Seanergy Maritime Holdings Corp. (“Seanergy” or the “Company”)
(NASDAQ: SHIP) announced today 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.”
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 (1) |
Sep 2019 – Jun 2022 |
Championship (2) |
Capesize |
179,238 |
2011 |
Sungdong |
Yes |
T/C Index Linked (3) |
Nov 2018 – Nov 2023 |
Lordship |
Capesize |
178,838 |
2010 |
Hyundai |
Yes |
T/C Index Linked (4) |
Aug 2019 – May 2022 |
Premiership |
Capesize |
170,024 |
2010 |
Sungdong |
4Q 2019 |
T/C Index Linked (5) |
3 years after scrubber installation |
Squireship |
Capesize |
170,018 |
2010 |
Sungdong |
4Q 2019 |
T/C Index Linked (5) |
3 years after scrubber installation |
Fellowship |
Capesize |
179,701 |
2010 |
Daewoo |
No |
Spot |
|
Knightship (6) |
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) Chartered by a major European utility and
energy company from September 2019 for a period of minimum 33 to
maximum 37 months with an optional period of about 11 to max. 13
months. The daily charter hire is based on the Baltic Capesize
Index (“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.
(2) Sold to and leased back on a bareboat basis
from a leading American commodities trader on November 7, 2018 for
a five-year period. The Company has a purchase obligation at the
end of the five-year period and the option to repurchase the vessel
at any time throughout the bareboat charter.
(3) Chartered by a leading American commodities
trader from November 7, 2018 for a period of 5 years, with an
additional period of about 24 to about 27 months at charterer’s
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.
(4) Chartered by a major European utility and
energy company from August 2019 for a period of minimum 33 to
maximum 37 months with an optional period of about 11 to maximum 13
months. 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) Both vessels are chartered by a major
commodity trading company for a period of 36 to 42 months with two
optional periods of 11 to 13 months each. The daily charter hires
are 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. Employment under the time charter is expected to commence
within the fourth quarter of 2019.
(6) Sold to and leased back on a bareboat basis
from a major Chinese leasing institution on June 29, 2018 for an
eight-year period. The Company has a purchase obligation at the end
of the eight-year period and 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)
|
Q3 2019 |
Q3 2018 |
9M 2019 |
9M 2018 |
Ownership days (1) |
920 |
1,012 |
2,730 |
3,003 |
Available days (2) |
805 |
1,003 |
2,579 |
2,994 |
Operating days (3) |
790 |
1,001 |
2,558 |
2,988 |
Fleet utilization (4) |
85.9% |
98,9% |
93.7% |
99.5% |
TCE rate (5) |
$20,143 |
$16,914 |
$12,004 |
$12,497 |
Daily Vessel Operating Expenses (6) |
$5,247 |
$4,907 |
$5,032 |
$5,087 |
(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 under sale and lease back
transactions.
(2) Available days are the number of ownership
days less the aggregate number of days that the vessels are
off-hire due to dry-dockings, special and intermediate surveys, or
lay-up days.
(3) 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. The
following table breaks down the off hires for the third quarter and
nine months ended September 30, 2019:
|
3Q 2019 |
9M 2019 |
Ownership Days |
920 |
2,730 |
Scrubber installation – incurred by the fleet |
32 |
50 |
Scrubber installation – compensated / to be compensated* by
charterer |
40 |
40 |
Total Scrubber installation (a) |
72 |
90 |
Scheduled maintenance (incl. BWTS) (b) |
43 |
61 |
Total Scheduled Off-Hires (a + b) |
115 |
151 |
Available Days |
805 |
2,579 |
Other Off-hires |
15 |
21 |
Operating Days |
790 |
2,558 |
*Compensated off hires reflect yard days incurred
in connection with the Company's scrubber installation program in
cooperation with certain charterers. Respective off hire days were
compensated through lump sum payments or will be compensated
through fixed premiums over the respective charter hire.
(4) 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.
(5) 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)
|
Q3 2019 |
Q3 2018 |
9M 2019 |
9M 2018 |
Net revenues from vessels |
23,959 |
26,387 |
58,730 |
64,529 |
Less: Voyage expenses |
8,046 |
9,456 |
28,023 |
27,188 |
Net operating revenues |
15,913 |
16,931 |
30,707 |
37,341 |
Operating days |
790 |
1,001 |
2,558 |
2,988 |
TCE rate |
20,143 |
16,914 |
12,004 |
12,497 |
(6) 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)
|
Q3 2019 |
Q3 2018 |
9M 2019 |
9M 2018 |
Vessel operating expenses |
4,827 |
4,966 |
13,842 |
15,276 |
Less: Pre-delivery expenses |
- |
- |
104 |
- |
Vessel operating expenses before pre-delivery expenses |
4,827 |
4,966 |
13,738 |
15,276 |
Ownership days |
920 |
1,012 |
2,730 |
3,003 |
Daily Vessel Operating
Expenses |
5,247 |
4,907 |
5,032 |
5,087 |
|
|
|
|
|
Net Income / (Loss) to EBITDA
Reconciliation:(In thousands of U.S. Dollars)
|
Q3 2019 |
Q3 2018 |
9M 2019 |
9M 2018 |
Net income / (loss) |
747 |
(5,563) |
(14,796) |
(17,872) |
Add: Interest and finance costs, net |
6,097 |
5,931 |
18,009 |
18,860 |
Add: Depreciation and amortization |
2,990 |
2,889 |
8,662 |
8,789 |
Add: Taxes |
(27) |
- |
32 |
(11) |
EBITDA |
9,807 |
3,257 |
11,907 |
9,766 |
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)
|
Q3 2019 |
Q3 2018 |
9M 2019 |
9M 2018 |
Interest and finance costs, net |
(6,097) |
(5,931) |
(18,009) |
(18,860) |
Add: Amortization of deferred finance charges |
270 |
154 |
874 |
728 |
Add: Amortization of convertible note beneficial conversion
feature |
907 |
1,251 |
2,693 |
3,335 |
Add: Amortization of other deferred charges |
1,457 |
- |
2,452 |
- |
Add: Cash interest waived - related party |
- |
- |
1,164 |
- |
Cash interest and finance
costs |
(3,463) |
(4,526) |
(10,826) |
(14,797) |
Third Quarter and Recent
Developments:
Update on Number of Shares Issued and
Outstanding
As of November 4, 2019, the Company had 26,895,999
shares of common stock, par value $0.0001 per share, issued and
outstanding. The Company also has 61,100 Class C warrants issued
and outstanding. The Company expects that the remaining Class C
warrants will be exercised by the expiration date of November 13,
2019. Assuming full exercise of the remaining Class C warrants and
based on our current share price, Seanergy’s total shares
outstanding will be 27,063,413.
Scrubbers Installations
Following the Company’s previous update, three out
of the five vessels that were scheduled to be fitted with scrubbers
within 2019 have completed the installations as of the date of this
press release and have commenced employment under their long-term
time charters. Specifically, the dry-docking surveys and scrubber
installations of the M/V Lordship, the M/V Partnership and the M/V
Championship were completed in August, September and October,
respectively.
The remaining two vessels to be fitted with
scrubbers (i.e. the M/V Premiership and M/V Squireship) are
expected to complete their respective installations within the
fourth quarter of 2019 and are expected to be delivered to their
charterers under their respective time charter parties.
Annual General Meeting of
Shareholders
The Annual Meeting of Shareholders for 2019 was
held on October 17, 2019. The following proposals were approved and
adopted:
- the election of Mr. Stamatios Tsantanis and Mr. Elias
Culucundis, as Class A Directors to serve until the 2022 Annual
Meeting of Shareholders;
- the appointment of Ernst & Young (Hellas) Certified
Auditors-Accountants S.A. as the Company's independent auditors for
the fiscal year ending December 31, 2019; and
- the approval of a reverse stock split of the Company’s issued
and outstanding common stock at a ratio of not less than 1‑for‑2
and not more than 1‑for‑20, with the exact ratio to be determined
at the discretion of the Company's board of directors.
The Company has no immediate plan to enact a
reverse stock split. A reverse stock split will be considered by
the Company’s board of directors if deemed necessary in order to
regain compliance with the Nasdaq Capital Market minimum bid price
requirement.
Seanergy Maritime Holdings
Corp.Unaudited Condensed Consolidated Balance Sheets(In
thousands of U.S. Dollars)
|
|
September 30,2019 |
|
|
December 31,2018* |
|
ASSETS |
|
|
|
|
|
|
Cash and restricted
cash |
|
15,398 |
|
|
7,444 |
|
Vessels, net |
|
235,093 |
|
|
243,214 |
|
Other assets |
|
28,215 |
|
|
16,904 |
|
TOTAL
ASSETS |
|
278,706 |
|
|
267,562 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Bank debt and other
financial liabilities |
|
187,061 |
|
|
195,221 |
|
Convertible notes |
|
12,798 |
|
|
11,124 |
|
Due to related
parties |
|
23,585 |
|
|
19,349 |
|
Other liabilities |
|
28,665 |
|
|
20,565 |
|
Stockholders’ equity |
|
26,597 |
|
|
21,303 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
278,706 |
|
|
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 endedSeptember 30, |
|
Nine months endedSeptember 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
Vessel revenue, net |
|
23,959 |
|
26,387 |
|
58,730 |
|
64,529 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
Voyage expenses |
|
(8,046 |
) |
(9,456 |
) |
(28,023 |
) |
(27,188 |
) |
Vessel operating expenses |
|
(4,827 |
) |
(4,966 |
) |
(13,842 |
) |
(15,276 |
) |
Management fees |
|
(248 |
) |
(264 |
) |
(742 |
) |
(792 |
) |
General and administrative expenses |
|
(1,017 |
) |
(1,544 |
) |
(4,191 |
) |
(4,547 |
) |
Depreciation and amortization |
|
(2,990 |
) |
(2,889 |
) |
(8,662 |
) |
(8,789 |
) |
Impairment loss |
|
- |
|
(6,878 |
) |
- |
|
(6,878 |
) |
Operating
income |
|
6,831 |
|
390 |
|
3,270 |
|
1,059 |
|
Other
expenses: |
|
|
|
|
|
|
|
|
|
Interest and finance costs, net |
|
(6,097 |
) |
(5,931 |
) |
(18,009 |
) |
(18,860 |
) |
Other, net |
|
13 |
|
(22 |
) |
(57 |
) |
(71 |
) |
Total other expenses,
net: |
|
(6,084 |
) |
(5,953 |
) |
(18,066 |
) |
(18,931 |
) |
Net income /
(loss) |
|
747 |
|
(5,563 |
) |
(14,796 |
) |
(17,872 |
) |
|
|
|
|
|
|
|
|
|
|
Net income / (loss) per
common share, basic and diluted |
|
0.03 |
|
(2.25 |
) |
(1.29 |
) |
(7.25 |
) |
Weighted average number of common
shares outstanding, basic and diluted |
|
24,427,753 |
|
2,468,108 |
|
11,469,904 |
|
2,464,928 |
|
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 10.6
years.
The Company is incorporated in the Republic of 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 Net
Income/ (Loss) to EBITDA and Net revenues from vessels to TCE rate,
in each case the most directly comparable U.S. GAAP measure.
2 For vessels on index-linked T/Cs, the TCE assumed
for the remaining operating days is equal to the FFA rate for the
respective period.
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