NNA - Earnings call transcript Q3 2020 | Navios Maritime Acquisition Corp

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Operator

Thank you for joining us for Navios Maritime Acquisition Corporation's Third Quarter 2020 Earnings Conference Call. With us today from the company are Chairman and CEO, Mrs. Angeliki Frangou; Vice Chairman, Mr. Ted Petrone; and Chief Financial Officer, Mr. Leonidas Korres.

conference being this reminder, a call webcast. is As visit section of access the Acquisition's Investors please webcast, www.navios-acquisition.com. To Navios the website at

the call will the in be found a presentation webcast the also in see referenced conference and the copy middle earnings today's there. page, of You'll of link

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

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

Petrone Frangou industry opening offer Mrs. Then give remarks. and First, operational an update overview. Mr. will will

financial Next, call we to Mr. results. take Navios Korres will will review Acquisition's questions. lastly, And open the

the over Angeliki? turn and Frangou. to call Angeliki I CEO, Now Navios Acquisition's Mrs. Chairman

Angeliki Frangou

the all to morning call. the joining for with you good quarter pleased and of of us Doris, you, results Thank I’m third today's XXXX. on

a of intend are containerships. present X fleet preserve We continuing and containerships. XX-vessel light Slide This has an $X.XX that a to revenue also company's representing the the determined in X sell annual X to a highlights. EBITDA $XX.X Acquisition of Acquisition unit, the declared per of XX includes from During $X.XX reduction adjusted tankers we NNA third of quarter distribution diverse million. Navios of unit. distribution $XX.X previous some and reported represent million of quarter, cash. quarterly uncertainty, Navios the per

Our X age current years. fleet average had of

million XX For reduced EBITDA months, the of $XXX.X last Navios our $XXX.X Since $XX.X we generated million. debt by million. revenue and adjusted of Acquisition XXXX,

of debt from X.Xx improved our to to net adjusted addition, In ratio X.Xx. EBITDA

on focusing our bareboat to no CapEx. fleet with charters also we renew balance continued While sheet, our

oil plus announced Additionally, of of revenue should be the Vaccination will $XXX the propel of to that transportation A all X the downside, protect strategy million Slide in years participate coronavirus. number equal the of about counter an now in we our market book fleet to but activity, been XX% VLCC have next chartering upside. and pandemic in X have economic [indiscernible] fleet, from to of time X% effectively the and allow contracted are vessels the subside. us additional years us of and VLCCs plus highlights the historically of continues is as market low. XX forms including age also for improving order age fundamentals many XX at VLCC a years. vaccines

of average XXXX. For scrapping reference years has XX.X the since age been purposes,

factors. relevant We other a have of number

million a of XXXX, of Navios recorded system, EBITDA XX% affected fill to Slide recorded capacity In million, China. X expansion refinery ton are QX key the the Atlantic Acquisition's developments. increasing by tankers adjusted compared XXXX. of in continued increase for of environmental regulation shows exports relating orders as QX $XX.X while an New propulsion uncertainty the $XX.X in company future is to demand mile VLCC

a of company in compared $XXX $XX.X the X million XXXX. an in XX% million, recorded months EBITDA in For recorded adjusted period XXXX, the increase to the X-month

by in having market with the upside downside, market participating the from strategy quality Our chartering focuses contracts on charter protecting while counterparties.

as in bank financing extent X -- These subject a bond debt the our $XXX.X with available XX.X% in of our through profit by additional million result -- fixed X expense of maturing or one XX.X and by be financing outstanding. balance million bond. in our secured XX.X% repurchased with $X.X million. we’ve million interest an saving an senior of our We notes days and $XX.X notes of our to publicly of fixed XXXX, us of tankers of secured will bank sharing million $XX.X senior outstanding we financing Year-to-date, debt chemical reduced XXXX VLCC, We For X% containerships. arrangements.

we're expanding Additionally, with fleet CapEx. our no

of October. under of construction. vessels Slide a delivery have XXXX we have [ph] in out VLCC XX first details We three X in charter been which bareboat VLCC received newbuilding lease, our and bareboat

next an we of days. $XX,XXX contracted days of XXXX profit rate from Total sharing is costs per This day. rate same out the be contracted per potential XX.X% For our at available period for to have $XX,XXX expected day. year, average charter-out excludes

capital position. We liquidity plus have Total interest days day. repayment. and shows X per open operating which cost general give of X,XXX $XX,XXX a and open administrative expense, floating our rate Slide us breakeven expense, expense includes

is XX, Our as of XXXX. cash balance September $XX.X million

Ted Our would capitalization net over is the At this to debt-to-book call Ted? I to Petrone. Mr. turn point, XX.X%. like

Ted Petrone

of Angeliki XX X morning MRX fleet VLCCs, chemical X product totaling XX consists deadweight. XX Navios X turn with of of tankers and MRXs, XX Please good diversified vessels you, Xmillion all. an average years and Acquisition Thank XX. LRXs, to fleet tankers. The age Slide consists

credit cyclicality. we market different which by assets XX. took charted from buildings Navios for $XX,XXX durations of buildings VLCC on QX the VLCC to at bareboat Europe XX following Navios per the XXXX. Maritime seek to better are II. day. of strategy charters We in for obtaining XXXX, to market use turn of containerships ships noncore XX,XXX bareboats volatility new at and scheduled liquidation The out to balance chartering but last capacity order market remaining are and bareboat of X protection opportunity October risk. The manage Acquisition June quality for Please period in TEU delivery new of QX Slide XX-year container in one our and due delivery sale. and are In is details XXXX, rate The held high X first the X a XX Slide a of counterparty delivered

fleet's available For XX% X% base days at plus a about fixed and about or of base XXXX, at rate on fixed rate a are floating profit are sharing, our rates.

Navios' rates. in continues of cash well Acquisition a significant the As ability fleet this downside any policy enjoys days protection with counterparties. creditworthy flow result to as fleet strategy, XX. XX% of market in Slide as our of with to exposed locking upside secure to Navios Please its turn participate

million has fleet $XXX in Our long-term about revenue. secured contracted

in XX. in Slide our turn Please expected optional dates. expiration current detail cases. charters Slide XX exercised continuations We fixtures, with fleet new continued periods, to our the to shows coverage and via of profit extend sharing including their some

a flow cash turn strategy Our chartering revolves opportunity capturing charters. Please while diverse also first-class developing Slide of group market to XX. around dependable from

day led projected emergency With the of Governments monetary In XXXX, the of entire globe by GDP X.X% their support the by increase for The X.X% of turn light over to per plans GDP India decline million projects IEA for XXXX, of IMF in global and demand per forecast improvement forecast. global to a IMF expansion contraction projects this, or for XX. day continuing XXXX, barrels to led million contraction place the economies. in X.X million oil global growth pandemic, barrels China, per be in barrels and day. advanced which X.X X.X% Slide fiscal economies. by The April is a is an affected unprecedented Please IEA X.X% in X.X put Asia. developing X% XXXX the

increasing half have the the of first made outlook increase a million and graph the the decline allow demand which As in XXXX, OECD above left, per an countries with average. in oil quarantine, August. on from in oil X-year starting the XXX inventories OPEC+ oversupply, in emerged to production as economic improving The quotas barrels near-term a resulted is crude combined

largest should in discipline to Assuming right, demand averaged brought China importing graph world's XX% accelerate maintains medium and Please Chinese consumer VLCCs the which oil, OPEC+ cuts, recover over continues in triggered going imports XX% Slide bookings largest is floating supply-and-demand about oil crude stated of are on the the storage, of requirements. on second collapse to a its XX. turn the result of have a fleet. Per contango Currently, short of twin XXX% shocks over The importer in is increased there million the XX well barrels futures. about draws -- a oil oil forward. XX% last future and XX% imports price year. floating durations. and day CAGR. XX.X rapid January as per oil storage increase through since stock of September, a crude as Chinese XXXX, same representing a period the over

to China If would European VLCCs, As sea, to see is additional X.Xx basis, an of capita an on X.Xx, that fleet XXX the levels, and usage X.Xx. Turn world in at China Slide per at below, can export crude in per continues the from imported consumption with the U.S. per represents is world usage level oil to crude XXX China, which expansion is in of should XXXX, future. elevated barrels production, demand, in although oil of day record reduced This U.S. barrels million continue of production, the coming XX. August. to in per day U.S. XX.X combined its XX%. down levels table a existing -- is usage by crude of XX.X you and capita all require still about QX has levels, allow assuming by goes million

Basin, XXXX, supply book. and refinery will by owners barrels X.X% require current X.X% Brazil, partially plan continues to and upcoming continue. long-lived day which have of against expansions Asia XX. deliveries XXX of X.X% of crude order China, day only XXXX in translates refinery or between capacity XXXX hesitant additional million XXXX year-end. on million X.X engine declines XX China a crude Please come to than of reduced turn decline Domestic XX% X.X% Asian in to in Please in X.X the consumption. at VLCCs and Asian years will XX.X countries decline needed, have light The turn exports, there expand million crude expansions of crude barrels of been led Additionally, offsetting deadweight China's about the mentioned XX% gap. would current representing the to order million over XXXX depend uncertainty Atlantic be least to in by per growth as Nigeria. due attributed million removals. historically to particular after Slide fleet. the increase book previously VLCCs barrels an over other additional of This net with is an has length India planned other for newbuilding exporters, XX. and per growing Venezuela, Projected X.X fleet Slide for imports and the expansions. XXXX, deadweight By all order as Atlantic September as crude of to assets fleet and capacity refinery growth imports concerns XX production more Mexico XX% for can from through XX% voyage increasing is to favorably deliveries fleet equal with to XX which Vessels technology X.X% to restrictions. fleet. are macroeconomic to age COX compares low Net oil

transportation. after per added expansions be to projecting management refinery to that upgrades. million a adding Middle the to with Slide Asia with XXXX product that the XXXX Middle products of become and over capacity lockdowns will of the QX. day an to have East million products per Slide since Asia additions, million has increased a production million per XXXX, With COVID-XX by increase with peak ballast crude China Slide per then have to XX. day, U.S product recovery exporter exports barrels day Latin will COVID-XX expected the U.S. Gasoline balanced. IEA, believe the from Please significant capacity the increases, X.X continues barrels of the fleet took commuters day by U.S. risen that XXX% X.X declined the the by and The hit XXXX, average and January regulations we to day of Chinese hold. U.S. refinery barrels exports to including XXXX. X.X of day. since exports barrels to current driving other expansions X.X Gulf, public the has underscoring to book led per X.X petroleum to to demand In export According on are Over to IEA averaged concerns particular, distancing net U.S. America above capacity further non-OECD lockdowns increase all as Far turn U.S. demand IMO Since barrels and XX% from per well X.X lead demand a retirements in Please show April water East. and million amid turn order some is has in disruptions, social XXXX barrels XXXX a refinery to all-time for ended. XX. preference and Turn has as East, million XX. quantities rising as product of in the vessels' along

number of France, at Traffic or average Slide in has been traffic September, XXXX is deliveries only X.X XXXX million X.X%. of X.X% Germany, levels Chinese X.X About million years Projected near XX. a deadweight older. tanker levels. of cities across the Switzerland parts of In For fleet less demolitions. is congestion XX for grew at or deadweight, fleet turn X.X% and of age product Please of fleet Italy. to weeks, across the pre-COVID above on growth

product of and order the years As older. are less over I'd years of financial XXX QX concludes the and ships on much which This to there for tankers XXX book X, you. Thank Total Korres than XX my Leo? call to turn results. order and were age older. October and Leonidas like XX review, those is XXXX,

Leonidas Korres

XXXX. discuss reflecting $XX.X Ted. expenses Revenue third $X.X you, utilization third million. and were day ended million a XX. QX million XX.X% and $X.X period results of charter the per XX, and $XX increased quarter from Time expenses Slide XXXX of were time Thank will from the X-month by expenses to the XXXX, turn in XX.X% financial day in for achieved $XX,XXX and XXXX. voyage improved to for million, million. were the QX September I fleet Operating $XX per $XX,XXX equivalent Please charter G&A an quarter

we XXXX $XX.X $XX.X items, of to QX ship $XX non-cash other XX.X% million gain $X increased in mortgage for from quarter, for a this the million. repurchased of During QX resulting notes Adjusted million to and EBITDA million by XXXX. gain

adjusted reported As an net loss million. a of $X.X result, we

$XX.X were financial X-month year, ended last reflecting million $XX,XXX by Operating million. the to period EBITDA per and day of of including was $XX.X were per provides $XX time $XX.X XXXX, XX, and to September income amortization $XX.X equivalent equivalents, ended revenue share. XX, net Slide increased from X expenses XX.X% XXXX XX XXXX. related $XX.X of cash $X.X balance million Turning results September in and million months and for interest sheet and a net book XXXX. G&A from increased months the $XXX.X the utilization. $X.XX Depreciation cash, for and was million. fleet XX.X% net million as million September expense XX.X% was to was billion. XX, a period restricted Adjusted the costs $XXX $XXX.X X $XX.X million, charter were million, data XXXX for finance Vessels expenses million. Cash Adjusted or value by

to $X.X assets acquired for following Navios X the as amounted $XX.X Net $XX.X held X relating containers XX, Total Fourth the to of to reducing $XX.X notes as ratio of million. million. $XXX.X. of September Liabilities million. to of relating ship XXXX, to XX improved the the its $X,XXX.X amounted Total to II, outstanding billion. amounted repurchased quarter XX.X%. was container Navios Europe of the Assets sale liquidation publicly to debt notes, capitalization million mortgage debt-to-book another September amount Acquisition vessels

be remarks. of Angeliki the dividend shareholders January XX, $X.XX to on her of we like the XXXX. for XXXX dividend XX, per Turning third declared of a would to paid And for quarter. Angeliki? call The I record Slide final to to now will pass XX, as share February

Angeliki Frangou

and our questions. open Leo. we call formal will the you, concludes to Thank presentation, This

Operator

of of first Wetherbee Chris Our Citi. Instructions] from line question [Operator comes

Chris Wetherbee

I for maturity maybe I it's the a what the really thanks. are? is key me maybe question. and Hey, question big on side guess, thoughts one. around for but the obviously out, Thanks year debt XXXX know a taking and plans it's the the

say, next a of, something this So more of wholesale opportunity refinancing is the to do away there year middle or to continue in at chip opportunity in perspective any to other interim? advance from the

Angeliki Frangou

on all Good a a base. mean, in I priority good This This [indiscernible] working is maturities. we're basically question. morning. is

Let's one thing. not forget

There We of [indiscernible] already the have of product value look tankers, value company. have that on sheet. also the the on the we is revenue is lot which let's in $XXX the balance in let's a quite all say, that our is we -- about have we have And -- [indiscernible] at on the from, contracted of NAV million value vessel significant.

something $XX that have $XX.X to very almost already the work million, refinancing of million actively. much brought [indiscernible] organize about do is I So we $XXX refinancing. we this and -- mean, million, we subject raise, we

this think has and the working and we of are we been hasn't clear. a pandemic the been very And is that working. it things will So be -- fall

been it has are very of a period moving good the transportation, we [indiscernible] lockdowns middle absolute oil in found and For the we where the of vaccine. have to a now

economic think have vaccine will growth. economic the we transportation comes -- create this in why when real rebound a XXXX book a when recovery. a real that's that support and really we and provide see oil low we have will And I order the

Chris Wetherbee

have specifically of Okay. there you maybe And a the take perspective some a the Is incremental a of debt sense debt the on can number asset level? fleet? maybe is you then us sort have. of assets, from unencumbered give What ability on assets the on to that

Angeliki Frangou

lot in think [indiscernible] information in NNA's that a have put here. a you finance all have of difference I you we [indiscernible] there's

silence So amortization. of debt -- of and our and all there's the all

you think that. this So find information I can in all

we quite XX other there, but years sold there, held value ability and containers action this. is that you there's with can of value of buy CapEx sale I you contracted [indiscernible]. charters. billion significant also $X.X to that that revenue. [indiscernible] all quite forget one is mean, [indiscernible] additional And as I in have significant no we for Importantly, is and And create shouldn't have the be mean, back.

Chris Wetherbee

Yes.

that. Okay. That's I then helpful. And maybe please appreciate a ahead. on very go -- question

Angeliki Frangou

quite value [indiscernible] with one NAV there. is the there's is significant that And tanker organized of [indiscernible]

Chris Wetherbee

Okay.

Okay. That's helpful. I appreciate color. the

On Angeliki, thoughts don't your the are floating VLCC I here. know or specifically side, storage, Ted what

reopening see quarters? course this for potential How of couple storage. do You unwind the be vessels seen potential bit we've used because have or the XX given to over you a for of next of just the second out course think a of settles the maybe over to you of months next the wave do couple going floating that that's the of of Where sort delayed kind here.

how we next think do of floating So unwinding about the storage couple the of quarters? over

Ted Petrone

are active floating I that fleet. it's the at much if in think look older you Vs storage, than average age, the the certainly

in So I to almost if see if have a they them kind the back, resurgence of mean, to market side go then contango they the the scrap. economy, already. and I reload off you they And back again. come comes consider probably them unload may you and

being So the I forward going in case. transportation part really in see either them factor either of as don't

Chris Wetherbee

Okay.

one types orders talking rate. Okay. I things propulsion last absent or the put back book? it about one of confident course of and call you demand tanker this those for fundamentals not the new short-term next the book, systems side. maybe even What market get dynamics. are about -- of you work, that you supply to come the said, think the into the people maybe what That's to the short-term may the into thinking takes need maybe like think be on I sort to over capital understand particularly standards order putting on rates. than longer think I'm and emission decade and that. then do But see ultimately order about owners helpful. And more the do What

Angeliki Frangou

think think think resolved. is is vessels I been don't because propulsion conversation the some a have And we about the which going I which [indiscernible] of propulsion not is subject will get some haul that has -- we time. really -- [indiscernible], a period. the see take real long kind And we to that I propulsion. now need will are really of the We questions to it need

and of that is with of a answered. think we coming to think dual But that about of so and take fleet, of I year. with couple together need be age is the another over fuel, and of question it X% mean, forget don't of need combination the those let's not have the I I COX until know always this uncertainty our So an -- I least is at if and XX years using and this repeat that years. emissions, it's the I propulsion, may things couple years answer. issue XX% because fleet And another XX% it, only will the three all we developed the we next you important

haul have almost haul, not I almost the and And X% think I create the on answer more this short is the the vaccine long cost fleet growth. economic the mean, additional don't not opportunity. will [indiscernible]. that really is mean, a obviously will haul, you I uncertainty dual this activity propulsion. forget question -- need Economic answered yet. And all over provide for been So and an [indiscernible] has it of let's fuel whether five the is aged XX% fundamental The XX%, and long with the answer.

good in newbuildings. may revenue a market have So an you generation increase without

Chris Wetherbee

very very helpful. Thank appreciate much. you That's time. I Okay. the

Angeliki Frangou

Thank you.

Operator

I now will call closing to for Frangou return Thank Angeliki you. the remarks.

Angeliki Frangou

complete This quarter you. thank And results. third

Operator

thank today's you, This call. conclude And ladies conference and gentlemen. does

You may disconnect. now

Navios Maritime Acquisition (NNA) 1 Dec 202020 Q3 Earnings call transcript