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Seanergy: ‘We are entering a new commodity supercycle’

Seanergy Maritime Holdings has emerged from the pandemic crisis much stronger, Stamatis Tsantanis, the company’s chairman and CEO tells Maritime CEO, emphasising the “solid balance sheet” and the increase of the fleet by 50%.

For the time being, Seanergy consists of 16 capesize vessels with an average age of 11.8 years and aggregate cargo carrying capacity of above 2,800,000 dwt.

Tsantanis explains: “From a commercial point, we have developed a critical mass of a high quality capesize fleet and have established significant partnerships with prominent international conglomerates. From a technical point, owning a homogeneous fleet provides a significant operating advantage for Seanergy.”

Tsantanis appears to be extremely bullish on the capesize market, pointing out:“ We are entering a new commodity and shipping supercycle. We strongly believe that the capesize segment will outperform the other sectors of dry bulk.”

Describing the chartering strategy of Seanergy, Tsantanis says the majority of the fleet is on period employment at a variable rate associated with the Baltic Capesize Index giving Seanergy a strong exposure in the spot market, which is now proving successful. At the same time, many of the company’s index-linked agreements have the option to convert from floating to fixed for periods ranging between three and 12 months based on the FFA curve.

“There is still a big variance between spot and the period rates. However, as the market is normalising, we intend to have a balanced chartering strategy with 50:50 allocation of time chartered and spot ships,” Tsantanis says.

Seanergy has been aggressive in the secondhand market, acquiring many ships recently with plans for plenty more.

“We are constantly evaluating investment opportunities and we intend to further grow our fleet with qualitative acquisitions. As with all our recent vessel purchases, we intend to proceed with accretive transactions that will generate significant value for our shareholders,” the Greek says.

Nevertheless, Tsantanis seems reluctant to invest in new tonnage. “Newbuilding capesize prices have a $20m premium as compared to a quality five to seven-year-old vessel, which effectively earns the same day rate. In addition, due to the upcoming environmental regulations, a conventional newbuilding ordered today may become technologically obsolete in a few years. Unless there is some certainty in the vessel of tomorrow that makes strong financial sense, our expansion strategy will remain the same with high quality secondhand tonnage,” Tsantanis says.

Seanergy is a public-listed company and its stock price has increased substantially from multi-year lows during the past months.

Tsantanis argues: “As we begin a period of sustainable profitability, I expect we’ll see increased institutional interest back in shipping.”

He also sees a renewed interest from lending sources to fund the right companies and the right projects in the shipping industry.

“Seanergy always had access to prominent quality bank debt. Over the years, we have established a diverse group of prominent lending sources in order to fund our growth,” Tsantanis notes.

Regarding Seanergy’s green strategy for the future, Tsantanis says his company is working with major charterers to develop solutions which reduce fuel consumption, as well as the CO2 emissions of the existing fleet by at least 10-15%.

“We have installed energy saving devices on some vessels and we will expand this investment on other ships as well,” Tsantanis says.

This article first appeared in the latest issue of Maritime CEO magazine. Splash readers can access the full magazine for free by clicking here.

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