September-quarter results in line with expectations

Third Quarter Preview

Results better than expected and should improve in upcoming quarters

Seanergy repurchases shares and acquires a new vessel amid recent shipping rate weakness

Michael Heim

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Industrials

Transportation

Seanergy Maritime Holdings Corp

<p><strong>Pricing</strong></p>
<p>Shipping rates continue to fall as decreased demand for steel in China and Europe reduce demand for shipping. Low port congestion led to increased fleet utilization and higher-than-expected operating days for Seanergy but also for the entire market leading to low rates. Newbuild orders remain at historic lows and ship scrapping is on the rise leading us to believe that vessel value and shipping rates are poised to improve in 2024 and 2025. The company updated TCE rate guidance for the fourth quarter that implies a nice bump up in rates.</p>
<p>
   </p>
<table border="1" style="border-collapse: collapse;width: 667px;height: 108px">
<tbody>
<tr style="height: 18px">
<td style="width: 149px;height: 18px">
         </td>
<td style="width: 64px;height: 18px">2023-3Q</td>
<td style="width: 66px;height: 18px">2022-3Q</td>
<td style="width: 73px;height: 18px">2023-2Q</td>
<td style="width: 82px;height: 18px">Noble Est.</td>
<td style="width: 233px;height: 18px">Comments</td>
</tr>
<tr style="height: 18px">
<td style="width: 149px;height: 18px">Vessels</td>
<td style="width: 64px;height: 18px"> 16</td>
<td style="width: 66px;height: 18px">17</td>
<td style="width: 73px;height: 18px">16</td>
<td style="width: 82px;height: 18px">16</td>
<td style="width: 233px;height: 18px"> M/V Titanship delivered</td>
</tr>
<tr style="height: 18px">
<td style="width: 149px;height: 18px">Ownership Days</td>
<td style="width: 64px;height: 18px"> 1472</td>
<td style="width: 66px;height: 18px">1569</td>
<td style="width: 73px;height: 18px">1456</td>
<td style="width: 82px;height: 18px">1472</td>
<td style="width: 233px;height: 18px">
         </td>
</tr>
<tr style="height: 18px">
<td style="width: 149px;height: 18px">Utilization</td>
<td style="width: 64px;height: 18px"> 99.2%</td>
<td style="width: 66px;height: 18px">99.2%</td>
<td style="width: 73px;height: 18px">99.0%</td>
<td style="width: 82px;height: 18px">98.0%</td>
<td style="width: 233px;height: 18px"> High vessel availability</td>
</tr>
<tr style="height: 18px">
<td style="width: 149px;height: 18px">Operating Days</td>
<td style="width: 64px;height: 18px"> 1460</td>
<td style="width: 66px;height: 18px">1557</td>
<td style="width: 73px;height: 18px">1443</td>
<td style="width: 82px;height: 18px">1443</td>
<td style="width: 233px;height: 18px">
         </td>
</tr>
<tr style="height: 18px">
<td style="width: 149px;height: 18px">TCE Revenues</td>
<td style="width: 64px;height: 18px"> $15,298</td>
<td style="width: 66px;height: 18px">$20,614</td>
<td style="width: 73px;height: 18px">$18,708</td>
<td style="width: 82px;height: 18px">$16,500</td>
<td style="width: 233px;height: 18px"> 60% of Q4 at rates above $21,640</td>
</tr>
</tbody>
</table>
<p><strong><span style="font-weight: normal"><br /></span></strong></p>
<p><strong>Financial results</strong></p>
<p> With TCE rates coming in slightly-below expectations but operating days being reported above expectations, net revenues were near expectations. Operating costs were generally in line with recently revised forecasts as were bottom line results. Interest and financing costs have risen with the increase in LIBOR rates despite refinancing efforts. Further scheduled reductions in debt and a convertible note should lower costs going forward.</p>
<table border="1" style="border-collapse: collapse;width: 667px">
<tbody>
<tr>
<td style="width: 168px">($ millions)</td>
<td style="width: 60px">2023-3Q</td>
<td style="width: 58px">2022-3Q</td>
<td style="width: 66px">2023-2Q</td>
<td style="width: 91px">Noble Est.&nbsp;</td>
<td style="width: 224px">Comments</td>
</tr>
<tr>
<td style="width: 168px">Net Revenues</td>
<td style="width: 60px"> $24.5</td>
<td style="width: 58px">$34.0</td>
<td style="width: 66px">$28.3</td>
<td style="width: 91px">$23.8</td>
<td style="width: 224px"> Up on high utilization</td>
</tr>
<tr>
<td style="width: 168px">Net Income (Loss)</td>
<td style="width: 60px"> ($5.0)</td>
<td style="width: 58px">$7.1</td>
<td style="width: 66px">$0.7</td>
<td style="width: 91px">($5.1)</td>
<td style="width: 224px">
         </td>
</tr>
<tr>
<td style="width: 168px">Adjusted Net Income</td>
<td style="width: 60px"> ($2.6)</td>
<td style="width: 58px"> $7.6</td>
<td style="width: 66px">$3.4</td>
<td style="width: 91px">($2.7)</td>
<td style="width: 224px">
         </td>
</tr>
<tr>
<td style="width: 168px">EPS Diluted</td>
<td style="width: 60px"> ($0.28)</td>
<td style="width: 58px">$0.40</td>
<td style="width: 66px">$0.18</td>
<td style="width: 91px">($0.29)</td>
<td style="width: 224px">
         </td>
</tr>
<tr>
<td style="width: 168px">Adjusted EPS Diluted</td>
<td style="width: 60px"> ($0.14)</td>
<td style="width: 58px"> $0.42</td>
<td style="width: 66px">$0.18</td>
<td style="width: 91px">($0.15)</td>
<td style="width: 224px">
         </td>
</tr>
<tr>
<td style="width: 168px">EBITDA</td>
<td style="width: 60px"> $7.1</td>
<td style="width: 58px"> $18.6</td>
<td style="width: 66px">$12.7</td>
<td style="width: 91px">$6.8</td>
<td style="width: 224px">
         </td>
</tr>
<tr>
<td style="width: 168px">Adjusted EBITDA</td>
<td style="width: 60px"> $9.5</td>
<td style="width: 58px"> $19.0</td>
<td style="width: 66px">$15.7</td>
<td style="width: 91px">$9.5</td>
<td style="width: 224px">
         </td>
</tr>
</tbody>
</table>
<p><strong>Things we learned this quarter</strong><br />
</p>
<ul style="list-style-type: disc">
<li>Utilization was favorable due to decreased congestion. The company plans to put 3-4 ships into drydock in 2024. We would expect utilization to decrease in 2024 relative to 2023.</li>
<li>Seanergy locked in some 2023-4Q charters at favorable prices. With 60% of 2023-4Q locked in at $21,640, the average TCE rate in the upcoming quarter should be above the 2023-3Q. The company indicates that if the remaining portion were to achieve the current TCE rate of $19,040, the average TCE rate for the quarter would be $19,480. However, Seanergy has typically received a premium rate to market.</li>
<li>Looking beyond the 2023-4Q, the company shows a fleet book with about 75% of its fleet chartered into various dates in 2024 all linked to index prices. We expect rates to remain near $20,000 in 2024. Higher rates, combined with an additional vessel, should boost net revenues.</li>
<li>Seanergy did not repurchase any shares during the 2023-3Q due to decreased cash flow from lower shipping rates. The shares of SHIP have been weak since the end of the quarter. However, lower cash flow, increased charter payments for Titanship, and company plans to redeem a $3 million convertible note could limit common stock repurchases.</li>
<li>Interest rates, which are generally tied to LIBOR rates, rose year over year. Interest and financing costs were $5.1 million in the quarter versus $4.1 million for the same period last year. With a planned debt reduction, the company expects interest and financing costs to be around $5 million per quarter in 2024 and then decline by $0.5 million per year. The company does not have required debt payment due until 2025-2Q.</li>
</ul>
<p><strong>Conclusion</strong></p>
<p>Results were largely in line with expectations that forecasted a drop in TCE rates. Seanergy&#8217;s shipping rates in future quarters are improving and we expect cash flow to improve. Industry fundamentals beyond the next few quarters remains positive. The company has chartered in an additional vessel with an option to buy in twelve months as it expands its fleet. We continue to rate the shares of SHIP as Outperform with a $10 price target.</p>
<p></p>
<p>
   </p>


Seanergy Maritime Holdings Corp (SHIP)

September-quarter results in line with expectations

Fundamental Analysis:

Rating: Log in to view

September-quarter results in line with expectations (SHIP)

Third Quarter Preview (SHIP)

Results better than expected and should improve in upcoming quarters (SHIP)

Seanergy repurchases shares and acquires a new vessel amid recent shipping rate weakness (SHIP)

Inbox Intel from Channelchek.