Seanergy Maritime Reports Q1 Results
Seanergy Maritime Holdings Corp. (NASDAQ: SHIP; SHIP.W) announced its operating results for the first quarter ended March 31, 2010.
Dale Ploughman, the company's Chief Executive Officer, stated: "Our first quarter 2010 revenues were in line with our expectations driven by our secured cash flow from fleet operations and the high utilization rate of our vessels. It is an important achievement that in a tough shipping environment we continue to be profitable. We attribute this success to our customer base, which we view as very strong and established, and our operators, which we feel are highly efficient. In the first quarter 2010 we were able to reduce our daily total vessel operating expenses by 10% over the same period last year.
“In the first quarter 2010 we completed a public offering of our common stock resulting in approximately $30.0 million in proceeds, which expanded our shareholder base and enhanced the liquidity of our common stock. The offering also strengthened our cash position and our ability to pursue fleet expansion opportunities. We are pleased to announce the completion of the MCS acquisition on schedule. We view this as a strategic and transformational acquisition for Seanergy. It increases our controlled fleet to the significant size of 20 vessels while decreasing the average fleet age, and we believe it expands our revenue and profit generation capacity.
“We believe that the acquisition of MCS is accretive to our shareholders. The purchase price for the 51% ownership interest in MCS was $33.0 million and the projected adjusted EBITDA from the MCS contribution is estimated to be $23.0 million for the remainder of 2010 and $40.0 million for 2011 implying a purchase price to EBITDA multiple of 1.6 times on an annualized basis.
“In the short period of less than two years as a publicly-traded company, we have more than tripled our controlled fleet from 6 to 20 vessels and quadrupled our deadweight, in our opinion without sacrificing the strength of our balance sheet. We also believe that the timing of the MCS acquisition is optimal, as it enables Seanergy to benefit from the gradual global economic recovery with a larger and younger fleet.
“Freight rates continue to remain firm despite an uncertain market place. Currently, congestion at iron ore and coal ports is increasing due to Chinese demand on both products and India's demand for coal which helps offset the newbuildings coming into the market. We expect the harvest season in the southern hemisphere to help sustain rates although volatility will most likely remain. We continue to remain quietly optimistic on the long term outlook for the dry bulk sector due to the robust growth especially in the Far East region and the gradual global economic recovery."
Christina Anagnostara, the Company's Chief Financial Officer, stated: "Our results for the first quarter 2010 correspond to a daily TCE, or time charter equivalent rate, of $18,314.
“Our cash reserves as of March 31, 2010 were $89.4 million, reflecting $7.4 million in cash generated from operations and approximately $30.0 million from our latest public offering of our common stock which were used for the acquisition of the controlling ownership interest in MCS. The purchase consideration was paid from the proceeds of our recent equity offering and our cash reserves.
We believe our strong cash position enables us to meet remaining debt repayments and anticipated capital expenditures in 2010, and we believe our healthy balance sheet allows us to take advantage of market opportunities as they become available.
“Following the MCS acquisition, our total assets will be approximately $730 million and our total debt will be approximately $430.8 million. As of June 3, 2010, our cash reserves amount to $84.5 million and the Company now operates a fleet of 20 vessels. On a combined fleet basis, we have secured under period employment 93% of ownership days in 2010, 58% for 2011, 27% for 2012 and 19% for 2013 providing us with significant cash flow visibility. As we welcome MCS as a new subsidiary we believe that this acquisition contributes significant value in the long term and allows our Company to take advantage and exploit market opportunities in Hong Kong and China, access the Chinese capital markets and subsequently expand its asset base revenue and profitability."
First Quarter 2010 Financial Results
Net Revenues for the three month period ended March 31, 2010 decreased to $18.2 million from $26.2 million in the same quarter in 2009. This is mainly attributable to the lower market imposed time charter rates earned during the three month period ended March 31, 2010 as compared to the same period in 2009.
The company operated a fleet of 11 vessels on average during the first quarter of 2010, earning a TCE rate of $18,314 as compared to an average of six vessels and TCE rate of $51,831 during the first quarter of 2009. The decrease in TCE reflects the new time charter contracts at prevailing lower market rates.
EBITDA was $8.9 million for the three months ended March 31, 2010 as compared to $21.3 million in the same quarter in 2009. Please refer to a subsequent section of the press release for a reconciliation of net income to EBITDA and operating cash flows to EBITDA.
Operating Income amounted to $5.2 million for the three months ended March 31, 2010, as compared to an Operating Income of $13.6 million for the same quarter in 2009.
Net Income was $0.1 million, or $0.002 per basic and diluted share for the three months ended March 31, 2010, as compared to Net Income of $12.1 million, or $0.54 per basic and $0.50 per diluted share, for the same quarter in 2009, based on weighted average common shares outstanding of 49,347,837 basic and diluted for 2010, 22,361,227, basic, and 24,621,227 diluted, for 2009.