Navios Partners Posts Strong Q1 Results

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Navios Maritime Partners L.P., an international owner and operator of dry cargo and tanker vessels, reported its financial results for the first quarter ended March 31, 2023.

Angeliki Frangou, Chairwoman and Chief Executive Officer of Navios Partners stated, “I am pleased with the results for the first quarter of 2023, in which we reported revenue and net income of $309.5 million and $99.2 million, respectively. We are also pleased to report net earnings per common unit of $3.22 for the first quarter of 2023.”

Angeliki Frangou continued, “We are focused on reducing our leverage rate. We are modernizing our fleet by selling old vessels and acquiring new vessels and managed our net LTV down to about 42% in the first quarter of 2023 from about 45% in the fourth quarter of 2022, measured for vessels in the water. Our stated goal is to continue to reduce leverage so that our net LTV falls within the range of 20% to 25%.”

Fleet update

  • $242.2 million gross sale proceeds from sale of 13 vessels
  • Completed the sale of eight vessels for $160.3 million in Q1 2023

During the first quarter of 2023, Navios Partners sold the Nave Cosmos, the Nave Dorado, the Nave Polaris, the Star N, the Navios Amaryllis, the Jupiter N, the Navios Prosperity I and the Nave Photon, to various unrelated third parties, for an aggregate sale price of $160.3 million.

  •     Sale of five vessels for $81.9 million expected to close in Q2 2023

On May 10, 2023, Navios Partners agreed to sell the Lumen N, a 2008-built LR1 Product Tanker vessel of 63,599 dwt, to an unrelated third party, for a sales price of $22.3 million. The sale is expected to be completed during the second quarter of 2023.

On April 12, 2023, Navios Partners agreed to sell the Navios Anthos, a 2004-built Panamax vessel of 75,798 dwt, to an unrelated third party, for a sales price of $11.0 million. The sale was completed on May 3, 2023.

On March 17, 2023, Navios Partners agreed to sell the Navios Libertas, a 2007-built Panamax vessel of 75,511 dwt, to an unrelated third party, for a sales price of $13.8 million. The sale was completed on May 4, 2023.

On February 6, 2023, Navios Partners agreed to sell the Serenitas N, a 2011-built Ultra-Handymax vessel of 56,644 dwt, to an unrelated third party, for a sales price of $12.3 million. The sale was completed on May 16, 2023.

On January 3, 2023, Navios Partners agreed to sell the Aurora N, a 2008-built LR1 Product Tanker vessel of 63,495 dwt, to an unrelated third party, for a sales price of $22.5 million. The sale was completed on April 5, 2023.

  • Delivery of two Newbuilding Capesize vessels

On April 27, 2023 and on March 29, 2023, Navios Partners took delivery of two 2023-built Capesize vessels, the Navios Sakura of 182,169 dwt and the Navios Altair of 182,115 dwt, respectively.

  • $161 million revenue contracted YTD – $3.4 billion total contracted revenue

Navios Partners entered into long-term charters which are expected to generate revenue of $161 million.

    One LR1 Product Tanker vessel has been chartered-out for an average period of 2.3 years, at an average rate of $32,094 net per day.

    One MR2 Product Tanker vessel has been chartered-out for an average period of 3.0 years, at an average rate of $23,196 net per day.

    Six 4,250 TEU vessels have been chartered-out for an average period of 1.8 years, at an average rate of $21,955 net per day.

    One 3,450 TEU vessel has been chartered-out for an average period of 2.9 years, at an average rate of $18,818 net per day.

Including the above long-term charters, Navios Partners currently has $3.4 billion contracted revenue through 2036.

Financing update

In May 2023, Navios Partners completed a $178.0 million sale and leaseback transaction with an unrelated third party, in order to finance the acquisition of two newbuilding 5,300 TEU containerships and two newbuilding Aframax/LR2 tanker vessels. The sale and leaseback transaction: (i) matures ten years after the drawdown date; and (ii) bears interest at Term Secured Overnight Financing Rate (“SOFR”) plus 210 bps per annum.

In May 2023, Navios Partners entered into a new credit facility with a commercial bank for up to $30.0 million in order to refinance existing indebtedness of three product tanker vessels. The credit facility: (i) matures five years after the drawdown date; and (ii) bears interest at Term SOFR plus 100 bps per annum for any part of the loan (up to 70%) secured by cash collateral and 225 bps per annum for the remaining loan amount.

In April 2023, Navios Partners entered into an export credit agency-backed facility for a total amount of up to $165.6 million in order to finance the acquisition of two newbuilding 7,700 TEU containerships. The facility: (i) matures 12 years after the drawdown date; and (ii) bears interest at SOFR plus 150 bps per annum.

In April 2023, Navios Partners entered into a new credit facility with a commercial bank for up to $65.0 million in order to refinance existing indebtedness of five product tanker vessels. The credit facility: (i) matures five years after the drawdown date; and (ii) bears interest at SOFR plus 200 bps per annum.

Cash distribution

The Board of Directors of Navios Partners declared a cash distribution for the first quarter of 2023 of $0.05 per unit. The cash distribution was paid on May 12, 2023 to unitholders of record as of May 9, 2023. 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.

Operating Highlights

Navios Partners owns and operates a fleet comprised of 81 drybulk vessels, 47 containerships and 45 tanker vessels, including one newbuilding Capesize chartered-in vessel under bareboat contract expected to be delivered in the second quarter of 2023, six newbuilding Aframax/LR2 vessels expected to be delivered in 2024 and the first half of 2025, two newbuilding MR2 Product Tanker chartered-in vessels under bareboat contracts expected to be delivered in the second half of 2025 and the first half of 2026 and 12 newbuilding Containerships expected to be delivered by the second half of 2023, in 2024 and by the first half of 2025. The fleet excludes one LR1 Product Tanker vessel agreed to be sold.

Navios Partners has entered into short, medium and long-term time charter-out, bareboat-out and freight agreements for its vessels with a remaining average term of 1.9 years. Navios Partners has currently fixed 63.1% and 41.4% of its available days for the remaining nine months of 2023 and for 2024, respectively. Navios Partners expects to generate contracted revenue of $732.4 million and $720.3 million for the remaining nine months of 2023 and for 2024, respectively. The average expected daily charter-out rate for the fleet is $27,688 and $30,335 for the remaining nine months of 2023 and for 2024, respectively.

EARNINGS HIGHLIGHTS

For the following results and the selected financial data presented herein, Navios Partners has compiled condensed consolidated statements of operations for the three month periods ended March 31, 2023 and 2022. The quarterly information was derived from the unaudited condensed consolidated financial statements for the respective periods. EBITDA, Adjusted EBITDA, Adjusted Earnings per Common Unit basic and diluted and Adjusted Net Income are non-GAAP financial measures and should not be used in isolation or substitution for Navios Partners’ results calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).

Three month periods ended March 31, 2023 and 2022

Time charter and voyage revenues for the three month period ended March 31, 2023 increased by $72.9 million, or 30.8%, to $309.5 million, as compared to $236.6 million for the same period in 2022. 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 periods ended March 31, 2023 and March 31, 2022, the time charter and voyage revenues were affected by $13.0 million and $4.8 million, respectively, relating to the straight line effect of the containerships and tankers charters with de-escalating rates. The TCE rate increased by 2.1% to $20,811 per day, as compared to $20,386 per day for the same period in 2022. The available days of the fleet increased by 23.9% to 13,908 days for the three month period ended March 31, 2023, as compared to 11,228 days for the same period in 2022 mainly due to the acquisition of the 36-vessel drybulk fleet from Navios Maritime Holdings Inc. and the deliveries of newbuilding and secondhand vessels, partially mitigated by the sale of vessels.

EBITDA of Navios Partners for the three month periods ended March 31, 2023 and 2022 was affected by the items described in the table above. Excluding these items, Adjusted EBITDA increased by $29.3 million to $155.4 million for the three month period ended March 31, 2023, as compared to $126.1 million for the same period in 2022. The increase in Adjusted EBITDA was primarily due to a $72.9 million increase in time charter and voyage revenues, partially mitigated by a: (i) $22.7 million increase in time charter and voyage expenses, mainly due to the increase in (a) bunker expenses arising from the increased number of freight voyages in the first quarter of 2023 and (b) bareboat and charter-in hire expense of the tanker and drybulk fleet; (ii) $10.0 million increase in vessel operating expenses in accordance with our management agreements, mainly due to the expansion of our fleet; (iii) $5.6 million increase in general and administrative expenses in accordance with our administrative services agreement, mainly due to the expansion of our fleet; (iv) $5.1 million increase in other expenses, net; and (v) $0.2 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items).

Net Income for the three month periods ended March 31, 2023 and 2022 was affected by the items described in the table above. Excluding these items, Adjusted Net Income decreased by $20.0 million to $65.7 million for the three month period ended March 31, 2023, as compared to $85.7 million for the same period in 2022. The decrease in Adjusted Net Income was primarily due to: (i) a $22.3 million increase in interest expense and finance cost, net; (ii) a $14.2 million decrease in the amortization of the unfavorable lease terms; (iii) an $11.3 million increase in depreciation and amortization expense; and (iv) a $3.1 million increase in amortization of deferred drydock, special survey costs and other capitalized items, partially mitigated by a: (i) $29.3 million increase in Adjusted EBITDA; and (ii) $1.6 million increase in interest income.

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