Navios Maritime Holdings Inc., a global, vertically integrated seaborne shipping and logistics company, yesterday reported financial results for the quarter ended March 31, 2012. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Holdings stated, "We had a solid quarter in a market environment that continues to be challenging. We have been focused on maintaining a healthy balance sheet while returning capital to our shareholders through dividend payments. We declared a $0.06 dividend per share for Q1 2012 to shareholders of record on June 26, 2012."
Ms. Frangou continued, "We have also focused on increasing the efficiency of our global fleet as a means of further reducing expenses. Efficiency equals strength in this market, and our technical group has been singularly focused on reducing our operating costs and maximizing fleet utilization. As a result, our operating costs are about 35% below the industry average and fleet utilization is at 99%."
HIGHLIGHTS - RECENT DEVELOPMENTS
Navios Holdings
Vessels Delivery
On May 14, 2012, Navios Holdings took delivery of the Navios Avior, a new 81,355 dwt 2012-built bulk carrier vessel, from a South Korean shipyard for a purchase price of $35.5 million. The vessel is chartered-out for two years at a net rate of $12,716 per day. It is anticipated that the Navios Avior will generate annual EBITDA of $3.0 million and aggregate EBITDA of $6.0 million over the life of the charter contract.
On March 30, 2012, Navios Holdings took delivery of the Navios Centaurus, a new 81,472 dwt 2012-built bulk carrier vessel, from a South Korean shipyard for a purchase price of $35.3 million. The vessel is chartered-out for two years at a net rate of $12,825 per day. It is anticipated that the Navios Centaurus will generate annual EBITDA of $3.1 million and aggregate EBITDA of $6.1 million over the life of the charter contract.
On March 26, 2012, Navios Holdings took delivery of the Navios Serenity, a 34,690 dwt 2011-built Handysize vessel and former long-term chartered-in vessel in operation for an acquisition price of $26.0 million. The vessel is currently chartered-out at a $10,616 per day until July 28, 2012.
New Facility Agreement
On March 23, 2012, Navios Holdings entered into a facility agreement with DVB BANK SE to finance the acquisition of the Navios Serenity and to refinance the existing debt under the Navios Astra loan facility which was due for repayment in 2013, thus eliminating refinancing risk for 2013. The new facility has a term of eight years and is divided in two tranches having amortization profile of 18 and 14 years and margin of 2.85% and 3.6%, respectively. As of May 17, 2012, $41.0 million was drawn under this facility.
Time Charter Coverage
Navios Holdings has long-term fleet employment for periods up to ten years. As of May 16, 2012, Navios Holdings had chartered-out 89.4%, 44.0% and 26.7% of available days for 2012, 2013 and 2014, respectively, equivalent to $278.9 million, $181.0 million and $122.6 million in revenue, respectively. The average daily charter-out rate for the core fleet is $22,021, $28,714 and $31,624 for 2012, 2013 and 2014, respectively. The average daily charter-in rate for the active long-term charter-in vessels for 2012 is $12,792.
The above figures do not include the fleet of Navios South American Logistics Inc. ("Navios Logistics") and vessels servicing Contracts of Affreightment.
Liquidity
Net Debt to Total Capitalization was 51% as of March 31, 2012. Navios Holdings' total available liquidity, including lines of credit, as of March 31, 2012 was approximately $223.0 million.
Dividend Policy
The Board of Directors declared a quarterly cash dividend for the first quarter of 2012 of $0.06 per share of common stock. The dividend is payable on July 3, 2012 to stockholders of record as of June 26, 2012. The declaration and payment of any further dividend remain subject to the discretion of the Board and will depend on, among other things, Navios Holdings' cash requirements after taking into account market opportunities, restrictions under its credit agreements and other debt obligations and such other factors as the Board may deem advisable.
Navios Maritime Acquisition Corporation ("Navios Acquisition")
On April 5, 2012, Navios Holdings received $1.3 million representing the cash distribution from Navios Acquisition for the fourth quarter of 2011.
Navios Maritime Partners L.P. ("Navios Partners")
On May 14, 2012, Navios Holdings received $6.7 million representing the cash distribution from Navios Partners for the first quarter of 2012.
On May 5, 2012, Navios Partners announced the completion of its follow-on public offering of 4,600,000 common units, which included the full exercise of the underwriters' over-allotment option, at $15.68 per unit, raising gross proceeds of approximately $73.6 million (including proceeds from the issuance of additional general partnership units to its general partner). Following Navios Partners' public equity offering, Navios Holdings' interest in Navios Partners decreased to 25.2%, including a 2% general partner interest.
Navios South American Logistics Inc.
Navios Logistics' new silo at its dry port facility in Nueva Palmira became operational in April 2012 increasing capacity to 460,000 metric tons. Navios Logistics paid an aggregate of approximately $9.0 million for the construction of the new silo.
On May 9, 2012, Navios Logistics agreed to extend its bareboat charters for each of the vessels M/T San San H and M/T Stavroula for a period of four years until June 2016.
Fleet Profile
Navios Holdings controls a fleet of 54 vessels totalling 5.6 million dwt, of which 31 are owned and 23 are chartered-in under long-term charters. Navios Holdings currently operates 48 vessels (17 Capesize, 12 Panamax, 18 Ultra-Handymax and one Handysize) totalling 5.0 million dwt. Additionally, Navios Holdings has six newbuilding charter-in vessels expected to be delivered at various dates through 2013 (the "Core Fleet"). The current average age of the operating fleet is 5.2 years.
Exhibit II provides certain details of the "Core Fleet" of Navios Holdings. It does not include the fleet of Navios Logistics.
Financial Highlights
First Quarter 2012 and 2011 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):
The first quarter 2012 and 2011 information presented below was derived from the unaudited condensed consolidated financial statements for the respective periods. EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Share are non-U.S. GAAP financial measures, and should not be used in isolation or as substitution for Navios Holdings' results.
From March 30, 2011, Navios Acquisition is no longer consolidated and is accounted for under the equity method of accounting. The table and the discussion below exclude the impact of the consolidation of Navios Acquisition and are presented to provide investors with a clearer picture of Navios Holdings on a going forward basis.
Navios Holdings' consolidated revenue for the three months ended March 31, 2012 decreased by $4.6 million to $152.0 million as compared to $156.6 million for the same period during 2011.
Revenue from drybulk vessel operations for the three months ended March 31, 2012 was $101.9 million as compared to $112.3 million for the same period during 2011. The decrease in drybulk revenue was mainly attributable to (i) a decrease in Time Charter Equivalents ("TCE") per day by 12.7% to $21,496 per day in the first quarter of 2012 as compared to $24,622 per day in the same period of 2011; and (ii) a decrease in short-term charter-in fleet available days by 122 days. This decrease was partially offset by an increase in long-term charter-in fleet available days by 247 days.
Revenue from the logistics business was $50.1 million for the three months ended March 31, 2012 as compared to $44.4 million for the same period of 2011. This increase was mainly attributable to: (i) an increase in both volumes and rates at the dry and the liquid port; and (ii) an increase in the liquid port's volume and the price of products sold.
EBITDA of Navios Holdings for the three months ended March 31, 2012 increased by $51.6 million to $62.6 million as compared to $11.0 million for the same period of 2011. EBITDA of Navios Holdings for the three months ended March 31, 2011 has been affected by the items mentioned in the footnote to the table above. Adjusted EBITDA of Navios Holdings for the three months ended March 31, 2012 decreased by $4.9 million to $62.6 million as compared to $67.5 million for the same period of 2011. The $4.9 million decrease in Adjusted EBITDA was primarily due to: (i) a decrease in revenue of $4.6 million; (ii) an increase in time charter, voyage and port terminal expenses of $3.0 million; (iii) an increase in general and administrative expenses of $0.6 million (excluding share-based compensation expenses); and (iv) an increase in other expenses of $0.4 million. The overall variance of $8.6 million was partially offset by: (i) a decrease in direct vessel expenses (excluding the amortization of deferred dry dock and special survey costs) of $0.9 million; (ii) a decrease in loss from derivatives of $0.2 million; (iii) a decrease of $2.3 million in income attributable to the noncontrolling interest; and (iv) an increase of $0.3 million in equity in net earnings of affiliated companies.
EBITDA of Navios Logistics was $8.7 million for the three month period ended March 31, 2012 as compared to $9.5 million for the same period in 2011.
Net income of Navios Holdings for the three months ended March 31, 2012 was $9.5 million as compared to a net loss of $36.7 million for the same period of 2011. Net loss of Navios Holdings for the three months ended March 31, 2011 has been affected by the items mentioned in the footnote to the table above. Adjusted Net Income of Navios Holdings for the three months period ended March 31, 2012 was $9.5 million as compared to $19.8 million for the same period of 2011. The decrease of Adjusted Net Income by $10.3 million was mainly due to: (i) a decrease in Adjusted EBITDA of $4.9 million; (ii) an increase in interest income/expense and finance cost, net of $4.1 million; (iii) an increase in depreciation and amortization of $0.6 million; (iv) an increase of $0.5 million in amortization for drydock and special survey costs; and (v) an increase of $0.2 million in share-based compensation expense.
Source: Navios Maritime Holdings Inc.