Tuesday, August 11, 2020

EuroDry Ltd. (EDRY)

2Q2020 Shortfall Impacts 2020 EBITDA Estimate, But Firmer Dry Bulk Market Drives 2H2020 Rebound

EuroDry Ltd. was formed on January 8, 2018 under the laws of the Republic of the Marshall Islands and trades on the NASDAQ Capital Market under the ticker EDRY. EDRY is the product of a spin-off of the dry bulk fleet by Euroseas (ESEA) completed in May 2018. For every five ESEA shares, ESEA shareholders received one EDRY share. There are currently ~2.2 million EDRY shares outstanding. EuroDry operates in the dry bulk shipping markets. EuroDry’s operations are managed by Eurobulk Ltd., an affiliated ship management company, and Eurobulk FE (Far East) Ltd, which are responsible for the day-to-day commercial and technical management and operation of the fleet. EuroDry employs the fleet on spot and period charters and through pool arrangements.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Adjusted 2Q2020 EBITDA of $0.2 million was weaker than expected due to lower TCE rates of $7,297/day.  1Q2020 TCE revenue of $4.3 million was below expectations by $0.5 million, as TCE rates tied to indices were lower than expected. The fleet included 7.0 vessels and ownership days were 637, while TCE rates dropped to $7,297/day from $7,885/day in 1Q2020. Relative to our estimates, TCE rates were ~$600/day lower, and shipping days of 595 were 17 lower.

Fine-tuning 2020 estimate mainly due to 2Q2020 shortfall.  Following the management call, we are moving our adjusted 2020 EBITDA estimate lower to $5.4 million based on TCE rates of $8,724/day, down from $5.7 million based on TCE rates of $8,684/day. We are forecasting that TCE rates ...

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report.  NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.