Nasdaq-listed EuroDry is to repurchase up to $10m of its own shares after logging one of its most profitable quarters.
Chief executive officer Aristides Pittas said the share purchase programme would add value to shareholders.
He said the decision had been taken as the stock was "trading at a very steep discount to our net asset value”.
The board of the Athens-based company “considers that buying our own stock represents a very attractive investment for us,” Pittas said.
“We are positioning ourselves liquidity-wise to capitalise on more traditional investment opportunities."
This could involve acquiring vessels “should such opportunities appear,” he said.
The comments came as EuroDry reported some of the best results since its launch in January 2018.
Net income increased fivefold to $10.6m, up from $2.2m in the same quarter last year.
Revenues were up significantly to $21m, compared with $14m in the same quarter last year.
The increase was due to the operation of a larger fleet and higher time charter earnings.
Pittas cautioned that the dry bulk market started reflecting the volatility and uncertainties of the in the broader economic and geopolitical environment.
Dry charter rates had declined by nearly 40% compared with late-May levels, though were still well into profitable range, he said.
Profits in the third quarter are expected to fall as three of the company’s vessels are scheduled for dry-docking.
Worsening economic conditions has been increasing the chances of a broad economic recession, which would affect the demand for dry bulk trade, he said.
Similarly, the continuing Covid pandemic and its regional flare-ups prompted countries including China to impose regional lockdowns. This also negatively affected dry bulk demand, he said.
Demand uncertainties
“The good news for the sector continue to come from the supply side where the orderbook remains at about 7% of the fleet near its lowest level ever," Pittas said.
“The resulting reduced vessel deliveries over the next two to three years should allow the market to quickly recover as long as demand uncertainties subside and average economic growth resumes,” he added.
EuroDry operates a fleet of 11 dry bulk vessels, ranging from supramax up to kamsarmax. That is up from an average of just over seven vessels in the second quarter last year.
Time-charter earnings were also 3.9% higher this quarter.
