With Supply Chains Rattling, The World Might Just Need A Bigger Boat, Or A Few — This Company Is Looking To Capitalize

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“Global supply chain” is a phrase that has become all too familiar in recent months as the world responds to the unpredictability and knock-on effects of the COVID-19 pandemic.

One dry bulk shipping company believes it is well placed to deal with supply chain issues as it steams into 2022 and beyond.

While Seanergy Maritime Holdings Corp. SHIP reported a net loss of $18.36 million in FY 2020, the Greek company turned that around in 2021 to report an adjusted net income of $53.3 million. The company was also able to offer a considerable dividend to shareholders, releasing a special dividend in the fourth quarter of last year on top of  a regular dividend payment, which it reportedly intends to keep for each year going forward.

Big Ships, Large Demand?

 

Seanergy operates big boats, so-called Capesize vessels, that because of their size, are unable to travel through the Suez or Panama canals. 

Instead, the vessels, which average 170,000-180,000 dead weight tonnage (DWT), transport their dry bulk cargo such as coal or iron ore around either Cape Horn or the Cape of Good Hope to get to their destinations. The vessels are reportedly in demand, and there isn't an oversupply of them worldwide.

“The global energy supply shortages, as well as the worldwide stimuli and infrastructure projects, will strongly support demand for dry-bulk shipping,“ Seanergy Chairman and CEO Stamatis Tsantanis said on the release of company results on March 10.

In addition to the demand fundamentals, Seanergy is building up its own fleet and is well-positioned to respond because of the low numbers of Capesize vessels worldwide, Tsantanis said. In 2021, for example, the company purchased seven Japanese Capesize vessels to reduce the overall age of its fleet and invested $193.2 million in vessel acquisitions overall.

The 2021 financials allowed the company to make further investments in the first few months of 2022. Seanergy has completed a total of $21.7 million in buybacks of convertible notes, warrants and common shares since the end of the fourth quarter and was able to prepay another $5 million of a convertible note on March 10.

“The ultimate effect of our buyback program will be the prevention of potential dilution by 25.95 million shares,” Tsantanis said. “This reflects our firm belief that our share price continues to be significantly undervalued.”

Other bulk shipping companies listed in the United States include Diana Shipping Inc. DSX and Eagle Bulk Shipping Inc. EGLE.

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Picture credit: Rinson Chory on Unsplash

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