Seanergy Maritime Holdings Corp. Expects Much Stronger Capesize Market in the Rest of 2020
Seanergy Maritime Holdings Corp., announced its financial results for the first quarter ended March 31, 2020.
For the quarter ended March 31, 2020, the Company generated net revenues of $13.3 million, a 17% decrease compared to the first quarter of 2019. EBITDA for the quarter was approximately $1 million, compared to EBITDA of $0.4 million in the same period of 2019 . Net loss for the first quarter was $8.3 million compared to net loss of $8.6 million in the first quarter of 2019. The daily Time Charter Equivalent (“TCE”)1 of the fleet for the first quarter of 2020 was $8,481, compared to $7,633 in the first quarter of 2019. The average daily OPEX of the fleet for the quarter was $5,566, which reflects an increase of 15% from $4,830 in the respective quarter of 2019 but is nonetheless in line with the daily OPEX recorded in the fourth quarter of 2019 of $5,584.
Shareholders’ equity at the end of the first quarter was $21.9 million, compared to $29.9 million as of December 31, 2019. Adjusted for our recent equity raising activities, our shareholders’ equity is $68.9 million. Please refer to the relevant capitalization table under ‘Recent Developments’.
Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:
“During the first quarter of 2020, the COVID-19 pandemic presented unprecedented challenges for societies, governments and businesses across the world. Under these circumstances, our main priority was the health and safety of our seagoing and office personnel. In addition, we ensured the smooth and uninterrupted commercial operations of our vessels and we successfully executed on steps to further strengthen our balance sheet.
Our fleet’s performance during the quarter was negatively impacted by the severe disruptions in iron ore trade resulting from the gradual shutdown of the global economy and industrial production as the pandemic was unfolding. Our daily TCE for the first quarter stood at $8,481, an increase of 11% compared to the TCE of the first quarter of 2019. We note that the average TCE of the Baltic Capesize Index (“BCI”) for the same period stood at $4,569 per day, a decrease of 48% compared with the same period in 2019.
In March 2020 we completed the previously announced refinancing of $30.6 million of indebtedness due in the first quarter of 2020, extending the maturities of two loan facilities secured by the M/V Leadership and M/V Squireship. In addition, we are finalizing discussions with existing and new lenders to address upcoming loan maturities. We expect to provide further details concerning our remaining maturities in subsequent updates.
We further expanded our business relationship with Glencore through the addition of a third vessel under a commercial arrangement that Seanergy has pioneered in the sector. The M/V Knightship was delivered to Glencore in May for a period of up to five years following her dry-docking and scrubber installation. Most importantly, 70% percent of our fleet is employed under index-linked time-charters, taking advantage of the steep improvement in Capesize rates.
In light of the weakness of the freight market and global economic uncertainty as the second quarter began, we successfully completed a series of public equity capital raisings to further strengthen our balance sheet. All such equity placements had strong institutional investor interest. Of the warrants issued in these offerings, almost all have been exercised to purchase common shares, and only a small number of Class D Warrants issued in an underwritten public offering on April 2, 2020 remain outstanding which represent less than 1.9% of the total warrants issued.
I also wanted to note that our share price declined through the first quarter of 2020 due to the unprecedented challenges faced in our sector. Even though the Nasdaq has granted us an extension until September 25, 2020 to comply with the minimum bid price, we have decided to proactively resolve this matter now. Therefore, our board of directors has determined to proceed with a reverse stock split expected to be effective on June 30, 2020. Such decision aims to restore the price of our shares to the range in which most of our dry-bulk peers trade. Notwithstanding the remaining time for our Company to regain compliance with the Nasdaq $1.00 minimum bid price and our confidence as to the positive developments in our sector, we believe that executing a reverse split at this time will encourage institutional interest in our stock in any future market recovery. We thank our shareholders for their support and loyalty during the previous challenging period for our sector and look forward to delivering shareholder value going forward in what we believe to be a significantly improved environment.
Looking forward towards the rest of 2020, strong steel demand in China, historically low iron ore inventories and the ongoing recovery of Brazilian iron ore exports are setting the tone for a much stronger Capesize market. Despite the weak performance of the market in the first two months of the second quarter, the average daily TCE of the Capesize index through June has improved to about $29,400 from levels as low as $2,000 in May. Provided that there are no additional export disruptions during the rest of the year, the Capesize market may closely track the positive second half of 2019.
Finally, Seanergy is well placed to benefit from the substantial improvement of the market with minimal upcoming dry-dockings and all vessels currently employed under spot charters or index-linked charters that are directly tied to the Capesize index. Moreover, Seanergy is well funded and in a position to capitalize on attractive opportunities at historically low asset values.”Full Report
Source: Seanergy Maritime Holdings Inc.