Q2 2026 EuroDry Ltd Earnings Call

August 6, 2026

Speaker #1: Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Ltd conference call on the second quarter 2026 financial results. We have with us today Mr. Tassos Aslidis, Chief Financial Officer, and Ms. Athena Ataliotti, Finance Manager of the company.

Operator: Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Ltd. Conference Call on the Q2 2026 financial results. We have with us today Mr. Anastasios Aslidis, Chief Financial Officer, and Ms. Athina Atalioti, Finance Manager of the company. 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. I must advise you that this conference is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed. Before passing the floor to Mr. Aslidis, I would like to remind everyone that in today's presentation and conference call, EuroDry will be making forward-looking statements.

Speaker #1: 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 1 on your telephone keypad.

Operator: 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. I must advise you that this conference is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed. Before passing the floor to Mr. Aslidis, I would like to remind everyone that in today's presentation and conference call, EuroDry will be making forward-looking statements.

Speaker #1: And wait for your name to be announced. I must advise you that this conference is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed.

Speaker #1: Before passing the floor to Mr. Aslidis, I would like to remind everyone that in today's presentation and conference call, EuroDry will be making forward-looking statements.

Speaker #1: These statements are within the meaning of the Federal Securities 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.

Operator: These statements are within the meaning of the federal securities 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. I kindly draw your attention to slide number two of the webcast presentation, which has the full forward-looking statement and the same statement that was also included in the press release. Please take a moment to go through the whole statement and read it. Now I would like to pass the floor to Mr. Aslidis. Please go ahead, sir.

Speaker #1: I kindly draw your attention to slide number 2 of the webcast presentation, which has the full forward-looking statement and the same statement that was also included in the press release.

Speaker #1: Please take a moment to go through the whole statement and read it. And now I would like to pass the floor to Mr. Aslidis.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you. Good morning, ladies and gentlemen, and thanks to all for joining us today for our scheduled conference call. Together with me is Ms. Athena Ataliotti, our Finance Manager.

Anastasios Aslidis: Thank you. Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Ms. Athina Atalioti, our finance manager. The purpose of today's call is to discuss our financial results for the three and six-month periods ended 30 June 2026. For that, please turn to slide three of the presentation. Our financial highlights are shown here. For the Q2 2026, we reported total net revenues of $17.7 million and net income attributable to controlling shareholders of $6.59 million or $2.32 per diluted share. Adjusted net income attributable to controlling shareholders for the quarter was $6.95 million, or $2.44 per diluted share. Adjusted EBITDA for the quarter was $11.71 million. Please refer to the press release for the reconciliation of adjusted net income and adjusted EBITDA.

Speaker #2: The purpose of today's call is to discuss our financial results for the 3 and 6-month periods ended June 30, 2026. For that, please turn to slide 3 of the presentation.

Speaker #2: Our financial highlights are shown here. For the second quarter of 2026, we reported total net revenues of 17.7 million, and net income attributable to controlling shareholders of 6.59 million, or $2.32 per diluted share.

Anastasios Aslidis: Our financial highlights are shown here. For the Q2 2026, we reported total net revenues of $17.7 million and net income attributable to controlling shareholders of $6.59 million or $2.32 per diluted share. Adjusted net income attributable to controlling shareholders for the quarter was $6.95 million, or $2.44 per diluted share. Adjusted EBITDA for the quarter was $11.71 million. Please refer to the press release for the reconciliation of adjusted net income and adjusted EBITDA.

Speaker #2: Adjusted net income attributable to controlling shareholders for the quarter was $6.95 million, or $2.44 per diluted share. Adjusted EBITDA for the quarter was $11.71 million.

Speaker #2: Please refer to the press release for the reconciliation of adjusted net income and adjusted EBITDA. Athena will go over our financial highlights in a more detailed later on the presentation.

Anastasios Aslidis: Athina will go over our financial highlights in more detail later on the presentation. Since initiating our 10 million share repurchase program in August 2022, we have repurchased 358,130 shares of common stock in the open market for a total of $5.8 million. Our board reapproved the program recently and approves and extend it annually, the most recent authorization is granted earlier this month and runs for another year. We will continue to execute repurchases in a disciplined, measured manner based on market conditions and other capital allocation priorities. We're also pleased to announce that on 28 July 2026, we signed a term sheet to refinance the MV Ekaterini, one of our Kamsarmax vessels, with a $19 million loan facility, higher by almost $8 million over the existing balance of the loan, further boosting our liquidity.

Speaker #2: Since initiating our $10 million share repurchase program in August 2022, we have repurchased $358,130 shares of common stock in the open market for a total of $5.8 million.

Speaker #2: Our board re-approved the program recently and approves an extended annually and the most recent authorization is granted earlier this month and runs for another year.

Speaker #2: We will continue to execute repurchases in a disciplined, measured manner based on market conditions and other capital allocation priorities. We're also pleased to announce that on July 28, 2026, we signed a term sheet to refinance the MV Ekaterini one of our Comtramax vessels, with a $19 million loan facility, higher by almost $8 million over the existing balance of the loan, further boosting our liquidity.

Speaker #2: This agreement is subject to customary closing documentation. Let's now move to slide 4. In that slide, we outline our chartering and operational developments. In the second quarter, we continue to deploy our fleet with flexibility.

Anastasios Aslidis: This agreement is subject to customary closing documentation. Let's now move to slide four. In that slide, we outline our chartering and operational developments. In the second quarter, we continued to deploy our fleet with flexibility. 4 of our vessels are currently operating on index-linked charters tied to the average Baltic Supramax 10TC index, which provides direct exposure to market conditions, while, as I mentioned, maintaining operational flexibility. Our remaining vessels are employed on fixed trade time charters with most having durations of 1 to 3 months. The exception is our vessel MV Christos K, which is fixed on a longer-term charter through November 2026. Further charter details are provided in the following slide. In the second quarter, we entered into two forward rate agreements.

Speaker #2: Four of our vessels are currently operating on index-linked charters tied to the average Baltic Supermax 10TC index, which provides direct exposure to market conditions while as I mentioned maintaining operational flexibility.

Speaker #2: Our remaining vessels are employed on fixed-trade time charters, with most having durations of 1 to 3 months. The exception is our vessel MV Christos K, which is fixed on a longer-term charter through November 2026.

Speaker #2: Further charter details are provided in the following slide. In the second quarter, we entered into forward freight agreements on November 19, and on March 30, we sold two 90-day Comtramax 82 5TC average contracts for the third quarter of 2026 at $17,250 and $17,100 per day, respectively, each equivalent to one vessel.

Anastasios Aslidis: On 19 November and on 30 March, we sold two 90-day Kamsarmax 82, five TC average contracts for Q3 2026 at $17,250 and $17,100 per day respectively, each equivalent to 1 vessel. These contracts I mentioned are based on the Kamsarmax 82, five TC index, which averages 5 major time charter routes and proves a good hedge on our market exposure. Similar contracts for Q2 2026 were settled very close to the rates agreed in the FFA contract. The final point on this slide is that operationally, we have no idle periods for the quarter, commercial offhire or dry dockings during the second quarter. Let's move to slide five, which provides an overview of our fleet. Today, we operate a fleet of 11 vessels with total carrying capacity of approximately 766,000 deadweight tons and an average age of around 13.8 years.

Speaker #2: These contracts I mentioned are based on the Comtramax 82 5TC index, which averages five major time charter routes and provides a good hedge on our market exposure.

Speaker #2: Similar contracts for the second quarter of 2026 were settled very close to the rates agreed in the FFA contract. A final point on this slide is that operationally we have no idle period for the quarter, commercial of high or dry dockings, during the second quarter.

Speaker #2: Let's move to slide 5, which provides an overview of our fleet. To date, we operate a fleet of 11 vessels, with total carrying capacity of approximately 766,000 dead weight tons, and an average age of around 13.8 years.

Speaker #2: In addition, we have four new buildings on order. Two Ultramax vessels are scheduled for delivery in the second and third quarters of 2027, each with capacity of 63,500,000 dead weight tons.

Anastasios Aslidis: In addition, we have 4 newbuildings on order. 2 Ultramax vessels are scheduled for delivery in Q2 and Q3 2027, each with capacity of 635,000 deadweight tons. We also have 2 Kamsarmax vessels on order, scheduled for delivery in Q1 and Q2 2028, each with a capacity of 82,000 deadweight tons. Upon delivery of these 4 vessels, our fleet will grow to 15 vessels with a total carrying capacity of approximately 1.06 million deadweight tons, having including an Ultramax segment of 8 vessels, a Kamsarmax segment of 4 vessels, all 12 of these vessels being eco-friendly ones, while continuing having our 3 legacy Panamax, which are all three Japanese-built. Next, let's move to slide six, where we show our fleet employment profile.

Speaker #2: We also have two Comtramax vessels on order, scheduled for delivery in the first and second quarters of 2028, each with capacity of 82,000 dead weight tons.

Speaker #2: Upon delivery of these four vessels, our fleet will grow to 15 vessels, with a total carrying capacity of approximately 1.06 million dead weight tons, having including an Ultramax segment of 8 vessels, a Comtramax segment of 4 vessels, all 12 of these vessels being eco-friendly ones, while continuing having our three legacy Panamaxes which are all three Japanese-built.

Speaker #2: Next, let's move to slide 6, where we show our fleet employment profile. Our current fixed-trade coverage for the remainder of the year stands at a little more than 25%.

Anastasios Aslidis: Our current fixed rate covers for the remainder of the year stands at a little more than 25%, based on existing charter arrangements. This excludes our 4 vessels operating on index-linked charters. Let's now move to slide eight to review key market developments for Q2 and initial trends through late July. Panamax rates averaged $17,969 per day in Q2 and have moderated slightly to $17,150 as of the end of last week. On the time charter side, one-year time charter rates have also strengthened. Clarksons assert the standard Panamax one-year time charter rate is approximately $17,125 per day as of 31 July. Notably, time charter rates are now trading in line with spot market levels, reflecting continued confidence in the underlying market outlook.

Speaker #2: Based on existing charter arrangements, this excludes our four vessels operating on index-linked charters. Let's now move to slide 8 to review key market developments for the second quarter and recent trends through late July.

Speaker #2: Panamax rates averaged $17,961 per day in the second quarter and have moderated slightly to $17,106 as of the end of last week. On the time charter side, one-year time charter rates have also strengthened.

Speaker #2: Clarksons assessed the standard Panamax one-year time charter rate at approximately $17,125 per day as of July 31. Notably, time charter rates are now trading in line with spot market levels, reflecting continued confidence in the underlying market outlook.

Speaker #2: During the second quarter, the dry bulk Baltic dry index and the Baltic Panamax index recorded year-over-year increases of approximately 78.54%, respectively, reflecting the strengthening of the dry bulk trade market compared to the second quarter of last year.

Anastasios Aslidis: During Q2, the Baltic Dry Index and the Baltic Panamax Index recorded year-over-year increases of approximately 78% and 54% respectively, reflecting the strengthening of the dry bulk trade market compared to Q2 of last year. We can now turn to slide nine. Here we review the global macroeconomic backdrop and its implications for dry bulk shipping demand. According to IMF's July-

Speaker #2: Please now turn to slide 9, where we review the global macroeconomic backdrop and its implications for dry bulk shipping demand. According to IMF's July.

Speaker #1: Please stand by, everyone. Presenters, are we connected? You may continue.

Operator: Please stand by, everyone. Presenters, are we connected? You may continue.

Speaker #2: Thank you, Operator. Apologies to everybody for the interruption. I'm going to pick up my presentation. I believe I was dropped the line on slide 9, so please turn to slide 9.

Anastasios Aslidis: Thank you, operator. Apologies to everybody for the interruption. I'm going to pick up my presentation. I believe we dropped the line on slide nine. Please turn to slide nine. Here, we review the global macroeconomic backdrop and its implication for dry bulk shipping demand. According to IMF July 2026 World Economic Outlook update, global growth is projected to slow to 3% in 2026 before recovering to 3.4% in 2027, broadly unchanged cumulatively from April's forecast. The world is navigating several competing forces. On the one hand, we have elevated energy prices continuing to push inflation and interest rates higher, while AI-driven investment is supporting growth for countries integrated into global technology value chain. Meanwhile, global disinflation has stalled with inflation pushing the yield of the 10-year US Treasury to approximately 4.7%.

Speaker #2: Here, we review the global macroeconomic backdrop and its implications for dry bulk shipping demand. According to the IMF's July 2026 World Economic Outlook update, global growth is projected to slow to 3% in 2026 before recovering to 3.4% in 2027—broadly unchanged cumulatively from April's forecast.

Speaker #2: The world is navigating several competing forces, and the one hand we have elevated energy prices, continuing to push inflation and interest rates higher, while AI-driven investment is supporting growth for countries integrated in the global technology value chain.

Speaker #2: Meanwhile, global disinflation has stalled, with inflation shock pushing the yield of the 10-year Treasury US Treasuries to approximately 4.7%. Geopolitical developments mainly the Iran conflict and the continuing Ukraine-Russia war have led to increased and volatile energy prices, and created inflationary pressures, which in turn may lead to higher interest rates.

Anastasios Aslidis: Geopolitical developments, mainly the Iran conflict and the continuing Ukraine-Russia war, have led to increased and volatile energy prices and created inflationary pressures, which in turn might lead to higher interest rates. In the overall context, the US economy has remained comparatively resilient. In its July 2026 economic outlook I mentioned, the IMF maintains its US growth forecast at 2.3% for 2026 and revised its 2027 forecast upward to 2.2%. China is projected to grow 4.6% this year, supported by front-loaded public infrastructure investment and a surge in high-tech manufacturing and in exports. The ASEAN-5 region is projected to grow to slow to 4.1% in 2026, down from 4.5% in 2025, before recovering to 4.3% in 2027, while a level China's growth now expected to reach.

Speaker #2: In the overall context, the US economy has remained comparatively resilient. In its July 2026 economic outlook I mentioned, the IMF maintains its US growth forecast at 2.3% for 2026 and revised its 2027 forecast upward to 2.2%.

Speaker #2: China is projected to grow 4.6% this year, supported by front-loaded public infrastructure investment and a surge in high-tech manufacturing and in exports. The Asian Five region is projected to grow to slow to 4.1% in 2026, down from 4.5% in 2025, before recovering to 4.3% in 2027, while China's growth is now expected at a level China's growth is now expected to reach.

Speaker #2: As far as global trade goes, world trade volume growth is projected to slow from 5% the overall trade in 2025 to 3.5% in 2026, before recovering to 4.3% in 2027.

Anastasios Aslidis: As far as global trade goes, world trade volume growth is projected to slow from 5%, the overall trade, in 2025 to 3.5% in 2026 before recovering to 4.3% in 2027. This moderation reflects the unwinding of earlier front-loading a set of tariffs and the continuing impact of tariffs on trade. The recovery in 2027 reflects a gradual adjustment as these dynamics gradually normalize through trade diversion, rerouting, and the continued expansion of technology-related trade flows. Looking specifically at the dry bulk sector, Clarksons projects ton-mile growth at 3.8% in 2026 and 1.8% in 2027, reflecting continued expansion in global commodity trade despite a challenging macroeconomic backdrop. Let's now move to slide 10, as we can review the current state of the dry bulk order book. As of July 2026, the order book stands at 14.4% of the existing fleet.

Speaker #2: This moderation reflects the unwinding of earlier front-loading ahead of tariffs and the continuing impact of tariffs on trade. The recovery in 2027 reflects a gradual adjustment as this dynamics gradually normalize through trade diversion, rerouting, and the continued expansion of technology-related trade flows.

Speaker #2: Looking specifically at the dry bulk sector, Clarksons projects 1-mile growth at 3.8% in 2026 and 1.8% in 2027, reflecting continued expansion in global commodity trade despite a challenging macroeconomic backdrop.

Speaker #2: Let's now move to slide 10, as we can review the current state of the dry bulk order book. As of July 2026, the order book stands at 14.4% of the existing fleet, although higher than the 7% order book level recorded in 2021, it remains among the lowest levels in history.

Anastasios Aslidis: Although higher than the 7% order book level recorded in 2021, it remains among the lowest levels in history. For context, the order book accounted for 66% of the fleet in 2008 and around 24% in 2014. Turning to slide 11, we examine the supply fundamentals in a little more detailed fashion. The total dry bulk fleet on the top of the slide currently consists of around 1.1 billion deadweight tons and has grown 3.3% year-on-year. Looking at the age profile of the fleet, roughly 11.8% of the total fleet is over 20 years old, representing vessels that could be considered for scrapping if market conditions moderate or environmental regulations become more stringent. According to Clarksons latest estimates, scheduled new building deliveries as a percent of the existing fleet are projected at 4.5% for both 2026 and 2027, and 6.9% for 2028 and beyond.

Speaker #2: For context, the order book accounted for 66% of the fleet in 2008, and around 24% in 2014. Turning to slide 11, we examine the supply fundamentals in a little more detailed fashion.

Speaker #2: The total dry bulk fleet, as shown at the top of the slide, currently consists of around 1.1 billion deadweight tons and has grown 3.3% year-on-year.

Speaker #2: Looking at the age profile of the fleet, roughly 11.8% of the total fleet is over 20 years old, representing vessels that could be considered for scrapping if market conditions moderate or environmental regulations become more stringent.

Speaker #2: According to Clarkson's late estimates, scheduled new building deliveries as a percent of the existing fleet are projected at 4.5% for both 2026 and 2027, and 6.9% for 2028 and beyond.

Speaker #2: To put it in context, in May, scheduled deliveries for 2028 and beyond were 5.5%, so additional orders placed are to be delivered after that year.

Anastasios Aslidis: To put it in context, in May, scheduled deliveries for 2028 and beyond were 5.5%. Additional orders placed are to be delivered after that year. Actual fleet growth, of course, is expected to be slightly lower than these numbers as slippage and demolition activity will offset a portion of the gross number of deliveries. Let's now turn to slide 12, where we share our perspective on where the market stands and what we are monitoring. The market has demonstrated a solid performance in 2026, with rates having recovered meaningfully. Supramax and Panamax time charter rates have recovered to levels last seen in March 2024. This rate recovery reflects sustained demand for tonnage driven by robust commodity flows, particularly iron ore, grain, and bauxite, which have supported healthy fleet utilization. Looking ahead to the H2 of 2026, there are several demand-side fundamentals to watch.

Speaker #2: Actual fleet growth, of course, is expected to be slightly lower than these numbers, as slippage and demolition activity will offset a portion of the gross number of deliveries.

Speaker #2: Let's now turn to slide 12, where we assess our perspective on where the market stands and what we are monitoring. The market has demonstrated a solid performance in 2026, with rates having recovered meaningfully.

Speaker #2: Supermax and Panamax time charter rates have recovered to levels last seen in March 2024. These rate recovery reflects sustained demand for tonnage driven by robust commodity flows, particularly iron ore, grain, and bauxite, which have supported healthy fleet utilization.

Speaker #2: Looking ahead to the second half of 2026, there are several demand-side fundamentals to watch. Iron ore exports from Australia and Brazil remain stable, while the Simandou project continues to ramp up production every year.

Anastasios Aslidis: Iron ore exports from Australia and Brazil remain stable, while the Simandou project continues to ramp up production every year. Chinese import demand, despite broader economic headwinds, has remained resilient. Grain and minor bulk trades have proven more durable than might be expected, given ongoing geopolitical tensions in the Middle East, indicating underlying strength in agricultural commodity shipments. Coal has stalled year to date due to softer changes in Indian demand and Indonesian export limitation, although recent shifts in Qatar's energy infrastructure have created emerging support for coal from Japan and South Korea. A potential US-Iran agreement could contribute to gradual normalization of vessel traffic in the Gulf, although always implementation risks remain. Such an agreement could improve overall market sentiment and reduce vessel repositioning inefficiencies. However, a normalization of LNG trade flows could moderate coal demand as trapped tonnage is released back in the market.

Speaker #2: Chinese import demand, despite broader economic headwinds, has remained resilient. Grain and minor bulk trades have proven more durable than might be expected, given ongoing geopolitical tensions in the Middle East, indicating underlying strength in agricultural commodity shipments.

Speaker #2: Coal has stalled year to date due to softer Chinese and Indian demand and Indonesian export limitations, although recent shifts in Qatar's energy infrastructure have created emerging support for coal from Japan and South Korea.

Speaker #2: The potential US-Iran agreement could contribute to gradual normalization of vessel traffic in the Gulf, although always implementation risks remain. Such an agreement could improve overall market sentiment and reduce vessel repositioning inefficiencies, however, and normalization of LNG trade flows could moderate coal demand as trapped tonnage is released back in the market.

Speaker #2: On the supply side, ordering activity, as I think I mentioned earlier, has accelerated in recent months. Nevertheless, the overall order book remains relatively modest by historical standards.

Anastasios Aslidis: On the supply side, ordering activity, as I think I mentioned earlier, has accelerated in recent months. Nevertheless, the overall order book remains relatively modest by historical standards. Looking ahead to 2027, our analysis suggests a balanced but more uncertain market environment. Fleet is expected to continue growing at similar rates as in 2026, while demand growth, as we mentioned earlier, will depend on Chinese steel production, effect on coal trade and production from a possible conclusion of the Iran war. The market outlook will also be influenced by several variables, including geopolitical developments, Red Sea routing dynamics, U.S.-China trade relations, the pace of Simandou project execution and ramping up, vessel speeds, and demolition activity. One should anticipate a more balanced market in 2027, though fundamentals should remain supportive relative to historical norms.

Speaker #2: Looking ahead to 2027, our analysis suggests a balanced but more uncertain market environment. Fleet is expected to continue growing at similar rates as in 2026, while demand growth, as we mentioned earlier, would depend on Chinese steel production, effects on coal trade and production, and a possible conclusion of the Iran war.

Speaker #2: The market outlook will also be influenced by several variables, including geopolitical developments, Red Sea rerouting dynamics, US-China trade relations, the pace of Simandu project execution, and ramping up vessel speeds and demolition activity.

Speaker #2: One should anticipate a more balanced market in 2027, though fundamentals should remain supportive relative to historical norms. Let's now turn to slide 13 for a quick review of our position on the dry bulk market cycle, as we have always found helpful to benchmark the present market against its historical context.

Anastasios Aslidis: Let's now turn to slide 13 for a quick review of our position on the dry bulk market cycle, as we have always found helpful to benchmark the present market against its historical context. As of 31 July 2026, Panamax one-year time charter rates stood at $17,125 per day, meaningfully above the historical median of $13,450 per day. This strength or similar strength is also reflected in asset values. Values for a 10-year-old Panamax are currently priced at approximately $30.5 million, well above both the historical median of $19.5 million and the 10-year average of about $19.2 million, and are currently near 10-year highs. In this environment, we have made a deliberate decision to pursue investments in newbuilding vessels rather than acquire secondhand tonnage at market peak levels.

Speaker #2: As of July 31, 2026, Panamax one-year time charter rates stood at 17,125 dollars per day, meaningfully above the historical median of 13,450 dollars per day.

Speaker #2: This strength, or a similar strength, is also reflected in asset values. Values for a 10-year-old Panamax are currently priced at approximately 30.5 million, well above both the historical median of 19.5 million and the 10-year average of about 19.2 million.

Speaker #2: And are currently near 10-year highs. In this environment, we have made a deliberate decision to pursue investments in new building vessels rather than acquire second-hand tonnage at market peak levels.

Speaker #2: This strategic choice reflects our convinction in both current market fundamentals and our longer-term intended fleet positioning. While second-hand prices are elevated, we believe new buildings represent better value and offer superior operational efficiency lower emission profiles, and reduced maintenance exposure, factors that we believe are increasingly important.

Anastasios Aslidis: This strategic choice reflects our conviction in both current market fundamentals and our longer-term intended fleet positioning. While secondhand prices are elevated, we believe newbuildings represent better value and offer superior operational efficiency, lower emission profiles, and reduced maintenance exposure, factors that we believe are increasingly important. Our fleet renewal program demonstrates a disciplined and measured approach to capital allocation, which acquired four newbuildings, two Ultras, and two Kamsarmax vessels at reasonable prices with staggered deliveries through 2028, which we believe will enhance our earnings power when the market conditions normalize while simultaneously reduce our exposure to aging tonnage and associated inefficiencies. I will now turn the call over to Athina, our finance manager, for a closer look at our Q2 financial performance. Athina?

Speaker #2: Our fleet renewal program demonstrates a disciplined and measured approach to capital allocation, which afforded four new buildings to ultras and two consumer vessels at reasonable prices, which staggered delivery through 2028, which we believe will enhance our earnings power when the market conditions normalize, while simultaneously reducing our exposure to aging tonnage and associated inefficiencies.

Speaker #2: I will now turn the call over to Athena, our finance manager, for a closer look at our second quarter financial performance. Athena?

Speaker #1: Thank you very much, Sergio. Good morning from me as well. Ladies and gentlemen, over the next five slides, I will give you an overview of our financial highlights for the second quarter and first half of 2026, and compare those results to the same period of last year.

Athina Atalioti: Thank you very much, Tasos. Good morning from me as well, ladies and gentlemen. Over the next five slides, I will give you an overview of our financial highlights for Q2 and H1 2026 and compare those results to the same period of last year. For that, let's turn to slide 15. For Q2 2026, the company reported total net revenues of $17.7 million, representing a 57% increase over total net revenues of $11.3 million during Q2 2025. That's a result of the higher time charter rates our vessels earned during Q2 2026 compared to the same period of 2025. The company reported a net income attributable to controlling shareholders of $6.6 million as compared to a net loss attributable to controlling shareholders of $3.1 million for the same period of 2025.

Speaker #1: For that, let's turn to slide 15. For the second quarter of 2026, the company reported total net revenues of 17.7 million representing a 57% increase over total net revenues of 11.3 million during the second quarter of 2025.

Speaker #1: As a result of the higher time charter rates, our vessels earned during the second quarter of 2026 compared to the same period of 2025.

Speaker #1: The company reported net income attributable to controlling shareholders of $6.6 million, as compared to a net loss attributable to controlling shareholders of $3.1 million for the same period of 2025.

Speaker #1: Interest and other financing costs for the second quarter of 2026 decreased to $1.5 million compared to $1.7 million for the same period of 2025.

Athina Atalioti: Interest and other financing costs for Q2 2026 decreased to $1.5 million compared to $1.7 million for the same period of 2025. Interest expense during Q2 2026 was lower, mainly due to the decreased benchmark rates of our loans and the decreased average debt during Q2 2026 as compared to the same period of last year. Adjusted EBITDA for Q2 2026 was $11.7 million compared to $1.9 million achieved during Q2 2025, recording a larger than a fivefold increase over the same period of last year.

Speaker #1: Interest expense during the second quarter of 2026 was lower mainly due to the decreased benchmark rates of our loans and the decreased average debt during the second quarter of 2026, as compared to the same period of last year.

Speaker #1: Adjusted EBITDA for the second quarter of 2026 was 11.7 million compared to 1.9 million achieved during the second quarter of 2025, recording a larger than a five-fold increase over the same period of last year.

Speaker #1: Basic and diluted earnings per share attributable to controlling shareholders for the second quarter of 2026 were $2.36 and $2.32, respectively, calculated on approximately 2.8 million basic and diluted weighted average number of shares outstanding. This compares to a basic and diluted loss per share attributable to controlling shareholders of $1.12 for the second quarter of 2025, calculated on approximately 2.7 million basic and diluted weighted average number of shares outstanding.

Athina Atalioti: Basic and diluted earnings per share attributable to controlling shareholders for Q2 2026 was $2.36 and $2.32, respectively, calculated on approximately 2.8 million basic and diluted weighted average number of shares outstanding compared to a basic and diluted loss per share attributable to controlling shareholders of $1.12 per share for Q2 2025, calculated on approximately 2.7 million basic and diluted weighted average number of shares outstanding. Excluding the effect on the net income attributable to controlling shareholders for the quarter of the unrealized loss on derivatives, the adjusted earnings attributable to controlling shareholders for the quarter ended 30 June 2026 would have been $2.49 and $2.44 per share basic and diluted, while for Q2 2025 it would be $1.1 per share basic and diluted.

Speaker #1: Excluding the effect on the net income attributable to controlling shareholders for the quarter of the unrealized loss on derivatives, the adjusted earnings attributable to controlling shareholders for the quarter ended June 30, 2026 would have been $2.49 and $2.44 per share basic and diluted, respectively, while for the second quarter of 2025 it would be $1.10 per share basic and diluted.

Speaker #1: Let's now look at the corresponding six-month period ended June 30, 2026, and compare it to the same period of 2025. For the first half of 2026, the company reported total net revenues of $30.5 million, representing a 49% increase over total net revenues of $20.5 million during the first half of 2025. This increase was a result of the higher time charter rates our vessels earned during the first half of 2026, compared to the same period of 2025.

Athina Atalioti: Let's now look at corresponding six-month period ended 30 June 2026 and compared to the same period of 2025. For H1 2026, the company reported total net revenues of $30.5 million, representing a 49% increase over total net revenues of $20.5 million during H1 2025, which was a result of the higher time charter rates our vessels earned during H1 2026 compared to the same period of 2025. The company reported a net income attributable to controlling shareholders of $6.8 million as compared to a net loss attributable to controlling shareholders of $6.8 million for H1 2025. Interest and other financing costs for H1 2026 amounted to $3 million compared to $3.5 million for the same period of 2025.

Athina Atalioti: 5Let's now look at corresponding six-month period ended 30 June 2026 and compared to the same period of 2025. For H1 2026, the company reported total net revenues of $30.5 million, representing a 49% increase over total net revenues of $20.5 million during H1 2025, which was a result of the higher time charter rates our vessels earned during H1 2026 compared to the same period of 2025. The company reported a net income attributable to controlling shareholders of $6.8 million as compared to a net loss attributable to controlling shareholders of $6.8 million for H1 2025. Interest and other financing costs for H1 2026 amounted to $3 million compared to $3.5 million for the same period of 2025.

Speaker #1: The company reported a net income attributable to controlling shareholders of 6.8 million as compared to a net loss attributable to controlling shareholders of 6.8 million for the first half of 2025.

Speaker #1: Interest and other financing costs for the first half of 2026 amounted to $3 million, compared to $3.5 million for the same period of 2025.

Speaker #1: This decrease is mainly due to the decreased benchmark rates of our loans and a decreased average debt during the first half of 2026 as compared to the same period of last year.

Athina Atalioti: This decrease is mainly due to the decreased benchmark rates of our loans and a decreased average debt during H1 2026 as compared to the same period of last year. In H1 2025, the company signed an agreement to sell motor vessel Pantelis for demolition for approximately $5 million. The vessel was delivered with buyers in March 2025, resulting in a gain of $2.1 million. There were no vessel sales in H1 2026. Adjusted EBITDA for H1 2026 was $16.6 million compared to $0.85 million achieved during H1 2025, an 18-fold increase compared to the same period of 2025.

Speaker #1: In the first half of 2025, the company signed an agreement to sell motor vessel Tassels for demolition for approximately $5 million. The vessel was delivered to its buyers in March 2025, resulting in a gain of $2.1 million.

Speaker #1: There were no vessel sales in the first half of 2026. Adjusted EBITDA for the first half of 2026 was 16.6 million compared to 0.85 million achieved during the first half of 2025, an 18-fold increase compared to the same period of 2025.

Speaker #1: Basic and diluted earnings per share attributable to controlling shareholders for the first half of 2026 was 2.45 dollars and 2.41 dollars respectively, calculated on approximately 2.8 million basic and diluted weighted average number of shares outstanding, compared to a loss per share of 2.47 dollars calculated on approximately 2.7 million basic and diluted weighted average number of shares outstanding.

Athina Atalioti: Basic and diluted earnings per share attributable to controlling shareholders for H1 2026 was $2.45 and $2.41, respectively, calculated on approximately 2.8 million basic and diluted weighted average number of shares outstanding compared to a loss per share of $2.47 calculated on approximately 2.7 million basic and diluted weighted average number of shares outstanding. Excluding the effect on the net income attributable to controlling shareholders for H1 of the year of the unrealized loss on derivatives, the adjusted earnings attributable to controlling shareholders for the six-month period ending 30 June 2026 would have been $2.61 and $2.57 per basic and dilute share, respectively.

Speaker #1: Excluding the effect on the net income attributable to controlling shareholders for the first half of the year of the unrealized loss on derivatives, the adjusted earnings attributable to controlling shareholders for the six-month period ended June 30, 2026, would have been 2.61 dollars and 2.57 dollars per basic and diluted share respectively.

Speaker #1: For the first half of 2025, excluding the effect on the loss attributable to controlling shareholders of the unrealized loss on derivatives and the net gain on sale of vessels, the adjusted net loss attributable to controlling shareholders would have been 3.17 dollars per share basic and diluted.

Athina Atalioti: For H1 2025, excluding the effect on the loss attributable to controlling shareholders of the unrealized loss on derivatives and the net gain on sale of vessel, the adjusted net loss attributable to controlling shareholders would have been $3.17 per share basic and diluted. Let's now move to slide 16 to review our fleet performance for Q2 2026 with a comparison to the same period of 2025. During Q2 2026, both our commercial and operational utilization rates reached 100%, compared with commercial utilization of 100% and operational utilization of 99.3% in Q2 2025. On average, 11 vessels were owned and operated during Q2 2026, earning an average time charter equivalent rate of $20,398 per day, compared to 12 vessels in the same period of 2025, earning on average $10,428 per day.

Speaker #1: Let's now move to slide 16 to review our fleet performance for the second quarter of 2026 with a comparison to the same period of 2025.

Speaker #1: During the second quarter of 2026, both our commercial and operational utilization rates reached 100%, compared with commercial utilization of 100% and operational utilization of 99.3% in the second quarter of 2025.

Speaker #1: On average, 11 vessels were owned and operated during the second quarter of 2026, earning an average time charter equivalent rate of 20,398 dollars per day compared to 12 vessels in the same period of 2025, earning on average 10,428 dollars per day.

Speaker #1: This reflects a more than doubling of daily charter rates on a per vessel basis year over year for the respective periods. Turn-to-operating costs total operating expenses including management fees, G&A expenses, but excluding dry docking costs, were 7,444 dollars per vessel per day during the second quarter of this year, compared to 7,539 dollars per vessel per day for the second quarter of 2025.

Athina Atalioti: This reflects a more than doubling of daily charter rates on a per vessel basis year-over-year for the respective periods. Turning to operating costs, total operating expenses including management fees, G&A expenses, but excluding dry docking costs, were $7,444 per vessel per day during Q2 of this year, compared to $7,539 per vessel per day for Q2 2025, reflecting a slight decrease. If we move further down, we can see our daily cash flow break-even rate, which takes into account the operating expenses, dry docking costs, interest expense, and scheduled loan repayments, but excludes balloon payments. This stood at $11,858 per vessel per day, compared to $12,222 per vessel per day for Q2 of last year.

Speaker #1: Reflecting a slight decrease, if we move further down, we can see our daily cash flow break-even rate, which takes into account the operating expenses, dry docking costs, interest expense, and scheduled loan repayments, but excludes balloon payments.

Speaker #1: This stood at 11,858 dollars per vessel per day compared to 12,222 dollars per vessel per day for the second quarter of last year. Let's now turn to the right-hand side of the table and review the same metrics for the first six months of 2026, compared with the corresponding period of 2025.

Athina Atalioti: Let's now turn to the right-hand side of the table and review the same metrics for H1 2026 compared with the corresponding period of 2025. During H1 2026, our commercial and operational utilization rates were 100% and 99.9%, respectively, compared with 99.2% for both commercial and operational utilization during H1 2025. On average, 11 vessels were owned and operated during H1 2026, earning an average time charter equivalent rate of $17,452 per day, compared to 12.4 vessels in the same period of 2025, earning on average $8,761 per day. Our operating expenses, including management fees and G&A expenses, averaged $7,462 per vessel per day in H1 of this year, compared to $7,419 per vessel per day for the same period of last year.

Speaker #1: During the first six months of 2026, our commercial and operational utilization rates were 100% and 99.9% respectively, compared with 99.2% for both commercial and operational utilization during the first six months of 2025.

Speaker #1: On average, 11 vessels were owned and operated during the first half of 2026, earning an average time charter equivalent rate of 17,452 dollars per day compared to 12.4 vessels in the same period of 2025, earning on average 8,761 dollars per day.

Speaker #1: Our operating expenses including management fees and G&A expenses averaged 7,462 dollars per vessel per day in the first half of this year, compared to 7,419 dollars per vessel per day for the same period of last year.

Athina Atalioti: Including interest expense, dry docking, and loan repayments, without balloon repayments, the cash break-even rate amounted to $12,198 per vessel per day for the first six months of 2026, compared to $11,869 per vessel per day for the same period of 2025. Please turn to slide 17. This slide serves as a calculation tool, which enables our shareholders and investors to assess the earnings potential in the remainder of 2026 in the current environment. The table shown in this slide has two components. The top chart refers to our fixed rate contract. Starting with our fixed rate contracts, coverage is approximately 28% for the remainder of 2026. This is about 50% in Q3 and about 6% in Q4 of 2026. The table also shows the average contracted daily charter rate and the resulting EBITDA contribution for the contracted days.

Speaker #1: Including interest expense, dry docking, and loan repayments, without balloon repayments, the cash break-even rate amounted to 12,198 dollars per vessel per day for the first six months of 2026, compared to 11,869 dollars per vessel per day for the same period of 2025.

Speaker #1: Please turn to slide 17. This slide serves as a calculation tool which enables our shareholders and investors to assess the earnings potential in the remainder of 2026 in the current environment.

Speaker #1: The table shown in this slide has two components. The top chart refers to our fixed-rate contract. Starting with our fixed-rate contracts, coverage is approximately 28% for the remainder of 2026.

Speaker #1: This is about 50% in the third quarter and about 6% in the fourth quarter of 2026. The table also shows the average contracted daily charter rates and the resulting EBITDA contribution for the contracted days.

Speaker #1: The second section of the table estimates the EBITDA contribution from our remaining open and index-linked days. For this purpose, we used the current forward trade market rates for the supermax and panamax countermax Baltic forward rates as of July 30, 2026.

Athina Atalioti: The second section of the table estimates the EBITDA contribution from our remaining open and index-linked days. For this purpose, we use the current forward freight market rates for the Supramax, Panamax, Kamsarmax, and Baltic forward rates as of 30 July 2026. These forward market assumptions are then translated into an indicative blended earning rate for our open days, which you can see across the Supramax, Panamax, and Kamsarmax forward rates. Based on these assumptions, and by further assuming a $7,500 per day per vessel OpEx and G&A cost and a 5% commission rate, one can calculate the EBITDA contribution. The final result is additionally adjusted for our preliminary dry docking expenses expected during the year. This calculation results in an annualized EBITDA contribution of $38.4 million during 2026.

Speaker #1: These forward market assumptions are then translated into an indicative blended earning rate for our open days, which you can see across the supermax panamax and countermax forward rates.

Speaker #1: Based on these assumptions and by further assuming a 7,500 dollars per day per vessel OPEX and G&A cost, and a 5% commission rate one can calculate the EBITDA contribution.

Speaker #1: The final result is additionally adjusted for our preliminary dry docking expenses expected during the year. This calculation results in an annualized EBITDA contribution of 38.4 million dollars during 2026.

Athina Atalioti: Naturally, investors can adjust the forward freight rate assumptions to evaluate different market scenarios and their potential impact on the company's earnings. In the rest of 2026, we can also easily estimate our EBITDA independence to the average rate earned by our open days. For example, a change of $1,000 per day in the average rate earned would result in a $1.4 million change in our 2026 EBITDA and have a $0.5 change on the earnings per share. Let's now move to slide 18, review our debt profile and cash flow break-even estimates. As of 30 June 2026, our outstanding debt stood at $98.1 million, with an average margin of about 1.99%. Assuming a three-month SOFR rate of 3.75% as of 30 June 2026, the all-in cost of our senior debt averages at 5.74%. The upper chart illustrates our debt amortization schedule.

Speaker #1: Naturally, investors can adjust the forward trade rate assumptions to evaluate different market scenarios and their potential impact on the company's earnings. In the rest of 2026, we can also easily estimate our EBITDA dependence to the average rate earned by our open days.

Speaker #1: For example, a change of 1,000 dollars per day in the average rate earned would result in an 1.4 million change in our 2026 EBITDA and have a 0.5 dollar change on the earnings per share.

Speaker #1: Let's now move to slide 18 to review our debt profile and cash flow break-even estimates. As of June 30, 2026, our outstanding debt stood at 98.1 million with an average margin of about 1.99%.

Speaker #1: Assuming a three-month soft rate of 3.75% as of June 30, 2026, the all-in cost of our senior debt averages at 5.74%. The upper chart illustrates our debt amortization schedule.

Speaker #1: Scheduled debt repayments total approximately 12.2 million during 2026, 21 million in 2027, 17 million in 2028, and 28.8 million in 2029. Inclusive of balloon payments of approximately 1.2 million, 10.2 million, 6.7 million, and 19 million respectively.

Athina Atalioti: Scheduled debt repayments total approximately $12.2 million during 2026, $21 million in 2027, $17 million in 2028, and $28.8 million in 2029, inclusive of balloon payments of approximately $1.2 million, $10.2 million, $6.7 million, and $19 million respectively. We have routinely been able to refinance balloon payments in the past, and we are confident that we would be able to do the same if we choose so in the future. Please note that although we have arranged the debt financing of our two Ultramax new buildings, our current debt figure that I quoted includes only the portion of one of the two loans drawn to date, representing the pre-delivery payments made thus far. The 2027 and 2028 repayment figures include scheduled repayments under both new building loan facilities to finance our Ultramax new buildings, which are scheduled for delivery during Q2 and Q3 of 2027.

Speaker #1: We have routinely been able to refinance balloon payments in the past and we are confident that we would be able to do so to do the same if we choose so in the future.

Speaker #1: Please note that although we have arranged the debt financing of our two ultramax new buildings our current debt figure that I quoted includes only the portion of one of the two loans drawn to date, representing the pre-delivery payments made thus far.

Speaker #1: The 2027 and 2028 repayment figures include scheduled repayments under both new building loan facilities to finance our ultramax new buildings, which are scheduled for delivery during the second and third quarter of 2027.

Speaker #1: Our debt figures do not include any debt that we would draw to finance the countermax new buildings or the refinancing of motor vessel catering.

Athina Atalioti: Our debt figures do not include any debt that we would draw to finance the Kamsarmax new buildings or the refinancing of motor vessel Ekaterini. Turning to the bottom of the slide, we present our cash flow breakeven estimates for the next 12 months, broken down by its major components. Our EBITDA breakeven level is at $8,458 per day, while our all-in cash flow breakeven incorporating operating expenses, dry docking cost, interest expense, and loan repayments is estimated at $12,872 per day. Let's move now to my final slide 19. Review some highlights from our balance sheet as of 30 June 2026. This slide offers a snapshot of our assets and liabilities and provides a concise picture of our financial position. Cash and other assets stood at approximately $37.5 million.

Speaker #1: Turning to the bottom of this slide, we present our cash flow break-even estimates for the next 12 months, broken down by their major components.

Speaker #1: Our EBITDA break-even level is at 8,458 dollars per day while our all-in cash flow break-even incorporating operating expenses dry docking cost, interest expense, and loan repayments is estimated at 12,872 dollars per day.

Speaker #1: Let's move now to my final slide, slide 19. To review some highlights from our balance sheet as of June 30, 2026. This slide offers a snapshot of our assets and liabilities and provides a concise picture of our financial position.

Speaker #1: Cash and other assets stood at approximately 37.5 million. Advances for new buildings amounted to approximately 14.4 million and the book value of our vessels was approximately 160.2 million.

Athina Atalioti: Advances for new buildings amounted to approximately $14.4 million, and the book value of our vessels was approximately $160.2 million. Bringing our total assets to approximately $212.5 million. On the liability side, total debt stood at approximately $98.1 million, while other short-term liabilities amounted to $5 million for combined liabilities of approximately $103.1 million, representing approximately 48.5% of total assets. After excluding the equity attributable to minority interest in the amount of $9.4 million, the shareholders' equity of common shareholders on a book value basis stood at approximately $100 million or $34.92 per share. However, based on our internal estimates and external valuations, the market value of our fleet is meaningfully above its book value.

Speaker #1: Bringing our total assets to approximately 212.5 million. On the liability side, total debt stood at approximately 98.1 million, while other short-term liabilities amounted to 5 million.

Speaker #1: For combined liabilities of approximately 103 million 103.1 million, representing approximately 48.5% of total assets. After excluding the equity attributable to minority interest in the amount of 9.4 million, the shareholders' equity of common shareholders on a book value basis stood at approximately 100 million, or 34.92 dollars per share.

Speaker #1: However, based on our internal estimates and external valuations, the market value of our fleet is meaningfully above its book value. We estimate the current market value of our vessels at approximately 240 million, compared to a book value of approximately 160 million, implying an excess value of approximately 80 million.

Athina Atalioti: We estimate the current market value of our vessels at approximately $240 million, compared to a book value of approximately $160 million, implying an excess value of approximately $80 million. Adjusting for this difference yields an estimated net asset value in excess of $60.81 per share. When compared to the recent trading range of our shares, which has moved up to around $28 recently, it becomes evident that still there is a substantial discount to our estimated net asset value and, by extension, a significant upside potential for both shareholders and potential investors. With that, I will hand the call back to Tasos to continue.

Speaker #1: Adjusting for this difference yields an estimated net asset value in excess of 60.81 dollars per share. When compared to the recent trading range of our shares, which has moved up to around 28 dollars recently, it becomes evident that still there is a substantial discount to our estimated net asset value and by extension a significant upside potential for both shareholders and potential investors.

Speaker #1: With that, I will hand the call back to Anastasios to continue.

Speaker #2: Thank you very much, Athena. We would like to open the floor now for questions if there are any.

Anastasios Aslidis: Thank you very much, Athina. We would like to open the floor now for questions if there are any.

Speaker #1: Thank you. First question comes from Tate Sullivan with Maxim Group. Please go ahead.

Operator: Thank you. First question comes from Tate Sullivan with Maxim Group. Please go ahead.

Speaker #3: Hi, thank you. Good day. Thanks for having the update call. And just a couple for me. The first on the debt margin of 1.99%, I think that was your average margin in June.

Tate Sullivan: Hi. Thank you. Good day. Thanks for having the update call. Just a couple for me. The first on the debt margin of 1.99%. I think that was your average margin in June. Do you think that will change going forward if you do decide to add any debt with your new builds, or do you have more recent indications of a lower spread so far?

Speaker #3: Might that do you think that will change going forward if you do decide to add any debt with your new builds, or do you have more recent indications of a lower spread so far?

Anastasios Aslidis: Most likely, if it changes, it will go down. I think we are getting quotes from our banks well below 2%, closer to 1.5% lately. I think, in fact, the latest loan that refinance that we did was much closer to 1.5%. The average, if anything, will come down. We hope.

Speaker #2: Most likely, if it changes, we'll go down. I think we are getting quotes from our banks well below 2%. Closer to 1.5% lately. And I think, in fact, the latest loan that refinanced that we did was much closer to 1.5%.

Speaker #2: So the average if anything will come down. We hope.

Speaker #3: Okay. Thank you. And then on and it's great you for the last couple quarters, including the slide on the forward EBITDA sensitivities. And then I just noticed that the dry docking days estimates for the second half, you now have 17, I think in the first quarter presentation you had two.

Tate Sullivan: Okay. Thank you. It's great you, for the last couple of quarters, including the slide on the forward EBITDA sensitivities. I just noticed that the dry-docking days estimates for H2, you now have 17, and I think in the Q1 presentation, you had 2. I'm sorry if I missed something, did you move forward some dry dock days from 2027?

Speaker #3: I'm sorry if I missed something, but did you move forward some dry dock days from 2027?

Speaker #2: I mean, we might say, but I think that involves our vessel Alexandros. Which its dry docking falls right on the turn of the fourth quarter.

Anastasios Aslidis: We might have. I think that involves our vessel, Alexandros, which its dry docking falls right on the turn of Q4. Now we have of the budgeted 20 something, 22, 23 days. Now we have 16 on Q4 and the remaining on Q1, 27. I mean, that changes as based on operational planning.

Speaker #2: So now we have of the budgeted 20-something, 22, 23 days. Now we have 16 on Q4 and the remaining on Q1, 27. So I mean, that changes us based on operational planning.

Speaker #3: Okay. I mean, it's impressive with the fleet renewal and adding the new builds. I mean, you're off-hire days decreased from I have 97 in 2025 now to what maybe 36 this year.

Tate Sullivan: Okay. I mean, it's impressive with the fleet renewal and adding the new builds, I mean, your off-hire days decreased from, I have 97 in 2025 now to what? Maybe 36 this year. In 2027 will probably the off-hire days increase a little bit just based on timing or is that not necessarily the case?

Speaker #3: In 2027, we'll probably the off-hire days increase a little bit just based on timing or is that not necessarily?

Anastasios Aslidis: It depends on the I mean, that's why we make a distinction between commercial and operational off-hire, of course. We have off-hire days due to the dry dockings, which we don't count in these figures. We hope that we're going to keep to minimum the operational commercial. Obviously, we have in 2027, a dry docking, an additional dry docking schedule. I think it's the vessel Starlight that is coming due for the dry dock and some in-water surveys. There would be some off-hire days on the basis of the dry dockers and the in-water surveys.

Speaker #2: It depends on the I mean, we all that's why we make a distinction between commercial and operational of hire, of course. We have off-hire days due to the dry dockings, which we don't count in these figures.

Speaker #2: But we hope that we're going to keep to minimum the operational commercial. Obviously, we have in 2027 a couple of a dry docking, an additional dry docking schedule.

Speaker #2: I think is the vessel Starlight that is coming due for its dry dock and some in-water survey. So. There would be some off-hire days on the basis of the of the dry dockings and the in-water surveys.

Speaker #3: Okay. Thank you. And last for me, I noticed you put the word into you put Indonesia in the market commentary. Slide and hearing from some other companies on more export restrictions or changes thereof from Indonesia.

Tate Sullivan: Okay. Thank you. Last for me, I noticed you put Indonesia in the market commentary slide and hearing from some other companies on more export restrictions or changes thereof from Indonesia. Do you think that's a more important consideration for your fleet going forward than anything going on in the Middle East in terms of exports?

Speaker #3: Do you think that's a more important consideration for your fleet going forward than anything going on in the Middle East in terms of exports?

Anastasios Aslidis: I think by far, not only for us but the whole market, anything going on in the Middle East is the overwhelming consideration because it has so many side effects, either in the form of direct effect on trade or on inefficiencies introduced in the various routes.

Speaker #2: I think by far by far not only for us, for the whole market, anything going on in the Middle East is the overwhelming consideration because it has so many side effects either in the form of direct effects on trade or on inefficiencies introduced in the various routes.

Speaker #3: Okay. Great. Great. Thank you. Have a great rest of the day.

Tate Sullivan: Okay. Great. Thank you. Have a great rest of the day.

Speaker #2: Thank you, Tate. Thanks for the call for the questions.

Anastasios Aslidis: Thank you, Tate. Thanks for the call, for the questions.

Speaker #3: Thanks.

Tate Sullivan: Thanks.

Speaker #1: Thank you, ladies and gentlemen. As a reminder, should you have any questions, please press star one. Next question from Mark Reichman with Noble Capital Markets.

Operator: Thank you, ladies and gentlemen. As a reminder, should you have any questions, please press star one. Next question from Mark Reichman with Noble Capital Markets. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Thank you. I've got several questions here. The first is on the Voyage expense of the so during the quarter. Voyage expenses had a positive impact of 1.5 million on your operating expenses.

Mark Reichman: Thank you. I've got several questions here. The first is on the voyage expenses. During the quarter, voyage expenses had a +$1.5 million impact on your OpEx, and I understand that's related to the bunker fuel. What would your expectations be? If you could just provide a little more color on that number and expectations for the H2 of the year.

Speaker #3: And I understand that's related to the bunker fuel. But what would your expectations be for the maybe if you could just maybe provide a little more color on that number and maybe expectations for the second half of the year?

Speaker #2: Yeah. I mean, as you have insinuated. This number typically has to be a small negative number because our vessels are chartered on a time charter basis.

Anastasios Aslidis: Yeah. As you have insinuated, this number typically has to be a small negative number because our vessels are chartered on a time charter basis. The fuel costs are paid generally by the charterers. A little bit of voyage expenses is left for us for certain situations. However, we deliver our vessels with fuel in their tanks, and we buy back fuel when the vessels are delivered to us. In an environment with increasing oil prices, you tend to make money on the fuel. What you take back at the pre-agreed price, if the price has increased in between while the charter was being performed and you resell to the next charter, you record a gain. During the Q2, the oil price was increasing, and we benefited from that trend.

Speaker #2: The fuel costs are paid generally by the charter. So a little bit of Voyage expenses is left for us for certain situations. However, we deliver our vessels with fuel in their tanks and we buy back fuel when the vessels are re-delivered to us.

Speaker #2: So in an environment with increasing oil prices, you tend to make money on the fuel. What you take back, you at the pre-agreed price, if the price has increased in between, while the charter was being performed and you resell to the next charter, you record a gain.

Speaker #2: So the second during the second quarter, the oil price was increasing and we benefited from that trend. Obviously, if the oil price is stable, you would expect that number to be near zero.

Anastasios Aslidis: Obviously, if the oil price is stable, you would expect that number to be near zero, the gains. If the oil price is dropping, you would probably have to give back some of those gains.

Speaker #2: I mean, the gains and if the oil price is dropping, you will probably have to give back some of those gains.

Speaker #3: Okay. So just looking at the forward curve on crude oil, you might expect that maybe the second half you'll have a little bit of an expense or stay relatively flat.

Mark Reichman: Okay. Just looking at the forward curve on crude oil, you might expect that maybe the H2 you'll have a little bit of an expense or stay relatively flat. Is that a good way to think about it?

Speaker #3: Is that a good way to think about it?

Anastasios Aslidis: A small negative number is expected because of the nature of the chartering we do. We do time charters.

Speaker #2: A small negative number is expected because of the nature of the chartering we do. We do time charters and we don't have major Voyage expenses, but we do have some.

Mark Reichman: Okay

Anastasios Aslidis: We don't have major voyage expenses, but we do have some, and those should always be recorded as a negative number. If the number is positive, it's the situations that I mentioned.

Speaker #2: And those should always be recorded as a negative number. So if the number is positive, if the situation is that I mentioned.

Speaker #3: Okay. And then second question is just vessel operating expenses have remained well controlled. Despite inflation, so would you expect daily operating expenses to remain near current levels or are there any cost pressures from labor, maintenance, or regulatory compliance?

Mark Reichman: Okay. The second question is just, vessel operating expenses have remained well controlled despite inflation. Would you expect daily operating expenses to remain near current levels, or are there any cost pressures from labor, maintenance, or regulatory compliance?

Anastasios Aslidis: I think we expect it to remain near our budget levels. I think we are doing well versus our budget. Our budget was slightly higher compared to last year, I think less than 3% overall. We recently, we're comparing the results to our budget. We are just on budget or maybe a little less. I have no reason to feel that the H2 would result in higher operating expenses. We cannot exclude that possibility, but we have taken into account, when we did our budget, the new levels of all the costs and inflationary pressures.

Speaker #2: I think we expect it to remain near our budget levels. I think we are doing well versus our budget. Our budget was slightly higher compared to last year.

Speaker #2: I think less than 3%. Overall, and we recently we comparing the results to our budget, we are just on budget or maybe a little less.

Speaker #2: I have no reason to feel that the second half would result in higher operating expenses. You cannot exclude that possibility, but we have taken into account when we did our budget the new levels of all the costs and inflationary pressures.

Speaker #3: Okay. And then just on the chartering strategy, several vessels roll off charter between August and November while others remain index linked. Are you inclined to lock in longer term fixed rates or retain greater exposure to the spot market?

Mark Reichman: Okay. Just on the chartering strategy, several vessels roll off charter between August and November, while others remain index-linked. Are you inclined to lock in longer-term fixed rates or retain greater exposure to the spot market? I'm assuming kind of the latter, based on the commentary.

Speaker #3: I'm assuming kind of the latter based on the commentary.

Speaker #2: I think when we discussed in our last board meeting the chartering strategy, the support was to put a few more vessels on one-year charters, let's say, if certain levels in the high teens or if we can find charters that start with a two.

Anastasios Aslidis: I think when we discussed in our last board meeting, the chartering strategy, the support was to put a few more vessels on one-year charters, let's say. If certain levels in the high teens or if we can find charters that start with a two for one year, we might put a few more of our vessels on longer-term charters. That's the approach. If we are in the mid-teens and below, we try to be on the spot market. If we're approaching the high teens and beyond that, we try to secure some of our tonnages on longer-term charters.

Speaker #2: For one year, then we might put a little more a few more of our vessels on longer-term charters. So that's the approach. If we are in the mid-teens, then below we try to be on the spot market.

Speaker #2: If we're approaching the high teens and beyond that, we'll try to secure some of our donuts on longer-term charters.

Speaker #3: Okay. And then my last question is just more of a macro question. And that is, with the earnings improvement, there's always the argument structural versus cyclical.

Mark Reichman: Okay. My last question is just more of a macro question, and that is, with the earnings improvement, there's always the argument structural versus cyclical. Maybe it was a couple of weeks ago, the management of a Capesize vessel operator had made the comment that vessel supply, rather than demand, represented the critical driver of future market conditions. They had cited their historically low Capesize order book, together with the aging fleet, as kind of an important structural support that might outweigh any economic or macroeconomic uncertainty. You've got kind of a structural support there. Would you say the same is true for the vessel classes that you operate, or do you think you're a little more exposed to cyclical? Maybe just that discussion on kind of the cyclical versus structural in terms of the market outlook.

Speaker #3: And maybe it was a couple of weeks ago the management of a Cape Size vessel operator had made the comment that vessel supply rather than demand represented the critical driver of future market conditions.

Speaker #3: And they had cited their historically low Cape Size order book together with the aging fleet as kind of an important structural support that might outweigh any economic or macroeconomic uncertainty.

Speaker #3: So you've got kind of a structural support there. Would you say the same is true for the vessel classes that you operate or do you think you're a little more exposed to cyclical?

Speaker #3: Maybe just that discussion on kind of the cyclical versus structural. In terms of the market outlook.

Speaker #2: I mean, cyclicality comes both from demand and supply. For our sizes, the middle range of sizes, ultra maximum comes from max. The order books are a little higher than the Cape Size order book, but the age profile of the segments is older.

Anastasios Aslidis: Cyclicality comes both from demand and supply. For our sizes, the middle range of sizes, Ultramax and Panamax, the order book is a little higher than the Capesize order book, but the age profile of the segments is older. The average age is higher. That counterbalances the lower order book, I guess, of the Capesize in some sense.

Speaker #2: The average age is higher. So what so that counterbalances the lower order book, I guess, of the Cape Size, in some sense. And if anything, if regulations become stricter, they would have more of an effect on the on an older vessel than on a newer one.

Anastasios Aslidis: If anything, if regulations become stricter, it would have more of an effect in an older vessel than on a newer one. I believe that in our case, too, the order book is still a supporting factor, but it has been a supportive factor for the last 3 or 4 years. The market did not do well in 2025, especially in late 2024. Demand was really the determining factor then, and I believe that's why we talk about the supply/demand balance. Both sides of the equation are equally important. I think demand during these years has improved for all the reasons that we discussed, and it was supported by a good supply story. We feel that that will continue in 2026, and we're hopeful that it will continue in 2027.

Speaker #2: So I believe that in our case too, the order book is still supporting factor, but it has been a supportive factor for the last three or four years.

Speaker #2: And the market did not do well in 2025, especially until late 2024. So demand was really the determining factor then. And I believe that's why we talk about the supply-demand balance, both sides of the equation are equally important.

Speaker #2: I think demand during these years has improved for all the reasons that we discussed. And it was supported by a good supply story. We feel that that will continue in 2026.

Speaker #2: And we are hopeful that it will continue in 2027.

Speaker #3: Well, that was a very concise answer. I really appreciate that. Very helpful.

Mark Reichman: Well, that was a very concise answer. I really appreciate that. Very helpful.

Speaker #2: Thank you. Thank you for your questions, Mark.

Anastasios Aslidis: Thank you. Thanks for your questions, Mark.

Speaker #1: Thank you. That concludes today's Q&A session. I will turn the call back over to the CFO for any closing comments.

Operator: Thank you. That concludes today's Q&A session. I will turn the call back over to the CFO for any closing comments.

Speaker #2: I would like to thank everybody for attending our call. Wish you have a nice remaining summer and look forward to welcome you to our November call.

Anastasios Aslidis: I would like to thank everybody for attending our call. Wish you have a nice remaining summer, look forward to welcome you to our November call. Thanks all.

Speaker #2: Thanks all.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, we ask that you please disconnect your lines.

Q2 2026 EuroDry Ltd Earnings Call

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