Other Highlights and Developments:
Quarterly cash dividend of $0.025 per share for Q1 2023 - resulting in total cash dividends of $1.30 per share or $23.4 million declared since March 2022, in addition to the spin-off and distribution of shares of United Maritime Corporation in July 2022
New financing and refinancing transactions of $53.8 million on improved terms adding approx. $15.0 million of extra liquidity
Elimination of 92% of the original $38.7 million convertible note, following the $8.0 million repayment in Q1 2023
$0.85 million open market common shares purchases by Seanergy’s management
Repurchased 47% of the outstanding Class E Warrants through a tender offer
Seanergy Maritime Holdings Corp., announced its financial results for the first quarter ended March 31, 2023, and declared a quarterly dividend of $0.025 per share for the first quarter of 2023.
For the quarter ended March 31, 2023, the Company generated Net Revenues of $18.0 million, compared to $29.7 million in the first quarter of 2022. EBITDA and Adjusted EBITDA for the quarter were $8.2 million and $3.9 million, respectively, compared to $12.8 million and $16.8 million, respectively, for the same period of 2022. Net Loss and Adjusted Net Loss for the quarter were $4.2 million and $0.3 million, respectively, compared to Net Income of $3.7 million and Adjusted Net Income of $7.7 million in the first quarter of 2022. The daily Time Charter Equivalent (“TCE”3) of the fleet for the first quarter of 2023 was $11,005, compared to $19,357 in the same period of 2022.
Cash and cash-equivalents and restricted cash, as of March 31, 2023, stood at $20.5 million. Shareholders’ equity at the end of the first quarter was $219.9 million. Long-term debt (senior loans, convertible note and other financial liabilities) net of deferred charges stood at $225.8 million, while the book value of the fleet was $428.2 million.
Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:
“In the first quarter of 2023, the Capesize market went through a period of seasonal weakness, with rates averaging a mere $9,144 per day. This now appears to be behind us. Charter rates for most of the second quarter have recovered to profitable levels, averaging $17,420 per day, while secondhand Capesize values have improved considerably since the start of the year with healthy sales and purchase activity. We are therefore encouraged to see the sector performing well during a period characterized by unwinding port congestion, adverse seasonality, and demand fluctuations. Based on our positive outlook, our board of directors has approved another quarterly dividend of $0.025 per share for the first quarter of 2023. I have also increased my personal investment in the Company’s common shares and intend to resume my open market purchases after the results and in line with our internal trading policy and restrictions.
“With regards to our commercial performance for the first quarter, our daily TCE of approximately $11,005 significantly outperformed the Baltic Capesize Index (“BCI”) for the period, which averaged $9,144. We are pleased to see our fleet consistently outperforming the BCI and we expect this to continue due to the quality of our vessels and the implementation of our hedging strategy. The improvement in the Capesize FFA market has given us the opportunity to convert approximately 25% of our remaining fleet days for 2023 to a fixed average daily rate of approximately $20,500. For the second quarter of 2023, we expect to achieve a TCE of approximately $18,8504. We believe that this improvement in market conditions from the end of the first quarter will lead to a significant step up in our profitability for the rest of the year.
“Furthermore, our balance sheet position remains strong, with a loan to value ratio below 50% as of the end of the quarter, which allows us to remain consistent with our strategy regardless of short-term market volatility. To this end, in the first quarter we have delivered the two older ships of our fleet to United Maritime Corporation (“United”) for a sizeable gain, while in April we completed three refinancings which led to the release of approximately $15.0 million of additional liquidity and the further decrease of our cost of debt. Through these transactions, we are advancing towards our aim of the renewal of our fleet, whilst improving our financial flexibility.
“Looking towards the rest of the year, the increased seaborne iron ore supply from major miners along with the reduction of iron ore inventories in China to levels comparable to what was seen before 2021, make us optimistic about Capesize demand. Moreover, we expect historically low fleet growth to underpin a strong earnings environment for Capesize vessels even during periods of muted demand growth. Within this environment, we aim to preserve a reasonable balance between returning capital to shareholders and investing selectively in vessels that are likely to produce high returns on capital.
“Seanergy is well positioned to benefit from the positive trend in the Capesize market. We are focused on seeking opportunities to modernize our fleet and improve our carbon footprint, while maintaining our focus on shareholder returns, as evidenced by the high levels of shareholder rewards, through securities buybacks the United spin-off and shares distribution and cash dividends, attained over the past two years.”
Second Quarter 2023 TCE Guidance:
As of the date hereof, approximately 75% of the Company fleet’s expected operating days in the second quarter of 2023 have been fixed at an estimated TCE of approximately $18,626. Assuming that for the remaining operating days of our index-linked T/Cs, the respective vessels’ TCE will be equal to the average Forward Freight Agreement (“FFA”) rate of $18,825 per day (based on the FFA curve of May 22, 2023), our estimated TCE for the second quarter of 2023 will be approximately $18,8705. The following table provides the break-down of index-linked charter and fixed-rate charters in the second quarter of 2023:
First Quarter and Recent Developments:
Dividend Distribution for Q4 2022 and Declaration of Q1 2023 Dividend
On April 25, 2023, the Company paid the previously announced quarterly dividend of $0.025 per share, for the fourth quarter of 2022, to all shareholders of record as of March 31, 2023.
The Company also declared a cash dividend of $0.025 per share for the first quarter of 2023 payable on or about July 6, 2023 to all shareholders of record as of June 22, 2023.
Buyback of Convertible Note
On January 3, 2023, the Company repaid $8.0 million of the convertible note issued to Jelco Delta Holding Corp. (“Note”) at its face value, without any additional consideration in accordance with the terms of the Note. Based on a conversion price of $12 per share, the buyback pre-empted the potential issuance of 667,000 shares. There is approximately $3.2 million currently outstanding under the Note, which is the only remaining convertible note issued by the Company.
Stock Purchases by the CEO & CFO
Seanergy’s Chairman and Chief Executive Officer, Stamatis Tsantanis, has purchased 145,000 shares at an average price of $5.17 per share, or approximately $750,000 worth of SHIP common stock, in the open market. In addition, the Company’s CFO, Stavros Gyftakis, has purchased 18,510 shares at an average price of $5.40 per share, or approximately $100,000 worth of SHIP common stock in the open market.
Completion of the tender offer for the purchase of the Class E Common Share Purchase Warrants
On January 10, 2023, the Company completed its tender offer to purchase all outstanding Class E Warrants at a price of $0.20 per warrant. The total number of warrants tendered was 4,038,114 warrants, representing approximately 47% of the outstanding Class E Warrants. The remaining outstanding Class E Warrants are exercisable to purchase up to 449,459 of the Company's common shares at an exercise price of $4.965 per common share.
Vessel Transactions and Commercial Updates
M/V Championship new time-charter agreement
On April 24, 2023, the M/V Championship commenced employment under a new T/C agreement at an index linked rate, at a premium over the BCI, with the same charterer. The new time charter will have a duration of about 24 to about 30 months and a new scrubber profit share scheme has been introduced, with Seanergy receiving the majority of the monetary benefit.
M/V Knightship time-charter extension
On March 28, 2023, the charterer of the M/V Knightship agreed to exercise the first optional period extending the T/C after the maximum original period for a period of about 11 months to about 13 months including the option to the Company to convert this charter party to a fixed rate based on prevailing BCI FFA rate.
M/V Geniuship time-charter extension
On February 8, 2023, the charterer of the M/V Geniuship agreed to extend the T/C agreement in direct continuation from the maximum duration of the previous agreement. The extension period is from about 11 months to a maximum of 15 months, while all other terms of the T/C remain unaltered.
Profitable sale of M/V Goodship and M/V Tradership and delivery to their new owners
On February 10, 2023 and February 28, 2023, the Company delivered to their new owners the 177,536 dwt M/V Goodship and the 176,925 dwt M/V Tradership, respectively. The Company entered into agreements for the sale of the two capesize dry-bulk vessels in December 2022 for an aggregate price of $36.25 million. The combined profit from the sale of the two vessels reached approximately $8.1 million.
Financing Updates
M/V Lordship sale & leaseback agreement
On April 24, 2023, the Company entered into a $19.0 million sale and leaseback agreement to partially refinance the loan facility with Alpha Bank, secured by the M/V Lordship, as well as M/Vs Squireship and Friendship. The M/V Lordship was sold and chartered back on a bareboat basis for a period of 4 years and 5 months. The Company has continuous options to repurchase the vessel at predetermined prices, following the second anniversary of the bareboat charter. At the end of the bareboat period, Seanergy has the option to repurchase the vessel for $7.8 million. The $19.0 million financing bears interest of 3-month term SOFR plus 3.00% per annum. The new interest rate is 50 bps lower than that of the previous financing. Approximately $6.6 million of additional liquidity was released to the Company through the refinancing. The charterhire principal will amortize over fifty-three consecutive monthly installments, averaging approximately $0.2 million each.
M/V Championship sustainability linked loan facility
On April 18, 2023, the Company amended and restated the loan facility with Danish Ship Finance secured by the M/Vs Fellowship and Premiership to refinance the sale and leaseback agreement for the M/V Championship. The amended and restated facility includes a new tranche of $15.8 million secured by the M/V Championship, while a sustainability adjustment mechanism was introduced in respect of the underlying interest rate of the facility. The new tranche has a five-year term and amortizes over twenty consecutive quarterly payments, averaging approximately $0.6 million per quarter. The interest rate is 2.65% plus 3-month Term SOFR and can fluctuate by 0.05% based on certain emission reduction thresholds.
M/V Knightship sale & leaseback agreement
On March 29, 2023, the Company entered into a $19.0 million sale and leaseback agreement to refinance a previous sale and leaseback agreement with AVIC, secured by the M/V Knightship. The vessel was sold and chartered back on a bareboat basis for a six-year period commencing on April 6, 2023. The Company has continuous options to repurchase the vessel at predetermined prices, following the second anniversary of the bareboat charter. At the end of the six-year bareboat period, the ownership of the vessel will be transferred to Seanergy at no additional cost. The $19.0 million financing bears interest of 3-month term SOFR plus 2.80% per annum. The new interest rate is 120 bps lower than that of the previous financing. Approximately $8.5 million of additional liquidity was released to the Company through the refinancing. The charterhire principal will amortize over seventy-two consecutive monthly installments, averaging approximately $0.3 million each.
Prepayment of Aegean Baltic Bank Loan Facility
In connection with the sales of the M/V Goodship and M/V Tradership, the Company prepaid on February 9, 2023, the outstanding amount of $6.1 million of the tranche secured by the M/V Goodship and on February 24, 2023, the outstanding amount of $6.8 million of the second and final tranche of the facility, secured by the M/V Tradership.
