Seanergy Maritime Holdings Corp. Swings To Loss, As Revenues Decreased in 2020

Seanergy Maritime Holdings Corp. announced its financial results for the fourth quarter and twelve months ended December 31, 2020.

For the quarter ended December 31, 2020, the Company generated net revenues of $21.3 million, representing a 23.3% decrease compared to the corresponding quarter of 2019. The time charter equivalent rate (“TCE”)1 earned during the fourth quarter of 2020 was $16,511, decreased by 28% from $22,935 in the fourth quarter of 2019, which is mainly attributable to the decrease of the Baltic Capesize Index (“BCI”) in the corresponding quarters. The Company recorded a net loss of $2.3 million compared to net income of $3.1 million in the same quarter of 2019, which includes one-off cash and non-cash charges amounting to $1.6 million associated with the financial restructuring of the Company.

For the twelve-month period ended December 31, 2020, net revenues amounted to $63.3 million, a 27% decrease compared to $86.5 million in the same period in 2019. The TCE earned during 2020 was $11,950, representing a 19% decrease when compared to a TCE of $14,694 in 2019 which compares favorably with the year-on-year percentage decrease in the 5-time charter (“T/C”) route average of the BCI of 27.5%. The average daily vessel operating expenses (“OPEX”) of the fleet for the twelve-month period of 2020 was $5,709, marking a 10% increase when compared with the respective figure for 2019 of $5,172.

Cash and cash-equivalents, restricted cash and term deposits, as of December 31, 2020 stood at $23.7 million, compared to $14.6 million as of December 31, 2019. Shareholders’ equity at the end of the fourth quarter of 2020 was $95.7 million, compared to $29.9 million at the end of the fourth quarter of 2019.

First Quarter 2021 TCE Guidance:

As of the date hereof, approximately 98% of our fleet operating days in the first quarter of 2021 have been fixed at a TCE of approximately $16,0002, or 89% higher compared to the $8,481 TCE recorded in the first quarter of 2020.

Stamatis Tsantanis, the Company’s Chairman and Chief Executive Officer, stated:

“We are very pleased that Seanergy has successfully turned the corner of a very challenging year in 2020 and has emerged as a stronger enterprise for the years to come. From a historical perspective, our results for the fourth quarter of 2020 were affected by a short-lived softening of the market, as well as by one-off cash and non-cash charges associated with our successful financial restructuring.

Overall, 2020 was marked by the severe consequences of the outbreak of the COVID-19 pandemic. The resulting volatility in day-rates reflected οn the earnings of our fleet, especially in the first half of the year. Our average TCE for Q4 was $16,511 per day, largely in line with the respective performance of the BCI which averaged $16,944 per day in the same period. However, due to the weakness of the first half, our daily TCE for 2020 stood at $11,950, decreasing by 19% compared to the previous year. This had a proportional effect on our EBITDA which decreased by 17% year-over-year, from $23.8 million for 2019 to $19.9 million for 2020.

During this highly challenging market environment, we took decisive steps to successfully execute on our strategic plan to position Seanergy for the long-term. We have grown our fleet with well-timed acquisitions of high-quality vessels, while seizing the opportunity to overhaul our balance sheet, providing the Company with a solid financial footing going forward.

In light of the volatile market conditions, we took swift actions to strengthen our liquidity. These actions facilitated the successful restructuring of $179 million of our debt, including our junior loans and convertible notes. As part of this restructuring, loan maturities due in 2020 were extended by two to four years at improved terms, providing Seanergy with a clean runway and financial flexibility. In addition, the refinancing of two of our vessels at a discount, in combination with our accelerated debt repayments, have resulted in an impressive $37.6 million year-over-year reduction in our overall debt.

Furthermore, within the third quarter of 2020 and while market conditions were improving, we took delivery of the M/V Goodship, a 2005-built Japanese unit, which we agreed to acquire earlier in the year at what has proven to be a historically low price. We also completed a sixth scrubber installation on the M/V Knightship in cooperation with Glencore, the charterer of the vessel, who compensated the Company for 100% of the scrubber investment.

Moving into 2021, the Capesize market has taken a strong upward turn, which we expect to be sustainable in the next years. The BCI has averaged in excess of $16,000 per day year-to-date, in a trend that is defying the seasonality patterns of the last 7 years, indicating potentially strong forward momentum. We believe the outlook for the next two years is very strong, supported by solid demand driven by a considerable growth in infrastructure projects in the post-COVID era. Vessel supply fundamentals are also very favorable with the lowest vessel orderbook of the last 17 years, as amplified by the catalytic effect of the upcoming environmental regulations.

Supported by the strong performance of the Capesize market, in the first quarter of 2021 so far, we successfully implemented our strategic plan to grow our fleet’s carrying capacity by 28%, while drastically deleveraging our balance sheet. In the beginning of the year, we regained compliance with Nasdaq’s minimum bid price requirement organically, without reverting to a reverse stock split. Subsequently, we completed a $75.0 million common equity offering priced at-the-market under Nasdaq rules, with strong institutional demand and in a solid valuation environment. The proceeds facilitated $33.6 million in additional debt repayments as well as the acquisition of three high-quality Japanese-built vessels.

These newly acquired vessels, M/Vs Tradership, Flagship and Patriotship, are expected to be delivered to us within the second quarter of the year, in what we expect to be a further improved market environment, increasing our fleet to 14 units. Moreover, we have committed two additional vessels in long term index-linked time-charters with leading miners and dry bulk operators, commencing in the second quarter of the year, ensuring that our fleet will timely capitalize on the improving market conditions.

Relating to the implementation of our ESG agenda, we are one of the first publicly listed companies to complete the evaluation of our fleet for compliance with the upcoming Energy Efficiency Existing Ship Index (“EEXI”) regulation for greenhouse gas emissions. We were pleased with the outcome of the evaluation which revealed no significant impact on, or expenses for, our fleet to comply with such regulations. On the same front, we joined the “Neptune Declaration on Seafarer Wellbeing and Crew Change,” a maritime industry initiative focusing on, among other things, facilitating crew changes during the pandemic and ongoing port restrictions. This matter has been brought out as the most important social aspect of the pandemic in our industry.

Concluding, over the last 15 months, we have managed to successfully navigate Seanergy through the challenging operating environment of 2020, implementing a number of strategic initiatives with positive transformational effect on our Company. We strengthened our equity base, reduced our debt and enhanced our liquidity while at the same time achieved greater scale and broadened our revenue generating capacity with the acquisition of high-quality vessels. Seanergy is today in what we believe to be an optimal financial position allowing the Company to better capitalize on improving market conditions with the goal of creating substantial value for our investors.”

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