Navios Maritime Acquisition Corporation, an owner and operator of tanker vessels, reported its financial results for the first quarter ended March 31, 2017.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition stated, “For the first quarter of 2017, Navios Acquisition reported EBITDA of $37.4 million and Net income of $5.6 million. We also declared a dividend of $0.05 per share for the quarter, resulting in a dividend yield of approximately 12.0%.”
Angeliki Frangou continued, “Our business model has two distinct characteristics. First, we seek long-term charters when available. This provides above market earnings during times in which period employment is unavailable and the spot rates are contracting. For the first quarter of 2017, Navios Acquisition’s average charter rate for its fleet was about 42% higher than the spot market average for this fleet. Second, we enjoy economies of scale through our relationship with Navios Holdings. Navios Acquisition’s operating costs were approximately 17% lower than the average of its listed peers. These efficiencies created estimated savings of $22.8 million in 2016.”
HIGHLIGHTS — RECENT DEVELOPMENTS
Dividend of $0.05 per share of common stock
On May 12, 2017, the Board of Directors of Navios Acquisition declared a quarterly cash dividend for the first quarter of 2017 of $0.05 per share of common stock. The dividend is payable on June 14, 2017 to stockholders of record as of June 7, 2017 and provides a current annualized yield of 12.1%. 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.
Time Charter Coverage and commitments
Navios Acquisition currently owns 36 vessels, of which eight are VLCCs, 26 are product tankers and two are chemical tankers.
As of May 16, 2017, Navios Acquisition had contracted 90.4% of its available days on a charter-out basis for 2017, expecting to generate revenues of approximately $183.1 million. The average contractual daily charter-out rate for the fleet is expected to be $17,833.
In May 2017, Navios Acquisition agreed to enter into a loan facility for an amount of up to $24.0 million with a commercial bank in order to refinance the existing facility of its two chemical tankers which matures in the first quarter of 2018. The facility will be repayable in 17 equal consecutive quarterly installments of $0.6 million each, with a balloon payment on the last repayment date. The facility matures in September 2021 and bears interest at LIBOR plus 300 bps per annum.
For the following results and the selected financial data presented herein, Navios Acquisition has compiled its consolidated statements of income for the three months ended March 31, 2017 and 2016. The quarterly information for 2017 and 2016 was derived from the unaudited condensed consolidated financial statements for the respective periods.
March 31, 2017
March 31, 2016
|(Expressed in thousands of U.S. dollars)||(unaudited)||(unaudited)|
|Earnings per share (basic)||$||0.04||$||0.15|
EBITDA is a non-GAAP financial measure and should not be used in isolation or substitution for Navios Acquisition’s results (see Exhibit II for reconciliation of EBITDA).
Revenue for the three month period ended March 31, 2017 decreased by $15.9 million or 19.8% to $64.5 million, as compared to $80.4 million for the same period in 2016. The decrease was mainly attributable to the: (i) decrease in the market rates during the first quarter ended March 31, 2017, as compared to the same period in 2016; and (ii) decrease in revenue by $3.8 million due to the sale of one MR2 product tanker in January 2016 and two chemical tankers in each of October and November 2016. Available days of the fleet decreased to 3,207 days for the three month period ended March 31, 2017, as compared to 3,477 days for the three month period ended March 31, 2016. The TCE Rate decreased to $19,475 for the three month period ended March 31, 2017, from $22,722 for the three month period ended March 31, 2016.
EBITDA for the three month period ended March 31, 2017 decreased by approximately $20.4 million to $37.4 million from $57.8 million in the same period of 2016. The decrease in EBITDA was mainly due to a: (a) $15.9 million decrease in revenue; (b) $2.3 million gain from sale of vessel incurred in the three month period ended March 31, 2016; (c) $2.1 million decrease in equity in net earnings of affiliated companies; and (d) $1.8 million increase in time charter expenses; partially mitigated by a (i) $0.8 million decrease in management fees, mainly due to the sale of one MR2 product tanker in January 2016 and two chemical tankers in October and November 2016, as discussed above; (ii) $0.8 million decrease in general and administrative expenses; and (iii) $0.2 million decrease in other expense, net.
Net income for the three month period ended March 31, 2017, decreased by approximately $18.2 million to $5.6 million compared to $23.8 million, for the same period in 2016. The decrease was due to a: (a) $20.4 million decrease in EBITDA; and (b) $0.2 million increase in direct vessel expenses; partially mitigated by a: (i) $1.5 million increase in interest income; (ii) $0.7 million decrease in depreciation and amortization; and (iii) $0.3 million decrease in interest expense and finance cost.