EuroDry .(US:EDRY)2022-02-11 10:09Financial Data and Key Metrics Changes - For Q4 2021, total net revenues were $22.3 million, a 248% increase from $6.4 million in Q4 2020 [29] - Net income for Q4 2021 was $16 million, compared to a net loss of $0.3 million in Q4 2020 [30] - Adjusted EBITDA for Q4 2021 was $16 million, up 773% from $1.8 million in Q4 2020 [31] - For the full year 2021, total net revenues were $64.4 million, a 189% increase from $22.3 million in 2020 [34] - Net income for 2021 was $31.2 million, compared to a net loss of $5.9 million in 2020 [34] - Adjusted EBITDA for 2021 was $42.3 million, an increase of 1,050% from $3.7 million in 2020 [36] Business Line Data and Key Metrics Changes - The fleet increased to 10 vessels with an average age of 12.9 years, enhancing operational efficiency [14] - Average time charter equivalent rate for Q4 2021 was $29,157 per day, compared to $10,761 per day in Q4 2020 [38] - Fleet utilization rates were 99.8% commercially and 99.5% operationally in Q4 2021, compared to 100% and 99.9% respectively in Q4 2020 [38] Market Data and Key Metrics Changes - Dry bulk spot earnings peaked in October 2021 but retreated by about 35% in November and December [16] - The dry bulk trade demand is expected to grow by 2.2% in 2022, down from 4.8% in 2021 [22] - The order book as a percentage of the total fleet stands at 6.8%, the lowest in over 25 years [23] Company Strategy and Development Direction - The company plans to finance the acquisition of the Molyvos Luck vessel with approximately $22.2 million, half through bank debt post-delivery [10] - The strategy includes cautious growth while maintaining a strong balance sheet and low leverage [55] - The company is considering replacing older vessels to modernize the fleet as part of its growth strategy [61] Management's Comments on Operating Environment and Future Outlook - Management noted that the market correction was expected seasonally, with a stronger market anticipated in Q2 2022 [61] - The company is prepared for a period of higher prices and earnings compared to the last decade, while remaining cautious [27] - The impact of new COVID-19 variants and rising energy prices may slow economic growth, but the overall outlook remains positive [24] Other Important Information - The company raised approximately $10 million through an at-the-market offering in 2021 [13] - The market value of the fleet is estimated at $182 million, significantly higher than the book value of $128.5 million [48] Q&A Session Summary Question: Changes in EBITDA calculator and drydocking costs - The CFO explained that drydocking costs were included due to minimal expenses in 2021, and operating expenses were adjusted for conservatism [50] Question: Inclusion of ballast bonus in Q1 EBITDA - The CFO confirmed that the ballast bonus for the Alexandros ship is included in the Q1 EBITDA [51] Question: Acquisition financing details - The CFO stated that half of the acquisition cost will be financed with bank debt after the acquisition [52] Question: Balancing acquisitions and share repurchases - The CEO noted the importance of cautious growth and maintaining liquidity over share buybacks, given the current low share price [55] Question: Fleet composition and S&P market outlook - The CEO discussed the dynamic nature of the S&P market and the potential for replacing older vessels as the fleet grows [61] Question: FFA activity and hedging strategy - The CEO clarified that FFAs are used only as a hedge and that the company is currently not hedged but may increase coverage in Q2 [65]