EuroDry Ltd. (NASDAQ: EDRY) reported Q2 EPS of ($1.73), $0.58 worse than the analyst estimate of ($1.15). Revenue for the quarter came in at $4 million versus the consensus estimate of $4.75 million.

Second Quarter 2020 Highlights:

• Total net revenues of $4.0 million. Net loss of $3.8 million; net loss attributable to common shareholders (after a $0.4 million dividend on Series B Preferred Shares) of $4.2 million or $1.86 loss per share basic and diluted. Adjusted net loss attributable to common shareholders1 for the period was $3.9 million or $1.73 loss per share basic and diluted.
• Adjusted EBITDA1 was $(1.3) million.
• An average of 7.0 vessels were owned and operated during the second quarter of 2020 earning an average time charter equivalent rate of $7,297 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.

Aristides Pittas, Chairman and CEO of EuroDry commented: “During the second quarter of 2020, the drybulk market experienced the effects of the COVID-19 pandemic and lockdown of the main economies resulting in decreased cargo volumes transported and significant declines in charter rates. These developments put pressure on our cash flow, which combined with the offhire time of one of our vessels to undergo its fourth special survey led to us posting our worst quarterly results since the Company’s spin-off. During the second half of June, the market started recovering – in line with the reopening of the major economies- with rates returning to the levels seen at the beginning of the year; therefore, we expect a reversal of fortunes in the third quarter if such trends continue.

“We believe, however, that there is significant uncertainty remaining about COVID-19 related developments in the world economies and the continuing trade tensions between U.S. and China which affect the drybulk markets. In addition, port lockdowns have affected our ability to change crew on board our vessels. We have taken relevant measures to ensure our crew members’ and shore employees’ health and safety, despite the ongoing hurdles and travel restrictions imposed by lockdowns around the world. Thus, our strategy is to ensure that we mitigate and address the risks of COVID-19 and have sufficient liquidity to deal with the possibility of renewed market weakness. In the midst of these unprecedented developments, we remain optimistic about the post-pandemic and medium term prospects of drybulk shipping as the fleet orderbook is the lowest in more than 20 years which should result in limited fleet growth when the above-said pandemic-driven uncertainty recedes.

“As always, we continue to seek and evaluate opportunities and options to renew or expand our fleet exploring also merger possibilities with other fleets in accretive transactions.”

Tasos Aslidis, Chief Financial Officer of EuroDry commented: “The net revenues of the second quarter of 2020 decreased compared to the second quarter of 2019 as a result of the time charter equivalent rates our vessels earned during the quarter which were lower by 32.0% compared to the average time charter equivalent rates our vessels earned in the second quarter of 2019. The significantly lower rates compared to the same period of last year are a result of the dramatic effects on the global economy and seaborne trade of the COVID-19 pandemic.

As part of our efforts to ensure sufficient liquidity, we have agreed or are in the process of discussing with some of our lenders to defer a number of loan repayments due in 2020 to later periods or to the end of the respective facilities. At the same time, we have agreed with our preferred shareholders to introduce the option from April 1, 2020 to January 29, 2021 for the Company to pay the preferred dividend in-kind by issuing new preferred shares. If paid in-kind, the preferred dividend would be at an annual rate of 10.25%, 1% higher than if it is paid in cash.

Total daily vessel operating expenses, including management fees, general and administrative expenses but excluding drydocking costs, averaged $6,131 per vessel per day during the second quarter of 2020 as compared to $5,948 per vessel per day for the same quarter of last year, and $6,093 per vessel per day for the first half of 2020 as compared to $5,898 per vessel per day for the same period of 2019. This increase is mainly due to increased supply of stores and spare parts for our vessels in 2020 compared to 2019.

Adjusted EBITDA during the second quarter of 2020 was $(1.3) million versus $1.8 million in the second quarter of last year. As of June 30, 2020, our outstanding debt (excluding the unamortized loan fees) was $53.4 million, while unrestricted and restricted cash was $4.4 million. As of the same date, our scheduled debt repayments over the next 12 months amounted to about $5.4 million (excluding the unamortized loan fees) and all our loan covenants are satisfied.”

For earnings history and earnings-related data on EuroDry Ltd. (EDRY) click here.