• Total Net Revenues (Q2 2024): $17.4 million, a 68.7% increase from Q2 2023.

• Net Loss Attributable to Controlling Shareholders (Q2 2024): $0.41 million or $0.15 loss per share.

• Adjusted Net Loss (Q2 2024): $0.45 million or $0.17 loss per share.

• Adjusted EBITDA (Q2 2024): $0.5 million.

• Share Repurchase: 313,318 shares repurchased for about $5 million.

• Interest and Other Financing Costs (Q2 2024): $2 million.

• Average Time Charter Equivalent Rate (Q2 2024): $14,427 per day.

• Total Daily Operating Expenses (Q2 2024): $7,062 per vessel per day.

• Cash Flow Breakeven Level (Q2 2024): $16,214 per vessel per day.

• Debt (as of June 30, 2024): $98.1 million.

• Book Value of Vessels (as of June 30, 2024): $197.2 million.

• Net Asset Value (NAV) per Share: Estimated in excess of $63.

• Warning! GuruFocus has detected 5 Warning Signs with EDRY.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EuroDry Ltd (NASDAQ:EDRY) reported a 68.7% increase in total net revenues for Q2 2024 compared to the same period in 2023, driven by higher time charter rates and an increased number of vessels.

• The company has successfully repurchased 313,318 shares of its common stock, totaling about $5 million, under its share repurchase plan.

• EuroDry Ltd (NASDAQ:EDRY) has a diversified fleet of 13 vessels, including modern Eco-1 vessels, which positions it well for future market opportunities.

• The company reported an adjusted EBITDA of $5 million for Q2 2024, doubling from $2.5 million in Q2 2023, indicating improved operational performance.

• EuroDry Ltd (NASDAQ:EDRY) is strategically keeping its fleet exposed to the market, anticipating potential rate increases due to limited supply growth and potential demand recovery.

Negative Points

• EuroDry Ltd (NASDAQ:EDRY) reported a net loss attributable to controlling shareholders of $0.41 million for Q2 2024, continuing a trend of negative earnings per share.

• The company experienced higher drydocking expenses in Q2 2024, which are expected to continue into the next quarter, impacting profitability.

• Interest and other financing costs increased to $2 million in Q2 2024, up from $1.25 million in the same period of 2023, due to higher debt levels and increased benchmark rates.

• Despite a favorable charter rate environment, EuroDry Ltd (NASDAQ:EDRY) has faced two consecutive quarters of negative EPS, raising concerns about future profitability.

• The company's stock is trading at a substantial discount compared to its net asset value, indicating potential undervaluation but also reflecting market skepticism.

Q & A Highlights

Q: Can you provide more color on the voyage and dry docking expenses for the quarter and expectations for the remainder of the year? A: The drydock expenses depend on the timing of the drydocks. We had more than one drydock last quarter, which increased costs. We expect higher drydock expenses next quarter as well. Voyage expenses vary based on the contracts and whether we have time charter or voyage contracts.

Q: Despite positive EBITDA, EuroDry has had two consecutive quarters of negative EPS. What will move EPS into the positive category? A: The breakeven level per day is crucial. For the first six months, vessels needed to earn around $14,500 to $15,000 a day to breakeven. We expect a breakeven level of $12,000 on a cash flow basis for the next 12 months. If time charter rates hold, we should see positive earnings.

Q: How should we think about off-hire days for a vessel with multiple charters within the same quarter? A: Commercial off-hire is usually an exception. We typically report rates including any ballast leg as part of the charter. For modeling purposes, we use an average of one to one and a half days of off-hire per quarter, excluding drydocking.

Q: What is the expected number of idle days in the third quarter due to drydocking? A: We expect around 85 days of off-hire due to drydock in the third quarter, which could be slightly over 100 days if including ongoing drydocks from the previous quarter.

Q: How sensitive is the stock buyback program to the stock price? A: The stock buyback program is limited by SEC rules, including volume restrictions and trading times. We are utilizing it to the full extent possible, but lower volume and other limits affect the number of shares we can buy back.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.