Seanergy Maritime Holdings Corp. (the “Company”) (NASDAQ: SHIP)
announced today its financial results for the second quarter and
six months ended June 30, 2019.
For the quarter ended June 30, 2019, the Company
generated net revenues of $18.8 million, a 12% increase compared to
the second quarter of 2018 despite the Company’s fleet having been
reduced by one unit compared to the same quarter of 2018. The daily
TCE of the fleet for the second quarter of 2019 was $9,104 per ship
per day, up 3% from $8,859 in the second quarter of 2018. The
average daily OPEX of the fleet for the quarter was $5,015, marking
an improvement of 4% from $5,242 in the second quarter of 2018.
For the six-month period ended June 30, 2019,
net revenues were $34.8 million, as compared to $38.1 million in
the first half of 2018. EBITDA for the first half of 2019 was $2.2
million, compared to EBITDA of $6.5 million in the same period of
2018. The daily TCE of the fleet for the first half of 2019 was
$8,368 per ship per day, compared to $10.272 in the first half of
2018. The average daily OPEX of the fleet was $4,923, reflecting a
5% improvement against the respective period of 2018. As of June
30, 2019, cash and cash equivalents, including restricted cash,
were $12.9 million.
Since the beginning of the third quarter of
2019, 62% of our fleet available days have been fixed at a daily
TCE of approximately $23,800 per ship per day, marking an increase
of 184% as compared to the fleet average TCE rate of $8,368 in the
first half of 2019.
Stamatis Tsantanis, the Company’s
Chairman and Chief Executive Officer, stated:
“Our results for the second quarter and first
half of 2019 were materially affected by a series of negative
events that had a severe impact in the Capesize segment. Most
importantly the freight market was affected by the dam accident in
the Brumadinho mine of Brazil, which caused the sharp reduction of
the Brazilian iron ore exports from an average of 7.5 million tons
per week to a low point of 2.5 million tons in April. In addition,
tropical cyclones in Australia also affected negatively the
seaborne iron ore trade. Lastly, the decrease in the availability
of iron ore in the market, resulted in the sharp increase of the
price of the product from approx. $70 per ton to approx. $120 per
ton and in fewer cargo shipments with lower vessel utilization. The
Baltic Capesize Index (‘BCI’) plummeted from 1,987 points in
the beginning of the year to a low of 92 points in April.
We are very pleased, however, to see a sharp
reversal of these factors since the end of May 2019. Firstly, the
Brazilian weekly iron ore exports have stabilized to the
pre-accident levels of about 7.5 million tons per week bringing
back a significant quantity of high-grade product to the long-haul
voyages. Moreover, an increased portion of the global capesize
fleet is currently undergoing drydocks for scrubber installations
and other retrofits. This is expected to intensify in the coming
months as we move towards January 1, 2020 when the IMO 2020 sulphur
cap will be implemented. As a result, the BCI soared from its April
lows to a multiyear high of 4,438 points in July.
Seanergy was well placed to capture the upturn,
based on index-linked employment for part of the fleet and
favorably positioned spot vessels. Looking ahead, we expect that
the aforementioned favorable developments on the demand and the
supply fronts, will contribute towards a sustainably healthy
market.
In response to the adverse market conditions of
the first half of the year, we took timely measures to enhance our
liquidity and preserve the Company’s cash flow. In May 2019 we
successfully priced a $20.5 million follow-on offering and
concurrent private placement. In addition, we obtained $9.5
million in commitments under two new loan facilities and
rescheduled $3.3m in principal payments due in 2019 under certain
of our loan facilities. These actions improved our cash flow by
approximately $33 million.
Concerning our capital expenditure and vessel
upgrade schedule, we are pleased to announce the completion of the
concurrent scrubber and ballast water treatment system
installations on the M/V Lordship, which took place next to the
vessel’s special survey. The M/V Lordship is about to commence on a
3 to 4-year index linked charter with a major European utilities
company. The scrubber installation on the M/V Partnership is
currently ongoing while the M/V Leadership is undergoing her
scheduled survey and dry-docking in the same yard. Upon completion
of the upgrade program in November, five scrubbers and three
ballast water treatment systems will be installed on our vessels,
increasing the valuation of the fleet and the Company’s NAV by
approximately $12.5 million.
As a final note, we are optimistic about the
prospects of the Capesize market based on the favorable
supply-demand fundamentals and believe that our Company is well
positioned to benefit from a sustained recovery as well as from
seasonal spikes based on our advantageous employment arrangements
and concise approach towards IMO 2020.”
Company Fleet:
Vessel Name |
Vessel Class |
Capacity (DWT) |
Year Built |
Yard |
Scrubber Fitted (1) |
Employment |
Initial Charter Period |
Partnership |
Capesize |
179,213 |
2012 |
Hyundai |
Yes |
T/C Index Linked (2) |
3 years after scrubber installation |
Championship (3) |
Capesize |
179,238 |
2011 |
Sungdong |
Yes |
T/C Index Linked (4) |
5 years |
Lordship |
Capesize |
178,838 |
2010 |
Hyundai |
Yes |
T/C Index Linked (5) |
3years after scrubber installation |
Premiership |
Capesize |
170,024 |
2010 |
Sungdong |
Yes |
T/C Index Linked (6) |
3 years after scrubber installation |
Squireship |
Capesize |
170,018 |
2010 |
Sungdong |
Yes |
T/C Index Linked (6) |
3 years after scrubber installation |
Fellowship |
Capesize |
179,701 |
2010 |
Daewoo |
No |
Spot |
|
Knightship (7) |
Capesize |
178,978 |
2010 |
Hyundai |
No |
Spot |
|
Geniuship |
Capesize |
170,058 |
2010 |
Sungdong |
No |
Spot |
|
Gloriuship |
Capesize |
171,314 |
2004 |
Hyundai |
No |
Spot |
|
Leadership |
Capesize |
171,199 |
2001 |
Koyo – Imabari |
No |
Spot |
|
(1) Scrubbers on selected ships to be installed
between July and October 2019.
(2) Chartered by a major European utility and
energy company from September 2019 for a period of 33 to 37 months
with an additional period of about 11 to max. 13 months at
charterers’ option. The daily charter hire is based on the BCI. In
addition, the Company has the option to convert to a fixed rate for
a period of between three and 12 months, based on the prevailing
Capesize Forward Freight Agreement Rate (“FFA”) for the selected
period.
(3) Sold to and leased back on a bareboat basis
from a major commodity trading company on November 7, 2018 for a
five-year period. We have a purchase obligation at the end of the
five-year period and we further have the option to repurchase the
vessel at any time.
(4) Chartered by a major commodity trading
company from November 7, 2018 for a period of 60 months, with an
additional period of about 16 to max 18months at charterers’
option. The daily charter hire is based on the BCI. In addition,
the Company has the option to convert to a fixed rate for a period
of between three and 12 months, based on the prevailing Capesize
FFA for the selected period.
(5) Chartered by a major European utility and
energy company from August 2019 for a period of 33 to 37 months
with an additional period of about 11 to max. 13 months at
charterers’ option. The daily charter hire is based on the BCI. In
addition, the Company has the option to convert to a fixed rate for
a period of between three and 12 months, based on the prevailing
Capesize FFA for the selected period.
(6) Chartered by a major commodity trading
company from about November 2019 for a period of min. 36
to max. 42 months with two additional periods of min. 11 to max. 13
months each, at charterers’ option. The daily charter hire is based
on the BCI.
(7) Sold to and leased back on a bareboat basis
from a major Chinese leasing institution on June 29, 2018 for an
eight-year period. We have a purchase obligation at the end of the
eight-year period and we further have the option to repurchase the
vessel at any time following the second anniversary of the delivery
under the bareboat charter.
Fleet Data:
(U.S. Dollars in thousands)
|
Q2 2019 |
Q2 2018 |
6M 2019 |
6M 2018 |
Ownership days (1) |
|
910 |
|
|
1,001 |
|
|
1,810 |
|
|
1,991 |
|
Operating days (2) |
|
883 |
|
|
999 |
|
|
1,768 |
|
|
1,987 |
|
Fleet utilization (3) |
|
97.0 |
% |
|
99.8 |
% |
|
99.7 |
% |
|
99.8 |
% |
TCE rate (4) |
$ |
9,104 |
|
$ |
8,859 |
|
$ |
8,368 |
|
$ |
10,272 |
|
Daily Vessel Operating Expenses (5) |
$ |
5,015 |
|
$ |
5,242 |
|
$ |
4,923 |
|
$ |
5,178 |
|
(1) Ownership days are the total number of
calendar days in a period during which the vessels in a fleet have
been owned or chartered in. Ownership days are an indicator of the
size of the Company’s fleet over a period and affect both the
amount of revenues and the amount of expenses that the Company
recorded during a period.
(2) Operating days are the number of available
days in a period less the aggregate number of days that the vessels
are off-hire due to unforeseen circumstances. Operating days
includes the days that our vessels are in ballast voyages without
having finalized agreements for their next employment.
(3) Fleet utilization is the percentage of time
that the vessels are generating revenue and is determined by
dividing operating days by ownership days for the relevant
period.
(4) TCE rate is defined as the Company’s net
revenue less voyage expenses during a period divided by the number
of the Company’s operating days during the period. Voyage expenses
include port charges, bunker (fuel oil and diesel oil) expenses,
canal charges and other commissions. The Company includes the TCE
rate, a non-GAAP measure, as it believes it provides additional
meaningful information in conjunction with net revenues from
vessels, the most directly comparable U.S. GAAP measure, and
because it assists the Company’s management in making decisions
regarding the deployment and use of the Company’s vessels and in
evaluating their financial performance. The Company’s
calculation of TCE rate may not be comparable to that reported by
other companies. The following table reconciles the Company’s net
revenues from vessels to the TCE
rate. (In thousands
of U.S. Dollars, except operating days and TCE rate)
|
Q2 2019 |
Q2 2018 |
6M 2019 |
6M 2018 |
Net revenues from vessels |
18,758 |
16,820 |
34,771 |
38,142 |
Less: Voyage expenses |
10,719 |
7,970 |
19,977 |
17,732 |
Net operating revenues |
8,039 |
8,850 |
14,794 |
20,410 |
Operating days |
883 |
999 |
1,768 |
1,987 |
TCE rate |
9,104 |
8,859 |
8,368 |
10,272 |
(5) Vessel operating expenses include crew
costs, provisions, deck and engine stores, lubricants, insurance,
maintenance and repairs. Daily Vessel Operating Expenses are
calculated by dividing vessel operating expenses by ownership days
for the relevant time periods. The Company’s calculation of daily
vessel operating expenses may not be comparable to that reported by
other companies. The following table reconciles the Company’s
vessel operating expenses to daily vessel operating
expenses. (In
thousands of U.S. Dollars, except ownership days and Daily Vessel
Operating Expenses)
|
Q2 2019 |
Q2 2018 |
6M 2019 |
6M 2018 |
Vessel operating expenses |
4,593 |
5,247 |
9,015 |
10,310 |
Less: Pre-delivery expenses |
29 |
- |
104 |
- |
Vessel operating expenses before pre-delivery expenses |
4,564 |
5,247 |
8,911 |
10,310 |
Ownership days |
910 |
1,001 |
1,810 |
1,991 |
Daily Vessel Operating
Expenses |
5,015 |
5,242 |
4,923 |
5,178 |
Net Loss to EBITDA Reconciliation:(In thousands
of U.S. Dollars)
|
Q2 2019 |
Q2 2018 |
6M 2019 |
6M 2018 |
Net loss |
(6,900 |
) |
(8,867 |
) |
(15,543 |
) |
(12,309 |
) |
Add: Net interest and finance cost |
5,709 |
|
7,789 |
|
11,965 |
|
12,929 |
|
Add: Depreciation and amortization |
2,838 |
|
2,961 |
|
5,672 |
|
5,900 |
|
Add: Taxes |
59 |
|
(11 |
) |
59 |
|
(11 |
) |
EBITDA |
1,706 |
|
1,872 |
|
2,153 |
|
6,509 |
|
Earnings Before Interest, Taxes, Depreciation
and Amortization ("EBITDA") represents the sum of net income /
(loss), interest and finance costs, interest income, depreciation
and amortization and, if any, income taxes during a period. EBITDA
is not a recognized measurement under U.S. GAAP.
EBITDA is presented as we believe that this
measure is useful to investors as a widely used means of evaluating
operating profitability. EBITDA as presented here may not be
comparable to similarly titled measures presented by other
companies. This non-GAAP measure should not be considered in
isolation from, as a substitute for, or superior to, financial
measures prepared in accordance with U.S. GAAP.
Interest and Finance Costs to Cash Interest and Finance
Costs Reconciliation:
(In thousands of U.S. Dollars)
|
Q2 2019 |
Q2 2018 |
6M 2019 |
6M 2018 |
Interest and finance costs |
(5,709 |
) |
(7,789 |
) |
(11,965 |
) |
(12,929 |
) |
Add: Amortization of deferred finance charges |
237 |
|
432 |
|
605 |
|
574 |
|
Add: Amortization of convertible note beneficial conversion
feature |
800 |
|
1,150 |
|
1,785 |
|
2,084 |
|
Add: Amortization of other deferred charges |
886 |
|
- |
|
995 |
|
- |
|
Add: Cash interest waived - related party |
- |
|
- |
|
1,164 |
|
- |
|
Cash interest and finance
costs |
(3,786 |
) |
(6,207 |
) |
(7,416 |
) |
(10,271 |
) |
Second Quarter and Recent Developments:
Public offering and Private placement of
Shares
On May 13, 2019, the Company completed a public
offering of 4,200,000 units at a price of $3.40 per unit. Each unit
consisted of one common share (or one pre-funded warrant in lieu
thereof), one Class B warrant to purchase one common share and one
Class C warrant to purchase one common share. In connection with
the offering, the underwriters exercised in full their
overallotment option with regard to 630,000 Class B warrants and
630,000 Class C warrants. The gross proceeds of the offering to the
Company, before underwriting discounts and commissions and
estimated offering expenses, were approximately $14.3 million. The
Class B warrants trade on the NASDAQ Capital Market under the
symbol “SHIPZ”.
Concurrently with the offering, the Company sold
$6.2 million of units at the public offering price, or 1,823,529
units, in a private placement to Jelco Delta Holding Corp., an
affiliate of the Company, in exchange for the forgiveness of
certain payment obligations, including all interest payments due in
the period from the fourth quarter of 2018 until the fourth quarter
of 2019.
Update on Number of Shares Issued and
Outstanding
As of July 31, 2019, 24,598,540 common
shares are issued and outstanding. In addition, the Company
has 889,589 Class C warrants outstanding (out of 6,653,529
Class C warrants issued in the public offering and concurrent
private placement of units which closed on May 13, 2019). Based on
the current market price of the Company’s common shares and
assuming the exercise of all remaining outstanding Class C warrants
in an alternate cashless exercise under the terms of the warrant
agreement, the total number of issued and outstanding shares of the
Company would be approximately 27.1 million.
Scrubbers, BWTS and Energy Saving
Devices installation
On August 1, 2019, the drydocking of the M/V
Lordship was completed, marking the first milestone in our scrubber
and ballast water treatment system installation program while the
dry docking of the M/V Partnership is currently ongoing. Three
vessels will follow within August, September and October 2019,
respectively, in line with our initial installation schedule.
In addition, we have agreed with one of our
existing charterers, to install various energy saving devices,
including a Mewis Duct on one of our vessels. The charterer will
fully fund all the upgrades and the optional period under the
underlying long-term time charter will be extended by 8 to 9
months. Through the optional period the Company will be entitled to
receive a premium over the agreed index-linked hire depending on
the improvement in the fuel consumption realized.
Seanergy Maritime Holdings
Corp.Unaudited Condensed Consolidated Balance Sheets(In
thousands of U.S. Dollars)
|
|
June 30, 2019 |
|
|
December 31, 2018* |
|
ASSETS |
|
|
|
|
|
|
Cash and restricted
cash |
|
12,940 |
|
|
7,444 |
|
Vessels, net |
|
237,839 |
|
|
243,214 |
|
Other assets |
|
18,750 |
|
|
16,904 |
|
TOTAL
ASSETS |
|
269,529 |
|
|
267,562 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Bank debt and other
financial liabilities |
|
188,327 |
|
|
195,221 |
|
Convertible notes |
|
11,101 |
|
|
11,124 |
|
Due to related
parties |
|
22,914 |
|
|
19,349 |
|
Other liabilities |
|
21,655 |
|
|
20,565 |
|
Stockholders’ equity |
|
25,532 |
|
|
21,303 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
269,529 |
|
|
267,562 |
|
* Derived from the audited consolidated
financial statements as of the period as of that date
Seanergy Maritime Holdings
Corp.Unaudited Condensed Consolidated Statements of
Operations (In thousands of U.S. Dollars, except for share and
per share data, unless otherwise stated)
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
|
2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
Vessel revenue, net |
|
18,758 |
|
16,820 |
|
34,771 |
|
|
38,142 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
(10,719 |
) |
(7,970 |
) |
(19,977 |
) |
|
(17,732 |
) |
Vessel operating expenses |
|
(4,593 |
) |
(5,247 |
) |
(9,015 |
) |
|
(10,310 |
) |
Management fees |
|
(247 |
) |
(264 |
) |
(494 |
) |
|
(528 |
) |
General and administrative expenses |
|
(1,488 |
) |
(1,451 |
) |
(3,174 |
) |
|
(3,003 |
) |
Depreciation and amortization |
|
(2,838 |
) |
(2,961 |
) |
(5,672 |
) |
|
(5,900 |
) |
Operating (loss) /
income |
|
(1,127 |
) |
(1,073 |
) |
(3,561 |
) |
|
669 |
|
Other
expenses: |
|
|
|
|
|
|
|
|
|
|
Interest and finance costs |
|
(5,709 |
) |
(7,788 |
) |
(11,965 |
) |
|
(12,929 |
) |
Other, net |
|
(64 |
) |
(6 |
) |
(17 |
) |
|
(49 |
) |
Total other expenses,
net: |
|
(5,773 |
) |
(7,794 |
) |
(11,982 |
) |
|
(12,978 |
) |
Net loss |
|
(6,900 |
) |
(8,867 |
) |
(15,543 |
) |
|
(12,309 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share, basic |
|
(0.98 |
) |
|
(3.59 |
) |
(3.18 |
) |
|
(5.00 |
) |
Weighted average number of common
shares outstanding, basic |
|
7,068,042 |
|
2,468,118 |
|
4,883,594 |
|
|
2,463,322 |
|
About Seanergy Maritime Holdings Corp.
Seanergy Maritime Holdings Corp. is the only
pure-play Capesize ship-owner publicly listed in the US. Seanergy
provides marine dry bulk transportation services through a modern
fleet of 10 Capesize vessels, with a cargo-carrying capacity of
approximately 1,748,581 dwt and an average fleet age of about 10.3
years.
The Company is incorporated in the Marshall
Islands with executive offices in Athens, Greece and an office in
Hong Kong. The Company's common shares trade on the Nasdaq Capital
Market under the symbol "SHIP", its Class A warrants under "SHIPW"
and its Class B warrants under “SHIPZ”.
Please visit our company website at:
www.seanergymaritime.com
Forward-Looking Statements
This press release contains forward-looking
statements (as defined in Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended) concerning future events. Words such as "may",
"should", "expects", "intends", "plans", "believes", "anticipates",
"hopes", "estimates" and variations of such words and similar
expressions are intended to identify forward-looking statements.
These statements involve known and unknown risks and are based upon
a number of assumptions and estimates, which are inherently subject
to significant uncertainties and contingencies, many of which are
beyond the control of the Company. Actual results may differ
materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to, the Company's ability
to continue as a going concern; the Company's operating or
financial results; the Company's liquidity, including its ability
to pay amounts that it owes and obtain additional financing in the
future to fund capital expenditures, acquisitions and other general
corporate activities; competitive factors in the market in which
the Company operates; shipping industry trends, including charter
rates, vessel values and factors affecting vessel supply and
demand; future, pending or recent acquisitions and dispositions,
business strategy, areas of possible expansion or contraction, and
expected capital spending or operating expenses; risks associated
with operations outside the United States; and other factors listed
from time to time in the Company's filings with the SEC, including
its most recent annual report on Form 20-F. The Company's filings
can be obtained free of charge on the SEC's website at www.sec.gov.
Except to the extent required by law, the Company expressly
disclaims any obligations or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company's expectations with
respect thereto or any change in events, conditions or
circumstances on which any statement is based.
For further information please
contact:Capital Link, Inc.Judit Csepregi230 Park Avenue
Suite 1536New York, NY 10169Tel: (212) 661-7566E-mail:
seanergy@capitallink.com
1 EBITDA and Time Charter Equivalent (“TCE”) rate are non-GAAP
measures. Please see the reconciliation below of EBITDA to net loss
and TCE rate to net revenues from vessels, in each case the most
directly comparable U.S. GAAP measure.
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