Navios Maritime Containers L.P. (“Navios Containers” or the
“Company”) (NASDAQ: NMCI), a growth vehicle dedicated to the
container sector of the maritime industry, today reported its
financial results for the first quarter ended March 31, 2020.
Angeliki Frangou, Chairman and Chief Executive
Officer, stated, "While the humanitarian crises caused by the
pandemic has been heart breaking, we have also been strengthened by
the courage and compassion of the first responders, particularly
the many dedicated health care workers. At any given time, our
vessels carry about 1,000 people. Keeping these people safe and
these vessels moving in and out of quarantined countries, with
ever-changing rules and challenges, requires the immediate input of
many disciplines. I am proud of the members of the Navios family as
they have shown admirable resilience during this unprecedented time
of uncertainty, and we have taken the necessary measures to ensure
the safety of our people while keeping our fleet functioning."
Angeliki Frangou continued, "I am pleased with
our results for the first quarter of 2020. For the first quarter,
Navios Containers reported $17.8 million of EBITDA, $5.0 million of
Net Income and $0.14 of Net Earnings per common unit. We entered
2020 relatively well positioned. However, economic activity and
global trade in the first half of 2020 is being significantly
impacted by the pandemic. The duration of the downturn and timing
of the recovery remain uncertain given the unique nature of the
pandemic. However, the IMF projects a 5.8% increase in global GDP
in 2021 after a 3% decrease in 2020."
HIGHLIGHTS -- RECENT
DEVELOPMENTS
New sale and leaseback
transaction
On March 11, 2020, the Company completed a
$119.1 million sale and leaseback transaction with an unrelated
third party to refinance the existing credit facilities of four
containerships. The sale and leaseback agreement for: (i) the
Navios Unison and the Navios Constellation matures in March 2027
and bears interest at LIBOR plus 310 bps per annum; and (ii) the
Navios Unite and the Navios Utmost matures in March 2025 and bears
interest at LIBOR plus 335 bps per annum.
Following the closing of the sale and leaseback
transaction, the Company has no significant debt maturities until
2023.
Fleet employment
Navios Containers owns a fleet of 29 vessels,
totaling 142,821 TEU. The current average age of the fleet is 11.8
years (See Exhibit II). As of May 4, 2020, Navios Containers has
chartered-out 44.0% and 10.1% of its available days for the
remaining nine months of 2020 and for the full year 2021,
respectively (including index-linked charters). Excluding
index-linked charters, Navios Containers has chartered-out 39.2%
and 8.2% of its available days for the remaining nine months of
2020 and for the full year 2021, respectively, which are expected
to generate $48.9 million and $22.7 million in revenue,
respectively. The average expected daily contracted charter-out
rate for the fleet is $15,632, net and $26,189, net for the
remaining nine months of 2020 and for the full year 2021,
respectively (excluding index-linked charters), and the total
expected available days for the remaining nine months of 2020 and
for the full year 2021, are 7,975 and 10,585 days,
respectively.
Earnings Highlights
EBITDA is a non-U.S. GAAP financial measure and
should not be used in isolation or as a substitute for Navios
Containers’ results calculated in accordance with U.S. generally
accepted accounting principles (“U.S. GAAP”).
See Exhibit I under the heading, “Disclosure of
Non-GAAP Financial Measures,” for a discussion of EBITDA of Navios
Containers and a reconciliation of such measure to the most
comparable measures calculated under U.S. GAAP.
First Quarter 2020 and 2019
Results
The first quarter of 2020 and 2019 information
presented below was derived from the unaudited condensed
consolidated financial statements for the respective periods.
|
|
Three Month Period Ended March 31,
2020 |
|
Three Month Period EndedMarch 31,
2019 |
(in thousands of U.S. dollars, except per unit data) |
|
(unaudited) |
|
(unaudited) |
Revenue |
|
$ |
40,261 |
|
|
$ |
31,832 |
|
|
Net Income |
|
$ |
5,009 |
|
|
$ |
53 |
|
|
Net cash used in operating activities |
|
$ |
(6,995 |
) |
|
$ |
(37 |
) |
|
EBITDA |
|
$ |
17,831 |
|
|
$ |
12,048 |
|
|
Net Earnings per common unit (basic and diluted) |
|
$ |
0.14 |
|
|
$ |
0.00 |
|
|
Revenue for the three months ended March 31,
2020 was $40.3 million, as compared to $31.8 million for the same
period during 2019. The increase of $8.5 million was mainly due to
the increase in the number of available days from 2,471 for the
three months ended March 31, 2019, to 2,639 for the three months
ended March 31, 2020. TCE per day increased from $12,217 for the
three months ended March 31, 2019 to $14,271 for the same period
during 2020.
Net Income for the three months ended March 31,
2020 was $5.0 million compared to $0.1 million for the same period
in 2019. The $4.9 million increase in Net Income was mainly due to
a $5.8 million increase in EBITDA. This overall increase of $5.8
million was partially offset by a: (i) $0.5 million increase in
interest expense and finance cost, net; and (ii) $0.4 million
increase in amortization of deferred drydock and special survey
costs.
EBITDA for the three months ended March 31, 2020
increased by $5.8 million to $17.8 million as compared to $12.0
million for the same period in 2019. The increase in EBITDA was
primarily due to a $8.5 million increase in revenue. This overall
increase of $8.5 million was partially offset by a: (i) $1.5
million increase in management fees mainly due to the increase of
the available days from 2,471 days for the three months ended March
31, 2019, to 2,639 days for the three months ended March 31, 2020;
(ii) $1.0 million increase in time charter and voyage expenses; and
(iii) $0.2 million increase in other expense, net.
Fleet Summary Data:
The following table reflects certain key
indicators indicative of the performance of the Navios Containers'
operations and its fleet performance for the three months ended
March 31, 2020 and 2019.
|
|
Three Month |
|
Three Month |
|
|
Period
Ended |
|
Period
Ended |
|
|
March 31, |
|
March 31, |
|
|
2020 |
|
2019 |
|
|
(unaudited) |
|
(unaudited) |
Available Days (1) |
|
|
2,639 |
|
|
|
2,471 |
|
Operating Days (2) |
|
|
2,628 |
|
|
|
2,463 |
|
Fleet Utilization (3) |
|
|
99.6 |
% |
|
|
99.7 |
% |
Vessels operating at period
end |
|
|
29 |
|
|
|
28 |
|
TCE (4) |
|
$ |
14,271 |
|
|
$ |
12,217 |
|
(1 |
) |
Available days for the fleet are total calendar days the vessels
were in Navios Containers' possession for the relevant period after
subtracting off-hire days associated with scheduled repairs or
repairs under guarantee, vessel upgrades, drydocking or special
surveys. The shipping industry uses available days to measure the
number of days in a relevant period during which vessels should be
capable of generating revenues. |
(2 |
) |
Operating days are the number of available days in the relevant
period less the aggregate number of days that the vessels are
off-hire due to any reason, including unforeseen circumstances. The
shipping industry uses operating days to measure the aggregate
number of days in a relevant period during which vessels actually
generate revenues. |
(3 |
) |
Fleet utilization is the percentage of time that Navios Containers'
vessels were available for generating revenue, and is determined by
dividing the number of operating days during a relevant period by
the number of available days during that period. The shipping
industry uses fleet utilization to measure a company's efficiency
in finding suitable employment for its vessels. |
(4 |
) |
TCE is defined as voyage and time charter revenues less voyage
expenses during a relevant period divided by the number of
available days during the period. |
Conference Call:
As previously announced, Navios Containers will
host a conference call on Thursday, May 7, 2020, at 8:30 am ET,
during which time Navios Containers’ senior management will provide
highlights and commentary on earnings results for the first quarter
ended March 31, 2020.
A supplemental slide presentation will be
available on the Navios Containers website at
www.navios-containers.com under the "Investors" section by 8:00 am
ET on the day of the call.
Conference Call details:Call Date/Time:
Thursday, May 7, 2020 at 8:30 am ETCall Title: Navios Containers Q1
2020 Financial Results Conference CallUS Dial In:
+1.866.703.4207International Dial In: +1.636.692.6440Conference ID:
389 6344
The conference call replay will be available two
hours after the live call and remain available for one week at the
following numbers:
US Replay Dial In: +1.800.585.8367International
Replay Dial In: +1.404.537.3406Conference ID: 389 6344
This call will be simultaneously Webcast. The
Webcast will be available on the Navios Containers’ website,
www.navios-containers.com under the "Investors" section. The
Webcast will be archived and available at the same Web address for
two weeks following the call.
About Navios Maritime Containers
L.P.
Navios Maritime Containers L.P. is a
growth-oriented international owner and operator of containerships.
For more information, please visit our website at
www.navios-containers.com.
Forward Looking Statements - Safe
Harbor
This press release contains forward-looking
statements (as defined in Section 27A of the Securities Act of
1933, asamended, and Section 21E of the Securities Exchange Act of
1934, as amended) concerning future events, including future
contracted revenues and rates, EBITDA, future available days,
future financial performance of the fleet, timing of vessel
deliveries, vessel acquisitions, financing activities, and Navios
Containers' growth strategy and measures to implement such
strategy, including future vessel acquisitions and the ability to
secure or refinance related financing, the further growth of our
containership fleet, and entering into further time charters. Words
such as “may,” “expects,” “intends,” “plans,” “believes,”
“anticipates,” “hopes,” “estimates,” and variations of such words
and similar expressions are intended to identify forward-looking
statements. These forward-looking statements are based on the
information available to, and the expectations and assumptions
deemed reasonable by Navios Containers at the time these statements
were made. Although Navios Containers believes that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to have been correct. These statements involve risks and are
based upon a number of assumptions and estimates that are
inherently subject to significant uncertainties and contingencies,
many of which are beyond the control of Navios Containers. Actual
results may differ materially from those expressed or implied by
such forward-looking statements. Factors that could cause actual
results to differ materially include, but are not limited to, risks
relating to: global and regional economic and political conditions
including the impact of the COVID-19 pandemic and efforts
throughout the world to contain its spread, including effects on
global economic activity, demand for seaborne transportation of the
products we ship, the ability and willingness of charterers to
fulfill their obligations to us and prevailing charter rates,
shipyards performing scrubber installations, drydocking and
repairs, changing vessel crews and availability of financing;
potential disruption of shipping routes due to accidents, diseases,
pandemics, political events, piracy or acts by terrorists,
including the impact of the COVID-19 pandemic and the
ongoing efforts throughout the world to contain it; the favorable
timing for acquisitions and chartering opportunities in the
container shipping sector and Navios Containers’ ability to take
advantage of such opportunities; the value of container shipping
vessels; Navios Containers’ ability to identify container shipping
vessels for acquisition at attractive prices, if at all, including
the availability of distressed acquisition opportunities in the
container shipping industry; Navios Containers’ ability to execute
on a low-cost operating structure; Navios Containers’ ability to
achieve a return on investment for and to pay cash distributions to
our unitholders or make common unit repurchases from our
unitholders; any advantages resulting from Navios Containers’
strategic focus on intermediate-size containerships; Navios
Containers’ ability to leverage the scale, experience, reputation
and relationships of the Navios Group, consisting of Navios
Maritime Holdings Inc., Navios Maritime Acquisition Corporation,
Navios Maritime Partners L.P., and any one or more of their
subsidiaries and affiliates. Navios Containers’ future financial
condition or results of operations and its future revenues and
expenses, including its estimated adjusted cash flow; the loss of
any customer or charter or vessel; the aging of Navios Containers’
vessels and resultant increases in operation and drydocking costs;
Navios Containers’ ability to maintain long-term relationships with
major liner companies; Navios Containers’ ability to access debt,
credit and equity markets; potential liability from litigation and
our vessel operations, including discharge of pollutants; Navios
Containers’ and the Navios Group’s performance in safety,
environmental and regulatory matters; increases in costs and
expenses, including but not limited to, crew wages, insurance,
technical maintenance costs, spares, stores and supplies, charter
brokerage commissions on gross voyage revenues and general and
administrative expenses; the changes to the regulatory requirements
applicable to the shipping and container transportation industry,
including, without limitation, stricter requirements adopted by
international organizations, such as the International Maritime
Organization and the European Union, or by individual countries or
charterers and actions taken by regulatory authorities and
governing such areas as safety and environmental compliance; the
anticipated taxation of Navios Containers and its unitholders; and
the effects of increasing emphasis on environmental and safety
concerns by customers, governments and others, as well as changes
in maritime regulations and standards. Navios Containers expressly
disclaims any obligations or undertaking to release publicly any
updates or revisions to any forward-looking statements contained
herein to reflect any change in Navios Containers' expectations
with respect thereto or any change in events, conditions or
circumstances on which any statement is based. Navios Containers
makes no prediction or statement about the performance of its
common units.
Contact:
Navios Maritime Containers
L.P.+1.212.906.8648investors@navios-containers.com
EXHIBIT I
NAVIOS MARITIME CONTAINERS L.P.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(Expressed in thousands of U.S. dollars - except for
unit and per unit data)
|
Three Month Period
Ended March 31,
2020 |
|
Three Month Period
EndedMarch 31,
2019 |
|
|
(unaudited) |
|
(unaudited) |
|
Revenue |
|
$ |
40,261 |
|
|
|
$ |
31,832 |
|
|
Time charter and voyage
expenses |
|
|
(2,601 |
) |
|
|
|
(1,647 |
) |
|
Direct vessel expenses |
|
|
(1,199 |
) |
|
|
|
(788 |
) |
|
Management fees |
|
|
(17,192 |
) |
|
|
|
(15,723 |
) |
|
General and administrative
expenses |
|
|
(2,543 |
) |
|
|
|
(2,494 |
) |
|
Depreciation and
amortization |
|
|
(7,058 |
) |
|
|
|
(7,109 |
) |
|
Interest expense and finance
cost, net |
|
|
(4,564 |
) |
|
|
|
(4,098 |
) |
|
Other (expense)/ income,
net |
|
|
(95 |
) |
|
|
|
80 |
|
|
Net
income |
|
$ |
5,009 |
|
|
|
$ |
53 |
|
|
Net earnings per unit, basic
and diluted |
|
$ |
0.14 |
|
|
|
$ |
0.00 |
|
|
Weighted average number of units, basic and
diluted |
|
|
34,603,100 |
|
|
|
|
34,603,100 |
|
|
NAVIOS MARITIME CONTAINERS
L.P.CONDENSED CONSOLIDATED BALANCE
SHEETS(Expressed in thousands of U.S. dollars – except for
unit data)
|
|
March 31, 2020 |
|
|
December 31, 2019 |
|
|
(unaudited) |
|
|
(unaudited) |
ASSETS |
|
|
|
|
|
Cash and cash equivalents,
including restricted cash |
$ |
20,623 |
|
$ |
18,109 |
Vessels and deferred dry dock and
special survey costs, net |
|
411,614 |
|
|
415,143 |
Other assets (including current
and non-current) |
|
27,243 |
|
|
20,762 |
Intangible assets |
|
1,801 |
|
|
6,288 |
Total
assets |
$ |
461,281 |
|
$ |
460,302 |
LIABILITIES AND PARTNERS’
CAPITAL |
|
|
|
|
|
Other current liabilities |
$ |
9,619 |
|
$ |
24,664 |
Current portion of long term
borrowings, net |
|
32,565 |
|
|
46,733 |
Long-term borrowings, net of
current portion |
|
224,108 |
|
|
198,925 |
Total Partners’ capital |
|
194,989 |
|
|
189,980 |
Total liabilities and
Partners’ capital |
$ |
461,281 |
|
$ |
460,302 |
Disclosure of Non-GAAP Financial Measures
EBITDA is a “non-U.S. GAAP financial measure”
and should not be used in isolation or considered a substitute for
net income/(loss), cash flow from operating activities and other
operations or cash flow statement data prepared in accordance with
generally accepted accounting principles in the United States.
EBITDA represents net income/(loss) attributable
to Navios Containers’ common unitholders before interest and
finance costs, before depreciation and amortization. Navios
Containers uses EBITDA as a liquidity measure and reconciles EBITDA
to net cash provided by/(used in) operating activities, the most
comparable U.S. GAAP liquidity measure. EBITDA is calculated as
follows: net cash provided by/(used in) operating activities adding
back, when applicable and as the case may be, the effect of: (i)
net increase/(decrease) in operating assets; (ii) net
(increase)/decrease in operating liabilities; (iii) net interest
cost; (iv) deferred finance charges; and (v) payments for drydock
and special survey costs. Navios Containers believes that EBITDA is
a basis upon which liquidity can be assessed and represents useful
information to investors regarding Navios Containers’ ability to
service and/or incur indebtedness, pay capital expenditures, meet
working capital requirements and pay dividends. Navios Containers
also believes that EBITDA is used: (i) by prospective and current
lessors as well as potential lenders to evaluate potential
transactions; (ii) to evaluate and price potential acquisition
candidates; and (iii) by securities analysts, investors and other
interested parties in the evaluation of companies in our
industry.
EBITDA is presented to provide additional
information with respect to the ability of Navios Containers to
satisfy its respective obligations, including debt service, capital
expenditures, working capital requirements and pay dividends. While
EBITDA is frequently used as a measure of operating results and the
ability to meet debt service requirements, the definition of EBITDA
used here may not be comparable to that used by other companies due
to differences in methods of calculation.
EBITDA has limitations as an analytical tool,
and therefore, should not be considered in isolation or as a
substitute for the analysis of Navios Containers’ results as
reported under U.S. GAAP. Some of these limitations are: (i) EBITDA
does not reflect changes in, or cash requirements for, working
capital needs; (ii) EBITDA does not reflect the amounts necessary
to service interest or principal payments on our debt and other
financing arrangements; and (iii) although depreciation and
amortization are non-cash charges, the assets being depreciated and
amortized may have to be replaced in the future. EBITDA does not
reflect any cash requirements for such capital expenditures.
Because of these limitations, among others, EBITDA should not be
considered as a principal indicator of Navios Containers’
performance. Furthermore, our calculation of EBITDA may not be
comparable to that reported by other companies due to differences
in methods of calculation.
Reconciliation of EBITDA to Cash from Operations
|
Three MonthPeriod
EndedMarch 31,
2020 |
|
|
Three MonthPeriod
EndedMarch 31,
2019 |
|
|
(unaudited) |
|
|
|
(unaudited) |
Expressed in thousands of U.S.
dollars |
|
|
|
|
|
|
Net cash used in operating
activities |
$ |
(6,995 |
) |
|
|
$ |
(37 |
) |
Net increase in operating assets |
|
6,482 |
|
|
|
|
607 |
|
Net decrease in operating liabilities |
|
14,140 |
|
|
|
|
5,277 |
|
Net interest and finance cost |
|
4,564 |
|
|
|
|
4,098 |
|
Amortization and write-off of deferred financing costs
charges |
|
(1,314 |
) |
|
|
|
(604 |
) |
Payments for dry dock and special survey costs |
|
954 |
|
|
|
|
2,707 |
|
EBITDA |
$ |
17,831 |
|
|
|
$ |
12,048 |
|
|
|
Three MonthPeriod
EndedMarch 31,
2020 |
|
|
Three MonthPeriod
EndedMarch 31,
2019 |
|
|
|
(unaudited) |
|
|
(unaudited) |
Net cash used in operating activities |
|
$ |
(6,995 |
) |
|
$ |
(37 |
) |
Net cash used in investing
activities |
|
$ |
(191 |
) |
|
$ |
(1,755 |
) |
Net cash provided by/(used in) financing activities |
|
$ |
9,700 |
|
|
$ |
(2,499 |
) |
|
|
|
|
|
|
EXHIBIT II |
Owned Vessels |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel
Name |
|
TEU |
|
Year Built |
|
|
Navios Summer (1) |
|
3,450 |
|
2006 |
|
|
Navios Verano (1) |
|
3,450 |
|
2006 |
|
|
Navios Spring (1) |
|
3,450 |
|
2007 |
|
|
Navios Amaranth (1) |
|
4,250 |
|
2007 |
|
|
Navios Indigo (1) |
|
4,250 |
|
2007 |
|
|
Navios Vermilion (1) |
|
4,250 |
|
2007 |
|
|
Navios Verde (1) |
|
4,250 |
|
2007 |
|
|
Navios Amarillo (1) |
|
4,250 |
|
2007 |
|
|
Navios Azure (1) |
|
4,250 |
|
2007 |
|
|
Navios Domino (1) |
|
4,250 |
|
2008 |
|
|
Navios Delight (1) |
|
4,250 |
|
2008 |
|
|
Navios Dedication (1) |
|
4,250 |
|
2008 |
|
|
Navios Devotion (1) |
|
4,250 |
|
2009 |
|
|
Navios Destiny (1) |
|
4,250 |
|
2009 |
|
|
Navios Lapis |
|
4,250 |
|
2009 |
|
|
Navios Tempo |
|
4,250 |
|
2009 |
|
|
Navios Dorado |
|
4,250 |
|
2010 |
|
|
Navios Felicitas |
|
4,360 |
|
2010 |
|
|
Bahamas |
|
4,360 |
|
2010 |
|
|
Bermuda |
|
4,360 |
|
2010 |
|
|
Navios Miami |
|
4,563 |
|
2009 |
|
|
APL Oakland |
|
4,730 |
|
2008 |
|
|
APL Los Angeles |
|
4,730 |
|
2008 |
|
|
APL Denver |
|
4,730 |
|
2008 |
|
|
APL Atlanta |
|
4,730 |
|
2008 |
|
|
Navios Utmost (1) |
|
8,204 |
|
2006 |
|
|
Navios Unite (1) |
|
8,204 |
|
2006 |
|
|
Navios Unison (2) |
|
10,000 |
|
2010 |
|
|
Navios Constellation (2) |
|
10,000 |
|
2011 |
|
|
- The vessel is subject to a sale and leaseback transaction for a
period of up to five years, at which time Navios Containers has an
obligation to purchase the vessel.
- The vessel is subject to a sale and leaseback transaction for a
period of up to seven years, at which time Navios Containers has an
obligation to purchase the vessel.
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