers in the Red Sea in July offered an upbeat in charter rates due to rerouting of vessels, early August has proven that seasonality remains. We are hoping for a better fall. In the current rate environment, we have chosen not to commit our vessels on longer-term contracts until market conditions improve, prioritizing operational flexibility. Should rates return to profitable and cash flow-accretive levels, we will endeavor to fix a portion of our fleet on longer terms. The statistics of the purchase fixed during the period are outlined in the accompanying presentation. Moving on to our operational highlights, Santa Cruz underwent scheduled dry docking and repairs over a period of approximately 35 days, the biggest part of those spanning in Q3, though. There was no idle time or commercial off-hire for our fleet during the period. Please turn to slide 5. Eurodrive's southern fleet consists of 12 vessels with another rate of approximately 13.6 gears and a total carrying capacity of about 843,000 deadweight tons. In addition, we have two ultimate vessels under construction, each with a capacity of 63,500 deadweight tons scheduled for delivery in the second and third courses of 2027. Upon delivery, our fleet will grow to 14 vessels with a total carrying capacity of nearly 1 million deadweight tons. I'd like to remind you that Eurodry owns 61% of the entities that own MotoVesos Christos K and Maria, and the remaining 39% is owned by owners represented by NRP Project Finance, otherwise referred to as the NRP Investors. Please turn to slide 6 for a further update of our fleet's employment. As of June 30, 2025, our fixed rate covers for the remainder of the year stands at approximately 25% based on existing time-charter agreements. This figure excludes vessels operating under index-linked charters which, while subject to market fluctuations, have secured employment. We currently have four vessels on index-linked charters with duration ranging from October 25 to May 2026. These charters can be practically changed to fixed rate with the use of better phase if rates improve to the levels we aspire. Turning to slide dates, we will go over the market highlights for the second quarter ended June 30, 2025 up until recently. Unmatched spot rates rose steadily from the second quarter of 2025, increasing from an average of about $10,300 per day to $11,900 per day by quarter end, a 15% gain. As of August 1, spot rates stand at $13,750 a day, surpassing the respective time starter average levels of $12,600 per day as a result of the Houthi attacks and the such frequent rerouting effects from the area. However, if one goes back only a couple of weeks prior to that, both spot and average time starter rates were even higher than that, at $16,000 per day and $13,250 per day respectively, suggesting that the usual summer lull is here. We hope to see seasonality displaying itself and resulting in a firmer market towards the end of the third quarter, though admittedly visibility remains limited amid persistent macro and geopolitical hedging. In the second quarter of 2025, the Baltic Dry Index and the Baltic Panamax Index declined by approximately 21% and 28%, respectively, year over year. underscoring the sustained shortness across the trade markets. These downward shifts reflect the ongoing imbalance between vessel supply and muted cargo demand, exaggerated by subdued global trade volumes and persistent microeconomic headwinds. Please now turn to slide 9. The IMF July 2025 update presents a more resilient global economic outlook than previously thought, with global trade developments continuing to shape the forecast. The global economy continues to exhibit stable yet underwhelming growth. Global GDP growth is now projected at 3% for 2025 and 3.1% for 2026. with the 2025 and 2026 projections revised upwards by 0.2% and 0.1% each point respectively compared to the April 2025 forecast. At these levels, the forecasts are below the 2024 outcome of 3.3% and the pre-pandemic historical average of 3.7%. Global policy remains highly uncertain. Some new tariffs took effect on Thursday, August 7th, with higher rates for most U.S. trading partners. Stating all together, these tariffs have pushed the average U.S. tariff rate to above 15%, according to Bloomberg Economic Testimony, well above the 2.3% last year, and this is the highest level since World War II. The United States economy is projected to grow by 1.9% in 2025 and accelerate slightly to 2% in 2026, according to the IMS. U.S. growth forecasts were revised upwards due to easing trade tensions, improved financial conditions, the weaker dollar, and recent tax incentives aimed at stimulating business investment and consumer spending. The higher projections, including the global figures overall, reflect a large transloading of international trade ahead of expected higher prices induced by tariffs. In Europe, GDP accelerated, driven by investment and net exports. Growth in the area is now projected at 1% for 2025, up 0.2% points from April's projections. Global inflation is expected to continue declining, with headline inflation projected at 4.2% in 2025 and 3.6% in 2026. In the euro area, inflation has gone down quite substantially, whilst in the US the unemployment rate remains low and inflation is still elevated. Emerging markets remain the primary drivers of global growth. India is forecast to expand by 6.4% in both 2025 and 2026, fueled by strong investments, robust agriculture, and a dynamic services sector. The ASEAN five countries are also projected to post health gains. In China, growth has been revised upwards, driven by stronger than expected economic performance in the first half of the year, and all of them anticipated tariffs between the U.S. and China, and the positive impact of fiscal stimulation reforms aimed at clearing local government barriers, which also boosted domestic demand. Turning to the dry bulk sector, Flagstone Research now projects a slightly positive trade growth of 0.2% in 2025, and now for the revision from the previously forecasted 0.4% decline, This is followed by 0.6% growth in 2026, up from 0.4% projected in April. While expectations remain modest, these adjustments reflect a gradual improvement in market sentiment and a more constructive outlook for trade flows. Please turn to slide 10 to review the current state of the outlook in the dry bag sectors. As you can see, as of August 1st, the order book is at 11% of the fleet. Though higher than the 7% low seen in 2021, the order book still remains among the lowest levels in history. While the order book is slightly rising, increased low seeming, higher scrapping rates, and intensity of environmental regulations further constrain the available bunker fleet. Turning into slide 11, let us now look into the supply fundamentals in a little bit more detail. As of August 2025, the total dry-bark operating fleet was 14,151 vessels. According to Plaston's latest report, new deliveries as a percentage of total fleet are expected to be 3.8% in 2025, 3.9% in 2026, and 4.9% in 2027 onwards. The actual fleet growth is of course expected to be lower than the aforementioned figures due to scrapping and some slippage. On the fleet profile, it's noticeable that about 10% of the fleet is older than 20 years old, indicating these vessels will likely be scrapped if the dry bulk sector continues operating in this suppressed environment. Please turn to slide 12, where we summarize our outlook for the dry bulk market. The bulk carrier market has been relatively weak so far in 2025, with timeshot a range bottoming out in the first quarter before recovering to slightly profitable levels across all vessel sizes. However, the momentum gained early in the year faded in the second quarter, following the U.S. administration's announcement of new tariff proposals. This has added to an already uncertain demand environment, with slowing activity in key markets, and ongoing political instability continuing to put pressure on the sector. After the recent uptick covered the street-starter rate for Ultramax and Kamsar Macbethas, are currently down only about 3% year-on-year. However, on the average of the whole of H1 of 2025, we are down about 30% relative to 2024 or 2025. For the remainder of 2025, bulk carrier demand and supply projections point to a softer market compared to 2024. In China, dry bulk imports are not expected to replicate the robust growth seen in 2023 and 2024, especially as far as coal is concerned. While recent government stimulus measures have improved, they are unlikely to drive significant structural demand growth, particularly given the high stockpile levels. In the United States, trade policy is now a central focus for dry bulk markets under the new Trump administration. Paris and China, Mexico, Canada and other key trade partners threaten to disrupt grain and minor bulk trades. Meanwhile, shipping through the Red Sea is not expected to resume immediately. However, any reduction in disruptions could dampen demand growth and contribute to further easing in bulk carrier markets. So, on the supply side, ordering of new vessels has remained relatively limited, constrained by the lack of available CTR slots and continued uncertainty over the optimal fuel of the future, despite significant orders for methanol and LNG fuel ships. While the overall order book to fleet ratio remains low by historical standards at 11%, the order book for Panamax vessels has been trending higher, reaching approximately 14%. For Panamax vessels, this ratio is about 11.5%. As we head into 2026, the bulk carrier market may face another year of soft earnings, as new vessel supply is expected to outpace demand growth, which, as discussed previously, flattens currency estimates at about 0.6%. Continued market shortness growth could prompt further supply-side adjustments, including slower vessel operating speeds and increased demolition activity, which could both help the market rebalance. Let's turn to slide 13. As of August 1st, the one-year time charter rate for Panamax pressures with a capacity of 75,000 dengue tons stands at approximately $12,700 per day, which remains slightly below the historical median of $13,500 per day. As of the second quarter of 2025, the market for 10-year-old Panamax bulk carriers, despite a 10% to 15% correction, remains relatively firm, with current asset value estimated at close to $25 million. This is significantly above both the historical median of $15.5 million and the 10-year average of $17.5 million. Reflecting residual strength in second-hand values, However, current pricing marks a clear decline from the mid-2024 peak of around $29.5 million, which is also the maximum price seen in the last 10 years. Despite the pullback, asset prices remain well supported by the historically low order book levels, the increased cost of construction of ships, and the fleet age dynamic. We are closely monitoring all the new developments which will shape the near and longer-term future. At current price levels, we are more likely to be selling a couple of our older versions whilst looking for the right opportunity to renew our fleet with more modern and eco-friendly versions. Let me now pass the floor over to our CEO, Kortas Sotlidis, to go over our financial highlights in more detail.

Thank you very much, Aristides. As usual, over the next four slides, I will give you an overview of our financial highlights for the second quarter and third half of 2025 and compare those results to the same series of last year. For that, let's go to slide 15. For the second quarter of 2025, we reported total net revenues of 11.3 million, representing a 35.3% decrease over total net revenues of 17.4 million that we achieved during the second quarter of last year. This decrease was the result of the lower time-charted rate our vessels earned, as well as the decreased average number of vessels operated during the second quarter of this year compared to last. We reported a net loss for the period of 3.11 million and a net loss attributable to controlling shareholders of 3.07 million as compared to a net loss of 0.3 and a net loss attributable to controlling shareholders of 0.4 million for the same period of 2024. The net loss of 0.4 million in fish water attributable to the non-controlling interests represents the loss attributable to the 39% ownership of the entities of the veterans Christos K and Maria which are partly owned by the NRC investors as I received mention earlier. Interest and other financing costs for the second quarter of 2025 amounted to $1.7 million, compared to $2 million over the same period of 2024. Both figures included a small amount of interest income. Interest expense for the second quarter of 2025 was lower, mainly due to the decreased software rates and margins on average at our law and state, partly offset by the increased average debt that we carried during the second quarter of 2025 as compared to the same period of the last year. Adjacency debt for the second quarter of this year was $1.9 million compared to $5 million achieved during the second quarter of 2024. Basic and diluted loss per se attributable to the controlling shareholders for the second quarter of was $1.12, calculated on about $2.7 million based on diluted weighted average number of federal spending, compared to a loss per share of $0.15, calculated on $2.7 million based on diluted weighted average number of federal spending for the second quarter of last year. Excluding the effect on the loss attributable to the controlling shareholders for the quarter of the unrealized gain on derivatives, the adjusted loss of the quarter ended June 30, 2025, which had been $1.10 per share, basically diluted, compared to an adjusted loss of $0.17 per share, basically diluted, for the quarter of the previous year. Let's now look at the numbers on the same slide and look at the numbers for the corresponding 6-month period ended June 30th, 2025 and compared to the same period of 2024. So, for the first half of this year, we reported total net revenues of 20.5 million, represented a 35.7% decrease over total net revenues of 31.9 million during the first half of 2024. which is again the result of the lower time track array star vessel term and some extended decrease average number of vessels operated during the first half of this year compared to last. Net loss for the period was 7.11 million and net loss attributable to the controlling shareholders was 6.77 million as compared to net loss of 2.24 million an net loss attributable to controlling shareholders of 2.19 million for the same period of 2014. Again, a portion of the net loss for the second quarter of this year, 0.34 million, represents a loss that corresponds to the certified ownership of the entities O, Owning, Haters, Kelly and Maria, which are owned by the NLP investors. Interest and other financing costs for the first half of 2025 amounted to 3.5 million compared to 4 million for the 28th of 2024. Again, this decrease is due to the lower benchmark rates of rates that are low on space partly offset by the higher levels of debt that we carried on average during the period. Adjusted to deduct for the first half of 2025 was $0.9 million, compared to $7.1 million during the first half of 2024. Basic and diluted loss per share, applicable to the controlling shareholder for the first half of 2025, was $2.47, calculated from $2.7 million, approximately, basic and diluted, whether it's an average number of shares outstanding, compared to a loss of $0.81 for the same period of last year. Again, here, assuming the effect of the net loss attributable to the controlling shareholders for the first half of the year, of the unrealized gain or loss on derivatives, and the gain on the sale of a venture, the abstracted loss for the six-month period at the June 30th, 2025, which have been $3.17 per share, basically diluted, compared to a deficit loss of $1.35 per share, basically diluted, for the first six months of 2024. Let's now move to slide 16 to review our fleet performance. We will start our review by looking at our virtualization rate for the second quarters of 2025 and 2024. As usual, our fleet's duplication is broken down into commercial and operational components. During the second quarter of 2025, our commercial duplication fleet was 100%, while our operational duplication rate was 99.3%, compared to 99.6% commercial and 99.4% operational for the second quarter of 2024. On average, 12 vessels were owned and operated during the second quarter of 2025, earning an average time shorter equivalent rate of $10,420 per vessel per day, compared to 13 vessels that were operated during the same period of last year, earning an average of $14,427 per day. Our total daily operation expenses including management fees, G&E expenses, but excluding drivers and costs, were $7,539 per vessel per day during the second quarter of this year, compared to $7,062 per vessel per day for the second quarter of 2024. If we move further down on the table, we can see the cash flow break-even levels, which takes into account, in addition to the above expenses, the drive-off in expenses, interest expenses, and also includes loan repayments. Thus, for the second quarter of 2025, our daily cash flow break-even level was $13,222 per vessel per day, compared to $13,240 per vessel per day for the second quarter of last year. Let's now quickly move to the right part of this table and go over the same figures for the six-month period of this year compared to the last. So, first on this digitalization rate, for the first half of 2025, both our commercial and digitalization rates were each 99.2%, compared to 99.8% commercial and 98.7% operational, for the same period of last year. On average, we operated 12.4 vessels, earning an average time shorter equivalent rate of $8,716 per day, compared to 17 vessels in the same period of 2024, earning an average $13,452 per day. here at our operating expenses, those including management fees and GMA expenses, but again, including writing costs, averaged $7,419 per vessel per day in the first half of this year, compared to $6,964 per vessel per day for the same period of last year. It was noted here that part of the increase was due to the increase in the dollar-euro exchange rate, And of course, our GMA expenses are divided by 12 seats, other than 13 seats that we paid during 2024. Looking further down at this table, at the left line, we can see the cut flow rate 2011 for the six months of 2024, which was $11,868 per vessel per day, compared to $13,101 per vessel per day for the same period of 2024. Now let's move to slide 17, to turn our attention to our debt profile. As of June 30th of this year, euro direct authentic debt stood at about 102 million. Total loan repayments during 2025 are expected to amount approximately to 12 million, including 6 million paid during the second quarter of this year. In 2026, we expect total loan repayments of approximately 13.3 million, which includes a 2 million balloon repayment, while in 2027, total repayments are projected to be around 20 million, also including a 10.2 million of a balloon. An important point to highlight on this slide is the average margin of our debt, which as of June 30th, 2025, stood at approximately 2.07% of our software. Assuming a three month software rate, as of August 1st, of about 4.32%, the estimated cost of our senior debt would be about 6.4%. At the end, our final debt cost is slightly lower, as we can swap the portion of the soft exposure of our deck into a lower fixed rate, bringing the effective cost of our senior deck to just below 6.3%. At the bottom of this slide, you can see our projected cash flow break-even level for the next 12 months, broken down into its various components. For example, our easy-dub break-even level is projected to be around $7,700 per vessel per day, While our overall cash flow break-even level, including inter-expenses and loan repayment, should be around $11,850 per day. This figure of course on a net-net basis, taking into account commission and possible five days, we need to achieve a gross time-travel equivalent rate of about $13,000 to reach cash flow and earnings break-even over the next 12 months. The final slide, let's move to slide 18, where we can see some highlights on our balances in a simplified way. This slide, as always, shows a snapshot of our assets and liabilities. As of June 30th, we had cut another current asset of about 20.3 million, alongside advances for new buildings that we did, of about $7.2 million, and with the book value for our assets, for approximately $179 million, resulted in a total book value for our assets of about $206.6 million. On our liability side, we had outstanding debt, as of June 30th, as mentioned previously, of $102.1 million, representing almost half, or 9.4% of the book value of our assets, while other liabilities amounted to about $5 million, roughly 2.5% of our total book assets, which in turn resulted in book shareholders' equity of about $90.5 million, relating to a net book value of $32 per share. According to our estimates, our vessels are worth $190 million, about $10 million more than the respective book value, resulting in a net asset value per share of about $36. If we compare our current trading range of our shares of between $10 and $11, we can see and highlight the potential for appreciation of our stock debt, should market conditions or other catalysts result in a reduction of these discounts. And with this statement, I would like to pass the floor back to our students to continue our call.

Thank you, Tarsal. Let me now open up the floor for any questions we may have.

Thank you. If you would like to ask a question, please press Store 1 on your telephone keypad. A confirmation show will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Mark Risman with Noble Capital Markets. Please proceed.

Thank you for taking my question. You know, I'm looking at the BPI chart on page 8. So while there was some strength in June, the Baltic Dry Index ended June at 1458. It ended July at 2108, dipped in early August, but is around 2051 on August 7th. So could you just please talk about the improvement in June and July and your expectations for the remainder of the year?

The first part is easy, which is what has happened. The prediction for the remainder of the year obviously is extremely difficult because, as we said, there are various differing directions from various other angles. We did... I mean, when we saw that tariffs were supposed to come we saw that people started stockpiling more and also when we had the Houthi attack in the Red Sea or on the bulk vessels we saw less people going to there so these two items led to the spike that we saw up till very recently And this slide correction we are seeing now is probably a reversion of this. It has to do with the summer long, et cetera. So this is the easy part, the explanation of what happened and why we saw this spike. Now, what to say about the future?

Part two of that question relates to pages eight, which is you show the one-year time charter rates as of August 1st, and then also on page 17, your break-even of your presentation. So are you willing to lock in the rates as of August 1st, or do you expect or need rates to go higher? Because it looks like your break-even is coming down for the whole year versus the first half. So at what point do you start locking in the rates?

We are close to the level that we would knock in rates. We have said internally that around $15,000, if we can do that, it provides a significant profit on ships. We haven't been able to see that yet. We are getting closer to that, and if that happens or not, will really depend on how the market develops within mostly September. Usually September seasonally is a good month. We hope this will be repeated this year as well. September, October, they are very good months.

Yes. Yeah, you can kind of look at that chart. And then just this is a question for Tassos that If you could just talk a little bit about Eurodrive's liquidity and plans for debt repayment.

Yeah, I think it's clear that our liquidity is a bit tight. We said about 6 million of our balances and about almost the same amount is restricted. But we do have certain ways of raising liquidity. One of them is by refinancing some of our vessels. We have some room through our leverage and our debt, and we have some discussions. Also, we definitely try to address certain liquidity requirements later in the year with our new building program by looking into financing our pre-delivery installments. So we feel that we're on the top of our liquidity needs, as far as operations at the current market level is concerned. And as you mentioned, if the market turns a bit higher, then that would definitely release more liquidity from our operations.

Okay. And if I could just get one more in, and that's just what accounted for the decline in voyage expenses from Q1 to Q2?

To some extent, that is a bit. I don't want to say random, but it depends on the way we do certain starters. If we do volume starters where we get paid a balanced bonus, then volume expenses are reflected on our financials. While we would do a time starter equivalent basis starter, then volume expenses are not reflected. So that is one factor contributing to some variability in volume expenses. Typically volume expenses are small for us because we overwhelmingly do time charter equivalent basis for our funders.

So, what that is saying is that when we calculate time... Yeah, what that is saying is that when we calculate the time charter equivalent, we usually take into account the volume expenses to come up with that.

Yeah, I guess what I'm saying is that if you look, we just concluded two charters, So, two power shifts, if you look at our website, it will be more clear, where we have a greater balance bonus in the contract. So, there will be a daily rate and a period of balance. During that balance period, we got a burn for our mortgage expenses, but our mortgage expenses will appear next quarter, I guess, on our financials. So, you will see elevated mortgage expenses because of the nature of the I see.

Okay. Great. Well, that's very helpful. Thank you very much. You're welcome, Mark.

As a reminder, this is Star 1 on your telephone keypad. If you would like to ask a question, our next question is from with Alliance Global Partners. Please proceed.

Yes. Hello. You covered a lot of ground. I'd just like to ask a couple questions about the MuBuild program. Kostas, can you remind us of the progress payments due in 26 and 27?

I think there is, we made already one payment last year, I think, and we have to do one payment each in the fourth quarter of this year. That makes it two of the five, and we have to make, I think, one more in 2026, and the remaining in 2027. Okay, great. So the first... Sorry, Ted, you're off. No, no, go ahead. I just wanted to highlight the profile. All payments are about 10%. I think the first one was 15%. All payments are 10%.

Okay. And then you talked about potentially financing the project payments and the new bill delivery payments. Would you have to have a time charter in place before you were able to finance those, or can you just help me understand what would be required to finance the new bill program?

Banks are willing to finance pre-delivery payments as well. In the past, when we had more abundant liquidity, we were paying our equity up front, the first four or five payments from equity, and then we were financing the whole contract that say, 60%, although I was taking care of the last payment. But banks have no problem financing at, say, 60% every payment that we have to make. So, until the market captures a bit more, we will do that for our dry bulk program. Great. Thank you so much. You're welcome, Paul.

There are no further questions at this time. I would like to return the call back over to Mr. Pidas for closing comments.

Thank you all for participating in this call today. We will be back to you in three months' time with the results of Q3.

Thank you. Thank you.