Thank you for standing by, ladies and gentlemen, and welcome to the Seanergy Maritime Holdings Corp. Conference Call on the Fourth Quarter and Year Ended December 31, 2023 Financial Results. We have with us today 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, Friday, March 14, 2024. The archived webcast of the conference call will soon be made available on the Seanergy website, www.seanergymaritime.com. To access today’s presentation and listen to the archived audio file visit the Seanergy website following the webcast and presentation section and on the investor relations page. Please now turn to slide two of the presentation. 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 fourth quarter and year ended December 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 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 fourth quarter and full year period of 2023, together with an update on our main corporate developments. Let’s move into slide number three. 2023 was one of the most volatile years for the Capesize market. We experienced a wild range of freight rates that bottomed at $2,200 per day in Q1 and peaked at almost $55,000 a day in Q4. Despite this extreme volatility, Seanergy was very well placed to take advantage of a stronger rebound in the Capesize market that transpired in the fourth quarter of 2023. As a result, we delivered another profitable year, building on our robust commercial performance, our hedging activities, and the investments we have made in improving our vessels' efficiency over the years. In doing so, we have successfully navigated the extreme freight rate instability and achieved a healthy mix of fleet growth, accretion, and cash dividends. We ended the fourth quarter of 2023 with a net income of approximately $10.8 million, which compares very favorably with a net income of $0.5 million reported in the fourth quarter of 2022. Following a strong fourth quarter of 2023, the Capesize market is currently undergoing the best first quarter since 2011. This is a result of higher raw material trade flows, limited fleet growth over the past year, and disruptions in key areas. Consistent with our commitment to reward our shareholders, our board of directors declared a total cash dividend of $0.10 per share, consisting of a special dividend of $0.075 on top of the $0.025 regular dividend for the quarter. This results in a dividend payout ratio exceeding 100% for the full year period of 2023. While we're currently evaluating our options to further increase capital returns to our shareholders, provided that the underlying conditions allow. In addition to our cash dividend distributions, since 2023, we have completed $2.5 million in share buybacks, or about 2% of our shares outstanding at an average price of $5.12, which is about 44% lower than the current market price. Additionally, in December we repaid the $3.2 million outstanding balance under our convertible note, addressing a long-standing legacy overhang over our share price while simplifying our capital structure. Apart from this, during 2023 we refinanced approximately $53.8 million of indebtedness and following these transactions, there are no other debt maturities until the second quarter of 2025. We are pleased to see Seanergy making parallel progress in our strategic objectives of rewarding shareholders, taking advantage of growth opportunities, and maintaining a strong balance sheet. I would like to add that we view our balanced capital allocation as the best way to serve the long-term interests of our shareholders. Moving on to slide number four, here we illustrate our priority in capital returns to our shareholders. Since March 2022, we have declared a total of approximately $26.4 million, or $1.45 per share, through a mix of regular and special cash dividend distributions that represent about 16% of our current share price. In terms of buybacks, the total securities repurchased, including common stock, convertible notes, and warrants, amount to approximately $41 million. Moving on to slide number five, here we review the commercial performance of our fleet. First, I would like to point out that we generally overperform the BCI index in a highly volatile Capesize market. Our 2023 TCE performance of $17,500 exceeded the Capesize index average of $16,400 approximately. This makes two consecutive years of us overperforming the BCI index. In addition, we have focused on acquiring high-quality vessels for our fleet comprised of Japanese vessels from the most reputable yards with significantly improved fuel efficiency characteristics. The qualitative improvement of our fleet that leads to increased earnings capacity is a continuous priority for us. Looking ahead to 2024, against the promising backdrop of the first quarter, we believe that our performance will remain solid. Assuming current FFAs, we expect our first quarter 2024 daily time charter equivalent to be equal to approximately $23,200. We have also taken advantage of the recent upswing in freight futures and hedged approximately 58% of our second quarter ownership days at a fixed gross rate of approximately $28,300. Concerning our fleet growth initiatives, during the fourth quarter, we took delivery of our first Newcastlemax vessel, which we had agreed to charter in on a bareboat basis. The underlying acquisition price is well in the money, and since its delivery, the vessel commenced employment under an index-linked time charter at a significant premium to the BCI. Furthermore, in the first quarter, we agreed to acquire a Capesize built in 2013 in Japan and we expect to take delivery by the end of the second quarter. Both transactions have been very well timed. This concludes my recap of our developments in the fourth quarter and to date, and I'm now passing the floor to Stavros before returning to discuss the outlook of the Capesize market. Stavros, please go ahead.

Thank you, Stamatis. Welcome, everyone, to our earnings call. Let us start with slide six by reviewing the main highlights of our financial statements for the fourth quarter and the twelve months period that ended on December 31, 2023. We actually had a great fourth quarter on the back of a very robust Capesize freight market and our effective operating platform. Our net revenues were equal to $39.4 million, 38% higher than the respective period last year, based on a time charter equivalent of $24,900. Our adjusted EBITDA and our net income were also significantly improved year-on-year, amounting to $23.9 million and $10.8 million, respectively. On an annual basis, our net revenues were equal to $110.2 million, slightly lower than last year due to the slower-than-expected Capesize market recovery in the first nine months of 2023; however, we recorded an average time charter equivalent of $17,500, outperforming the BCI by approximately 7%. Our adjusted EBITDA was equal to $53 million and our net income reached $2.3 million, reflecting the challenges faced earlier in the year. Moving on to our balance sheet, our cash position remains strong in 2023 at $24.9 million, or approximately $1.5 million per vessel. This is despite consistent dividend payments, securities buybacks, and hefty debt monetization schedules. In slide seven, it is evident that despite the weaker than expected Capesize market during the first nine months of the year, we achieved another profitable year with an adjusted EBITDA of $53 million. This can be attributed to our effective hedging strategy throughout the year, which helped us hedge against some of the downward market pressures. Additionally, our solid operating leverage allowed us to capitalize on the strength of the market in the fourth quarter. On the expense side, we retained our daily OpEx per vessel at practically the same levels as the previous year, despite the inflationary pressures. This reflects our strategic decision to increase the number of vessels managed on our in-house management platform. With all these actions, our adjusted EBITDA margin for the year remains strong at 48%, closely aligning with the previous year's performance. Moving on to slide eight, we discussed our debt optimization and overall leveraging efforts throughout 2023. Starting with our debt structure, our debt outstanding at the end of 2023 was equal to $235 million. This includes loans, finance, leases, and remaining payments under our bareboat vessels, including respective purchase options, and corresponds to approximately $13.9 million per vessel, almost half of the average market value of our vessels as of the end of last year. Our debt repayments reduced our corporate leverage to 47% during 2023, with more than 90% of our debt covered by the scrap value of the fleet based on current scrap prices. Here, it is worth mentioning that Seanergy achieved another significant milestone this year by fully repaying the last outstanding convertible note totaling $11.2 million. During the year, we successfully concluded $53.8 million of refinancing’s, reducing the underlying pricing in overall terms while also adding $15 million in liquidity at that time. Equally importantly, we have now addressed all loan maturities until the second quarter of 2025. Meanwhile, we are in advanced discussions with a potential lender for the financing of our latest Capesize acquisition as Stamatis mentioned earlier. This strategic move is anticipated to further enhance our interest margin profile and improve the overall structure of our debt. On the interest expense front, we did see an increase compared to the previous year, which was driven by the increased reference rate despite the sharp decrease achieved in the interest margin of our facilities. We expect this cost to decrease in the coming quarters following the anticipated interest rate cuts from the central banks. Moving on to slide nine, we highlight our great potential for profitability in 2024. We anticipate a significant increase in EBITDA compared to 2023, even if BCI rates average to the figures in 2023. If the current FFA curve materializes, our EBITDA profitability could be remarkable, reaching close to $115 million. It's worth mentioning that in 2023, our overall premium over the BCI for our fleet improved, reflecting our investments in the energy efficiency of our vessels and our effective commercial strategy. In addition, we have fixed almost 60% of fleet days for the second quarter at an average rate of approximately $28,300. In summary, we remain optimistic about our profitability in 2024 and our overall liquidity, affirming our ability to continue rewarding our shareholders while enhancing the composition of our fleet. This concludes my review. I will now turn the call back to Stamatis who will discuss the market and industry fundamentals.

Thank you, Stavros. Let's move to slide number 10. Despite the gloomy predictions for 2023, ton-mile demand for the year was actually 6% higher as compared to 2022. That resulted in a much greater number of cargos of iron ore, coal, and bauxite that exceeded an incremental of 170 million tons. As we repeated in our previous discussions, the freight rate volatility of the year was driven mainly by the effective supply of vessels during the year. Since the start of the fourth quarter of 2023, the Capesize market has strengthened considerably, which was carried forward into Q1 of 2024. This has led to the strongest BCI average rate in more than a decade. This positive effect has also been apparent in asset prices, with Capesize values rising since the end of the third quarter between 20% and even 40%, depending on the vintage and individual vessel specifications. Moving on to slide 11, in the current year, our outlook remains very positive. The recovery in global manufacturing, as well as extensive infrastructure investments, may drive further growth in seaborne trade of raw materials. With the expectation of a gradually lower interest rate environment, manufacturing and infrastructure investments will continue to flourish. Overall, 2024 ton-mile demand growth for Capesize cargoes is expected to be about a 3.5% to 4% increase and given the current momentum, positive demand growth is likely to continue into 2025 with projected ton-mile growth of around 2.5%. Moving on to slide 12, turning to vessel supply, in deadweight terms the order book for Capesize vessels currently stands at about the same level as 2004, 20 years back, while replacement needs have grown considerably since then due to stringent environmental regulations. Overall net Capesize fleet growth is expected at around 2.5% in 2024 and 1.5% in 2025, both lower than the respective ton-mile demand growth in nominal figures. Beyond the low order book, fleet efficiency has returned to historical average levels, which suggests that effective fleet supply is unlikely to grow further, except for short-term events. Capesize vessel’s peak has already fallen in the past decade from about 12-12.5 to approximately 10.5-11 knots. Strong dry bulk markets in the past years have not resulted in speed increases and we believe that this trend is sustainable due to the implementation of CII, EEXI, and other regulations that will affect the efficiency of the vessels. To close today's call, we want to emphasize that we are executing a clear strategy that includes rewarding shareholders through capital returns, investing in our fleet to drive growth and efficiencies, and maintaining a strong balance sheet. The actions we have taken to grow our fleet substantially over the past three years with quality assets and strengthen our financial position have placed Seanergy in a prime position to benefit from a healthy freight market as the Capesize segment enjoys the best demand and supply fundamentals in the dry bulk space. As a result, we expect to generate significant cash flows that will facilitate further shareholder value creation moving forward. This concludes our remarks and I would like to turn the call back to the operator and answer any questions you may have. Operator, please take the call. Thank you.

Thank you. The first question comes from Tate Sullivan from Maxim Group. Please go ahead with your question. Your line is open.

Great. Thank you for taking my question. First, it's great to see the special dividend. I did not anticipate that. Just for modeling purposes, when is that payable, the special dividend and the quarterly dividend you just announced? Please, is it this quarter?

Hello, Tate. Good morning. How are you?

Good morning. Great. Thank you. Thank you very much.

Well, as we have stated, it's going to be payable approximately on the 10th of April, as we have noted.

Thank you. And then also the Capesize acquisition, the 2013 build, shifted $34 million, seems roughly in line with acquisitions in the last couple of years. Has it been? Have you seen a good deal flow recently, before the recent rally? Can you talk about the S&P market a bit?

The answer is yes. We have seen a big inflow, a big activity of transactions in the last few weeks. People are buying a lot of Capes, and we have seen older ships and those inferior to the ones that we have been purchasing, being sold at very firm values. So we strongly believe, if we compare this particular acquisition with the recent precedents that we have experienced in the market, that it stands in a very, very advantageous position. So the answer is yes, of course.

And can you talk about how much leverage you might add for that ship acquisition and the loan-to-value ratio for the whole fleet currently, or after the recent escalation in values that you've seen?

Well, we're very conservative in all our transactions. So overall, leverage of the company, as you know, stands at around 50%. So, it's something very logical here. And it's an amortizing leverage that we have. And in this particular transaction, we're going to aim for around, I don't know, 50%, 60%, combined maybe with other assets or leasing transactions. We are in the process of finalizing terms. I cannot disclose anything further at this point.

Thank you. And then you announced the SAFeCRAFT announcement about installing a hydrogen tank and associated fuel cell equipment to generate electricity. Will this take place over the next year or so on one of your vessels? Has it already taken place? Can you talk more about that?

Yes, thank you for giving me the opportunity to speak a little bit more about that. First of all, we are the first and only Greek shipping company to participate in this innovative project that is being mostly funded by the European Union. So you can understand the importance that this project has for us. We are in the process of selecting the assets and finalizing the selection of the assets that will be eligible for this particular conversion, installing these devices that we need to install. So, it's not just the hydrogen tanks. It's a more complicated element that we need to install on the ship, and it takes much longer. We will hopefully finalize the selection of these vessels in the next month or so. The process of installing them will take place during the dry dock of 2025. We will require a very extensive, excuse me, we'll require a very extensive study of the ship going forward and the impact. So once we finalize that and do the 3D scanning and all the laser placements and all that, we expect that to be finalized sometime by the end of 2025. So it's a long process.

Thank you very much.

Thank you, Tate.

Thank you. We are now going to proceed with our next question. And the question comes from the line of Michael Heim from Noble Capital Markets. Please ask your question. Your line is open.

Thank you for taking my question. Regarding the acquisition of the Iconship, will that $34 million expenditure fall into the second quarter when the ship is received?

Well, yes. I mean, we have already paid a deposit on the ship, so the actual full expenditure and delivery of the vessel will most likely happen within May, we expect. But just to be a little bit more conservative, let's assume by the end of the second quarter, yes.

And then would you review your plans for dry docking ships in 2024?

Well, we are pretty much, how do you say, flexible on that front. It all depends on the schedule. We have a very light schedule for 2024 altogether, so it's not going to be a heavy year on dry docks altogether. So, it's something very manageable in our opinion, 2024, the dry dock schedule.

Okay. And then, finally, I noticed a big rise in the interest and other income line in the fourth quarter, even though the cash position was relatively the same. Could you explain what items might fall into that line item?

There's no other major items to expect now, Mike. On the expense, on the cash expense side, I mean, we expect interest expense to remain at pretty much similar levels, so around $2,500 per vessel per day, $2,500 to $2,750 per vessel per day. And that's about it. I mean, also on the G&A front, you should expect 2023 to provide a good proxy for 2024. We don't expect major movements out of these figures. Now, of course, as everybody expects, base interest rates should start coming off, and this will have a direct reflection on our bottom line. We have done what we should have done from our side in reducing our interest margins to a great extent over the last couple of years. So, as soon as you see base rates decreasing, that will reflect very nicely in our bottom line.

Okay. Thank you.

Thanks, Mike.

Thank you. We are now going to proceed with our next question, and the questions come from the line of Liam Burke from B. Riley Financial. Please ask your question.

Thank you. Good afternoon, Stamatis. Good afternoon, Stavros.

Hello, Liam. Hi. Good morning.

Stamatis, the outlook for the Capes looks very, very strong for 2023. It's anticipated that China's steel production would be relatively flat from last year. So, looking at the iron ore trade, where do you see some of the offsets to flat China's steel production this year?

Well, first of all, we are very happy with the figures that we experienced in 2023. If you recall, the same time last year, everybody was talking about the bankruptcies of Evergrande and the other big developer in China. So, everybody was very gloomy about the Chinese demand for iron ore, as well as steel production. And of course, it was for the local demand and the housing crisis in China, it appeared to be quite severe. However, we've had a 6% increase in ton miles, so a huge import increase in China of raw materials associated with that trade, like iron ore, coal, and bauxite. And of course, a very big increase in the exports of steel products. So, even if there were gloomy predictions in the beginning, the actual trade inbound and outbound from China has been very, very strong. So, the big variations of freight rates in 2023 is not attributable to demand; the demand was particularly strong, and one of the strongest demands we've seen in the last five years. It was attributable to the effective supply of ships. While we did not have a big increase in the fleet on a nominal basis by deliveries of new buildings in 2023, we had big variations in respect of congestion and various other trade problems in various areas. The reason why we saw the sharp decrease in the second quarter of the year, and in Q1, was the fact that the grain corridor in the Black Sea was unwound, and a lot of Panamax and Supramax vessels were automatically released, about 200 ships were released looking for employment. From September onwards, we saw congestion creeping up to the historical averages. Then we had the Panama Canal situation where we kind of locked a number of smaller ships in that area. And then the Red Sea situation is something that we still wait to see the effect of those problems and the fact that the vessels are deviating around the Cape of Good Hope. So, overall, I strongly believe that demand will continue to be very healthy in 2024, even if it remains at the same numbers as 2023. It's a very strong and very healthy demand, and the actual variation of the freight rates will be a derivative of the effective supply of vessels. So, the fewer ships available and the bigger the deviations to avoid conflict areas, the higher the rates. And I strongly believe that the effect of the Red Sea is, the full effect of the Red Sea deviation is yet to be seen. We will see that towards mid to end of Q2, in our opinion. I hope that covers your question.

Yes, it sure does. Thank you. The other question I had is on the special dividend. Is that going to be incorporated into your normal capital allocation program?

Well, for us, it's very important to reward our shareholders, and we have demonstrated historically that we've paid hefty dividends to our shareholders to the extent that cash flow and cash balances allow. When we had experienced a very volatile year like 2023, where rates ranged from $2,500 a day to $55,000 a day, you can imagine that we must be cautious with the distribution of our cash. However, as we've stated in our release, we have already fixed the number of our vessels for Q1 and of course for Q2. So, we have crystallized a big amount of our cash flow. If the situation allows, we might incorporate the special dividend into the regular dividend or further increase the special dividend. We have not decided yet. We will wait and see. But the overall strategy is to reward the shareholders as much as we can.

Great. Thank you very much.

Thank you. Nice to hear from you. We will now move on to our next question. Kristoffer Barth Skeie from Arctic Securities is on the line. Please go ahead with your question; your line is open.

Hello, guys. Thank you for taking my question. How are you?

Hello and very good afternoon. Nice to hear from you. And sorry to hold the conference call on a Friday so late for European time.

No, no. That's perfectly fine. And obviously, congrats on a very good quarter. Strong finish to the year. And I must say that the Capesize transaction seems to be extremely well done. I mean, we have a generic Capesize built in 2013 valued at $40 million now. So, already deep in the net money. So, congrats on that. I was just wondering if you could comment on what has been the recent strength in the market during Q1. And sort of if the strength in Q1 is driven by a very strong volume growth, what should we expect from the remainder of the year, sort of when the upside of volumes is already taken out? What's your view on that?

Well, thank you. As I mentioned to Liam before, I believe that the current strengthening of the Capesize rates is a combination, first of all, of the restocking of China. I remind you that in December, the Chinese iron ore stockpiles were down at 105 million tons. Now, it's the beginning of the construction season in China. So, they need to restock iron ore. They produced a very strong amount of steel last year and we expect them to be consistent this year as well, for a number of reasons. I believe that the, and we have discussed this extensively internally, that the variation of rates for 2024 will be a product of how the effective vessel supply is going to be moving around the world. We still see the Red Sea disruptions affecting, in our case, they have affected about 20% of our fleet, which is very strong. Assuming that the Capesize market is half of how much we are affected, or even a quarter of that, you still have anywhere between 5% and 10% of the global fleet being affected by the Red Sea. And that, when you're moving products in such long distances, prolonging the voyage by anywhere from 15 to 25 days, that's a material increase of the ton mile. So, assuming all that remains the same and we don't see any normalization anytime soon, I believe that the supply deficit will continue to be dominant in the market, and we will see a very strong level of rates. Now, if in the summer the war ends and the Houthis allow passages to continue and there is no congestion anywhere, then we might see some softening in the market. But overall, I think the predictions right now are that the vessel supply will continue to be constrained a lot.

I agree and thanks a lot for answering my question. With regards to capital allocation, I mean, obviously, the distribution, the special dividends, was a very positive surprise going forward into 2024. How do you sort of consider additional buyback compared to potential special dividends? So, how do you weigh those two against each other?

Well, that's an excellent question. As you have seen, we have done a perfectly balanced approach. We acquired ships, which we believe will contribute very significantly to the cash flow of the company going forward. We also buy back the stock and at the same time, we pay a dividend. So, we're doing all three that we can in a perfectly balanced way. It's going to be pretty much the same. I mean, assuming that the rates and the cash flow allows, we will continue to reward the shareholders and of course, do buybacks as well in the event that allows. But let us all be reminded that buybacks are kind of restricted by the trading rules. I mean, there's only so much buyback of shares that we can do. In many cases, we have kind of maximized that and the stock price has been increasing. So, we're doing the best to comply with all three major balanced allocations of capital.

Okay, great. Thanks. Have a nice weekend.

Thank you and you too.

Thank you. We have no further questions at this time. So, this ends the question-and-answer session and concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.