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Seanergy Maritime Holdings Corp. Reports Financial Results for the Fourth Quarter and Year 2011

Thursday, 16 February 2012 | 00:00
Seanergy Maritime Holdings Corp. announced yesterday its operating results for the fourth quarter and year ended December 31, 2011. Management Discussion: Dale Ploughman, the Company's Chairman and Chief Executive Officer, stated: "We are pleased to report a profit of $6.6 million versus a loss of $2.6 million in the same quarter a year ago. The improved market conditions in the drybulk shipping industry witnessed in the last quarter of 2011 along with our balanced chartering strategy which includes profit sharing and index-linked charter parties, helped Seanergy's financial performance, which, together with the effect of cost cutting measures initiated during the year, contributed to a profitable quarter. That being said the fourth quarter was an opportunity for China to build up stockpiles of iron ore and coal. This indicates that the first quarter of 2012 will be difficult.
Going forward we intend to profitably employ those vessels whose long-term charters are set to expire, in line with our strategy of favorably positioning our vessels to take advantage of seasonal trade patterns that result in upward pressure on charter rates. So far, it should be noted that fixing vessels on floating rate contracts and profit sharing agreements has proved important in helping Seanergy benefit from spot market fluctuations. We continue to execute our business plan with the purpose of becoming a leading contender in the dry bulk shipping industry.
Market conditions in the beginning of 2012 remain weak, as downside risks to future shipping demand seem to be increasing and deliveries of new vessels over the next twelve months are projected by industry experts to remain close to their peak. For the rest of the year, we expect rates to average at low levels yet with similar seasonal variations to those seen in 2011, as industrial and agricultural inventory cycles as well as unanticipated events continue to drive volatility in the demand for dry bulk vessels.
As far as long-term market fundamentals are concerned, the extremely low expectations seen currently are factoring in a very pessimistic economic outlook and future evolution of vessel supply. As such, any positive developments may cause a re-adjustment of expectations to the upside."
Christina Anagnostara, the Company's Chief Financial Officer, stated:
"We are continuously taking proactive measures in view of the weakness and uncertainty experienced in the markets as we enter 2012. Over the past weeks, significant developments took place as regards to our loan facilities and capital structure that are likely to prove significant in improving Seanergy's financial stability during a period of unfavorable market conditions. Citibank and Marfin waived certain financial covenants, while Marfin deferred 2012 principal debt payments on both the term and revolving facilities. In total, the amendments are expected to reduce our principal debt payments by approximately $24.8 million in 2012. We appreciate the continuing support shown by our lenders and our major shareholders to position Seanergy favorably for future growth.
During the fourth quarter of 2011 Seanergy vessels earned a daily Time Charter Equivalent ("TCE") of $14,806 compared to $15,277 in the same period of 2010, a decrease of 3%. Nevertheless we saw an increase of 6% in quarterly revenue as fewer vessels had to undergo dry docking surveys than in 2010, which increased fleet operating days. Furthermore, we are pleased to report that General and Administrative expenses in the fourth quarter of 2011 decreased by 48%, or $1.5 million, as compared to the same quarter in 2010, while Vessel Operating expenses and Management fees over the same period fell by 18% and 17% respectively, translating into total quarterly reduction in expenses of approximately $2 million. Cost-saving measures implemented over the past year have therefore started to bear fruit and we believe that are going to support profitability and cash flow in the current year, subject of course to the effect of market conditions."
Fourth Quarter 2011 Financial Results:
Net Revenues

Net Revenues in the fourth quarter of 2011 increased to $27.5 million from $25.9 million in the same quarter in 2010. The increase in quarterly revenues was a result of the higher number of operating days enjoyed by our fleet compared to the same quarter last year. This is due to the fact that fewer vessels had to undergo dry docking surveys in the fourth quarter of 2011 compared to 2010.
EBITDA, Operating Income
Operating Income for the fourth quarter of 2011 was equal to $9.8 million, as compared to an operating income of $1.1 million for the same quarter in 2010. EBITDA amounted to $15.6 million in the last quarter of 2011, as compared to $10.7 million in 2010.
For more information we refer you to the EBITDA and Adjusted EBITDA reconciliation section contained later in this press release.
Net Profit
Net profit for the fourth quarter of 2011 was equal to $6.6 million, or $0.91 per basic and diluted share. In the same quarter of 2010, net loss was equal to $2.6 million, or $0.36 loss per basic and diluted share based on weighted average common shares outstanding of 7,314,330 basic and diluted for 2011 and 7,314,932 basic and diluted for 2010, on a reverse-split adjusted basis.
The increase in quarterly profit was due to higher revenue earned, a 48% decrease in General and Administrative Expenses, an 18% and 17% decrease in Vessel Operating Expenses and Management fees, respectively, resulting from cost cutting measures, and a 45% decrease in Depreciation compared to the same quarter of the previous year.
Year Ended December 31, 2011 Financial Results:
Net Revenues

Net Revenues in 2011 amounted to $104.1 million, compared to $95.9 million in 2010. This amounts to an increase of 9%, reflecting the full effect of the larger fleet that resulted from our acquisition of MCS that was completed in 2010. We owned an average of 20 vessels in 2011, up from 16.6 in 2010.
EBITDA, Adjusted EBITDA, Operating Income, Adjusted Operating Income
The operating results for 2011 include the non-cash losses incurred in the third quarter of 2011 due to the $201.9 million impairment of goodwill and vessel values.
Excluding non-cash losses resulting from impairment charges, adjusted EBITDA was $53.8 million for 2011 as compared to $47.3 million in 2010. Including impairment charges, we recorded negative EBITDA of $148.1 million for 2011.
Adjusted operating income excluding the impairment charges amounted to $18.3 million in 2011, as compared to an operating income of $18.4 million in 2010. Operating loss including the impairment charges was equal to $183.6 million.
For more information we refer you to the EBITDA and Adjusted EBITDA reconciliation section contained later in this press release.
Net Loss
Net loss for 2011 was equal to $197.8 million, or $27.04 loss per share based on weighted average common shares outstanding of 7,314,636 for 2011. Adjusted Net Income excluding non-cash impairment charges, was $4.1 million, as compared to $0.1 million, or $0.02 per share, in 2010, based on weighted average common shares outstanding of 5,861,129 basic and diluted for 2010 on a reverse-split adjusted basis.
Debt Repayment
As of December 31, 2011, the Company had $346.4 million of outstanding debt. This reflects a reduction of $17.2 million and of $53.1 million during the fourth quarter and year ended December 31, 2011, respectively.
As of February 15, 2012, total debt outstanding was approximately $326.4 million.
Fourth Quarter 2011 Developments:
BET Commander Dry Docking

The survey for the M/V BET Commander commenced on August 24, 2011 and was completed on October 6, 2011 at a cost of approximately $1.26 million.
Vessel Employment
In November 2011, the M/V BET Prince, a 163,554 dwt Capesize dry bulk carrier built in 1995, commenced a time charter for a period of about eleven to about thirteen months at a gross charter rate linked to the adjusted Time Charter Average of the Baltic Exchange Capesize Index.
As of the date of this press release, the Company has contracted employment for 70% of its ownership days for 2012 and 21% for 2013.
Source: Seanergy Maritime Holdings Corp.
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