ATHENS, GREECE -- (Marketwire) -- 05/29/12 -- Seanergy Maritime Holdings Corp. (the "Company") (NASDAQ: SHIP) announced today its operating results for the quarter ended March 31, 2012.
First Quarter 2012
•Net Revenues of $17.4 million.
•Adjusted EBITDA of $4.9 million, which excludes non-cash losses of $2.3 million incurred on the sale of a vessel.
•Adjusted Net Loss of $4.0 million, which excludes non-cash losses of $2.3 million incurred on the sale of a vessel.
For more information we refer you to the EBITDA and adjusted EBITDA reconciliation section contained in this press release.
Dale Ploughman, the Company's Chairman and Chief Executive Officer, stated: "The first quarter of 2012 was dominated by a difficult market environment that adversely impacted our financial performance. Quarterly net loss was impacted by a $2.3 million non-cash loss on the sale of the African Zebra, the oldest vessel in our fleet.
On a positive note, due to the implementation of cost-cutting measures initiated in 2011, administrative expenses were down by approximately 23% this quarter as compared to the first quarter of 2011, management fees were reduced by 22% and vessel operating expenses were decreased by 3%. Lower operating and financial expenses reduced the impact of a 31% decline in revenues on adjusted net income. We are confident that cost reduction measures will continue to have a positive impact on Seanergy's cash flow and profit margins going forward, as the shipping market may improve a little in the second half of the year.
Furthermore, the finalization of the amendments of certain of our loan agreements over the course of the first quarter 2012 and the capital injection of $10 million by our major shareholders had a positive impact on our balance sheet. As the continuing weak market environment is contributing to a fall in asset prices, we believe that there are likely to be more opportunities for accretive growth.
As far as the market outlook is concerned, as we had expected the first quarter was a challenging one, with the Baltic Dry Index ("BDI") reaching a 25-year low of 647 points on February 3. Significant factors were newbuilding deliveries in January that were at the highest levels ever leading to significant market oversupply, celebrations of the Chinese New Year that started two weeks earlier than usual and led to reduced demand in an already oversupplied market and weather related issues in Brazil resulting in lower iron ore exports, thereby further reducing demand for vessels. The BDI has already risen by 60% since the lows seen in February and we believe that the second half of the year will be a little stronger. We expect that higher port congestion and reduced average vessel speed will contribute to the restriction of vessel supply which may lead to considerable volatility in freight rates. On the demand side, the inventory cycle should lead to a need for raw material re-stocking, while ton mile demand is likely to increase as more dry bulk commodities will start being sourced from places such as the African continent, and even North America. Lastly, it is encouraging that newbuilding ordering activity is sharply lower, as approximately 49% fewer orders have been contracted this year compared to the corresponding period last year. However, we believe it would be far more prudent to desist from ordering altogether. The vessels' delivery schedule will start dropping off from 2013 onwards, as this year is likely to mark the peak in newbuilding deliveries. Faster economic growth, changes in trade patterns and increased scrapping activity will speed up the absorption of excess tonnage but only if owners do not place new orders. As market expectations are currently very low, we believe that such developments would have the capacity to lead to a significant pick-up in freight rates.
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