EuroDry loss widens as dry bulk rebound fizzles
- Bulker owner will not lock-in vessels for longer terms at unprofitable rates
- Tariffs uncertainty cited as one factor a modest market recovery has ‘fizzled out’
- Euroseas acknowledges near-term outlook is ‘volatile’ although uptick in demand could translate into better rates
Nasdaq-listed owner is toughing out a poor market, waiting for a ‘meaningful upturn’ in demand
EURODRY, the Nasdaq-listed owner of 12 bulk carriers that started as a spin-off from containership owner Euroseas, is taking the full brunt of today’s poor market in the hope of better times ahead.
“We have refrained from locking our vessels into longer-duration charters at non-profitable levels, deciding to face the market by pursuing short-term trip charters to potentially benefit from any reversal in trends,” said chief executive Aristides Pittas.
Although it had modestly increased, the orderbook as a percentage of the existing fleet remained low, said Pittas.
This offered “the possibility that a meaningful upturn in demand could quickly translate to better rates”.
However, the first quarter of this year had seen charter markets in the sector at a low ebb, “the lowest since the early days of the pandemic”, according to Pittas.
A partial rebound in April and May had been insufficient to return most vessels to profitability.
“In addition, it started fizzling out by the end of May and early June in the face of season trends, and the uncertainty created by the back-and-forths on the tariff front.”
EuroDry has two newbuilding ultramaxes on order and Pittas indicated the future of some of a quartet of older panamaxes in the fleet is being kept under review.
“As always, we continuously look for new opportunities to invest, mainly, in combination with the renewal of our fleet,” he said.
The recent $5m demolition sale of the company’s oldest vessel, the 25-year-old panamax Tasos (IMO: 9180906), resulted from a cost/benefit analysis, he added.
Most of the EuroDry fleet is trading in the spot market or short-term periods and only three of its vessels are on time charters stretching into next year.
Those are also exposed to the spot market as the charters are linked to the Baltic supramax index.
As EuroDry is fully exposed to the short-term charter markets, it is no surprise that we had a rather poor financial outcome for the quarter,” said Pittas.
The near-term outlook remained “volatile” as demand has been affected by the weakness of the steel industry and overall economic growth in China, he said.
Pittas also cited a negative medium-term trend for thermal coal and ongoing strife in Ukraine and Gaza that had “pushed significant reconstruction projects to the future.”
First-quarter revenues slumped by 36.2% to $9.2m, while average time charter equivalent rates for the fleet decreased even further, by 42.5%, to $7,167 per day.
An offsetting factor was that the fleet had no drydockings during the latest quarter, compared with 52.5 days of scheduled off-hire in the same period last year.
The company’s net loss for the first quarter doubled to $4m, up from $1.9m in the same quarter of 2024.
