Seanergy Maritime announced today its financial results for the second quarter and six months ended June 30, 2020.
For the quarter ended June 30, 2020, the Company generated net revenues after voyage expenses of $4.7 million, a 41% decrease compared to the second quarter of 2019. The daily TCE of the fleet for the second quarter of 2020 was $5,424, down 40% from $9,104 in the second quarter of 2019 mainly due to the timing of the spot voyage fixtures in the second quarter of 2020 and the better market conditions in the second quarter of the previous year. The average daily per vessel OPEX of the fleet for the quarter was $5,140, largely in-line with the $5,015 incurred in the second quarter of 2019. Cash interest and finance costs for the second quarter of 2020 was $4.0 million compared to $3.8 million for the same period in 2019 (see table further below).
For the six-month period ended June 30, 2020, net revenues after voyage expenses were $12.3 million, decreased by 17% when compared to $14.8 million in same period of 2019. EBITDA for the first six months of 2020 was negative $1.1 million, compared to EBITDA of $2.1 million in the same period of 2019, a decrease driven by the reduction in net revenues after voyage expenses. The daily TCE of the fleet for the first six months of 2020 was $6,985 per ship per day, compared to $8,368 in the first six months of 2019. The average daily OPEX of the fleet was $5,353, reflecting a 9% increase against the respective period of 2019 mainly on the back of the increase noted in the OPEX figure for the first quarter of 2020 which was due to the timing of various related expenses. General and Administrative expenses in the first six months of 2020 stood at $3.1 million, in
line with the $3.2 million recorded in the respective period in 2019.
As of June 30, 2020, cash and cash equivalents including restricted cash stood at $30.4 million, marking an 109% improvement against December 31, 2019. Shareholders’ equity as of June 30, 2020 was $58 million, increased by 94% compared to $29.9 million as of December 31, 2019.
Third Quarter 2020 TCE Guidance:
Since the beginning of the third quarter of 2020, 88% of our available days (fleet ownership days less off-hire days due to surveys) have been fixed, at a daily TCE of approximately $22,4142 per ship per day, marking an increase of 221% as compared to the fleet average TCE rate of $6,985 in the first six months of 2020. During this period, 30% of our fleet is employed under voyage charters and 70% under Index-linked Time Charters.
For the vessels being operated under voyage charters, spot estimates are provided using the load-to-discharge method of accounting. Load-to-discharge accounting recognizes revenues over fewer days as opposed to the discharge-to-discharge method of accounting used prior to 2018, resulting in higher rates for these days and only voyage expenses being recorded in the ballast days. Over the duration of the voyage (discharge-todischarge) there is no difference in the total revenues and costs to be recognized. The rates quoted are for days currently contracted. Increased ballast days at the end of the quarter will reduce the additional revenues that can be booked based on the accounting cut-offs and therefore the resulting TCE will be reduced accordingly.
Stamatis Tsantanis, the Company’s Chairman and Chief Executive Officer, stated:
“As mentioned in our recent releases, the first half of 2020 was one of the most challenging periods in the history of dry bulk shipping. Our results for the second quarter and first six months of 2020 were materially affected by the depressed earnings environment due to a combination of events that impacted negatively the Capesize
market. In the beginning of the year, the outbreak of the COVID-19 pandemic in Asia and the subsequent slowdown of Chinese industrial production had a detrimental effect on the demand for iron ore imports. Going into the second quarter and while the Chinese economy started to recover, the severe weather effects in Brazil handicapped Vale’s iron ore production capacity. As a result, exports reduced by 10% year-over-year, and
consequently, the daily TCE of the Baltic Capesize Index (‘BCI’), on May 14, 2020 reached $1,992, the lowest point after the all-time lows in 2016.
During this challenging period, we acted to enhance our liquidity and further strengthen our balance sheet by raising equity from our shareholders to reduce our debt levels and capitalize on market opportunities. In May 2020, we successfully completed a series of equity capital raising transactions, with total net proceeds of approximately $47 million.
Furthermore, we concluded the refinancing of one of our loan facilities, which was maturing in July 2020, by settling the $29.1 million outstanding for $23.5 million instead. This settlement is expected to result in a $5.6 million gain and an equivalent equity accretion that will be recorded in our financial results for the third quarter of 2020. At the same time, we are making good progress in our discussions with our lenders regarding the remaining loan facilities expiring in 2020 with the objective of extending the maturities and improving the financing terms of these loan facilities.
In addition, among the accretive transactions that we concluded in this period, we acquired one Capesize vessel at a historically low price, utilizing part of the equity capital raising proceeds. The vessel will be delivered to us imminently. Based on the Capesize forward freight contracts for the remainder of 2020 trading at about $20,474 per day, the incremental TCE revenue from this vessel alone may exceed $2.9 million by the end of the year.
While the effect of the above transactions will be fully reflected in our September 30, 2020 results, the current picture represents a significant improvement, with cash reserves of $30.4 million compared to $14.6 million as of December 31, 2019, and stockholders’ equity of $58 million, which stands at the highest levels recorded since the Company’s re-launching in 2015.
Regarding current market conditions, we are very pleased to see a significant reversal of the negative factors of the first half into a full-blown recovery. Following the improvement in the weather conditions in Brazil, Vale has ramped up its production, which in combination with the robust demand for cargo from China, has seen the daily TCE of the BCI surging from its May lows of $1,992 to a 10-month high of $33,760 in July.
Our daily TCE for the third quarter, based on 88% of our available days, stands at $22,414, which is 221% higher than our 1H TCE.
Looking ahead, we are confident that the stable demand from China, the COVID-19 economic stimulus relief and the ramp up of the Brazilian exports, in-line with Vale’s recently reiterated production guidance, will contribute towards what we believe will be a sustainably healthy market for the rest of 2020 and in 2021.
Seanergy was well positioned to capture the upturn, based on index-linked employment for the majority of our fleet. In addition, we will continue to pursue opportunities that will serve our strategic targets of sustainable growth and capital structure improvement in the near future.”