EuroDry .(US:EDRY)2023-08-08 23:43Financial Data and Key Metrics Changes - For Q2 2023, the company reported total net revenues of $10.3 million, a 50.7% decrease from $21 million in Q2 2022, primarily due to lower time charter rates and increased idle periods for vessels [26][59] - The net loss for Q2 2023 was $1.2 million, compared to a net income of $10.6 million in Q2 2022, with adjusted net loss of $1.3 million or $0.48 per share [26][60] - Adjusted EBITDA for Q2 2023 was $2.5 million, down from $13.7 million in Q2 2022 [35][60] - Interest and other financing costs for Q2 2023 amounted to $1.4 million, up from $0.8 million in Q2 2022 [59] Business Line Data and Key Metrics Changes - The average time charter equivalent rate per vessel per day was $12,179 in Q2 2023, compared to $24,025 in Q2 2022 [26][62] - Daily operating expenses averaged $6,780 per vessel per day in Q2 2023, compared to $5,806 in Q2 2022 [18][74] - The fleet utilization rate for Q2 2023 was 98.3% commercial and 95% operational, compared to 99.4% for the same period last year [61] Market Data and Key Metrics Changes - The average Panamax spot rate was around $10,500 per day in Q2 2023, dropping to approximately $7,900 per day by June 30, 2023 [29] - The total dry bulk vessel operating fleet was 13,350 vessels as of July 2023, with expected lower fleet growth due to scrapping and slippage [32] - The order book as a percentage of total fleet stood at just 7.4% as of July 2023, indicating minimal fleet growth over the next 2 to 3 years [56] Company Strategy and Development Direction - The company is currently trading its ships on a spot basis due to low freight rates, preparing to capitalize on potential market improvements [5] - The company is committed to share repurchases, having repurchased 216,000 shares for about $3.25 million, as its stock is trading at a significant discount to net asset value [51][63] - The company is considering vessel acquisitions if prices drop, while also prioritizing stock buybacks due to the current market conditions [84] Management's Comments on Operating Environment and Future Outlook - Management noted that the dry bulk market has weakened, with expectations for a gradual recovery in rates as demand picks up in the latter half of 2023 [30][70] - The IMF projects global growth to fall to 3% in 2023 and 2024, with specific growth in shipping demand from India, China, and ASEAN-5 [30][55] - Management expressed optimism about the potential for improved earnings in the coming quarters as supply-demand fundamentals appear more balanced [57] Other Important Information - The company incurred additional expenses due to a vessel incident, which affected profitability, but expects insurance to cover most costs [28][78] - The company has a cash flow breakeven level of around $12,815 per vessel per day, which includes loan repayments and other expenses [38][47] Q&A Session Summary Question: What did the commentary about future potential $2 million payments reflect? - Management clarified that a $4 million guarantee was posted for potential MARPOL violations, with expectations that insurance would cover most costs, and a reserve of $500,000 was set aside [41][78] Question: How does the company view the potential impact of new regulations? - Management indicated that while new regulations may impose financial implications, they are preparing for these changes and do not expect significant immediate impacts [80] Question: What is the company's strategy regarding share buybacks versus vessel acquisitions? - Management stated that while they are considering vessel acquisitions, the current priority is to repurchase shares due to their significant discount to NAV [84]