Ladies and gentlemen, thank you for standing by. And welcome to Seanergy Maritime Holdings Corp. First Quarter 2022 Financial Call. At this time, all participant are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. Many of the remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe or similar indications of future expectations. Although, such forward-looking statements are considered to be reasonable by the company cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors, many of which are beyond the company’s ability to control or predict. Please refer to the company’s annual report on Form 20-F and other filings with the Securities and Exchange Commission, which discuss many of these risks and uncertainties. Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those the company expresses today. In light of uncertainties inherent in any forward-looking statements, listeners are cautioned to not place undue reliance on these statements. The company undertakes no obligation to revise or update any forward-looking statements whether as a result of new information or future events. In the earnings call today, the company may refer to non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income and TCE rate. For a full reconciliation of the non-GAAP measures to GAAP measures, please see the company’s earnings release posted to the News section of their website earlier today. I would now like to hand the conference over to your speaker today, Stamatis Tsantanis. Please go ahead.

Hello, everyone, and welcome to our conference call. Today, we are presenting the financial figures for the first quarter of 2022 and we are announcing a cash dividend for a second consecutive quarter. Following an impressive 2021 performance, Seanergy achieved its strongest first quarter results of its recent history despite the expected seasonal slowdown in the Capesize market. This was attributable to the geopolitical uncertainties caused by the war in Ukraine and the COVID-related lockdowns in China. Overall, our outlook for the Capesize market remains very optimistic, with strong expectations for the remainder of the year, with the underlying futures currently trading at levels exceeding $30,000 a day. Moving on to the first quarter highlights. Adjusted net income was significantly boosted year-on-year reaching $7.7 million versus a marginally positive result in the first quarter of 2021. Despite the seasonal slack in the Capesize market, our fleet achieved a daily time charter equivalent of $19,400 a day, which is 19% higher compared to Q1 2021 and 31% higher than the average of the daily Baltic Capesize Index in the same period, which was equal to about $14,700. This is the highest first quarter TCE achieved by Seanergy since 2009. Our hedging activities over the past quarters were, therefore, successful in mitigating the negative effects of drybulk seasonality. Overall, I am pleased with our commercial performance and I am happy to see that the Capesize market has since risen quite strongly. For the second quarter of 2022, we have fixed approximately 76% of our fleet days at an estimated TCE of $22,750. At the current FFA average for the remainder of the year, our full year EBITDA would exceed $101 million, as our CFO will explain shortly. All of our fleet operation period employment with some of the world’s largest drybulk charterers…

Thank you, Stamatis. Let me first welcome everyone to our first quarter earnings call for 2022. We will start by reviewing the main highlights of our financial statements. In the first quarter, we saw the usual seasonal slowdown in the drybulk and more specifically the Capesize market affecting our results, but our performance was still much improved compared to the first quarter of the previous year. Net vessel revenue was equal to $29.7 million, marking an increase of 46% from the fourth quarter of 2021. As mentioned by Stamatis earlier, our daily time charter equivalent for the quarter was $19,400, increased by 19%, when compared to $16,200 for the first quarter of 2021. Our freight hedging strategy has indeed paid off as our first quarter TCE exceeded the average Baltic Capesize Index by a considerable margin. Adjusted EBITDA in the first quarter was approximately $16.8 million, up from $7.9 million in the same quarter of 2021 and net income for the quarter was $3.7 million, compared to a net loss of $1.3 million in the same quarter last year. During the quarter, we recorded a one-time non-cash loss associated with the buyback of the convertible note and the refinancing of the Amsterdam Trade Bank facility. Adjusted for this loss and other non-cash expenses, net income for the quarter was equal to $7.7 million, resulting in non-GAAP EPS of $0.04. The year-over-year percentage increase in adjusted EBITDA of about 113% over a 19% increase in our TCE illustrates once again our company’s operating leverage. At the current FFA curve for the remainder of the year, I would expect to see full year 2022 EBITDA of about $100 million, an improvement of 28% compared to 2021. Furthermore, the considerable reduction in finance expenses would result in an even larger percentage increase in…

Thank you, Stavros. As mentioned in my opening remarks, the first quarter of 2022 went through its usual seasonal lows. The average level of the Baltic Capesize Index for Q1 was approximately $14,700, with reaching a bottom of $5,800 per day by late January before recovering to about $23,400 in March. The key drivers behind the weaker charter rates were the global instability of the war in Ukraine, the seasonal reduction in Brazilian iron ore trade and the slowdown in China from the new COVID lockdowns. Despite the volatility, Q1 rates were much higher than the 10-year average of first quarter performance, which makes us optimistic about the rest of the year. In fact, according to Clarksons Research, for 2022 and 2023, we expect growth in drybulk ton mile to be about 1.4% and 1.9%, respectively, against projected fleet growth that is unlikely to go above 2% until 2024. We expect a slow vessel supply and new regulation starting in 2023 to continue to underpin a strong drybulk market over the next years. More specifically, in Q1, Vale exported only 64 million ton of iron ore, just 19% to 20% of its annual target. This sets up tremendous potential for the following quarters since Vale has set its production target for 2022 at a range of to 320 million tons to 335 million tons and the required export rate for the rest of the year is going to generate considerably higher vessel demand. In China, we are happy to see the beginning of the COVID restriction easing and the normalization in steel production since the lowest point in February. As the country reopens fully from the COVID induced lockdowns, the decision of the local authorities to introduce a series of fresh infrastructure stimulus measures is expected to be particularly beneficial…

The first is from Magnus Fyhr from H. Wainwright. Please go ahead. Your line is open.

Yeah. Thank you. Hello, Stamatis and Stavros. Just you mentioned some positive developments in your key -- some of your key markets, I mean, Brazilian iron ore exports, as well as a pickup in China. Where do you see the biggest risk going forward as far as derailing the drybulk market recovery or continued strength in the market?

Hey, Magnus. Good morning. Thanks for the question. Well, obviously, there are risks when you have wars and conflicts and inflationary pressures and all that. There are risks that we have to take into consideration on a daily basis. Let’s start with the conflict in Ukraine. It’s tragic to say that every time there is some sort of a global conflict where the normalized routes are being disrupted, then products and raw materials tend to come from longer distances. So that has helped our trade a lot and we expect the emergence of coal to be positive for drybulk as well. I mean if you ask me like a couple of months ago with the COVID restrictions in China and all that, I would tell you that, a major Chinese slowdown would be the biggest risk. However, on the contrary, we see that China is going back to the old infrastructure playbook and they have funded the regional governments a substantial amount of infrastructure investments throughout the country. So that is positive as well. Aside from that, I cannot really think of anything that has not either been resolved or we have a clear outlook for the future within this year as to how it’s going to play out.

As far as, I guess, the third one, the Brazilian iron ore exports has been kind of the Achilles heel here, but it looks like Vale is picking up, trying to reach their estimated guidance. What are you seeing there now as far as pickup during 2Q?

Well, we are seeing Vale more and more into the market. So it’s slowly, slowly casting up. They have to start exporting about 20% more in the second half of the year as compared to the first half of the year in order to meet their annual targets. I am confident that they will be meeting the lower -- the lowest part of the range they have given as a guidance. So I am optimistic that the volumes will catch up. We see Vale pretty much in the market on a daily basis and that’s a game that they play very, very well, trying to fix from two months ahead and backwards. So we are seeing volumes picking up slowly, slowly. So there will be additional tonnage being absorbed in the Brazilian trade.

All right. Very good. So with all this volatility in the market, I mean, the Capesize market was down quite a bit last week after recovering nicely. What is Seanergy doing as far as your chartering strategy for the second half of the year, are you guys going to save spot or are there opportunities to fix vessels at attractive terms?

Well, we have already started to fix some ships for June and the remainder of the year. So we are being active on that. We know that the market can reach and exceed $50,000 a day sometime in Q3, but we don’t want to take the risk for the whole fleet. So we have been fixing ships. Right now, the average for the second half of the year is in, let’s say, $33,000, $34,000, which is massively profitable for us. We will be continuously fixing from floating to fix some ships in the next few weeks or months. So we are on top of that.

Okay. Great. That’s all I had. Thank you.

Thank you, Magnus. It was nice to hear from you.

Thank you for your question. We have the next question from Tate Sullivan from Maxim Group. Please go ahead. Your line is open.

Hi. Hi. Hi. Thank you all. In the prepared remarks, Stavros, I think, I heard you say a level of $100 million EBITDA for 2022 and is that I hear that right and can you review the rate outlook for that level of EBITDA please?

Hi. Hi, Tate. Good to hear from you. Yes. Yes. And that was under the assumption that the rates going forward will develop in line with the levels -- the current levels of the FFAs, which are around $32,000 for the remainder of the year.

Okay. Great. And on that point for the 2Q 2022 TCE guidance, is the level of $24,569 based on if you convert it all to FFAs today, is that essentially what that is assuming?

No. This assumes, first of all, the existing conversions that we have, it assumes also the two vessels that are running on fixed rates and it assumes that for the remaining ships for June for days that have not been invoiced yet, they will average at around $32,000.

Okay. Great. Thank you. And one more for me please. Just can you review the -- you mentioned a change in accounting in the new convertible note accounting treatment and just specifically to diluted shares outstanding, the decrease from $205 million to $177 million. So with this new treatment, is that -- will that be consistent…

No.

… level of diluted shares…

The region…

…from $177 million?

The most region of the convertible has to do with the fact that part of the convertible note that was recorded under equity has moved down the liabilities and that’s why you will see a slightly marginally higher liabilities on the convertible side and our equity -- shareholders’ equity having been reduced marginally that basically we have moved part of the convertible from the equity to the liability side. Now the fact that the notes that are coming out of the convertible have not been included under the diluted number of shares is that’s based on the accounting group on the fact that based on the movement of the price of the shares, this have not been regarded as dilutive, the instrument has not been regarded as dilutive, should the share price increase and on average be higher than the strike price of the convertible then this will be included again in the calculation.

Okay. Great. All right. Thank you very much.

Thank you.

Thank you for your question. We have the next question from Poe Fratt from Alliance Global. Please go ahead.

Hi. Good morning, Stamatis. Good morning, Stavros or actually afternoon for you guys. Can you talk about the second half of the, when you look at what’s been fixed. You said that for the second half, you have some days fixed at 33,000 a day to 34,000 a day. Can you just maybe put the other side of the equation on them, and say, how many of the second half days are fixed right now?

Yeah. Well, basically, we have fixed four ships that is excluding the two that we already have on fixed time charter rates and that is ranging between 28,000 and 39,000. So it’s a big range, if you want to say, an average around 34,000 on these four ships. That’s pretty much it is. So these are the four ships we have converted from floating to fix for the second half of the year plus the other two that we are running on a fixed rate. We will continuously look into the market for opportunities to fix some more in the high-30s when this opportunity arises again.

And Stamatis, I know the two are fixed with the Patriotship and the Worldship, doesn’t the Patriotship time charter expire at the end of this month?

Well, yes, it does. But we have an optional period. It doesn’t mean -- this is the initial period of the ship. So we don’t anticipate for that CP to end prior to the end of the year. And in any case, we are in discussions with all of our charters for whatever is expanding throughout the year to renew at same or better terms. So like we have done very successfully on the Fellowship, which we renewed for another two years with Anglo and we have improved its BCI rating by 2.5% as a benefit. So we are working with our chapters to fix the ships that are being expiring this year and we anticipate to have better numbers on these renewals.

Okay. Great. Thank you. And I want to thank you for adding at least the summary cash flow statement that’s included in the press release. I really appreciate that. Can we just talk about your fleet profile right now and sort of what strategy is going forward? There were some, I believe, some broker reports out there that tied an acquisition to you. Can you just talk about what’s going on with the S&P front?

Well, the company will continue to have a balanced deployment of its capital. First and foremost, it’s our shareholder rewards like our convertible debt repurchases that we have executed since the beginning of the year, our dividend payments. And if the opportunity comes across that we believe it’s going to be accretive for our shareholders without diluting our shareholders, we will be looking into accretive acquisition opportunities. So all three things are, for us, represent a balanced capital deployment strategy. So we will continue on this plan. We cannot, let’s say, confirm any rumor right now. We will announce when and if there is a certain deal that is going to take place. But, again, that is assured that we will continue our fully balanced capital deployment outlined.

Great. Thank you. And then just on the converts, you have about $10 million of the converts, my understanding those either mature or you expect to retire those by the end of this year. Is that a good working assumption?

Probably. We have not had any discussions with the holder of the notes. We might have two repayments by the end of the year or we might extend their tenure for a little bit more. So depending on the cash flow, we will revisit the matter end of Q3 beginning of Q4. It’s a bit premature to have the discussion now, but whatever the outcome is surely going to be beneficial for our shareholders.

Okay. And then on the OpEx side, can you expect any change from the first quarter OpEx looking out over the rest of the year?

Well, I think, increases in OpEx, in operating expenses are pretty dominant throughout all the reporting companies. The reason is multi-faceted. One is because all these years of COVID, we have had accumulation of a number of expenses that now are materializing and basically we have the crew change costs that become more and more difficult, not just because of COVID, but because of the Ukrainian -- the Russian invasion in Ukraine. So we have all these factors together. I believe that we are going to be stable at these levels that we announced in Q1. So there’s not going to be a material increase. And we also had a lot of expenses associated with drydocks and all the other stuff that we went through the last few months. So I would say that the guidance of Q1, I mean, the levels of Q1, there are numbers that you can pretty much depend on.

Great. Thanks for your time.

Thank you, Tate. Nice to hear from you.

That was Poe.

Oh! Sorry, sorry. Poe, sorry. Nice to hear from you. Apologies.

Thank you for your questions. We have another question from the line of Tate Sullivan from Maxim Group. Please go ahead.

Hi, Stamatis. Just following up on your comments on Vale production, so it sounds like you have already seen them selling some of their production into the market post the first quarter, I mean they do have to play catch up with their guidance. I mean, is that a meaningful risk, let’s say, they fall short of their guidance, and historically, how much of the impact on rates can that have excluding an impact like a flooding event or so forth?

Okay. So let’s think of a worst case scenario. The worst case scenario is pretty much what we have been experiencing so far, the rest of the first five months of the year. So the market a year to date has been in the region of our what, $17,000 a day, $18,000 a day. And that is with Vale really exporting its lowest volumes over the last five or more years. So that’s the absolute worst case scenario that we will see, because coal trade is pretty strong and we expect that to pick up a lot. So assuming that Vale remains at this super low levels and they miss the guidance by, let’s say, 30%, because this is what we are talking about now or 25% then that means that the market is going to have a floor at the current levels, which in my opinion is a very, very unlikely scenario. If it start to catch up and the market only has upside from now, whether that upside for the remaining of the year it’s going to be 50,000 or 60,000 or it’s going to be 30,000 or even 25,000, we are very happy with all these scenarios. So, in any case, we are way above breakeven and we are very profitable in any case.

Great. Thank you. And then let’s talk a different topic on the coal trade. I mean, as your percentage of cargo increase meaningfully with coal versus iron ore and was that the case…

Yes.

…in the first quarter I imagine? Okay.

Yes. Yes. It has changed substantially. We see European imports of coal increase a lot from long distances. As I mentioned previously in my script, Europe is importing 50 million tons of coal from Russia and now this has started to be diverted for much longer distances. At the same time, Russia is exporting these lost cargoes to further distances like China. So that has helped ton mile a lot. We are not seeing the full effect of that yet, because there are a lot of inventories here and there in Europe, not so much in India and in other places where they are dangerously low. But we expect that to accumulate and pick up in the next few months. So we expect coal, as we are going into the second half of the year in order to procure for the winter of 2022, 2023 to pick up a lot.

Thank you, Stamatis.

You are welcome, Tate. Thank you.

Thank you for the question. There are no further questions. I will now hand back the call over to Mr. Tsantanis.

Well, thanks very much for attending our call today. Roberto, thank you for being a great Operator. You may disconnect your lines. Thank you.

That concludes the conference for today. Thank you for participating. You may all disconnect.