Highlights of the Fourth Quarter of 2018:
- Net revenues: $27 million in Q4 2018, compared to $24.3 million in Q4 2017
- Adjusted net loss1: $2.8 million in Q4 2018, as compared to $0.1 million in Q4 2017
- Adjusted EBITDA1: $6.3 million in Q4 2018, as compared to $7.8 million in Q4 2017
Highlights of Full Year 2018:
- Net revenues: $91.5 million in 2018, compared to $74.8 million in 2017
- Adjusted net loss: $13.8 million in 2018, as compared to $14.6 million in 2017
- Adjusted EBITDA: $22.9 million in 2018, as compared to $14.1 million in 2017
- Commercial agreements with leading international charterers for scrubber installations and period employment
- Successfully concluded approximately $70 million of loan refinancings
- Seanergy became the only pure-play Capesize listed company
ATHENS, Greece, March 19, 2019 (GLOBE NEWSWIRE) -- Seanergy Maritime Holdings Corp. (the “Company”) (NASDAQ: SHIP), a Capesize dry bulk shipping company, announced today its financial results for the fourth quarter and twelve months ended December 31, 2018.
For the quarter ended December 31, 2018, the Company generated net revenues of $27 million, an 11% increase compared to the fourth quarter of 2017. Adjusted EBITDA for the quarter was $6.3 million, a 19% decrease compared to EBITDA of $7.8 million in the same period of 2017. Adjusted net loss for the fourth quarter was $2.8 million compared to net loss of $0.1 million in the fourth quarter of 2017. The daily Time Charter Equivalent (TCE)1 of the fleet for the fourth quarter of 2018 was $15,312, compared to $15,378 in the fourth quarter of 2017. The average daily OPEX of the fleet for the quarter was $5,557, up by 2% from $5,468 in the respective quarter of 2017.
For the twelve months ended December 31, 2018, net revenues were $91.5 million, increased by 22% compared to the same period of 2017. Adjusted EBITDA for the period was $22.9 million, a 63% increase compared to $14.1 million in 2017. Adjusted net loss for the twelve months of 2018 was $13.8 million compared to an adjusted net loss of $14.6 million for the same period of 2017. The daily TCE of the fleet for the twelve months of 2018 stood at $13,156, representing a 27% increase from $10,395 in 2017. Average daily OPEX of the fleet for the period was $5,198, representing a 4% increase from $4,985 in the respective period of 2017.
Stamatis Tsantanis, the Company’s Chairman & Chief Executive Officer, stated:
“During the fourth quarter of 2018, the Company generated net revenues of $27 million, an increase of 11% from the same quarter of 2017 and a marginal sequential improvement from the $26.4 million recorded in third quarter 2018. Our average Capesize TCE for the fourth quarter of 2018 was $17,250 per day exceeding by approximately 9% the respective performance of the Baltic Exchange Capesize Index (“BCI”) which averaged $15,876 in the same period.
“During the full year of 2018, the earnings of our fleet benefited from the stronger Capesize market of the second half of the year. Namely, the daily TCE of our fleet increased by 27% compared to the previous year having a significant impact on Adjusted EBITDA which increased by 63% year-over-year.
We also entered into innovative commercial agreements for the installation of exhaust gas cleaning systems (“scrubbers”) on five of our Capesizes that are expected to be completed in Q3 and Q4 of this year. Upon completion, the vessels will commence index-linked period employment with three leading dry-bulk charterers ranging in duration between three and five years. The total investment, to be covered by the charterers, is expected to exceed $12.5 million, including equipment and installation costs. We believe that this approach towards the new regulations is the most prudent, since we avoid the installation costs and other uncertainties of the fuel markets.
Moreover, we refinanced the M/V Championship through a leasing agreement with Cargill International SA, which released approximately $7.2 million of liquidity for the Company. The vessel was chartered back to us on a bareboat basis and subsequently entered into a five-year time charter with Cargill at a rate which is linked to the average of the 5- T/C routes of the BCI. As part of the transaction, the Company issued 1,800,000 common shares to Cargill.
Overall, in 2018 we successfully concluded the debt refinancing of approximately $48 million with new loan facilities or sale and leasebacks exceeding $70 million. As a result, we reduced the average interest cost of the underlying loans by 2.25% and extended the respective maturities by an average of 4.5 years. Moreover, we further expanded our lending relationships with prominent financial institutions in Asia and in the U.S.
Finally, consistent with our strategy to focus on the Capesize sector, which we believe to have the most positive fundamentals in dry bulk shipping, we became the only pure-play Capesize company listed in the US capital markets. This is a result of the sale of our two Supramax vessels which was completed in November 2018. The divestment from the Supramax asset class was well-timed considering the subsequent decline in the fair market value of these vessels and the decrease in their earnings. In addition, we expanded our Capesize fleet by acquiring the Korean-built Capesize M/V Fellowship.
“In the first quarter of 2019, our main focus has been on preserving liquidity in order to address the temporary market slowdown. In this context, we have concluded a $4.5 million facility with a major European bank, which is an existing lender of the Company. We intend to use the proceeds for general corporate purposes including to partly pre-fund our scrubber capital expenditure program for 2019. The CAPEX related to the scrubbers including equipment acquisition, installation and any off hire, will be reimbursed in full by the respective charterer following the delivery of the vessels to the agreed period charters starting in third quarter 2019. At the same time, we have reached agreements with various lenders of the Company, subject to definite documentation, for the deferral of $3.3 million in principal payments within 2019 to the balloons of the respective facilities.
“In the beginning of 2019 we have experienced a sharp drop in the market that was driven primarily by the supply disruption caused by the Brumadinho dam disaster in Brazil. The main drivers of the market in 2019 are expected to be the Chinese government policies and trade relations, the availability of long-haul iron ore cargoes from Brazil, the disruptions caused by the upcoming implementation of IMO 2020 regulations and fleet growth prospects. It appears that the U.S. and China are moving closer to a temporary agreement on trade, and we expect that the situation in Brazil will normalize within the second quarter.
“We remain optimistic about the Capesize market in 2019 and 2020, despite the recent temporary market slowdown. The drastic reduction of new vessel deliveries in combination with the fleet disruptions from the implementation of the new environmental rules as well as the anticipated installation of scrubbers, especially in bigger vessels such as Capesizes, are expected to lead to a significant tonnage supply contraction and in turn, to higher charter rates in the second half of 2019.”
|Vessel Name||Vessel Class||Capacity |
|Championship (1)||Capesize||179,238||2011||Sungdong||T/C Index Linked (2)|
|Partnership||Capesize||179,213||2012||Hyundai||T/C Index Linked (3)|
|Lordship||Capesize||178,838||2010||Hyundai||T/C Index Linked (5)|
|Leadership||Capesize||171,199||2001||Koyo – Imabari||Spot|
|Total / Average||1,748,581||10.0 years|
(1) 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.
(2) Chartered by the major commodity trading company that leased back the M/V Championship to the Company. The daily charter hire is calculated at an index linked rate based on the average of the 5 T/C routes of the BCI. In addition, the time charter provides Seanergy with the option to convert the index linked rate to a fixed rate for a period of between three and 12 months, based on the prevailing Capesize forward freight agreement rate for the selected period. The vessel was delivered to the charterer on November 7, 2018 for a period of employment of 60 months, with an additional period of 18 months at charterer’s option.
(3) Chartered by a major European utility and energy company and was delivered to the charterer on December 7, 2018 in direct continuation of the vessel's previous time charter, for a period of about five months to about eight months. The daily charter hire is calculated at an index linked rate based on the average of the 5 T/C routes of the BCI. In addition, the time charter provides the Company with the option to convert the index linked rate to a fixed rate for a period of between three and 12 months, based on the prevailing Capesize forward freight agreement rate for the selected period.
(4) 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.
(5) Chartered by a major European charterer. The daily charter hire is calculated at an index linked rate based on the average of the 5 T/C routes of the BCI. In addition, the time charter provides Seanergy with the option to convert the index linked rate to a fixed rate for a period of between three and 12 months, based on the prevailing Capesize forward freight agreement rate for the selected period. The vessel was delivered to the charterer on June 28, 2017 for a period of about 18 months to about 22 months.
|Q4 2018 ||Q4 2017 ||FY 2018 ||FY 2017 |
|Ownership days (1)||928||1,012||3,931||3,864|
|Available days (2)||924||1,012||3,918||3,851|
|Operating days (3)||914||1,003||3,902||3,837|
|Fleet utilization (4)||98.5||%||99.1||%||99.3||%||99.3||%|
|TCE rate (5)||$15,312||$15,378||$13,156||$10,395|
|Daily Vessel Operating Expenses (6)||$5,557||$5,468||$5,198||$4,985|
(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) Available days are the number of ownership days less the aggregate number of days that the vessels are off-hire due to drydockings, special and intermediate surveys, or days when the vessels are in lay-up. The shipping industry uses available days to measure the number of ownership days in a period during which the vessels should be capable of generating revenues. During the three months ended December 31, 2018 and 2017, the Company incurred four and zero off-hire days for vessel dry dockings, respectively. During the twelve months ended December 31, 2018 and 2017, the Company incurred 13 and 13 off-hire days for vessel drydockings, respectively.
(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 shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually could generate revenues. During the three months ended December 31, 2018 and 2017, the Company incurred 10 and nine off-hire days due to unforeseen circumstances, respectively. During the twelve months ended December 30, 2018 and 2017, the Company incurred 16 and 14 off-hire days due to unforeseen circumstances, respectively.
(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) Time Charter Equivalent (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)
|Q4 2018||Q4 2017||FY 2018||FY 2017|
|Net revenues from vessels||26, 991||24,289||91,520||74,834|
|Less: Voyage expenses||12, 996||8,865||40,184||34,949|
|Net operating revenues||13,995||15,424||51,336||39,885|
(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)
|Q4 2018||Q4 2017||FY 2018||FY 2017|
|Vessel operating expenses||5,466||5,549||20,742||19,598|
|Less: Pre-delivery expenses||309||15||309||337|
|Vessel operating expenses before pre-delivery expenses||5,157||5,534||20,433||19,261|
|Daily Vessel Operating Expenses||5,557||5,468||5,198||4,985|
Net Loss to EBITDA and Adjusted EBITDA Reconciliation:
(In thousands of U.S. Dollars)
|Q4 2018||Q4 2017||FY 2018||FY 2017|
|Add: Net interest and finance cost||6,353||4,921||25,213||17,352|
|Add: Depreciation and amortization||2,721||3,004||11,510||11,388|
|Add: Impairment loss||389||-||7,267||-|
|Less: Gain on Debt Refinancing||-||-||-||11,392|
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 adjusted EBITDA and adjusted Net Loss are not recognized measurements under U.S. GAAP. Adjusted EBITDA represents EBITDA adjusted to exclude the gain on debt refinancing and impairment charges, which the Company believes are not indicative of the ongoing performance of its core operations. Adjusted Net Loss represents Net Loss adjusted to exclude the gain on debt refinancing and impairment losses charges.
EBITDA, adjusted EBITDA and adjusted Net Loss are presented as we believe that these measures are useful to investors as a widely used means of evaluating operating profitability. EBITDA, adjusted EBITDA and adjusted Net Loss as presented here may not be comparable to similarly titled measures presented by other companies. These 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.
Net Loss to Adjusted Net Loss Reconciliation:
(In thousands of U.S. Dollars)
|Q4 2018||Q4 2017||FY 2018||FY 2017|
|Add: Impairment loss||389||-||7,267||-|
|Less: Gain on debt refinancing||-||-||-||11,392|
Fourth Quarter and Recent Developments:
New Loan Facility
The Company has successfully concluded a $4.5 million top-up tranche on an existing loan facility with a major European bank, to be used for general corporate purposes including to partly pre-fund the installation cost of scrubbers on two of the Company’s vessels. The top-up tranche will bear the same interest as the existing loan. In addition, the lender has agreed to extend the maturity date of the original facility by 6 months to coincide with that of the top-up tranche. Following delivery of the two vessels under agreed long-term time charters which is expected during the second half of 2019, the charterers have agreed to reimburse the Company for the total costs incurred for the installation.
Within the fourth quarter of 2018 and the first quarter of 2019, the first installments towards the previously announced commercial agreements for the equipment and installation costs of scrubbers were paid for three and two vessels, respectively. The underlying amounts were fully covered by the vessels’ respective charterers and the new top-up facility. Following these payments, construction of all scrubber systems to be installed onboard five of our vessels has commenced. At the same time, we have progressed with the preparatory work, engineering and 3D scanning on all five vessels. Installations will commence from April 2019 onwards and are expected to be finalized by October 2019.
Jelco Loan Amendments
In January 2019, the Company and Jelco Delta Holding Corp. (“Jelco”), an entity affiliated with our major shareholder, entered into a supplemental letter with regards to the April 10, 2018 loan facility in order to extend the final repayment date from January 31, 2019 to April 1, 2019. As of the date of this press release, the amount outstanding under the facility is $2.0 million.
In February 2019, the Company amended and restated the October 4, 2016 loan facility with Jelco in order to (i) extend the final repayment date from January 28, 2019 to June 30, 2020 and (ii) record additional second priority securities over the M/V Partnership. As of the date of this press release, the amount outstanding under the facility is $5.9 million.
In February 2019, the Company entered into a supplemental agreement to the May 24, 2017 loan facility with Jelco in order to (i) extend the final repayment date from May 24, 2019 to December 30, 2020 and (ii) record additional second priority securities over the M/V Partnership. As of the date of this press release, the amount outstanding under the facility is $11.45 million.
Overall, the Company deferred and extended $17.35 million of payments to Jelco.
Jelco Convertible Note Amendment
In February 2019, the Company amended the September 27, 2017 convertible note issued to Jelco, in order to (i) extend the maturity date from 27 September, 2021 to December 31, 2022, (ii) amend the repayment schedule for the aggregate outstanding principal amount to be payable in a bullet instalment on the maturity date, (iii) provide the Company with an option for early prepayment in shares of the Company’s common stock and (iv) record new second priority securities over the M/V Partnership. As of the date of this press release, the amount outstanding under the note is $13.75 million.
Reverse Stock Split
The Company announced today that the Company’s Board of Directors (the “Board”) has determined to effect a 1-for-15 reverse split of the Company’s common stock. At the annual meeting of the shareholders of the Company held on September 27, 2017, 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-15 and granted the Board the authority to determine the exact split ratio and proceed with the reverse stock split. The Board approved the reverse stock split on February 26, 2019.
The reverse stock split will be effective, and the common stock will begin trading on a split-adjusted basis on the NASDAQ Capital Market at the opening of trading on March 20, 2019. When the reverse stock split becomes effective, every fifteen 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 42,153,348 shares to approximately 2,810,223 shares. The exercise price of the Company’s outstanding class A warrants will adjust accordingly.
No fractional shares will be issued in connection with the reverse stock split. 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.
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 March 20, 2019. 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 18, 2017, a copy of which is available at www.sec.gov.
As previously announced, today, Tuesday, March 19, 2019 at 9:00 a.m. Eastern Time, the Company’s management will host a conference call to present the financial results.
Conference Call Details
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238- 0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote “Seanergy” to the operator.
A telephonic replay of the conference call will be available until March 26, 2019, by dialing 1(866) 331-1332 (US Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or +44 (0) 3333 009785 (Standard International Dial In). Access Code: 2094507#.
There will also be a simultaneous live webcast over the Internet, through the Seanergy website (www.seanergymaritime.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Seanergy Maritime Holdings Corp.
Unaudited Condensed Consolidated Balance Sheets
(In thousands of U.S. Dollars)
|December 31, |
|December 31, |
|Cash and restricted cash||7,444||11,039|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Bank debt and other financial liabilities||196,698||195,021|
|Due to related parties||19,349||17,342|
|TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY||267,880||275,705|
*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 |
|Twelve months ended |
|Vessel revenue, net||26,991||24,289||91,520||74,834|
|Vessel operating expenses||(5,466||)||(5,549||)||(20,742||)||(19,598||)|
|General and administrative expenses||(1,953||)||(1,783||)||(6,500||)||(5,081||)|
|Depreciation and amortization||(2,721||)||(3,004||)||(11,510||)||(11,388||)|
|Operating income||3, 216||4,824||4, 275||2,802|
|Interest and finance costs||(6,427||)||(4,959||)||(25,296||)||(17,399||)|
|Gain on debt refinancing||-||-||-||11,392|
|Total other expenses, net:||(6,402||)||(4,940||)||(25,333||)||(6,037||)|
|Net loss per common share, basic||(0.08||)||0.00||(0.56||)||(0.09||)|
|Weighted average number of common shares outstanding, basic||39,456,294||36,601,746||37,606,454||35,845,890|
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 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" and class A warrants under "SHIPW".
Please visit our company website at: www.seanergymaritime.com
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 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.
230 Park Avenue Suite 1536
New York, NY 10169
Tel: (212) 661-7566
1 EBITDA, adjusted EBITDA, adjusted net loss and Time Charter Equivalent (“TCE”) rate are non-GAAP measures. Please see the reconciliation below of Net Loss/Income to EBITDA and Adjusted EBITDA, Net Loss to Adjusted Net Loss and Net revenues from vessels to TCE rate, in each case the most directly comparable U.S. GAAP measure.