Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Limited call on the first quarter 2019 financial results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer, and Mr. Tasos Aslidis, 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 this time, if you wish to ask a question, please press star one on your telephone keypad and wait for the automated message advising your line is open. I must advise you that this conference is being recorded today. Statements in this presentation may be forward-looking statements within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized.
Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to potential risks and uncertainties, including but not limited to the need to manage our growth and integrate additional capital, acquire additional vessels, volatility in the dry bulk shipping business and vessel charter rates, our ability to obtain sufficient capital, the volatility of our stock price and other risks and factors. Forward-looking statements made during this presentation speak only as of the date on which they are made, and EuroDry does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this presentation. Because forward-looking statements are subject to risks and uncertainties, we caution you not to place undue reliance on any forward-looking statement. All written or oral forward-looking statements by EuroDry or persons acting on its behalf are qualified by this cautionary statement.
This presentation also contains historical data about the dry bulk trade, the dry bulk, and the dry bulk. These figures have been compiled by the company based on available data from a variety of sources, like broker reports and various industry publications, or represent company's own estimates. The company exercised reasonable care and judgment in preparing these estimates. However, the estimates provided herein may not match information from other sources. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful under the securities laws of such jurisdiction. I would like to pass the floor to Mr. Pittas. 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 Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the first quarter period ended March 31st, 2019. As a reminder, I would like to mention that in May 2018, Euroseas contributed to EuroDry its dry bulk fleet of six vessels, one Ultramax and two Capesize vessels built between 2016 and 2018, and three Japanese-built Panamax vessels built between 2000 and 2004. EuroDry was spun off from Euroseas on May 30th, 2018. Since the spinoff, EuroDry bought an additional Panamax bulker. Comparisons in the following presentation to periods of last year refer to the dry bulk fleet existing at the time for the periods presented. Please turn to slide three. Our income statement highlights are shown here.
For the first quarter of 2019, we reported total net revenues of $5.8 million, adjusted EBITDA of $2.5 million, and net income attributable to common shareholders of $0.4 million. Basic and diluted earnings per share attributable to common shareholders for the first quarter of 2019 was $0.18 per share. An average of seven vessels were owned and operated during the first quarter of 2019, earning an average time charter equivalent rate of $9,472 per day. The company declared its fourth preferred shares dividend of $0.5 million, which was paid partly in kind, $0.1 million, by issuing additional Series B preferred shares, and partly in cash, $0.4 million. Our CFO, Tasos Aslidis, will go over our financial highlights in more detail later on in the presentation. Please turn to slide four for our chartering operations and sale and purchase highlights.
During the first quarter of 2019, the dry bulk markets continued the declining trend of the fourth quarter of last year as they were affected by trade uncertainties and iron ore supply disruptions. Charter rates reached bottom in February, but they have since then recovered to their levels in the beginning of the year. For our fleet, this decline was significantly mitigated due to our physical and FFA contracts we put in place at the beginning of the quarter that partly insulated us from the depressed markets. In particular, the Pantelis was fixed for a trip of about 30 days at $5,500 per day. Thereafter, fixed for a trip of about 55 days at $9,850 per day. The Tasos was fixed for a trip of about 30 days at $7,750 per day.
Thereafter, it was fixed for a trip of about 60 days at $12,250 per day, plus $225,000 ballast bonus, which should result in about $7,000 to $7,500 per day time charter equivalent. Thereafter, it was fixed for another trip of about 75 days at $6,900 per day. The Starlight was fixed with earliest delivery July and latest October 2019 at $9,000 per day for the first 40 days, and thereafter 100% of the BPI for time charter index. In the first quarter of 2019, we had FFA short exposure of 40 days per month at $11,950 per day, which resulted in a profit of about $600,000. Going forward, we have hedged 270 days in Q3 at a rate of approximately $11,128 per day, and similarly, 270 days in Q4 at a rate of approximately $11,361 per day.
Please note that the quoted average prices are gross before deducting commissions and clearing expenses, which are roughly in the range of $55 per contract day. Please also note that there are size, route, and other important differences between FFA contracts and physical charters, notwithstanding the need to post cash security margin if the market changes against the contract's end of, too. In our case, if the market increases. There were no dry dockings or repairs for this quarter. However, for the second quarter, we do expect to dry dock MV Starlight. Please turn to slide five for the synopsis of the EuroDry fleet as of today. Including the Starlight, EuroDry comprises of seven dry bulk vessels with a cargo carrying capacity of 528,000 deadweight tons and with a fleet average age of 10.6 years. Slide six shows the employment schedule.
As you can see, coverage for the remainder of 2019, including Baltic Panamax Index and FFA contracts, stands at about 78%. Having secured the 2 Kamsarmaxes until Q1 2020 on profitable rates, we are pursuing the strategy of employing the remaining five of our vessels on short-term contracts or index-linked contracts or pools. As discussed previously, we have practically hedged three of these vessels for the remainder of 2019 at slightly above $11,000 per day via the FFAs. Our market exposure for the rest of 2019 is currently therefore practically just two vessels. In 2020, we are wide open in expectation of market improvements. In the following slides, we synopsis our outlook into the dry bulk market. Let's turn to slide eight.
The IMF projected world GDP growth in 2019 is revised downwards from 3.5% in the previous quarter to 3.3%, with reduction stemming from mostly all big economies except China, which was revised marginally upwards to 6.3%. It seems the IMF believes China's stimulus will work. The U.S. is down by 0.2% to 2.3%. The Eurozone down by 0.3% to 1.3%. India down 0.2% to 73%, and Brazil down the most by 0.4% to 2.1%. For 2020, global GDP growth rebounds to 3.6% as per the IMF, which is, however, lower than their expectations the previous quarter by 0.1%. U.S. slightly, Japan significantly, and China just marginally are expected to decline a bit relative to the IMF's 2019 expectations, but all other major players are expected to slightly improve.
Looking on the dry bulk trade, according to Clarksons, the trade in 2019 is now projected to grow by 2.4%, down from the 3.1% expected in the previous quarter estimate. A major reason for this decline being the Vale mine incident, of course. In 2020, Clarksons expects a recovery of the growth rate to 3.2%. Please turn to slide nine to review the dry bulk delivery schedule. Currently, the order book stands at 5.4% for 2019, 4.2% for 2020, and just 1% for 2021. This is comparatively very low, near the lowest levels of the last 20 years. Please note that due to slippage, cancellations, and scrapping, the overall fleet growth during the next two years, but also 2021, unless a significant number of new orders is placed for 2021 delivery, should be extremely small. Please turn to page 10, where we summarize our outlook on the dry bulk market.
We believe that the recent market slowdown is due to short-term factors, and that in the medium and long term, the fundamental supply-demand balance is supportive of an improving market. Mainly due to the Vale incident, the rates for the Capesize vessels dropped below OPEX levels in February. However, a strong improvement recently has brought them back to around $12,000 per day. Panamax and Supramax were much less affected by the Vale disaster and dropped much less before increasing again to about $10,000 per day and $9,000 per day respectively. The recent accident in Vale's iron ore mine in Brazil will reduce Brazilian iron ore exports between 50-70 million tons annually until the mines come back to operation. Vale had recently announced the return of about 30 million tons of iron ore exports back in the market.
The local authorities, for a second time, ordered the temporary seizure of the mines. The lost quantities can only be partially replaced by increasing production across other mines in the world. Low order book levels and reduced vessel availability for unavoidable downtime to implement solutions required for compliance with emissions and ballast water treatment regulation, and possible slowdown of the average speed of the fleet would limit fleet growth and allow any trade recovery to translate to higher charter rates. Taking all these facts into account, our analysis for 2019, 2020, and 2021 shows a slightly improving supply-demand balance, which would suggest a strong second half 2019, considering the weak environment in Q1, and an even stronger 2020. Also, for 2021, the current fundamentals look very promising as the order book stands only at 1% of the projected fleet.
Longer-term iron ore trading volume growth is at risk due to the lack of further mining production investments in both Australia and Brazil, the two major producers. Coal imports, despite the longer-term concerns due to the overall desire to reduce coal use, are still expected to further grow in 2019 and 2020 as electricity demand growth remains robust. Grain trade is also expected to do better in 2019 than 2018, especially if a much-desired trade agreement between China and U.S. is ever reached. Finally, environmental regulations coming into effect as of 2020 are the wild card, which may or may not create a tighter market and which are adding uncertainty into the future. Let's turn to slide 11. The left side of the slide shows the evolution of one year time charter of Panamax dry bulk vessels since 2001.
Even though dry bulk vessel rates bounced back from the all-time lows in 2016, we are still below historical levels, even subtracting the super cycles. The median rate for 2001 to 2018 is at about $13,300 per day. The right-hand side of the slide shows the vessel values in relation to 10 years' historical prices. Of course, dry bulk prices have moved above all-time low values that were established at the beginning of 2016, but the average price of 10-year-old Panamax is $18 million, and we are still significantly lower than that. With a stabilizing and even improving freight rate environment, we would expect asset values to improve as well. I will now pass the floor over to our CFO, Tasos Aslidis, to go over our financial highlights.
Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will take you over now our financial result highlights for the first quarter of 2019. For that, please turn to page 13. For the first quarter of this year, we reported total net revenues of $5.8 million, representing a 25% increase over total net revenues of $4.6 million during the first quarter of 2018. This increase was mainly due to the increased average number of vessels we operated. We reported net income for the period of $0.9 million and net income attributable to common shareholders of $0.4 million as compared to net loss and net loss attributable to common shareholders of $1.4 million for the same period of last year.
The difference between net income and net income attributable to common shareholders is the preferred dividend of $0.5 million that we declared on our Series B preferred shares during the first quarter of this year. This preferred dividend was paid partly in kind, $0.1 million, by issuing additional Series B preferred shares and partly in cash, the remaining $0.4 million. Interest and other financing costs, including interest income for the first quarter of 2019, amounts $0.9 million compared to $0.4 million for the same period of 2018. Interest during the first quarter of 2019 was higher due to higher debt and higher liabilities that we paid during the period as compared again to last year. Depreciation expenses for the first quarter of 2018 increased to $1.6 million, compared to $1.2 million for the same period of 2018. Again, as a result of the increased average number of vessels we operate.
Increased general and administrative expenses reflect mainly the operation of the company as a separate public company following the completion of the spinoff that Aristides mentioned at the beginning of the presentation. Adjusted EBITDA for the first quarter of 2019 was $2.5 million compared to $0.1 million achieved during the first quarter of 2018. Excluding the effect from the earnings attributable to common shareholders for the unrealized gain derivatives. The adjusted loss attributable to common shareholders for the quarter ended March 31st, 2019, would have been $0.21 per share, basically diluted, compared to an adjusted loss of $0.69, basically diluted for the same period of last year. Now, can you please kindly turn to slide 14? In this slide, we will review our fleet performance during the first quarter of this year and compare it to the same period of the previous year.
Our utilization rate is as usual, broken down into commercial and operational components. We had 100% commercial utilization rate for the quarter and 99.7% operational utilization rate compared to, again, 100% commercial and 99.7% operational utilization rate for the same period of 2018. I would like to remind you here that our utilization rate calculation does not include vessels in scheduled repairs or dry dock if such events took place during the period. In the first quarter of this year, we operated seven vessels with another time charter equivalent rate of $9,472 per vessel per day compared to five vessels in the same period of 2019, which though earned $11,116 per vessel per day. Total operating expenses, including management fees and general and administrative expenses, but excluding dry docking costs, decreased by 12% during the first quarter of this year compared to the same period of 2019.
As always, we want to emphasize that cost control remains a key component of our strategy. Let's now look at the bottom of this table to our daily cash flow breakeven level presented here on a per vessel per day basis. For the first quarter of 2019, we report an operating cash flow breakeven level, including loan repayments and the cash portion of the preferred dividend, but before any balloon payments of $11,575 per vessel per day as compared to $13,623 per vessel per day as we had during the first quarter of 2018. Let's now turn to slide 15. This slide shows on the right-hand side an estimate of our cash flow breakeven level for the next 12 months, and on the left side, we show our scheduled debt repayments, including scheduled balloon repayments over the next five years.
The chart shows our debt profile before and after the financing of the balloon payment of Eirini P of $4 million, which was scheduled to be paid in the second quarter, and we recently completed the said finance. We can see in the chart that we have no balloon payments coming up before 2021. Expressed in dollars per vessel per day, our loan principal payments over the next 12 months amount to about $2,850 per vessel per day contribution to our cash flow breakeven level. If we make similar assumptions for the rest of the components of our cash flow breakeven and make assumptions for our operating expenses, general and administrative expenses, interest, dry docking costs, et cetera, always on a per vessel per day basis, we can project that we will have approximately a cash flow breakeven level over the next 12 months of $12,650 per vessel per day.
You can see that table on the right part of the slide. Lastly, let's now turn to slide 16. In this slide, we review highlights from our balance. The left side of this slide shows a snapshot of the company's capital structure. On the top, we list our unrestricted cash of $9.4 million, the restricted cash and other liquid assets of $4.4 million, as well as other assets of about $4 million. Including our vessels at book value, our total assets at the end of the first quarter of 2019 stood at about $127 million. Of that, the book value of our vessels was $109 million, which is within 5% of their market value.
Moving on to our liabilities, our bank debt amounts to about $61 million, which is roughly 50% of our total assets, while our preferred equity outstanding is about $20 million, or about 15% of our total assets, and other various liabilities, about $3 million or 2% of our assets. The above numbers result in a net book value of about $43 million or about $19 per share. In closing, I would like to mention that against this figure, our current stock price of $7.50 per share represents a significant discount to the intrinsic value of the company. With that, I would like to pass the floor back to our Chairman and CEO, Aristides, to continue the call.
Thank you, Tasos. I would like to open the floor up for any questions you may have.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone keypad and wait for the automated message advising your line is open. Please state your first and last name before you ask your question. If you wish to cancel your request, please press star two.
Once again, that's star one if you wish to ask a question and star two to cancel the request. We will now take our first question. Please go ahead. Your line is now open.
Hello, this is Tate Sullivan from Maxim Group. Thank you for taking my question. First question on cash flow in slide 15. To confirm, you said there are no more balloon payments due for the rest of 2019, is that correct? After the refinance.
Yes. That is correct. We don't have any balloons coming due in the remaining of this year and 2020. The next balloon payment will be in 2021.
2021. It was a great cash flow quarter in the first quarter of 2019 with about cash flow from operations of close to $7 million. Is that probably the high for the year just based on timing of collecting receivables, or can you give any detail into outlook for cash flow from operations or capital expenditure needs?
I think it was mostly collection of receivables. Other than that, it was an average quarter because, as you pointed out, the average earnings were lower than the same period of last year.
Okay. Understood.
It was also the lack of any dry docking expenses.
Okay. Good point. On that note, on the dry docking that you expect in 2Q, what are the usual expenses related to that period that it will be dry docked?
A typical cost for dry docking one of our vessels, one of our Panamax, which are built between 2000 and 2004, is around $800,000 per dry dock.
Okay, great. Okay, well, thank you.
We expect one dry dock in Q2 and one in Q3 this year.
Okay. While we're talking, touching base, too, on the impact of the recent tenor of China-U.S. trade negotiations, has that come up in your negotiations with customers for future contracts at all? What are specific examples of how that has impacted your fleet, please, if you can discuss?
We haven't had any direct impact from that. What we get the impact from the cargo flows generally as a market. There is nothing particular in our trading. For example, due to the grain tariffs, we tend to get less business out of the U.S. for grains and more out of Argentina, Brazil, Latin America, generally. The overall sentiment is negative through these trade wars, and it affects general sentiment, which general sentiment drives markets.
Right. Absolutely. Thank you for that, and have a great rest of the day, and thank you for all the details.
Thank you very much.
Thank you. We will now take our next question. Please go ahead. Your line is now open.
Yeah. Hi. Poe Fratt from Noble Capital Markets. Good morning.
Hi, Poe.
On the Starlight, it looks like it's up to 20 days as far as what you're budgeting for downtime for the dry dock?
Yeah, I think that's about right, I believe.
Then the third quarter, can you specify which vessel is going to be in dry dock and also like amount of time?
The Eirini. Again, about 20 to 25 days.
Okay, great. Then when you look at the Pantelis and the Tasos right now, it looks like they're open at the end of this month. Can you give us an idea of the current market for those two vessels? Then also the rationale for not doing any FFAs for the second quarter but then loading them on for the third and fourth.
Yes. We do have the FFAs on the second quarter. We still have them. Maybe I didn't mention them as we were talking, but yes, we do have FFAs there for the second quarter as well, at around $11,000. That's an omission, but they are there. Right now, the levels that we are seeing for vessels like Tasos and Pantelis are around $10,000, hopefully up to $10,000.
Great. That's helpful. I did miss the second quarter FFAs. Have you layered on 270, or was it?
It was 270 days. It's our omission. It's not in the presentation. Yeah.
Great. That's helpful. Then in Tasos, when you look at the refinancing of the Eirini debt, it looks like you may have paid down part of the debt and then pushed out the maturity. Can you give us what exactly happened there?
It was essentially a direct refinancing of the amount. In fact, we might have gotten a slightly more, like something like $50,000 more. It was just pushed out and of course the refinance debt is also amortized, so that's why you see the new balloon being lower than the original balloon.
I can put the difference as what will be amortized. I assume it was pushed out for three years then?
Exactly three years. You can see from the chart that from about $4 million, the new balloon is $2.1 million, so the difference, roughly $1.9 million, was amortized equally over the next three years. Used to be in status for you over the next three years.
Yep. Any change in the LIBOR spread or any other structural changes to that?
I think the LIBOR spread was marginally better, but it was roughly the same. The low risk.
Okay. It's 2.7%.
2.7. Yeah, 2.7. I wasn't sure.
270 basis points. Great. Okay. Thank you so much. Well, actually one last one, if you wouldn't mind. Given what happened over the first quarter, has the tone of the M&A market changed at all or any comment on what you're seeing as far as potential expansion opportunity?
I think things have been a bit quiet during the quarter on that front. Everybody is still in wait and see mode to see how things develop. One because of the trade wars, second also because of the IMO changes and the fuel issues. People are dealing with these things more than looking actively at M&A at this stage. At least that's what we see ourselves.
Great. Thank you so much.
Thank you.
Thank you, Poe.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for the automated message advising your line is open. If you wish to cancel your request, please press star two. Once again, that's star one if you wish to ask a question.
I think there's no more questions.
No questions at this time.
Okay. I'd like to thank everybody that was listening in, and we'll talk to you again in three months' time with our Q2 results. Thank you.
Thanks, everybody.
That does conclude the conference call today. Thank you for participating. You may all disconnect.