Seanergy Maritime Holdings Corp. (SHIP), a leading pure-play Capesize ship owner, has announced a record-breaking second quarter, exceeding its previous performance and setting a new high for the first half of the year. This exceptional performance, driven by a strong Capesize market, has led to a substantial increase in the company’s dividend and the introduction of a new payout policy.
Seanergy’s 18-vessel fleet, including 1 Newcastlemax and 17 Capesize vessels, has powered the company to record results. In the second quarter of 2024, Seanergy posted a net income of $14.1 million, a significant jump from the $700,000 recorded in the same period last year. For the first half of 2024, net income soared to $24.3 million, a remarkable turnaround from the $3.5 million loss experienced in the same period last year.
Seanergy’s robust financial performance has prompted the board to enhance its dividend policy, focusing on distributing approximately 50% of operating cash flow after debt payments. As a result, the company boosted its second-quarter cash dividend to $0.25 per share, up from $0.15 and $0.10 in the previous two quarters. This move is a testament to Seanergy’s commitment to rewarding its investors, having already returned $34.7 million in cash dividends since the first quarter of 2022.
Seanergy is further boosting shareholder value by resuming stock buybacks. The company repurchased $1.8 million worth of shares at an average price of $10.56 per share, under its $25 million share repurchase plan launched in December 2023. Chairman and CEO, Stamatis Tsantanis, has personally been acquiring common shares and call options in the open market, with plans to continue buying more SHIP stock in the coming quarters.
“Based on our strong and visible cash flow generation, we expect to be able to continue returning significant capital to our shareholders in the coming quarters,” Tsantanis said.
Seanergy’s CEO attributes the company’s exceptional performance to its strategic decision to position itself as a leading dry bulk operator with a pure-play Capesize fleet. This move allowed Seanergy to capitalize on the strong performance of the wider Capesize market, outperforming other dry bulk segments and solidifying its leadership position within the asset class.
Seanergy’s strategic expansion includes the acquisition of a modern Capesize vessel, expected to be delivered in the third quarter of 2024. This addition will boost its fleet to 19 high-quality Capesize vessels, up from 17 at the start of 2024.
The Capesize market has been experiencing strong momentum since the first quarter of 2024, marking its best performance in over a decade. This positive trend continued into the second quarter, boosting Seanergy’s fleet to an average daily time charter equivalent (TCE) of $26,636. With a strategic hedging plan in place, Seanergy’s TCE was approximately 18% higher than the Baltic Capesize Index’s average of $22,600.
“Seanergy is well positioned to continue performing strongly amidst the favorable Capesize market fundamentals, and we will remain focused on delivering high shareholder returns while opportunistically growing our fleet,” Tsantanis said.
United Maritime Corporation (USEA), which was spun off from Seanergy two years ago, has also been making strategic moves, capitalizing on opportunities across various diversified sectors. Following a recent swing to profitability in the second quarter, United Maritime has declared its seventh consecutive quarterly dividend of $0.075 per share.
The company is also making a minority investment in a new offshore Energy Construction Vessel (ECV) project through a partnership with Norwegian counterparts, with expected completion in 2027. The ECV will serve both the oil and gas and renewable energy sectors, where demand currently outpaces supply.
United Maritime has also partnered to charter-in an Aframax tanker, which is run by a reputable tanker pool operator, for as long as nine months. The company has also secured $48.3 million year-to-date in financing deals, the proceeds of which will be directed toward refinancing multiple ship leases.
Both Seanergy and United Maritime remain optimistic about the outlook for the Capesize sector, where they see themselves advantageously positioned. Vessel demand remains robust, fueled by China’s growing iron ore and coal imports and a similar demand story unfolding in the Brazilian export market.
Orderbook data suggests that a slow-growing fleet size will persist, leading to a scenario where dry bulk demand is likely to outpace supply for the foreseeable future.
