Navios Maritime Partners L.P. Reports First Quarter Revenue of $42.4 million

May 23, 2017

Navios Maritime Partners L.P., an international owner and operator of container and dry bulk vessels, reported its financial results for the first quarter ended March 31, 2017. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners stated, “For the first quarter of 2017, Navios Partners reported revenue of $42.4 million and adjusted EBITDA of $25.9 million. We are pleased with these results as we are coming off the worst year in history for the dry bulk market – with the BDI reaching a historical low in the first quarter of 2016 and the container sector suffering its own set of challenges.”

Angeliki Frangou continued, “Through balance sheet discipline and rigorous cost management, Navios Partners has weathered the storm. And, by innovative transactions, Navios Partners is positioned to thrive in a recovering market. During the first quarter of 2017, we refinanced debt, so that Navios Partners has no debt maturing for over three years. Navios Partners also raised $100.0 million in equity and has acquired five drybulk vessels which are expected to provide reasonable levered returns. Finally, Navios Partners took advantage of a unique opportunity by raising $75.0 million for Navios Maritime Containers Inc. (“Navios Containers”), a growth vehicle dedicated to containers. Navios Partners will benefit from any recovery in the container sector through its 40% equity in Navios Containers.”

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Navios Maritime Containers Inc.

In April 2017, Navios Partners agreed to acquire the entire container fleet (the “Fleet”) of Rickmers Maritime Trust Pte. (the “Trust”). The Fleet consists of 14 Container vessels. The acquisition of the first five 4,250 TEU vessels is expected in May 2017. These vessels are employed on charters that have staggered expirations in 2018 and early 2019 at a net daily charter rate of $26,850.

On May 11, 2017, Navios Partners formed Navios Containers, a Marshall Islands company, which agreed with investors to sell approximately 15.0 million of its shares for aggregate gross proceeds of approximately $75.0 million, at a subscription price of $5.00 per share. Navios Containers intends to use the proceeds to acquire the Fleet that Navios Partners previously agreed to purchase from the Trust as well as for further vessel acquisitions, working capital and general corporate purposes. The offering is expected to close on or about June 1, 2017.

Navios Partners will invest $30.0 million and receive 40% of the equity, and Navios Maritime Holdings Inc. (“Navios Holdings”) will invest $5.0 million and receive 6.67% of the equity of Navios Containers. Each of Navios Partners and Navios Holdings will also receive warrants, with a five-year term, for 6.8% and 1.7% of the equity, respectively. The Fleet vessels are expected to be delivered starting in May, 2017. The acquisition is subject to a number of conditions, and no assurance can be provided that the acquisition will close at all or in part. Navios Containers also announced today that it intends to file an application to register on the Norwegian Over-The-Counter market (N-OTC). Navios Containers expects to be registered on or about June 1, 2017.

Debt Refinancing

On March 14, 2017, Navios Partners completed the issuance of a new $405.0 million Term Loan B facility. The Term Loan B facility bears an interest rate of LIBOR plus 500 basis points (“bps”) and has a three and a half year term with 5.0% amortization profile. Navios Partners used the net proceeds of the Term Loan B facility to: (i) to refinance the existing Term Loan B; and (ii) to pay fees and expenses related to the term loans. In March 2017, Navios Partners agreed to refinance $32.0 million of its existing credit facility with DVB Bank S.E. Based on the refinanced terms, the credit facility will mature in August 2020 and will bear interest at a rate of LIBOR plus 310 bps.

Acquisition of Vessels

In April 2017, Navios Partners agreed to acquire two 2007 South Korean-built Panamax vessels of approximately 75,000 dwt each, for a total purchase price of $27.0 million. The vessels are expected to be delivered to Navios Partners’ owned fleet by July 2017. In April 2017, Navios Partners agreed to acquire one 2010-built Capesize vessel of 178,132 dwt, for a purchase price of $27.5 million. The vessel is expected to be delivered to Navios Partners’ owned fleet by September 2017. In May 2017, Navios Partners agreed to acquire one 2009 Japanese-built Capesize vessel of 180,274 dwt, for a purchase price of $28.3 million. The vessel is expected to be delivered to Navios Partners’ owned fleet by August 2017. In May 2017, Navios Partners agreed to acquire one 2011 South Korean-built Capesize vessel of 179,016 dwt, for a purchase price of $31.05 million. The vessel is expected to be delivered to Navios Partners’ owned fleet by June 2017.

Three month periods ended March 31, 2017 and 2016

Time charter and voyage revenues for the three month period ended March 31, 2017 decreased by $3.2 million or 7.1% to $42.4 million, as compared to $45.6 million for the same period in 2016. The decrease was mainly attributable to the decrease in TCE to $14,671 per day for the three month period ended March 31, 2017, from $15,524 per day for the three month period ended March 31, 2016, due to the sale of the MSC Cristina in January 2017. As a result of the vessel’s sale, available days of the fleet decreased to 2,794 days for the three month period ended March 31, 2017, as compared to 2,821 days for the three month period ended March 31, 2016.

EBITDA for the three months ended March 31, 2017 was negatively affected by the accounting effect of a: (i) $1.5 million allowance for doubtful accounts; (ii) $1.3 million loss related to the disposal of the MSC Cristina and; (iii) $0.5 million equity compensation expense. Excluding these items, Adjusted EBITDA decreased by $2.2 million to $25.9 million for the three months ended March 31, 2017, as compared to $28.1 million for the same period in 2016. The decrease in Adjusted EBITDA was primarily due to a: $3.2 million decrease in revenue and $0.3 million increase in general and administrative expenses.

The above decrease was partially mitigated by a: (i) $0.4 million decrease in time charter and voyage expenses; (ii) $0.4 million decrease in management fees due to the sale of the MSC Cristina in January 2017; (iii) $0.4 million decrease in other expenses; and (iv) $0.1 million increase in other income. The reserve for estimated maintenance and replacement capital expenditures for the three month periods ended March 31, 2017 and 2016 were $3.3 million and $3.0 million, respectively (please see Reconciliation of NonGAAP Financial Measures in Exhibit 3). Navios Partners generated an operating surplus for the three month period ended March 31, 2017 of $17.6 million, compared to $18.3 million for the three month period ended March 31, 2016.

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 income for the three months ended March 31, 2017 was negatively affected by the accounting effect of a: (i) $3.2 million write-off of deferred finance fees and discount related to the refinancing of the Term Loan B Facility; (ii) $1.5 million allowance for doubtful accounts; (iii) $1.3 million loss related to the disposal of the MSC Cristina; and (iv) $0.5 million equity compensation expense.

Excluding these items, Adjusted net income for the three months ended March 31, 2017 amounted to $0.7 million compared to $0.2 million for the three months ended March 31, 2016. The increase in Adjusted net income of $0.5 million was due to a: (i) $2.0 million decrease in depreciation and amortization expense; (ii) $0.5 million decrease in interest expense and finance cost, net; and (iii) $0.5 million increase in interest income. The above increase was partially mitigated by a $2.2 million decrease in adjusted EBITDA and $0.2 million increase in direct vessel expenses, comprising of the amortization of dry dock and special survey costs.

Full Report

Source: Navios Maritime Partners L.P.

Source from : Hellenic Shipping News

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