Seanergy Maritime Holdings 2026 Q3 Earnings Call

Please go ahead, sir. Thank you, operator, and welcome, everyone.

Seanergy delivered another highly profitable quarter, and our nine-month net income reached a record $61.9 million. In the third quarter, our fleet earned approximately $34.5 thousand on a time charter equivalent basis, up 46% year-over-year, and adjusted EBITDA was $40.8 million. For the first nine months, adjusted EBITDA more than doubled to $110.5 million, and adjusted earnings per share rose to $3.21, up from $0.60 last year. These results show the earnings power of our pure-play Capesize platform. They also allow us to increase shareholder returns and renew our fleet at the same time from a position of strength. Our board of directors has raised the quarterly cash dividend by 14% to $0.40 per share, which is double the first quarter level.

This is our 20th consecutive quarterly dividend, five years without interruption through good and bad market conditions. Cumulative cash dividends now reach about $3.59 per share, and including buybacks, we have returned approximately $117 million to our shareholders. Now to fleet investments, which have been our main focus since our last call. Since our second quarter results, we have added four more high-quality Capesize and Newcastlemax vessels for a total of about $264 million. A modern 2019-built Japanese Capesize, the Midnightship, joining our fleet in January 2027, a scrubber-fitted Newcastlemax newbuilding at Hengli for delivery in the first quarter of 2029, a scrubber-fitted Capesize newbuilding at a first-class Japanese shipyard for delivery in the second half of 2029, and a 2014-built Japanese Newcastlemax for delivery in the second half of 2029.

Our fleet investment program now stands at 12 Capesize and Newcastlemax vessels, consisting of nine newbuildings and three modern Japanese-built secondhand vessels. That is about $855 million of investment and 2.3 million deadweight tons of new capacity, growing our fleet's current capacity by more than 50% over the next few years. We expect the contribution of the new acquisitions to our NAV, EBITDA, and cash flow to be very, very significant. Stavros, further down, will take you through the funding of this CapEx. Our first Capesize newbuilding at Hengli is now expected in January 2027, in a couple of months from now, about four months ahead of schedule. Together with the Midnightship, that means two modern Capesizes will join our fleet at the start of next year, adding to our earnings from early 2027.

At the same time, we continue to sell older vessels at the right time. We have agreed to sell the 2009-built Friendship, our oldest vessel, to United Maritime for $33 million, with delivery in January of 2027. The deal was negotiated and approved by a special committee of independent directors. Delivery is expected in the first quarter of 2027, as I just said, generating approximately $20 million of net liquidity and a book gain of about $12 million. Seanergy will continue to manage the vessel while at United Maritime. Regarding the employment of the new ships, four out of the six vessels joining our fleet by the end of 2028, we have secured or we are close to securing multi-year charters with first-class charterers.

The structure is the same each time, a floor rate above the vessel's cash break-even from day one, plus profit sharing above a certain set level. That means that downside protection from delivery is secured, and upside when the market is strong will also benefit our shareholders. On a commercial side, our index-linked charters give us direct exposure to a strong market, and our conversion options let us lock in rates when the market makes sense. For the fourth quarter, we have fixed about 86% of our operating days at close to $33,000 per day on a time charter equivalent basis. Based on the current FFA curve, we expect a fourth quarter time charter equivalent at about $33,300 per day. That puts 2026 on track to be a record profitable year for Seanergy. We have also started to lock in good rates for 2027.

We have converted four vessels so far to fixed rates, and that excludes the newbuildings, at an average of about $35,000 a day, while the rest of the fleet keeps its index-linked exposure. We might also consider some additional fixtures in the near future. Finally, our existing charters continue to be renewed with the same charterers, a clear sign of demand for our well-maintained and fuel-efficient vessels. With that, I will now pass the call to Stavros for the financial review, and I will come back to this call to discuss the market fundamentals.

Stavros, please go ahead. Thank you, Stamatis, and welcome to everyone joining today's call.

I will focus on our financial results before turning to our liquidity leverage and the funding profile of the fleet investment program. For the third quarter, net revenues increased to $57.5 million from $47 million in the prior year period, while net income more than doubled to $26 million from $12.8 million. Adjusted EBITDA increased to $40.8 million from $28.9 million, and adjusted earnings per share was $1.25 compared with $0.67 in the third quarter of 2025. For the first nine months, net revenues increased by 43% to $155.2 million, while net income rose to a record $61.9 million, and adjusted net income reached $69 million. Adjusted EPS was $3.21 compared with $0.60 in the prior year period.

Importantly, operating cash flow reached approximately $82.2 million, providing substantial internally generated capital to support both shareholder distributions and fleet investments. Turning now to the balance sheet, we ended the third quarter with close to $168 million of cash and restricted cash and total debt outstanding of $419 million, including our EUR 100 million unsecured bond. Net loan-to-value ratio, including the outstanding bond principal and after deducting cash reserves as of the end of the quarter, stood at 28%, leaving us with financial flexibility as we continue to deploy capital. At quarter end, we had invested $109 million in our fleet renewal program, and today, this figure has increased to approximately $127 million, or 15% of the program's CapEx. So far, most of the payments towards the shipyards or previous owners of the vessels have come from the company's own funds.

Let me now put the remaining investment commitments into context, which I repeat, are staggered through 2029. In 2027, we expect to pay approximately $354 million, with approximately $177 million already covered by secured financing, and this without having concluded on the vessel-specific financing of two vessels. These are the 2019-built Midnightship, which will be delivered to us within the first quarter of 2027, and the Japanese new building Capesize scheduled for delivery in July 2027. We have seen strong interest from existing and new lenders in financing these ships and estimate the debt capacity at approximately $100 million. Beyond 2027, approximately $75 million is payable in 2028 and $298 million in 2029. We believe we are very well positioned to execute these remaining investment commitments while maintaining a moderate leverage profile. The funding base is diversified.

We have already paid approximately $127 million towards the program, primarily from own resources. We have committed bilateral financing arrangements for five vessels. We have the proceeds of our EUR 100 million unsecured bond, and we entered the quarter with approximately $168 million of liquidity. These sources are complemented by operating cash flow and proceeds from selective disposals as the renewal program progresses. Importantly, we believe this remaining amount can be financed at moderate leverage levels, allowing us to complete our fleet renewal program while preserving balance sheet strength and financial flexibility. As Stamatis mentioned earlier, the multi-year employment secured or being finalized for the first wave of newbuilding deliveries also strengthens the financial profile of the program. The contractual floor rates are expected to cover the vessel's cash break-evens from commencement, providing visibility around operating cash generation and debt service, while the market-linked components preserve upside.