Highlights of the Third Quarter of 2020:
▪ Net revenues after voyage expenses: $15.8 million in Q3 2020 compared to $15.9 million in Q3 2019 ▪ Net Income: $3.6 million in Q3 2020, as compared to $0.7 million in Q3 2019
▪ EBITDA1: $12.7 million in Q3 2020, as compared to $9.8 million in Q3 2019
▪ Gain of $5.2 million from refinancing of a loan facility at a discount
Highlights of the Nine Months ended September 30, 2020:
▪ Net revenues after voyage expenses: $28.1 million in 9M 2020 compared to $30.7 million in 9M 2019 ▪ Net Loss: $16.0 million in 9M 2020, as compared to a net loss of $14.8 million in 9M 2019
▪ EBITDA: $11.6 million in 9M 2020, as compared to $11.9 million in 9M 2019
Balance Sheet Highlights:
- ▪ Shareholders’ equity of $86.5 million as of September 30, 2020 compared to $29.9 million as of December 31, 2019
- ▪ Third party debt of $160.1 million as of September 30, 2020 reduced from $183.1 million as of December 31, 2019
- ▪ Cash and cash equivalents of $33.8 million as of September 30, 2020 compared to $14.6 million as of December 31, 2019
For the quarter ended September 30, 2020, the Company generated net revenues after voyage expenses of $15.8 million, compared to $15.9 million in the corresponding quarter of 2019. This compares favorably with the 29% decrease in the average Capesize spot earnings in the third quarter of 2020 versus the same quarter of 2019. Accordingly, the average Time Charter Equivalent (“TCE”)1 earned by the fleet during the third quarter of 2020 was $16,219 per vessel per day, a decrease of 19% from $20,143 in the third quarter of 2019. Seanergy recorded net income of $3.6 million in the third quarter, compared to net income of $0.7 million in the same quarter of 2019. Basic net income per share for the third quarter of 2020 was $0.08. During the quarter, the Company recognized a $5.2 million gain from the refinancing of a loan facility at a discount through a new loan facility provided by a third-party lender.
For the nine-month period ended September 30, 2020 net revenues after voyage expenses amounted to $28.1 million, an 8.5% decrease compared to $30.7 million in the same period of 2019. The TCE earned during the first nine months of 2020 was $10,267, representing a 14% decrease from $12,004 in the same period of 2019, on the back of the historically low earnings environment of the first half of 2020.
Cash and cash-equivalents, including restricted cash, as of September 30, 2020 stood at $33.8 million, increased from $14.6 million as of December 31, 2019. Shareholders’ equity at the end of the third quarter of 2020 was $86.5 million compared to $29.9 million at the end of 2019. Third party vessel-secured debt was $160.1 million at the end of the third quarter of 2020 as compared to $183.1 million as of December 31, 2019.
Stamatis Tsantanis, the Company’s Chairman and Chief Executive Officer, stated:
“We are very pleased to see the third quarter of 2020 turning profitable for Seanergy following one of the worst six-month periods in recent history of our market. The Capesize daily rates improved significantly compared to the historically low first half of the year and that was reflected in the operating performance of our fleet. Our TCE for the third quarter was $16,219, improved by 132% from $6,985 in the first six months of 2020. The main factors behind the recent rate improvement were the increased demand for iron ore in China and the continued recovery in Brazilian exports. Our commercial performance in the fourth quarter tracks the BCI index which has averaged at approximately $20,500 quarter-to-date.
Despite the global short-term uncertainties, we expect this positive trend to continue in the long run, given the increasing demand of commodities combined with the lowest Capesize newbuilding orderbook of the last 15 years. Seanergy is the only pure-play Capesize company publicly listed in the US and is well-positioned to capitalize on positive market fundamentals. Our balanced commercial approach between index-linked time- charters and spot market exposure and our improved balance sheet offer a strong competitive advantage.
The COVID-19 global pandemic has affected the shipping industry and the seafarers onboard our vessels as port restrictions imposed globally have posed challenges on the timing and efficacy of crew changes. Through our meticulous planning we have been able to source solutions for our crew members despite the global travel restrictions. Our focus continues to be to safeguard the well-being of our onshore employees and crew members, avoid disruptions in the day-to-day vessel operations and service our clients efficiently.
In light of volatile market conditions, we took actions during the first nine months of 2020 to preserve our liquidity and strengthen our balance sheet. As a result of these actions, vessel-secured debt has seen an impressive reduction of $23 million since the end of 2019, while our trade credit position has improved by approximately $11.2 million in the same period. Further to the normal amortization of our senior facilities which was met in full, the reduction in our third-party debt was supported by the refinancing of two vessels at a discount, which resulted in a $5.2 million gain. We remain in discussions with our lenders regarding our loan facilities expiring in 2020, and have received positive feedback from our senior lenders to date, as described further in this release.
Furthermore, within the third quarter of 2020, we have taken delivery of our eleventh Capesize vessel, a 2005 built Japanese unit, which we agreed to acquire in the second quarter of the year at what we believe to be a historical low price. Despite the challenges faced globally in shipping, the delivery was concluded successfully during a rising market.
Concluding, despite the challenging operating environment imposed by the evolving pandemic, we have managed to strongly position Seanergy in a prominent position for what we believe will be a strong market rebound in the post COVID-19 era. Our strategic targets of sustainable growth and capital structure improvement, as means to achieve improved returns for our shareholders, continue to be in the foreground of all our initiatives.”
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