Seanergy Maritime reports record first quarter Net Income of $10.2 million

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Seanergy Maritime Holdings announced its financial results for the first quarter ended March 31, 2024. The Company also declared a quarterly cash dividend of $0.025 per common share and a special cash dividend of $0.125 per common share for the first quarter of 2024.

For the quarter ended March 31, 2024, the Company generated Net Revenues of $38.3 million, compared to $18.0 million in the first quarter of 2023. Net Income and Adjusted Net Income for the quarter were $10.2 million and $11.6 million, respectively, compared to Net Loss of $4.2 million and Adjusted Net Loss of $0.4 million in the first quarter of 2023. EBITDA and Adjusted EBITDA for the quarter were $21.6 million and $23.2 million, respectively, compared to $8.2 million and $3.9 million, respectively, for the same period of 2023. The daily Time Charter Equivalent (“TCE”2) of the fleet for the first quarter of 2024 was $24,073, compared to $11,005 in the same period of 2023.

Cash and cash-equivalents and restricted cash, as of March 31, 2024, stood at $24.2 million. Stockholders’ equity at the end of the first quarter was $240.6 million. Long-term debt (senior loans, finance lease liability and other financial liabilities) net of deferred charges stood at $223.2 million, while the book value of the fleet, including a chartered-in vessel and the advances for vessels acquisitions, was $442.0 million.

Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:

“We are pleased to report that in the first quarter of 2024 we achieved record profits on the back of the continuing positive momentum in the Capesize market. This was mainly driven by higher iron ore exports, healthy coal volumes, as well as certain geopolitical events.

“Seanergy generated a net income of $10.2 million, compared to a net loss of $4.2 million in the same period of 2023, as our fleet performed in line with the market with a daily time charter equivalent of approximately $24,000.

“In light of our strong performance and consistent with our commitment to rewarding our shareholders, our Board authorized paying a quarterly and special cash dividend of $0.15 per share. With these dividends, we have declared total cash dividends of $1.60 per share, or $29.6 million, since March 2022. Given the strong Capesize outlook, we are optimistic that we are well-positioned to continue executing on our clear corporate strategy, which entails rewarding our shareholders generously while growing and renewing our fleet.

“With regard to our guidance for the second quarter of 2024, based on current FFA levels, we expect our daily TCE to be equal to approximately $26,400, likely outperforming the Capesize market thanks to our proactive hedging strategy. Looking beyond that, for the second half of the year we have converted about 33% of our ownership days to a fixed daily rate of approximately $30,000. We remain vigilant on market developments and are keen to secure attractive daily rates that offer high returns on capital.

“Moving on to fleet developments since our last quarterly update, in March we agreed to acquire an additional Capesize vessel built in 2012 in Japan for a price of $35.6 million that we expect to fund through a combination of cash on hand and debt. Delivery is expected to take place in the second half of 2024, while we continue to evaluate opportunities to add high-performing ships to our fleet. Furthermore, we recently obtained credit committee approval from one of our close lending partners for a new sale and leaseback agreement to finance the previously announced acquisition of the M/V Iconship along with the refinancing of an existing facility at a considerably lower interest margin.

“To conclude with a brief market update, contrary to regular seasonality, the first quarter of 2024 was the strongest of the past decade for Capesize earnings. Brazilian iron ore exports rose about 12% year on year and were the highest since 2019, while coal seaborne trade remained at very high levels. The limited vessel orderbook of the past years seems to be contributing to a gradually improving supply and demand balance, while the geopolitical uncertainty related to the Red Sea crisis has also been marginally constructive for Capesize earnings. On a forward-looking note, the current orderbook suggests fleet growth of about 2% per year for 2025 and 2026, which will likely be surpassed by vessel demand growth according to most industry sources. Longer term, the commitment of major miners to future growth projects as well as the limits on fleet growth brought about by stricter environmental regulations are expected to lead to strong market conditions.

“Seanergy has proven its ability to execute on its fleet growth plan and with its high-quality vessels, strong balance sheet and successful commercial strategy, is well positioned to continue creating shareholder value.”

First Quarter and Recent Developments:

Distribution of Q4 2023 Dividend and Declaration of Q1 2024 Dividends

On April 10, 2024, the Company paid a quarterly dividend of $0.025 per share and a special dividend of $0.075 per share, for the fourth quarter of 2023, to all shareholders of record as of March 25, 2024.

Continuing its quarterly dividend payments, the Company has declared a quarterly cash dividend of $0.025 per common share for the first quarter of 2024 payable on or about July 10, 2024 to all shareholders of record as of June 25, 2024. In addition, the Company has declared a special dividend of $0.125 per common share to all shareholders of record as of June 25, 2024 which will be paid on or about July 10, 2024.

At-The-Market Offering Program

Since the filing of the Company’s annual report, the Company has issued and sold 267,585 common shares at an average price of $9.67 per share, resulting in gross proceeds of $2.6 million under the up to $30.0 million “at-the-market” equity offering program initiated in December 2023 with B. Riley as sales agent.

As of May 13, 2024, the Company had 20,779,660 common shares issued and outstanding.

Vessel Transactions and Commercial Updates

Vessel Acquisitions

On February 5, 2024, the Company agreed to acquire a 181,392 dwt Capesize bulk carrier, built in 2013 in Japan, which will be renamed M/V Iconship. The purchase price of $33.7 million is expected to be funded through cash on hand and the AVIC Sale & leaseback agreement. The M/V Iconship is expected to be delivered to the Company within June 2024.

On March 18, 2024, the Company agreed to acquire a 181,396 dwt Capesize bulk carrier, built in 2012 in Japan. The purchase price of $35.6 million is expected to be funded through a combination of cash on hand and debt financing. The vessel is expected to be delivered to the Company between July and October 2024.

M/V Knightship – Time charter extension

In May 2024, the charterer of the M/V Knightship exercised the second optional period extending the time charter which will commence in December 2024. The extension period is for a minimum of 11 months to a maximum of 13 months, while all other main terms of the time charter remain the same.

Financing Updates

AVIC Sale & leaseback agreement

The Company obtained credit committee approval from one of its close lending partners for three separate sale and leaseback agreements of $58.3 million in aggregate to refinance the sale and leaseback agreements with CMBFL, secured by the M/Vs Hellasship and Patriotship, and to partially finance the acquisition of the M/V Iconship. The vessels will be sold and chartered back on a bareboat basis for a five-year period commencing on each delivery date. The Company will have continuous options to repurchase the vessels at predetermined prices at any time of the bareboat charter. At the end of the bareboat period, Seanergy will have the obligation to purchase the vessels for an aggregate amount of approximately $31.5 million. Each financing will bear interest of 3-month term SOFR plus 2.55% per annum. The new interest rate will be approximately 120 bps lower than the rate of the refinanced sale and leaseback agreements. In aggregate for the three vessels, the charterhire principals will amortize over twenty consecutive quarterly installments, averaging approximately $1.3 million per quarter. The agreements are subject to the completion of definitive documentation.