Q3 2020 Seanergy Maritime Holdings Corp Earnings Call

Thank you for standing by ladies and gentlemen, and welcome to the synergy Maritime conference call on the thought of quotes on line items 2020 financial results, we have with US missed the some of their son, Thomas Chairman and Chief Executive Officer, I missed the Starbucks gift Takis Chief Financial Officer of the company at this time.

All participants are in a listen only mode that'd be a presentation followed by a question on non fiction at which time. If you wish the asked the question. Please press star one on your telephone keypad and wait for your name to be announced I must advise you that this conference is being recorded today forward looking statements. Please be reminded that the company publicly released its final.

Actual results, which are available to download on the synergy website synergy my the times Dot Com. If you do not have the copy of the press release, you may contact capital link at <unk>.

Two one to 6617566 and they will be happy to send it to you before turning the call. The if it's the Miss the sometime this we would like to remind you that this conference call contains forward looking statements as defined in the section 20 Sevena of the Securities I Oh from 1933 items.

Amended and section 21 E of the Securities Exchange Act of 1930 for as amended concerning future events and the company's close stretched Ci and measures to implement such strategies.

Net such as expects intends plans believes anticipates hates estimates and variations of such words and similar expressions are intended to identify forward looking statements. These statements involve known and on the list I'm all based upon the number of assumptions on the estimates which are inherently subject to significant.

On the subsidies 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 competitive factors in the market in which the company operates miss because they see it.

The <unk> operations outside the United States change in rules and regulations applicable to the shipping industry an oversight does it.

Included from time to time in the company's annual report on form 20-F and of the filings with the Securities and Exchange Commission. The SCC. The company's filings can be obtained free of charge on the Fccs website at Www Dot SCC don't go of the company expressed interest.

<unk> and the obligations or undertaking to release publicly updates or revisions to any forward looking statements contained herein to reflect any change in the companys expectations with respect that to or any change in events conditions or circumstances on which any statement is based.

Now I will pass the flow to Miss the Sun kind of <unk>. Please go ahead sorry.

I think so.

Good morning, everyone and thank you for joining us today to discuss our results for the sort of quarter in the <unk> nine month period of the social and 20.

First I hope that everyone listening to our goal is in good health during this difficult circumstances.

I also want to make especially of the mentioned to think of shoe fighters for the continuous support and the commitment in our fleet during these challenging the types.

The third quarter of 2020 of the global economy sort of foster can vary from the initial up sort of show for the COVID-19 of the latest crush the Chinese economy rich the GDP growth of 4.9% in the quarter income thing is drive strong demand for seaborne transportation of for all materials.

Result, Capesize freight today's for the jumped from the daily average rate of about 7100 doors.

Doors in the first half of the year to approximately $20600 per day in the second half still know.

The current rate stands at about $12000 per day.

The daily average to see all of our fleet for the set of quarters. The total of 20 was $16219 a significant improvement from 7000 Boes per day in the first six months well for those are the 20 due to the fact that of coverage of the Capesize market. After the Joel This is more than doubled the size of sort of parts of the <unk>.

Of course of course, that's what I'm tempted to date of commercial performance the trucks, the <unk> index, which was our British at approximately 20500 quota the date I.

As the market the shaft and since the beginning of November it would be fair to assume the the PC for the quarter, we'll end up at the approximately $17000 per day I lived the positive developments.

Given the supply and demand fundamentals for the dry bulk industry, we're optimistic about the prospects of the Capesize market.

The JIC for of course on employing most of our vessels on the index linked arrangements leased the cops and who stood on the chart the rates when the markets one of the shows are favorable.

Regarding the capital structure, we have worked to sort of physically position of synergy in the best possible way to benefit from future developments. The company's balance sheet is in the strongest position over the last couple of years, which highlights are as follows.

We ended the third quarter was at the $3.8 million from cash, which is the highest ever cash bottoms. The reported it seems that the launching of the company in 2015.

Oh secured debt was about 160 million marking of 15% of discount since the start of the year I see a decrease of approximately 22.9 million.

We bought the an additional of Capesize vessels at the was acquired for without any debt financing.

Total shareholders' equity was approximately $86.5 million compared to $29.9 million at the end of 2000. The 19. This is almost three times up.

Based on the current strength of our balance sheet and the Capesize market the outlook I would like to state that the we're excited about the prospects of our company with this in mind of let's discuss the most important company of developments in Q3 until now.

Well the others 20, we completed our final public offering of shares of the warrants net losses from the offering were approximately 25 million it.

So thats one of them 20, the total net proceeds from our cup. The legend activities amounted to about sort of $2 million from net got Italy, or the total common shares outstanding our 68.3 million ex.

Excluding the volume of our ships and the cash flow from operations. Our cash is currently at 50 cents per share.

In July 2020, we completed the refinancing transaction of the loan facility secured as the two of our Capesize ships. The original loan was initiated in September 2015, and the we achieved and what they do have the discount with the legacy land debt of approximately 20% the new loan of to the 2.5 million was provided by interest trouble.

In Q3, we recognized 5.1 million to gain net of find them sales following to the sort of financing.

Yeah, the continuation of the discussions with the senior lenders that were mentioned in the last 10 in school during the second quarter were obtained the provost for the two year extension of maturity well in one of our senior secured facilities. The because of an outstanding balance of 53.2 million and origin of my sort of thing December 2020.

We also received approvals for covenant the relaxation of <unk> on another secured facility with maturity dates in 2022 they.

He said agreements are subject to the documentation, which has been the importantly postponed until what of structured of later, but the Juno didn't that best disgust, that's one of those.

Total Delta Holdings is our single junior lender, which is all sort of late as part of the entity Gelclair has provided the extensions of the maturities of two facilities, which fell due in June September 2020 for the total amount of $11.9 million plus I put of interest.

We have been in discussions for the comprehensive of destruction of the facilities, which takes into account the accommodations. The I agreed, but the senior secured lenders. However, however, total for for the course and show solution, which has been proportion of where the concession to separate the two of those senior lenders because I've been accepted but Joe cool and the latest waiver of period expired on the at the end of November of still sales.

And I'm going to discuss the good cross default provisions and the companies that of many credit facilities, our senior lender sort of expressed their support for the company and the were set of of saying all of the senior loan facilities and the will of course continue doing so going forward. Our intention is to what is the solution, which will be fed up with the book two oldest the close of the company.

Before I pass the call doors here for all I would like to update you about the my announced stock purchases I was just the day I have bought 300000 of Santa just common shares in accordance with the previously announced plan for the open market purchases I was sort of the stated I have strong quarter for them some of the company in the its fundamentals and the.

Mission has announced the would the not intend to initiate any public equity offerings at least the until March 27 to one node implement the new reverse stock split spoke to the date I would not bicycle towards share for several of your stock is who's going to discuss our financial results go ahead some of them.

Thanks good.

Good morning, everyone I hope that you can get somebody says the same thing till autumn.

Good evening for four months of Mark the cleared improvement in the so called during the year when compared to go out of the sort of stalled a bit like the it's going to recover the of the keeps its market share.

He's made growth we seem to see the books feeling the need to be Monday, tying the stage of the storm the cost you're probably doing a pediatric study might say can be subsets of the one see sort of the sort of most of the funding.

In terms of of financing for four months I, specifically said due to the agent explicitly issued earlier today, we could be days of financing of these odds invasive before.

During the third quarter net interest they didn't get any of the news the fine I said anything yourself.

Yourself, maybe Doug the only gets expensed simple missions among the 258 than it used to be 1% 15.9 million. The same called <unk>. The the margin reduction was the these old <unk> and lowered the I'm sorry, the <unk>.

Which was partly offset by more the days during the quarter. Indeed are completely called the 907. So you did mention the rebasing the <unk> one.

When compared to only 700, the nine companies based in the school district, the 19 using weeks to lessen some of the to the extent of installation and one vessel in the two each kid, especially to be true.

Good morning. The addition of the goods hoops you know so most of this year also you could exceed days in the current core.

I think that's sort of basic daily in the east or the I'm talking to people in the <unk>.

<unk> between the was 16290 or 90 per cent lower than the great sounds <unk> hundred reported you don't like banks are the even ex he the same kind of thinking 90. This was mainly due to the disproportional dope like during the 9% the Abili T any sort of what the Keepsakes index beauty the p.

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Besides the fact that most of the four month, what's the deployment of seven day since well index linked tanks out the it's using the <unk> 21 of the revenue in the so called the the thinking the he was mainly in the <unk>, we will get the targets.

Most of the BC idols radio abruptly in the third quarter you. The whats takes hold for he absolutely suppose you held the being materially affected by the time of things like the local gets features.

Moving onto the vessel operating expenses amounted to 6.4 million, but that little bit of things going be asking for it to 4.8 million. So we'll do so income 19, the easy said the beauty of being reasonably the days due to the addition of the cheap meat as well as the easy daily operating expenses by approximately 14 per cent compared to the.

The same quarter last year.

Part of the increase was due to maintain its expenses include training and Familiarization expenses related to this could I believe you wont see so called missing.

The cops, most importantly, colgate collections of equipping the obviously, it's going to be but I'm guessing <unk> ex <unk>.

The changes of equals the more than normal due to extended who gets day sort of see father's day, Colgate tasting and increase the I will close like the will be some of it goes it shouldn't be understood. The owing to the problem of these deductions and the quality of the majors and loved standard ICSI fathers hub the lifts that standard on board the actually it's all over the the war.

The situation has been dragged on for months. Indeed, these are companies for they only the two simple to use of products during the cold.

Turning to financing expense you see we called the <unk> that has been fine Arts schools of 5.3 million in the <unk> one of the link between the high school age of 6.1 million in the same quote the that's going to make the aided by loading day snakes, when the crossing the bases interest expenses were awfully well do the same quarter last year and amounted for both.

For the in the cost of media leases because the costs. He said, it's only the lake the quite the indebtedness Onetwenty, maybe what's said he says.

EBITDA for the six good bit of thing between <unk> point Sevenmillion asking for Tonight. We did the same school because things like the one net income was equal to 3.6 million compared to a net income well for 0.7 million I just think we're going to stimulate the baby died of anything you can see you include the financing gain the was the the quote.

During the third quarter of strength <unk> for me the finance equals one of what senior <unk> of the discount that he's out from the reduction you know the little bit let's see the page in the balance sheet going for.

Moving on to discuss the nine month of results net operating revenue was equal to kick the one to 28.1 million compared to 50.7 million in of the corresponding nine month speed of the strength of the daily time charter equivalent of was $10267 down from approximately $12000 in the first nine months of.

Moving to 19.

I would like to point out the time sort of the even on the TV over the first six months of links between the amounted told the 70000 for the day before the <unk>. She did a bleed the 60000 too on the the said quote.

We are optimistic the thing to think the one we know the mark but blocks for the bags simulate the go see the Clinton 18 of 10 to 20, and therefore, we expect the any sort of volume it could be less qualified.

Operating expenses increased by 16% of total of during the nine what the video day since September 30, Twentytwenty, mainly due to the chute disgusted <unk> related to the scrub that we've been in the called the you know the well as reported in the South Beach in the face we'll do with you we carry the additionally, soon its expenses I would to do the city.

The lease premiums from said kind of what caused it.

Having said this we believe that the way the expenses of more I could it be the little bit more video the like when she didn't move the expenses that the listing selling cute over the full unit the nation.

EBITDA for the nine month period of things doing the once equaled 11.6 million as compared to 11.9 need the and the nine month period of strength in 18, it's like the could ease of doing the same.

Net loss for the first nine months of 20 to 20, the was 16 million compared to the net loss of 14.8 million between the Nike mainly due to the odds of its market conditions and seeing the 26 months of great strength.

Regarding our balance sheet as of September sales, the 20 to 20, <unk> 53.8 million gosh, that's the key words.

Instead of the <unk> would be once equal to 86.5 million up from 14.6 million anything from 9.9 million expected for the advantage of thinking maybe.

Following the cup the leasing activities the place in the second the could go to some of the you are <unk>, which you shouldn't see grew by 11 point to me the don't see financial strength Tonight the updating.

Attesting to the <unk>, you know the where all the financing keurig share.

Senior unsecured debt once you use the way it looks maybe we think for the median for 183 million <unk> on the 60, all 14.5 million for the <unk>, which is deemed to be sustainable when she did any of the average age of works for me.

Thanks for getting I've got the gossip deserves gossiping sleep of isn't amongst the books, maybe 3.1 million one of the highest especially the crest position amongst our peers.

Moving on to like the focus of the measures aimed at enhancing the <unk> doing.

During the third quarter of Twentytwenty Seanergy, concluding completed an underwritten public offering but the result of committed for the seats. The whole folks maybe you don't just like the median when including the partial exercise of them that I did so when I look from adoption the.

The increase in equity capital has improved the debt that's everything up our speed of the company and then for us, but we're going to be instrumental in for Steve the discussions with senior lenders.

For the same time the acquisition of wanting more high quality keeps isn't isn't using equity of the along the housing both sort of position of scaling the pattern that didnt like the way you see the average break even the raising of the feed for.

Following these transactions Seanergy has established the significant <unk>, we could be down the way, we buy even if market conditions phase the grew as expected the company weve you'd be able to hit that eight at the at least until the end of going to cling to do without requiring any takes into effect the topic.

After the spin we thought we'd like to provide some specific updates on the bordering I'd be these are the minded to of recently I've seen the startup of the you can kind of engaged in discussions with the senior lenders.

The <unk> has always been a day said coming maturities, while maintaining adequate through the cycle. We did the during a difficult commodity then water.

The discussions have been quite food from so far income.

Nine it's not the that's all the maturity the supporting the city doing Gandhi well.

While improving the tenants of our buildings in many cases.

In addition to the previously announced cycle by the extension and the refinancing of the eight she'll be from CDD, when they're not going to get the outstanding balance of approximately 60 million during the third quarter. The company of bank could kill me definitely one of the two year extension of one of the senior secured facilities, but I didn't notice to the maturity date from December doing well.

And then outstanding balance of that eight point to me.

Additionally, we have of being a couple of <unk> covenants was evident facilities that will enable the she needed depicts the could be just plan effectively over the next few years.

The the separately whats the subject to the definitive documentation well in particular in the topic to know the once instrumentation and complete the sort of.

No see no loans maturing before the fourth quarter of 22 of which enhances our ability to be from going Mark that's it.

In summary, the length of stay so it's more the importance of maintaining of financing flexibility in the context of market developments over the old despite the favorite of when supply and demand fundamentals of income driven the recovery of the market bottle. During the day 16 and of led to three consecutive years of improvement of the Capesize market. The.

For the bus to use a couple of suite of slated for the high level of volatility inherent in the day like market sort of pretty said, but do you think the events for.

Firstly, the initiation of trade works for the time of me station the 2018 for where the major one of the done because I've been thinking 19 and more recently the outbreak.

Of the global from them and the resulting Locdown sat down with the equal items not on the war income.

He is going to increase the agreed to be anything that's net flicks BBB. We play to you don't know lung sealy to capitalize on the sustainable because of any of the keeps his market regardless of all of the.

Lastly of having on the that's the most important issues of the lead you to I've seen the did for the mutually beneficial the ways of thinking to account base that is so for the coldest for the company out of focus is now placed squarely upon finding out of more news on the couple of study when I sort of got the month through the use of junior loans provided by day.

And the like the park.

These maturities of what do you do during what has proved to be studied the bullet. They do you all the girls sequel, Nobody can predict the let's say.

Yes, we are in finding range anything of any sense.

The allow all the park.

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Net.

The long.

<unk> for the launch and blowing show the notes the present, a junior Oh, you're trying to get your sense you keep the night Beach the company and given the who'd have agreed terms because he or she began the so this might you use that I'd solution the league, but that shouldn't be only the mother of Stein.

Having said these are the disclosing already actually the last weighted but why the by the end of expired inside of the hit until November.

Based on the frequent dialogue with the senior lenders were confident with the continued support and the the note on the girls the pool. The lesions. So all of the senior lenders of me very supportive of the biggest but it's only the Swans unit growth, the which is no the financial institution with whom we have not get the return of getting otherwise it's sort of business.

As usual and we hope to the kind of gave me I've seen the generic they don't soon.

This concludes my point of view.

I will now turn the call back towards the who will discuss the market than the fundamentals study.

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As mentioned earlier today, we are very optimistic about the long term prospects of the capesize sector. The.

The market has improved in each year from 2017 until 2019 and has been able to stage. The very first of the covering some of the COVID-19 and just crisis so far into the Trent.

I was reminded by stop of the said earlier the last three years have been marked by Videsh extraordinary negative event, the trade wars and he said the prison time between the U.S. and China in the first quarter for those in late in the major mining disaster that occurred in Brazil for the first quarter. So there's a 19.

And the emergence of the corporate bond debt, making the first quarter of 10 to 20, it's had a severe impact in dry bulk trade.

Is it the guard is very encouraging to see that as zillions of the market, which has been very fast and bounced back from the black Swan event and the tubing higher average levels every consecutive year.

All indications bunch of the five the might have to of today the of sustainably higher levels as soon as the effects of these one off event dissipates.

I just got somebody the developments during the quarter, the kind of year, China imports of for the materials. Initially cross in the first quarter since the 20 due to the current of Vitesse effect before jumping back from the pit as from June until September in order to compensate for the initial decline.

We are optimistic of the global economic stimulus and the announced infrastructure investments.

Amounting to three no so for years to all those who would help for the market that eyes to even higher levels. The.

The Capesize market is the first to respond positively due to the resilience instead of an out of demand and the increasing high quality ore supply from Brazil, but six but sort of its $400 million over the next three years up from about the Honda to 320 million total this year.

As provided by Britain Monday, she embodies search fresh economic data for October shows continued strength in China as the industry. A stimulus continues to provide support for the manufacturing and called the section said sectors.

The official measure for the deficit of production grew 6.9% of the year on the here in October as the Chinese economy continue sort of cover steel production has outpaced the frozen 19 levels over the first 10 months of the year by 5.5 per cent totaling $875 million in my view of these figures for.

Even more support for the post the start of the Capesize segment that has proven the resilient even the through such unprecedented the circumstances.

Looking towards the next two years in more detail and to understand the Wanna tend to do the volume of trade is expected to return to one of its growth of about 3%.

As it goes for fleet growth the.

The Capesize order book is the lowest is at the lowest levels since 2003.

New building orders so far in Twentytwenty have amounted to about 2.5 million deadweight ton of a fraction of compared to the full year figures of $20.7 million in 28 day, and 14.2 million tons in turn to 90 day.

It's a very significant reduction, which will likely lead to put themselves shortage of total ads over the coming years, especially as the older ships and become how to talk about it.

Given the obscure the outlook of the new environmental regulation the set until the IMO provides more guy them some of the shape and for of new restrictions of Theyre going to be introducing the president let's start the it is unlikely to share surgeon you're building the vessel activity.

In addition, major of that I voted the as does not provide long beat of the contracts, which makes it even more difficult for new ships for.

Finally, the the lessons of for the showed banks the finance vessels at the lot of compliance of strict and highly upset them the glaciers and without fear of the employment is adding another layer of the difficulty to anyone of considering new buildings sooner.

So you know just emphasis on the improvement of the fleet's environmental efficiency and the established long term relationships with prominent afterwards and sure of fleets continue the commercial success in this environment.

Given the material improvement of our balance it in the past the quarters, we expect to be in an advantageous position for future of market development.

On that note of let's turn the call over to the operator, and I'm sort of any questions. You may have so sort of place technical thanks.

Thank you for that ladies and gentlemen, as a reminder, the if you wish to ask a question. Please press star one on your telephone keypad and wait for the automated message advise your line is open season stage of fast enough named before you ask your question do you wish to conceive of a class. Please press star team. Once again, please press star one.

I wish to asked the question.

Thank you we will now take off ask the question. Please go ahead. Your line is a pen the.

Hello, Good day. The this is Tate Sullivan from Maxim group. Thank you for your comments.

My first question can you kind of are you after purchasing a shift in threeq huge money and with your cash at the end of the quarter and then considering the Gelco negotiations are you are you happy with your your shift mix and if so can you comment on the near term uses of cash and then the longer term. These.

Couple of questions.

Of course Ah first of all the the morning today, the hope you're well.

Well the basically you know we raised the GAAP, though in 2020 and that got the leaders of be allocated in the southern manner.

Is that a way salt and the we were directed the which is fair of for all the share holders of the company with a cost of the way days the way the level of the company significantly [noise], we bought the set of levers ship and now we have a significant cash cushion to establish said to deal with any potential future uncertainty that make up now that's.

Chip alone the we thought a real quick it it was one of the the best moving so we have the done the goes we agreed to acquire the that ship in the end of for the second in the quarter to one of the lowest historical prices. However for the type of the ship, we bought the for $11.4 million or it's.

It's first of all the goods along the ship is going to make the net cash of about a 1.7 non printed millions of dollars. So you're getting about sort of hitting the half months the 10% of the 10 on your capital no and invest in the so it makes great sense of by the chip and on the debt for the basis. It contributes a lot of the cash flow of the company. So you know we feel great about it.

And you know we wish we had the capacity to do additional similar parts.

Oh excuse me you do have an athlete to make similar purchases well right now with non because the you know we're in discussions I'm the with flattish lenders you know the to facilitate the you know set of 10 or a workforce of but so if the that I'm setting the goes away will the most suddenly.

But instead of the look a into additional acquisitions if for the market in the next six to nine months the covers of the high level.

Yes, Thank you and the not another one of you mentioned.

The cushion to the good.

Work true if the volatility of returns can you remind me in have you talked about your breakeven rate roughly for 21 and 22 with your current shift mix in context of the BPCI currently tracking the quarter to date 20500, yes.

Yes, well our breakeven has reduced the significantly in 2020, especially after the current offerings was done because with the 11 of the company significantly so from about I was out on day 10000 to the the break even the was in the previous years, especially in 2019 with all of this Capex. We're now below 15000 dollar.

The day, sometimes for 10000 dose the day Oh, the second quarter, So I will share unfolding for $15000 a day as the weighted average Vicki one of the company no right now the beside the is so nobody is at 20000 to days of 12, there is a huge volatility the as you know in the Capesize segment in the beginning of the here it was a true.

For $3000 a day it pick the 35000 Boes a day. So you know we have to be cautious as to the way that we allocate our capital in the cash reserves of goes you know Oh, we might see dips again in lieu of unless she picks again. So you know we need to be cautious on the wind it'd be conservative about the way that the we allocate our GAAP, though.

Great. Thank you for those kinda talk of a great rest of the day.

Thank you, Dave nice to hear from you.

Thank you I will now pass the call back she says the closing remarks.

No other questions Shannon.

No the question that there's times.

Alright, thanks, very much everyone. Thank you for listening to our call and the stay safe. Thank you very much.

Thank you that does conclude our conference. It say thanks for participating you may all disconnect.

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