Navios Maritime Containers L.P. Rides the Pandemic Storm Amid Container Market Woes
Navios Maritime Containers L.P., a growth vehicle dedicated to the container sector of the maritime industry, today reported its financial results for the second quarter and six months ended June 30, 2020.
Angeliki Frangou, Chairman and Chief Executive Officer, stated, “I am pleased with our results for the second quarter of 2020. The container trade was severely hurt by global quarantine in place for much of the second quarter of 2020. Yet, Navios Containers reported revenue of $28.8 million and EBITDA of $7.0 million for the second quarter of 2020.”
Angeliki Frangou continued, “The timing of the recovery remains uncertain given the unique nature of the pandemic. Consumer demand has been understandably weak because of health and employment fears and general immobility arising from the pandemic. However, as people gradually return to a more normalized life, we expect that the economy will heal in the second half of 2020, with growth accelerating in 2021.”
HIGHLIGHTS — RECENT DEVELOPMENTS
Time charters of two 10,000 TEU vessels extended through 2026
In June 2020, Navios Containers agreed to extend the time charters at a net daily rate of $26,276 until May 2026 for each of the Navios Unison, a 2010-built 10,000 TEU containership, and the Navios Constellation, a 2011-built 10,000 TEU containership. The charter extensions were agreed in return for a charter hire reduction of $1,050 per day per vessel until May 2024. Following the extensions, an additional cumulative EBITDA of approximately $22.0 million is expected for both vessels.
The vessels cumulative additional EBITDA is calculated as follows: revenue at contracted net charter rate per day based on 360 days less, (i) operating expenses based on fixed rates as per the management agreement and (ii) general and administrative expenses equal to approximate current costs based on 365 days.
Navios Containers owns a fleet of 29 vessels, totaling 142,821 TEU. The current average age of the fleet is 12 years (See Exhibit II). As of July 21, 2020, Navios Containers has chartered-out 72.9% and 11.1% of its available days for the remaining six months of 2020 and for the full year 2021, respectively (including index-linked charters). Excluding index-linked charters, Navios Containers has chartered-out 69.3% and 9.3% of its available days for the remaining six months of 2020 and for the full year 2021, respectively, which are expected to generate $39.0 million and $22.8 million in revenue, respectively. The average expected daily contracted charter-out rate for the fleet is $10,556, net and $23,289, net for the remaining six months of 2020 and for the full year 2021, respectively (excluding index-linked charters), and the total expected available days for the remaining six months of 2020 and for the full year 2021, are 5,336 and 10,585 days, respectively.
Revenue for the three months ended June 30, 2020 was $28.8 million, as compared to $33.7 million for the same period during 2019. The decrease of $4.9 million was mainly due to a decrease in time charter rates partially offset by the increase in the number of available days from 2,568 for the three months ended June 30, 2019, to 2,598 for the three months ended June 30, 2020. Time charter equivalent, or TCE per day decreased from $12,594 for the three months ended June 30, 2019 to $10,148 for the same period during 2020.
Net Loss for the three months ended June 30, 2020 was a $2.1 million compared to $0.4 million Net Income for the same period in 2019. The $2.5 million decrease in Net Income was mainly due to a $5.7 million decrease in EBITDA and $0.6 million increase in amortization of deferred drydock and special survey costs. This overall increase of $6.3 million was partially offset by a: (i) $2.7 million decrease in depreciation and amortization, relating mainly to the lower amortization of intangible assets; and (ii) $1.1 million decrease in interest expense and finance cost, net.
EBITDA for the three months ended June 30, 2020 decreased by $5.7 million to $7.0 million as compared to $12.7 million for the same period in 2019. The decrease in EBITDA was primarily due to a: (i) $4.9 million decreased in revenue; (ii) $1.1 million increase in time charter and voyage expenses; and (iii) $0.8 million increase in management fees due to the increase in the number of available days and the increase in the fee for the ship management services, as per the management agreement. This overall decrease of $6.8 million was partially offset by a: (i) $1.0 million increase in other income, net; and (ii) $0.1 million decrease in other direct vessel expenses.
Source: Navios Maritime Containers L.P.