Navios Maritime Midstream posts 3Q profit

Angeliki Frangou

Navios Maritime Midstream Partners L.P., an owner and operator of tanker vessels, reported its financial results for the third quarter and the nine month period ended September 30, 2015.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Midstream stated, “We are excited to report our results for the third quarter of 2015. We had $16.2 million of EBITDA and $6.2 million of net income, or $.30 per common unit. We also announced a 2.4% increase in distributions to $.42 and a quarter cents per unit. Navios Midstream’s annualized distribution will be $1.69 per unit — offering a current yield of 11.5%.”

Angeliki Frangou continued, “The VLCC market remains healthy and the relative low price of oil bodes well for oil consumption and transportation. So far, this correlation has held — the 2015 year to date spot rate for a VLCC improved more than 100% to an average of about $56,000 compared to the average rate of $27,000 in 2014. In addition, the charter market has improved by 86%, with 56 long-term time charters fixed through mid-October compared to 30 for all of 2014.”

RECENT DEVELOPMENTS

Quarterly Cash Distribution
The Board of Directors of Navios Midstream declared a cash distribution for the third quarter of 2015 of $0.4225 per unit. This represents an increase of 2.4% from the cash distribution of $0.4125 per unit declared in the previous quarter. The cash distribution is payable on November 13, 2015 to unitholders of record as of November 11, 2015.

Profit Share
During the third quarter of 2015, Navios Midstream benefited from the VLCC spot market and recognized $2.1 million under its profit sharing arrangements. Profit share recognized for the nine months ended September 30, 2015, was $4.6 million.

Long-Term Cash Flow
Navios Midstream has entered into long-term charter-out agreements for its vessels, with a remaining average term of 5.6 years, which are expected to provide a stable base of revenue and distributable cash flow. Navios Midstream has currently contracted out 100% of its available days for 2015 and 2016, expecting to generate revenues of approximately $81.9 million and $89.6 million, respectively. The average expected daily charter-out rate for the fleet is $44,151 and $40,798 for 2015 and 2016, respectively.

Three month periods ended September 30, 2015 and 2014
Revenue for the three month period ended September 30, 2015 increased by $6.3 million to $22.5 million, as compared to $16.2 million for the same period in 2014. Time Charter Equivalent (“TCE”) was $45,432 for the three month period ended September 30, 2015 and $43,478 for the three month period ended September 30, 2014. The increase was due to profit sharing of $2.1 million recognized in the three month period ended September 30, 2015, in relation to certain charters and the acquisition of the Nave Celeste and the C. Dream in June 2015.

EBITDA increased by $4.0 million to $16.2 million for the three month period ended September 30, 2015, as compared to $12.3 million for the same period in 2014. The increase in EBITDA was due to a $6.3 million increase in revenue. The above increase was partially mitigated by a: (a) $1.7 million increase in management fees; (b) $0.5 million increase in general and administrative expenses; and (c) $0.1 million increase in time charter expenses.

The reserve for estimated maintenance and replacement capital expenditures for the three month period ended September 30, 2015 was $3.6 million (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Midstream generated an Operating Surplus for the three month period ended September 30, 2015 of $9.7 million. 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 month period ended September 30, 2015 was $6.2 million compared to a less than $0.1 million loss for the three month period ended September 30, 2014. The increase in net income was due to a: (i) $4.0 million increase in EBITDA; and (ii) $3.8 million decrease in interest expense and finance cost; partially mitigated by a :(a) $1.5 million increase in depreciation and amortization; and (b) $0.1 million increase in direct vessel expenses.

Earnings per common unit for the three month period ended September 30, 2015 was $0.30.

Nine month periods ended September 30, 2015 and 2014
Revenue for the nine month period ended September 30, 2015 increased by $10.0 million to $57.5 million, as compared to $47.5 million for the same period in 2014. Time Charter Equivalent (“TCE”) was $45,917 for the nine month period ended September 30, 2015 and $42,987 for the nine month period ended September 30, 2014. The increase was due to profit sharing of $4.6 million recognized in the nine month period ended September 30, 2015, in relation to certain charters and the acquisition of the Nave Celeste and the C. Dream in June 2015.

EBITDA increased by $7.3 million to $42.8 million for the nine month period ended September 30, 2015, as compared to $35.5 million for the same period in 2014. The increase in EBITDA was due to: (i) $10.0 million increase in revenue. The above increase was partially mitigated by a: (a) $1.7 million increase in management fees; and (b) $1.0 million increase in general and administrative expenses.

The reserve for estimated maintenance and replacement capital expenditures for the nine month period ended September 30, 2015 was $8.1 million (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Midstream generated an Operating Surplus for the nine month period ended September 30, 2015 of $29.5 million. 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 nine month period ended September 30, 2015 was negatively affected by a $1.7 million write-off of deferred finance cost in association with debt prepayment. Excluding that write-off, Adjusted net income for the nine month period ended September 30, 2015 was $19.6 million compared to a $1.4 million loss for the nine month period ended September 30, 2014. The increase in Adjusted net income was mainly due to a: (i) $7.3 million increase in EBITDA; and (ii) $15.4 million decrease in interest expense and finance cost; partially mitigated by a $1.7 million increase in depreciation and amortization.

Earnings per common unit for the nine month period ended September 30, 2015 was $0.89.

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