EuroDry (EDRY) Q3 2026 Earnings Call Transcript

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DATE

Wednesday, Nov. 11, 2026

CALL PARTICIPANTS

• Chairman and Chief Executive Officer - Aristides Pittas
• Chief Financial Officer - Anastasios Aslidis

TAKEAWAYS

• Net Revenue -- $19.4 million, representing a 34.9% increase compared to the prior-year quarter due to higher time charter equivalent rates.
• Adjusted EBITDA -- $11.3 million, rising from $4.1 million in the third quarter of 2025.
• Net Income -- $6.9 million, or $2.39 per diluted share, as compared to a net loss of $0.7 million in the same period last year.
• TCE Rate -- $20,551 per day, compared to $13,232 per day earned in the third quarter of 2025.
• Daily Operating Expenses -- $7,687 per vessel, reflecting management fees and general and administrative expenses but excluding dry docking costs.
• Cash Flow Breakeven -- $11,984 per vessel per day, encompassing operating expenses, dry docking, interest, and scheduled loan repayments.
• Estimated Forward Breakeven -- $13,000 per vessel per day, representing the all-in cash flow requirement for the next 12 months.
• Newbuilding Contract -- $37 million, for the construction of a third 82,000 deadweight Kamsarmax bulk carrier scheduled for delivery in the third quarter of 2029.
• ATM Equity Program -- $10.7 million, raised through the issuance of 163,753 common shares at an average price of $67.54.
• Share Repurchase Program -- $5.8 million, used to repurchase 358,130 shares since August 2022 under an authorized $10 million program.
• Total Debt -- $105.7 million, carrying an average margin of 1.84% and a total senior debt cost of 5.89%.
• Net Asset Value -- $66 to $67 per share, based on an estimated fleet market value of approximately $247 million.
• Cash Position -- $50 million, in unrestricted cash as of Sept. 30, 2026.
• Order Book -- 15.7% of the existing global dry bulk fleet, representing a low level relative to historical averages despite recent growth.
• Fleet Age Profile -- 12.1% of the global fleet, consists of vessels over 20 years old which are potential candidates for scrapping.
• Ultramax Spot Rates -- $25,500 per day, as of Nov. 6, 2026, strengthening from a third-quarter average of $23,500 per day.
• Panamax Spot Rates -- $17,200 per day, as of Nov. 6, 2026, compared to an $18,000 average during the third quarter.
• Dry Docking Budget -- $4 million, allocated for the scheduled maintenance of three vessels during the fourth quarter of 2026 and the first quarter of 2027.
• FFA Loss -- $556,000, incurred on two Forward Freight Agreements previously agreed upon.
• Ton-Mile Growth -- 4.1%, projected for 2026 by Clarksons, driven by long-haul trade from Africa to China.

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RISKS

• Pittas warned that "risks remain tilted to the downside, particularly from further geopolitical escalation, renewed trade tensions, fiscal vulnerabilities and the potential reassessment of AI-related investment expectations," which could impact global dry bulk demand.
• Aslidis stated that expected dry docking expenses for three vessels "will influence our results in the next couple of quarters," as daily cash requirements for maintenance are projected to rise.
• Pittas indicated that the IMF revised China's growth forecast down to 4.5% for 2026, noting that "resilient exports are no longer sufficient to fully offset persistent weakness in domestic demand."

SUMMARY

EuroDry Ltd. (NASDAQ:EDRY) reported a transition to profitability for the 3-month period ending Sept. 30, 2026, as total net revenues reached $19.4 million. Management reported that the company reestablished its at-the-market equity program to raise $10.7 million in capital, taking advantage of share prices trading near net asset value. The company stated that its investment strategy prioritizes newbuildings over secondhand vessels due to current elevated asset prices. Management indicated that the fleet renewal program includes five vessels under construction with deliveries scheduled between 2027 and 2029. The company reported that it intends to maintain high spot market exposure to benefit from prevailing freight rates while managing a staggered order book.

• CEO Pittas indicated that shipyards are currently at capacity, stating, "even in 2029, there are very limited spaces and in substandard shipyards that you can get a decent ship."
• Management noted that scrapping activity remains low due to strong market rates, but CEO Pittas stated, "if the market drops down to $10,000 per day, that's when you will see a lot of ships being scrapped."
• The company opted for newbuilding contracts over secondhand purchases, with Pittas stating, "we have chosen to invest in newbuildings rather than buy expensive secondhand tonnage at these elevated prices."
• Management confirmed that the company intends to maintain spot market exposure for its vessels unless fixed-time charter rates exceed $20,000 per day.
• CFO Aslidis reported that the company anticipates no difficulties in refinancing balloon payments, which total $19 million in 2029.
• Management noted that global ton-mile demand remains supported by chokepoint disruptions in the Strait of Hormuz and the Red Sea, which have lengthened trade routes.

INDUSTRY GLOSSARY

• ATM (At-the-Market): An equity offering that allows a company to sell shares directly into the secondary market at prevailing prices.
• DWT (Deadweight Tons): A measure of a vessel's carrying capacity, including cargo, fuel, and supplies.
• EEDI (Energy Efficiency Design Index): A set of technical standards for new ships aimed at reducing greenhouse gas emissions.
• FFA (Forward Freight Agreement): A financial derivative used to hedge against or speculate on future freight rates.
• NAV (Net Asset Value): The total value of a company's assets minus its liabilities, often expressed on a per-share basis.
• TCE (Time Charter Equivalent): A standard shipping industry performance measure used to compare period-to-period changes in a fleet's performance.

Full Conference Call Transcript

Operator: Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Limited conference call on the third quarter 2026 financial results. We have with us today Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasos Aslidis, Chief Financial Officer of the company. [Operator Instructions] 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. Pittas, I would like to remind everyone that in today's presentation and conference call, EuroDry will be making forward-looking statements. 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 #2 of the webcast presentation, which has the full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And now I would like to pass the floor to Mr. Pittas. Please go ahead, sir.

Aristides Pittas: Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the 3-month and 9-month periods ended September 30, 2026. Please turn to Slide 3 of the presentation. Our financial highlights are shown to you. For the third quarter of 2026, we reported total net revenues of $19.4 million and net income attributable to controlling shareholders of $6.86 million or $2.39 per diluted share. Adjusted net income attributable to controlling shareholders for the quarter was $6.67 million or $2.32 per diluted share. Adjusted EBITDA for the quarter was $11.34 million.

Please refer to the press release for the reconciliation of adjusted net income and adjusted EBITDA. Tasos will go over our financial highlights in more detail later on in the presentation. Since the initiation of 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 has extended the program for a further year in August 2026 and will review it again in 12 months. As previously announced, the company signed a contract with Hengli Shipbuilding for the construction of a third 82,000 deadweight Kamsarmax bulk carrier.

The vessel will be built to an eco-design specification compliant with EEDI Phase 3 standards and is scheduled for delivery in the third quarter of 2029. The total consideration for the newbuilding contract is approximately $37 million and will be financed through a combination of debt and equity. The contract is conditional on receipt of a refund guarantee from a bank acceptable to the company. With our shares reaching all-time highs in the third quarter and trading at a premium to net asset value, we took the opportunity to reestablish our At-The-Market equity program.

We thus raised approximately $10.7 million of accretive equity capital through the issuance of 164,753 (sic) [ 163,753 ] common shares at an average price of $67.54, thus strengthening our balance sheet and providing additional liquidity to fund our fleet renewal program. Let's now move to Slide 4, which summarizes our recent chartering and operational developments. During the period, we had no vessel sales or purchases apart from the aforementioned order for the additional Kamsarmax. There were no dry dockings or repairs and no new FFA hedging activity to report. However, we did incur a loss on the 2 FFAs previously agreed of $556,000. On our chartering side, we continued to practically employ all our vessels in the spot market.

Four of our vessels are currently operating on index-linked charters tied to the average Baltic Supramax index, providing direct exposure to prevailing market conditions too. Only the Christos K is on a fixed-time charter at $15,500 per day till December-January. Operationally, we had no idle periods, no commercial off-hire days and no scheduled off-hire days during the quarter. Turning to Slide 5, which provides an overview of our fleet, we currently operate 11 vessels with a total carrying capacity of approximately 766,000 deadweight tons and a size-weighted average age of around 13.8 years. In addition, we have 5 newbuildings under construction at Chinese shipyards.

Our order book includes 2 63,500 deadweight ton Ultramax vessels scheduled for delivery in the second and third quarters of 2027, respectively. We also have 3 82,000 deadweight ton Kamsarmax vessels on order scheduled for delivery in the first and second quarters of 2028 and the third quarter of 2029, respectively. Upon delivery of these 5 vessels, our fleet will expand to 16 ships with a total carrying capacity of approximately 1.1 million deadweight tons. The pro forma fleet will comprise 7 Ultramaxes, 1 Supramax, 5 Kamsarmax vessels alongside our 3 legacy Japanese-built Panamax vessels. You can see the details of our charter commitments in Slide 6.

Please now turn to Slide 8, which highlights key market developments for the third quarter and recent trends through November 6. Panamax spot rates averaged $18,000 per day during the third quarter of 2026 before easing to $17,200 per day as of November 6. Kamsarmax spot rates, of course, followed a similar path to the Panamax. In contrast, Ultramax spot rates strengthened from a third quarter average of $23,500 per day to $25,500 per day. On the time charter side, Panamax 1-year time charter rates softened recently, declining from a third quarter average of $18,100 per day to $16,875 per day as of November 6.

Notably, Panamax 1-year time charter rates are trading broadly in line with spot levels, which we view as a sign of underlying market resilience despite the recent moderation in freight rates. During the third quarter of 2026, the Baltic Dry Index and the Baltic Panamax Index recorded year-over-year increases of approximately 65% and 42%, respectively, underscoring the significantly stronger dry bulk freight market relative to the third quarter of 2025. Please turn to Slide 9, where we review the global macroeconomic backdrop and its implications for dry bulk shipping demand. According to the IMF's October 2026 World Economic Outlook, global economic activity has remained resilient despite ongoing geopolitical disruptions, elevated energy prices and trade uncertainty.

Global GDP growth is projected to slow to 3.1% in 2026 before recovering to 3.4% in 2027. The resilience has been supported by continued investment in artificial intelligence, technology-related demand and the ability of economies to adapt to geopolitical and trade disruptions. However, performance remains uneven. Technology-linked economies and energy exporters have greater resilience, while energy-importing countries outside the global technology supply chain face a more challenging outlook. Meanwhile, inflationary pressures remain elevated, with global headline inflation projected at 4.7% in 2026 before easing to 4.1% in 2027. The risks remain tilted to the downside, particularly from further geopolitical escalation, renewed trade tensions, fiscal vulnerabilities and the potential reassessment of AI-related investment expectations. Turning to the major economies.

U.S. growth is projected to remain steady at 2.3% in both 2026 and 2027. The IMF has revised China's growth forecast down by 0.1 percentage point to 4.5%, noting that resilient exports are no longer sufficient to fully offset persistent weakness in domestic demand. Growth is expected to moderate further to 4% in 2027. In the ASEAN-5 economies, growth is projected at 4.4% in 2026 before moderating slightly to 4.3% in 2027, but generally overpassing the growth rates of China. Looking at global trade, world trade volume growth is slower, but decent in 2026 compared to 2025 and should stabilize in 2027, reflecting the impact of tariffs and ongoing adjustments in global supply chains.

Clarksons has revised its 2026 ton-mile growth forecast upward from 3.7% to 4.1%, with growth forecast at 3.3% in 2027 and 2.8% in 2028. The upgrade on ton-mile demand reflects longer-haul trade, with Africa to China flows materially boosting ton-mile demand in 2026. Chokepoint disruptions, including those in the Strait of Hormuz and the Red Sea, have had a minimal net effect on dry bulk as lower trade volumes have been offset by vessels being trapped. Although growth is expected to moderate in 2027 and 2028, ton-mile expansion remains positive and supportive of the market, while geopolitical developments, shifting trade patterns and rising vessel deliveries remain key factors to monitor.

Please turn to Slide 10 as we review the current state of the dry bulk order book. As of November 2026, the order book stood at 15.7% of the existing fleet. Although above the 7% low seen in 2021, it remains quite low. At the same time, increased slow steaming, higher scrapping rate and tightening environmental regulations could further constrain the available bulker fleet. Turning to Slide 11, we take a more detailed look at supply fundamentals. As shown in the top chart, the dry bulk fleet currently stands at around 1.1 billion deadweight tons, up 3% year-on-year-to-date.

Looking at the age profile of the fleet, roughly 12.1% of the fleet is over 20 years old, representing vessels that could become scrapping candidates if market conditions moderate or environmental regulations tighten. According to Clarksons' latest estimates, scheduled newbuilding deliveries expressed as a percentage of the previous year's fleet and before any scrapping are projected to reach 4.5% in 2026 and 4.8% in 2027. The remaining 9.6% of the order book is expected to be split pretty evenly between 2028 and 2029 and beyond. Now let's turn to Slide 12. As of November 6, 2026, the 1-year Panamax time charter rate stood at $16,875 per day, well above the 20-year median of $13,275 per day.

Asset values tell the same story, even more pronounced. A 10-year-old Panamax is valued at about $33.5 million, at the top of the range since 2017, and far above the median of $22.5 million and the average of about $20.7 million. Against this backdrop, we have chosen to invest in newbuildings rather than buy expensive secondhand tonnage at these elevated prices. The newbuildings offer greater operational efficiency, better environmental performance and lower maintenance requirements. We are confident that through the staggered deliveries of our order book in 2027, 2028 and 2029, we will improve our earnings potential and our operating margins to the benefit of all our shareholders.

Further, our strong balance sheet positions us well to take advantage of any opportunities that will present to us in the future to further grow the company. And now I pass over the floor to Tasos for his part of the presentation.

Anastasios Aslidis: Thank you very much, Aristides. Good morning from me, ladies and gentlemen. Over the next 4 slides, I will give you an overview of our financial highlights for the third quarter and 9 months of 2026 and compare those results to the same periods of last year. For that, let's turn to Slide 14. I will pursue this time around a briefer presentation than usual of our results to let more time for your questions.

For the third quarter of 2026, the company reported total net revenues of $19.4 million, a 34.9% increase over $14.4 million in the third quarter of 2025, the increase primarily due to higher time charter equivalent rates earned and partly offset by a lower average number of vessels operated. The company reported a net income for the period attributable to controlling shareholders of $6.9 million, as compared to a net loss attributable to controlling shareholders of $0.7 million for the same period of 2025.

There is a net income attributable to noncontrolling shareholders of about $0.5 million in the third quarter of 2026, representing the income that was generated that corresponds to the 39% ownership by outside parties of 2 of our vessels, as compared to $0.2 million for the third quarter of last year. Adjusted EBITDA for the third quarter of 2026 was $11.3 million, compared to $4.1 million for the third quarter of 2025.

Adjusted basic and diluted earnings per share attributable to controlling shareholders for the third quarter of this year was $2.36 and $2.32, respectively, calculated on 2.8 million and 2.9 million, approximately, weighted average number of shares outstanding, compared to adjusted loss per share attributable to controlling shareholders of $0.23 for the third quarter of 2025. The adjustment on earnings was due to the exclusion from the earnings of the unrealized gains for 2026 and losses for 2025 of the FFA contracts for the period that we are discussing.

For the first 9 months now of 2026, the company's reported total net revenues of $49.9 million, a 43.1% increase over $34.9 million in the first 9 months of 2025, again due to higher time charter equivalent rates earned and partly offset by lower number of vessels operated during the corresponding periods. The company reported a net income for the period attributable to controlling shareholders of $13.7 million, as compared to a net loss attributable to controlling shareholders of $7.45 million for the first 9 months of 2025. There is, again here, a net income of about $1 million attributable to noncontrolling shareholders, again stemming from the 39% ownership of outside parties of 2 of our vessels.

Adjusted EBITDA for the first 9 months of this year was $27.9 million, compared to $5 million for the first 9 months of 2025. And adjusted basic and diluted earnings per share, again attributable to controlling shareholders, for the first 9 months of 2026 was $4.98 and $4.88, calculated on 2.8 million and 2.9 million, approximately, basic and diluted weighted average number of shares outstanding, compared to a loss per share of $3.39 for the same period of 2025. The adjustment here is also attributed to the unrealized FFA losses for both periods, but also in the case of 2026, to the exclusion of the gain on sale of motor vessel Eirini, which took place early in the year.

Let's now move to Slide 15 to review our fleet performance in the third quarter of 2026 and the 9-month period and compare them to the same periods of last year. Again, for the sake of brevity, today I will not focus on the fleet utilization rates, which in any case are just short of 100%, but rather on the time charter equivalent rates that we earn.

In the third quarter of 2026, our fleet, which was an -- being of average of 11 vessels, earned an average time charter equivalent rate of $20,551 per day, compared to a fleet of 12 vessels that we operated in the third quarter of last year, which earned an average of $13,232 per day. Our total daily operating expenses, including management fees, G&A expenses, but excluding dry docking costs, were $7,687 per vessel per day in the third quarter of this year, compared to $7,013 in the same period of 2025.

Further down on this table, on the bottom left part of it, we can see the cash flow breakeven levels, which take into account the operating expenses that we mentioned, dry docking costs, interest expense and scheduled loan repayments, excluding balloon payments. Thus, for the third quarter of 2026, our daily cash flow breakeven level was $11,984 per vessel per day, compared to $12,482 per vessel per day for the third quarter of 2025.

Moving to the 9-month figures, again, during the first 9 months of this year, we operated 11 vessels, earning an average time charter equivalent rate of $18,501 per day, compared to 12.3 vessels in the same period, the first 9 months of 2025, earning on average $10,210 per vessel per day. Our total operating expenses for the period averaged $7,537 in the first 9 months, compared to $7,284 for the first 9 months of 2025. Our cash flow breakeven level, including the dry docking, interest and loan repayments, for the first 9 months of 2026 was $12,125 as compared to $12,070 for the same period of 2025. Let's move now to Slide 16.

This slide presents our loan profile and shows both the cost of the loan and our cash flow breakeven for the next 12 months. As of September 30, EuroDry had an outstanding debt of $105.7 million with an average margin of 1.84%. If we assume a SOFR rate of 4.06%, the total cost of our senior debt as of September 30, 2026 is about 5.89%. On the top chart, we can see the repayments of our loans. We have already made $20 million of repayments this year, including a balloon that we have refinanced, and there remains about $2.7 million for the fourth quarter of 2026.

In 2027, we have an $11.7 million of repayments scheduled, the same amount for 2028 in terms of loan repayments, plus an additional $6.7 million of balloon repayments. In 2029, $11.2 million of repayments and another $19 million of balloon repayments. Judging from history, we would expect to have no difficulties refinancing our balloons if we choose to do so. On the bottom part of this slide, the chart shows our estimated cash flow breakeven level for the next 12 months by major components. Our EBITDA breakeven stands at $8,726 per vessel per day, while our all-in cash flow breakeven, which adds interest expense and loan repayments, we estimate it to be just shy of $13,000 per vessel per day.

I would like to draw your attention here to the higher expected dry docking expenses for the period, for the next 12 months, of about $1,053 per vessel per day, as compared to, if you remember from the previous slide, to $132 per vessel per day for the third quarter of 2026. This reflects dry dockings, scheduled dry dockings, of our vessels Alexandros P, Blessed Luck and Starlight, all happening in the fourth quarter of this year and the first quarter of 2026. Let's now turn to Slide 17, the last slide of my brief remarks here, for a visual highlight from our balance sheet as of September 30, 2026.

Cash and other assets on our balance sheet as of that date stood at approximately $63.4 million, $50 million of that is unrestricted cash and the remaining other assets. Advances for newbuildings that we have already paid amounted to approximately $18.3 million, while the book value for our vessels as of September 30 was approximately $157.4 million, bringing the total value of our assets on a book basis to $239.1 million. On the liability side now, bank debt, as I mentioned earlier, stood at $105.7 million, representing in percentage terms 44% of the total book value of our assets, while other liabilities, various other liabilities, amounted to $6.3 million or about 2.6% of our assets on a book basis.

After excluding approximately $8.9 million of minority shareholder interest, our shareholder equity stood at approximately $117.2 million or on a net book value basis of about $38.9 per share. However, we estimate the current market value of our vessels to be approximately $247 million, about $90 million above their book value. Adjusting for this difference, we get a net asset value per share between $66 and $67, about $28 more than the book value per share. In fact, our shares traded near their net asset value in the past 2 months, proving that under certain capital and shipping market conditions, they can realize their full potential.

Thus, with our shares currently trading at around their book value of roughly $39 per share, there remains a substantial upside to be realized if they approach again their net asset value, offering significant rewards to our shareholders and investors. And with that, I would like to turn the floor back to Aristides to continue with the Q&A.

Aristides Pittas: Thank you, Tasos. Let me open up the floor for any questions you may have.

Operator: [Operator Instructions] Our first question comes from the line of Richard Magnusen with NOBLE Capital Markets.

Richard Magnusen: You may have already addressed this, but I missed the first couple minutes of the -- of your call. But regarding the TCE rates as we look forward in 2027, can you give any more detail on your expectations for the trends in the rates according to the different ship sizes?

Aristides Pittas: Well, yes, I think it's extremely difficult to make a bet on how the rates will develop because there are so many conflicting factors that may lead the market either to being extremely strong or to being poor. Because it's not the traditional supply-demand question that we have been used to dealing with, but it's all the geopolitical events that drive what happens. If you look only at supply/demand, the markets seem quite balanced, so you would expect things to remain at quite good levels as they currently are. But geopolitics is going to play a role, and it can push the market much higher or lower. So we didn't offer a specific long-term view.

We are basing all our forecasts, obviously, as we always do, on the FFA curve, and the FFA curve is a little bit lower than where we currently are for 2027.

Richard Magnusen: Okay. And then related to that, I think a Slide 10 showed that the order book is about 15.7% of the fleet. And I think last time it was about, was it 14.7%, a little bit lower? What are your thoughts on the continuation of this rate increasing, the global fleet, new ships coming and the order book growing as we continue forward?

Aristides Pittas: Yes. The order book is indeed growing, but the deliveries that we will have in 2027 and 2028 will not grow because the yards are full. Even in 2029, there are very limited spaces and in substandard shipyards that you can get a decent ship. So if the order book continues expanding, it will expand mostly in 2030 onwards. So I don't anticipate a huge increase of the fleet within the next few years. And of course, if that will be absorbed, we're talking about levels of 4% to 5% fleet growth annually for the next 3 years. These are volumes that can be absorbed by a strong market.

But then again, if we have a recession and the markets drop, it's extremely difficult to call the markets these days, I would say.

Anastasios Aslidis: If I may add, the order book for the fleet was underbuilt from the period of 2020 up to last year. Order book was well below the what was required for replacement of the fleet, which is between 10% and 12%. So it has been consistently below 10% for that period. So a little bit of catching up, I don't think it's something that worries us too much at this point.

Aristides Pittas: Correct.

Operator: [Operator Instructions] Our next question comes from the line of Tate Sullivan with Maxim.

Tate Sullivan: Just to clarify, I think you just answered it, but the shipyards -- it was the shipyards being full that led to the 3-year delivery time line for the most recent newbuild? Was that the case, or I thought it might have been just based on your previous 2 orders' time line?

Aristides Pittas: Yes. As you saw, we had to go for 2029, late 2029, for the delivery of our third Kamsarmax, and now people would need to go to 2030. So exactly.

Tate Sullivan: Okay. And then your presentation noted higher scrapping values. Is that a recent dynamic, or have you seen that for the last 6 months, or is that more recent?

Aristides Pittas: There's some noise in the line. I didn't quite get your question, Tate.

Tate Sullivan: Sorry. Did you hear? Are you seeing higher scrapping rates in the presentation note? And is that a recent dynamic?

Aristides Pittas: No, not yet. Not yet, because the market is strong. When the ships are making $20,000 a day, you definitely try to avoid scrapping your ships if you can. If the market drops down to $10,000 per day, that's when you will see a lot of ships being scrapped.

Operator: [Operator Instructions] Our next question comes from the line of Poe Fratt with Alliance Global Partners.

Charles Fratt: Just to expand on that scrapping. Do you think scrapping, 12% of the fleet is more than 20 years old, is it time that's just going to trigger that scrapping of that tonnage? Or is it going to take, as you said, a recession and a bad market?

Aristides Pittas: It will take a bad market. If the market is strong as it currently is, people tend to pass the next special survey of the ship and spend $2 million, $3 million, $4 million to pass the survey. But if the market has dropped, there's no way you can recover those amounts. So whilst today people pass surveys of 20-year-old ships, they will not pass them if the market corrects.

Charles Fratt: Understood. And then just on the -- often when companies order newbuilds, they sometimes get an option along with that order. Do you have an option for a fourth Kamsarmax?

Aristides Pittas: No, we don't currently. Currently, it's -- the market is in favor of the shipyards, so they are not really giving options that much. And if they do, they give them for 1 or 2 months only. So it's not really a significant option. It's a shipyards' market these days.

Charles Fratt: Okay. And then it seems like you're still focused on renewing the fleet. Is there potential to do 2 things? One is, can you -- is there any buyout provision in the joint ventures that you have? And then secondly, when do you start thinking about selling some of the older tonnage?

Aristides Pittas: It's a good question. And whilst there is no specific buyout provision, of course, there is an agreement that we would be offered the chance to buy. It is us that decides if the vessels are held or sold, and the investors are very happy to follow us. On our 3 elder ships, indeed, we did consider the possibility of selling one of them, but we decided to proceed and go and pass vessel survey. So that vessel will -- the Blessed Luck, will go into dry dock within December.

So we are keeping them because they are providing very good EBITDA at the moment, and if the market is strong enough as we think, it makes sense to keep them for longer. Technically, all 3 of these Panamaxes are in a very good technical condition for their age, so it's going to be commercial reasons that force us to sell them, if at all.

Anastasios Aslidis: Of course, as I mentioned earlier, the fact that they're going to go through dry dock will influence our results in the next couple of quarters.

Charles Fratt: And how much are you going to spend, Tasos, on that dry dock? And then, as you mentioned, what's in store for early '27 as far as dry docking?

Anastasios Aslidis: I think the budget for the 3 vessels I mentioned is close to $4 million for all 3, roughly split equally between the 3, and it falls, again, roughly between Q4 and Q1, 50-50 roughly.

Charles Fratt: And then when do you expect the other 2 to go into dry dock?

Anastasios Aslidis: As I said, in the next...

Aristides Pittas: Not both of them.

Anastasios Aslidis: I mean, in Q1.

Aristides Pittas: I think the other 2 are maybe in Q1 and Q2.

Anastasios Aslidis: Yes, we'll see. You never -- it depends on the exact date that the yards are available and the last trip before the dry dock. So in the early part of the year, for sure.

Charles Fratt: Okay. Yes, the first half of the year maybe. And then just a couple quick ones. What's the timing on the first Kamsarmax payment for the latest order? And then also, what are you thinking about on the chartering front for the Ultramaxes that are going to get delivered in the first half of next year?

Aristides Pittas: Yes. The first payment on the last Kamsarmax order will probably be around January. We are waiting to receive the bank that the shipyard proposes to provide us the refund guarantee. So we need that before we effect any payments, and it should come within December or January. And the second question, what was it?

Charles Fratt: It was on the chartering strategy for the...

Aristides Pittas: On the chartering side, we prefer to be playing the spot market, and only if we see levels in excess of $20,000 a day, we may consider a year's charter. But otherwise, we prefer to be playing the spot market.

Charles Fratt: Great. And then not necessarily a comment or a question, but a comment. Many companies don't buy their stock back when it's way undervalued, and many companies don't issue stock when NAV or the market allows them to sell at NAV or higher. So congratulations on that front.

Aristides Pittas: Thank you. Yes, we think that when the market -- when we're trading significantly below NAV, it's worth buying back stock, and when we're trading above NAV, it's probably worth issuing some more stock. We've done it a few times, and as you said, we did it last month as well.

Operator: We have reached the end of the question-and-answer session. I'd like to turn the floor back to management for closing comments.

Aristides Pittas: Thank you very much, all, for listening in to our today's session. We'll be back in 3 months' time.

Anastasios Aslidis: Thanks, everybody. Happy Thanksgiving to our American friends.

Aristides Pittas: Okay. Bye.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

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