Seanergy Maritime Holdings Corp. (the “Company”) (NASDAQ: SHIP),
announced today 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.”
Company Fleet:
Vessel Name |
VesselClass |
Capacity(DWT) |
Year Built |
Yard |
Scrubber Fitted |
Employment |
Minimum T/Cduration |
Partnership |
Capesize |
179,213 |
2012 |
Hyundai |
Yes |
T/C Index Linked (1) |
3 years |
Championship (2) |
Capesize |
179,238 |
2011 |
Sungdong |
Yes |
T/C Index Linked (3) |
5 years |
Lordship |
Capesize |
178,838 |
2010 |
Hyundai |
Yes |
T/C Index Linked (4) |
3 years |
Premiership |
Capesize |
170,024 |
2010 |
Sungdong |
Yes |
T/C Index Linked (5) |
3 years |
Squireship |
Capesize |
170,018 |
2010 |
Sungdong |
Yes |
T/C Index Linked (6) |
3 years |
Knightship (7) |
Capesize |
178,978 |
2010 |
Hyundai |
Yes |
T/C Index Linked (8) |
3 years |
Gloriuship |
Capesize |
171,314 |
2004 |
Hyundai |
No |
T/C Index Linked (9) |
10 months |
Fellowship |
Capesize |
179,701 |
2010 |
Daewoo |
No |
Voyage/Spot |
|
Geniuship |
Capesize |
170,058 |
2010 |
Sungdong |
No |
Voyage/Spot |
|
Leadership |
Capesize |
171,199 |
2001 |
Koyo – Imabari |
No |
Voyage/Spot |
|
(1) |
Chartered by a major European utility and energy company and
delivered to the charterer on September 11, 2019 for a period of
minimum 33 to maximum 37 months with an optional period of 11-13
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 3 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 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. |
(3) |
Chartered by Cargill from November 7, 2018 for a period of 60
months, with an additional period of 24 to 27 months at charterer’s
option. The daily charter hire is based on the BCI plus a gross
daily scrubber premium of $1,740. 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 and
delivered on August 4, 2019 for a period of minimum 33 to maximum
37 months with an optional period of 11-13 months. The daily
charter hire is based on the BCI plus a net daily scrubber premium
of $3,735. 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 Glencore and was delivered to the charterer on
November 29, 2019 for a period of minimum 36 to maximum 42 months
with two optional periods of about 11 to maximum 13 months. The
daily charter hire is based on the BCI plus a gross daily scrubber
premium of $2,163. |
(6) |
Chartered by Glencore and was delivered to the charterer on
December 19, 2019 for a period of minimum 36 to maximum 42 months
with two optional periods of about 11 to maximum 13 months. The
daily charter hire is based on the BCI plus a gross daily scrubber
premium of $2,163. |
(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. |
(8) |
Chartered by Glencore and delivered to the charterer on May 15,
2020 for a period of minimum 36 to maximum 42 months with two
optional periods of about 11 to maximum 13 months. The daily
charter hire is based on the BCI. |
(9) |
This vessel is being chartered by
a dry bulk charter operator and was delivered to the charterer on
April 23, 2020 for a period of minimum 10 to maximum 14 months. The
daily charter hire is based on the BCI. |
Fleet Data:
|
Q1 2020 |
Q1 2019 |
Ownership days (1) |
910 |
900 |
Operating days (2) |
901 |
885 |
Fleet utilization (3) |
99.0% |
98.3% |
TCE rate (4) |
$8,481 |
$7,633 |
Daily Vessel Operating Expenses (5) |
$5,566 |
$4,830 |
(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)
|
Q1 2020 |
Q1 2019 |
Net revenues from vessels |
13,339 |
16,013 |
Less: Voyage expenses |
5,699 |
9,258 |
Net operating revenues |
7,640 |
6,755 |
Operating days |
901 |
885 |
TCE rate |
8,481 |
7,633 |
(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)
|
Q1 2020 |
Q1 2019 |
Vessel operating expenses |
5,065 |
4,422 |
Less: Pre-delivery expenses |
- |
75 |
Vessel operating expenses before pre-delivery expenses |
5,065 |
4,347 |
Ownership days |
910 |
900 |
Daily Vessel Operating
Expenses |
5,566 |
4,830 |
Net Loss to EBITDA Reconciliation:
(In thousands of U.S. Dollars)
|
Q1 2020 |
Q1 2019 |
Net loss |
(8,343) |
(8,643) |
Add: Net interest and finance cost |
5,688 |
6,236 |
Add: Depreciation and amortization |
3,634 |
2,834 |
EBITDA |
979 |
427 |
Earnings Before Interest, Taxes, Depreciation
and Amortization ("EBITDA") represents the sum of net (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)
|
Q1 2020 |
Q1 2019 |
Interest and finance costs, net |
(5,688) |
(6,236) |
Add: Amortization of deferred finance charges |
172 |
368 |
Add: Amortization of convertible note beneficial conversion
feature |
1,136 |
985 |
Add: Amortization of other deferred charges |
153 |
110 |
Cash interest and finance
costs |
(4,227) |
(4,773) |
First Quarter and Recent Developments:
Finalization of $30.6 million refinancing
In March 2020 we entered into definitive
documentation for the extension of the maturities of two loan
facilities secured by the M/V Leadership and M/V Squireship from
March 17, 2020 and November 10, 2021, respectively, to December 31,
2022. The underlying terms for both loan facilities remain
substantially the same, while certain financial covenants and
restrictions on dividend payments binding the Company have been
cancelled.
Public offering and Registered direct
offerings
Between April 1, 2020 and May 7, 2020, Seanergy
undertook a series of equity raisings beginning with an
underwritten public offering and followed by four registered direct
offerings of common shares and concurrent private placements of
warrants, raising approximately $30.1 million in gross proceeds in
the aggregate.
Following Seanergy’s capital markets activity
since the end of March, the Company’s capitalization table is as
follows:
(amounts in thousands USD) |
31 Mar 2020 (unaudited) |
24 June 2020 (unaudited) |
Debt: |
|
|
Long-term debt (1) |
201,596 |
200,212 |
Convertible notes (2) |
15,767 |
15,767 |
Total debt |
217,363 |
215,979 |
|
|
|
Total Shareholder’s equity (3) |
21,897 |
68,944 |
Total capitalization (4) |
239,260 |
284,923 |
(1) |
Includes arrangement fees and various deferred charges and excludes
all convertible notes. |
(2) |
Includes $3.4 million of the total outstanding $38.7 million in
convertible notes that are classified under liabilities in
accordance with the beneficial conversion feature guidance of U.S.
GAAP. The balance of $12.4 million is the net non-cash amortization
in accordance with the beneficial conversion feature guidance of
U.S. GAAP. |
(3) |
Includes $35.3 million of the total outstanding $38.7 million in
convertible notes that are classified under equity in accordance
with the beneficial conversion feature guidance of U.S. GAAP. |
(4) |
Does not give any effect to the potential future exercise of
warrants issued in the recent transaction or other outstanding
warrants. |
M/V Knightship scrubber installation and
Glencore T/C
The M/V Knightship is the third of the Company’s
vessels that was time-chartered by ST Shipping and Transport Pte.
Ltd., (“ST Shipping”) following the M/V Premiership and the M/V
Squireship. ST Shipping is a fully owned subsidiary of Glencore
plc, a leading multinational commodity trading and mining
company.
The time-charter commenced on May 15, 2020,
immediately following completion of the scrubber installation on
the vessel and extends for a period of 36 to 42 months. The daily
hire of the T/C is based on the 5 T/C routes of the BCI.
The charterer has compensated the Company for
100% of the scrubber investment, including equipment and
installation cost as well as for the associated off-hire days. In
addition to the daily hire, the Company is entitled to additional
revenue (profit-sharing) above a certain spread between the price
of High and Low Sulphur Fuel Oil throughout the term of the
charter.
Compliance with Nasdaq Minimum Bid
Price
As previously announced, the Nasdaq on April 17,
2020, granted an extension to the grace period for regaining
compliance with the minimum $1.00 per share bid price requirement
from July 13, 2020 to September 25, 2020. However, in order to
proactively resolve this matter, the Company’s Board of Directors
(the “Board”) has determined to effect a 1-for-16 reverse split of
the Company’s common stock. At the annual meeting of the
shareholders of the Company held on October 17, 2019, the Company’s
shareholders approved the reverse stock split by a ratio of not
less than 1-for-2 and not more than 1-for-20 and granted the Board
the authority to determine the exact split ratio and proceed with
the reverse stock split.
The reverse stock split is expected to be
effective, and the common stock to begin trading on a
split-adjusted basis on the Nasdaq, at the opening of trading on
June 30, 2020. When the reverse stock split becomes effective,
every sixteen shares of the Company’s issued and outstanding common
stock will be automatically combined into one issued and
outstanding share of common stock without any change in the par
value per share or the total number of authorized shares. This will
reduce the number of outstanding shares of the Company’s common
stock from approximately 480,050,689 shares to approximately
30,003,168 shares, to be adjusted for the cancellation of
fractional shares. The exercise price, and the number of shares
issuable on exercise, of the Company’s outstanding Class A, Class B
and Class D warrants will adjust proportionately.
No fractional shares will be issued in
connection with the reverse stock split. Registered shareholders
who would otherwise hold a fractional share of the Company’s common
stock will receive a cash payment in lieu of such fractional share
at a price equal to the fraction to which such shareholder would
otherwise be entitled multiplied by the closing price of the common
stock on the Nasdaq on the last trading day prior to the effective
date of the reverse stock split, as adjusted for the reverse stock
split as appropriate.
The reverse stock split will not affect any
stockholder's ownership percentage of the Company's common stock
(except as a result of the cancellation of fractional shares),
alter the par value of the Company's common stock, have any direct
impact on the market capitalization of the Company, or modify any
voting rights or other terms of the common stock.
Shareholders with shares held in book-entry form
or through a bank, broker, or other nominee are not required to
take any action and will see the impact of the reverse stock split
reflected in their accounts on or after the effective date of the
reverse stock split. Such beneficial holders may contact their
bank, broker, or nominee for more information. Shareholders with
shares held in certificated form will receive instructions from the
exchange agent, Continental Stock Transfer & Trust Company, as
to how to exchange existing share certificates for new certificates
representing the post-reverse split shares.
Additional information about the reverse stock
split can be found in the Company’s proxy statement furnished to
the Securities and Exchange Commission on August 30, 2019, a copy
of which is available at www.sec.gov.
Seanergy Maritime Holdings
Corp.Unaudited Condensed Consolidated Balance Sheets(In
thousands of U.S. Dollars)
|
March 31, 2020 |
|
December 31,2019* |
ASSETS |
|
|
|
Cash and restricted
cash |
6,182 |
|
14,554 |
Vessels, net |
251,086 |
|
253,781 |
Other assets |
14,118 |
|
14,216 |
TOTAL
ASSETS |
271,386 |
|
282,551 |
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Bank debt and other
financial liabilities |
178,325 |
|
183,066 |
Convertible notes |
15,767 |
|
14,608 |
Due to related
parties |
23,271 |
|
24,237 |
Other liabilities |
32,126 |
|
30,782 |
Stockholders’ equity |
21,897 |
|
29,858 |
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
271,386 |
|
282,551 |
* 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 March 31, |
|
|
2020 |
|
2019 |
|
Revenues: |
|
|
|
|
Vessel revenue, net |
13,339 |
|
16,013 |
|
Expenses: |
|
|
|
|
Voyage expenses |
(5,699 |
) |
(9,258 |
) |
Vessel operating expenses |
(5,065 |
) |
(4,422 |
) |
Management fees |
(252 |
) |
(247 |
) |
General and administrative expenses |
(1,359 |
) |
(1,686 |
) |
Depreciation and amortization |
(3,634 |
) |
(2,834 |
) |
Operating
loss |
(2,670 |
) |
(2,434 |
) |
Other
expenses: |
|
|
|
|
Interest and finance costs |
(5,688 |
) |
(6,236 |
) |
Other, net |
15 |
|
27 |
|
Total other expenses,
net: |
(5,673 |
) |
(6,209 |
) |
Net loss |
(8,343 |
) |
(8,643 |
) |
|
|
|
|
|
Net loss per common
share, basic and diluted |
(0.31 |
) |
(3.23 |
) |
Weighted average number of common shares outstanding, basic
and diluted |
27,194,564 |
|
2,674,885 |
|
|
|
|
|
|
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
approximately 11 years. The Company is incorporated in the Marshall
Islands and has 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 operating
or financial results; the Company's liquidity, including its
ability to service its indebtedness; 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 the Registration Statement and 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 Csepregi 230 Park
Avenue Suite 1536 New York, NY 10169 Tel: (212) 661-7566 E-mail:
seanergy@capitallink.com
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