ATHENS, GREECE—(Marketwired – Sep 29, 2016) – Seanergy Maritime Holdings Corp. (the “Company”) (
NASDAQ
:
SHIP
) announced today its financial results for the second quarter and six months ended June 30, 2016.
For the second quarter and six months ended June 30, 2016, the Company generated net revenues of $8.2 and $15.2 million respectively. As of June 30, 2016 total stockholder's equity was $20.9 million and cash and restricted cash was $3.1 million.
Stamatis Tsantanis, the Company's Chairman & Chief Executive Officer, stated:
“During the first half of 2016, the dry bulk market experienced its worst performance of the last 25 years. The severe market weakness however, provides unique investment opportunities to acquire quality tonnage at historically low prices. Over the past several months we have worked towards our stated goal of expanding our operating fleet by actively monitoring the market for vessel acquisition opportunities. As announced in a separate press release, we recently reached an agreement to purchase two 2010–built South Korean Capesize vessels at a price of $20.75 million each. The acquisition price compares very favorably with similar secondhand Capesize vessels, which have averaged approximately $35 million over the past 5 years.
“Furthermore, we have recently improved our financial position by completing a registered direct offering in August where we sold common shares to an unaffiliated institutional investor. In addition, we reached a number of agreements with certain of our lenders to reduce our financial expenses and help us preserve our cash flow. It is evident through these transactions and the commitment shown by our lenders and investors that there is a high degree of confidence in our business plan.
“Over the first six months of 2016 the financial performance of Seanergy has been negatively affected by the historic low dry bulk charter market, especially in the first quarter of the year. Baltic freight indices show that the average daily rates for Capesize vessels over the first six months of 2016 fell by 22% when compared to the same period of 2015. Against this difficult background, our six Capesize vessels earned a TCE rate of $4,267 as compared to an average reading of $3,570 for the Baltic Capesize Index. Currently, the Capesize market has improved substantially compared to the levels seen in the first quarter, which we expect to lead to better financial performance for the rest of the year as our vessels are expected to operate in a higher charter rates environment.
“At the same time, the continued rise in China's iron ore imports and the commitment to capacity expansion shown by major miners in Australia and Brazil reinforce our positive long term expectations. We intend to pursue additional acquisition opportunities that we believe can further enhance value for our shareholders and we believe that Seanergy is the right platform in the dry bulk listed space to take advantage of the eventual recovery of the freight market and asset values.”
Current Company Fleet:
Vessel Name
Vessel Class
Capacity
(in DWT)
Year Built
Yard
Leadership
Capesize
171,199
2001
Koyo – Imabari
Geniuship
Capesize
170,057
2010
Sungdong SB
Gloriuship
Capesize
171,314
2004
Hyundai HI
Squireship
Capesize
170,018
2010
Sungdong SB
Championship
Capesize
179,238
2011
Sungdong SB
Premiership
Capesize
170,024
2010
Sungdong SB
Gladiatorship
Supramax
56,819
2010
CSC Jinling Shipyard
Guardianship
Supramax
56,884
2011
CSC Jinling Shipyard
Total / Average
1,145,553
7.8 Years
Fleet Data:
Q2 2016
Q2 2015
6M 2016
6M 2015
Ownership days (1)
728
91
1,456
103
Available days (2)
637
91
1,354
103
Operating days (3)
590
80
1,208
88
Fleet utilization (4)
81.0
%
87.9
%
83.0
%
85.4
%
Fleet utilization excluding drydocking & lay–up off hire days (5)
92.6
%
87.9
%
89.2
%
85.4
%
TCE rate (6)
$5,649
$9,788
$4,685
$8,659
Daily Vessel Operating Expenses (7)
$4,082
$7,769
$4,600
$9,117
(1) Ownership days are the total number of days in a period during which the vessels in a fleet have been owned. 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 vessels are off–hire due to major repairs, dry dockings, special and intermediate surveys, or days vessels are in lay–up. The shipping industry uses available days to measure the number of ownership days in a period during which vessels should be capable of generating revenues. During the three months ended June 30, 2016, the Company incurred 91 off–hire days for a vessel in lay–up. During the six months ended June 30, 2016 the Company incurred 102 off–hire days for a vessel lay–up.
(3) Operating days are the number of available days in a period less the aggregate number of days that vessels are off–hire for any reason, including off–hire days between successive voyages, as well as other unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues. In the quarter ended June 30, 2016 the Company incurred 47 off–hire days between voyages. In the six months ended June 30, 2016, the Company incurred 144 off–hire days between voyages and 2 off–hire days due to other unforeseen circumstances.
(4) Fleet utilization is the percentage of time that our vessels were generating revenue, and is determined by dividing operating days by ownership days for the relevant period.
(5) Fleet utilization excluding drydocking & lay–up off–hire days is calculated by dividing the number of the fleet's operating days during a period by the number of available days during that period. The shipping industry uses fleet utilization excluding drydocking & lay–up days to measure a Company's efficiency in finding suitable employment for its vessels and excluding the amount of days that its vessels are off–hire for reasons such as scheduled repairs, vessel upgrades, dry dockings, special or intermediate surveys and lay–ups.
(6) Time Charter Equivalent (TCE) rate is defined as our net revenue less voyage expenses during a period divided by the number of our operating days during the period. Voyage expenses include port charges, bunker (fuel oil and diesel oil) expenses, canal charges and other commissions. We include TCE rate, a non–GAAP measure, as we believe it provides additional meaningful information in conjunction with net revenues from vessels, the most directly comparable US GAAP measure, and because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies. The following table reconciles our net revenues from vessels to TCE rate.
(In thousands of US Dollars, except operating days and TCE rate)
Q2 2016
Q2 2015
6M 2016
6M 2015
Net revenues from vessels
8,164
1,757
15,165
1,757
Less: Voyage expenses
4,831
974
9,505
995
Net operating revenues
3,333
783
5,660
762
Operating days
590
80
1,208
88
TCE rate
5,649
9,788
4,685
8,659
(7) 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. We include daily vessel operating expenses, a non–GAAP measure, as we believe it provides additional meaningful information in conjunction with vessel operating expenses, the most directly comparable US GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of daily vessel operating expenses may not be comparable to that reported by other companies. The following table reconciles our vessel operating expenses to daily vessel operating expenses.
(In thousands of US Dollars, except ownership days and Daily Vessel Operating Expenses)
Q2 2016
Q2 2015
6M 2016
6M 2015
Vessel operating expenses
2,972
707
6,698
939
Ownership days
728
91
1,456
103
Daily Vessel Operating Expenses
4,082
7,769
4,600
9,117
Second Quarter Developments:
Supplemental Agreement to the UniCredit Bank AG Loan Facility
On June 3, 2016, we entered into a supplemental agreement to our senior secured loan facility with UniCredit Bank AG, dated September 11, 2015. Among other things, pursuant to the supplemental agreement the margin has been split into a cash portion and a non–cash portion. The non–cash portion of the margin will be capitalized and repaid in full by June 30, 2017. In addition, among other things, the application and the effective date of certain covenants is deferred to earliest June 30, 2017.
Supplemental Letter to the HSH Nordbank AG Loan Facility
On May 16, 2016, we entered into a supplemental letter to our senior secured loan facility with HSH Nordbank AG, dated September 1, 2015. Among other things, pursuant to the supplemental letter certain prepayments are deferred to June 30, 2018.
Amendments to the Revolving Convertible Promissory Note to the Sponsor
On April 21, 2016, May 17, 2016 and June 16, 2016 the Company entered into a fifth, sixth and seventh amendment, respectively, to our unsecured revolving convertible promissory note of September 7, 2015. These amendments increased the maximum amount that we are permitted to borrow under the note to approximately $21.2 million and further modified the amount by which this amount is reduced on September 10, 2017, and each year on the anniversary of that date to $3.1 million. As of today, the Company has drawn down the entire amount available under the note.
Subsequent Developments:
2016 Annual Meeting of Shareholders
On September 28, 2016, the Company held its 2016 Annual Meeting of Shareholders, or the Meeting, in Athens, Greece pursuant to a Notice of Annual Meeting of Shareholders dated August 17, 2016. At the Meeting, each of the following proposals, which was set forth in more detail in the Notice of Annual Meeting of Shareholders and the Company's Proxy Statement sent to shareholders on or around August 17, 2016, were approved and adopted: (i) the election of two Class A Directors, Stamatios Tsantanis and Elias Culucundis, to serve until the 2019 Annual Meeting of Shareholders and (ii) the approval of the appointment of Ernst & Young (Hellas) Certified Auditors – Accountants S.A. to serve as the Company's independent auditors for the fiscal year ending December 31, 2016.
Acquisition of two 2010 built Capesize Vessels
On September 26, 2016 the Company entered into separate agreements with an unaffiliated third party for the purchase of two secondhand Capesize vessels for a gross purchase price of $20.75 million per vessel. The vessels are expected to be delivered between mid–November 2016 and early January 2017, subject to the satisfaction of certain customary closing conditions.
Completion of Registered Direct Offering
In a direct offering that was completed on August 10, 2016, the Company sold 1,180,000 shares of common stock to an unaffiliated institutional investor at a purchase price of $4.15 per share, for aggregate gross proceeds of $4.9 million. The net proceeds from the sale of the securities, after deducting placement agent fees and related offering expenses, are approximately $4.1 million. The net proceeds of this offering are expected to be used for general corporate purposes. The securities were offered pursuant to a shelf registration statement on Form F–3 previously filed and declared effective by the United States Securities and Exchange Commission (“SEC”). A prospectus supplement relating to the offering was filed by the Company with the SEC on August 9, 2016.
Supplemental Letter to the UniCredit Bank AG Loan Facility
On July 29, 2016, we entered into a supplemental letter to our senior secured loan facility with UniCredit Bank AG, dated September 11, 2015. Among other things, pursuant to the supplemental letter the effective date of a certain covenant is deferred to July 01, 2017.
Supplemental Agreements to the Alpha Bank A.E. Loan Facilities
On July 28, 2016, we entered into a second supplemental agreement related to our senior secured loan facility with Alpha Bank A.E., dated March 6, 2015. Among other things, pursuant to the second supplement agreement the next four repayment installments were reduced to $100,000 each, amounting to an aggregate reduction of $600,000 that will be added to the balloon payment. In addition, the effective date of certain covenants is deferred to July 01, 2017.
On July 28, 2016, we entered into a supplemental agreement related to our senior secured loan facility with Alpha Bank A.E., dated November 4, 2015. Among other things, pursuant to the supplement agreement the effective date of certain covenants is deferred to July 01, 2017.
Seanergy Maritime Holdings Corp.
Unaudited Condensed Consolidated Balance Sheets
June 30, 2016 and December 31, 2015
(In thousands of US Dollars)
June 30,
2016
December 31, 2015
ASSETS
Cash and restricted cash
3,109
3,354
Vessels, net
195,655
199,840
Other assets
5,874
6,158
TOTAL ASSETS
204,638
209,352
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank debt
177,090
177,505
Convertible promissory note
510
134
Other liabilities
6,134
8,429
Stockholders' equity
20,904
23,284
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
204,638
209,352
Seanergy Maritime Holdings Corp.
Unaudited Condensed Consolidated Statements of Operations
For the three and six months ended June 30, 2016 and 2015
(In thousands of US Dollars, except for share and per share data, unless otherwise stated)
Three months ended
June 30,
Six months ended
June 30,
2016
2015
2016
2015
Revenues:
Vessel revenue, net
8,164
1,757
15,165
1,757
Expenses:
Voyage expenses
(4,831
)
(974
)
(9,505
)
(995
)
Vessel operating expenses
(2,972
)
(707
)
(6,698
)
(939
)
Management fees
(222
)
(32
)
(454
)
(48
)
General and administrative expenses
(701
)
(702
)
(1,540
)
(1,385
)
Depreciation and amortization
(2,216
)
(135
)
(4,436
)
(158
)
Operating loss
(2,778
)
(793
)
(7,468
)
(1,768
)
Other expense:
Interest and finance costs
(2,339
)
(249
)
(4,379
)
(273
)
Other, net
(15
)
(5
)
(12
)
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