Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Conference Call on the Third Quarter 2019 Financial Results. We have with us today, Mr. Pittas, Chairman and Chief Executive Officer; and Mr. Aslidis, Chief Financial Officer of the Company. At this time, all participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today, Friday the 15th of November, 2019. Please be reminded that the Company announced its results with the 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. Kindly draw your attention to slide two of the webcast presentation, which has the full forward-looking statements and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. I’d now like to pass the floor over to Mr. Pittas. Thank you, sir. Please go ahead.

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 nine-month period and quarter ended September 30, 2019. As a reminder, I would like to mention that in May 2018, Euroseas contributed to EuroDry drybulk fleet of six vessels, one Ultramax and two Kamsarmax vessels built between 2016 and 2018, and three Japanese-built Panamax vessels built between 2000 and 2004. EuroDry was spun-off from Euroseas on May 30, 2018. Since the spin-off, EuroDry bought an additional Panamax bulker. Comparisons in the following presentation to periods of last year refer to the drybulk fleet existing at the time for the periods presented. Please turn to slide three. Our income statement highlights are shown here. The third quarter of 2019, we reported total net revenues of $7.7 million, adjusted EBITDA of $2.2 million, and adjusted net income attributable to common shareholders of minus $0.6 million or minus $0.26 per share. Q3 operation of EuroDry commenced as a separately listed public company with the focus on positioning the company to capitalize on market opportunities. By the financing of portion of our debt, we managed to raise required funds and pursued selected vessel acquisitions, like the Starlight, which we acquired late last year. We generally expect that the drybulk market could offer opportunities for realizing significant returns in the medium term as the fleet supply is expected to grow modestly in the next couple of years. Thus, leaving the focus on trade demand developments is partly dependent on political factors. The aftermath of the emissions implementation and ballast water treatment regulations over the next two years could possibly further squeeze vessel supply, leading…

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you over our financial results highlights for the third quarter and nine-month period of 2019. For that, please turn now to slide 14. For the third quarter of this year, we reported net revenues of $7.7 million, representing 13% increase over total net revenues of $6.8 million during the third quarter of 2018. And that increase was mainly the result of increased average number of vessels we operated this year. The Company reported net loss for the period of $0.4 million and net loss attributable to common shareholders of $0.8 million as compared to net income of $1.7 million and net income attributable to common shareholders of $1.4 million for the third quarter of 2019. Depreciation expenses for the third quarter of 2019 amounted $1.6 million compared to $1.4 million for the same period of last year. Interest and other financing costs for the third quarter of 2019 amounted to $0.8 million, remaining about the same to the corresponding year of last year. Adjusted EBITDA for the third quarter of 2019 was $2.2 million compared to $3.8 million for 2018. Basic and diluted loss per share, attributable to common shareholders for the third quarter of 2019 was $0.35 calculated on 2.25 million basic and diluted weighted average number of shares outstanding compared to basic diluted earnings per share of $0.63 for the third quarter of last year. Excluding the effect on the income or loss attributable to common shareholders for the quarter of the unrealized gain or loss in derivatives, the adjusted loss attributable to common shareholders for the quarter ended September 30, 2019 would have been $0.26 per share basic and diluted compared to adjusted earnings of $0.62 per share basic…

Thank you, Tasos. Let's open the floor for any questions there might be.

[Operator Instructions] We will now take our first question. Please go ahead. Your line is open.

Hi. Tate Sullivan from Maxim Group. Good morning. Thanks for taking my questions. Could we start with just your market comments and -- I mean, what are the -- and they were helpful in terms of the new supply coming into the market. But, can you comment in terms of -- can you give an approximate number of active vessels in your market including your own as well as absolute number of scheduled additions for the next couple of years, please, if you have that available?

We can get that number, I think, it -- we don’t have it on the top of our heads, the expected fleet growth in terms of vessels, solid and deadweight for our segments. But, we’ll be happy to provide that information.

We don't have the actual numbers in my head but what I have in my head is the percentage increase of vessels that will be supplied in 2019, 2020 and 2021. 2019 is practically done, so we don't have. But in 2020, we expect 5.7% increase in the fleet. The majority of that growth comes from Capesize size vessels. So, in the Panamax vessels where we evolved; and the Supramax is a bit less than that. Similar growth rates are expected in 2021. About 5.7% -- sorry, 3.3% in 2021, 5.7% in 2019, and 2020 growth. From that, you have to supply -- subtract the scrapping and the late deliveries and the occasional cancellations and all that stuff. So, overall, we would expect the global fleet to grow around 3% next year.

You can look in slide 10, there is a little insert there in that actually shows what is scheduled to be delivered by segment in terms of vessel numbers for the next two years quarter. So, that is -- but the numbers are gross, they are not net growth rates. The net growth rates lower than the 5.7, which is mentioned.

Yes, 5.7 is what is planned to be supplied, to be delivered within that year. But, it will not necessarily happen, because there are delays, and of course there will be scrapping, which you have to subtract from that.

And then how -- and right now in terms of the newbuild market, how long does it take from the time of order to delivery, roughly? And based on…

Yes. Normally, it takes about 18 months from the time you order till the time you deliver, 18 to 24 months.

Okay. And I know it's hard to generalize, but can you give some comments on what are the most common routes and ports for your ships or the number of ships around Brazil versus the numbers around Australia? And again, I know, it's hard to generalize, but any comment?

This is a big discussion. I suggest, we a call after this call, and we can discuss the matters then.

Okay, thanks. And then, the last one for me. Do you have a normal time or an expected time between the contract for the one ship that ends the contract this month or is that hard to say?

It will be in direct continuation. So, there will be no downtime. In drybulk these days, there is no downtime or waiting time. It will be in direct continuation.

We'll now take our next question. Go ahead. Your line is open.

Yes, sorry. I can't tell if my line is open. This is Poe Fratt from Noble Capital Markets. Good morning. Just go back to slide 10…

Good morning.

Good morning. To go back to slide 10, you're showing 5.9% -- or 5.7% growth. What has -- that’s a gross number. What has scrapping run so far? We're almost done with the year. So, what do you think the net growth is for 2019?

I think, it should be closer to…

3.5%.

3.5%.

Yes, just want to clarify, because that chart does show higher than expected growth, just to make sure we’re on the same page.

This is -- what that shows is the scheduled deliveries as a percent of the fleet. It's only the schedule deliveries, doesn't do all the accounting or the -- subtract the scrapping. If we do…

Also, the 5.7% is what -- is in the analyst, Clarkson’s books to be delivered in this year, but not all of it will be delivered. There is slippage of around 10% in that. So, there is slippage, there is the scrapping. So, overall, we expect the growth rate will be around 3.5.

3.9. I think, if we did our internal analysis, we make assumptions for scrapping, that certain and it is expected to ship in the last couple of months, we would be just below 4%, 3.7% to 3.9% net growth of the fleet for 2019.

Yes. Great, yes. Because scrapping and slippage will mute that gross number and take it down by almost half. When you look at sort of the scrubber situation out there, my impression is that there -- people have been scrambling to get shipyard time and the installations are maybe taking a little bit longer. Is that your impression too? And then, second part of that question is, is IMO 2020 changing your chartering strategy at all? Are you -- how are you approaching the potential for fuel cost to diverge here?

Yes. First, on the scrubber issue, you're absolutely right. It's not an impression, it's an actual fact that it has been taking longer to install the scrubbers than originally anticipated by maybe 10 days or something like that on average. So, this obviously is happening. On the change of fuel from January 2020, we are already taking the necessary measures and we will be starting to get supplies of high sulfur -- of low sulfur fuel oil on our ship obviously. Before that time, we've already started in one or two ships. And there will be this disadvantage, let's say to the ships that do not have scrubbers against the scrubber fitted ships, at least initially, with the price difference being around $250 per ton at this point in time, $200 to $250, depending on the port. There are going to be problems in availability of both types of fuels, samples, we have only one or the other. So, planning will need to be made to where you bunker which to be much more careful. This is something we will be discussing together with our charterers and helping them because they are the ones in time charters that direct the vessel where it needs to go. And we will be discussing with them to try and help and optimize the situation. But, all this will create some disruption generally, and this disruption is essentially reducing the number of ships available. So, we think that it will be a positive disruption, even though the scrubber fitted ships will be benefiting with higher time charter rates. Of course, if the time charter rates that they will be getting a sufficient to amortize the investment, this is something that remains to be seen.

Great. But, your chartering strategy won't change. You still expect to focus more on time charters; the fuel cost risk is on customer or the charterer?

Yes. The big majority of our fixes will be time charters, either spot time charter for one trip or the longer time charters. Yes.

Great. And then, if you can -- if you look at the -- can you give us color on the third quarter rate from the Guardian Pool, on the Alexandros P? And then, sort of give us an idea of where that is quarter-to-date for the fourth quarter. That would be helpful.

Yes. I can tell you that generally the Guardian Pool has outperformed the index by a very little bit over all over the years that we've been within. So, we've outperformed the index. Of course adjusted for the size of our vessels because the Supramax index is 57,000 deadweight vessel, but we are 63,000 [ph] which means that -- implies generally at least the 10% higher rate. And this is what we have been achieving. We have been achieving a little bit higher than 10% above the index historically upto now. And this quarter, I think, it’s running around the same level. We have better standard when we get the next statement from them.

Generally results from pools -- in general, have more lag with the market. So, if the market drops, we do a little better during the period of the market drop because they carry the older charters; and if the market increases, they do it in-house [ph] because they get the lower charter that have been fixed before. So, the same is reflected in the results of pool.

Yes. And a lot of companies give Tasos forward cover, percentage of days booked for the fourth quarter, and sort of an average TCE rating. Do you have ballpark numbers for those two? I know that most of your capacity is under contract, but indexed. So, I was just trying to get a flavor where we stand during the middle of the quarter on both, on really rates.

Yes. I mean, the best way to -- if you look on slide seven, what we show is fixed, which is what determines a big chunk of what our rates will be for the third quarter. The remaining part -- the unfixed part or the part that is open to the market, I think looking at the average index today is probably the best estimate of what is there. This is what we do frankly ourselves, we -- to make projection for the quarter. So I don’t have on the top of my head a number to give you. But, you can see on slide seven, the fixed charters and the ones that are linked to the index, the others to-date index and whatever expectations you might want to put for the remaining month and a half, would constitute good guess for Q4.

Yes. And I noticed on that, the Guardian Pool, the Alexandros P is highlighted in blue, it shows as an option. And should we view that as an option or is that more in the pool, it's in the pool permanently and it should work and generate 112 pool points each quarter?

Yes, it's our option really to exit the pool, if we decide at any point that we want to do that. But, this is not something we're currently considering.

Yes. So, we should have this for pool employment?

At the pool, yes.

Okay, great. And then, Tasos, if you could just talk about costs and what throw cost down over the third quarter and then sort of where, relative to what the 5,200 per day that you're guiding or offering for the next 12 months? That would be helpful.

There is -- I mean, from quarter-to-quarter, there is some -- variation on the operating expenses is nothing the way certain expenses happen, and that affects the quarterly average. I think compared to the same period of last year that we saw, I think we saw a little lower cost compared to last year. I think we were having some vessels that were relatively new to the fleet that we would get to a vessel -- join the fleet middle of last year and sort of -- originally the results, the contribution of the new vessels is a little higher. But there is nothing -- there is no real trend there. I think we're doing that around budget. If you look at the quarter -- volatility of the OpEx, which I happened to see that -- look at just before our call, it’s around $5,000, give or take, even $100 up and down. So, I think, we are -- not expect them to certainly move the course. [Ph] We're trying to keep them as low as we can. We have been helped little bit, because I think the exchange rate we had budgeted it 12% -- 10%, I mean the dollar-euro exchange rate is slightly lower. That's basically -- there's nothing more to add than that.

And then, you've done a good job of refinancing, redeeming the preferred or partially redeeming the preferred. Should we expect 2020 to be pretty quiet from a refinancing standpoint? You have, what, about $7 million due in 2020. When should we sort of expect you to start looking into refinancing, you might have to do in 2021?

We will refinance, the plan is to refinance the remaining of the preferred sometime towards the end of 2020, because in 2021, the coupon steps up to 14%, and obviously, we don't want to do that. So the plan is to refinance it at some point within this year.

Within next year.

Yes. Within this coming year. And…

In terms of debt, there is no urgency to refinance anything. We have no balloons. We have capacity, access -- we have borrowing capacity in one of our ships, the Xenia. And there is a possibility, if we needed to invest, we can refinance one of our ships to increase -- by increasing the debt to create investment capacity.

More investment capacity from what we already have.

Would you highlight how much financing capacity that's on the Xenia?

I think probably $4 million to $5 million.

Great. Thank you so much.

Thank you for the questions.

Thank you.

Thank you. There are no further questions at this time. I would now like to turn the floor back to Mr. Pittas.

Thank you all for listening in to our conference call this quarter. And we'll be with you in next year, early next year to discuss how the year ended and what we think will happen. Thank you very much.

Thank you, guys. Thanks, everybody.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.