New Vessels Boost Navios Maritime Partners’ Results as Dry Bulk Market Improves

Τετάρτη, 07 Φεβρουαρίου 2018 23:21

Navios Maritime Partners L.P., an international owner and operator of container and drybulk vessels, reported its financial results for the fourth quarter and year ended December 31, 2017.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners stated, “I am pleased with the results for the fourth quarter and full year of 2017. For the fourth quarter, Navios Partners reported revenue of $59.3 million and Adjusted EBITDA of $37.1 million. For the full year, Navios Partners reported revenue of $211.7 million and Adjusted EBITDA of $133.1 million.”

Angeliki Frangou continued, “Navios Partners is a dynamic growth platform, with favorable operating costs and no near-term cash requirements. We have been investing in the future by enlarging and renewing our drybulk fleet; during the past 12 months, Navios Partners expanded its drybulk fleet by 37% and reduced the average age of this fleet by 12%. In a recovering market, we are positioned to generate significant free cash flow.”

Fleet Renewal Program

Acquisition of Two Panamax Vessels in 2018
In January 2018, Navios Partners agreed to acquire two 2006-built Panamax vessels of approximately 74,500 dwt each, for a total purchase price of $22.0 million. The vessels are expected to be delivered to Navios Partners’ owned fleet within the first quarter of 2018. One of the vessels is chartered out for $9,375 net per day until May/November 2018 and the other vessel is chartered out for $9,844 net per day until March/August 2018.

Agreement to Charter – in a Vessel
In November 2017, Navios Partners entered into a 10-year bareboat charter-in agreement for a Kamsarmax vessel of approximately 81,000 dwt. Navios Partners has the option to acquire the vessel after the end of the fourth year. The vessel is expected to be delivered within the second half of 2019.

Acquisition of Seven Drybulk Vessels in 2017
During 2017, Navios Partners acquired seven drybulk vessels with an average age of 7.4 years at acquisition for a total purchase price of $156.2 million. The vessels had a combined capacity of 925,832 dwt. All vessels were delivered to Navios Partners’ owned fleet by September 2017.

Sale of Two Drybulk Vessels in 2017
In December 2017, the Company completed the sale of the Navios Gemini S, a 1994-built Panamax vessel of 68,636 dwt. The vessel was sold to an unrelated third party for a total net sale price of $4.1 million. In April 2017, the Company sold the Navios Apollon, a 2000-built Ultra-Handymax vessel of 52,073 dwt. The vessel was sold to an unrelated third party for a total net sale price of $4.8 million. The average age of the two vessels was 20 years.

Debt Developments

In January 2018, Navios Partners secured a new $14.3 million credit facility with a commercial bank in order to partially finance the acquisition of two Panamax vessels. The facility matures in the first quarter of 2023, has a 6-year amortization profile and bears interest at LIBOR plus 300 bps per annum.

Long-Term Cash Flow

Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of approximately 2.0 years. Navios Partners has currently contracted out 63.5% of its available days for 2018, 17.8% for 2019 and 15.8% for 2020, including index-linked charters, respectively, expecting to generate revenues (excluding index-linked charters) of approximately $108.5 million, $55.5 million and $65.9 million, respectively. The average expected daily charter-out rate for the fleet is $19,845, $24,763 and $29,992 for 2018, 2019 and 2020, respectively.

Three month periods ended December 31, 2017 and 2016

Time charter and voyage revenues from Navios Partners for the three month period ended December 31, 2017 increased by $9.6 million or 19.3% to $59.3 million, as compared to $49.7 million for the same period in 2016. The increase in time charter and voyage revenues was primarily due to: (i) the increase in revenue following the acquisition of the seven vessels in 2017 and one vessel in December 2016; and (ii) the increase in Time Charter Equivalent rate per day (“TCE”) to $17,160 per day for the three month period ended December 31, 2017, from $16,954 per day for the three month period ended December 31, 2016. The above increase was partially mitigated by the decrease in revenue due to the sale of the MSC Cristina and the Navios Apollon. The available days of the fleet increased to 3,376 days for the three month period ended December 31, 2017, as compared to 2,854 days for the three month period ended December 31, 2016, mainly due to the increased fleet.

EBITDA of Navios Partners for the three month period ended December 31, 2017 was negatively affected by the accounting effect of a: (i) $30.3 million impairment loss of the Navios Hope; (ii) $2.4 million impairment loss on the sale of the Navios Gemini S; and (iii) $0.5 million equity compensation expense. EBITDA for the three months ended December 31, 2016 was negatively affected by the accounting effect of a $10.0 million impairment loss on the sale of the Navios Apollon. Excluding these items, Adjusted EBITDA increased by $3.5 million to $37.1 million for the three month period ended December 31, 2017, as compared to $33.6 million for the same period in 2016. The increase in Adjusted EBITDA was primarily due to: (i) a $9.6 million increase in revenue; (ii) a $0.2 million decrease in general and administrative expenses; and (iii) an $0.8 million increase in equity in net earnings of affiliated companies. The above increase was partially mitigated by a: (i) $0.1 million increase in time charter and voyage expenses; (ii) $2.3 million increase in management fees due to the increased fleet; (iii) $4.6 million decrease in other income; and (iv) $0.1 million increase in other expenses.

The reserve for estimated maintenance and replacement capital expenditures for the three month periods ended December 31, 2017 and 2016 was $4.1 million and $3.0 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Partners generated an operating surplus for the three month period ended December 31, 2017 of $25.5 million, as compared to $24.0 million for the three month period ended December 31, 2016. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Net Income of Navios Partners for the three month period ended December 31, 2017 was negatively affected by the accounting effect of a: (i) $30.3 million impairment loss of the Navios Hope; (ii) $2.4 million impairment loss on the sale of the Navios Gemini S; and (iii) $0.5 million equity compensation expense. Net income for the three month period ended December 31, 2016 was negatively affected by the accounting effect of a $10.0 million impairment loss on the sale of the Navios Apollon. Excluding these items, Adjusted Net Income for the three month period ended December 31, 2017 amounted to $10.4 million as compared to $7.9 million for the three month period ended December 31, 2016. The increase in Adjusted Net Income of $2.4 million was due to: (i) a $0.1 million decrease in direct vessel expenses comprising of the amortization of dry dock and special survey costs; (ii) a $0.4 million decrease in depreciation and amortization expense; (iii) an $0.8 million increase in interest income; and (iv) a $3.5 million increase in adjusted EBITDA. The above increase was partially mitigated by a $2.2 million increase in interest expense and finance cost, net.

Years ended December 31, 2017 and 2016

Time charter and voyage revenues from Navios Partners for the year ended December 31, 2017 increased by $8.8 million or 4.6% to $199.3 million, as compared to $190.5 million for the same period in 2016. The increase in time charter and voyage revenues was primarily due to the increase in revenue following the acquisition of the seven vessels in 2017 and one vessel in December 2016. The above increase was partially mitigated by: (i) the decrease in revenue due to the sale of the MSC Cristina and the Navios Apollon; and (ii) the decrease in TCE to $16,025 per day for the year ended December 31, 2017, from $16,364 per day for the year ended December 31, 2016. The available days of the fleet increased to 12,193 days for the year ended December 31, 2017, as compared to 11,296 days for the year ended December 31, 2016, mainly due to the increased fleet.

Time charter and voyage revenues from Navios Containers for the period from April 28, 2017 (date of inception) to August 29, 2017 amounted to $12.4 million. Available days of the fleet were 627 days for the period from April 28, 2017 (date of inception) to August 29, 2017 and TCE for the period amounted to $19,338. There were no operations in the corresponding period in 2016.

EBITDA of Navios Partners for the year ended December 31, 2017 was affected by the accounting effect of a: (i) $4.1 million gain on change in control from Navios Containers’ deconsolidation; (ii) $30.3 million impairment loss of the Navios Hope; (iii) $2.4 million impairment loss on the sale of the Navios Gemini S; (iv) $1.5 million allowance for doubtful accounts; (v) $1.3 million loss related to the disposal of the MSC Cristina and; (vi) $1.9 million equity compensation expense. EBITDA for the year ended December 31, 2016 was negatively affected by the accounting effect of a: (i) $27.2 million impairment loss on the sale of the MSC Cristina and the Navios Apollon; and (ii) $19.4 million loss on the sale of the HMM securities. Excluding these items, Adjusted EBITDA increased by $3.0 million to $126.6 million for the year ended December 31, 2017, as compared to $123.5 million for the same period in 2016. The increase in Adjusted EBITDA was primarily due to: (i) an $8.8 million increase in revenue; (ii) a $1.8 million decrease in time charter and voyage expenses; (iii) a $1.9 million decrease in other expenses; and (iv) a $0.9 million increase in equity in net earnings of affiliated companies. The above increase was partially mitigated by a: (i) $3.4 million increase in management fees due to the increased fleet; (ii) $2.2 million increase in general and administrative expenses; and (iii) $4.6 million decrease in other income.

EBITDA of Navios Containers for the period from April 28, 2017 (date of inception) to August 29, 2017 was negatively affected by the accounting effect of $0.4 million relating to the reactivation costs of four laid-up vessels. Excluding this item, Adjusted EBITDA was $6.7 million for the period from April 28, 2017 to August 29, 2017.

The reserve for estimated maintenance and replacement capital expenditures for the year ended December 31, 2017 and 2016 was $14.9 million and $11.9 million, respectively (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Partners generated an operating surplus for the year ended December 31, 2017 of $92.6 million, as compared to $85.0 million for the year ended December 31, 2016. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Net Income of Navios Partners for the year ended December 31, 2017 was affected by the accounting effect of a: (i) $4.1 million gain on change in control from Navios Containers’ deconsolidation; (ii) $30.3 million impairment loss of the Navios Hope; (iii) $2.4 million impairment loss on the sale of the Navios Gemini S; (iv) $3.2 million write-off of deferred finance fees and discount related to the refinancing of the Term Loan B Facility; (v) $1.5 million allowance for doubtful accounts; (vi) $1.3 million loss related to the disposal of the MSC Cristina; and (vii) $1.9 million equity compensation expense. Net income for the year ended December 31, 2016 was negatively affected by the accounting effect of a: (i) $27.2 million impairment loss on the sale of the MSC Cristina and the Navios Apollon; (ii) $19.4 million loss on the sale of the HMM securities; and (iii) $20.5 million loss from the non-cash accelerated amortization of the intangible assets relating to two vessels. Excluding these items, Adjusted Net Income for the year ended December 31, 2017 amounted to $21.0 million as compared to $14.6 million for the year ended December 31, 2016. The increase in Adjusted Net Income of $6.4 million was due to a: (i) $4.0 million decrease in depreciation and amortization expense; (ii) $2.9 million increase in interest income; and (iii) $3.0 million increase in Adjusted EBITDA. The above increase was partially mitigated by a: (i) $0.3 million increase in direct vessel expenses, comprising of the amortization of dry dock and special survey costs; and (ii) $3.2 million increase in interest expense and finance cost, net.

Net income of Navios Containers for the period from April 28, 2017 (date of inception) to August 29, 2017 was negatively affected by the accounting effect of $0.4 million relating to the reactivation costs of four laid-up vessels. Excluding this item, Adjusted Net Income was $1.0 million for the period from April 28, 2017 to August 29, 2017. There were no operations in the corresponding period in 2016.