The results were negatively impacted by the severe disruptions in the iron ore trade due to the tragedy at Vale’s Brumadinho mine. Other factors impacting the market were the adverse weather conditions in Australia, first-quarter seasonality, and trade tensions between the US and China.
The daily Time Charter Equivalent of the fleet dropped by 35% to $7,633 from $11,700 in the prior-year quarter, largely in line with a 33% drop in the Baltic Capesize Index in the same period. The average daily operating expenditures of the fleet reduced by 6% year-over-year to $4,830.
However, the negative impact of all these events appears to be behind the company. During the second quarter, the company has seen a strong recovery in the Capesize market which has so far been reflected in the operating performance. From a low rate of $3,500 per day, the Capesize market is now trading around $14,000 per day. The company, therefore, expects the multiyear low rates of Q1 to end up being the lowest point in its financial performance for this year.
On market developments, it is worth noting that in the period from January to May 2019 Capesize demolition in deadweight terms rose by about 140% compared to last year, driven by the sales of six older Very Large Ore Carriers. As a result, net fleet growth of 1 million deadweight tons up to May 2019 is more than four times lower than a year ago. For full-year 2019, net Capesize fleet growth is now expected to be lower than 1.7% highlighting a slowing trend in fleet growth expectations.
Also read: Globus Maritime Q1 earnings results
The company’s first scheduled dry-docking, that of 2004 built M/V Gloriuship was completed successfully in April at the same shipyard was the scrubber installations will take place. The first scrubber installation on M/V Lordship is currently in process. The company expects that all scrubber installations and scheduled maintenance will be completed by the end of October. The company’s commercial agreements relating to scrubber installation are covering a majority of the cost of such off-hires.
In May 2019, Seanergy Maritime completed a public offering and a private placement for $20.5 million. The company raised $14.3 million of gross proceeds through a public offering of units. In addition to the public offering, the company closed a private placement of $6.2 million of units at the public offering price to Jelco Delta Holding Corp. in exchange for the forgiveness of certain payment obligations of the company, including all interest payments due in 2019.
Shares of Seanergy Maritime ended Friday’s regular session down 1.96% at $0.65 on the Nasdaq. The stock has fallen over 94% in the past year and over 89% in the past three months.