Thank you for standing by, Ladies and gentlemen, and welcome to the Seanergy Maritime Holdings Corp. Conference Call on the First Quarter ended March 31, 2024, financial results. We have with us Mr. Stamatios Tsantanis, Chairman and CEO; and Mr. Stavros Gyftakis, Chief Financial Officer of Seanergy Maritime Holdings Corp. [Operator Instructions] Please be advised today's conference call is being recorded today, Wednesday, May 15, 2024. The archived webcast of the conference call will soon be made available on the Seanergy website www.seanergymaritime.com. under the Webcast and Presentations section under the Investor Relations page. Many of the remarks today contain forward-looking statements based on the current expectations. Actual results may differ materially from the results projected from those forward-looking statements. Additional information concerning factors that can cause the actual results to differ materially from those in the forward-looking statements is contained in the first quarter ended March 31, 2024, earnings release, which is available on the Seanergy website again, www.seanergymaritime.com.. I would now like to turn the conference over to one of your speakers today, the chairman and CEO of the company, Mr. Stamatios Tsantanis. Please go ahead, sir.

Thank you, operator. Hello. I would like to welcome everyone to our conference call. Today, we are presenting the financial results for the first quarter of 2024. An update of our recent corporate developments. I'm pleased to report during a 3 month period ended on March 31, 2024, Seanergy achieved a record profitability, generating a net income of approximately $10 million in the usual weakest quarter of the year for the Capesize segment. After a volatile 2023, in 2024, has started very strongly for the dry bulk market with the Baltic Capesize Index stating its best first quarter performance in more than 10 years. Seanergy was optimally positioned to take advantage of this positive market environment, leading to its best-performing first quarter on record. Our fully produced net revenues of $38.3 million versus $18 million in the same period last year, more than double, corresponding to an average time charter equivalent rate of more than $24,000 per day. Roughly in line with the current average BCI. The improved terms achieved on the rechartering of vessels over the past quarters, our effective hedging activities and the fast specification vessels comprising our fleet have proven to be important drivers of our positive commercial performance and for important pillars of our long-term corporate strategy. Looking towards the second quarter of 2024. And based on the current FFA levels, we expect our daily TCE to be equal to about $26,400 per day, likely outperforming the capesize market by a wide margin. Beyond that, for the second half of the year, we have converted about 1/3 of our ownership days at a fixed daily rate of approximately $30,000. As a general principle during the currently healthy market conditions, we are keen to secure attractive fixed daily rates that can generate high free cash flow and…

Thank you, Stamatios. I would like to welcome everyone from my side as well to our first earnings call for 2024. Let us start by reviewing the main highlights of our financial statements for the period. We had another great quarter, while we achieved a record first quarter profitability as strong Capesize freight rates continue dominating the market. Our net revenue was equal to $38.3 million, more than double compared to the respective period last year, while our time charter equivalent reached to $24,100 very close to the average BCI for the quarter. Our adjusted EBITDA rose to $23.2 million during the first quarter, almost 5-fold from the respective figure of last year. Our net income was $10.2 million compared to a net loss of $4.2 million last year, which translates to an EPS of $0.50. Moving on to our balance sheet. I am pleased to say that our cash position remained strong and almost intact in the first quarter of 2024 standing at $24.2 million or approximately $1.4 million per vessel. This was achieved despite consistent dividend payments, almost $8 million advances for the announced vessel acquisitions and the regular debt repayments. With regard to debt outstanding, which stood at $223 million at the end of the first quarter, translating to a modest loan-to-value ratio of approximately 40%. Finally, total shareholders' equity amounted to $241 million as of March 31, 2024. Let's not delve into the refinancing activities we completed in the first quarter. We agreed with one of our close lending partners to enter into 3 separate sale and leaseback agreements of $58.3 million in aggregate to finance a law ship and Partnership and to partly finance the acquisition of Icon ship. Under this agreement, the vessels will be sold and subsequently leased back on a bareboat basis…

Thank you, Stavros. For the first quarter of 2024, the Capesize market remained at elevated levels in continuation of the strong market conditions seen in the fourth quarter of the previous year. The strong start runs counter to the usual seasonality and was driven by increased online demand during a time when the supply of ships has been restricted both due to the low newbuilding ordering in the previous years and restricted traffic through Panama and Suez canal. Brazilian iron ore exports arose more than 10% compared to last quarter as Ovale managed its highest export rate since 2019. Chinese port iron ore stockpiles reached a low point 2023, driving demand for imports restocking basically and leading to an increase of about 7.2% year-on-year in 2024. Additionally, coal imports rose by around 13% during a period of low domestic production for the current year, China steel production is expected to remain at high levels seen in 2023, with demand driven mainly by manufacturing infrastructure, and that's a global thing and exports amid continued weak real estate market. Outside China steel production in the rest of the world has been particularly strong over the past 6 months, lending support to iron ore and Capesize demand, a trend that is expected to continue during the current year. Similarly, Indian coal-generated electricity reached record high levels in the first quarter, building on a positive trend playing out over the past few years. Moving on to bauxite that has had a substantial effect in complementing iron ore cargoes for Capesize vessels. Projections for aluminum demand are generally supportive for the next year due to healthy manufacturing trends globally, while longer-term aluminum is also likely to play an important role in energy transition. Volume growth is expected to be 8% and 5% higher, respectively, in…

[Operator Instructions] And it comes from the line of Tate Sullivan from Maxim Group.

Great. Good day and a great comment and a great sequential increase in the special dividend too and if I may start on the forward hedging strategy with 2Q looking like another quarter-over-quarter increase in the time charter equivalent rate with what you've done so far. Have you seen stable FSAs for the second half of 2024 -- or can you not comment on what you're seeing or what your activity has been so far for 3Q?

Well, great to hear from you. The thing is that the [indiscernible] from time to time is moving completely irrational and doesn't reflect the real underlying value of the freight rates. So from time to time, we're seeing spikes in the FSA. And when we see these spikes, right now, we have fixed 30% at set of our fleet actually for the second half at around $30,000 a day. So whenever we see those spikes, we are there, we're ready and we usually take advantage of those opportunities, and [indiscernible] -- so we were pretty much at the same levels of the BCI for Q1. We expect to be above the BCI in Q2. And as long as we generate and secure a very healthy process for the second half of the year, I believe it doesn't really matter whether you are a bit above or a bit below the BCI. But the most important thing is that we have a very dynamic strategy. So whenever we see that, we monitor very carefully. We just take advantage of the spikes, and we move on, it's as simple as that.

And then, I mean, it seems like quite good visibility going into 2025. Mean given the net Capesize growth you mentioned of 1% in '25, and good ton-mile growth, and there have been some other shipping companies that had to close yesterday and this morning talking about more scrapping in '25, is that going to take place in the Capesize market, too? And have you already seen that?

Well, the Capesize segment has the lowest order growth over the last 20-plus years. We have seen some pickup in newbuilding ordering the last 6 months, but this has not happened in the Capesize segment. Capesize segment ordering has been quite subdued. And we don't really expect due to the very big price differential between the second hand and the new building, Don't really anticipate any immediate. And even if it does, there are no slots available before 27 or even 28. So I don't really expect any additional Capesize to be ordered or deliver anytime soon. And that is going to help the market a lot, given the fact that sometimes are doing very well. There are always geopolitical incidents happening that are most of the times is beneficial to the trade. And also beneficial for the commodity but beneficial for the trade. And I think that it's going to drive a sustainable profit stream that is going to deliver good returns to our shareholders. So that's all I can say. And as we have [pledged] so many times, when the revenues and the cash flow is good, we always take care of our shareholders and we give back. So with a higher degree of certainty of the cash flow stream, we will continue rewarding our shareholders to the best of our capacity.

And just one follow-up is, are there -- certainly not your fleet, but other -- are there other Capesize ships in the market that are still transporting cargo that are greater than 20 years old? And just can you comment on the scrapping activity.

I will give the -- a parallel example is one of the tankers. When the tankers spiked a couple of years ago after the inversion of Russia into Ukraine, even older ships built in 2004, '05, '06 were actually trading significantly 6-digit freight rate level. So when the market is good and there is not availability of supply of vessels even the older ships trade quite well. So I'm aware of certain fixtures right now for 20-year-old vessels, older than 20-year-old vessels. That are in the region of $25,000 [boats], $23,000 to $25,000 [boats]. So it's quite good. I mean even at the older vessels, they are trading quite good. And they believe that if the market demand additional ships, you're not going to find them in new buildings because they are not enough.

Well, thank you very much. Look forward to talking tomorrow.

TThank you, Tate.

[Operator Instructions] And the question comes from the line of Liam Burke from B. Riley Financial.

Stamatios, you talked about the macro. You went through the iron ore bauxite. Is coal going to be a positive or for you -- for the balance 2024?

Yes, it is. And we're seeing very strong volumes. It is a result of 2 main factors. Number one, you have higher energy needs in Southeastern Asia as well as India, which still relies heavily on coal because a mega delivery of coal-fired power plants in Southeast Asia, [indiscernible] and India, which is going to be driving the LNG capacity and needs for the next 5 years. brand new factories. So we don't really see coal slowing down. What has really helped the coal trade a lot, and we're seeing that in our own fleet is the fact that the [CPEC] is now scarce. So all the coal going from Australia to Europe, and we've had a lot of these trades, it now has to go around the cape of good hope. So it doesn't get a [indiscernible] inside the premium states. As you can imagine, that increased the ton-mile. So demand by self will continue to be strong. We don't see demand slowing down and ton-mile effect due to geopolitics is actually helping the market a lot. So it isn't going anywhere. New factors have been built that are cleaner and better and developing world and so fast accelerating growth economies like India, they needed new energy, what you're going to find it, cannot build nuclear plants in 5 years. Or you cannot put like wind mills all over the place. you need energy and you need electricity. And coal is the most abundant and cheapest form for electricity to happen. And I think that we'll see that going on for the foreseeable future.

Great. And I should know this, but you gave guidance or your partial guidance for your fixtures in the second half of the year. Do you have any dry docking schedules in the second half, that would affect utilization rates?

We have a couple of ships. So it's not really a big dry dock. It's not really a big dry dock program for the second half of the year. It's a couple of ships. Which will likely finish very quickly. We are in discussions with the charterers of these ships to install energy saving devices and paints and all that. That is going to require a little bit additional time and a little bit additional cost that we're now discussing how to split. But this is not going to be a substantial effect on our P&L for the second half of the year, which if it continues like this, it's going to be pretty much as expected.

Got it. And I know this sounds kind of nitpicking, but DVOE was slightly up, both sequentially and year-over-year. Is that just normal cost of operations?

That's a great question, and I think I should address it right now for good. From the public shipping dry bulk companies, synergies has the lowest book value per deadweight which means that we have bought our ships cheaper than the majority of the companies, right? Sometimes the ships require additional maintenance. So we have paid less for the ships, but we need a bit more expenses to maintain them better. So it's not a matter of -- it's not a matter of how do you say, of any inflation or things like that. On top of that, the regulations in the regulatory environment in dry bulk space, especially with cape's. That we call Australia a lot and now China has become much more demanding, which means that you cannot really cut down on crew costs, which is the biggest component of direct voyage operating expenses [indiscernible] operating expenses. And that means that we need to invest on ship riders that have the higher quality to avoid delays, avoid -- ships to avoid losing operational days. So that's something that as a company we examine and we assess on a weekly basis when we discuss about the fleet. So the saving of buying our ships cheaper is much, much higher than the actual incremental operating expenses cost which is nothing compared to how much money we've -- we have saved for the shareholders in cost and how much more demand we generate from the revenues from additional units [indiscernible].

[Operator Instructions] Now we're going to take our first question, and it comes from the line of Kristoffer Barth Skeie from Arctic Securities.

Thank you for the good presentation. And especially a really good quarter, both operationally, I mean, it's beat across all parameters. I was wondering could you -- please elaborate a bit on distribution. You're now paying 30% of -- Yes, is this sort of a new normal? Or how should we think about distributions going forward? I mean there's still trading quite significantly below NAV. So how do you weigh that up against the buybacks?

Well, as you know, we have been reporting our shareholders quite significantly over the last 2 years that we have initiated the dividend schedule. We discontinued that for a temporary period of time last year due to bad market conditions when we saw the cape rates going down to $3,000 a day. We are conservative people. The more we fix and the more certain we feel about the cash flow, the more our appetite is to reward our shareholders more and more. So we started with $0.10 in Q1. We're now doing $0.15 in Q2. We hope that if the market allows, we will continue to expand the dividend payout as much as possible. We don't have any imminent acquisition opportunities. And the ones who have a great [indiscernible] have already been pretty much funded. So we don't have any serious outflows here and there. Having said that, we will, of course, need to have a good cash cushion to avoid any mishaps in the market, as you know to the volatile trade. And we will continue our generosity to reward our shareholders because we want to and we feel obliged to providing the best possible returns for the shareholders of Seanergy.

Right. Great. Got it. And in terms of in also with regards to the acquisition, it's quite low and attractive margin you're getting now 255 So I guess your -- that should have a positive effect also certain net financials, but sort of into Q2 and maybe Q3, how is the cash effect in terms of these refinancings?

So we expect for the financing, we expect basically to minimize basically nullify the equity component in the acquisition of the ship of the icon ship. So basically, it's like we're buying here with no more equity. And then there's a small equity injection that we need to do for the newer ship that we have agreed to acquire during this quarter, which is around $6 million on top of that the rent has already paid on the balance will be covered by debt. So we don't expect significant outflows to cover the CapEx for the acquisition of these 2 ships. And as Stamatios said, as the market stabilizes and we see that there are more opportunities for long-term fixed rate feature at good rates, dividend we go up.

Great. To a -- last question from me. With regards to the market. What are you seeing [indiscernible] affect or booster going into Q3 and Q4? Or is it still sort of healthy volumes from Brazil? Or do you see any other [indiscernible] this market forward?

Well, we -- as a benchmark, 2023 last year was a very strong year. If we manage to have the same volumes in 2024. That's also going to be awesome, considering the fact that we have the red sea facets closure that has increased -- decreased the amount of supply of ships in the water. So -- and that is going to escalate even more because the longer the distances, the more the backlog of required supply that you're going to need later in the year. Of course, geopolitics are favorable for the industry or sometimes they're not. I mean we saw a certain period in the beginning of 2023. If you remember that all the locked supply was unwound in the sea, and there were no delays. So we may see it as well. Overall, I believe that the demand supply fundamentals are very favorable. But due to all these aberrations in supply, we might see shrinks either on the high side or on the low side. So that's the name of the game when you're trading on the Capes.

There are no further questions for today. This concludes today's conference call. Thank you for participating. You may now all disconnect.