Navios Maritime Partners L.P., an international owner and operator of dry cargo and tanker vessels, reported its financial results for the fourth quarter and year ended December 31, 2021.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners stated, “I am pleased with the outstanding results for the fourth quarter and full year of 2021. During the fourth quarter of 2021, Navios Partners recorded revenue of $268.1 million, Adjusted EBITDA of $156.6 million and Adjusted Net Income of $121.8 million. For the full year of 2021, Navios Partners recorded revenue of $713.2 million, Adjusted EBITDA of $426.5 million, and Adjusted Net Income of $364.1 million.”
Angeliki Frangou continued, “In 2021, we reimagined the public shipping company. Today, Navios Partners is one of the leading U.S. publicly-listed shipping companies diversified across 15 vessel types in three segments, servicing more than 10 end markets. Each segment works independently to mitigate volatility from the other. While we do not expect this to work perfectly, we believe the diversity will sufficiently reduce volatility and create flexibility in our operational and financial decision-making process as we charter, purchase and sell vessels and finance our activities.”
Fleet Update
Acquisition of four 5,300 TEU Newbuilding Containerships in Q4 2021
In November 2021, Navios Partners agreed to purchase four 5,300 TEU newbuilding containerships (two plus two optional) for a purchase price of $62.8 million each. The vessels are expected to be delivered into Navios Partners’ fleet during 2024. The closing of the transaction of the two optional containerships is subject to completion of customary documentation.
Following the acquisition of the four vessels, Navios Partners has an approximately $1.0 billion investment in 18 newbuilding vessels delivering through 2024.
Sale of two 16-year old Containerships
In February 2022, Navios Partners agreed to sell the Navios Utmost and the Navios Unite, two 2006-built Containerships of 8,204 TEU each, to an unrelated third party for an aggregate sales price of $220.0 million. The sale is expected to be completed during the second half of 2022.
Following the above transactions, Navios Partners will own and operate a fleet comprised of 54 dry bulk vessels, 47 containerships and 45 tanker vessels.
Secured Long-term Time Charters for 11 Containerships
Navios Partners has secured new long-term time charters for 11 containerships which are expected to generate approximately $670 million contracted revenue.
Four 5,300 TEU newbuilding containerships, expected to be delivered in 2024, have been chartered-out for an average period of 64 months, at an average net rate of $37,282 per day.
Three 4,250 TEU containerships have been chartered-out for an average period of approximately 36 months, at an average net rate of $50,181 per day (2.7x the current average contracted net rate of $18,541).
Two 3,450 TEU containerships have been chartered-out for an average period of approximately 45 months, at an average net rate of $44,250 per day (3.2x the current average contracted net rate of $13,643).
Two 2,750 TEU containership have been chartered-out for an average period of approximately 37 months, at an average net rate of $41,805 per day (2.5x the current average contracted net rate of $16,788).
Financing Update
In December 2021, Navios Partners entered into a new sustainability linked credit facility with a commercial bank for a total amount of up to $72.7 million for the refinancing of the existing credit facilities of three tanker and two dry bulk vessels. On December 15, 2021, the full amount was drawn. The new credit facility is repayable in 19 consecutive quarterly installments of $2.2 million each together with a final balloon payment of $30.3 million to be paid on the last repayment date. The facility matures in the fourth quarter of 2026 and bears interest at LIBOR plus a margin (ranging from 270 bps to 280 bps per annum depending on the emission efficiency ratio of the vessels as defined in the loan agreement).
Cash Distribution
The Board of Directors of Navios Partners declared a cash distribution for the fourth quarter of 2021 of $0.05 per unit. The cash distribution was paid on February 11, 2022 to all unitholders of record as of February 9, 2022. 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 Partners’ 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.
Long-Term Cash Flow
Navios Partners has entered into short, medium and long-term time charter-out agreements for its vessels with a remaining average term of approximately 1.8 years. Navios Partners has currently fixed 53.2% of its available days for 2022 and 27.2% for 2023. Navios Partners expects to generate contracted revenues of approximately $697.2 million and $499.2 million for 2022 and for 2023, respectively. The average expected daily charter-out rate for the fleet is $27,957 and $37,530 for 2022 and for 2023, respectively.
Three month periods ended December 31, 2021 and 2020
Time charter and voyage revenues for the three month period ended December 31, 2021 increased by approximately $198.9 million, or 287.4%, to $268.1 million, as compared to $69.2 million for the same period in 2020. The increase in revenue was mainly attributable to the increase in the size of our fleet and to the increase in Time Charter Equivalent (“TCE”) rate. For the three month period ended December 31, 2021, TCE rate increased by 64.1% to $23,005 per day, as compared to $14,021 per day for the same period in 2020. The available days of the fleet increased by 136.5% to 11,363 days for the three month period ended December 31, 2021, as compared to 4,805 for the same period in 2020 mainly due to the mergers with Navios Containers and Navios Acquisition.
EBITDA of Navios Partners for the three month periods ended December 31, 2021 and 2020 was affected by the items described in the table above. Excluding these items, Adjusted EBITDA increased by approximately $121.1 million to $156.6 million for the three month period ended December 31, 2021, as compared to $35.5 million for the same period in 2020. The increase in Adjusted EBITDA was primarily due to a: (i) $198.9 million increase in time charter and voyage revenues; and (ii) $1.1 million increase in net loss attributable to noncontrolling interest. The above increase was partially mitigated by: (i) a $47.5 million increase in vessel operating expenses, mainly due to the increased fleet; (ii) a $13.9 million increase in time charter and voyage expenses; (iii) an $8.5 million increase in general and administrative expenses, mainly due to the increased fleet; (iv) a $6.3 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items); (v) a $2.2 million decrease in other income, net and (vi) a $0.5 million decrease in equity net earnings of affiliated companies.
Net income/(loss) attributable to Navios Partners’ unitholders for the three month periods ended December 31, 2021 and 2020 was affected by the items described in the table above. Excluding these items, Adjusted Net Income for the three month period ended December 31, 2021 amounted to $121.8 million as compared to $12.8 million for the three month period ended December 31, 2020. The increase in Adjusted Net Income was primarily due to a: (i) $121.1 million increase in Adjusted EBITDA; and (ii) $30.9 million increase in amortization of the unfavorable lease terms. The above increase was partially mitigated by a: (i) $30.9 million increase in depreciation and amortization expense; (ii) $9.6 million increase in interest expense and finance cost, net; (iii) $2.4 million increase in amortization for deferred drydock, special survey costs and other capitalized items; and (iv) $0.1 million decrease in interest income.
Years ended December 31, 2021 and 2020
Time charter and voyage revenues for the year ended December 31, 2021 increased by approximately $486.4 million, or 214.5%, to $713.2 million, as compared to $226.8 million for the same period in 2020. The increase in revenue was mainly attributable to the increase in the size of our fleet and to the increase in TCE rate. For the year ended December 31, 2021, TCE rate increased by 73.7% to $21,709 per day, as compared to $12,497 per day for the same period in 2020. The available days of the fleet increased by 82.9% to 31,884 days for the year ended December 31, 2021, as compared to 17,430 for the same period in 2020 mainly due to the NNA Merger and NMCI Merger.
EBITDA of Navios Partners for the years ended December 31, 2021 and 2020 was affected by the items described in the table above. Excluding these items, Adjusted EBITDA increased by $326.7 million to $426.5 million for the year ended December 31, 2021, as compared to $99.8 million for the same period in 2020. The increase in Adjusted EBITDA was primarily due to a: (i) $486.4 million increase in time charter and voyage revenues; and (ii) $4.9 million increase in net loss attributable to noncontrolling interest. The above increase was partially mitigated by a: (i) $97.7 million increase in vessel operating expenses, mainly due to the increased fleet; (ii) $25.1 million increase in time charter and voyage expenses; (iii) $17.5 million increase in general and administrative expenses, mainly due to the increased fleet; (iv) $13.0 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items); (v) $10.2 million increase in other expense, net; and (vi) $1.1 million decrease in equity in net earnings of affiliated companies.
Net income attributable to Navios Partners’ unitholders for the year ended December 31, 2021 was approximately $516.2 million as compared to a $68.5 million net loss for the same period in 2020. Net income/ (loss) was affected by the items described in the table above. Excluding these items, Adjusted Net Income for the year ended December 31, 2021 amounted to $364.1 million compared to $9.9 million for the year ended December 31, 2020. The increase in Adjusted Net Income was primarily due to a: (i) $326.7 million increase in Adjusted EBITDA; (ii) $108.5 million increase in the amortization of the unfavorable lease terms recorded in the year ended December 31, 2021; and (iii) $0.3 million increase in interest income. The above increase was partially mitigated by: (i) a $56.7 million increase in depreciation and amortization expense; (ii) an $18.6 million increase in interest expense and finance cost, net; and (iii) a $6.0 million increase in amortization for deferred drydock, special survey costs and other capitalized items.