Seanergy Maritime Holdings Corp. (NASDAQ: SHIP) is having a great day in the market today, and for good reason. The company announced its financial results for the third quarter, showing strong growth on all aspects of the report. Today, we’ll talk about:
- The earnings report;
- what we’re seeing from SHIP stock as a result; and
- what we’ll be watching for ahead
SHIP Is Climbing On Financial Results
As mentioned above, Seanergy Maritime Holdings is having a great start to the trading session this morning after announcing its financial results for the third quarter. Here’s what we saw from the report:
- Net Revenue – During the third quarter, the company generated net revenue of $26.4 million. That worked out to be a 40% increase on a year over year basis.
- Adjusted EBITDA – In terms of adjusted EBITDA, SHIP said that it generated $10.1 million in the third quarter. That was an impressive 257% increase year over year from $2.8 million.
- Adjusted Net Income – In the third quarter, adjusted net income came in at $1.3 million, comparing well to the adjusted net loss of $4.9 million in the third quarter of 2017.
- Net Loss – The company said that including non-cash impairment losses from the sale of two vessels, the net loss for the quarter came to $5.6 million.
The company also said that in the fourth quarter of 2018, its Capesize vessels have been fixed for 84% of their ownership day at a TCE of about $18,600. Baltic Capesize Index averages have come to about $15,732 quarter to date.
In a statement, Stamatis Tsantanis, CEO and Chairman and SHIP, had the following to offer:
During the third quarter of 2018, the Capesize market conditions improved significantly and that was reflected in the operational performance of our fleet. Our net revenues for the quarter were $26.4 million, our adjusted EBIDTA was $10.1 million and our adjusted net income was $1.3 million. Our average Capesize TCE for the third quarter of 2018 was $18,244 per day.
Consistent with our strategy to focus in the Capesize sector, which we believe to have the most positive fundamentals in dry bulk shipping, we became the only pure-play Capesize company listed in the US capital markets. This is a result of the sale of our Supramax vessels which was completed in November 2018. In addition, we expanded our capesize fleet by acquiring the Korean-built Capesize M/V Fellowship. The vessel was delivered to us on November 22, 2018. We will continue to pursue accretive acquisitions of quality second hand Capesize tonnage.
We also entered into innovative agreements with three leading dry-bulk charterers to install scrubbers on five of our ships with forward starting time charters, ranging in duration from three to five years. The underlying rates are index-linked providing for full participation in the Capesize market, plus profit sharing above certain levels of the fuel spread. This significant investment is undertaken in close cooperation with our charterers in order to ensure compliance with upcoming regulations. We believe that this approach towards the new regulations is the most prudent, since we avoid the installation costs and other uncertainties of the fuel markets.
In addition, we completed a leasing transaction of $23.5 million with Cargill International SA for one of our Capesize vessels. This financing arrangement resulted in a capital release of approximately $7.8 million while reducing materially the underlying interest cost. The deal includes a five-year time charter with Cargill, as well as the scrubber installation. In connection with this transaction, we issued 1.8 million shares of Seanergy to Cargill.
In 2018 to date we have successfully concluded the debt refinancing of approximately $48 million with new loan facilities exceeding $70 million. As a result, we reduced the average interest cost of the underlying loans by 2.25% and extended the respective maturities by an average of 4.5 years. Moreover, we further expanded our lending relationships with prominent financial institutions in Asia and the U.S.
We are very optimistic for the Capesize market in 2019 and 2020. The drastic reduction of new vessel deliveries in combination with the fleet disruptions from the implementation of the new environmental rules is leading to a significant tonnage supply deficit. Despite a recent temporary market slowdown, the Baltic Capesize Index in 2018 has been about 10% higher than in 2017 and we expect the positive market trend to continue based on the solid fundamentals.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Seanergy Maritime Holdings, the news proved to be positive. After all, as investors, we’re looking for growth. That’s exactly what the company showed through their earnings report. So, it’s no surprise to see that excited investors are sending the stock on a run for the top. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:02), SHIP is trading at $0.75 per share after a gain of $0.06 per share or 8.68% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on SHIP. In particular, we’re interested in following the continued growth of the company as the dry bulk shipping sector conditions continue to improve. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the iWatch Markets mailing list below!