EuroDry (NASDAQ: EDRY) signs Kamsarmax build for $37 million

What happened

EuroDry Ltd. (NASDAQ: EDRY) signed a contract with Hengli Shipbuilding (Dalian) for a third 82,000 DWT Kamsarmax bulk carrier. The newbuild will cost about $37.0 million and will be financed with debt and equity.

The vessel will be built to an eco-design specification and will comply with EEDI Phase 3 standards. Delivery is due in the third quarter of 2029. EuroDry said the contract adds to a program that already includes two Ultramax vessels and two Kamsarmax vessels under construction.

The ship is the latest addition to EuroDry's five-vessel newbuilding program. The deal is conditional on a refund guarantee from a bank acceptable to EuroDry.

Key numbers

Metric	Latest	Change	Source
Contract consideration	$37.0 million		SEC 6-K
Vessel size	82,000 DWT		SEC 6-K
Current fleet	11 vessels		SEC 6-K
Current fleet capacity	766,420 dwt		SEC 6-K
Vessels under construction	5 vessels		SEC 6-K
Under-construction capacity	373,000 dwt		SEC 6-K

Read more: EuroDry (EDRY) stock analysis and investment case

Why it matters

OptimistFi's case is that EuroDry creates value only by preserving liquidity through weak freight markets and adding modern tonnage without over-levering or diluting shareholders. This order adds another modern ship to that plan and brings the newbuilding program to five vessels.

The 373,000 dwt orderbook equals about 48.7% of the current 766,420 dwt fleet. EuroDry said its fleet would grow to 16 vessels and 1,139,420 dwt after the two Ultramax deliveries in 2027 and the three Kamsarmax deliveries in 2028 and 2029.

EuroDry also said the ship will be eco-designed and comply with EEDI Phase 3 standards. Management said ordering new tonnage is a better economic proposition because modern five-year-old Kamsarmaxes are valued at or above newbuilding prices.

The company said the order lowers the average age of its fleet and fits a market that values fuel-efficient ships. The risk is that EuroDry is still committing $37.0 million before delivery, and the contract remains conditional on a bank guarantee.

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What's next

The next dated milestone is delivery in the third quarter of 2029. Before then, EuroDry must secure the refund guarantee from a bank acceptable to EuroDry.

If that happens, the newbuild becomes a live fleet addition. If not, the contract stays conditional and the fleet addition does not happen.

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