Thank you for standing by, and welcome to the Seanergy Maritime Holdings Corp. Second Quarter 2021 Financial Results webcast. This press release contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended, concerning future events. Words such as may, should, expects, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements. Those statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the company's operating or financial results, the company's liquidity, including its ability to service its indebtedness; competitive factors in the market in which the company operates; shipping industry trends, including charter rates, vessel values and factors affecting vessel supply and demand; future pending or recent acquisitions and dispositions; business strategy; areas of possible expansion and contraction and expected capital spending or operating expenses; risks associated with operations outside the United States; risks associated with the length and severity of the ongoing novel coronavirus, COVID-19 outbreak, including its effects on demand for dry bulk products and the transportation thereof and the other factors listed from time to time on the company's filings with SEC, including its most recent annual report, Form 20-F. The company's filings can be obtained free of charge on the SEC's website at www.sec.gov. Except to the extent required by law, the company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. I will now like to hand the call over to your first speaker today, Mr. Stamatios Tsantanis, CEO. Please go ahead, sir.

Thank you, operator. Hello, everyone, and welcome to our earnings call. I'm excited to announce a record third quarter for Seanergy with our best financial results since we launched the company in 2015. This is attributed to the strongest Capesize market in more than a decade as well as to our significant fleet expansion in a timely manner. During this call, we will discuss our financial results and all major corporate developments before providing an update on our view of current market conditions and dry bulk market outlook. First, I will start by highlighting that we are now completing our substantial fleet growth from 10 to 17 Capesize vessels where all, but one, are already contributing to our revenues in a very strong market. We expect our final delivery to be completed in November. Total investment in 2021 for these acquisitions was $193 million and was achieved while maintaining a solid liquidity position with moderate leverage in addition to the significant contribution to our cash flow and new acquisitions as well as our total fleet have already increased in value considerably. In 2021, we have concluded 10 new time-charter employment agreements of at least 1-year period each. So all our vessels will operate in period employment with world-renowned charterers. Following a tough multiyear period for our industry that led to limited new-building activity, the dry bulk fleet order book is currently at the lowest level in 2 decades. Looking ahead, the upcoming environmental regulations for the CO2 emissions are expected to reduce the effective vessel supply progressively starting in 2023. As a result, we believe the Capesize market is supported by the most favorable demand-supply fundamentals of its recent history. After several years of hard work, Seanergy has a high-quality Capesize fleet with tremendous operating prospects and a sustainable balance…

Thank you, Stamatios. I would like to welcome everyone to our third quarter earnings call for 2021. Let's start by reviewing the main highlights of our financial statements for the third quarter and 9-month period that ended on September 30, 2021. As mentioned briefly by our CEO, the exceptionally strong dry bulk market had a direct reflection on our financial performance with vessel revenues reaching $50 million and marking an increase of 146% from the second quarter of 2020. Our daily time charter equivalent for the quarter was $30,764, a 90% increase compared to $16,219 for the third quarter of 2020. Our guidance for the fourth quarter is higher, standing in excess of $35,000 and with 8 vessels operating under unhedged index-linked time charters, we are on track to see even stronger financial results. Adjusted EBITDA in the third quarter of 2021 was $32.2 million, up from $7.8 million in the same quarter of 2020 and net income for the quarter was a record $20.1 million, up by 460% from a net income of $3.6 million in the same quarter last year, while we note that the 2020 figure was affected by a $5.2 million gain on debt refinancing. The increase in the net profit by $17 million over an increase of [ $14,500 ] in our daily TCE underscores the significant operating leverage of our company. For the 9 months period that ended September 30, 2021, we recorded a daily time charter equivalent of $23,449 compared to $10,267 in the corresponding period of 2020. Gross revenue was equal to $100 million, an increase of 130% from $43.5 million in last year's corresponding interim period. Adjusted EBITDA for the first 9 months of 2021 was $51.4 million, up from $7.3 million in 2020. Lastly, net income recorded in the period…

Thank you, Stavros. I want to start the market update discussion by reiterating that we're very optimistic for the long-term prospects of the Capesize market, which is supported by the most favorable demand-supply fundamentals of the recent history. The strong surge in demand for raw materials like iron ore and coal as well as various operating inefficiencies related to COVID pandemic played an important part in the recent spike of day rates. This increase of the rates occurred even though the global fleet average speed has increased by more than 50% in the last 12 months. We expect demand for dry bulk commodities to continue growing at a healthy pace in the next years and a declining effective vessel supply. Spot market volatility will always be a significant part of the Capesize market. To analyze vessel demand a bit further, in the period from 2022 to 2024, dry bulk demand is expected to rise by approximately 2.5% annually. Net fleet growth is projected to be around 2.1% annually. In the Capesize sector, we expect demand growth to be driven mainly by long-distance cargoes like Brazilian iron ore exports and bauxite from West Africa. High-quality iron ore has very advantageous environmental qualities in terms of CO2 emissions when turned into steel, while aluminum demand is also rising. Energy, infrastructure and property development are all likely to continue to generate demand for raw materials, such as iron ore, coal and bauxite. As regards to vessel supply, I must say that we are in the most disciplined state of the recent history. This discipline is an indirect result of the upcoming environmental regulations for the CO2 emissions that will come to force in 2023. Firstly, the new environmental regulations has led to significant uncertainty about the standards of newbuilding vessels in respect to…

[Operator Instructions] Your first question is from the line of Tate Sullivan of Maxim Group.

I just want to start. Can you -- can we talk about your October acquisition of the Dukeship a little bit, the $34 million acquisition [indiscernible]. Can you just give an idea of how you look at the internal rates of return and where you stress that rates go and what gets you comfortable completing that acquisition in October?

Yes, of course. First of all, this ship, we don't have any plans for financing, so we're just going to leave it debt free for now. So on the basis that it's going to be a cash-only acquisition and assuming, for example, that we're going to have an FFA rate of about 2.5 million -- sorry, $25,000 a day for next year. That implies something in the region of a return on invested capital of about 12%. This is what we think it's going to yield. That's on a cash-only basis, excluding leverage or things like that. So we strongly believe it's a very, very decent return at these numbers to have an EBITDA of, let's say, $3.5 million, $5 million.

Great. And then...

Per year. That's per year, sorry.

Per year. So then even if you stress the rates a little more going out, I mean, you still get an internal rate. And then do you assume certain scrap value in 10 years? And so I mean what -- do you have a hurdle rate before evaluating future acquisitions? Or can you just describe strategically how you look at it going forward as well?

Well, right now, I think we're going to have a pause on the acquisitions for a number of reasons. Number one, we have already expanded the fleet substantially by almost 70% in the last 12 months. So that's a very sizable increase of the fleet by itself. We are also seeing that the values of the ships are starting to rise. I'm not saying no to an -- to a quality acquisition in the future, but that's going to come on to replace all the tonnage. So we don't have anything in mind. So for the time being, I don't think we would be looking actively for any future -- for an -- in the immediate future for any fleet expansion.

Okay. And then, I mean, going past 4Q to the current quarter, and then if rates, I mean, do -- held above $25,000 a day and the cash you can generate, I mean, do -- does the priority turn to possible repurchases or paying down debt? Or how are you looking at next year?

Yes. We are fully focused -- first of all, you can assume that there's not going to be any imminent acquisitions, and we're fully focused on distributing and returning shareholders' distributions as well as share buybacks. So this is top of our priority. And seizing the opportunity now, I need to say that we have not really been so active in the stock buyback front because at the time when the stocks started to drop, at that time we had entered the blackout period because of the earnings. So we haven't really been active because we were in a blackout period. Now after the earnings that we exit the blackout period, we're going to be very active in supporting the stock through buybacks as much as we can.

Great. And last one for me. Is the Leadership you delivered to the new owners on September, so the cash inflow from that, do you -- does your balance sheet as of 9/30 [ reflect ] that cash?

Well, the $52 million that we see on the balance sheet is pro forma basically the sale of the Leadership, yes. So that includes the cash of the Leadership inside, $52 million.

Your next question is from the line of Magnus Fyhr from H.C. Wainwright.

Yes. Just a follow-up question on the capital allocation. You mentioned share buybacks and potential [indiscernible], what are your -- what is your view on dividend distribution versus buybacks? I mean some of the competitors have started to announce the dividend strategy. And I was just curious to what's Seanergy's stance there?

Yes. That's an excellent question, Magnus. We want to -- we will most likely do a combination of both. So we will start with the stock buyback. And once we are certain that our dividend policy is going to be sustainable, then at a certain point, we will start that dividend policy. It's nothing imminent yet. I just want to make sure that whatever dividend we announced it's going to be sustainable. So announcing a dividend right now and 6 months or a year down the road, having to discontinue the market is bad. It's certainly something that we don't want to do. We want to feel 100% certain that our dividend distribution is going to be sustainable for many, many quarters to come. So we want to feel that certainly, we're going to see how Q4 and Q1 goes. As you have seen, the market has dropped significantly. So we want to be a little bit cautious about our dividend plan. And at the end of the day, paying a token dividend just to pay a dividend, it's not our style. I mean whether we're going to do it, it's going to have substance and it's going to be sustainable. So this is what we want to do. In the meantime, once we exited from the blackout period, we'll start making repurchases in order to support the stock as much as we can.

All right. And how do you achieve sustainability? I guess that's the big question with the dividend strategy. You have converted a few of your index-linked product to fixed rate. So is that something you would continue in order to pay a dividend? If -- I mean, how -- what's your thoughts there as far as getting a sustainable dividend?

Yes. First of all, we have reduced the breakeven of the company substantially. So we have a great room to have a sustainable dividend in the future. We strongly believe that the market is going to be strong for the years to come. But in the meantime, there's going to be volatility like we are seeing now. Rates can go from $80,000 down to $30,000 and maybe back up again. So in the meantime, we're going to have a lot of volatility. And that volatility is not $5,000, $10,000, $20,000. It's in the region of $50,000 a day. So we're talking about a huge number of uncertainty in respect of day rates and cash flow, as you can appreciate. Having said that, we believe that the market is going to be way more positive from the second half of 2022 with the new environmental regulations kicking in the beginning of 2023. So there's going to be a natural improvement into the market coming from these environmental regulations. And once we have better clarity, we will have a more sustainable dividend policy. We're not going to wait until then to possibly announce a dividend policy. We're just going to make sure that we're going to -- we have strong cushion for a good dividend distribution to our shareholders. So to answer your question, what we're doing from floating to fixed, it's very, very short, it's a very short run. I mean we do it for 3 to 6 months. We don't do it for years. We strongly believe that there's going to be availability for a longer period fixtures in 2022 for 2 years, 3 years or more at rates in excess of $30,000, $35,000 a day, and that is going to allow even more distributions from our end.

All right. And just to continue on maybe looking at the short term, you mentioned the second half of 2022 looks attractive. How do you play the near term? Do you just stay [ spot ]? Or do you think there could be opportunities to go along, I mean, given the volatility in rates?

Well, for the first quarter of 2021, which is usually the weakest quarter, we have an average of $27,000 fixed on 7 ships. So 7 out of the 17 ships have been fixed at an average of $27,000, either on our fixed rate time charters or conversions from floating to fixed. So we are way above the current rate now for the first quarter. So having said that, we believe that the market is going to be stronger from Q2 onwards, as it always is. And there's no need to continue fixing more. Now if there is another spike in the market, we will continue doing that. But in the meantime, I think we're relatively well hedged for the first quarter of 2022.

Your next question is from the line of Poe Fratt of NOBLE Capital Markets.

He's probably been disconnected, Ella.

And there are currently no further questions. Please continue.

All right, Ella. Well -- and everybody, thank you very much for attending our call today. It's been a record financial results for Seanergy. We are very optimistic about the long-term finance -- about the long-term prospects of the market, and we strongly believe that we are in the historical opportunity right now. There will be volatility in the short term, but we're very positive for the long-term prospects of the market. That being said, I would like to thanks -- to thank again everyone for attending our call. And Ella, you may disconnect the call if you want.

Thank you. With that, we conclude the presentation today. Thank you for participating. You may disconnect.