Ladies and gentlemen, welcome to the EuroDry Conference Call on the Second Quarter 2023 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] 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. Please be reminded that the company announced its results with a press release that has been publicly distributed. Before passing the floor over 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 number 2 of the webcast presentation, which has the full forward-looking statement and the statement was also included in the press release. Please take a moment to go through the whole statement and read it. And I now would like to pass the floor to Mr. Pittas. Please go ahead, sir.

Good morning, ladies and gentlemen, and thank you all for joining us today for our scheduled conference call. Together with me is Mr. Tasos Aslidis, our Chief Financial Officer. The purpose of today's call is to discuss our financial results for the 6-month period and quarter ended June 30, 2023. Please turn to Slide 3 of the presentation. Our financial highlights are shown here. For the second quarter of 2023, we reported total net revenues of $10.3 million and a net loss of $1.2 million or $0.43 loss per basic and diluted share. Adjusted net loss was $1.3 million or $0.48, adjusted loss per basic and diluted share. Adjusted EBITDA for the quarter was $2.5 million. Please refer to the press release for the reconciliation between adjusted net loss and adjusted EBITDA. The Board of Directors approved the extension of its share repurchase program, which was originally established in August 2022 for another year. The program provided the company with authorization to purchase up to $10 million. Today, we have repurchased 216,000 of our common shares, i.e., about 8% of our total outstanding shares in the open market for about $3.25 million since the inception of the program. The extension of our share repurchase program was approved by the Board of Directors as our stock is trading at a very large discount to our net asset value. Thus, buying our own stock represents an attractive investment opportunity for us. The Board will review the program after the period of 12 months or after the $10 million deployment. Share repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of purchases under the program will be determined by management based upon market conditions and…

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. Over the next 4 slides, I will give you an overview of our financial highlights for the second quarter and first half 2023, in comparison to the same period of last year. Let's turn to Slide 15. For the second quarter of 2023, the company reported total net revenues of $10.3 million, representing a 50.7% decrease over total net revenues of $21 million during the second quarter of last year, the decrease was mainly the result of the lower time charter rates or vessel served during the second quarter of this year compared to last. And secondly, the increase of idle period of vessel Good Heart as Aristides mentioned. The company reported net loss for the period of $1.2 million as compared to a net income of $10.6 million for the same period in the second quarter of last year. Interest and other financing costs for the second quarter of 2023 amounted to $1.4 million compared to $0.8 million for the same period of 2022. Interest expense during the second quarter of this year was primarily mainly due to the increased amount of debt that we carry and the increased LIBOR and SOFR rates, our loans get over the period compared to last year. Interest income for the second quarter of this year stood at about $140,000 compared to practically low interest income during the same period of 2022. Adjusted EBITDA for the second quarter of 2023 was $2.5 million compared to $13.7 million during the second quarter 2022. Basic and diluted loss per share for the second quarter of 2023 was $0.43, calculated on about 2.76 million weighted average number of shares outstanding compared to earnings per share of $3.66 basic and $3.61 diluted completed…

Thank you, Tasos. I now open up the floor for any questions we may have.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Tate Sullivan with Maxim Group.

You mentioned a strong foundation for higher rates and positioning the fleet. Is that mainly moving off of more FFAs? Are you repositioning ships? Or what did you imply by that.

Mainly, we are trading our ships spot at this stage because freight rates are low in anticipation of higher freight rates. So we will be able to capture the market. Of course, we are not taking out any FFAs to hedge the positions at these levels. We are really preparing ourselves to be ready to capitalize on the strengthened market if that happens.

And you gave a lot of detail on the Good Heart and the MARPOL violation. Did that possibly reflect more stringent regulations in that specific port? Or can you give detail to start there, please? And was that the first on MARPOL violation for your fleet?

Yes. I spend some time on it because it was a relatively big incident. The vessel was out of service for 48 days for us, and we incurred a few expenses there, and it was one of the reasons -- probably the main reason why we didn't have a profitable quarter as we thought we would have had despite 2 dry dockings that we had during this quarter. So that's why I spent some more time on that. There has been no specific allegation of any wrongdoing, but it might come. But we are insured for that. I don't think it reflects any significant change in anything. It was just an unfortunate incident that may happen and happened during this instance.

What did the commentary about future -- the potential future $2 million payments reflect? And did you say you posted a reserve of $500,000 for that? And does insurance cover if that -- is the amount of $2 million? Can you put some context to those numbers?

Sure. We had to post a guarantee for $2 million for EuroDry and for $2 million for the managers. So it's essentially a guarantee for $4 million, which is, by far, the maximum amount that we may need to pay if we -- if indeed that has occurred, and [Indiscernible] with the Department of Justice. So this is a maximum that would be payable. In previous instances that we have seen in the past, amounts up to 1.5 million have been paid for that -- for similar things. We think that this will be covered by insurance. There will be some costs that will not be covered by insurance, which is why we have agreed to put up a reserve on our accounts to take a provision for $500,000. We don't expect that we will need to pay anything in excess of that.

Okay. And then, I mean, with the cash breakeven level, I mean, just my last on that point of -- you said around 14,000, that number excluding the Good Heart? I mean, would it been closer to 12, 12.5, do you have that number handy here. Maybe we can take it offline.

That number, the cash breakeven includes loan repayments and everything.

It includes a bit of elevated expenses from Good Heart.

Okay. I'll back into that. And then on the potential slow steaming, I mean you mentioned energy efficient, existing ship index, EEXI, the CII carbon intensity indicator rating? And then maybe some changes with the EU carbon tax going forward? Has there been any -- are you preparing for any potential -- I mean, financial situations with any of those regulations? Or anybody experienced any financial implications or could they in the fleet? And maybe it's a topic for an off-line discussion as well?

Yes. No, this is a nice topic for a general discussion. Very briefly, the EU ETS regulation that will come in the effect as of next year will affect financially the charterers mainly that wants to bring goods into Europe or out of Europe. So it won't really affect us. In particular, it will affect Europe. The other regulations, the main effects that they will have is that they will result in us needing to go at lower speeds. If ships go at lower speeds is a positive, obviously, for the market because it effectively reduces supply vessels. Of course, all companies are taking measures to try and reduce the carbon footprint, and we are doing the same. This is done through some modifications that one can do on the vessel. This is through technological developments, use of digitalization and things like that.

Thank you for all the comments.

[Operator Instructions] Our next question comes from Kristoffer Skeie with Arctic Securities.

Thanks a lot for running through the market, and I appreciate all the color on the numbers. Just want to sort of first touch upon the market. What do you see as a sort of near-term catalyst for any improvement in the rates. It seems like it's a bit sluggish and not that directional currently. Do you believe that we might see any revival of congestion during second half? I mean you've seen the Panama Canal, the restrictions there have led to some improvement, at least for the container liners now, do you think that will make sure for the drybulk vessels as well?

I think that congestion has been extremely little during the last couple of months, abnormally little. There are bound to be effects, I think that will increase it. Also, there is historically an increase in the demand for certain cargoes during the third quarter and the fourth quarter. So this historical increase, I think, will happen again. And we are coming out of the seasonally quiet period. Thus, we think that we will see improving rates. But as I said, there are various conflicting views now and possibilities that can happen. So it's really difficult to call the market at this stage.

And with regards to that, I mean, you have had this great overview over 1-year time charter rate versus asset values. And it seems like values are disconnected now from rates. What's your view on that? I mean, you touched upon it, but do you believe that values are set to come down or that [Indiscernible] disconnect, it typically don't last that long that is my experience.

Yes. You're absolutely right. That's why one has to give by the values have to drop significantly or charter rates to improve further. Currently, charter rates are not improving. So we have started to see values dropping a little bit. We will have to see how this whole thing plays out. But the values during this last month in July did see some headwinds and they draw and they are on a dropping mode. We will have to see what will happen. There is an expectation by most owners that because of the very low order book at some point when demand picks up, we should see a significant revival in charter rates. I think this is a valid expectation.

Yes. I totally agree. And I mean, with regards to -- I mean, you have '24 and '25 and growth looks extremely promising. So it should provide sort of a backdrop in terms of asset values. And with that in mind, how do you consider share buybacks compared to vessel acquisitions?

Vessel acquisition is something that we are – Yes, I’ll tell you. I think I know where you’re going. Vessel acquisitions, we will – we are considering at this stage because the company – I think that if prices drop a little bit, we will be able to see profitable projects in the market. But still one of the most profitable projects is to buy back our own stock, which is trading at such a significant discount to our NAV. So definitely, we will continue the process of repurchasing stock. And we are looking at the possibility of maybe acquiring one more vessel.

Thank you. [Operator Instructions] There are no further questions at this time. I would now like to turn the floor back over to Aristides for closing comments.

Well, thank you all for listening in to our today's conference call. We will be back to you in 3 months' time. Enjoy the rest of the summer.

Thanks, everybody, for attending.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.