Q2 2025 EuroDry Ltd Earnings Call

Speaker #2: Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Limited conference call for the second quarter of 2025 financial results. We have today here with us Mr. Aristides Pittas, Chairman and Chief Executive Officer, and Mr. Anastasios Aslidis.

Speaker #2: Chief Executive Officer, at this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. At which time, if you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced.

Speaker #2: I must advise you that this conference is being recorded today. Please be reminded that the company announces results with a press release that has been publicly distributed.

Speaker #2: Before passing the floor over to Mr. Pittas, I would like to remind everybody that in today's presentation and conference call, EuroDry will be making forward-looking statements.

Speaker #2: These statements are within the meanings of the Federal Security 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.

Speaker #2: I kindly draw your attention to slide number two on the webcast presentation, which has the full forward-looking statement. The same statement was also included in the press release; please take a moment to go through the whole statement and read it.

Speaker #2: I would now like to turn the floor over to Mr. Pittas. Please go ahead, sir.

Speaker #3: Good morning, ladies and gentlemen, and thank you for joining us today for our scheduled conference call. Together with me is Mr. Tasos Aslidis, our Chief Financial Officer.

Speaker #3: The purpose of today's call is to discuss our financial results for the three and six-month periods ended June 30, 2025. Please turn to slide three of the presentation.

Speaker #3: Our financial highlights are shown here. For the second quarter of 2025, we reported total net revenues of $11.3 million and a net loss attributable to controlling shareholders of $3.1 million, or $1.12 lost per basic and diluted share.

Speaker #3: As of the end of the quarter, the net loss attributable to controlling shareholders was $3 million, or $1.10 lost per basic and diluted share.

Speaker #3: As of the end of the quarter, EBITDA was $1.9 million. Please refer to the press release for the reconciliation of adjusted net loss and adjusted EBITDA.

Speaker #3: Also, our CFO, Anastasios Aslidis, will go over our financial highlights in more detail later on in the presentation. As of today, we have repurchased 334,000 shares of our common stock in the open market for a total of $5.3 million under our $10 million share repurchase plan announced in August 2022.

Speaker #3: Our board of directors has approved an extension of the program for an additional year. We intend to continue executing repurchases up to the original approved amount of $10 million at a disciplined rate, taking into account the company's liquidity needs and relatively small free float.

Speaker #3: We are also pleased to announce that tomorrow, our 2024 Environmental, Social, and Governance report will become available on our website. This is the fifth year we are providing such a report.

Speaker #3: The report outlines our ongoing initiatives and progress across all key ESG pillars, reflecting our continued commitment to sustainable and responsible operations. Please turn to slide four to view our recent developments.

Speaker #3: On the charter in front, all our recent fixtures have been either short-term or on index-linked charters. While the Houthi attacks on the Val carriers in the Red Sea in July offered an upbeat in charter rates due to the routing of vessels, early August has proven that the seasonality remains.

Speaker #3: We are hoping for a better fall. In the current rate environment, we have chosen not to commit our vessels to longer-term contracts until market conditions improve, prioritizing operational flexibility.

Speaker #3: Should rates return to profitable and cash-flow accretive levels, we will endeavor to fix a portion of our fleet on longer terms. The specifics of the charters fixed during the period are outlined in the accompanying presentation.

Speaker #3: Moving on to our operational highlights, Santa Cruz underwent scheduled dry docking and repairs over a period of approximately 35 days, with the majority of this timeframe spanning into Q3.

Speaker #3: There was no idle time or commercial off-hire for our fleet during the period. Please turn to slide five. EuroDry's current fleet consists of 12 vessels with an average age of approximately 13.6 years and a total carrying capacity of about 843,000 deadweight tons.

Speaker #3: In addition, we have two Ultramax vessels under construction, each with a capacity of 63,500 deadweight tons, scheduled for delivery in the second and third quarters of 2027.

Speaker #3: Upon delivery, our fleet will grow to 14 vessels with a total carrying capacity of nearly 1 million deadweight tons. I'd like to remind you that EuroDry owns 61% of the entities that own motor vessels Christos K and Maria, and the remaining 39% is owned by owners represented by NRP Project Finance, otherwise referred to as the NRP investors.

Speaker #3: Please turn to slide six for a further update on our fleet employment. As of June 30, 2025, our fixed-rate coverage for the remainder of the year stands at approximately 25%, based on existing time charter agreements.

Speaker #3: This figure excludes vessels operating under index-linked charters, which, while subject to market fluctuations, have secured employment. We currently have four vessels on index-linked charters with durations ranging from October 25 to May 2026.

Speaker #3: These charters can be practically changed to fixed rates with the use of FFAs if rates improve to levels we aspire to. Turning to slide eight, we will go over the market highlights for the second quarter ended June 30, 2025, up until recently.

Speaker #3: Anamax spot rates rose steadily through the second quarter of 2025, increasing from an average of about $10,300 per day to $11,900 per day by quarter end.

Speaker #3: A 15% gain. As of August 1, spot rates stand at $13,750 a day, surpassing the respective time charter average levels of $12,600 per day, as a result of the Houthi attacks and the subsequent routing effects from the area.

Speaker #3: However, if one goes back only a couple of weeks prior to that, both spot and average time charter rates were even higher, at $16,000 per day and $13,250 per day, respectively, suggesting that the usual summer lull is here.

Speaker #3: We hope to see seasonality displaying itself and resulting in a firmer market towards the end of the third quarter. Though admittedly, visibility remains limited amid persistent micro and geopolitical headwinds.

Speaker #3: In the second quarter of 2025, the Baltic Dry Index and the Baltic Panamax Index declined by approximately 21% and 28%, respectively, year over year, underscoring the sustained softness across the freight markets.

Speaker #3: These downward shifts reflect the ongoing imbalance between vessel supply and muted cargo demand, exacerbated by subdued global trade volumes and persistent microeconomic headwinds. Please now turn to slide nine.

Speaker #3: The IMF July 2025 update presents a more resilient global economic outlook than previously thought, with global trade developments continuing to shape the forecast. The global economy continues to exhibit stable, yet underwhelming growth.

Speaker #3: Global GDP growth is now projected at 3% for 2025 and 3.1% for 2026, with the 2025 and 2026 projections revised upwards by 0.2% and 0.1% points, respectively, compared to the April 2025 forecast.

Speaker #3: At these levels, the forecasts are below the 2024 outcome of 3.3% and the pre-pandemic historical average of 3.7%. Global policy remains highly uncertain. Trump's new tariffs took effect on Thursday, August 7, with higher rates for most U.S. trading partners.

Speaker #3: Taken all together, these tariffs have pushed the average U.S. tariff rate to above 15%, according to Bloomberg Economic Estimates—well above the 2.3% from last year—and this is the highest level since World War II.

Speaker #3: The United States economy is projected to grow by 1.9% in 2025, and accelerates slightly to 2% in 2026, according to the IMF. U.S. growth forecasts were revised upwards due to easing trade tensions, improved financial conditions, the weaker dollar, and the recent tax incentives aimed at stimulating business investment and consumer spending.

Speaker #3: The higher projections, including the global figures overall, reflect a large front-loading of international trade ahead of expected higher prices induced by tariffs. In Europe, GDP accelerated, driven by investment and net exports.

Speaker #3: Growth in the area is now projected at 1% for 2025, up 0.2 percentage points from April's projections. Global inflation is expected to continue declining, with headline inflation projected at 4.2% in 2025 and 3.6% in 2026.

Speaker #3: In the euro area, inflation has gone down quite substantially, while in the U.S., the unemployment rate remains low, and inflation is still elevated. Emerging markets remain the primary drivers of global growth.

Speaker #3: India is forecast to expand by 6.4% in both 2025 and 2026, fueled by strong investment, robust agriculture, and a dynamic services sector. The ASEAN five countries are also projected to post healthy gains.

Speaker #3: In China, growth has been revised upwards, driven by stronger-than-expected economic performance in the first half of the year and lower-than-anticipated tariffs between the U.S. and China.

Speaker #3: And a positive impact of fiscal stimulus and reforms aimed at clearing local government arrears, which have all boosted domestic demand. Turning to the dry bulk sector, Clarkson's research now projects a slightly positive trade growth of 0.2% in 2025, an upward revision from the previously forecasted 0.4% decline.

Speaker #3: This is followed by 0.6% growth in 2026, up from 0.4% projected in April. While expectations remain modest, these adjustments reflect a gradual improvement in market sentiment and a more constructive outlook for trade flows.

Speaker #3: Please turn to slide 10 to review the current state of the order book in the dry bulk sector. As you can see, as of August 1st, the order book is at 11% of the fleet.

Speaker #3: Though higher than the 7% low seen in 2021, the order book still remains among the lowest levels in history. While the order book is slightly rising, increased flow, seeming higher scrapping rates, and the intensity of environmental regulations could further constrain the available bulker fleet.

Speaker #3: Turning into slide 11, let us now look into the supply fundamentals in a little bit more detail. As of August 2025, the total dry bulk operating fleet was 14,161 vessels.

Speaker #3: According to Clarkson's latest report, new deliveries as a percentage of the total fleet are expected to be 3.8% in 2025, 3.9% in 2026, and 4.9% in 2027 onwards.

Speaker #3: The actual fleet growth is, of course, expected to be lower than the aforementioned figures due to scrapping and some slippage. On the fleet profile, it’s noticeable that about 10% of the fleet is older than 20 years old, indicating these vessels will likely be scrapped if the dry bulk sector continues operating in this suppressed environment.

Speaker #3: Please turn to slide 12, where we summarize our outlook for the dry bulk market. The bulk carrier market has been relatively weak so far in 2025, with time charter rates bottoming out in the first quarter before recovering to slightly profitable levels across all vessel sizes.

Speaker #3: However, the momentum gained early in the year faded in the second quarter, following the U.S. administration's announcement of new tariff proposals. This added to an already uncertain demand environment, with slowing activity in key markets and ongoing geopolitical instability continuing to put pressure on the sector.

Speaker #3: After the recent uptick in charter rates for Ultramax and Supramax vessels, we are currently down only about 3% year on year. However, for the average of the whole of H1 2025, we are down about 30% relative to the first half of 2024.

Speaker #3: For the remainder of 2025, bulk carrier demand and supply projections point to a softer market compared to 2024. In China, dry bulk imports are not expected to replicate the robust growth seen in 2023 and 2024.

Speaker #3: Especially as far as coal is concerned. While the recent government stimulus measures have improved, they are unlikely to drive significant structural demand growth, particularly given the high stockpile levels.

Speaker #3: In the United States, trade policy is now a central focus for dry bulk markets under the new Trump administration. Tariffs on China, Mexico, Canada, and other key trade partners threaten to disrupt grain and minor bulk trades.

Speaker #3: Meanwhile, shipping through the Red Sea is not expected to resume immediately. However, any reduction in disruptions could dampen demand growth and contribute to further easing in bulk carrier markets.

Speaker #3: So, on the supply side, the ordering of new vessels has remained relatively limited, constrained by the lack of available shipyard slots and continued uncertainty over the optimum fuel of the future.

Speaker #3: Despite significant orders for methanol and LNG fuel ships, the overall order book to fleet ratio remains low by historical standards at 11%. However, the order book for Panamax vessels has been trending higher, reaching approximately 14%.

Speaker #3: For Handimax vessels, this ratio is about 11 and a half percent. As we head into 2026, the bulk carrier market may face another year of soft earnings, as new vessel supply is expected to outpace demand growth, which, as discussed previously, Clarkson's currently estimates at about 0.6%.

Speaker #3: Continued market softness, though, could prompt further supply-side adjustments, including slower vessel operating speeds and increased demolition activity, which could both help the market rebalance.

Speaker #3: Let's turn to slide 13. As of August 1st, the one-year time charter rate for Panamax vessels with a capacity of 75,000 deadweight tons stands at approximately $12,700 per day.

Speaker #3: Which remains slightly below the historical median of $13,500 per day. As of the second quarter of 2025, the market for 10-year-old Panamax bulk carriers, despite attempts to correct by 15%, remains relatively firm, with current asset values estimated at close to $25 million.

Speaker #3: This is significantly above both the historical median of 15 and a half million dollars and the 10-year average of 17 and a half million dollars.

Speaker #3: Reflecting residual strength in second-hand values. However, current pricing marks a clear decline from the mid-2024 peak of around $29.5 million.

Speaker #3: Which is also the maximum price seen in the last 10 years. Despite the pullback, asset prices remain well supported by historically low order book levels, the increased cost of construction of ships, and the fleet age dynamics.

Speaker #3: We are closely monitoring all the new developments, which will shape the near and longer-term future. At current price levels, we are more likely to be selling a couple of our older vessels while looking for the right opportunity to renew our fleet with more modern and eco-friendly vessels.

Speaker #3: Let me now pass the floor over to our CFO, Anastasios Aslidis, to go over our financial highlights in more detail.

Speaker #4: Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. As usual, over the next four slides, I will give you an overview of our financial highlights for the second quarter and first half of 2025, and compare those results to the same periods of last year.

Speaker #4: For that, let's go to slide 15. For the second quarter of 2025, we reported total net revenues of 11.3 million, representing a 35.3% decrease over total net revenues of 17.4 million that we achieved during the second quarter of last year.

Speaker #4: This decrease was the result of the lower time charter rates our vessels earned, as well as the decreased average number of vessels operated during the second quarter of this year compared to last.

Speaker #4: We reported a net loss for the period of $3.11 million, and a net loss attributable to controlling shareholders of $3.07 million, as compared to a net loss of $0.3 million and a net loss attributable to controlling shareholders of $0.4 million for the same period of 2024.

Speaker #4: The net loss of $0.4 million in this quarter, attributable to the non-controlling interest, represents the loss attributable to the 39% ownership of the entities of the vessels Christos K and Maria, which are partly owned by the NRP investors, as Aristides mentioned earlier.

Speaker #4: Interest and other financing costs for the second quarter of 2025 amounted to 1.7 million compared to 2 million, over the same period of 2024, both figures including a small amount of interest income.

Speaker #4: Interest expense for the second quarter of 2025 was lower mainly due to the decreased software rates and margins, which are low and steady. This was partly offset by the increased average debt that we carry during the second quarter of 2025, as compared to the same period of last year.

Speaker #4: Adjusted EBITDA for the second quarter of this year was $1.9 million, compared to $5 million achieved during the second quarter of 2024. Basic and diluted loss per share attributable to the controlling shareholders for the second quarter of 2025 was $1.12, calculated on about 2.7 million basic and diluted weighted average number of shares outstanding, compared to a loss per share of $0.15 calculated on 2.7 million basic and diluted weighted average number of shares outstanding for the second quarter of last year.

Speaker #4: Excluding the effect on the loss attributable to the controlling shareholders for the quarter of the unrealized gain and derivatives, the adjusted loss for the quarter ended June 30, 2025, was $1.10 per share, both basic and diluted, compared to an adjusted loss of $0.17 per share, both basic and diluted, for the same quarter of the previous year.

Speaker #4: Let's now look at the numbers on the same slide and compare the numbers for the corresponding six-month periods ended June 30, 2025, to the same period of 2024.

Speaker #4: So, for the first half of this year, we reported total net revenues of $20.5 million, representing a 35.7% decrease over total net revenues of $31.9 million during the first half of 2024. This is again the result of the lower time charter rates our vessels earned and an extended decrease in the average number of vessels operated during the first half of this year compared to last.

Speaker #4: Net loss for the period was 7.11 million, and net loss attributable to the controlling shareholders was 6.77 million, as compared to a net loss of 2.24 and a net loss attributable to controlling shareholders of 2.19 million for the same period of 2024.

Speaker #4: Again, a portion of the net loss for the second quarter of this year is $0.34 million, representing the loss that corresponds to the 35% ownership of the entities owning Christos K and Maria, which are owned by the NRP investors.

Speaker #4: Interest and other financing costs for the first half of 2025 amounted to $3.5 million, compared to $4 million for the same period of 2024.

Speaker #4: Again, this decrease is due to the lower benchmark rate and soft rates that are low and steady, partly offset by the higher levels of debt that we carried on average during the period.

Speaker #4: Adjusted EBITDA for the first half of 2025 was $0.9 million, compared to $7.1 million during the first half of 2024. Basic and diluted loss per share attributable to the controlling shareholders for the first half of 2025 was $2.47, calculated on approximately 2.7 million basic and diluted weighted average number of shares outstanding, compared to a loss of $0.81 for the same period last year.

Speaker #4: Again, here excluding the effect on the net loss attributable to the controlling shareholders for the first half of the year of the unrealized gain or loss on derivatives and the gain on the sale of a vessel, the adjusted loss for the six-month period ended June 30, 2025, was $3.17 per share, basic and diluted, compared to an adjusted loss of $1.35 per share, basic and diluted, for the first six months of 2024.

Speaker #4: Let's now move to slide 16 to review our fleet performance. We will start our review by looking at our fleet utilization rate for the second quarters of 2025 and 2024.

Speaker #4: As usual, our fleet utilization is broken down into commercial and operational components. During the second quarter of 2025, our commercial utilization fleet was 100%, while our operational utilization rate was 99.3% compared to 99.6% commercial and 99.4% operational for the second quarter of 2024.

Speaker #4: On average, 12 vessels were owned and operated during the second quarter of 2025, earning an average time charter equivalent rate of 10,420 dollars per vessel per day, compared to 13 vessels that we operated for the during the same period of last year, earning an average of 14,427 dollars per day.

Speaker #4: Our total daily operating expenses, including management fees and G&A expenses but excluding the adjusting costs, were $7,539 per vessel per day during the second quarter of this year, compared to $7,062 per vessel per day for the second quarter of 2024.

Speaker #4: If we move further down on this table, we can see the cash flow break-even levels, which take into account, in addition to the above expenses, the dry docking expenses, interest expenses, and also include loan repayments.

Speaker #4: Thus, for the second quarter of 2025, our daily cash flow break-even level was $12,222 per vessel per day, compared to $13,240 per vessel per day for the second quarter of last year.

Speaker #4: Let's now quickly move to the right part of this table and go over the same figures for the six-month periods. Of this year compared the last.

Speaker #4: So, first on the utilization rate, for the first half of 2025, both our commercial utilization rates were each 99.2%, compared to 99.8% commercial and 98.7% operational for the same period of last year.

Speaker #4: On average, we operated 12.4 vessels, earning an average time charter equivalent rate of $8,716 per day, compared to 13 vessels in the same period of 2024, earning on average $13,452 per day.

Speaker #4: Looking also here at our operating expenses, those including management fees and G&A expenses, but again, excluding the dry docking costs, average 7,499 dollars per vessel per day in first half of this year, compared to 6,964 dollars per vessel per day for the same period of last year.

Speaker #4: This was noted here that a part of the increase was due to the increase in the dollar-euro exchange rate. Of course, our G&A expenses are divided by 12 ships rather than 13 ships that we had during 2024.

Speaker #4: Looking further down on this table at the last line, we can see the cash flow break-even level for the six-month of 2024, which was 11,868 dollars per vessel per day, compared to the 13,101 dollars per vessel per day for the same period of 2024.

Speaker #4: Now, let's move to slide 17 to turn our attention to our debt profile. As of June 30th of this year, EuroDry's outstanding debt stood at about $102 million.

Speaker #4: Total loan repayments during 2025 are expected to amount approximately to 12 million, including 6 million paid during the second quarter of this year. In 2026, we expect total loan repayments of approximately 13.3 million, which include a 2 million balloon repayment.

Speaker #4: While in 2027, total repayments are projected to be around $20 million, including a $10.2 million balloon payment. An important point to highlight on this slide is the average margin of our debt, which as of June 30, 2025, stood at approximately 2.07% over software.

Speaker #4: Assuming a software three-month soft rate as of August 1st of about 4.32%, the estimated cost of our senior debt would be about 6.4%.

Speaker #4: At the end, our final debt cost is slightly lower as we have swapped a portion of the software exposure of our debt into a lower fixed rate, bringing the effective cost of our senior debt to just below 6.3%.

Speaker #4: At the bottom of this slide, you can see our projected cash flow break-even level for the next 12 months, broken down into its various components.

Speaker #4: For example, our EBITDA break-even level is projected to be around $77,000 per vessel per day, while our overall cash flow break-even level, including interest expenses and loan repayments, is projected to be around $11,850 per vessel per day.

Speaker #4: This figure, of course, on a net-net basis, takes into account commission and possible off-hire days. We need to achieve a gross time charter equivalent rate of about $13,000 to reach cash flow and earnings break-even over the next 12 months.

Speaker #4: The final slide let's move to slide 18, where we can see some highlights from our balance sheet. In a simplified way, this slide is always shows a snapshot of our assets and liabilities.

Speaker #4: As of June 30th, we had cash and other car and assets of about 20.3 million, alongside advances for new building that we did of about 7.2 million, and along and with the book value of our vessels for approximately 179 million resulted in a total book value for our assets of about 206.6 million.

Speaker #4: On our liability side, we had outstanding debt as of June 30th of $102.1 million, representing almost half, 49.4%, of the book value of our assets.

Speaker #4: While other liabilities amounted to about $5 million, roughly two and a half percent of our total book assets, which in turn resulted in book shareholder equity of about $90.5 million, translating to a net book value of $32 per share.

Speaker #4: According to our estimates, our vessels are worth $109 million, about $10 million more than the respective book value, resulting in a net asset value per share of about $36.

Speaker #4: If we compare our current trading range of our shares of between 10 and 11 dollars, we can see and highlight the potential for appreciation our stock has, should market conditions or other catalysts result in a reduction of this discount.

Speaker #4: And with this statement, I would like to pass the floor back to Aristides to continue our call.

Speaker #5: Thank you, Tasos. Let me now open up the floor for any questions we may have.

Speaker #2: Thank you. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Speaker #2: You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset.

Speaker #2: Before pressing the star keys, our first question is from Mark Rickman with Noble Capital Markets. Please proceed.

Speaker #6: Thank you for taking my question. You know, I'm looking at the BDI BPI chart on page eight. So while there was some strength in June, the Baltic Dry Index ended June at 14.58, it ended July at 21.08, dipped in early August, but is around 20.51 on August 7th.

Speaker #6: So could you just please talk about the improvement in June and July and your expectations for the remainder of the year?

Speaker #7: The first part is easy, which is what has happened. The prediction for the remainder of the year, obviously, is extremely difficult because, as we said, there are various differing directions from various other angles.

Speaker #7: When we saw that tariffs were supposed to come, we noticed that people started stockpiling more. Additionally, when we had the Houthi attack in the Red Sea, or on the bulk vessels, we observed less traffic going through that area.

Speaker #7: So, these two items led to the spike that we saw up until very recently. This slight correction we are seeing now is probably a reversal of this.

Speaker #7: It has to do with the summer lull, etc. So, this is the easy part: the explanation of what happened and why we saw this spike.

Speaker #7: Now, what to say about the future of markets?

Speaker #6: So, back to that question. Okay. Well, part two of that question relates to page eight, where you show the one-year time charter rates as of August 1st.

Speaker #6: And then also on page 17, your break-even of your presentation. So, are you willing to lock in the rates as of August 1st, or do you expect or need the rates to go higher?

Speaker #6: Because it looks like your break-even is kind of coming down for the full year versus the first half. So at what point do you lock in the rates?

Speaker #7: We are close to the levels that we would lock in rates. We have said internally that’s around $15,000 if we can do that.

Speaker #7: It provides a significant profit on ships. We haven't been able to see that yet. We are getting close to that. And if that happens or not, we'll really depend on how the market develops within mostly September.

Speaker #7: Usually, September, seasonally, is a good month. We hope this will be repeated this year as well. September and October are very good months. Yes.

Speaker #6: Yeah. You can kind of look at that chart. And then, this is a question for Tasos. If you could just talk a little bit about EuroDry's liquidity and plans for debt repayment.

Speaker #7: Yeah, I think it's clear that our liquidity is a bit tight. We had about $6 million of annual fixed cash in our balances and about almost the same amount as restricted.

Speaker #7: But we do have certain ways of raising liquidity. One of them is by refinancing some of our vessels. We have some room through our leverage and our debt, and we have some discussions.

Speaker #7: Also, we would definitely try to address certain liquidity requirements later in the year vis-à-vis our new building program by looking into financing our pre-delivery installments.

Speaker #7: So, we feel that we're on top of our liquidity needs as far as our operations at the current market level are concerned. As I did mention, and as you mentioned, if the market turns a bit higher, then that would definitely release more liquidity from our operations.

Speaker #6: Okay. And if I could just get one more in, and that's just what accounted for the decline in voyage expenses from Q1 to Q2?

Speaker #7: To some extent, that is a bit—I don't want to say random, but it depends on the way we do certain charters. If we do voyage charters, where we get paid a balanced bonus, then voyage expenses are reflected on our financials.

Speaker #7: While it would do a time charter equivalent basis charter, then voyage expenses are not reflected. So that is one factor contributing to some variability in voyage expenses.

Speaker #7: Typically, voyage expenses are small for us because we overwhelmingly do time charter equivalent basis for our contracts.

Speaker #6: So what Tasos is saying that when we calculate yeah, what Tasos is saying that when we calculate the time charter equivalent we usually take into account the voyage expenses to come up with that.

Speaker #6: So, yeah, I guess what I'm saying is that if you look, we just concluded two charters for two of our ships. If you look at our website, it would be more clear.

Speaker #6: We have agreed on a balanced bonus in the contract. So, there will be a daily rate and a period of balance. During that balancing period, we will be reimbursed for our voyage expenses.

Speaker #6: But our voyage expenses will appear next quarter, I guess, on our financials. So you will see elevated voyage expenses because of the nature of the contract we closed.

Banking institutions are willing to finance pre-delivery payments as well. So instead of in the past, when we had more abundant liquidity, we were...

Paying our equity up front. So, that's the first four or five payments from equity, and then we finance.

The whole contract that says 60%. So that was taken care of in the last payment, but banks.

I have no problem with financing. It says 60% of every payment that would have to be made.

So, uh, until the market helps us a bit more, we will do that for our dry bulk product.

Great, thank you so much.

You're welcome.

There are no further questions at this time. I would like to return the call back over to Mr. Peters for closing comments.

Thank you all for participating in this call. Today, we will be back to you in 3 months' time with the results of Q3. Thank you. Enjoy the rest of the summer, everybody.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.