Amplify Commodity Trust Reports $12.3 Million Net Loss in Latest Quarter

Amplify Commodity Trust, which operates the Breakwave Dry Bulk Shipping ETF (BDRY) and Breakwave Tanker Shipping ETF (BWET), reported significant financial challenges in its latest 10-Q filing for the quarter ending December 31, 2024. The Trust recorded a net loss of $12.3 million, a stark contrast to a net income of $44.8 million during the same period in 2023. The loss was primarily driven by substantial realized and unrealized losses on investments and futures contracts, totaling approximately $12.2 million. The net asset value (NAV) per share for BDRY decreased from $10.71 to $6.04, while BWET's NAV fell from $14.85 to $9.88.

The financial performance reflects a notable decline compared to the previous fiscal period. For the three months ended December 31, 2023, BDRY had a net income of $44.7 million, driven by realized gains on investments and futures contracts. In contrast, the recent quarter saw BDRY's market value per share drop by 43.39%, and BWET's market value per share decreased by 33.48%. The Trust's total assets also fell from $42.5 million in June 2024 to $35.4 million by the end of December 2024.

Strategically, the Trust underwent a significant change in sponsorship, transitioning from ETF Managers Capital LLC to Amplify Investments LLC effective February 15, 2024. This change was part of a broader rebranding effort, with the Trust now operating under the name Amplify Commodity Trust. The Trust continues to focus on its investment objectives, which involve tracking the performance of futures contracts related to dry bulk and crude oil tanker freight.

Operationally, BDRY and BWET reported a combined total of 8,675,140 shares outstanding as of December 31, 2024. The Trust's engagement metrics indicate a substantial increase in share transactions, with BDRY adding 3.3 million shares and redeeming 425,000 shares during the quarter. BWET, however, saw a decrease in share transactions, redeeming 75,000 shares without any new issuances. The Trust's management has indicated that the geopolitical landscape, particularly the ongoing Israel-Hamas conflict and its impact on shipping routes, has contributed to the volatility in freight rates and overall market conditions.

Looking ahead, the Trust's management remains cautious, acknowledging the potential for continued volatility in the freight markets due to geopolitical tensions and economic conditions. The Trust has not provided specific forward-looking guidance but emphasizes its commitment to navigating these challenges while adhering to its investment strategies. The management's focus will be on maintaining liquidity and managing risks associated with its futures contracts as it seeks to stabilize its financial performance in the coming quarters.