EuroDry Ltd. Q1 FY2021 Earnings Call

Thank you for standing by, ladies and gentlemen, and welcome to the EuroDry Conference Call on the First Quarter 2021 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 a listen-only mode. 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 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. And I would 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 Anastasios Aslidis, our Chief Financial Officer. The purpose of today’s call is to discuss our financial results for the three months period ended March 31, 2021. Please turn to Slide 3. Our income statement highlights are shown here. For the first quarter of 2021, we reported total net revenues of $8.6 million and a net income of $0.9 million. Adjusted net income attributable to the common shareholders was $1.3 million or $0.55 per share. Adjusted EBITDA for the period stood at $4 million. In stark contrast to a year ago, it has been a very positive 2021 so far with drybulk rates rebounding significantly as a result of solid trade growth and limited supply growth. The drybulk market continues to impress with its strong trajectory since the onset of this year. As during the past week, the Baltic Drybulk Index reached its highest level since October 2010. Well, CFO, Anastasios Aslidis will go over our financial highlights in more detail later on in his presentation. Please turn to Slide 4 for our operational highlights. Motor vessel Pantelis was fixed for a trip of about 80 days to 100 days at $10,450 per day that is scheduled to be concluded by the end of the month and is currently being negotiated for the three months to five months charter at a level around $23,000 a day. The Tasos was fixed in January for about 60 days at $8,750 per day. And thereafter, it was fixed for about 50 days to 65 days at $19,750 per day. Lastly, the Ekaterini was extended at 106% of the Kamsarmax index for a minimum period until March 2022. Our hedges through a phase which were put in place in the last quarter of 2020, and January 2021 naturally have been loss making in such a strong market. In Q1, we settled 120 days, the equivalent of 1.3 Panamax vessels, which were originally sold at the rate of $10,995 per day with a loss of $724,000. We have also sold the 90 days of quarter, Q2, Q3 and Q4 of 2021 the equivalent of one Panamax vessel at $12,550 per day. During Q1 there were no dry dockings or major repairs. A few days ago we agreed to acquire a motor vessel Blessed Luck with 76,000 deadweight drybulk vessel built in 2004 in Japan for $12.12 million. The vessel is majority owned by a third party and has been managed by Eurobulk, also the manager of the company’s vessels. The vessel is expected to be delivered to the company upon completion of its current voyage within May 2021. The acquisition will be financed partly by a short-term sellers’ credit of $5 million and the one year bridge loan of $6 million provided by an entity affiliated with my family and the remaining funds will come from the company. Both the sellers’ credit and short-term loan carry an annual interest rate of 8%. In parallel, the company is in the process of arranging a bank loan with the acquired vessel as collateral, expected to be finalized within approximately three months. This will provide sufficient funds to repay the sellers’ credit in full and possibly, part of the bridge loan. At the same time, the company entered into a charter agreement for the vessel for a period between a minimum of 11 months and a maximum of 13.5 months at a gross rate of $19,500 per day which will commence upon delivery of the vessel and contribute about $4 million of EBITDA during the minimum period of the charter. The acquisition of the Blessed Luck will complement our cluster of medium age Japanese-built Panamax-size vessels alongside our cluster of own-built new buildings increasing our fleet to eight units thus contributing to a proportional increase in our EBITDA. Please turn to Slide 5 for a summary of EuroDry’s current fleet. As you can see, it’s comprised of seven drybulk vessels with a fleet average age of 12.6 years and a cargo carrying capacity of about 530,000 deadweight tons. As I mentioned before following the delivery of the Blessed Luck, our fleet will increase the fleet average age to slightly increase to 13.1 years and the cargo carrying capacity will increase to approximately 605,000 deadweight. Slide 6 shows the current vessel employment schedule. As you can see, the effective coverage for the remainder of 2021 without including the Blessed Luck stood at about 7% in terms of minimum fixed rate contracts. If we include the vessels that are hedged to FFAs, the coverage increases to 21%. This figure, of course, excludes ships on index charters or in pools that have secured employment, but are open to market fluctuations. We are happy with our current positioning of little forward coverage as we are optimistic about the development of the market. Aslidis will present to you our EBITDA later on. So how strong current FFA market predictions can boost our EBITDA and consequently earnings as well. This calculator will enable each one of you to easily use its own separate assumptions to determine or approximate expected EBITDA and make several conclusions at whether our stock should be trading at. Now, let’s turn to Slide 7, where we’ll go over the market highlights for the quarter ended in March 31, 2021. During the first quarter, the drybulk index increased very strongly driven by buoyant demand and operational bottlenecks, the trends after the short dip is continuing in Q2. The Capesize freight market, which was the last to react to the improving markets, is at levels not seen in the past decade prior to slightly correcting during the last few days. According to Clarksons, spot rates for Panamax is $116,100 a day in the first quarter, and by May 14 they had increased to around $24,700 per day. Meanwhile, one year’s time charter rates were as a result close to $18,000 per day in Q1. But by last week, they have increased to about $22,000 per day. Please turn to Slide 9. As vaccine production is ramping up and rollouts are gathering pace around the world, the return to more normal levels of social and economic activity looks to be achievable by most developed economies, thus pointing to an improved outlook for global growth. Of course, the situation in developing and underdeveloped countries is still quite dire, with India affected the most. But overall global demand seems to continue to rise. In the beginning of April, the IMF projected world GDP growth in 2021 was revised upwards from 5.5% in January to 6% now. Among the developed and developing economies, China and India were expected to grow the strongest in 2021. China’s growth was revised upwards to 8.4% compared to 8.1% growth in the previous quarter. India is expected to grow by a very firm 12.5%. I would think that the current pandemic wave may dent this growth a bit, but hopefully not insignificantly. Most important economies are expected to see further growth for this year when compared to the previous quarter estimates. The U.S. economy is estimated to grow at 6.4% while the Eurozone’s GDP is set to rebound to 4.4%. Looking ahead, global growth for 2022 according to the IMF economic outlook will continue to see above-average increases of 4.4%. With most individual countries continuing to grow above trend, except China and India, which are expected to grow at still very reasonable 5.6% and 6.9%, respectively. Looking at the dry bulk trade growth and basing ourselves on Clarksons’ projections for 2021, we expect demand to continue trading upwards at 3.4% for this year. For 2022 and 2023, the dry bulk trade is expected to grow at a more subdued base of 2.6% and 2.5%, respectively. Please turn to Slide 10. The order book as a percentage of the total fleet up until May 2021 stands at 5.6%, which is the lowest level seen in the last 25-plus years. The main reason for the weak performance of dry bulk shipping during the last decade has been the high number of deliveries, which easily outpaced the growth of the trade. With the current order book and continuing demand trends, we expect the fundamentals to support and continuously rebound in the dry bulk trade for the next couple of years at least. Please turn to Slide 11 to review the dry bulk delivery schedule. For 2021 deliveries, the order book is still dominated by large vessels. According to Clarksons, fleet growth in 2021 will be around 3.8%, taking into account scrapping and other fleet changes that have taken place to date. Well less than the demand growth and supporting the case for the strengthening market, which is further enhanced due to the logistical bottlenecks we’re experiencing. For 2022 and beyond, the order book is currently around 3.4%, which could imply that through scrapping and slippage, we could see minimal fleet growth until 2024, when probably new vessels will have to be ordered for. Otherwise, we could see rates and prices surpassing even the previous supercycle rates if demand holds up. Please turn to Slide 12, where we summarize our outlook on the dry bulk market. The unknown duration of the pandemic and its financial consequences render any type of modeling very difficult. However, if the distribution of vaccines can help with the containment of COVID-19 in the developed markets by the first half of 2021 as widely anticipated, we can expect significant global demand growth for dry bulk commodities, as the world economy will be transitioning towards, and countries are planning to spend billions on new infrastructure projects. Furthermore, disruptions related to the pandemic create a favorable environment for ships as many COVID-19 related delays squeeze the available fleet. Ordering of new ships for 2023 and 2024 delivery is expected to be contained due to the lack of clarity for the fuel of the future, as not knowing the optimal ship for even five years out makes the placing of any new order very speculative and risky. Also, another supporting factor as mentioned before is the lack of open slots in 2024 as shipyards have filled the space with container and tankers. Therefore, 2021 and onwards indicates a couple of promising years amidst a low order book and even further demand rebound, expectations of further raising trade tensions between China and the U.S., additional economic stimulus, and most importantly, China and India. China is expected to grow by 8.4% according to the IMF. When China has grown at such levels in the past 20 years, the dry bulk market experienced extraordinary returns. India’s projected growth at 12.5%, not substantially reduced due to the latest pandemic wave, is bound to increase favorable overall seaborne trades as well. Let’s turn to Slide 13. The left side of the slide shows the evolution of one-year time charter rates of Panamax dry bulk vessels since 2000. As of May 14, 2021, the one-year time charter rate for Panamax with current capacity of 75,000 deadweight tons stood at around $22,000 per day. The highest it has been during the last years and approaching the levels last seen in 2010. The demand-supply balance, the pace of increases, and the prevailing sentiment all point to the possibility we will be seeing still higher values. As you can see on the right side of the slide, the current price of a 10-year old Panamax vessel is around $20 million. Kindly note that since January 2021 Clarksons has updated the anchored vessel to 82,000 deadweight from 75,000 deadweight previously. Over the past year, dry bulk prices have gradually been increasing, exceeding the historical median levels and reaching towards the historical average prices. With a continuously strengthened freight rate environment, we would expect to see asset values increase even further. In this environment, we are, of course, capitalizing on the strong market to strengthen our balance sheet and increase our free liquidity. As free liquidity increases from next quarter onwards, we will decide how best to use it for the benefit of our shareholders, whether it be a reduction in debt, further vessel purchases, share buybacks, or reinstatement of dividends, most likely a combination. We also continuously evaluate opportunities for possible combinations with other fleets, focusing especially on using our status as a public company, which can provide significant advantages and value. Let’s now pass the floor over to our CFO, Tasos Aslidis to go over the various financial highlights in more detail.

Thank you very much, Aristides. Good morning from me as well, ladies and gentlemen. I will now take you through our financial highlights for the first quarter of 2021, and compare them to the same period of last year. For that, let’s turn to Slide 15. For the first quarter of 2020, the company reported total net revenues of $8.6 million, representing a 69.3% increase over total net revenues of $5.1 million during the first quarter of 2020, which was the result of the higher time charter rates our vessels earned during the first quarter of this year. The company reported a net income for the period of $0.9 million and net income attributable to common shareholders of $0.4 million, as compared to a net loss and a net loss attributable to common shareholders of $2.3 million and $2.6 million, respectively, for the same period of last year. Interest and other financing costs for the first quarter of 2021 amounted to $0.6 million, slightly decreased as compared to $0.7 million for the same period of 2020. Depreciation expenses for the first quarter of this year were $1.7 million compared to $1.6 million for the same period of last year. Adjusted EBITDA for the first quarter of 2021 was $4 million, compared to $0.6 million achieved during the first quarter of 2020. Basic and diluted earnings per share attributable to common shareholders for the first quarter of 2021 was $0.19 calculated on 2.3 million shares basic and 2.32 million shares diluted compared to basic diluted loss per share of $1.17 for the first quarter of 2020, again calculated on 2.27 million basic and diluted weighted average numbers of shares outstanding. Excluding the effect of the earnings attributable to common shareholders for the quarter of the unrealized loss on derivatives, the adjusted earnings again attributable to common shareholders for the first quarter of 2021 was $0.55 per share, compared to an adjusted loss of $0.91 per share for the first quarter of last year, in which the adjustment included also the loss on the write-down of inventory. Let’s now turn to Slide 16 to review our fleet performance. We will start our review by looking first at our fleet utilization rates for the first quarter of 2021 and 2020. As usual, our fleet utilization rate is broken down into commercial and operational. During the first quarter of 2021, both our commercial and operational utilization rates were 100%, the same level of equipment during the first quarter of last year. During both of those quarters, we owned and operated an average of seven vessels. In the first quarter of 2021, our seven vessels earned an average time charter equivalent rate of $14,924 per vessel per day, compared to $7,855 per vessel per day during the first quarter of last year. Our total daily vessel operating expenses including management fees, general and administrative expenses, but excluding dry docking costs averaged $6,571 per vessel per day during the first quarter of this year, as compared to $6,055 per vessel per day during the same period of 2020. If we look at the bottom of this table, we can see the cash flow breakeven level rate that we set during the first quarter of last year, which takes into account dry docking expenses, cash interest expenses, loan repayments, and our preferred dividends if paid in cash. Thus, for the first quarter of 2021, our daily cash flow breakeven rate was about $10,589 per vessel per day as compared to $11,146 per vessel per day that we had during the first quarter of 2020. Let’s now move to Slide 17. This is a new slide, and we included it to provide our shareholders and investors an assessment of the earning potential of our fleet for the rest of 2021. The table shown in this slide has two components. The first refers to our fixed price contracts and that includes the contribution from the vessel to be acquired, M/V Blessed Luck, its not worth noting that except for the charter of Blessed Luck, two of our vessels are under fixed rate contracts for about 90 days in total during the second quarter. We consider this full employments. If the market is performing very well, we are expected to produce significant earnings for us. The rest of our vessels are included in contracts linked to the relevant size of drybulk vessels. Our calculator shown here indicates the Kamsarmax and Panamax Baltic rates as of May 17, 2021. And that showed how these index levels translate to rates for our fleet. We actually show the final blended rates for the open basis for our fleet, which you can see right below the Kamsarmax and Panamax rates in the table. And, as you can see, it turns out to be very similar during these levels. Based on these assumptions, and by further assuming for simplicity $65,000 per vessel per day, operating and G&A expenses and a 5% commission rate, we can estimate the EBITDA contribution of our fleet. The final results, as you can see in the second to the last line of the table, is adjusted for the FFAs contracts of 90 days per quarter that we presented. This overall exercise is meant to provide a tool to calculate our EBITDA for the remaining of 2021 as I mentioned, obviously requiring clear assumptions about the rates to do. However, it’s hard not to observe that if the market rates for the rest of the year, currently indicated by FFA contracts materialize, our total EBITDA will more than double in the rest of 2021. And also, please note that since we did this table a couple of days ago, the full FFA rates moved up by 10%. Let’s now move to the next slide, Slide 18, which provides some highlights – Slide 19 I’m sorry to review our debt profile. On this slide, at the top part, we can see our loan repayments as well as our balloon payments. From the bottom of the slide, we can see projections for our cash flow breakeven level over the following 12 months. As of March 31, 2021, we have an outstanding bank debt of about $56 million. This does not include the debt we expect to assume for the acquisition of Blessed Luck, which is explained earlier by Aristides, amounting to about $11 million. At the top of the slide, shows the debt payment profile. And in 2021, as you can see, we plan to make about $65 million of debt repayment and we have an $8 million balloon payment due this year, which is collateralized by three of our Panamax vessels. These balloon payments in 2021 is well below the scrap price of their respective vessels collateralized. And we anticipate that we will have no issues with financing when you choose to do so. Again, in this chart, we can see that we have a constant level of loan repayments, constant level over the next four years, with another balloon payment coming during 2023 of about $11.3 million, which is collateralized by one of our Kamsarmax vessels. As we are on the slide, I would like to make a quick note on our cost of funds. The average margin of our debt, as you can show the part of the slide note, is about 3%, assuming the LIBOR rate of about 0.3% on top of it, the cost of our senior debt is estimated to be around 3.2%. If we include the cost of the preferred equity that we have, the average blended cost for our non-equity funding would be around 4% as of the end of the last quarter. Regarding our preferred equity, I would like to highlight this following $3 million net redemption that we made during the first quarter of 2021, which they’ve agreed to reduce the dividend rates on the preferred equity to 3% per annum if paid in cash and 9% if paid in kind since our option, until January 2023. It is important to note here that this dividend rate was increased to 14% in January and now that increase has been pushed out to 2023. On the bottom chart of this slide, we can see our cash flow breakeven estimate for the next 12 months, which is expected to be around $10,573 per vessel per day. That doesn’t include the Blessed Luck and the additional loans, and its related loans are expected to increase the breakeven level by about $250 per day. Let’s now move to the next slide, Slide 20. Where we can see some highlights from our policy. This slide in the presentation gives you a snapshot of our assets and liabilities in a compact way. Now asset side first, we can see that we hit cash and other assets for about $10.4 million as of the end of March 2021. Of course, on our asset side, our vessels, the book value of each amount to $97.7 million making our total book value to about $108.1 million. On the liability side, our bank debt, again from the last quarter stood at $56 million, which approximately represents 52% of the book value of our assets. Our preferred equity stood at about $13.6 million, which represents another 12.6% of total book assets; and other liabilities for about $3.9 million or 3.6% of total assets. That leaves us with a net value of $34.6 million, which translates to $14.7 million. However, the market value for our fleet is hedge of its book value. We made the market value for our vessels, the second vessel we currently own is about 20% higher than their book value resulting in a net asset value per share of about $22. Although our share price has recently increased, it still trades below that level. And we believe it represents an investment with significant acquisition opportunities. And with that I would like to turn the floor back to Aristides.

Thank you, Anastasios. So let me open up the floor now for any questions we may have. Thank you.

Hello, good day. Tate Sullivan from Maxim Group. Just starting on Slide 17 with the EBITDA calculator. Have you calculated or shown this table before and in your company’s history? And it’s not just why did you think this was a good time to introduce it?

The first time we provide, I think it’s – what prompted us to provide that capability to our investors was the significant change in the market and the expected improvement of our outlook. We wanted to highlight and give the investors the opportunity to understand and even play themselves with these assumptions to assess the potential for our company shares profitability increase.

Yes, it’s great. And I would just – I mean, just with just a couple of questions on the table too. Does it include the new contract you mentioned, the Pantelis contract, and can you review the details of that contract as well, please?

It does not include the contract which you mentioned that Pantelis is negotiated.

This is still under negotiation. So it will probably conclude within today or tomorrow, but it’s not 100% fixed. We think it will be fixed, but it’s not 100% fixed.

Tate, as you can see, that includes the one year point that we booked on the vessel that we are acquiring.

Right, okay. And then just on Slide 17, the EBITDA calculator as well. It implies that EBITDA estimates are based on FFA rates? You mentioned as of 10 days ago, or what was the timing?

This is still under negotiation. So it will probably conclude within today or tomorrow, but it’s not 100% fixed. We think it will be fixed, but it’s not 100% fixed. As you can see, that includes the one year point that we booked on the vessel that we are acquiring. Right, okay. And then just on Slide 17, the EBITDA calculator as well. It implies that EBITDA estimates are based on FFA rates? You mentioned as of 10 days ago, or what was the timing?

Okay, great. And before turning over on the acquisition for about $12 million, can you give more background on what made you comfortable closing it at that level, and are there other comparative acquisitions that you can highlight any background that you can provide?

Sure. We saw the market is rising, and saw that we could fix this ship out at a very decent rate for at least a year, which we did, and which makes us comfortable that within the first year, we will be able to essentially record approximately $4 million of that total investment. So even though we paid a price, which is higher than the historical average prices and historical median prices for such vessels, after the passing of this year, with this extra charter, we will have reduced the price to around $8 million, which is even below the median historical levels, and forecasting a high market going forward, we think it’s a very good addition to the company. The problem the company has been facing, of course, is that our liquidity has not built up yet. We can see it’s building up as time goes by, very significantly. We did this EBITDA calculator to help ourselves evaluate how much we will be increasing our returns, and our liquidity to see how we can grow the company that’s very conservatively in this rising market.

Okay, great. Well, thank you for that background. I’ll turn it over. Thank you.

Thank you.

We will now take our next question. Please go ahead. Your line is now open. Excuse me, your line is unmuted; your line is now open.

I apologize. Good morning, Aristides. Good morning, Tasos. This is Poe Fratt from Noble Capital Markets. Tasos, I just wanted to double check on just your EBITDA calculator. And just ask you, in the first quarter, it has the FFAs adjusted in Section A. Why didn’t you do that for the sake of consistency over the rest of the year with your contracted days just because the FFAs are already locked in?

You mean why it’s included in the $4.0 million? EBITDA is supposed to be on line three. That is what you are asking?

Yes, that’s what I’m asking for. It’s for just – it’s just for the sake of comparison, it would have been easier just to sort of look at it, maybe it would depress the average TCE rate too much, but.

Yes, the TCE rate actually, it’s less than the FFA that is shown there, the $14,924. I debated in my mind where to put the FFA contributions, and I decided I wanted to separate the six from the future. So that’s why I chose to put it in the line of water support included in the lower part of the table, where supposedly it’s only with the open day’s information?

No, I think it’s very helpful. I mean, there’s always a little bit of art to it, as opposed to science. But I think it’s a helpful way to look at your operating leverage since we looked at the rest of 2021. I’ll just highlight the Pantelis, it’s consistent. The potential rate on the Pantelis is consistent with what the FFAs, which were on May 17 in general terms.

Yes, I think, Aristides mentioned, $230,500, $250,000 a day, which is actually higher than what would have been the implied rate for Pantelis, post Pantelis contract. That’s something that is contributing to the EBITDA.

Okay, thank you. And then when you are looking at the loan that you potentially are lining up for Blessed Luck. What should we be thinking about as far as just leverage percentage? You probably do the math a little bit; you have $11 million of either sellers’ credit or bridge loan. So how much of that will be covered? It didn’t – I couldn’t really tell exactly how much you.

It will be another $8 million, Poe. It will be around $8 million.

We are in the process of signing a term sheet with a bank for a loan of about $8 million. So that would allow us to repay the sellers’ credit and half of the other loan. And we will need about $3 million less for source and liquidity purposes.

Thanks. And I apologize, you might have mentioned it, but could you give us sort of an outlook for the TASOS beyond the end of June? Are you in discussions about potentially a follow-on charter for that, or can you just give us an idea of what the outlook TASOS looks like?

Yes, we haven’t started discussing a new charter for the TASOS. Presently, it’s still quite a long time till then. Probably the health of the vessels, we will continue trading in three times charters or small time charters. But we haven’t had any discussions yet. We will take whatever the market is. We want to have – as you see, we have about 75% exposure to the market, I would say. 70% exposure to the market, including the Blessed Luck. We like that. We are optimistic about the prospects of the charter market going forward. So, we like to be playing the market at this stage with a significant percentage of our fleet. That’s why all the other vessels are in index-linked charters.

Thanks. And then maybe just a follow-on to that Aristides on the Blessed Luck discussion. You mentioned your net value is low, where you think it’s worth the risk. But you do highlight that there’s uncertainty as far as the ocean systems going forward. You are buying an older asset, you are increasing your age profile; it seems to be countered to what a lot of other companies are doing there. Can you just maybe even expand a little bit more than the comments you already made on how you look to set that transaction?

Sure. Obviously, a play in the Blessed Luck is not a play in the long term of the company. It’s a short term, I would say, rather opportunistic play, whereby this year, we’re going to make $4 million on this vessel. We think that next year will also be strong. Therefore, even in two years, we will have brought the vessel to a very low valuation below the scrap value of the ship. So, we think that we will have a relatively old vessel, but all these vessels built before 2013 are not very different in the consumptions they have. So it’s really after 2013 that they started building more eco vessels, i.e. those consuming less fuel. And again, the differences are not huge. We do expect a very significant breakthrough sometime towards the end of these 10 years. But till that time, I think this vessel probably can live easily until its 25 years of both age. This is the average scrapping age of ships, and this vessel is very well-maintained. So technically, we think that this can stay operational for more than the two years that is required to break even.

That’s helpful. Yes, we are going to ask you what you thought the remaining level was, sounds like that nine to 10 years maybe outside.

As I said, 25 years is the average scrapping rate age for the dry bulk vessels; it’s maybe gone down by one year at most. It has to pass its next vessel survey in what is it, four years from today? We think it will be able to do that. But it will depend, of course, on the economic considerations at the time. If the market is good, the ship will hold value.

And then – that you may have talked about it. But if you would just get distracted during the middle of the call. But would you highlight just any dry docking activity that you have over the rest of the year? And then also just talk about, any cost pressures you’re seeing, whether the first quarter run rate, as far as that’s roughly $5,700, we could use for the rest of the year. Any color on that would be helpful.

We don’t have any dry dock scheduled for this year. But hopefully, we set up our 2021 results in terms of cost per vessel. Again, I don’t see so far anything I think that is worth mentioning, obviously record the situations have made certain operations in ports a bit more difficult due to congestion. I think, for example, we have a couple of vessels that are waiting to get into port. Sometimes, there are some issues with COVID-related, but not really that make us to feel them as extraordinary structures. With what we know to this point.

Great. And just to clarify, I think it says the preferred dividend that you pick in the first quarter it looked like you did.

Actually, no, we didn’t pick; this is because we did in the crucial space the following quarter. I think we’re going to pay this Q1 dividend in cash, but it will be an extra expense in Q2. We did pay the Q4 dividend in kind. That’s why we don’t have any dividends this quarter on the cash flow breakeven basis.

Okay, great. Thank you so much.

Thank you.

Thank you.

Thank you. We will now take our next question. Please go ahead. Your line is now open.

Thank you. A follow-up from me Tate Sullivan at Maxim. Your comments with the EBITDA calculation, and let’s say I mean $31 million of EBITDA in 2021. And then your comments of potential buybacks, dividend, or debt reduction. And then I’m just looking at your slide, you have $8 million of loan payments due this year. What is your plan with that $8 million? Would you still extend that – extend that maturity, or can you just give context to what you might do there?

So, I think this $8 million, this balloon will be extended, because it’s relatively cheap money. If we decide to repay something, it will be the preferred equity and of course the short-term loan that we’ve currently given to the company. So, the 8% money has priority to be repaid, while the normal bank debt will be less than 4%. So, we need to decide and we have to decide by next quarter what we will be doing without increasing liquidity because, okay, this quarter we didn’t have too much, but by the end of next quarter, we will. And we always look at the situation at that point in time and decide what is the better use of our liquidity and what would benefit our shareholders the most then.

Okay, thank you. That’s it from me. Thank you very much.

Thank you.

Thank you. There are no further questions at this time. I would now like to hand back to Mr. Pittas for closing remarks.

Thank you all for attending our conference call today under these nice market circumstances. We’ll talk to you again in three months’ time.

Thanks very much.

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