At this time, all participants are on a listen-only mode. There will be a presentation followed by a question-and-answer session, at which time, if you'd like to ask a question, please press star one 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 its results with a press release that has been publicly distributed.
Before passing the floor to Mr. Pittas, I would like to remind everyone that in today's presentation and conference call, EuroDry 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'd 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 Mr. Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the three-and-nine-month period ended September 30th, 2024. Please turn to slide three of the presentation. Our financial highlights are shown here.
For the third quarter of 2024, we reported total net revenues of $14.7 million and the net loss attributable to controlling shareholders of $4.2 million, or $1.53 loss per basic and diluted share. This significant loss is a consequence of the poor market we have lately been witnessing, but more importantly, on the fact that we chose to bring forward two dry dockings, which, coupled with the two scheduled dry dockings we had during this quarter, cost about $4.5 million and resulted in significantly higher days.
Adjusted net loss attributable to controlling shareholders for the quarter was $3.9 million, or $1.42 lost per basic and diluted share. Adjusted EBITDA for the period was $0.5 million. Please refer to the press release for the reconciliation between adjusted net loss and adjusted EBITDA. Our CFO, Tasos Aslidis, will go over our financial highlights in more detail later on in the presentation.
As of November 19, 2024, we had repurchased 314,000 shares of our common stock in the open market for a total of about $5 million since the initiation of our repurchase plan of up to $10 million, which was announced in August 2022. We will continue to execute a repurchase program around current share price levels.
During the quarter, we refinanced two of our loans involving four of our vessels, releasing $16 million of available cash reserves, extending loan maturities to 2029 and 2030 respectively, and also lowering the loan margins. Still, our debt levels are below 45% of our vessel market value. Please turn to slide four for an overview of our sales and purchase chartering and dry docking highlights.
The duration of most of our charter contracts is short-term for the time being, typically spanning 10-100 days, according to their minimum duration. This approach enhances our flexibility, allowing us to fully capitalize on the potential positive market shift whenever this happens. You can see the specifics of the various charters in the accompanying presentation.
As I already said, believing that Q4 and calendar 2025 would be better than Q3, we brought forward the dry dockings of M/V Maria and M/V Christos K, thus significantly upgrading the vessels. Additionally, we completed scheduled dry dockings for vessels M/V Yiannis and M/V Eirini P. During the quarter, we faced an additional 10 days of technical off-hire for our motor vessel M/V Good Heart, which incurred turbocharger damage.
Please turn to slide five. EuroDry's fleet consists of 13 vessels, including five Panamax dry bulk carriers, five Ultramax vessels, two Kamsarmax and a Supramax dry bulk carrier. Our 13 dry bulk carriers have a total cargo capacity of about 1 million deadweight tons and an average age of 13 and a half years. I'd like to remind you that EuroDry owns 61% of the entities that own motor vessels Christos K and Maria.
The remaining 39% is owned by owners represented by NRP Project Finance, otherwise referred to as the NRP investors. Now, please turn to slide six for a further update on our fleet employment. Currently, approximately 63% of our fleet is secured under fixed-rate charters for the remainder of 2024, excluding ships on index charters, which are open to market fluctuations but have secured employment, with a daily rate ranging between $7,750-$18,500 per vessel.
The wide range of charter rates reflects the importance of positioning of ships during these difficult times. Turning to slide eight, we go over the market highlights for the third quarter, ended September 30th, 2024, up until recently. In Q3 2024, Panamax vessels experienced a moderate decrease in both one-year time charters and spot rates.
The average one-year time charter rate for Panamax vessels stood at $14,923 per day for the quarter, dropping to $14,100 per day by the end of September. Similarly, the average spot rate was $20,563 per day, with a slight decline to $11,500 per day on the last day of Q3. The market has since declined even further, as evidenced by the rate shown at the end of last week across these three dry bulk segments. Time charter rates for Panamax vessels have dropped a further 4.5%, while spot rates are also down 12.5%.
Please now turn to slide nine. The IMF's latest update from October 2024 projects stable yet somewhat underwhelming global economic growth, with unchanged forecasts hovering around similar levels across 2024 and 2025. While the U.S. has shown resilience with upgraded growth projections, other advanced economies, particularly in Europe, have seen either downgrades or stagnant growth outlooks.
This mixed landscape underscores the need for careful management of sectoral dynamics and monitored policy to help maintain stability and ensure a soft landing, particularly as disinflation continues globally. However, many regions still grapple with services price inflation, highlighting ongoing pressures within specific sectors. Emerging markets continue to drive global growth, led by India, the ASEAN five countries, and still China.
China's growth appears to be slower at 4.8% this year and 4.5% next year, but there is hope that the extra stimulus recently announced may boost productivity growth further. India is projected to grow by 7% in 2024 and a further 6.5% in 2025, supported by significant investment, strong demand in technology, and infrastructure expansions. Southeast Asian countries are also positioned for solid growth, benefiting from regional demand and investment momentum.
In parallel, Clarksons's forecasts for dry bulk trade demand in 2024 reflect the dramatic effect of ton- miles from the Red Sea, mostly, and Panama Canal disruptions. Assuming these disruptions ease almost entirely, 2025's forecasts show trade demand growth of just 1.3% for the year, from 5.2% in 2024 and 1% projection in 2026. These projections indicate a cautious outlook for the dry bulk sector, aligning with the global economic landscape.
All the above-mentioned IMF projections and Clarksons projections are, however, very uncertain as we remain mindful of key macro risks, including the aftermath of the U.S. elections and evolving global geopolitical tensions, which could impact medium and longer-term growth prospects. Please turn to slide 10. Let's now review the current state of the order book in the dry bulk sector.
As you can see, the current order book stands at 10.3% of the fleet, a slight increase from the 2021 low of 7%, indicating a modest uptick in new contracts. Despite this rise, the order book remains one of the lowest in historical terms. Factors such as slow steaming, heightened scrapping rates, and stricter environmental regulations could constrain the available bulk fleet in the coming years, thus supporting rates as supply tightens relative to demand.
Turning to slide eleven, let us now look into the supply fundamentals in a bit more detail. As of November 2024, the total dry bulk vessel operating fleet was 13,600 vessels. According to Clarksons latest report, new deliveries as a percentage of total fleet are expected to be 3.6% in 2024, 3.5% in 2025, and 5.9% in 2026 onwards.
The actual fleet growth is, of course, expected to be lower than the aforementioned figures due to scrapping and slippage. Also note that 9% of the fleet is older than 20 years old and therefore a good candidate for scrapping, especially if the market remains at current levels or lower. Please turn to slide 12, where we summarize our outlook for the dry bulk market.
Dry bulk rates have continued to decline, with some hitting year-to-date lows. The anticipated fourth quarter upswing has not materialized, and average trip charter rates for Ultramax and Kamsarmax vessels are down by 30% year over year. Earlier market support from Chinese stockpiling of iron ore and coal, as well as disruptions in trade routes, is now fading as supply now starts to exceed demand.
Chinese economic stimulus in September intended to provide the means to address the country's economic slowdown but had little effect, and therefore, a few weeks ago, China announced a further five-year stimulus package totaling $1.4 trillion to tackle their government debt problems, signaling also that more economic support would come next year. This could indeed provide the necessary fuel to boost markets in 2025.
The Panama Canal passage is running more effectively and efficiently following the resolution of the drought issues, leading to an increased supply of ships. The Suez Canal situation remains stable, although there is limited visibility on when a full return to normalcy can be expected. On the supply side, new ship orders remain limited, primarily due to constrained shipyard slots and ambiguity around the fuel of the future.
Many of the orders being placed are nowadays structured as methanol or LNG ready so that they can operate on alternative fuels if necessary, with less need for conversions. As mentioned, the order book-to-fleet ratio is still near historical lows, providing a potential setup for rate recovery if demand improves. Additionally, upcoming emissions regulations like the EEXI, CII, EU ETS, FuelEU, etc., could tighten supply through increased scrapping or reduced operating speeds for certain vessels. Let's now turn to slide thirteen.
As of November 15th, 2024, the one-year time charter rate for Panamax ships, with a capacity of 75,000 deadweight tons, stands at $13,475 per day, slightly below the historical median of $13,700 per day by about 2.1%. Meanwhile, the market value for 10-year-old Panamax dry bulk carriers remains strong, with current prices reaching $25.25 million.
This level is significantly above the 10-year historical median of $15 million and the 10-year average of about $17.5 million. These trends highlight a still resilient second-hand market despite the 10%-15% correction we have witnessed already. We believe the second-hand prices may soften a bit more to align with current charter rates if rates remain at current levels in the following months.
Without, however, we will see significant further drops as this will be constrained by new building prices. There, we feel there is not much space to give as the yards are full into 2028 and in no need to accept projects at lower prices. Additionally, building costs have also risen, thus placing a floor to how much the yards could afford to reduce prices even if they wanted to.
In this context, we are evaluating our opportunities to further grow the company with investments that will enhance our shareholder future returns. And with that, let me pass the floor over to our CFO, Tasos Aslidis, to go over various financial highlights in more detail.
Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. Over the next four slides, I will give you an overview of our financial highlights in the third quarter and nine months of 2024 and compare them to the same periods of last year. I will not try to go through every number in the slides that will follow, but rather concentrate on the main points. Let's start and turn to slide fifteen.
For the third quarter of 2024, the company reported total net revenues of $14.7 million, representing a 47% increase over total net revenues of $10 million during the third quarter of last year, and that increase was primarily the result of the increased average number of vessels operated during the third quarter of this year compared to last.
Interest and other financing costs for the third quarter of 2024 amounted to about $2 million compared to $1.6 million for the same period of last year. Interest expense during the third quarter of this year was higher, mainly due to the increased amount of debt we carried during the period as compared to last year. At the same time, interest income during the third quarter of this year was lower.
We had only $16,000 of interest income as compared to $362,000 during the same period of 2023, the difference again being attributed to lower cash balances that we had during the two periods. Adjusted EBITDA for the third quarter of 2024 was $0.5 million compared to $3.1 million achieved during the third quarter of 2023.
Basic and diluted loss per share attributable to controlling shareholders for the third quarter of 2024 was $1.53, calculated on 2.7 million basic and diluted weighted average number of shares outstanding, compared to a loss per share of $0.19, calculated on 2.8 million basic and diluted weighted average number of shares outstanding for the third quarter of 2023.
It should be noted that, as Aristides mentioned, dry docking expenses in the third quarter of this year amounted to $4.5 million compared to $0.8 million in the third quarter of 2023, a difference of $3.7 million, or about $1.35 per share, which is the main reason behind the difference in the result between the two quarters.
If we adjust our result for the unrealized loss or earnings from interest rate swaps, we get adjusted loss per share of $1.42 for the third quarter of 2024 compared to a loss of $0.24 per share for the same period of last year. Let's now look at the numbers for the corresponding nine-month periods ended September 30th, 2024, and compare them to the same period of last year.
For the first nine months of 2024, we reported total net revenues of $46.6 million, representing again a 47% increase over total net revenues of $31.7 million during the same period, the first nine months of 2023, and this again was mainly the result of the increased number of vessels we operated during the period of this year compared to last.
Interest and other financing costs for the first nine months of 2024 amounted to about $6 million compared to $4.4 million for the same period of 2023, the same reason we had more higher levels of outstanding debt during that year, and interest income for the first nine months of 2024 was $78,000 versus $734,000 during the first nine months of 2023. Adjusted EBITDA for the first nine months of this year was $7.6 million compared to about $8 million achieved during the first nine months of 2023.
Basic diluted loss per share attributable to controlling shareholders for the first nine months of this year was $2.34, again calculated on about 2.7 million basic diluted weighted average number of shares outstanding, compared to a loss per share of $1.17 for 2023.
If we adjust this figure for the unrealized earnings or losses, respectively, from the interest rate swaps, the resultant adjusted earnings per share or adjusted loss per share becomes $2.77 for the first nine months of 2024 and a loss of $0.57 for the same period of 2023. I will repeat here my reference to drybulk expenses for the nine-month period, which accounts for the majority of the difference in the results. Let's now turn to slide 16 to review our fleet's performance.
We'll start our review by looking at our fleet utilization rates for the third quarter and nine-month period of 2024 and compare them to 2023. As always, we'll provide the breakdown of our utilization rate into commercial and operational. I will not go through the numbers in detail, but just highlight that our total utilization rate ranged between 98.5% and 99%, except for a period in 2023, specifically the second quarter, during which a vessel incident resulted in higher off-hire time and, as a result, lower utilization rate.
Regarding the rest of the figures in this slide, I would like to highlight that, on average, we owned and operated 13 vessels during the third quarter and nine-month period of 2024, earning on average a time charter equivalent rate of $13,339 per day for the nine-month period and about $13,105 for the third quarter of this year.
Comparatively, in 2023, we owned and operated 10 vessels during both periods, earning an average of $12,126 per day during the third quarter of 2023 and an average of $11,644 during the nine-month period of the year. The final point I would like to make on this slide is to point you to the last line of the table, the one that shows our cash flow break-even levels.
During the nine months of 2024, our cash flow break-even level was around $13,788 per vessel per day, while it was about $15,145 for the third quarter of the year. I would like to highlight the variability of this figure is due mainly to the dry bulk expenses, which, as we mentioned several times today, were elevated during the last three months of 2024.
Please remember this number when we'll discuss the expected cost flow break-even level for the next 12 months in a subsequent slide. Let's indeed turn to the next slide, slide seventeen, to review first our debt profile. After September 30th, 2024, EuroDry's outstanding debt stood at $94.6 million and, on a pro forma basis, including recent refinancings we concluded, at $110.6 million.
The repayment schedule outlined in this chart is thus adjusted for the refinancing we completed. Repayments for 2025 and 2026 are between $12 and $13 million each year, and only in 2027 we have to repay a significant balloon payment of about $10 million, which, as we have done several times in the past, we would have the option to refinance. A quick comment on this slide about the cost of our debt.
The average margin on our debt as of September 30th stood at around 2.19% over SOFR. Assuming a three-month SOFR rate of about 4.5%, the estimated cost of our senior debt is approximately 6.69%. However, if we factor in our interest rate swaps, the portion of the debt that has been covered under interest rate swaps, the effective cost of our senior debt decreases a bit to around 6.54%, positioning to manage our interest expenses more effectively amidst market rate fluctuations.
And this average cost of debt will further come down as the refinancings I mentioned were concluded with margins below our average margins. At the bottom of this slide, we can see our projected cash flow break-even level for the next 12 months that I referred to in the previous slide, broken down into its components.
What is important to note is that we expect our cash flow break-even level to be around $11,766 per vessel per day, and that is really due to much lower scheduled drydocking expenses of $468 per vessel per day that we anticipate for the next 12 months. We have only one drydocking schedule and one in-water survey.
If you recall from the previous slide, the same figure for the third quarter of 2024 was $3,776 per vessel per day, and the difference of about $3,300 is fully reflected in the cash flow break-even levels that we expect. Let's now conclude our presentations by moving to slide 18, where we can see some highlights from our balance sheet in a simplified way. This slide offers a snapshot of our assets and liabilities.
As of September 30th, 2024, cash and other current assets stood at about $20.3 million in our balance sheet. The book value for our vessels was approximately $194.4 million, resulting in total book value of assets of $214.7 million.
On the liability side, our debt as of September 30th, as I mentioned in the previous slide, stood at $94.6 million, while other liabilities amounted to $8.3 million and minority interest, the part of our vessels of two of our vessels owned by our JV partners, minority interest of $8.7 million, which in turn resulted in book shareholder's equity of about $103 million, translating to about $37 per share. But also, it should be noted that the market value for our vessels is higher than their respective book value.
We estimate that our vessels are worth about $248 million, a number that is, although lower than last quarter, significantly higher than their book value, higher by $54 million or 18.5%, resulting in NAV per share, net asset value per share, of about $55.5, which, compared to our share price of $15 per share, illustrates the appreciation potential our shareholders have if market or other factors trigger a reduction of this discount, and with this, I would like to turn the floor back to Aristides to continue the call.
Thank you, Tasos. Let me open up the floor for any questions that you may have.
Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Y ou may press star two if you'd like to remove 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. Our first question comes from Mark Reichman with Noble Capital Markets. Please proceed with your question.
Thank you. So, Tasos, I'm looking at the fleet profile, and so, Tasos, your 13-vessel time charters are set to expire in November or December of this year. And so I was wondering if you could just talk a little bit about your renewal strategy and also just your expectations for pricing. Obviously, we can see the rates in the market, but just a little visibility there would be appreciated.
Yes. Hi. Of course, we will have to take the market. Our current belief is that these are relatively low levels where we would not like to fix for longer periods, so we will probably be fixing our ships on trip-time charters, short charters, which are anything between 15 to 90 days at the current levels. Of course, for this type of ships, positioning is extremely important, so depending on where the ship is, the numbers that you can see can vary from anything between a bottom of, say, $7,500 to a top of $20,000, but it all depends on where your ship is at the time that it opens up,
And then just a second. Yes. Go ahead.
We will not be securing longer charters at these rates because we think that and hope that in 2025, after the new year, we will at some point see higher charter rates.
Okay, and then on just voyage expenses, real quickly. So for the first half, they totaled about $3.7 million compared to $4 million for the full year of 2023. Could you just talk a little bit about expectations on voyage expenses? I mean, is it.
I mean, our charters typically are time charters, so voyage expenses relate primarily to gains or losses on the purchase and delivery of fuels on board between charters. And in case we have a ballast trip, then during that period, we pay the voyage expenses ourselves. So they fluctuate in a less standard way.
Okay. What would be your expectations for the fourth quarter?
Because of the reasons I described, it's hard to have expectations because it depends really on the type of charters we do and whether it happens for us to record a gain or loss when we buy back any remaining fuel from the previous charter and sell it to the next one. I mean, for modeling purposes, I would use a percentage of the previous results modeling forward.
Okay.
And just one more thing. Actually, I think for modeling purposes, the reasons you would just use the time charter equivalent that you suppose that the vessels will get and neglect that.
Okay. Okay. I think that's what we had done. But so just lastly, so fourth quarter looks like that'll be a very strong quarter. You won't have the dry docking expenses. Could you just, I know you touched on it. I didn't catch it all, but could you just talk a little bit about dry docking for 2025? Do you think if rates are low in the first quarter, would you pull any forward? Or just if you could just kind of reiterate the dry docking expectations in 2025.
In 2025, we have only one scheduled dry dock for Santa Cruz, and we have a dry dock for one of our new—it's not actually dry dock. We have a special surveyor for one of our new buildings which will pass in water. So that's why we have a very minimal dry docking expense in the forward 12-month break-even expectation.
Right. 468. Okay. Thank you very much. I really appreciate it.
Thank you very much. Bye.
As a reminder, if you'd like to ask a question, please press Star 1 on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Tate Sullivan with Maxim Group. Please proceed with your question.
Hi. Thank you. I was reviewing it. It was a little about a year ago that you formed the partnership with NRP Project Finance. Can you give us an update on that joint venture, and are you still looking to do more potential acquisitions? And I just noticed that are you still flowing out some income to the joint venture? Just any update is appreciated.
I think, Tate, hi, this is Aristides. The relationship with NRP is going very well, and we have regular meetings, and everything is running smoothly. We have said that we are there to look at other projects together, and it is something that may happen. Indeed, for the financials, Tasso, you can say a few things perhaps.
I think we bought the ships this time last year. We sold them. We are fully consolidating their figures in our fleet, and we report their portion as minority interest, both on the income and on the balance sheet. The project in isolation so far has recorded some losses, but that's why we brought forward the dry dock. We expect and we hope that the project will turn quite profitable over the next year.
Understood. Great. Okay. Thank you. Just globally, is the current weakness in dry bulk in most trade routes, or is there better strength in Europe versus Asia? Can you just comment on sort of what that balance is going forward, please?
Yes. I think, Tate, that it's uniformly relatively poor. China is a huge driver of dry bulk trade, and the fact that it has been slow has affected our expectations, and I think the biggest part of the market. But ships are ships. They float around. They go wherever they can find the best rate. So even if there were imbalances, they balance out relatively quickly. I wouldn't say that there is a particular area of the world currently that is much stronger than any other.
Okay. Thank you for your comments. Have a good rest of the day.
Thank you, Tate.
Thank you.
Our next question comes from Poe Fratt with Alliance Global Partners. Please proceed with your question.
Hi. Good afternoon, Aristides, and good afternoon, Tasos. Tasos, when you reviewed the refinancings that you did, it looks like you repaid $10 million, and you have new loans for $26 million, hence the increase in cash of about $16 million. Can you just broadly describe the debt amortization on the two new loans and what the balloon payments would be in 2029 and 2030?
Yeah. I think we have. I mean, I can give you a little more detail after the call if you want, but we increased. We relevered four of our ships into loan facilities, extending the maturity five and six years, respectively, going to 2029 and 2030 at a little lower margin. I don't have off the top of my head the balloons, but I'll be happy to provide you that information.
Okay. I'll follow up with you. And then if you look at. I think you talked about the joint venture with NRP and potentially some other opportunities you're looking at. How do those potential opportunities factor into your stock buyback program? It looks like your stock buyback program has been fairly. The activity has been fairly muted, although if I'm correct, I think you started buying stock back in this quarter, maybe 1,000 shares or so. Can you just talk about your stock buyback program relative to your other capital allocation priorities?
Sure. Yes. This is. You're right. There's been very little buybacks up to now in the last quarter. We now feel that the stock price is even lower than where it should be. So on the one hand, we would like to proceed with further buybacks.
On the other hand, we are looking at a couple of projects and investment opportunities and thinking about them, and we have to decide how really we will go along with all that. Unfortunately, the resources are not unlimited, so we can do both very heavily. But we will see. We will let you know how we proceed.
I wanted to add that the stock buyback is limited by certain regulatory factors, and we cannot execute more than what we have been already executing. There is up to 25% of the average volume that we can buy and certain other things that really don't allow us to buy as aggressively as we would have liked, potentially.
I think also the main reason is that indeed the liquidity in the stock is not that high, so that makes it a bit less. We could have done more, obviously, but having a not very liquid stock and thinking about investing some of our funds are the two reasons that kept us from doing more.
Just to confirm, though, Aristides and Tasos, the buyback program was active in the fourth quarter as the stock went down?
It was active, but I mean, in the fourth quarter, because weeks into the fourth quarter, we stopped doing it because it comes within our trade window.
Yeah. You're quite clear.
Our closed window. But it was a very limited amount of shares that we bought back.
Yes. I always view it as more of a complement, not a number one priority, but I just wanted to make sure I understood that it is you do feel that roughly in the 15s or the mid-15s that the stock is undervalued and that you're more active than you have been, obviously subject to the constraints of the average volume and everything, but you're more active now than you have been over the course of the last three quarters.
That I thing is a fair statement.
Okay. And then I think I'll follow up, Tasos, on the details on the debt amortization and then the balloons. But the new loans, just to clarify, the new loans are about $26 million?
It's a $16 million incremental.
Okay. On top of the $10 million that was due in the quarter, right?
No. We refinanced even loans that weren't due in this quarter.
Okay. Sounds good. Thanks so much.
You're welcome, Poe.
Thank you, Poe.
We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Aristides Pittas for closing comments.
Thank you all for listening to us today. We will be back to you in three months' time. Thank you.
Thanks, everybody.
This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
Thank you.