Navios Maritime Acquisition Corporation, an owner and operator of tanker vessels, reported its financial results for the first quarter ended March 31, 2020.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition stated, “While the humanitarian crises caused by the Pandemic has been heartbreaking, we have also been strengthened by the courage and compassion of the first responders, particularly the many dedicated heath care workers. At any given time, our seagoing vessels carry over 1,000 people. Keeping these people safe and these vessels moving in and out of quarantined countries, with ever-changing rules and problems, requires the immediate input of many disciplines. I am proud of the members of the Navios family as they have shown admirable resilience during this unprecedented time of uncertainty. We have taken the necessary measures to ensure safety of our people while keeping our fleet functioning.”
Angeliki Frangou continued, “I am pleased with our results for the first quarter of 2020. During the quarter, Navios Acquisition recorded revenue of $97.9 million and adjusted EBITDA of $56.2 million, representing increases of about 27% and 36%, respectively, over the first quarter of 2019. Navios Acquisition also recorded adjusted net income of $14.9 million, or $0.95 per share, for the first quarter of 2020. We declared a quarterly distribution of $0.30 per share for the first quarter of 2020.”
HIGHLIGHTS — RECENT DEVELOPMENTS
Quarterly dividend: $0.30 per share
On April 29, 2020, the Board of Directors declared a quarterly cash dividend in respect of the first quarter of 2020 of $0.30 per share of common stock, which will be paid on July 9, 2020 to stockholders of record as of June 3, 2020. 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 Acquisition’s 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.
In April 2020, Navios Acquisition entered into indicative terms sheets for contemplated sale and leaseback arrangements of $76.7 million, with unrelated third parties in order to refinance $54.0 million outstanding on the existing facilities on four product tankers. The agreements will be repaid through periods ranging from four to seven years in consecutive quarterly installments of up to $1.9 million each, with a purchase obligation of $28.7 million to be repaid on the last repayment date. The agreements bear interest at LIBOR plus a margin ranging from 390 to 410 bps per annum, depending on the vessel financed. No assurance can be provided that definitive agreements will be executed or that the financing will be consummated in whole or in part.
Liquidation of Navios Europe II Inc.
On April 21, 2020, Navios Europe II agreed with the lender to fully release the liabilities under the junior participating loan facility for $5.0 million. Navios Europe II owns seven container vessels and seven dry bulk vessels. The structure is expected to be liquidated during the second quarter of 2020 and Navios Acquisition expects to receive cash and steel value. The Company’s Board of Directors formed a Special Committee of independent and disinterested directors to consider and approve the liquidation. Vessels to be acquired will be held for sale.
Continuous Offering Program
On November 29, 2019, Navios Acquisition entered into a Continuous Offering Program Sales Agreement, pursuant to which Navios Acquisition may issue and sell from time to time through the sales agent shares of common stock having an aggregate offering price of up to $25.0 million. As of May 5, 2020, since the commencement of the program, Navios Acquisition has issued 426,628 shares of common stock and received net proceeds of $2.8 million.
As of April 30, 2020, Navios Acquisition’s fleet consisted of a total of 46 vessels, of which 13 are very large crude carriers (“VLCCs”) (including three bareboat chartered-in VLCCs expected to be delivered in each of the fourth quarter of 2020, and the first and the second quarters of 2021), 31 are product tankers and two are chemical tankers.
Currently, Navios Acquisition has contracted 83.4% of its available days on a charter-out basis for the remaining nine month period of 2020. The average base contractual net daily charter-out rate for the 70.5% of available days that are contracted on base rate and/or base rate with profit sharing arrangements is expected to be $19,578 for the remaining nine month period of 2020.
Three month periods ended March 31, 2020 and 2019
Revenue for the three month period ended March 31, 2020 increased by $20.7 million, or 26.9%, to $97.9 million, as compared to $77.1 million for the same period of 2019. The increase was mainly attributable to an: (i) increase in revenue by $8.8 million due to the acquisition of five product tankers of Navios Europe I in December 2019; and (ii) increase in market rates during the three month period ended March 31, 2020 as compared to the same period of 2019; partially mitigated by the sale of three VLCCs in 2019. Available days of the fleet increased to 3,755 days for the three month period ended March 31, 2020, as compared to 3,683 days for the three month period ended March 31, 2019, mainly as a result of the acquisition of five product tankers of Navios Europe I in December 2019; partially mitigated by the sale of three VLCCs in 2019. The time charter equivalent rate, or TCE Rate, increased to $24,442 for the three month period ended March 31, 2020, from $19,643 for the three month period ended March 31, 2019.
Time charter and voyage expenses for the three month period ended March 31, 2020 increased by $1.3 million, or 27.1%, to $6.1 million, as compared to $4.8 million for the same period of 2019. The increase was mainly attributable to a: (a) $1.2 million increase in bunkers consumption and voyage expenses related to the spot voyages incurred in the period; and (b) $0.1 million increase in brokers’ commission.
Net earnings was $0.9 million for each of the three month periods ended March 31, 2020 and 2019. Net earnings was affected by the items described in the table above. Adjusted net earnings for the three month period ended March 31, 2020 was $14.9 million as compared to $0.6 million for the same period of 2019. The increase in adjusted net earnings was mainly attributable to a: (a) $15.0 million increase in adjusted EBITDA; (b) $1.0 million decrease in interest expense and finance cost; and (c) $1.1 million decrease in depreciation and amortization; partially mitigated by a: (i) $2.2 million decrease in interest income; and (ii) $0.6 million increase in direct vessel expenses (in relation to amortization of dry dock and special survey cost).
Adjusted EBITDA affected by the items described in the table above, for the three month period ended March 31, 2020 increased by $15.0 million to $56.2 million, as compared to $41.2 million for the same period of 2019. The increase in Adjusted EBITDA was mainly due to a: (a) $20.7 million increase in revenue; and (b) $1.1 million decrease in general and administrative expenses (excluding stock-based compensation); partially mitigated by a: (i) $2.6 million increase in other (expense)/ income, net; (ii) $1.9 million increase in management fees mainly due to the acquisition of the five product tankers of Navios Europe I in December 2019 and to the amendment of the fees under the management agreement, partially mitigated by the sale of three VLCCs in 2019; (iii) $1.3 million increase in time charter and voyage expenses; (iv) $0.8 million decrease in equity in net earnings of affiliated companies; and (v) $0.2 million increase in direct vessel expenses (other than amortization of dry dock and special survey cost).