Seanergy Maritime Holdings Corp. Halves Losses for 2019, as Capesize Market Improves
Seanergy Maritime Holdings Corp. announced its financial results for the fourth quarter and twelve months ended December 31, 2019.
For the quarter ended December 31, 2019, the Company generated net revenues of $27.8 million, representing a 3% increase compared to the corresponding quarter of 2018. The time charter equivalent (“TCE”)1 earned during the fourth quarter of 2019 was $22,935, increased by 50% from $15,312 in the fourth quarter of 2018 while fleet operating days were 9% lower due to the dry-docking of three vessels. The Company recorded net income of $3.1 million compared to a net loss of $3.2 million in the same quarter of 2018.
For the twelve-month period ended December 31, 2019, net revenues amounted to $86.5 million, a 5% decrease compared to $91.5 million in the same period in 2018, which is mainly attributable to a 13% reduction in operating days following the sale of two Supramax vessels in the previous year. The TCE1 earned during 2019 was $14,694, representing a 12% increase from $13,156 in 2018. The average daily operating expenses (“OPEX”) of the fleet for the twelve-month period of 2019 was $5,172, in line with the respective figure for 2018 of $5,198.
Cash and cash-equivalents, including restricted cash, as of December 31, 2019 stood at $14.6 million, compared to $7.4 million as of December 31, 2018. Shareholders’ equity at the end of the fourth quarter of 2019 was $29.9 million, compared to $21.3 million at the end of the fourth quarter of 2018.
First Quarter 2020 TCE Guidance:
As of the date of this release, in the first quarter of 2020 so far, approximately 90% of our fleet operating days have been fixed at a TCE of approximately $10,0002.
Spot estimates are provided using the load-to-discharge method of accounting. Load-to-discharge accounting recognizes revenues over fewer days as opposed to the discharge-to-discharge method of accounting used prior to 2018, resulting in higher rates for these days and only voyage expenses being recorded in the ballast days. Over the duration of the voyage (discharge-to-discharge) there is no difference in the total revenues and costs to be recognized. The rates quoted are for days currently contracted. Increased ballast days at the end of the quarter will reduce the additional revenues that can be booked based on the accounting cut-offs and therefore the resulting TCE will be reduced accordingly.
Stamatis Tsantanis, the Company’s Chairman and Chief Executive Officer, stated:
“In 2019 the positive Capesize market trend from previous years remained in place, despite the high volatility seen during the year. This was reflected in the daily earnings of our fleet, which have marked consecutive year-on-year improvements over the last 3 years. The average time charter equivalent of our vessels in the fourth quarter of the year was $22,935, outperforming the average daily time charter rate of the Baltic Capesize Index for the same period, which stood at $22,184. In the second half of 2019, Seanergy achieved profitability over the course of two consecutive quarters and a significant increase in EBITDA, which demonstrates the operating leverage of Seanergy close to mid-cycle levels.
The present condition of the freight market is attributable to multiple factors such as the fuel price adjustment in the Baltic Exchange indices, the heavy rain season and floodings in Brazil, as well as the coronavirus outbreak in the midst of the Chinese New Year celebrations. Looking beyond the current weakness, we envisage 2020 to be a positive year. Brazilian iron ore exports are expected to ramp up considerably as per Vale’s guidance from the reduced levels of 2019, while China’s steel production, supported by growth in real-estate and infrastructure projects, could experience a growth rate of up to 7% in the year to compensate for the weaker first quarter. Additionally, fuel prices are reducing from the transitional period of IMO 2020 implementation in January, which makes our spot voyages more profitable. As a result, the long-term positive trend in the Capesize market is expected to continue.
Furthermore, as regards Seanergy’s scrubber installation program, five exhaust-gas cleaning system installations scheduled for 2019 were completed in timely fashion and the vessels have been delivered to their charterers under long-term time charters. We are pleased to view our charterers as strategic partners that are willing to invest in our vessels in ways that increase the commercial and market value of our fleet during a time of heightened uncertainty concerning environmental regulations. We also proactively procured sufficient quantity of compliant fuel (MGO) at competitive pricing early in the second half of 2019 in order to cover the needs of our five non-scrubber fitted vessels for the majority of the first quarter of 2020, ensuring the seamless compliance of the Company’s non-scrubber fitted vessels with the IMO 2020 regulation while providing for a natural hedge against the adverse movements in the price of compliant fuel oil.
Moreover, I would like to stress that seven out of our ten vessels went through dry-docking in 2019, incurring 233 repair days as compared to only 13 days in dry-dock during 2018, which significantly limited our fleet’s earning capacity in 2019. Following our Company’s particularly heavy dry-docking schedule in 2019 we expect to see minimal such disruptions in 2020, which will further improve cash generation and profitability.
Finally, we recently received from NASDAQ an additional six months extension in relation to the bid price deficiency, thus moving the curing period to mid-July 2020.”Full Report
Source: Seanergy Maritime Holdings Corp.