Seanergy Maritime Holdings Corp. Reports 141% Increase in Charter Revenues to $20,143
Seanergy Maritime Holdings Corp. announced its financial results for the third quarter and nine months ended September 30, 2019.
For the quarter ended September 30, 2019, the Company generated net revenues of $24.0 million, representing a 9% decrease compared to the corresponding quarter of 2018. This decrease is attributed to a 21% reduction in our operating days mainly due to the dry-dockings of three vessels during the third quarter of 2019 and the sale of our two Supramax vessels in the fourth quarter of 2018. The Time Charter Equivalent (TCE)1 earned during the third quarter of 2019 was $20,1431, increased by 19% from $16,914 in the third quarter of 2018. Seanergy recorded Net Income of $0.7 million compared to a net loss of $5.6 million in the same quarter of 2018, marking a profitable quarter despite the increased down-time due to the heavy dry-docking schedule.
For the nine-month period ended September 30, 2019 net revenues amounted to $58.7 million, a 9% decrease compared to $64.5 million in the same period in 2018. The decrease is attributable to a 14% reduction in operating days due to four dry-docking surveys taking place in 2019 and the sale of the two Supramax vessels in 2018. The Time Charter Equivalent (TCE)1 earned during the first nine months of 2019 was $12,004, representing a 4% decrease from $12,497 in the same period of 2018. The average daily OPEX of the fleet for the nine-month period of 2019 was $5,032, marginally improved from $5,087 in the respective period of 2018.
Cash and cash-equivalents, including restricted cash as of September 30, 2019 stood at $15.4 million, which is an increase from $7.4 million as of December 31, 2018. Shareholders’ equity at the end of the third quarter of 2019 was $26.6 million compared to $21.3 million at the end of the fourth quarter of 2018.
Fourth Quarter 2019 TCE Guidance:
As of the date of this release, in the fourth quarter of 2019 so far, approximately 80% of our fleet operating days have been fixed at a TCE of approximately $25,8002, an increase of about 68.5% as compared to a TCE rate of $15,312 in the fourth quarter of 2018.
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:
“During the third quarter of 2019, Capesize market conditions improved significantly compared to the first half of the year and that was reflected in the operational performance of our fleet. Our TCE for the third quarter was $20,143, improved by 141% from the first six months of 2019. The main factors behind the recent rate improvement, were the continued recovery in Brazilian iron ore exports, combined with the reduced availability of tonnage due to the accumulation of scrubber installations projects. We expect this positive trend to continue, keeping charter rates at elevated levels. As of the date of this release, our commercial performance in the fourth quarter has resulted in a TCE of $25,800 so far on 80% of the fleet operating days.
Turning to the recent fleet developments, we are pleased to announce that three out of five scrubber installations for 2019 have been successfully completed, while the two remaining scrubber installations and concurrent dry-docking surveys are underway and will be completed by the end of the fourth quarter of 2019. In addition, two further scheduled dry-docking surveys have also been completed and by year-end we will have dry-docked 70% of our fleet, achieving a key milestone as we move into the implementation of IMO 2020.
Our dry-docking schedule to date in 2019 has limited the earning capacity of our fleet since our off hire rate increased to approximately 14% in the nine-month period ending September 30, 2019. Further, we note that three dry-docking surveys that were originally scheduled for 2020 were brought forward to the current year in order to minimize down-time and costs by performing survey activities concurrently with the scrubber installation. We expect that the completion of our dry-docking surveys and scrubber installation program within the fourth quarter of 2019 will lead to minimal disruptions to our earnings stream in 2020 and will further improve our cash generation. Most importantly, as more vessels will be delivered under index-linked charters we will be able to track the performance of the index more closely and enjoy the full upside of the Capesize market.
It is also worth noting that we have set as one of our important priorities the Company’s Environmental Social Governance (“ESG”) practices and we are continuously taking all necessary actions to ensure that our fleet is well-positioned to be at the forefront of technical developments in our industry. From a financial perspective, we expect that significant investments in cooperation with our strategic partners, that are the end-users of our vessels, will increase the commercial and market value of our fleet without any investment outlays by the Company.”Full Report
Source: Seanergy Maritime Holdings Corp.