Navios Maritime Partners L.P. Reports Impressive Net Income of $162.1 Million During Third Quarter, As Diversification Strategy Pays Out
Navios Maritime Partners L.P. (“Navios Partners”) (NYSE: NMM), an international owner and operator of dry cargo and tanker vessels, today reported its financial results for the third quarter and nine month periods ended September 30, 2021.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners stated, “I am pleased with the results for the third quarter of 2021. During the third quarter of 2021, Navios Partners recorded Revenue of $228.0 million, Adjusted EBITDA of $145.2 million and Net Income of $162.1 million.”
Angeliki Frangou continued, “Navios Partners is one of the largest U.S. publicly-listed shipping companies, operating across three segments, with 15 vessel types, servicing more than 10 end markets. Diversification creates resiliency in our overall business model, enabling us to mitigate individual segment volatility, while also allowing us to leverage each sector’s unique fundamentals. Diversification also creates significant flexibility in chartering, S&P and financing activities.
We have been taking advantage of robust markets through our chartering activity. In our containership segment, we have secured a number of long-term charters and have thus far fixed 88.1% of available containership days for 2022 and developed $1.6 billion in total contracted revenue through 2030. In our dry bulk segment, we continue to benefit from a strong spot market, with most available days exposed to market. We are positioned to fix vessels once attractive period charters are available. Lastly, our tanker segment is benefiting from existing long-term contracts and a materially improving market. We hope that the tanker market continues to strengthen.”
Merger with Navios Maritime Acquisition Corporation
On October 15, 2021, Navios Partners completed its merger (the “Merger”) with Navios Maritime Acquisition Corporation (“Navios Acquisition”). As a result of the Merger, Navios Acquisition became a wholly-owned subsidiary of Navios Partners. Each outstanding common unit of Navios Acquisition that was held by a unitholder other than Navios Partners, Navios Acquisition and their respective subsidiaries was converted into the right to receive 0.1275 of a common unit of Navios Partners. As a result of the Merger, 3,388,226 common units of Navios Partners were issued to former public unitholders of Navios Acquisition. On August 25, 2021, Navios Partners purchased 44.1 million shares of Navios Acquisition, thereby acquiring a controlling interest in Navios Acquisition, and the results of operations of Navios Acquisition are included in Navios Partners’ consolidated statements of operations commencing on August 26, 2021.
On October 29, 2021, Navios Partners completed the sale of the Navios Altair I, a 2006-built Panamax vessel of 74,475 dwt to an unrelated third party for a sale price of $14.0 million.
Following the completion of the Merger, Navios Partners owns and operates a fleet comprised of 54 dry bulk vessels, 43 containerships and 45 tanker vessels.
Navios Partners is in advanced discussions with a commercial bank for a new credit facility of up to $72.7 million for the refinancing of: (i) $20.0 million maturing in December 2021; (ii) $33.2 million maturing in the second and third quarter of 2022; and (iii) $26.7 million maturing in the second quarter of 2024. The new facility is expected to: (i) have an amortization profile of eight years; (ii) mature in the fourth quarter of 2026; and (iii) bear interest at LIBOR plus 2.75% per annum. The transaction is expected to close in the fourth quarter of 2021. No assurance can be provided that the definitive agreement will be executed or that the refinancing will be consummated in whole or in part.
In each of September and October 2021, Navios Partners agreed to enter into a bareboat charter-in agreement for a newbuilding Kamsarmax vessel of approximately 81,000 dwt. The total amount financed for the two vessels is approximately $52.7 million and the implied effective interest rate for each is 4.8% and 4.3%, respectively.
The Board of Directors of Navios Partners declared a cash distribution for the third quarter of 2021 of $0.05 per unit. The cash distribution is payable on November 12, 2021 to all unitholders of record as of November 8, 2021. The declaration and payment of any further dividends remain subject to the discretion of the Board of Directors and will depend on, among other things, Navios Partners’ cash requirements as measured by market opportunities and restrictions under its credit agreements and other debt obligations and such other factors as the Board of Directors may deem advisable.
Secured Long-term Time Charters for 10 Containerships
Navios Partners has secured new long-term time charters for 10 containerships which are expected to generate approximately $690.0 million contracted revenue.
Six 5,300 TEU newbuilding containerships, expected to be delivered in 2023 and 2024, have been chartered-out for 60 – 64 months at an average net rate of $37,050 per day.
Three 4,250 TEU containerships have been chartered-out for 50 – 54 months and one 4,250 TEU containership for 42 – 44 months. The total average net rate for the first 42 – 44 months amounts to $46,536 per day (2.25x the current average contracted net rate of $20,663 for 3.4x duration) and for the remaining period amounts to $31,906 per day.
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 1.6 years. Navios Partners has currently fixed 78.8% of its available days for the fourth quarter of 2021, 42.0% for 2022 and 22.5% for 2023. Navios Partners expects to generate contracted revenues of approximately $215.4 million, $582.0 million and $380.3 million for the fourth quarter of 2021, for 2022 and for 2023, respectively. The average expected daily charter-out rate for the fleet is $23,388, $29,350 and $34,095 for the fourth quarter of 2021, for 2022 and for 2023, respectively.
For the following results and the selected financial data presented herein, Navios Partners has compiled condensed consolidated statements of operations for the three and nine month periods ended September 30, 2021 and 2020. The quarterly information was derived from the unaudited condensed consolidated financial statements for the respective periods. EBITDA, Adjusted EBITDA, Adjusted Earnings/ (Loss) per Common Unit basic and diluted and Adjusted Net Income/ (Loss) are non-GAAP financial measures and should not be used in isolation or substitution for Navios Partners’ results calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The results of operations of Navios Maritime Containers L.P. (“Navios Containers”) and Navios Acquisition are included in Navios Partners’ consolidated statements of operations commencing on April 1, 2021 and August 26, 2021, respectively.
Source: Navios Maritime Partners L.P.