Seanergy Maritime Holdings Corp.

Thank you for standing by and welcome to the Synergy Maritime Holdings Corp. 2nd 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. These 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 or 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 other factors listed from time to time in the company's filings with the SEC, including its most recent annual report on Form 20F. 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. At this time, all participants are currently in listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, please press star 1 on your telephone. I must advise you this conference is being recorded today. I would now like to hand the call over to your first speaker today, Mr. Stamatis Santani's CEO. Please go ahead, sir.

Thank you operator. Hello everyone and thank you for joining our call. Today we will discuss our results for the second quarter and first six months of 2021 and we will provide you with a general update of the major corporate events that have taken place. I'm very excited to see that our strategic plan has started to pay off and Synergy is expected to prosper for years to come. Our substantial freight fleet growth over the last 12 months has been well-timed and has allowed Synergy to maximise its participation in this strong market rise. I am also happy to see that the freight rates have recovered close to historical averages after a decade of underperformance. I believe that Synergy is well placed to reward its shareholders in this environment. In addition, our financial transactions over the past 12 months have solidified our capital structure and we expect to take full advantage of the strongest market in a decade. I think the following highlights are the most important. The company's fleet has reached 16 Cape vessels with 2.8 million deadweight tons. We have grown our fleet by more than 50% since the end of Q3 2020, and all vessels acquired are built at the highest quality shipyards in Japan, while two of them come with exhaust gas scrubbers installed. Since our last update in May, we have purchased and already taken delivery of one more Japanese 2009-built Cape-size vessel, and we have agreed to dispose of the Leadership, a 2001-built vessel that was acquired in 2015. As of the end of the second quarter, the market value of our fleet was approximately $448 million against debt outstanding of about $213 million. A total investment of $160 million has been made in 2021 for these purchases, while total debt on the balance sheet has only risen by about $34.6 million. This implies a loan-to-value of approximately 22% on the new vessels. The weighted average interest rate of the new debt is about 3.35%, which will also partially replace some legacy, more expensive debt. Regarding our commercial developments, further to the four new period employments announced in our previous earnings release, we have concluded one more fixed rate time charter at $31,750 per day for 12 to 16 months. This is the second vessel in our fleet to be employed at more than $31,000 a day for at least a one-year period. Currently, 12 vessels are employed on index-linked time-charters, 2 are on fixed time-charter rates, and 2 are employed on a voyage basis. Therefore, close to 88% of our fleet is in period contracts. Our fleet achieved a Q2 2021 daily time chatter equivalent rate of $20,100, increased by 270% from the first quarter of 2020. Our Q2 fleet TCE is obviously lower than the index due to certain floating to fixed conversions we did in the beginning of the year for hedging purposes. However, In Q3 so far, about 94% of our fleet days are fixed at almost $29,000 a day, which will ensure a significant improvement in financial performance over the first half of 2021. Adjusted EBITDA was equal to $11.3 million compared to losses of $1.85 million in the same quarter of last year. Net income was equal to $2 million in the quarter and $640,000 in the six-month period. Cash and cash equivalents as of June 30, 2021 stood at $56.4 million compared to $23.7 million as of December 31, 2020. Debt outstanding at the end of the quarter was approximately $204 million. Shareholders' equity at the end of the second quarter of 2021 was $199.4 million, compared to $95.7 million at the end of 2020, which means an increase of about 110%. Let's move on to discuss the most important developments since our last earnings call. Overall, during the year, we have acquired six cape-sized vessels, while we also decided to sell the oldest vessel in our fleet. On July 27, 2021, we took delivery of our newest addition to the fleet, the Friendship. This is a 2009-built cape-sized vessel that we agreed to acquire in July. The vessel has been fixed on an index-link time-shutter with NYK Line, which is one of the leading Japanese shipowners and operators for a period of 17 to 24 months. Employment will commence promptly with a daily rate at a premium over the BCI. During July, we also agreed to sell the leadership to Asian buyers. The leadership is a 20-year-old Cape size vessel and was the first ship acquired by Synergy in March 2015. We are happy to take this opportunity to replace our oldest vessel during favorable market conditions. The delivery of the leadership to its new owners is expected in early September. As a brief recap of the information provided in the last earnings release, we took delivery of four new vessels in Q2 2021, two of which were delivered in May and two in June. All vessels have entered the new time chatters, two of which are fixed rates exceeding $31,000 as mentioned earlier. As of today, we are pending delivery of the Worldship, a 2012 built Cape size that we expect to take delivery by the end of August. As a reminder, the Special Survey and Ballast Water Treatment System installation for all new vessels was completed by their previous owners and therefore we do not anticipate incurring significant capital expenditure for at least the next two years. Moreover, two vessels come fitted with the Exhaust Gas Scrubber System. Vessel values have been on a clear upward trajectory in the past months and given the spot and time center market conditions, I believe that further improvements are well within reach given where asset prices have traded historically. In Q2, we have concluded financing transactions of 117.3 million, including a 30.9 million sale in Lisbon with a prominent Asian financial institution, as well as a new loan commitment from an existing bank. Stavros will go into more detail on this, but the average interest rates will be approximately 3.35% margin over LIBOR. This is a very significant improvement when compared to the facilities that were prepaid within 2021. Synergy is today in an optimal financial position to capitalize on improving market conditions, with the goal of creating substantial value for investors in the next few years. And with this message, I would like now to pass the call to our CFO, Stavros, who is going to discuss our financial results. I will come back to the call for the market update shortly. Stavros, please go ahead.

Thank you, Stamatis. Welcome everyone to our second earnings call for 2021. Let's start by reviewing the main highlights of our financial statements for the second quarter and six-month period that ended on June 30, 2021. Our financial performance benefited from the strong dry bulk market as gross revenue was equal to $28.9 million, an increase of 209% from the second quarter of 2020. Our daily time charter equivalent for the quarter was approximately $20,100, a 270% increase compared to $5,424 for the second quarter of 2020. Our TCE performance was affected by the conversion of index ceiling charters to fixed during the fourth quarter of 2020, which was done as part of our freight hedging strategy. For the third quarter, the majority of our fleet's available days have been fixed at a rate that is roughly in line with the quarter-to-date average of the BCI, including eight conversions of index-linked rates to fixed. Based on our commercial performance so far, we are on track to see stronger financial results in the next quarter. At the moment, 13 vessels are employed under index-linked charters, that allow the company to benefit from the positive freight market trends, and eight of these charters have conversion options allowing us to convert to flat rate based on the prevailing FFA curve. For the fourth quarter, we have fixed only two index link chips at around $32,500, but we continue to monitor the movements of the FFAs and may proceed with more similar fixtures. Adjusted EBITDA in the second quarter of 2021 was 11.3 million, up from negative adjusted EBITDA of 1.8 million in the same quarter of 2020, while Synergy also generated a net income of 2 million compared to a net loss of 11.3 million in the same quarter last year and a net loss of 1.3 million in the first quarter of 2021. For the six-month period that ended June 30, 2021, Synergy recorded a daily time-chartered equivalent of $18,327, compared to $6,985 and $8,368 in the corresponding periods of 2020 and 2019. Gross revenue was equal to $50 million, an increase of 116% from last year's corresponding interim period. Adjusted EBITDA for the first six months of 2021 was equal to $19.2 million, a big improvement from a negative adjusted EBITDA of half a million in 2020. Lastly, we recorded net income of 0.6 million compared to a net loss of 19.7 million in the first six months of 2020. As a reminder, from our first quarter earnings release, our daily breakeven for the rest of 2021 is around 13,000, excluding our anticipated vessel capex, which are fully funded by our cash reserves. So, we expect our high operating leverage to result in continued cash flow improvements going forward. Moving on from our operating results, I am very glad to see that the financial restructuring that was completed in December last year, in combination with the aggressive prepayment of our legacy loans in the first quarter of 2021, are now bearing fruit in the form of significantly lower interest and finance expenses. Second quarter 2021 interest and finance expenses were equal to 4.3 million compared to 5.6 million in the same period of 2020. When factoring in the non-cash items, the company incurred approximately 2.9 million of cash interest and finance costs, a significant decrease from 4 million in the second quarter of 2020. For the 6-month period that ended June 30, 2021, interest and finance expense was equal to 8.3 million compared to 11.2 million in 2020. Excluding non-cash items, the cash interest expense for the interim period was equal to 5.2 million when compared to 8.2 million in the same period last year. As a reminder, the large non-cash expenses are related mainly to the amortization feature of the convertible notes and to the amort of deferred finance charges. The expensive legacy debt that was repaid and refinanced over the past year was generally replaced with competitively priced financing arrangements that reflect the improved financial footing of our company. The weighted average interest rate on the facilities that were fully prepaid was 8.4% as compared to 3.35% for the new 104.3 million incoming financings. Given the market environment dry bulk shipping and the track record we have established with our lenders, we expect that terms of our financings will improve further going forward. For the time being, as regards our current results, it is encouraging to see the significant reduction in interest expenses with little variation in starting debt period over period, as our debt balance as of the end of the second quarter of 2021 was about $204 million compared to $213 million in the end of the second quarter of 2020. When compared to the end of 2020, total debt outstanding has increased by approximately 35 million, against an expected increase in the book value of our fleet of around 160 million. This implies that the effective loan-to-value on new vessel acquisitions is in any case lower than 30%. I would like to stress that our ability to lower both the average age and leverage ratio of our fleet during this positive market infliction is an important positive development for the future. Moreover, we ended the second quarter with a cash balance of 56.4 million, up from 23.7 million at the end of 2020. Total shareholders' equity has increased to 199.4 million as of June 30, 2021, from 95.7 million at the end of 2020. As was also the case in our previous earnings call, the rapid increase in vessel values since the start of the year has caused the market values of our vessels as of the end of the second quarter to be higher than the book value on the balance sheet. The market value of just equity is therefore higher than what is reflected on our balances. Indicatively, we note that based on third-party broker valuations as of the end of June, the market value of the six vessels that we have agreed to acquire this year has already appreciated by approximately 15 million versus the acquisition price. Based on the same market values for our fleet as per June 30, 2021, our corporate leverage is estimated at approximately 50%. I will now move on to discuss the financing transactions that have taken place since our last update. During the quarter, the company has secured approximately $104.3 million in vessel financings, while it has also received a commitment letter for an additional secured loan of about $13 million. As a brief recap of what was mentioned previously in our first course results, between April and May 2021, we entered into a $37.45 million facility with Alphabank for the financing of the leadership, the squireship and the lordship. a 20.5 million sale in Lisbon with Cargill for the flagship, and a 15.5 million loan facility with Aegean Baltic Bank for the tradership and the goodship. The term of these financings, ranged between 4 and 5 years, and the weighted average interest rate is approximately 3.3%. Further to these three financings, we concluded successfully a $30.9 million sale and leaseback agreement with China Merchant Bank Financial Leasing, one of the most prominent Chinese lessors, in order to finance two of our new acquisitions, the Hela Ship and the Patriot Ship. The applicable interest rate is LIBOR plus a margin of 3.5%. This financing has an important strategic angle for Synergy since we expand our exposure to the Chinese financing market which has proven to be a reliable and efficient source of capital for shipping. Lastly, most recently in July, we agreed terms with Alphabank for a secured loan facility of up to $13 million to finance our latest acquisition, the 2009 built cape size that was renamed Friendship. The facility will be for a term of 4 years, will bear interest at a rate of LIBOR plus 3.25% and will be structured as an additional trance in our existing loan with Alphabank, one of our key lenders that had supported our company through thick and thin. Following our proactive approach to managing the company's overall leverage, we are glad to be able to negotiate competitive terms with our lenders. In this respect, the financing concluded in 2021 have daily debt service rates ranging from approximately 3,000 to about 6,500 per vessel per day. As a result, the overall fleet break-even, when including anticipated daily operating expenses, is expected to remain low, especially when compared to current charter market and FFA levels. This is a very important improvement from previous years, and I would probably highlight it as the main takeaway from my remarks today. The actions taken since April 2020 positioned synergy favourably for the significant improvement in the dry bulk market that started in the second half of last year and has accelerated within 2021. At this point, I would like to conclude by acknowledging the fact that purely from a financial perspective, we are undergoing a transitional period with radical changes. The changes in our capital structure have been quite extensive, by any standard, and it will take some time before we see the full benefit of lower interest rate margins and lower breakeven rates reflecting our financial results. As regards our fleet, we are yet to take delivery of one more vessel, while the delivery of the recently sold leadership to its new owners has still not been concluded. Needless to mention that operating and general and administrative expenses continue to be somewhat inflated as we manage the implications of the pandemic in the worldwide operations of our fleet, let alone in arranging and successfully completing the deliveries of newly acquired vessels. The current financial statements, therefore, do not reflect the full revenue-generating capacity of our fleet, and I expect that the second half of the year will be more representative. This concludes my review. I will now turn the call back to Stamatis, who will discuss the market and industry fundamentals. Stamatis?