Seanergy Maritime Holdings Corp.

Thank you for standing by, ladies and gentlemen, and welcome to the Synergy Maritime Holdings Corp conference call on the fourth quarter and year-ended December 31st, 2024 financial results. We have with us Mr. Stamatis Santanis, Chairman and CEO, and Mr. Stavros Giftakis, Chief Financial Officer of Synergy Maritime Holding Corp. At this time, all participants are in a listen-only mode. There'll be a presentation followed by a question and answer session, at which time, if you wish to like us, If you wish to like to ask a question, please press star 11 on your telephone keypad and you will then hear an automated message advising that your hand is raised. Please be advised that this conference call is being recorded today, Thursday, March the 6th, 2025. The archive webcast of the conference call will soon be made available on the Synergy website, www.synergymaritime.com. To access today's presentation and listen to the archived audio file, visit the Synergy website following the webcast and presentation section under 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 31st, 2024 earnings release, which is available on the Synergy website, again, www.synergymaritime.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 Santanis. Please go ahead, sir.

Thank you operator and welcome everyone. Today we are pleased to present our financial results for the fourth quarter and full year 2024 along with key corporate updates. We will discuss our record profitability strategic fleet expansion, and capital return initiatives, as well as our outlook on the Cape size market and the factors positioning Synergy for the long-term success. We're pleased to report another strong and profitable quarter, marking our fourth consecutive year of profitability. Synergy's consistent financial performance underscores the strength of our Cape size focus strategy. Our effective hedging approach, once again, allowed us to outperform the Baltic Cape Size Index BCI and our diversified dry bulk peers, many of whom remain exposed to weaker performance of smaller vessel classes. 2024 was a record year for Synergy, with net income reaching $43.5 million compared to just $2.3 million in 2023. It is important to note that our Q4 and full year results include one of legal expenses related to our AGM and litigation, which had temporary impact to our bottom line. Stavros will provide further details on this later in the call. Our strategic focus remains on balancing capital returns, fleet growth, and financial discipline, ensuring maximum shareholder value as we continue to operate in a fundamentally strong capesize market. Reflecting on our solid Q4 performance, we have declared a cash quarterly dividend of 10 cents per share, bringing our total 2024 dividends to 76 cents per share, or $15.6 million in total distributions. Additionally, we repurchased 226,000 shares at an average price of $9.44 during Q4, reinforcing our commitment to shareholder value. As part of our capital allocation strategy, we continuously assess the balance between dividends and buybacks, and given the recent pressure on dry bulk equities, we acted decisively to maximize value for our shareholders. On the fleet expansion front, we recently took delivery of two high-quality Japanese-built vessels, the Mayship and the Blue Ship. With this addition, our total fleet has grown to 21 vessels, representing a carrying capacity of 3.8 million deadweight tons. PurePlay, CapeSize, and NewCastleMaxis. In 2024 and early 2025, we have invested $138 million in four premium vessels, further strengthening our fleet's cash flow generation potential. Given the positive CapeSize fundamentals, we firmly believe that acquiring high-quality vessels that attract evaluations enhances our ability to deliver strong returns throughout the cycle. Since the beginning of 2024, we have successfully completed $174 million in financings and refinancings, reinforcing our ability to support fleet expansion while maintaining financial flexibility. Stavros will provide additional insights into these transactions, but I would like to highlight that we ended the year with a fleet loan to value of 45% while expanding our fleet and delivering significant capital returns to our shareholders. The Cape Size market remains well positioned to continue strength underpinned by robust demand for iron ore, bauxite, and coal, with trade volumes increasing in 2024, limited fleet expansion with net Cape Size fleet growth at just 1.7% in 2024, and projected decline further to 1.4% in 2025. 2024 and 2025 represent the lowest Cape Size delivery years since 2003, reinforcing a favorable supply-demand balance. Despite short-term volatility, we expect the market setup for 2025 and beyond to remain highly supportive. During Q4 2024, we generated revenues of $41.7 million, daily TCE of $23,200 a day, net income of $6.6 million. Slide 3. Prioritizing Shareholder Returns Turning to slide three, our clear and disciplined capital return strategy continues to maximize value for shareholders through consistent dividends and strategic buybacks. Over the past three years, we have distributed more than $40 million in dividends, equating to $2.21 per share. When including share repurchases and convertible note buybacks, our total capital returns amount to $87 million, representing approximately 60% of our current equity market capitalization. This reflects our strong commitment to shareholder value, while at the same time allowing us to strategically expand our fleet in a capital-efficient manner. Our ability to simultaneously grow the fleet and reward shareholders with significant capital returns underscores Synergy's financial strength and confidence in the capesized market's long-term fundamentals. As the market remains strong in the years ahead, we remain committed to maintaining a balanced approach to growth and shareholder distributions. Slide 4, commercial highlights and fleet updates. Moving to slide 4, Synergy once again delivered industry-leading time-shattered equivalent performance in both Q4 and full-year 2024. Our Q4 daily TCE was $23,200, while the full-year TCE reached $25,100 per day outperforming the Baltic Cape Size Index by 27% and 11% respectively. This outperformance validates our strategic focus on the Cape Size segment, setting us apart from other diversified dry bulk peers who remain exposed to smaller vessel classes with weaker returns. Even amid the weaker Q4 market, we maximized earnings by strategically locking in FFA-based fixed rates for a portion of our fleet days ensuring greater revenue, stability, and enhanced profitability. Looking ahead to 2025, we have already secured 22% of our operating days at an average gross rate exceeding $22,100 a day. For Q1 2025, we expect an indicative time shutter equivalent of approximately $13,400 per day. Our focus remains on strategically fixing vessels at profitable rates, ensuring cash flow visibility and maximizing shareholder returns. Our fleet expansion continued in Q4 2024, reinforcing our position as a leading pure play cape size operator. In October 2024, we took delivery of the 2012 built Kaizen ship, completing another year of targeted fleet expansion. Combined investment in IconShip, delivered June 2024, and KaizenShip totaled 69.3 million, representing an excellent value relative to their estimated market prices. Both vessels are on index-linked charters with a premium over the BCI, providing strong cash flow visibility into 2025 and beyond. In addition, we exercised a highly attractive purchase option for the 2011 built Newcastle Max, the Titan Ship, at $20.25 million. At year-end 2024, Titan Ship's market value exceeded $35 million, highlighting our ability to secure high-quality assets at compelling prices. The vessel operates on an index link charter with a fixed floor and significant profit sharing upside, ensuring strong earnings potential. Recent additions to our fleet. Two additional Japanese-built vessels acquired since last quarterly update. The MV Mayship, a 2013-built Newcastle Max, and the MV Blue Ship, a 2011-built Cape Size. Total investment of $69 million, further expanding our high-quality, efficient fleet. The Blue Ship is expected to enter an index-linked time-charter, while the May Ship will operate under a structured fixed-floor time-charter with profit-sharing similar to the Titan Ship's charter. With 3.8 million deadweight tons of pure-play 21 Cape sizes and Newcastle Maxis now in operation, Synergy has achieved significant fleet scale but will remain committed to disciplined growth. We continue to evaluate strategic fleet opportunities leveraging our deep industry relationships and access to high-quality assets to enhance shareholder value. I will now pass the call to Stavros, who will fill you in on our financial information for the quarter and the full year, as well as discussing our balance sheet and debt refinancings. Stavros, please go ahead.

Thank you, Stamati, and welcome to everyone joining us for today's earning call. Let's begin with slide five, where we'll review the key highlights of our financial performance for the fourth quarter and the full year ending December 31st, 2024. Our net revenue for the quarter was $41.7 million, based on a daily time transfer equivalent of about $23,200. At the same time, our adjusted EBITDA and net income reached $20.4 million and $6.6 million, respectively. Despite the softening capesize markets, We delivered a solid performance, underscoring our resilience and ability to navigate market fluctuations effectively. On a full-year basis, we achieved record profitability, deflecting both the caped-size market and the successful execution of our strategy. Our net revenue surged to $167.5 million, up 50% year-over-year, with our time charter equivalent ascending to approximately $25,100. Adjusted EBITDA grew to $98.4 million, and our net income rose significantly to $43.5 million, compared to $53 million and $2.3 million, respectively, in 2023. Earnings per share reached $2.12, posting an impressive increase from $0.12 last year. Moving on to our balance sheet, our cash position strengthened further in 2024, closing the year at $34.9 million, equivalent to approximately $1.8 million per vessel. This strong cash position was achieved despite returning $20.5 million to shareholders through dividends and share buybacks. More importantly, we maintained leverage at moderate levels despite the fleet expansion that took place during the year, keeping the total debt at $261.5 million for a book-value debt-to-capital ratio of less than 50% once again. This financial strength provides valuable flexibility, particularly in the current environment with a temporary softening of the capitals market, ensuring we can effectively manage liquidity and seize strategic opportunities. Our total assets reached 545.8 million, while our stockholder equity stood at 262.2 million. Notably, we delivered a robust ROE of 17% for the full year, demonstrating our ability to drive shareholders' value through operational efficiency and strategic capital allocation. Moving on to slide 6, we can see that we once again delivered robust core profitability with our adjusted EBITDA nearly doubling year over year. As Tamades highlighted earlier, our time-charted equivalent outperformed the BCI on both a quarterly and annual basis. Our adjusted EBITDA margin expanded to 57.6% this year, reflecting our ongoing efforts on improving operational efficiency and cost management. This improvement underscores our commitment to maintaining strong financial health and delivering value to our stakeholders even in a challenging market environment. In fact, based on the current FFA rates, we anticipate our EBITDA to reach close to 80 million for the full year 2025. Additionally, our operating cash flow margin ratio improved significantly compared to last year, reaching 44%, indicating our ongoing efforts to enhance our ability to generate cash from our core operations. On the expense side, we successfully maintained daily OPEX per vessel at 7,000, effectively at the same level with our previous year despite the inflationary pressure and the ageing factor of our vessels. In addition, it is important to note that this record profitability was achieved despite incurring significant one-off expenses in 2024 having to do with our proxified and related litigation. This costs a total of $4.1 million for the year, with about 60% of these expenses impacting the GNAs and net income of the fourth quarter. Turning to slide 7, we will discuss our debt optimization initiatives. From the start of 2024 up to date, we successfully completed $174.4 million in financing and refinancing transactions. Despite these financings, we have managed to maintain our leverage at moderate levels, with a debt per vessel currently standing at $13.8 million, slightly higher than the average scrap value of the vessels. Regarding cash interest expenses, we reduced daily cash interest expense to approximately $2,700 per vessel. Through our financing and refinancing transactions, we successfully lowered our weighted average margin in 2024 and expect this to decrease further through our recent agreements. Should this margin tightening get combined with rate cuts from the Fed, it would lead to a significant reduction of our daily interest expense. Now, before we move on, let me highlight some details on our latest transactions. In February, we finalized another sustainability loan to refinance the existing debt of Walship and Ownership under significantly improved terms and partially financed the acquisition of our latest Newcastle Max, the Mayship. The total amount of the transaction is $53.6 million with a term of 5 years and an interest rate of 2.05% plus term SOFR per annum, 55 basis points lower than the rate of the refinanced agreement. This is a sustainability-linked loan, as I said before, so the rate can be further reduced based on the achievement of certain emission reduction targets. Through this refinancing, we minimized the equity outlay for the acquisition of the Mayship, safeguarding our liquidity position in a seasonally weak market. Additionally, we recently signed a term sheet with a reputable Chinese lessor for two sale and leaseback agreements totaling approximately $34.5 million, which remains currently subject to documentation. These agreements will be utilized to refinance the only balloon payments pending this year, shaping a clear path for 2025. They are also expected to add further liquidity to the company and will bear a significantly improved interest rate compared to the existing indebtedness of the two ships. Now moving to slide 8, I would like to highlight once again our resilient operating leverage and our strategic positioning to capitalize on any upward movement in the Cape Size market. At the same time, our risk management strategy is in place to safeguard our revenue and cast flows against market volatility. As Tamatis mentioned earlier, we have already had 22% of our days for the year effectively leveraging freight market spikes. As you can see in the graph, if Cape Size rates in 2025 aligned with the current FFA curve, we anticipate our EBITDA for 2025 to be approximately $78 million. In a more favorable scenario, EBITDA could exceed $100 million. To summarize, we are well prepared to navigate market fluctuations and seize opportunities, ultimately driving sustainable growth and enhancing shareholder value. That concludes my review of our financial results and updates. I will now pass the call back to Samati will provide insights into the Cape Size market and industry fundamentals.