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02/17/2011Press Releases


“We are pleased with the annual and quarterly results that we are reporting. The fourth quarter of 2010 saw the successful implementation of our plan to grow Seanergy’s fleet as we completed the acquisition of the remaining 50% ownership interest in Bulk Energy Transport (Holdings) Limited (“BET”) in October 2010. This year therefore set an important milestone for our company, as the consolidation of our ownership interests in BET and Maritime Capital Shipping Limited (“MCS”) more than tripled our wholly owned fleet from an initial base of six vessels with a carrying capacity of 316,676 deadweight tons to a total of 20 vessels with a carrying capacity of 1,293,105 deadweight tons.

It is of particular importance that we have achieved the above by acquiring assets at favorable prices, as we paid approximately $95 million in 2010, of which only $43 million was in the form of cash and the remainder was in the form of shares. This way, we believe that we managed to increase our earnings potential while maintaining a strong balance sheet and we therefore believe we remain well positioned to invest in further
opportunities to acquire vessels that we believe will be accretive to our earnings. Furthermore, gaining exposure to all segments of the dry bulk industry has, in our view, enhanced the operational flexibility of our fleet.

We have significant time charter coverage with reputable charterers, which we believe provides cash flow stability and a degree of protection against the volatile freight rate environment, coupled with upside potential, as five of our vessels in total operate under profit sharing arrangements that allow us to participate in market upswings.

The fourth quarter of 2010 was characterized by freight market deterioration that continued into the new year, as the extended flooding in Australia led to disruption in coal trade that we previously viewed as providing support to freight rates up until that time, especially for larger vessel segments. As the situation unfolds in Australia, we believe it is possible that short term disruptions will subside and that freight rates may revert to

We believe that long term dry bulk fundamentals remain solid as world industrial production is poised to continue growing due to growth witnessed in emerging markets. According to the International Monetary Fund, growth in emerging markets is expected to continue at the same pace and estimates for US GDP growth were revised upwards on the back of improved consumer demand.

The major downside risk for dry bulk shipping remains the issue of vessel oversupply. Vessels scheduled for 2011 delivery represent about 25% of the current dry bulk fleet, yet much of that comes from 2010 deliveries that were pushed back due to lack of sufficient funding available to ship owners. In 2010 slippage amounted to about 40% of the orderbook and we believe that the trend is poised to continue as financing for new vessels is increasingly hard to attain for all but the most solid companies in the sector. Furthermore, the vast majority of the order book represents orders contracted before 2009, at prices considerably higher than current market levels therefore making them poor investments considering current conditions. In addition, scrapping activity in the first month of 2011 has been much higher than the comparable period in 2010, according to industry sources. High prices paid for scrap sales (around $500 / LDT in 2011) combined with the recent fall in freight rates have contributed to this trend and are expected to further increase demolitions, especially as Bangladeshi yards start coming online later in the year.”
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