Navios Maritime Holdings’ First Half Financial Results

Κυριακή, 05 Σεπτεμβρίου 2021 16:08
Navios Maritime Holdings’ First Half Financial Results

Navios Maritime Holdings Inc., a global seaborne shipping and logistics company, reported financial results for the second quarter and six months ended June 30, 2021.

Angeliki Frangou, Chairman and Chief Executive Officer, stated, “I am pleased with the results for the second quarter of 2021. In the second quarter, Navios Holdings reported revenue of $143.6 million, Adjusted EBITDA of $85.9 million and Adjusted Net Income of $30.3 million.”

Angeliki Frangou, continued, “The dry bulk market is strong, supported by rates across different vessel types. Capesize rates are around $50,000 and Panamax and Supramax about $35,000 per day. We are optimistic that healthy rates will remain in the near term as demand for dry bulk commodities is robust while the logistics chain continues to be challenged.”

HIGHLIGHTS – RECENT DEVELOPMENTS

Debt Reduction

Year to date, Navios Holdings repaid approximately $251.4 million of outstanding debt. The amount consists of (a) $100.0 million redemption of 11.25% Senior Secured Notes; (b) $21.4 million repurchase of 7.375% First Priority Ship Mortgage Notes; (c) $130.0 million in repayment of other credit facilities, from which $70.0 million repayment related to the Navios Logistics loan (as discussed further below) and $60.0 million net repayment related to other credit facilities. The $60.0 million net repayment consists of $135.3 million in repayments of credit facilities and sale and leaseback agreements; partially offset by $75.3 million additional loan from N Shipmanagement Acquisition Corp. and related entities (“NSM”).

On July 13, 2021, the Company’s $70.0 million loan, plus accrued interest, owed to Grimaud Ventures S.A (“Grimaud”), a wholly-owned subsidiary of Navios South American Logistics Inc. (“Navios Logistics”), was repaid by the Company in full through the issuance of 9,301,542 shares of the Company’s common stock and $7.5 million in cash.

On July 30, 2021, Navios Logistics declared and paid a pro rata dividend to the holders of its common equity in shares of Grimaud. Immediately thereafter, Grimaud redeemed the equity interests held by its non-controlling shareholder in full at fair market value. Grimaud is now an indirect wholly-owned subsidiary of the Company, and its equity interests are pledged as collateral under the 2022 Senior Secured Notes (as defined below).

Navios Partners’ Merger

On August 26, 2021, Navios Maritime Partners L.P. (“Navios Partners”) announced a definitive transaction agreement providing for a combination of Navios Partners and Navios Maritime Acquisition Corporation (“Navios Acquisition”) in a transaction in which public shareholders of Navios Acquisition will receive 0.1275 of a common unit of Navios Partners for each outstanding common share of Navios Acquisition. All of Navios Acquisition’s outstanding 8.125% First Priority Ship Mortgage Notes, due on November 15, 2021 (the “Ship Mortgage Notes”), are being redeemed in accordance with their terms with the proceeds of a cash contribution from Navios Partners and newly arranged secured term loan financings (the “Transaction”). The merger is expected to close in the fourth quarter of 2021 upon completion of certain customary conditions. After the completion of the merger, Navios Holdings expects to have a 10.3% ownership interest in Navios Partners. As of September 1, 2021, pro-forma of the merger, the value of Navios Holdings’ investment in Navios Partners was $95.8 million.

Vessel Sales

In June 2021, the Company agreed to sell to Navios Partners the Navios Azimuth, a 2011-built Capesize vessel of 179,169 dwt, the Navios Ray, a 2012-built Capesize vessel of 179,515 dwt, and the Navios Bonavis, a 2009-built Capesize vessel of 180,022 dwt for an aggregate sales price of $88.0 million. The sale of (i) the Navios Bonavis and the Navios Ray was completed in June 2021, and (ii) the Navios Azimuth was completed in July 2021.

In June 2021, the Company completed the sale to Navios Partners of a 2011-built Capesize vessel of 181,415 dwt, that was previously chartered-in. The net sale proceeds were $8.5 million.

In June 2021, the Company completed the sale of the Navios Serenity, a 2011-built Handysize vessel of 34,690 dwt, to an unrelated third party for a sale price of $10.6 million.

Bond Maturities

Our 7.375% First Priority Ship Mortgage Notes mature in January 2022 (the “2022 Notes”). Our 11.25% Senior Secured Notes mature in August 2022 (the “2022 Senior Secured Notes”).

In June 2021, Navios Holdings entered into a supplemental indenture which eliminated the Company’s obligation to make a springing maturity offer for the 2022 Senior Secured Notes upon the redemption, at par, of $100.0 million in aggregate principal amount of the 2022 Senior Secured Notes (the “Redemption”). The Redemption, which was funded through (i) the sale of the Navios Azimuth, previously pledged as collateral in respect of the 2022 Senior Secured Notes and (ii) the borrowing of $75.3 million from a subsidiary of NSM, was completed on July 23, 2021.

Year to date, Navios Holdings has repurchased $21.4 million in par value of the 2022 Notes.

Although Navios Holdings is currently attempting to address these upcoming maturities and create additional liquidity to fund working capital requirements through the sale of assets and refinancing plans, there can be no assurance it will be successful in such attempts, or that any such attempts will be consummated on terms satisfactory to us, or at all.

Fleet Statistics

Navios Holdings controls a fleet of 38 vessels totaling 4.1 million dwt, of which 25 are owned (including five bareboat-in vessels) and 13 are chartered-in under long-term charters (collectively, the “Core Fleet”). The fleet consists of 12 Capesize, 21 Panamax, four Ultra-Handymax and one Handysize vessels, with an average age of 8.6 years.

Navios Holdings has currently chartered-out 80.5% of available days for the remaining six months of 2021. 50.0% of these available days are chartered-out on fixed rate and 30.5% are chartered-out on index.

The average contracted daily charter-in rate for the long-term charter-in vessels for the remaining six months of 2021 is $16,441 per day.

The above figures do not include the fleet of Navios Logistics.

Exhibit II provides certain details of the Core Fleet of Navios Holdings. It does not include the fleet of Navios Logistics.

Second Quarter 2021 and 2020 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):

Revenue from the Dry Bulk Vessel Operations for the three month period ended June 30, 2021 increased by $47.8 million, or 124.7%, to $86.1 million, as compared to $38.3 million for the same period during 2020. The increase in dry bulk revenue was mainly attributable to the increase in the time charter and freight market during three month period ended June 30, 2021. The TCE per day increased by 175.6% to $21,572 per day in the three month period ended June 30, 2021, as compared to $7,827 per day in the same period of 2020.

Revenue from the Logistics Business was $57.6 million for the three month period ended June 30, 2021, as compared to $58.8 million for the same period in 2020. The decrease was mainly attributable to (i) a $4.4 million decrease in revenue from the cabotage business mainly due to fewer operating days; (ii) a $3.1 million decrease in sales of products due to the decrease in the Paraguayan liquid port’s volume of products sold; and (iii) a $0.3 million decrease in revenue from the port terminal business mainly due to lower volumes transshipped in the grain port terminal. The overall decrease was partially mitigated by a $6.6 million increase in revenue from the barge business mainly due to a $7.8 million increase in CoA/voyage revenues related to higher liquid cargo moved, partially mitigated by a $1.1 million decrease in time charter revenues mainly due to a decrease in time charter rates.

Net Income attributable to Navios Holdings’ common stockholders was $24.9 million for the three month period ended June 30, 2021, as compared to a $35.3 million Net Loss attributable to Navios Holdings’ common stockholders for the same period in 2020. Net Income attributable to Navios Holdings’ common stockholders was affected by items described in the table above. Excluding these items, Adjusted Net Income attributable to Navios Holdings’ common stockholders for the three month period ended June 30, 2021 was $30.3 million, as compared to $25.0 million Adjusted Net Loss attributable to Navios Holdings’ common stockholders for the same period in 2020. This decrease in Adjusted Net Loss was mainly due to (i) a $58.8 million increase in Adjusted EBITDA as discussed in the paragraph below; (ii) a $2.0 million decrease in depreciation and amortization; and (iii) a $0.2 million decrease in stock-based compensation expense. This overall decrease of $61.0 million was partially mitigated by (i) a $4.8 million increase in interest expense and finance cost, net, mainly due to the higher weighted average interest rate at Navios Logistics due to the issuance of the 10.75% Notes due 2025; (iii) a $0.6 million decrease in income tax benefit; and (iii) a $0.2 million increase in amortization of deferred drydock, special survey and other capitalized items.

Net Loss of Navios Logistics, on a standalone basis, was $1.1 million for the three month period ended June 30, 2021 as compared to $12.0 million of Net Income for the same period in 2020.

Adjusted EBITDA of Navios Holdings for the three month period ended June 30, 2021 increased by $58.8 million to $85.9 million, as compared to $27.2 million for the same period in 2020. The increase in Adjusted EBITDA was primarily due to (i) a $46.5 million increase in revenue; (ii) a $5.9 million decrease in time charter, voyage and logistics business expenses; (iii) a $4.7 million decrease in net income attributable to noncontrolling interest; (iv) a $2.1 million increase in equity in net earnings from affiliate companies; (v) a $1.9 million increase in gain on bond extinguishment; (vi) a $0.6 million decrease in other expense, net; and (vii) a $0.1 million decrease in general and administrative expenses (excluding stock-based compensation expenses). This overall increase of $61.8 million was partially mitigated by a $3.0 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items).

EBITDA of Navios Logistics, on a standalone basis, was $21.4 million for the three month period ended June 30, 2021, as compared to $27.0 million for the same period in 2020.

First Half 2021 and 2020 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):

Revenue from the Dry Bulk Vessel Operations for the six month period ended June 30, 2021 increased by $77.2 million, or 106.4%, to $149.8 million, as compared to $72.6 million for the same period during 2020. The increase in dry bulk revenue was mainly attributable to the increase in the time charter and freight market during six month period ended June 30, 2021. The TCE per day increased by 139.7% to $17,862 per day in the six month period ended June 30, 2021, as compared to $7,451 per day in the same period of 2020.

Revenue from the Logistics Business was $110.8 million for the six month period ended June 30, 2021, as compared to $115.6 million for the same period in 2020. The decrease was mainly attributable to (i) a $7.8 million decrease in sales of products due to the decrease in the Paraguayan liquid port’s volume of products sold; and (ii) a $6.4 million decrease in revenue from the cabotage business mainly due to lower time charter rates affected by market conditions and fewer operating days. The overall decrease was partially mitigated by (i) a $6.7 million increase in revenue from the barge business mainly due to a $13.8 million increase in CoA/voyage revenues related to higher CoA/voyage revenues of convoys previously under time charter contracts, partially mitigated by a $7.2 million decrease in time charter revenues mainly due to the expiration of certain legacy time charter contracts; and (ii) a $2.7 million increase in revenue from the port terminal business mainly due to higher volumes transshipped in the grain port terminal.

Net Income attributable to Navios Holdings’ common stockholders was $25.1 million for the six month period ended June 30, 2021, as compared to $88.5 million Net Loss attributable to Navios Holdings’ common stockholders for the same period in 2020. Net Income attributable to Navios Holdings’ common stockholders was affected by items described in the table above. Excluding these items, Adjusted Net Income attributable to Navios Holdings’ common stockholders for the six month period ended June 30, 2021 was approximately $25.1 million, as compared to $48.8 million Adjusted Net Loss attributable to Navios Holdings’ common stockholders for the same period in 2020. This decrease in Adjusted Net Loss was mainly due to (i) a $79.2 million increase in Adjusted EBITDA as discussed in the paragraph below; (ii) a $3.8 million decrease in depreciation and amortization; (iii) a $0.3 million decrease in stock-based compensation expense; and (iv) a $0.2 million increase in income tax benefit. This overall decrease of $83.5 million was partially mitigated by (i) a $9.3 million increase in interest expense and finance cost, net, mainly due to the higher weighted average interest rate of Navios Logistics due to the issuance of the 10.75% Notes due 2025; and (ii) a $0.3 million increase in amortization of deferred drydock, special survey and other capitalized items.

Net Income of Navios Logistics, on a standalone basis, was $2.1 million for the six month period ended June 30, 2021 as compared to $19.0 million for the same period in 2020.

Adjusted EBITDA of Navios Holdings for the six month period ended June 30, 2021 increased by $79.2 million to $135.1 million, as compared to $55.9 million for the same period in 2020. The increase in Adjusted EBITDA was primarily due to (i) a $72.4 million increase in revenue; (ii) a $14.2 million decrease in time charter, voyage and logistics business expenses; (iii) a $6.1 million decrease in net income attributable to noncontrolling interest; (iv) a $1.9 million decrease in other expense, net; and (v) a $0.1 million decrease in general and administrative expenses (excluding stock-based compensation expenses). This overall increase of $94.7 million was partially mitigated by (i) a $9.3 million decrease in gain on bond extinguishment; (ii) a $4.1 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items); and (iii) a $2.1 million decrease in equity in net earnings from affiliate companies.

EBITDA of Navios Logistics, on a standalone basis, was $44.7 million for the six month period ended June 30, 2021, as compared to $49.2 million for the same period in 2020.

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