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Fleet Additions and Freight Rate Increases Boost Navios Maritime Partners’ L.P. Third Quarter Results

Navios Maritime Partners L.P., an international owner and operator of dry cargo vessels, reported its financial results for the third quarter and nine months ended September 30, 2018. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners stated, “I am pleased with the results for the third quarter of 2018, for which Navios Partners had $42.0 million of EBITDA and $16.3 million of adjusted net income.

We declared a quarterly distribution of $0.02 per unit for the third quarter, representing a current yield of approximately 5.5%.” Angeliki Frangou continued, “NMM has good liquidity and a strong balance sheet. As of September 30, 2018, we had $58.3 million of cash and total debt of $511.7 million. Our net debt to book capitalization was 35%, representing a 16% reduction compared to the fourth quarter of 2016. We have no committed growth capex and no debt maturities until 2020.”

Distributions
Distribution of Navios Containers units Navios Partners announced a distribution of approximately 2.5% of the outstanding equity of Navios Maritime Containers Inc. (“Navios Containers”) to the unitholders of Navios Partners in connection with the proposed listing of Navios Containers on a U.S. stock exchange as set forth in the registration statement on Form F-1, filed with the U.S. Securities and Exchange Commission. Following the distribution, Navios Partners will own approximately 33.5% of the equity in Navios Containers. Approximately 855,050 shares of common equity of Navios Containers will be distributed by Navios Partners to its unitholders, with the actual number of shares of common equity distributed depending on the number of units of Navios Partners that are issued and outstanding on the record date. The record date for the unitholders entitled to the distribution will be November 23, 2018 and the distribution is expected to occur on or about December 3, 2018.

Three month periods ended September 30, 2018 and 2017
The details below exclude the impact of the consolidation of Navios Containers for the periods presented as it is intended to provide investors with a clearer picture of Navios Partners on a going forward basis. Navios Containers’ effect on time charter and voyage revenues and adjusted EBITDA for the period from July 1, 2017 to August 29, 2017 was $9.3 million and $4.4 million, respectively.

Time charter and voyage revenues for Navios Partners for the three month period ended September 30, 2018 increased by $11.9 million, or 23.4%, to $62.6 million, as compared to $50.7 million for the same period in 2017. The increase in time charter and voyage revenues was mainly attributable to: (i) the increase in revenue following the acquisition of five vessels in 2017 and five vessels in 2018; and (ii) the increase in the time charter equivalent rate, or TCE rate, to $17,606 per day for the three month period ended September 30, 2018, from $15,588 per day for the three month period ended September 30, 2017 due to the increase in the freight market. That increase was partially mitigated by the decrease in revenue due to the sales of the Navios Gemini S in 2017 and the YM Unity and the YM Utmost in 2018. The available days of the fleet increased to 3,428 days for the three month period ended September 30, 2018, as compared to 3,178 days for the three month period ended September 30, 2017, mainly due to the increased size of the fleet.

EBITDA of Navios Partners for the three month period ended September 30, 2018 was negatively affected by the accounting effect of a: (i) $5.3 million impairment loss on the sale of the Navios Felicity; and (ii) $0.6 million equity compensation expense. EBITDA of Navios Partners for the three month period ended September 30, 2017 was negatively affected by the accounting effect of a $0.5 million equity compensation expense. Excluding these items, Adjusted EBITDA increased by $8.7 million to $42.0 million for the three month period ended September 30, 2018, as compared to $33.3 million for the same period in 2017. The increase in Adjusted EBITDA was primarily due to: (i) an $11.9 million increase in revenue; and (ii) a $1.9 million increase in equity in net earnings of affiliated companies. The above increase was partially mitigated by a: (i) $1.1 million increase in time charter and voyage expenses; (ii) $0.9 million increase in management fees due to the increased fleet; (iii) $3.0 million decrease in other income; and (iv) $0.1 million increase in other expenses.

Navios Partners generated an operating surplus for the three month period ended September 30, 2018 of $25.8 million, as compared to $27.2 million for the three month period ended September 30, 2017. Operating 5 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 September 30, 2018 was negatively affected by the accounting effect of a: (i) $5.3 million impairment loss on the sale of the Navios Felicity; and (ii) $0.6 million equity compensation expense. Net Income of Navios Partners for the three month period ended September 30, 2017 was negatively affected by the accounting effect of a $0.5 million equity compensation expense. Excluding these items, Adjusted Net Income for the three month period ended September 30, 2018 amounted to $16.3 million compared to $5.9 million for the three month period ended September 30, 2017. The increase in Adjusted Net Income of $10.5 million was due to: (i) an $8.7 million increase in adjusted EBITDA; (ii) a $0.2 million decrease in direct vessel expenses; (iii) a $3.0 million decrease in depreciation and amortization expense; and (iv) a $0.1 million increase in interest income. The above increase was partially mitigated by a $1.4 million increase in interest expense and finance cost, net.

Nine month periods ended September 30, 2018 and 2017
The details below exclude the impact of the consolidation of Navios Containers for the periods presented as it is intended to provide investors with a clearer picture of Navios Partners on a going forward basis. Navios Containers’ effect on time charter and voyage revenues and adjusted EBITDA for the period from April 28, 2017 (date of inception) to August 29, 2017 was $12.4 million and $6.7 million, respectively. Time charter and voyage revenues for Navios Partners for the nine month period ended September 30, 2018 increased by $33.8 million, or 24.1%, to $173.8 million, as compared to $140.0 million for the same period in 2017.

The increase in time charter and voyage revenues was mainly attributable to: (i) the increase in revenue following the acquisition of seven vessels in 2017 and five vessels in 2018; and (ii) the increase in the TCE rate to $16,745 per day for the nine month period ended September 30, 2018, from $15,591 per day for the nine month period ended September 30, 2017 due to the increase in the freight market. That increase was partially mitigated by the decrease in revenue due to the sales of the MSC Cristina, the Navios Apollon and the Navios Gemini S in 2017 and the YM Unity and the YM Utmost in 2018. The available days of the fleet increased to 9,980 days for the nine month period ended September 30, 2018, as compared to 8,817 days for the nine month period ended September 30, 2017, mainly due to the increased fleet.

EBITDA of Navios Partners for the nine month period ended September 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) $5.3 million impairment loss on the sale of the Navios Felicity; and (iii) $1.9 million equity compensation expense. EBITDA of Navios Partners for the nine month period ended September 30, 2017 was negatively affected by the accounting effect of a: (i) $4.1 million gain on change in control from Navios Containers’ deconsolidation; (ii) $1.5 million allowance for doubtful accounts; (iii) $1.3 million loss related to the sale of the MSC Cristina; and (iv) $1.4 million equity compensation expense. Excluding these items, Adjusted EBITDA increased by $18.7 million to $108.2 million for the nine month period ended September 30, 2018, as compared to $89.5 million for the same period in 2017. The increase in Adjusted EBITDA was primarily due to a: (i) $33.8 million increase in revenue; and (ii) $4.5 million increase in equity in net earnings of affiliated companies. The above increase was partially mitigated by a: (i) $4.1 million increase in time charter and voyage expenses; (ii) $5.9 million increase in management fees due to the increased fleet; (iii) $0.8 million increase in general and administrative expenses; (iv) $8.4 million decrease in other income; and (v) $0.4 million increase in other expenses.

Net Income of Navios Partners for the nine month period ended September 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) $5.3 million impairment loss on the sale of the Navios Felicity; (iii) $1.9 million equity compensation expense; and (iv) $0.2 million write-off of deferred finance fees. Net Income of Navios Partners for the nine month period ended September 30, 2017 was negatively affected by the accounting effect of a: (i) $4.1 million gain on change in control from Navios Containers’ deconsolidation; (ii) $3.2 million write-off of deferred finance fees and discount related to the refinancing of the Term Loan B Facility; (iii) $1.5 million allowance for doubtful accounts; (iv) $1.3 million loss related to the sale of the MSC Cristina; and (v) $1.4 million equity compensation expense. Excluding these items, Adjusted Net Income for the nine month period ended September 30, 2018 amounted to $31.6 million compared to $10.6 million for the nine month period ended September 30, 2017. The increase in Adjusted Net Income of $21.0 million was due to: (i) an $18.7 million increase in Adjusted EBITDA; (ii) a $0.4 million decrease in direct vessel expenses; (iii) a $7.8 million decrease in depreciation and amortization expense; and (iv) a $0.6 million increase in interest income. The above increase was partially mitigated by a $6.5 million increase in interest expense and finance cost, net.
Full Report

Source: Navios Maritime Partners L.P.

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