EuroDry Ltd., an owner and operator of drybulk vessels and provider of seaborne transportation for drybulk cargoes, announced its results for the three- and twelve-month periods ended December 31, 2020.
Full Year 2020 Highlights:
• Total net revenues of $22.3 million.
• Net loss of $5.9 million; net loss attributable to common shareholders (after a $1.6 million dividend on Series B Preferred Shares) of $7.5 million or $3.28 loss basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $6.9 million or $3.04 adjusted loss per share basic and diluted.
• Adjusted EBITDA was $3.7 million.
• An average of 7.0 vessels were owned and operated during the twelve months of 2020 earning an average time charter equivalent rate of $9,387 per day.
Fourth Quarter 2020 Highlights:
• Total net revenues of $6.4 million.
• Net loss of $0.3 million; net loss attributable to common shareholders (after a $0.4 million dividend on Series B Preferred Shares) of $0.7 million or $0.31 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $0.8 million or $0.34 adjusted loss per share basic and diluted.
• Adjusted EBITDA1 was $1.8 million.
• An average of 7.0 vessels were owned and operated during the fourth quarter of 2020 earning an average time charter equivalent rate of $10,761 per day.
• The Company declared a dividend of $0.4 million on its Series B Preferred Shares. The dividend will be paid in-kind by issuing additional Series B Preferred Shares.
1 Adjusted EBITDA, Adjusted net income/(loss) and Adjusted earnings/(loss) per share are not recognized measurements under US GAAP (GAAP) and should not be used in isolation or as a substitute for EuroDry’s financial results presented in accordance with GAAP. Refer to a subsequent section of the Press Release for the definitions and reconciliation of these measurements to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Recent developments
• In January 2021, the Company refinanced the outstanding loans of two of its vessels, M/V Alexandros and M/V Xenia, with a new loan of $26.7 million which, after repaying the outstanding loans of the vessels, resulted in approximately $3.9 million of additional funds available to the Company. The loan is to be repaid in 24 quarterly installments of $0.5 million along with a balloon payment of $14.7 million to be paid together with the last installment.
• In January and February 2021, the Company redeemed a net amount of $3 million of its Series B Preferred Shares (“Preferred Shares”) and, contemporaneously, agreed with its preferred shareholders to reduce the dividend rate of its Preferred Shares to 8% per annum for two years from the 14% per annum level it was set to increase on January 29, 2021. Over the next two years, the Company has also the option to pay the preferred dividends in kind at a rate of 9%. The dividend will reset to 14% per annum in January 2023. The partial redemption and the reduction of the dividend rate for two years would result in about $0.50 per share higher earnings per year over the next two years and $0.18 higher earnings per share thereafter.
• The Company has agreed to refinance the outstanding loan of M/V Eirini P with a loan of $5 million which, after repaying the outstanding loan of the vessel, will result in approximately $1.6 million of additional funds available to the Company. The loan will be repaid in 20 quarterly instalments of $0.21 million along with a balloon payment of $0.8 million to be paid together with the last installment. The loan is subject to customary documentation and is expected to be finalized in February 2021.
Aristides Pittas, Chairman and CEO of EuroDry, commented:
“During the fourth quarter of 2020 and especially in the beginning of 2021, the drybulk market improved gradually and reached levels last seen in the fall of 2019 just before the COVID-19 pandemic took center stage. Given the historically low orderbook, at only about 6% of the existing fleet, and the expected rebound of drybulk seaborne trade as vaccines help control COVID-19, we anticipate economic fundamentals that would support a strong charter market throughout 2021. We believe, our fleet is well positioned to take advantage of the higher market rates as the equivalent of 85% of our fleet is exposed to market. Our fourth quarter results were influenced by the scheduled drydocking of M/V Xenia the cost of which was a contributing factor in the quarter’s loss; with no drydockings scheduled within this year and assuming charter rates remain near current levels, we would expect a meaningfully profitable year during 2021.
“At the same time, our increased liquidity, following our recent debt refinancings and preferred shares dividend rate reduction, allows us to pursue some of our fleet expansion plans. As always, we are looking at the capital markets, private and public, to fund our broader growth strategy which includes taking advantage of our public listing to provide a consolidation platform for other owners and fleets.”
Tasos Aslidis, Chief Financial Officer of EuroDry, commented: “Comparing our results for the fourth quarter of 2020 with the same period of 2019, our net revenues decreased by about $1.2 million, due to the lower time charter equivalent rates our vessels earned as compared to the fourth quarter of 2019.
“Total daily vessel operating expenses, including management fees, general and administrative expenses, but excluding drydocking costs, increased by approximately 5.1% during the fourth quarter of 2020 compared to the same quarter of last year, while for the full year 2020 we had an increase of approximately 5.8%. This increase is mainly due to increased supply of stores and spare parts for our vessels in 2020 compared to 2019 and increased crewing costs, the latter resulting from difficulties in crew rotation due to COVID-19 related restrictions. As always, we want to emphasize that cost control remains a key component of our strategy.
“Adjusted EBITDA during the fourth quarter of 2020 was $1.8 million compared to $3.8 million achieved for the fourth quarter of last year. As of December 31, 2020, our outstanding debt (excluding the unamortized loan fees) was $51.4 million versus restricted and unrestricted cash of approximately $4.6 million.”
Fourth Quarter 2020 Results:
For the fourth quarter of 2020, the Company reported total net revenues of $6.4 million representing a 15.7% decrease over total net revenues of $7.6 million during the fourth quarter of 2019 which was the result of the decreased average time charter equivalent rate our vessels earned in the fourth quarter of 2020 compared to the same period of 2019. The Company reported a net loss for the period of $0.3 million and a net loss attributable to common shareholders of $0.7 million, as compared to net income of $1.4 million and net income attributable to common shareholders of $1.0 million for the same period of 2019. Gain on derivatives of $0.03 million and drydocking expenses of $0.5 million contributed to the result for the quarter as compared to gain on derivatives of $0.2 million and drydocking expenses of $0.07 million during the fourth quarter of 2019. Depreciation expenses for the fourth quarter of 2020 amounted to $1.65 million, remaining unchanged compared to the same period of 2019.
Interest and other financing costs for the fourth quarter of 2020 amounted to $0.5 million compared to $0.8 million for the same period of 2019. Interest during the fourth quarter of 2020 was lower due to lower debt during the period and the decreased Libor rates of our loans during the period as compared to the same period of last year.
On average, 7.0 vessels were owned and operated during the fourth quarter of 2020 earning an average time charter equivalent rate of $10,761 per day compared to 7.0 vessels in the same period of 2019 earning on average $12,439 per day.
Adjusted EBITDA for the fourth quarter of 2020 was $1.8 million compared to $3.8 million achieved during the fourth quarter of 2019.
Basic and diluted loss per share attributable to common shareholders for the fourth quarter of 2020 was $0.31 calculated on 2,285,601 basic and diluted weighted average number of shares outstanding, compared to basic and diluted earnings per share of $0.45 for the fourth quarter of 2019, calculated on 2,261,103 basic and diluted weighted average number of shares outstanding.
Excluding the effect on the loss attributable to common shareholders for the quarter of the unrealized (gain)/ loss on derivatives, the adjusted loss attributable to common shareholders for the quarter ended December 31, 2020 would have been $0.34 per share basic and diluted compared to adjusted earnings of $0.43 per share basic and diluted for the quarter ended December 31, 2019. Usually, security analysts do not include the above item in their published estimates of earnings per share.
Full Year 2020 Results:
For the full year of 2020, the Company reported total net revenues of $22.3 million representing a 18.2% decrease over total net revenues of $27.2 million during the twelve months of 2019, as a result of the decreased average time charter equivalent rate our vessels earned in the twelve months of 2020 compared to the same period of 2019. The Company reported a net loss for the period of $5.9 million and a net loss attributable to common shareholders of $7.5 million, as compared to net income for the period of $0.02 million and a net loss attributable to common shareholders of $1.9 million, for the twelve months of 2019. For the twelve months of 2020, a gain on bunkers resulted in decreased voyage expenses of $0.3 million for the period as compared to voyage expenses of $1.1 million in the same period of 2019. Vessel operating expenses were $11.6 million for the twelve months of 2020 as compared to $10.8 million for the same period of 2019, mainly due to increased supply of stores and spare parts for our vessels in 2020 compared to 2019 and increased crewing costs resulting from difficulties in crew rotation due to COVID-19 related restrictions. Depreciation expenses for the twelve months of 2020 were $6.6 million compared to $6.5 million during the same period of 2019. Interest and other financing costs for the twelve months of 2020 amounted to $2.3 million compared to $3.5 million for the same period of 2019. This decrease is due to lower average outstanding debt in the twelve months of 2020 compared to 2019 and the decreased Libor rates of our loans in 2020 compared to the previous year.
On average, 7.0 vessels were owned and operated during the twelve months of 2020 earning an average time charter equivalent rate of $9,387 per day compared to 7.0 vessels in the same period of 2019 earning on average $11,190 per day. In the twelve months of 2020, three vessels underwent special survey for a total cost of $2.3 million, as compared to two vessels that underwent special survey and one vessel that underwent an intermediate survey for a total cost of $1.7 million in the twelve months of 2019. For the twelve months of 2020, the Company recognized a $0.5 million loss on three interest rate swaps and a $0.3 million loss on FFA contracts as compared to a gain on derivatives of $0.5 million for the same period of 2019, comprising of a $0.8 million gain on FFA contracts and a $0.3 million loss on one interest rate swap.
Adjusted EBITDA for the twelve months of 2020 was $3.7 million compared to $10.3 million achieved during the twelve months of 2019.
Basic and diluted loss per share attributable to common shareholders for the twelve months of 2020 was $3.28, calculated on 2,275,062 basic and diluted weighted average number of shares outstanding compared to basic and diluted loss of $0.85 per share for the twelve months of 2019, calculated on 2,251,439 basic and diluted weighted average number of shares outstanding.
Excluding the effect on the loss attributable to common shareholders for the year of the unrealized (gain) / loss on derivatives, the adjusted loss attributable to common shareholders for the year ended December 31, 2020 would have been $3.04 per share compared to a loss of $0.69 per share basic and diluted for 2019. As previously mentioned, usually, security analysts do not include the above item in their published estimates of earnings per share.
