Navios Maritime Holdings Inc., a global, vertically integrated seaborne shipping and logistics company, reported financial results for the fourth quarter and year ended December 31, 2016.

Angeliki Frangou, Chairman and Chief Executive Officer, stated “Navios Holdings is positioned to capture any market recovery. In 2016, we reduced expected 2017 breakeven by $28.0 million through a number of actions, including purchasing, at a discount, (i) about $60.0 million in face value of our unsecured bonds and (ii) $61.1 million of par outstanding Series G and H ADSs. We also reduced the average charter rate for our charter-in fleet by $2,170 per day and cash requirements for servicing commercial bank debt. Our scale provides industry leading operating efficiencies, with Opex about 37% below industry averages and G&A among the lowest of our publicly listed shipping peers.”

Angeliki Frangou continued, “We are pleased that we have removed the uncertainty regarding our iron ore port in South America. The London arbitration tribunal has ruled in favor of Navios Logistics – that the Vale 20-year port services contract remains in full force and effect. The Vale minimum guarantee, for 4 million of the 10 million tons of annual capacity, should generate about $35.0 million in annual EBITDA. Over the 20-year term of the contract, this minimum guarantee should generate about $1.0 billion in EBITDA.”

HIGHLIGHTS — RECENT DEVELOPMENTS

$27.0 million agreement to sell certain loans to Navios Maritime Partners L.P. (“Navios Partners”)

Navios Holdings has agreed to sell to Navios Partners certain loans previously funded by Navios Holdings to Navios Europe Inc. for $27.0 million. The sale proceeds would be: (i) $4.05 million in cash and (ii) approximately 13.1 million common units of Navios Partners. Following the completion of this transaction, Navios Holdings would own approximately a 30.9% interest in Navios Partners, including the general partner interest.

The aggregate loan balances sold as of February 2017 amounted to $21.4 million.

Navios Partners may require Navios Holdings, under certain conditions, to repurchase the loans after the third anniversary of the date of the sale based on the then outstanding balance of the loans.

Navios South American Logistics Inc. (“Navios Logistics”)

On December 21, 2016, a London arbitration tribunal ruled the 20-year contract (the “Contract”) between Corporacion Navios S.A. and Vale International S.A. (“Vale”) for the iron ore port under construction to be in full force and effect. After receiving written notice from Vale repudiating the Contract, Navios Logistics initiated arbitration proceedings in London pursuant to the dispute resolution provisions of the Contract. On December 21, 2016, the arbitration tribunal issued its decision that the Contract remains in full force and effect. The arbitration tribunal also determined that Navios Logistics may elect to terminate the Contract if Vale were to further repudiate or renounce the Contract and then would be entitled to damages calculated by reference to guaranteed volumes and agreed tariffs for the remaining period of the Contract.

On February 10, 2017, a New York arbitration tribunal ruled in favor of Navios Logistics on a dispute with Vale regarding the termination date of a COA contract. Vale has been ordered to pay Navios Logistics $21.5 million, compensating for all unpaid invoices, late payment of invoices, and legal fees incurred.

On December 15, 2016, Navios Logistics entered into a loan facility for an amount of $25.0 million for general corporate purposes. The loan was fully drawn in December 2016. The loan bears interest at a rate of LIBOR plus 325 basis points.

Fleet update

Navios Holdings controls a fleet of 66 operating vessels totaling 6.7 million dwt, of which 40 are owned and 26 are chartered-in under long-term charters (collectively, the “Core Fleet”). The fleet consists of 21 Capesize, 23 Panamax, 20 Ultra Handymax and two Handysize vessels and the current average age of operating fleet is 7.8 years.

As of February 6, 2017, Navios Holdings has chartered-out 19.5% of available days for 2017 (excluding index and profit sharing days). The average contracted daily charter-in rate for the long-term charter-in vessels for 2017 is $12,214.

The above figures do not include the fleet of Navios Logistics and vessels servicing contracts of affreightment.

Revenue from drybulk vessel operations for the three months ended December 31, 2016 was $56.5 million as compared to $59.3 million for the same period during 2015. The decrease in drybulk revenue was mainly attributable to a decrease in available days of our fleet by 700 days, mainly due to a decline in short-term charter-in fleet available days, partially mitigated by the increase in the Time Charter Equivalent (“TCE”) rates achieved.

Revenue from the logistics business was $43.0 million for the three months ended December 31, 2016, as compared to $52.4 million for the same period of 2015. This decrease was mainly attributable to the decrease in time charter, voyage and port terminal revenues, partially mitigated by an increase in sales of products in the liquid terminal.

Net Loss of Navios Holdings was $14.4 million and $60.6 million for the three months ended December 31, 2016 and 2015, respectively. Net Loss was affected by items described in the table above. Excluding these items, Adjusted Net Loss of Navios Holdings for the three months ended December 31, 2016 was $27.6 million as compared to $27.9 million for the same period of 2015. The $0.3 million decrease in Adjusted Net Loss was mainly due to (i) a $3.7 million decrease in depreciation and amortization; (ii) a $2.5 million decrease in share-based compensation expense; and (iii) a $0.3 million decrease in amortization for deferred drydock and special survey costs. This decrease in Adjusted Net Loss was partially mitigated by (i) a $4.5 million decrease in Adjusted EBITDA; and (ii) a decrease in income tax benefit of $1.7 million.

Net loss of Navios Logistics was $5.7 million for the three month period ended December 31, 2016, as compared to net income of $1.4 million for the same period in 2015.

Adjusted EBITDA of Navios Holdings for the three months ended December 31, 2016 decreased by $4.5 million to $29.1 million as compared to $33.6 million for the same period of 2015. The $4.5 million decrease in Adjusted EBITDA was primarily due to (i) a $12.2 million decrease in revenue; (ii) a $3.2 million decrease in equity in net earnings from affiliated companies; and (iii) a $1.9 million increase in direct vessel expenses (excluding the amortization of deferred drydock and special survey costs). This decrease was partially mitigated by (i) a $5.9 million decrease in time charter, voyage and logistics business expenses; (ii) a $3.6 million decrease in general and administrative expenses (excluding share-based compensation expenses); (iii) a $2.6 million decrease in net income attributable to the noncontrolling interest; and (iv) a $0.7 million decrease in other expense, net.

EBITDA of Navios Logistics was $7.1 million for the three month period ended December 31, 2016, as compared to $15.9 million for the same period in 2015.

Revenue from the logistics business was $220.3 million for the year ended December 31, 2016 as compared to $251.0 million for the same period of 2015. This decrease was mainly attributable to a decrease in the cabotage fleet’s operating days, a decrease in sales of products in the liquid terminal and a decrease in products transported in the dry port terminal.

Net Loss of Navios Holdings was $75.8 million and $134.1 million for the year ended December 31, 2016 and 2015, respectively. Net Loss was affected by items described in the table above. Excluding these items, Adjusted Net Loss of Navios Holdings for the year ended December 31, 2016 was $83.9 million as compared to $104.3 million for the same period of 2015. The $20.4 million decrease in Adjusted Net Loss was mainly due to (i) a decrease in depreciation and amortization of $10.3 million; (ii) an increase in Adjusted EBITDA of $10.6 million; (iii) a decrease in interest expense and finance cost, net of $2.1 million; and (iv) a decrease in share based compensation expenses of $2.3 million. This decrease in Adjusted Net Loss was partially mitigated by (i) an increase in income tax of $4.5 million; and (ii) an increase of $0.4 million in amortization for deferred drydock and special survey costs.

Net income of Navios Logistics was $10.2 million for the year ended December 31, 2016, as compared to $22.2 million for the same period in 2015.

Adjusted EBITDA of Navios Holdings for the year ended December 31, 2016 increased by $10.6 million to $144.0 million as compared to $133.4 million for the same period of 2015. The $10.6 million increase in Adjusted EBITDA was primarily due to (i) a $72.8 million decrease in time charter, voyage and logistics business expenses; (ii) a $14.7 million decrease in other expense, net; (iii) a $6.7 million decrease in general and administrative expenses (excluding share-based compensation expenses); (iv) a $4.3 million decrease in net income attributable to the noncontrolling interest; and a (v) $1.4 million decrease in direct vessel expenses (excluding the amortization of deferred drydock and special survey costs). This overall increase of $99.9 million was set off by (i) a $61.0 million decrease in revenue; and (ii) a $28.3 million decrease in equity in net earnings from affiliated companies.

EBITDA of Navios Logistics was $68.1 million for the year ended December 31, 2016, as compared to $80.5 million for the same period in 2015.

Full Report

Source: Navios Maritime Holdings