EuroDry Ltd. Reports Results for the Six-Month Period and Quarter Ended June 30, 2019

Maroussi, Athens, Greece – August 8, 2019

EuroDry Ltd. (NASDAQ: EDRY, the “Company” or “EuroDry”), an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced today its results for the three and six month period ended June 30, 2019. Euroseas Ltd. (“Euroseas” or “Former Parent Company”) contributed to the Company seven subsidiaries comprising its drybulk fleet of six vessels, one Ultramax and two Kamsarmax vessels built between 2016 and 2018, and three Japanese-built Panamax vessels built between 2000 and 2004 (the “Spin-off”). The Company was spun-off from Euroseas Ltd. on May 30, 2018. Historical comparative period reflects the results of the carve-out operations of the seven subsidiaries that were contributed to the Company.

Second Quarter 2019 Highlights:

• Total net revenues of $6.2 million. Net loss of $1.8 million; net loss attributable to common shareholders (after a $0.6 million dividend on Series B Preferred Shares and a $0.2 million preferred deemed dividend) of $2.6 million or $1.14 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1for the period was $1.5 million or $0.65 per share basic and diluted.

• Adjusted EBITDA1was $1.8 million.

• An average of 7.0 vessels were owned and operated during the second quarter of 2019 earning an average time charter equivalent rate of $10,724 per day.

• The Company declared its second cash dividend of $0.6 million on its Series B Preferred Shares. During the second quarter of 2019, the Company redeemed approximately $4.3 million of its Series B Preferred Shares with a simultaneous reduction of the dividend rate for the remaining outstanding preferred shares to 9.25% per annum (from 12%) until January 2021.

First Half 2019 Highlights:

• Total net revenues of $12.0 million. Net loss of $0.9 million; net loss attributable to common shareholders (after a $1.0 million dividend on Series B Preferred Shares and a $0.2 million preferred deemed dividend) of $2.2 million or $0.96 loss per share basic and diluted. Adjusted net loss per share attributable to common shareholders1 for the period was $1.9 million or $0.87 per share basic and diluted.

• Adjusted EBITDA1 was $4.3 million.

• An average of 7.0 vessels were owned and operated during the first half of 2019 earning an average time charter equivalent rate of $10,078 per day.

Aristides Pittas, Chairman and CEO of EuroDry commented: “During the second quarter of 2019, the drybulk market started recovering with the spot market reaching multiyear highs by the month of July. Along with the reversal of certain short term factors, like the reopening of iron ore mines in Brazil, the improvement has also been the result of limited supply growth due to the low orderbook coupled with reduced vessel availability as a percentage of the fleet prepares to comply with the lower sulfur emission requirements. We are optimistic about the near and medium term prospects of the market as fleet growth is expected to remain constrained; the main uncertainty is related to the continuation and extent of the trade tensions, mainly between U.S. and China.

“At the same time, we are carefully evaluating various opportunities and options to deploy the funds and investment capacity we have available in terms of acquiring new vessels, renewing our fleet, and exploring merger possibilities with other fleets in accretive transactions.”

Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The net revenues of the second quarter of 2019 increased slightly compared to the second quarter of 2018 as a result of the increased number of vessels operating in our fleet, partially offset by the charter rates our vessels earned during the quarter which were lower by 11.1% compared to the average time charter equivalent rate our vessels earned in the second quarter of 2018. Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $5,948 per vessel per day during the second quarter of 2019 as compared to $6,726 per vessel per day for the same quarter of last year, and $5,898 per vessel per day for the first half of 2019 as compared to $6,701 per vessel per day for the same period of 2018. This decrease is mainly due to lower general and administrative expenses in 2019 compared to 2018 as a result of the cost of the Spin-off of EuroDry incurred in 2018.

Adjusted EBITDA during the second quarter of 2019 was $1.8 million versus $2.4 million in the second quarter of last year. As of June 30, 2019, our outstanding debt (excluding the unamortized loan fees) was $60.4 million versus unrestricted cash and restricted cash of $8.5 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $7.1 million (excluding the unamortized loan fees) and all our loan covenants are satisfied.”

Second Quarter 2019 Results:
For the second quarter of 2019, the Company reported total net revenues of $6.2 million representing a 1.2% increase over total net revenues of $6.1 million during the second quarter of 2018 which was the result of the increased average number of vessels partly offset by the decrease in the average time charter equivalent rate our vessels earned in the second quarter of 2019 compared to the same period of 2018. The Company reported net loss for the period of $1.8 million and net loss attributable to common shareholders of $2.6 million, as compared to net income and net income attributable to common shareholders of $0.5 million and $0.4 million respectively, for the same period of 2018. The results for the second quarter of 2019 include a $0.2 million of unrealized loss on an interest rate swap contract which was entered into during the third quarter of 2018 and a $0.9 million of unrealized loss on forward freight agreement (“FFA”) contracts. Depreciation expenses for the second quarter of 2019 amounted to $1.6 million compared to $1.3 million for the same period of 2018. Decreased general and administrative expenses reflect mainly expenses related to the Spin-off incurred in the second quarter of 2018. During the second quarter of 2019, one of our vessels completed its special survey with a total cost of $0.9 million.

Interest and other financing costs for the second quarter of 2019 amounted to $0.9 million compared to $0.6 million for the same period of 2018. Interest during the second quarter of 2019 was higher due to higher debt and higher Libor during the period as compared to the same period of last year. On average, 7.0 vessels were owned and operated during the second quarter of 2019 earning an average time charter equivalent rate of $10,724 per day compared to 5.6 vessels in the same period of 2018 earning on average $12,069 per day.

Adjusted EBITDA for the second quarter of 2019 was $1.8 million compared to $2.4 million achieved during the second quarter of 2018. Basic and diluted loss per share attributable to common shareholders for the second quarter of 2019 was $1.14 calculated on 2,244,803 basic and diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $0.17 for the second quarter of 2018, calculated on 2,226,753 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the income / (loss) attributable to common shareholders for the quarter of the unrealized (gain) / loss on derivatives, the adjusted loss attributable to common shareholders for the quarter ended June 30, 2019 would have been $0.65 per share basic and diluted compared to adjusted earnings of $0.16 per share basic and diluted for the quarter ended June 30, 2018. Usually, security analysts do not include the above items in their published estimates of earnings per share.

First Half 2019 Results:
For the first half of 2019, the Company reported total net revenues of $12.0 million representing an 11.5% increase over total net revenues of $10.7 million during the first half of 2018, as a result of the increased average number of vessels in the Company’s fleet. The Company reported net loss for the period of $0.9 million and a net loss attributable to common shareholders of $2.2 million, as compared to net loss and net loss attributable to common shareholders of $1.3 million and $1.4 million respectively, for the first half of 2018. Vessel operating expenses were $5.3 million for the first half of 2019 as compared to $4.4 million for the first half of 2018, mainly due to the increased average number of vessels operated, partly offset by the timing of certain repairs, maintenance expenses and spare replacements performed in the beginning of 2018, concurrently with the drydocking of the two vessels that underwent special survey. Depreciation expenses for the first half of 2019 were $3.2 million compared to $2.5 million during the same period of 2018. On average, 7.00 vessels were owned and operated during the first half of 2019 earning an average time charter equivalent rate of $10,078 per day compared to 5.3 vessels in the same period of 2018 earning on average $11,649 per day. In the first half of 2019, one vessel underwent special survey for a total cost of $0.9 million, as compared to two vessels that underwent special survey in the first half of 2018 for a total cost of $1,4 million. Interest and other financing costs for the first half of 2019 amounted to $1.9 million compared to $1.0 million for the same period of 2018. This increase is due to the increased amount of debt in the current period compared to the same period of 2018 and due to interest capitalized in 2018 during the construction period of m/v Ekaterini.

Adjusted EBITDA for the first half of 2019 was $4.3 million compared to $2.1 million achieved during the first half of 2018. Please see below for Adjusted EBITDA reconciliation to net income/ (loss).

Basic and diluted loss per share attributable to common shareholders for the first half of 2019 was $0.96, calculated on 2,244,803 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss per share of $0.64 for the first half of 2018, calculated on 2,226,753 basic and diluted weighted average number of shares outstanding.

Excluding the effect on the loss attributable to common shareholders for the first half of the year of the unrealized (gain) / loss on derivatives, the adjusted net loss per share attributable to common shareholders for the six-month period ended June 30, 2019 would have been $0.87 compared to a loss of $0.69 per share basic and diluted for the same period in 2018. Usually, security analysts do not include the above items in their published estimates of earnings per share.

Full report

About EuroDry Ltd.
EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands to consolidate the drybulk fleet of Euroseas Ltd. into a separate listed public company. EuroDry was spun-off from Euroseas Ltd on May 30, 2018; it trades on the NASDAQ Capital Market under the ticker EDRY. EuroDry operates in the dry cargo, drybulk shipping market.

EuroDry's operations are managed by Eurobulk Ltd., an ISO 9001:2008 and ISO 14001:2004 certified affiliated ship management company and Eurobulk (Far East) Ltd. Inc., which are responsible for the day-to-day commercial and technical management and operations of the vessels. EuroDry employs its vessels on spot and period charters.

The Company has a fleet of 7 vessels, including 4 Panamax drybulk carriers, 1 Ultramax drybulk carrier and 2 Kamsarmax drybulk carriers. EuroDry’s 7 drybulk carriers have a total cargo capacity of 528,931dwt.

EuroDry Ltd. press release