Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for joining us for Navios Maritime Partners' Fourth Quarter 2022 Earnings Conference Call. With us today from the company are Chairwoman and CEO; Ms. Angeliki Frangou; Chief Operating Officer, Mr. Efstratios Desypris; Chief Financial Officer; Ms. Eri Tsironi; and Vice Chairman, Mr. Petrone. Ted Instructions] [Operator

Partners. review could will the Harbor This about statement. Securities Now forward-looking the statements call Navios XXXX of contain Reform of within conference Litigation I Act Safe the Private meaning

more in Such The the forward-looking the set understood discussed Forward-looking statements are are assume Securities to management expectations the and based risks. forth be actual that any with risks which are Partners' and and filings not update such to information forward-looking fully are Navios the should Partners beliefs materially Navios of risks results statements Exchange information in and could call. facts. contained current uncertainties, does not upon obligation of conference Navios are historical statements in Commission. light herein statements. this Such from Partners' subject differ to cause

is for today's agenda The call follows. as

First, Ms. opening remarks. Frangou will offer

overview Partners' will Desypris Navios segment of Mr. data. give Next, an

Then Partners' will Next, open give Tsironi results. lastly, to And industry the Ms. will of call we'll take an Navios provide overview. questions. an financial Mr. overview Petrone

call turn over Navios and CEO, Partners' the Ms. Angeliki I'll Now Chairwoman Frangou. to

Angeliki Frangou

and with us Good I quarter pleased call. you the our fourth XXXX. year morning results joining on of am for to of all today's

we year, million. net income of reported of full the $X.X For $XXX.X revenue a billion and

million. fourth the $XXX.X and quarter, of For we income reported million revenue $XXX.X net of

full report year. pleased also to income for net per of the are We unit common $XX.XX

age three Partners about leading Navios publicly-listed with X.X is a diversified positioned. vessel XX XXXX classes Navios company, of well entered sectors Partners in asset an average shipping in years.

have vessels three each of acquired NMM segments. split years, roughly on fleets, container, Today, charter-adjusted sectors of a based in drybulk into couple basis. one last the Over equally tanker and XXX we X

competitive [younger] achieving to a fleet technologically advanced newer when a older vessels. we more portfolio In compared actively maintain technologies the have believe our are the advantage to diversification, as been to managing addition we

segment and on to acquired and be is charters, as containers take tankers [Indiscernible] the when We assets of advantage and we offset experiencing [Indiscernible] acquired XXXX. model of a in attractive market tankers. such when on opportunities good as can by such acquire allow long-term creditworthy Our us assets business cost difficulties also can

is [Indiscernible] industry all collateral campaign. consequences Banks Trading and patterns tighten our events as changing the uncertainty the such ever, terminate by forecasts. [battered] Ukrainian macro Central As are because of Recessions conflict of mobility.

So vigilant. and far, wet adapted remain global these has We dry ton conditions, trade by miles mostly to commodities. increasing for

of our on vessels We new the average period acquired in activity in are a by rate focused rationalizing selling fleet term also vessels. relative reducing old after medium acquire and

LTV We quarter at XX%, the have vessels fourth XXXX a the old end in net for of measured the of about growth.

leverage reduce We class XX% of that should our an while given to so expected market, leverage to rate the expand allowing our XX%. is charter range is appropriate the LTV this be and that would sheet happen in base. between develop. range this Also our current the should goal opportunities naturally Our in net for believe cycle, balance full

to turn Please Slide X.

an of debt excellent replacement fleet for income $XXX and significant of cash A million. had amortization our program year, we see, generating certain equity our amount used can was you As of #X, fund; flow our net to net almost facilities.

million We was $XXX long-term was in fourth X have approximately newly of Capesize vessels. million X $XXX.X the charters, also busy million and been contracted We for tankers quarter. in acquired for $XXX.X which

$XXX.X sold also We vessels XX million. for

day. breakeven activities during $X,XXX of XXXX open created Our per a low

X. Slide this down bring We on

cash in days flow available side contained. vessel of As half details by and you are XX,XXX of XX% The approximately being our type generate given target the low are XXXX present balance We can about drybulk the XX% and about exposed. in are available days. substantial days, days this Of opened the chart. market hope We the breakeven. open see, to right-hand or open of

over to Partners' Officer. the Navios turn now Efstratios Chief I'll Desypris, presentation Operating

Efstratios Desypris

diversified Thank action. in well-performing asset aim redeploy our you, basic Angeliki, countercyclicality, We creates into in believe benefit volatility asset to segments a huge segments. and good We consider from to which morning, in our principles X opportunity demonstrates base. statements. everyone. [Indiscernible] and platform dynamic We underperforming cash financial Slide the our from base assets diversified of on this

drybulk value of while XX%. In QX is vessel X%, containerships, volumes growth tanker XXXX, increased the by approximately dropped adjusted of decrease and miles sum, a net of for X%. our of As mile fleet dropped charters, XX% by by sales

[binding] capture also not asset into patient. segments allows because contracted chartering. optimize charter-adjusted returns, containerships analysis this with period we to a enter basis, our other which be chartering effectively activities, prices. Multiple segments us will on can can We the In In otherwise, attractive segments, we it charters. hedge

Accordingly, containership charter. we see days long-term long-term a XX% simply can our are risk We you high fact, This risk we As for one rates. the trading the on from charters are container on And the the available historically containers the charter other. residual not and credit manage to bottom, segment of market independently the risk. XXXX. for almost fixed our fixed enjoying chart of reduced ensure in that

fixed the XXXX. available XX% are segment, current average surpassing days levels. of charter tanker to almost In tanker We our XX-year rates

expect strong returns. We will fleet target generate our

bulk our dry rates Lastly, our are below the in averages. segment, historical

been entering averaging [Indiscernible]. short-term have patiently We charters, some

of our for As are fixed about days available XX% XXXX. a result,

see you XX, can activities. Slide fleet renewal In our

in about total of $X.X that will the are by through million. for entering Partners about we renewing our XX bank profile, billion long-term we for into vessels. XXXX. always are charters, years held a containerships, investment revenue contracted billion We benefiting maintain and delivered X.X our technologies investment fleet average vessels of generating be charters. so that newbuilding newer Navios We acquiring $XXX In duration from a related vessels into in carbon-efficient creditworthy $X.X XX fleet made more

$XXX These chartered out LRX/Aframax by of the years at total million. of X of day, subsector approximately entered average an ordering per $XX,XXX vessels X we $XXX been a for space, tanker the net rate generating have vessels for In million. revenues price

LRX ordered vessels We for also spec X $XX million. have about highly

drybulk Finally, we vessels These $XX,XXX of for XXXX. three have have duration X day. of order at delivered a per chartered being an on vessels June average years through Capesize rate almost about out are fleet, been on that of net the

We have also market. active been the S&P very in

sold years. a sold $XXX a demand consideration million. tanker have a XX strong XX million, $XX.X sold average for and an comprising tanker of corresponding we X drybulk in vessels also vessels. second-hand taking for age advantage approximately We this total market total vessels with increase of of vessels We X of Also

chartering option price Finally, scrubber-fitted the of acquiring XXXX-built million. was part for of This vessel we one Capesize of exercised our a previously $XX.X fleet. contract vessel

XX, Slide secure continue to long-term Moving for fleet. employment our we to

market. almost a fleet, Also As contracted rate Angeliki $XXX average tanker earlier, day, for Approximately our years duration $XX,XXX net revenue. of average Capesize at an strong of million million] per we have contracted in our mentioned vessels X in we generating about X newbuilding revenue. additional million in have QX, [$XXX was a for approximately contract charter opportunity created of extending $XXX

with the Almost of X.X next revenue this charters contracted group counterparties. contract comes our our with quality diverse extending years. $X.X XXXX XX% revenue earned amount total revenue of contracted of Our containerships billion. XX from in a will to through be

the highlights. Tsironi, CFO, pass our call will financial which you to the take Eri now I through

Erifili Tsironi

and not our presentation comparable included available in I results and press the The Thank months highlight in fourth good the summarized website. expanded would fleet release financial you, XX, on slide NMM through financial XXXX. ended XXXX, is to acquisitions. is I as unaudited to for like will and results the XXXX Efstratios, XXXX, are all. recently company's its quarter that in morning, briefly XX the December review information

to for XXXX. to of compared revenue revenue rate by $XX,XXX revenue rates. the for day to compared charter same the because increased in to where rules for highlights our the Total on XXXX And is Slide recognition of for on by million XXXX. earnings by have the Moving our $XX,XXX to fourth basis straightline $XXX.X equivalent $XX,XXX increased average year. quarter day $XX,XXX the of per escalating to same quarter of to same charter period compared in period requiring understated a been for $XX.X the million days [GAAP] by the last per Time some XX% Available period X% time $XXX.X XX. XX% increased million charters

period contrast, In our XX% compared rates of both drybulk our for and last terms In for performance, $XXX.X were for rates. XX% the tankers to XX% of sector and enjoyed quarter Rates containers rates $XX,XXX tankers $XX,XXX. the to to increased $XX,XXX. fourth million XXXX to by million by year. EBITDA $XXX.X to lower increased same improved doubled container

XX% and the period million the adjustment XXXX per year revenue were of QX to compared full improved slightly increased $XXX.X for GAAP required understated million XXXX same to XXXX. XXXX, income the to escalating is $X.XX $X.XX. charters for rates. compared million $XXX.X reaching for by by the revenue billion because with $XX.X XXXX Total for unit in Net

by to to compared XXXX. increased XX% days $XX,XXX for available Our $XX,XXX

X% $XX,XXX day day per $XX,XXX Fleet average to TCE rate increased to per for by compared XXXX.

$XX,XXX compared to $XX,XXX. last XXXX million million TCE In to for containers the period $XXX.X XX% by tankers for Dry the and increased $XXX.X same lower terms increased EBITDA performance, XX% to by XXXX XX% $XX,XXX. sector rates of to to XX% bulk rates year. were for compared at for

to $XXX.X to income year. $XX.X. Excluding for million. same items, XX% EBITDA by last million period one-off per XX% for the Net to $XXX.X increased by increased compared unit $XXX.X were million adjusted XXXX Earnings

to were increased $XXX.X unit one-off adjusted income Excluding $XX. Adjusted XX% items, income net by per net million.

will balance XX, key I discuss Slide data. to Turning briefly some sheet

In As other program. cash million. capitalized of and equivalents under $XXX.X and pre-delivery XXXX, newbuilding expenses paid XX, our $XXX.X million we installments December of were cash XXXX,

We vessels. also X and newbuilding million acquire to $XXX XX paid second-hand

sold cash we adding X for $XXX vessels payment net, million million debt. respective after of $XXX.X Finally, their the

$X.X XX.X%. $XXX repayments had book scheduled borrowings, debt we our portion, of billion. million period, current net the fees deferred including to at Long-term debt to During facilities. capitalization the credit amounted stood Net under

debt profile. Slide XX highlights our

debt our are available the value by leasing based Xx covered Our liabilities fleet publicly on of and valuations.

leasing funding bank and debt our diversify to continue We between structures. resources

Our with due values is target single significant year. in any maturity no profile

Slide balance sheet XX summarizes our activities. recent

of tried costs compared to some mitigate to the a to reduction have average of XX% X.X%, We margin interest rate reducing by increased XXXX. our

of current X.X%, debt, XX% case addition, a interest In has of increases. providing natural average fixed against an rate operating rate rate including lease at our liabilities

newbuilding Finally, is the average of X.XX%. our facilities margin

newbuilding already concluded In phase. terms approximately program, are our requirements documentation in XX% newbuilding of of or debt

expand and our used to that have have first to creditation we also facility. our adding export opportunity new banks We financing the resources while concluded lessors,

acquisitions. Finally, of for new million we have existing new finances ventures $XXX arranged and

achieve aiming group advance, our be we to XXXX. In of are can pioneering is whose a and values regulations by include clear emissions a have see to with certain to initiatives. environmental core strong process, XX, Turning governance and Slide this aspire the been of diversity, zero in one ESG to socially you We have ethics. first safety fleets conscious compliance. full code corporate very and Navios inclusion adopting

composed is management majority committees by that oversee board directors and Our and our independent operations. independent

leading Partners shipping company Navios Slide our highlights. is XX details a U.S. publicly-listed company.

creates individual Our volatility. resiliency diversification us and to segment mitigate enables strategy

Our trade of global investment financial strength, and make an we scale platform NMM attractive advantage should patterns. as diversification take

I'll to now Petrone through Ted the the industry take to call you section. pass

Ted Petrone

of and China demand products. ton and uncertainties of XXXX million longer pre-pandemic the IEA through in a basis Please softening Russian in 'XX. you, to growth increase rising exceeding the the per review the levels. U.S. rising economy risen in Despite demand re-opening of million on projects slightly crude Gulf or X.X tanker sharply mild both strengthen of continue before XX significantly miles of XX% in barrels per Eri. China, absence XXX.X Chinese particular, day tanker January, product world end barrels Hemisphere or the turn for in oil day, rates for rates XXXX, tankers the X% QX, Ukraine industry. on and of economic to in to oil accounted Since Thank over have Slide winter cooling back the in crude After crisis, the for XXXX for mid-November X% all exports. global Northern crude the

has rates Slide due China. to demand board shifted the XX. fundamentals products combined to Tanker across and risen Turning the improving India crude which routes with invasion Russian out exports supply to longer and to Ukraine, of and have the

ton for are and refineries crude the and to rates the and U.S., price crude on on further to expected pressure increasing products product supply support increase miles Russian inefficiencies. crude rates. tankers as caps XXXX the the began Far East growth February and could and crude product Brazil discounted as is by clean by should upward replacing into trade already Additionally, effect be This East, sanctions Atlantic December and aided ton EU new X Middle Xth. from add exported trades, Product also returning XX.X% Incremental respectively. and mile to strong with European come on Russian product. X.X%

XX Turning net fleet long-lived growth and fleet is XXXX. negative levels, the to the of of due and only fleet and of XX deliver this over will of attributed XX light at VLCCs each only The expensive is macroeconomic the lowest XXXX or since enforced vessels, be total X.X% book. over hesitance Slide assets none or X% years restrictions XX. growth is 'XX Xx concerns one for XXXX XXX of uncertainty of This in fleet XXXX. which in owners' book decline COX for XX Vessel or to XX% the in order can level age order engine order during year. in of projected the record current the X.X% Vessels partially years. and to balance technology minus XXXX, beginning to

levels, average going decades The XXX Slide product the trading to of at XXX fleet or sector projected X.X% returning concluding new IMO three rates lowest levels. tanker forward. vessels for vessels, XX.X% book of is fleet order board across of routes or pre-pandemic tanker crude regulations In tanker for only are and age record oil of XXXX. The XX. global XX with current longer earnings order strong fleet healthy years which compares combination in the product or as Turning one Product the inventories, it 'XX the favorably for demand continue of X.X% lowest on the the well provide review, tanker to growth and both for older. is tanker below and the as XXXX at the and X.X% book should net

its Please mid-May. weakened review of X,XXX XX the the high in points lockdown XXXX dollar combines Slide average trade. X,XXX were U.S. the turn economy, The the BDI a attained to of strengthened and previous for drybulk XXXX below some Ukraine by industry. drybulk the war of Chinese the year. The BDI Then X,XXX the world

be index should that However, still noted highest was it XXXX. XXXX second since the

With for QX policy a the of the COVID that with fiscal zero to the combined lower XXXX. X.X%. U.S. drybulk lowest regard and recovery the future QX, and indicated in by X,XXX first classes. time trade projected in Overall, its that of as was weakening the by the Overall, was fifth of additional Chinese was QX the the point increase stimulus since asset in dollar, markets than is to row average the quarter the year drybulk reversal market QX all highest XXXX year

factors. GHG low China's Going reopening positive U.S. forward, demand remain main long-term and intact. historically strengthening supply the and economy, order dollar tightening fundamentals regulations book, are emissions

impacted imports ore XXXX. steel demand fell in production concerns and to XX. while turn seaborne zero Please ore, to and and Slide in production X% Chinese steel policy significantly 'XX, regard estate COVID China's With real iron iron

However, COVID demand. to the focused should and of China's boost increase X.X% expected Overall, trade is XXXX. zero iron the iron wish ore stimulus fiscal real supporting estate to on global removal by ore in sector

Additionally, 'XX in year. the the iron by of half ore over first X.X% expected trade second to is of this increase half

a as imports reactivate European impact increased the seaborne by in coal-fired coal This 'XX supply to are Ukraine continues has XXXX. in imports X% global coal, European by expected European crisis coal countries led further XX% and to persist. to plants. Concerning concerns increase power

Overall, supported shifting an haul by ban EU expected towards to miles. coal estimated ton routes. growth patterns trading coal be is will seaborne XXXX the to X.X% trade longer on Russian Additionally, lead

the by expected of half XXXX. trade Additionally, 'XX the half over in coal to is increase X.X% first second of

ton The impacted to XXXX. side, seaborne longer and in food respectively this routes trade Ukraine, to ton partially exports are grain negatively driven and driven trading XXXX adjustments by increasing initially reducing the the haul pandemic. grain the and issues miles. by in Black Trade X.X% for by -- On trade be global X.X% is grain volume was by heightened Sea mitigated increase volume mile war by growth security continues expected trade

at of low X.X% age since fleet, X% Slide growth China's early freight and Concluding the combined slowing is trades for over our be Please only this resources, Net the demand of Current IMO remove all of continuing with XX. reopening, X.X% XX in to of longer XXXX haul XXXXs. years a fleet, lowest stands one to expected X.X% and historically since deliveries, support pace sanction-related of drybulk as will owners turn COX enforced the fleet compares the order about of for year. book. forward. that natural which with rules the beginning sector book at uneconomic due the 'XX favorably are XXXX tonnage order Vessels rates war going review, total newbuilding the

Slide Please XX. turn to

Focusing half faltering led which the container pre-COVID have Freight the year in demand with container back the moderated rates. as easing uncertain the today's on of accelerated Container Index continuing on of in in Shanghai port in towards to XXXX, charter congestion for above second historical 'XX conditions consumer averages. end correction QX the of Starting industry, remain slower decreasing the combined rates goods the trade, decreasing and and rates vessel fall and into rapidly macroeconomic

U.S. some zero is on purchases China's on COVID projected below As by still left graph graph XXXX but bottlenecks will slowed lower not U.S. average. easing have XXXX. goods was inventory by policy, right, sales helped goods through you in import to The X.X% port but decrease and the low, which the off which moderating Slowing well port the XXXX, in lower of goods, congestion. to AU increase ratio the have the Overall, note trade in recent long-term by X.X% slowed has exports. and finished been takeaway container imports shows

be XXXX growth while the container or of and of Turning and of age for due GDP zero years XX X.X% the to fundamentals order XXXX. stands to and for vessels XXXX. at a growth fleet the political against recent challenging XX% supply upgrade in XX.X% or TEU current In Net in to fleet About book book China's concluding expected in of and provide for Slide reversal its larger. X.X% XX.X% 'XX older. X.X% XX. is of is January XX,XXX of The challenged uncertainties, COVID XXXX, policy spot IMF's combination demand bright a economic remain sector the X.X% the review, world to and order

concludes comments. our final This call presentation. Angeliki would to like I to over now the her for turn

Angeliki Frangou

Thank formal open questions. concludes Ted. presentation. you, call We to This our the

Operator

Omar [Operator Instructions] Our comes Jefferies. first question Nokta from from

Omar Nokta

vessel about -- lot have to and is about to ask wanted you the to you very and a I approach the announced ask wanted I fleet overall on sales clearly, going portfolio. today. the dynamic a

sold of paying free are about XX cash You've ships? How much And then that that you you with that use debt million. remains? bringing the how expecting ships, down those to are thinking in of $XXX after the net associated

Angeliki Frangou

question. selling efficient good you if I mean, of by as I mean, acquiring am better rationalize also debt. and carbon a all on net our keeping the $XXX is and which less fleet This technologically correct, know, the advanced a footprint. vessel we million it's vessels have $XXX million, I basically

strategy. a is this So

materially age today years containers lower provided seen and the tankers long has older about of and X.X on than drybulk. on years, us It of a and is X industry. X that on have average an about We fleet age years working

Omar Nokta

just presentation think just Can the over again LTVs the that's see ratio you for early you a been in be? year you on somewhere And maybe about Angeliki what XX%. the aiming had the what you Could ago, I target that I And to were range. go -- equity the saying leverage you were go mid-XXs. about you'd because like in earlier mentioned, over you net

Angeliki Frangou

LTV about about LTV ratio XX%. is net equity net Our is --

we newbuildings. on already in LTV that done not we should payments do You include our realize the have

So there happening vessels that a the is as water. is natural into deleveraging come

vessels repayment year are capital approximately have naturally coming the a per million of deleveraging and into $XXX you because So water. the

and targeting we the generation cash of this that we from the vessel. generation what range with is is So there a see, on cash a because XX%, are XX%

picture, So we big well. entered XXXX

quite We containers, of X that have we and done is XXXX and believe last cash acquisitions; drybulk well a on the years, zero have in flows. one rewards X that one in major positioned reversal in the COVID basically in one seen Chinese which significant produce the we policy tankers, the can

Omar Nokta

XX% confirming, you LTV net contracts. target just the LRX think mentioned checking, is XX%. had double Efstratios, And So I to

it average? X all it of up So now, fully X been those on that for newbuildings comes contracted -- years have was

Efstratios Desypris

LRXs have exactly, the QX. concluded been X Yes, in but last

today all average rate X of are at around X them So years for $XX,XXX. contracted of an

Omar Nokta

the market fleet you stands How And or come about up one, one fleet that just as and you've just do just backlog today the seems transactions either within you we've renewal? effectively. the acquiring and more containers the divesting given really seen much there whether It's final on within in been containers for maybe How sort it today, then open more have in about are ships? been thinking ships done here. of active and about sales overall clearly, harvesting drybulk some are that And the become thinking that correct, you tankers. you centered has are it

Angeliki Frangou

the our you and 'XXs mean, I if see on chartering basically, high-teens, seen segment, we vessels. seen we around have mean, have that of I container the

have base per Page -- less than we open X, And We are see $X,XXX a on mean, have base. day. if minimal I container open you breakeven $X,XXX. basically

the in approximately a it's are rates see that we So a there high-teens still about And level of there. XX minimal.

is So the this containers. are we where on

fleet, segment our already charter on, we is, decisions And the these renew and had to made container older remember, we able -- vessels. the in as we basically, I've you are Our XXXX, fleet. position on early

our the $X.X positions have So vessels already of billion is is need we backlog part taken. in newbuilding. this have to the we already we of basically renew. And This

harvesting have we the and ordered the to existing do. had. we are And decision wanted ones already we the is we this So

Operator

remarks. questions like the over have Angeliki or we no time. closing turn I this It back to would appears further additional any at program to now for

Angeliki Frangou

Thank you. presentation. our you completes very This much. Thank

Operator

Thank gentlemen. concludes conference. you, ladies today's and This

You disconnect. may now

Navios Maritime Partners (NMM) 21 Feb 232022 Q4 Earnings call transcript