Dry Bulk Owner Navios Maritime Partners L.P. Reports Second Quarter Revenues of $47.7 Million

Navios Maritime Partners L.P., an international owner and operator of dry cargo vessels, reported its financial results for the second quarter and six months ended June 30, 2019.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners, stated, “I am pleased with the results for the second quarter of 2019 for which Navios Partners reported $47.7 million of Revenue and $22.3 million of EBITDA. We also declared a quarterly distribution of $0.30 per unit, representing a current yield of approximately 7%.”

Angeliki Frangou continued, “We have also secured the last piece of bank financing needed to refinance our Term Loan B. We expect to complete this refinancing by the end of the year and will then have no debt maturities until the end of 2021.”

Cash Distribution

The Board of Directors of Navios Partners declared a cash distribution for the second quarter of 2019 of $0.30 per unit. The cash distribution is payable on August 9, 2019 to all unitholders of record as of August 6, 2019.

Financing Arrangements

In July 2019, Navios Partners agreed to enter into a new credit facility with a commercial bank, for a total amount of up to $140.0 million for refinancing eight drybulk vessels and five containerships. The credit facility has an amortization profile of 6.5 years, matures in August 2021 and bears interest at LIBOR plus 320 bps per annum. The above facility is subject to signing of definitive documentation.

On July 24, 2019, Navios Partners completed a $22.0 million sale and leaseback transaction with unrelated third parties, for a 2011-built Capesize vessel. The sale and leaseback transaction has a duration of eleven years and an implied fixed interest rate of 6.3%. Navios Partners has the option to buy the vessel starting at the end of year five de-escalating to a $6.3 million obligation at maturity.

On June 28, 2019, Navios Partners completed a $7.5 million sale and leaseback transaction with unrelated third parties, for a 2006-built Panamax vessel. The sale and leaseback transaction has a duration of three years and an implied fixed interest rate of 6.1%. Navios Partners has the option to buy the vessel at the end of year three for a $2.0 million obligation at maturity.

There are no financial covenants or loan-to-value requirements in connection with the sale and leaseback transactions.

Since January 1, 2019, Navios Partners has repaid $113.2 million to the Term Loan B.

 

Fleet Developments

On July 24, 2019, Navios Partners took delivery of the Navios Libra, a 2019-built Kamsarmax vessel of 82,011 dwt, for a 10-year bareboat charter-in agreement. Navios Partners has the option to acquire the vessel after the end of the fourth year.

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 93.9% of its available days for 2019, 40.9% for 2020 and 24.3% for 2021, including index-linked charters, expecting to generate revenues (excluding index-linked charters) of approximately $150.8 million, $86.8 million and $80.8 million, respectively. The average contracted daily charter-out rate for the fleet is $14,529, $25,332 and $27,684 for 2019, 2020 and 2021, respectively.

Three month periods ended June 30, 2019 and 2018

Time charter and voyage revenues for the three month period ended June 30, 2019 decreased by $10.5 million, or 18.0%, to $47.7 million, as compared to $58.2 million for the same period in 2018. The decrease in time charter and voyage revenues was mainly attributable to: (i) the decrease in revenue due to the sales of the YM Unity and the YM Utmost in July 2018, the Navios Felicity and the Navios Libra II in December 2018 and the Navios Galaxy I in April 2019; and (ii) the decrease in the time charter equivalent rate, or TCE rate, to $14,130 per day for the three month period ended June 30, 2019, from $16,472 per day for the three month period ended June 30, 2018. That decrease was partially mitigated by the increase in revenue following the acquisition of the Navios Mars and the Navios Sphera in August 2018. The available days of the fleet decreased to 3,203 days for the three month period ended June 30, 2019, as compared to 3,366 days for the three month period ended June 30, 2018, mainly due to the decrease of the fleet.

EBITDA for the three month period ended June 30, 2019 was negatively affected by the accounting effect of a $3.6 million revision of the estimated guarantee claim receivable. EBITDA for the three month period ended June 30, 2018 was negatively affected by the accounting effect of a: (i) $37.9 million impairment loss on the sale of the YM Unity and the YM Utmost; and (ii) $0.6 million equity compensation expense. Excluding these items, Adjusted EBITDA decreased by $12.3 million to $22.3 million for the three month period ended June 30, 2019, as compared to $34.7 million for the same period in 2018. The decrease in Adjusted EBITDA was primarily due to a: (i) $10.5 million decrease in revenue; (ii) $1.6 million increase in general and administrative expenses; (iii) $0.2 million increase in other expenses; and (iv) $1.4 million decrease in equity in net earnings of affiliated companies. The above decrease was partially mitigated by a: (i) $0.3 million decrease in time charter and voyage expenses; (ii) $0.9 million decrease in management fees; and (iii) $0.2 million increase in other income.

The reserves for estimated maintenance and replacement capital expenditures for the three month periods ended June 30, 2019 and 2018 were $7.3 million and $6.4 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 June 30, 2019 of $6.2 million, as compared to $19.8 million for the three month period ended June 30, 2018. 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 Loss for the three-month period ended June 30, 2019 was negatively affected by the accounting effect of a: (I) $3.6 million revision of the estimated guarantee claim receivable; and (ii) $1.5 million write-off of deferred finance fees and discount related to $73.5 million prepayments of the Term Loan B Facility in the second quarter of 2019. Net Income for the three month period ended June 30, 2018 was negatively affected by the accounting effect of a: (i) $37.9 million impairment loss on the sale of the YM Unity and the YM Utmost; (ii) $0.6 million equity compensation expense; and (iii) $0.2 million write-off of deferred finance fees. Excluding these items, Adjusted Net Loss for the three month period ended June 30, 2019 amounted to $1.4 million loss compared to $9.2 million income for the three month period ended June 30, 2018. The decrease in Adjusted Net Income of $10.6 million was due to a: (i) $12.3 million decrease in adjusted EBITDA; and (ii) $0.2 million increase in interest expense and finance cost, net. The above decrease was partially mitigated by a: (i) $1.1 million decrease in depreciation and amortization expense; and (ii) $0.8 million increase in interest income.

Six month periods ended June 30, 2019 and 2018

Time charter and voyage revenues for the six month period ended June 30, 2019 decreased by $16.7 million, or 15.0%, to $94.6 million, as compared to $111.2 million for the same period in 2018. The decrease in time charter and voyage revenues was mainly attributable to: (i) the decrease in revenue due to the sales of the YM Unity and the YM Utmost in July 2018, the Navios Felicity and the Navios Libra II in December 2018, and the Navios Galaxy I in April 2019; and (ii) the decrease in the TCE rate, to $13,664 per day for the six month period ended June 30, 2019, from $16,295 per day for the six month period ended June 30, 2018. That decrease was partially mitigated by the increase in revenue following the acquisition of the Navios Mars and the Navios Sphera in August 2018. The available days of the fleet decreased to 6,480 days for the six month period ended June 30, 2019, as compared to 6,552 days for the six period ended June 30, 2018, mainly due to the decrease of the fleet.

EBITDA for the six month period ended June 30, 2019 was negatively affected by the accounting effect of a: (i) $7.3 million impairment loss on the sale of the Navios Galaxy I; and (ii) $3.6 million revision of the estimated guarantee claim receivable. EBITDA for the six month period ended June 30, 2018 was negatively affected by the accounting effect of a: (i) $37.9 million impairment loss on the sale of the YM Unity and the YM Utmost; and (ii) $1.2 million equity compensation expense. Excluding these items, Adjusted EBITDA decreased by $21.2 million to $45.0 million for the six month period ended June 30, 2019, as compared to $66.2 million for the same period in 2018. The decrease in Adjusted EBITDA was primarily due to a: (i) $16.7 million decrease in revenue; (ii) $1.5 million increase in time charter and voyage expenses; (iii) $2.7 million increase in general and administrative expenses; (iv) $0.1 million decrease in other income; and (vi) $2.5 million decrease in equity in net earnings of affiliated companies. The above decrease was partially mitigated by a: (i) $1.0 million decrease in management fees; and (ii) $1.4 million decrease in other expenses.

The reserves for estimated maintenance and replacement capital expenditures for the six month periods ended June 30, 2019 and 2018 were $14.7 million and $12.4 million, respectively (please see “Reconciliation of Non-GAAP Financial Measures” in Exhibit 3).

Navios Partners generated an operating surplus for the six month period ended June 30, 2019 of $11.9 million, as compared to $37.2 million for the six month period ended June 30, 2018. 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 Loss for the six month period ended June 30, 2019 was negatively affected by the accounting effect of a: (i) $7.3 million impairment loss on the sale of the Navios Galaxy I; (ii) $3.6 million revision of the estimated guarantee claim receivable; and (iii) $1.5 million write-off of deferred finance fees and discount related to $73.5 million prepayments of the Term Loan B Facility in the first half of 2019. Net Income for the six month period ended June 30, 2018 was negatively affected by the accounting effect of a: (i) $37.9 million impairment loss on the sale of the YM Unity and the YM Utmost; (ii) $1.2 million equity compensation expense; and (iii) $0.2 million write-off of deferred finance fees. Excluding these items, Adjusted Net Loss for the six month period ended June 30, 2019 amounted to $3.6 million loss compared to $15.2 million income for the six month period ended June 30, 2018. The decrease in Adjusted Net Income of $18.8 million was due to a: (i) $21.2 million decrease in adjusted EBITDA; and (ii) $1.8 million increase in interest expense and finance cost, net. The above decrease was partially mitigated by a: (i) $0.1 million decrease in direct vessel expenses; (ii) $2.5 million decrease in depreciation and amortization expense; and (iii) $1.6 million increase in interest income.
Full Report

Source: Navios Maritime Partners L.P.