Thank you for standing by, ladies and gentlemen, and welcome to the Seanergy Maritime Holdings Corp. Conference Call on the Third Quarter Ended September 30, 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, Tuesday, November 14, 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 actual results to differ materially from those in the forward-looking statements is contained in the third quarter ended September 30, 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 speakers 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 are presenting the financial results for the third quarter and first 9 months of '23, while also announcing the distribution of another cash dividend. Starting with our commercial performance, I'm pleased to report that in the third quarter, Seanergy achieved a daily time charter equivalent rate of $15,300, once again, overperforming the Baltic Capesize Index by around 14%. This is a result of our strategic investment in improving the energy efficiency of our fleet, where the majority of our ships are obtaining premiums over the index as well as our effective hedging strategy where we locked in about 30% of our fleet in fixed rates exceeding $20,000 a day. Considering the performance of the Capesize market, despite the strong demand for seaborne transportation of iron ore, coal and bauxite in the first 9 months of the year, congestion stood at historically low levels. Therefore, vessel utilization improved, expanding the effective fleet supply, which in turn has put severe pressure on the spot market. As congestion found bottom in July and August, the increased cargo flows resulted in significant supply tightness, which led to a recovery in day rates to levels exceeding $30,000 per day in October. Having entered the fourth quarter with 70% of our days taking advantage of the higher market, we're well positioned to benefit from the recent recovery of our sector. Notwithstanding the overall weak Cape market conditions, which impacted our financial results for the quarter, our cash reserves remain at satisfactory levels. On that basis, our Board of Directors has approved another consistent quarterly cash dividend of $0.025 per share. Regarding fleet developments on October 24, we took delivery of our first Newcastlemax vessel, which was renamed Titanship. That vessel was acquired with a 12-month bareboat structure with a purchase option for Seanergy at the end of the charter. The vessel commenced an index-linked employment with a first-class charter for a period of about 1 year at a substantial premium over the Baltic Capesize Index. This is actually the highest premium achieved by any vessel of our fleet. The addition of the Titanship will further strengthen our ability to overperform the Capesize Index. Combined with an attractive acquisition price, it is likely to produce higher returns on capital. In terms of other commercial developments, we have extended various existing time charters of our vessels, while more and more ships benefit from the scrubber equipment installed in 2019 without us paying for it. Similarly, within 2024, we expect more vessels to enjoy improvements in the profit-sharing terms on the employment, which would provide an additional tailwind to our TCE. In terms of guidance for Q4, about 60% of our total fleet days have now been fixed at the daily TCE rate of $21,600. When applying the recent FFA rate of $15,700 for November and December on our open days, the average TCE rate for the period is expected at approximately $19,500. On a more optimistic note, if we apply the average Capesize spot rates since the beginning of Q4 2023, then the resulting TCE for the period is projected to be approximately $22,800 per day. Moving on to capital returns, our Board has authorized the distribution of another regular quarterly cash dividend of $0.025 for the third quarter, which brings our total distributions since the commencement of our dividend program to about $1.36 per share, representing approximately 26% of our recent closing price. Returning capital to our shareholders will remain an important priority for us, and I'm confident that our healthy balance sheet and low refinancing needs over the next 2 years will allow us to continue on the same path. That concludes my summary of third quarter developments, and I'm now going to pass the floor to Stavros, our CFO, before returning to discuss the current status and outlook of the Capesize market. So Stavros, please go ahead.

Thank you, Stamatis, and welcome, everyone, to our third earnings call for 2023. Let us start by reviewing the main highlights of our financial statements. Our net revenue in the third quarter amounted to $24.5 million, while in the 9-month period, it reached $70.8 million, definitely a drop compared to the expected figures of 2022 as the freight market during the quarter remains subdued. However, we are pleased that we have outperformed the market in terms of time charter equivalent, as Stamatis mentioned before, highlighting Seanergy's versatility in all market conditions. Meanwhile, our adjusted EBITDA was $9.5 million in the quarter and $29.1 million in the 9-month period. Finally, we recorded a net loss of $5 million in the third quarter, expanding the net loss for the 9-month period to $8.5 million. It is essential to consider the inflationary conditions under which we currently operate as they have had an impact on our overall cost. At the same time, the advantage we generally gain from vessels equipped with scrubbers was reduced in the third quarter because of the temporarily narrowing gap between high and low fuel prices. We are optimistic that our freight hedging strategy, along with the already observed improvement in spot rates in recent months and the widening fuel spread, along with improved profit-sharing schemes on some of our vessels, should result in improved financial performance in the current quarter. Moving on to our balance sheet, our cash position remained practically unchanged at $22 million. This allowed us to continue returning capital to our shareholders by maintaining regular dividend distributions. Now on the debt front, aggregate balances dropped to $223 million, with our market value adjusted loan-to-value ratio remaining at 52% despite the correction in vessel volumes. We consider such debt levels to be sustainable. While after the $54 million refinancing completed during the first half of the year, we have no debt maturities, no balloon payments at least until the second quarter of 2025. This arguably illustrates the financial health of our company and our ability to weather the volatility of the market by managing our short-term liquidity needs successfully. As regards to our cash interest expense, these were increased in 2023 so far due to the high-interest rate environment. However, our recent financing transactions at improved pricing terms did partly mitigate the steep increase in base rates. With regard to new transactions, as briefly mentioned by Stamatis, we have recently completed the bareboat agreement for our first Newcastlemax, the Titanship. Following a down payment of $7 million, splitting two equal installments paid in the second and the fourth quarter, the agreement provides for a daily rate of $9,000 over the 12-month period of the bareboat charter, which will not burden our cost breakeven. At the end of the bareboat charter, we have a purchase option of $20.2 million, which we expect to exercise. In aggregate, the acquisition cost for the vessel following the exercisable purchase option will be approximately $30.5 million, which we feel is very competitive. This concludes my review. I would now turn the call back to Stamatis, who will discuss the market and industry fundamentals.

Thank you, Stavros. Since the beginning of 2023, a significant increase has transpired in Capesize demand as tonne miles relating to iron ore, coal, and bauxite have increased substantially by up to 8%. In comparison, the size of the Capesize fleet has increased by approximately 2%, which clearly highlights the favorable fundamentals in the dry bulk market. Despite the healthy nominal supply and demand balance, the trade market did not respond as positively as initially anticipated. Quite the opposite, actually. The main reason was the increased efficiency of the Capesize fleet and a significant decrease in congestion, which in turn added considerably to the effective supply of available vessels. Additionally, as highlighted in our previous earnings updates in August, we've also observed an increase in deadweight adjusted vessel speed, resulting mainly from the operating vessels of large ore carriers. This, we believe, contradicts the emphasis placed on the reduction of the industry's carbon footprint. Going back to the reduced congestion matter. During the first 9 months of the year, the levels of port congestion fell to historical lows and reached a multiyear bottom in the summer months. Since the end of August, the reversal of this trend has reduced the availability of vessels with congestion starting to return closer to long-term averages. As a result, Capesize charter rates have seen an impressive recovery since the lows of the third quarter, rising to levels exceeding $30,000 a day in October from rates as low as $8,000 a day recorded earlier in the summer. Looking ahead, we remain positive about the prospects of the dry bulk market based on the lowest newbuilding order book of recent decades and limited shipyard availability. Capesize fleet growth is expected to be lower than 1% in the next 2 years, suggesting that the expected trade growth will support high fleet utilization and healthy charter rates. Additionally, any curtailment of fleet supply resulting from stricter environmental regulations and temporary disruptions has the potential to improve the market balance significantly. Moving on to Capesize demand, China's iron ore imports until the end of September were up by 6.7% year-on-year, while inventories were down about 20%. Low iron ore inventories are driving increased demand for iron ore as steel production has also been on a positive trajectory. Thus, we're seeing strong momentum in export demand in industries outside the local property market in China. Long-haul iron ore exports from Brazil had a significant 7% growth from last year, and we are optimistic about the prospects for future increases based on high profit margins. As regards other Capesize commodities, coal seaborne trade is up about 6.5% year-on-year according to results driven by a large increase in China imports. There is a massive order book of coal-fired power plants in China as well as in Southeast Asia in general. So increasing coal usage to generate electricity seems to be on a stable path. Lastly, demand for bauxite exports out of Guinea has become another significant driver of Capesize cargo flows with exports rising about 24% year-on-year in the third quarter. Going forward, we expect this trend to continue to increase Capesize tonne mile demand. As a result, I believe that the fundamentals of the iron ore, coal, and bauxite markets should support a healthy Cape vessel demand over the next few years. Moving on to vessel supply, the outstanding order book for Capesize and VLOC vessels is at its lowest point in several years, while the availability of shipyards to deliver new orders is extremely limited. The total Capesize and VLOC order book is only about 5% of the existing fleet, with growth for 2024 expected to be lower than 1%. The decision to invest in newbuilding vessels can be difficult to justify financially due to higher costs and technological uncertainty. Therefore, I believe it is highly unlikely that we will see any significant increases in the order book over the next 2 years at least. Additionally, we have the acceleration of all existing and new environmental regulations notably EEXI, CII and EU ETS. As a result, a gradual reduction of vessel speed to comply with these regulations will also have to happen, which will further limit effective vessel supply. As highlighted in our last earnings report, it has been observed that many large ore carriers are sailing at very high speeds. Since these increased speeds have an exponential effect on CO2 emissions, the only logical conclusion in our minds is that we will start to see a slowdown, especially to the extent that the environmental emissions reductions become a more important priority over profits. Overall, the limited order book and the difficulty surrounding decisions to build new vessels are both contributing to limited supply growth for the Capesize fleet. Concluding, with such a positive dry bulk market outlook, Seanergy's high-quality fleet and healthy financial standing are positioning our company favorably to achieve high retention investment and deliver attractive capital returns to our shareholders. This concludes our remarks, and I would like now to turn the call over to the operator and answer any questions you may have. So operator, please take the call. Thank you.

We will now take the first question from the line of Tate Sullivan from Maxim Group.

Can you talk, Stamatis, are you built related to the fees from related parties and the increase in general and administration expenses? I think you've mentioned before, you're building your own ship management business. Is that part of the reason for the higher general and administration expenses? And should that continue going forward too?

Yes, Tate. I hope all is well. Nice to hear from you. Well, we actually have increased general and administrative expenses, but at the same time, we're compensating approximately $600 per ship per day from United. So yes, general and administration expenses are a little bit up, but we compensate that to a large degree from the fees associated with United Maritime.

And do you have a ship management business? And could you start to manage ships for other fleets? Or am I incorrect?

Of course, of course, yes. I mean, right now, the vast majority of the fleet under our ownership is under the Seanergy ship management. So the answer is yes, we consider ourselves a very premium provider of ship technical management and commercial management services. So the answer is yes, we can manage ships for other companies, but now we're focusing on Seanergy and United. We do maintain a few vessels for independent third parties for benchmarking reasons. So we still maintain one or two companies, and we have relationships with most of the independent third parties out there for the exchange of information and knowledge and all that, but the vast majority of almost everything is under our roof.

And then on any scheduled, I mean you have a newer fleet of Capesize, mostly scrubbers, is there any scheduled downtime for 2024 for modeling purposes?

Well, we have about 3, 4 ships next year that will enter dry docks. We don't consider any important or any particular difficult downtime altogether. I must say around 15 to 20 days per ship. So it's very, very minimal to the total operating days of the company.

Have you noticed any signs of scrapping in the older Capesize fleet recently?

Well, the oldest vessel in our fleet is from 2009, so it's still considered, let's say, middle-aged. It's not considered older. And it still operates very successfully and in very competitive terms with the rest of the fleet. So we don't really feel any pressure whatsoever. Right now, the market has opened a lot in various commodities that do not necessarily require age limits. So we're very comfortable in the age bracket of our fleet. But most importantly, I must remind everyone that there are no newbuilding orders. The order book is very limited. It's the lowest order book of the last 20, 25 years. So we're going to have to live with the ships that the current global fleet has right now. So eventually, everything is going to get a bit older in the next few years.

And outside of your fleet, no recent trend in scrapping? I have not seen any, but...

Correct. Yes. Yes. We don't see any material trends in scrapping. However, we believe that starting in 2024, the total combination of the environmental regulations is going to be impacting the market, and many ships will not be able to compete with the rest of the fleet. So regardless of age, there are certain vessels that may not have managed to be designed for the environmental profile of the fleet of tomorrow. Those ships will need to be either significantly upgraded or they will have to exit the trade.

And Stavros, one last question from me. You mentioned higher interest costs and expenses in 2024. Can you provide a rough estimate of your current floating rates?

In total, the refinancings we've undertaken have led to our margin being in the range of 2.5% to 3%, despite paying above the base rate. Currently, the SFR is about 4.5% to 5%, so the all-in cost sits around 7% to 7.5%. Looking ahead, we anticipate our quarterly interest expense will be approximately $5 million. As we move into 2024, due to the steep amortization of the loans, the outstanding balance will decrease, leading to expenses of around $4.9 million, then $4.8 million, and so on. Regarding breakeven, you should consider about $2,800 per vessel per day for our cost breakeven related to interest.

We will now take the next question. It's from the line of Kristoffer Barth Skeie from Arctic Securities.

Congrats on the quarter and obviously, good guiding. Can you please elaborate a bit on the bauxite trade and how it will affect the Capesize market and seasonality? There's a lot of talk in the market about this now and I mean, typically, the first quarter has been the weakest one, but do you see any structural change here over the coming years?

Well, yes, most importantly, is the fact that from 2024 onwards, we will see the acceleration of all the new environmental regulations that so far, they have only been in place, some of them, but they have not really been enforced. So 2024 is going to be the first recording year of all the new environmental regulations. So the EEXI will kick in full-fledged, CII as well. But most importantly, what will have the first monetary impact for the owners is the EU ETS. We still have a lot of discharging in the EU, so that's going to be the first real emissions-related pain. So as I mentioned to Tate before, we strongly believe that many ships will have to slow down significantly or will have to be upgraded considerably to remain competitive for the next few years. We have seen a massive increase in demand arising from China and other places year after year anywhere between 5% and 9%. So the volumes are tremendous. If the effective supply of vessels is a little more moderate because of speed, congestion, and other reasons, I believe we can see significant spikes in the market starting in 2024, and that will only get better for us going forward.

Okay. So going back to this bauxite trade out of West Africa. Is this something you've seen increase lately? And how much are you involved in this trade?

Guinea is experiencing substantial growth, and we will also see the Simandou project, which involves iron ore from West Africa. Volumes are increasing significantly. While I don't want to focus solely on bauxite—although it is a major growing trend—the overall demand for raw materials such as iron ore, coal, and bauxite seems to be steadily improving in the coming years. Bauxite volumes have risen significantly, but they don't quite compare in absolute terms to iron ore and coal shipments. The year-on-year increases we’ve observed amount to millions of tons.

We will now take the next question from the line of Michael Heim from NOBLE Capital Markets.

I do not see any mention of any share buybacks during the quarter and the shares have been a little bit weak since the quarter has ended. Do you feel that you have the balance sheet and the cash flow to make repurchases if the opportunities arise? And how do you prioritize share repurchase versus paying down debt?

That's a great question, and thank you for asking this. The answer is that we prioritize on a number of things right now, but most importantly, is the cash flow of the company. We still have a dividend in place, which we intend to continue for the foreseeable future. So right now, in respect to giving back money to our investors, I think that's been a priority that we want to continue. Year-to-date, the Capesize market has experienced the worst period of the last 5 to 6 years. So at the beginning of 2023, we were anticipating a much better freight rate environment. Unfortunately, it didn't meet our expectations; it was far below our expectations. So we decided to maintain cash flow as much as we can in order to sustain a good cash position and healthy balance. The only upcoming buyback that we have until the end of the year is for a small outstanding convertible of $3 million that we're going to repurchase and that's it. I think that is a significant repurchase by itself. So far this year, we've conducted quite a few repurchases and I’ve purchased from the open market myself. So altogether, it's a maintenance of cash. We believe 2024 is going to be a better year, but since we were a bit disappointed in 2023, we prefer to maintain a good cash position. Of course, the principal repayment of debt, as Stavros mentioned before, is quite steep, so we want to have the proper cash flow to manage all the cash flows that we need to address in the next few months.

There are no further questions at this time. I would now like to turn the conference back to Mr. Stamatis Tsantanis for closing remarks.

Dear all, thank you very much for attending our call today. We look forward to catching up again in the next few weeks and months with other corporate developments. In the meantime, once again, thanks for attending our call. And thank you. You may disconnect now.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.