Thank you for standing by, ladies and gentlemen, and welcome to the Seanergy Maritime Holdings Corporation Conference Call on the First Quarter Ended May 31, 2023 Financial Results. We have with us, Mr. Stamatis Tsantanis, Chairman and CEO; and Mr. Stavros Gyftakis, Chief Financial Officer of Seanergy Maritime Holdings Corp. Please be advised that this conference call is being recorded today Thursday, May 25, 2023. The archived webcast of the conference call will soon be made available on the Seanergy website www.seanergymaritime.com. Many of the remarks today contain forward-looking statements based on 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 May 31, 2023 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 speaker today the Chairman and CEO of the company Mr. Stamatis Tsantanis. Please go ahead, sir.

Thank you, operator. Hello. I would like to welcome everyone to our conference call. Today we’re presenting the financial results of the first quarter of 2023, while we’re also pleased to announce the distribution of another cash dividend. As we discussed in our previous earnings call, during the first quarter of 2023, we went through adverse seasonality in the Capesize market. The Baltic Capesize Index averaged approximately $9,100 per day, and obviously this affects the financial performance considerably. We attribute this market weakness mainly to the tail end of the COVID restrictions in China. However, following China’s official reopening in March, we have seen a strong rebound in industrial activity as well as vessel charter rates for Capesize. The overall fundamentals are quite encouraging for the remainder of the year. Notwithstanding the week Q1, our Board of Directors has declared another regular cash dividend of $0.025 per share, which brings our total dividend distributions since the beginning of 2022 to $1.30 per share or approximately $1.55 per share when including the shares of United Maritime at the current trading price. I will now provide some financial highlights and our CFO, Stavros Gyftakis, will provide further analysis later in this call. As I mentioned earlier, the average BCI for Q1 was approximately a mere $9,100 per day, but our daily time charter equivalent outperformed this figure once again by approximately 20%. Our Q1 net revenues amounted to $18 million, our EBITDA was $8.2 million and we had a net loss of $4.2 million. The decrease from last year’s corresponding figures primarily reflects the decline in the daily time charter equivalent from approximately $19,300 last year to about $11,000 per day this year. However, we expected our financial performance will improve significantly along the recent rise in the Capesize charter rates. Specifically…

Thank you, Stamatis. I would like to welcome everyone from my side as well to our earnings call. Let us start by reviewing the main highlights of our finance statements for the first quarter ended March 31. Net revenue for the quarter was equal to $18 million, reflecting a decrease from the net revenue of $29.7 million in the same period of 2022. This was the result of a seasonally softer earnings environment, which inevitably impacted our results. At the same time, our EBITDA was equal to $8.2 million below the $12.8 million in the same quarter last year, while we recorded a net loss of $4.2 million versus a net profit of $3.7 million in the first quarter of 2022. However, with freight rates having already increased more than 80% compared to the first quarter average, we are confident that our bottom line will improve going forward. This is also backed by our successful freight hedging strategy for the rest of 2023 as discussed earlier by Stamatis. Moving onto our balance sheet. Our cash at the end of the first quarter may have been reduced compared to the previous quarter, but remained satisfactory at $20.5 million or approximately $1.25 million per vessel. This despite the $4.5 million payment of the dividend for the third quarter of 2022, which took place in the first quarter of 2023 and the repayment of $8 million of our only outstanding convertible note. At this point, it is worth noting that since the end of the first quarter, we have completed three new financing transactions, which have added approximately $15 million of extra liquidity. I will come back with more details on this in a moment. As regards to debt outstanding, we stood at $226 million at the end of the first quarter, translating…

Thank you, Stavros. Q1 was a disappointing quarter for the Capesize market with the usual seasonal factors playing their role and notably the tail end of the COVID restrictions in China. The average BCI rate for Q1 was a mere $9,100 per day. Net Capesize fleet growth in the quarter was 1.9% year-on-year, but when accounting for the unwinding of port congestion, the effective growth in ship supply was much higher. To a large extent, this reflects the front loading of new vessel deliveries for the year, while congestion has now reached very low levels. Supply growth for the balance of 2023 is expected to be considerably slower and according to Clarksons total 2023 Capesize split growth is expected to be around 2%, which has already taken place within the first quarter of the year. The improvement in vessel earnings that has occurred since March is quite encouraging and a clear indication of the favorable market balance. Let’s now move to a discussion of the high level demand and supply picture. Regarding Capesize vessel demand, iron ore and coal ton miles are expected to grow by around 2% and 4% respectively in 2023 with grow being sustained at similar levels into 2024. Bauxite seaborne trade, which has also emerged as an important source of demand in the recent years is expected to grow about 5% in absolute terms. The long-term decarbonization and organization trends lend support to increasing bauxite trade and aluminum consumption is expected to keep growing robustly. One particular point I wanted to make is that the port inventories in China have fallen into multi-year lows, so we believe we may face a $20 million to $30 million stocking process in the next months that can play a very significant role in the next quarters. Regarding the general…

Thank you, sir. We are now going to proceed with our first question. And the questions come from the line of Tate Sullivan from Maxim Group. Please ask your question.

Hello, Stamatis. Hello, Stavros. Thank you. How are you?

Hello, Tate. Have a good day. How are you?

Good. Good to hear from you. A lot very active on the financing front end. To summarize, is it diversifying lenders or moving away from lenders that were less flexible on terms, on expiring facilities? What would you summarize as the overall strategy? Was it mainly to add your lenders fleet?

Hi, Tate. This is Stavros. Look, for different – I mean, the three refinancings that were done basically for different reasons. The Championship, the sale and leaseback with Cargill was coming to an end in November, so we took a proactive stance there, which was mainly commercially-driven because we wanted to improve the terms of the chartering and the terms of the scrubber benefit. So basically, we took the decision to repurchase the vessel a bit earlier and we were supported by one of our house banks, Danish Ship Finance, which catered also for lower interest expense. Now on the two financings, which were done through the sale and leaseback in Japan, strategically, we want to do more financing with Japan because they offer both flexibility and reduced cost at sizable advances. So it was – I mean, firstly to improve the financing terms and secondly to release some liquidity in order to be able, firstly, to take advantage of any opportunities to grow or renew the fleet and secondly, to have ample liquidity to face any market conditions.

Great, great. Thank you. And yes, I mean, meaningful debt reduction in the first quarter, but then you adding – added the extra liquidity this quarter. And Stamatis, can you, with the market backdrop, I mean, encouraging with the supply already coming into the market, but then I think the rates have declined somewhat recently. I mean, is there any short-term factors that you can point to that, that hopefully should go away that should help start to rebound to reflect a positive supply demand dynamic?

Well, yes, basically what happened is that everybody had a lot of high expectations for the Chinese reopening. But I’m afraid this did not live up to their initial expectations. So we’re seeing some of that high to deflate. However, as I mentioned previously in the call, we are seeing multi-year lows into the iron ore port stock inventories, and that means that China will be forced or we expect China to restock that at a certain point soon, and that’s going to lead into increased voyages towards China. So we have full confidence that the Chinese infrastructure investment is going to continue. We will see that restocking taking place, and generally, we’re very optimistic in the short-term and in the second half as well. So it’s a temporary thing. What we’re seeing now, it started off with the best possible expectations. I think that has kind of deflated now, but I think we’ll see a strong rebound in the market in the next two months.

Okay. And then with most of the supply growth already taking place, I mean, ships coming out of the new build out of the yards, I assume. Have new build prices started to decrease or yard seeking bids for new Capesize orders or not at this point?

On the contrary, we don’t see any new building Capesize vessels being ordered. And the reason is multiple. First of all, you have a very high spread between a 10-year old or a five-year old ship as compared to a new building, so it doesn’t make any financial sense. At the same time, all the ship yard slots are pretty much taken by containers, LNGs and tankers, so there’s no open slot until well into 2026. So even if someone was completely crazy and wanted to place a new building order today, you’ll still have to wait three years before you take delivery of that ship. So having said all that, we don’t really see any problems arising from any new building order book in the near future.

Thank you. And Stavros, going to back to the balance sheet, just my last question please, is any – what are the shortest term maturities after all the recent refinancing out of the $223 million of total debt, roughly if it happens?

We don’t have any balloon coming up for the next 18 months. We have only the Jelco remaining payment on the convertibles, which is $3.2 million in the fourth quarter. But this is, I would say, a tiny mini balloon there. And then next facility, which is coming up for refinancing is in 18 months, and it’s an Alpha Bank facility, which is very well covered by the value of the assets. So there shouldn’t be any issues there.

Okay. Thank you very much.

Thank you, Tate.

Thank you, Tate. Have a good day.

We are now going to proceed with our next question. And the questions come from the line of Kristoffer Skeie from Arctic Securities. Please ask your question.

Hello, gentlemen. Thank you for the presentation.

Thank you. Good afternoon.

Good afternoon. So in terms of chartering strategy, I think you did quite the nice job of converting the spot length vessels to the rate of $20,500 for the remaining – remainder of the year. So I think that looks very decent, at least how the market is looking right now. But going forward, what do you expect in terms of the market in the second half and what do you see as sort of catalysts in the short-term? I mean, because we’ve all been waiting for the market to go from strength to strength, but we haven’t seen that lately, so how do you think about that?

That’s actually a great question. And that is evident more on the smaller sizes. I mean on the Panamax and the Supramax is that has deflated a lot and due to other events and I’m afraid that this has been dragging the Capesize market not significantly, but it has started to drag the Capesize market quite a lot. When people have now the opportunity to split cargos, especially short haul cargos from coal in the Far East and all that and that has been affecting Capesize’s a little bit. I think this is going to normalize in the near future. I think the biggest catalyst for us will be the restocking of China with iron ore , that has decreased down to three-year lows, if I remember. Well, we haven’t seen such low inventories since the first half of 2021. So that is going to drive the market higher. And overall I think demand will continue to be healthy, but the catalyst in the market is not going to come so much from demand. It’s going to come from supply. We have seen since the beginning of the year, the implementation of two major new regulations and not the EEXI and CII, but effectively nothing really has changed in the day-to-day life of a shipping company. Yes, everybody has been recording speeds and has been recording CO2 emissions and all that, but from a regulatory point of view, nothing has really happened. The ships are actually going with the same speed and we haven’t seen the anticipated speed reduction as it was predicted last year. I see right now vessels ballasting from east to west with speed like 14 knots. And I’m wondering why would someone ballast their ships at 14 knots? It doesn’t make any sense. So people still do that. I’m pretty sure that the next few months we will see vessels starting to slow down as we end the recording year for the CII. And generally there is talking of China with and all that. I think that this is going to drive market higher. And obviously when the grain corridor in the Black Sea is going to reopen, that is going to absorb a lot of Panamax’s back there, so we will see a healthcare market in the Panamax and we’ll not see split of cargos for the Capesize. It’s only a matter of time to see all that. So this is going to happen. It’s a multifaceted thing here. But the most important thing is that we have a very, very given supply of ships. We have no new buildings coming in. The fleet is aging. So one way or another, this is going to start making an impact into the market.

Thank you. And are you listing to take on more term coverage or what the rate levels do you need to see in order to enter into one year or two year time charters?

Well, the answer is yes. We tend to play that a little bit short-term. If you ask me in hindsight, we would’ve done or we should have done more in Q1 last year, but we all had different expectations. Everybody had different expectations. So, we still overperformed to the BCI, but not to the extent that we wanted. I think that we’re going to start making a little bit more cover in the following quarters. If we feel that we see spikes in the market like we saw a few weeks ago, we’re going to take advantage of that. But I wouldn’t bet on anything, maybe cover Q1 of 2024 as well. But with the predictions that we have in the market on the demand and supply, I wouldn’t really want to be so much locked in for Q2 2024 and onwards. I think that we’re going to see a major rebound in the market then.

I totally agree. Thank you, guys and have a great day.

Thank you. You too.

We have no further questions at this time. I will now hand back the conference to Mr. Stamatis Tsantanis for closing remarks.

Well, everyone thanks for attending our call today. As I said, the Q1 had significant weakness, which is well behind us. Rates in Q2 have already been trading at almost double as what we experienced in Q1. So obviously things will look much, much better in the Q2 call, which is going to be in about a month and a half from today, so thanks for – two and a half months from today, sorry. So once again, thanks for attending our call and looking forward for more positive things to come in later in the year. Thank you, Ross. Thank you.