Revenue:
$280.7 million for Q2 2022
$517.3 million for H1 2022
Net Income:
$118.2 million for Q2 2022
$203.8 million for H1 2022
Net cash from operating activities:
$142.0 million for Q2 2022
$147.2 million for H1 2022
EBITDA:
$163.5 million for Q2 2022
$289.6 million for H1 2022
Fleet update YTD
$1.3 billion acquisition of vessels
$835.0 million acquisition of 36-vessel drybulk fleet
$241.2 million acquisition of two newbuilding LNG dual-fuel Containerships
$234.0 million acquisition of four newbuilding LR2/Aframax tankers
$100.0 million unit repurchase program
$0.05 per unit cash distribution for Q2 2022
Navios Maritime Partners L.P., an international owner and operator of dry cargo and tanker vessels, reported its financial results for the second quarter and six month period ended June 30, 2022.
Angeliki Frangou, Chairwoman and Chief Executive Officer of Navios Partners stated, “We are pleased to report our results for the second quarter of 2022 in which we recorded $280.7 million of revenue and $118.2 million of net income. Net income amounts to $3.84 per common unit for the quarter and $6.62 for the first six months of 2022.”
Angeliki Frangou continued, “We are also pleased with the transaction we announced last night involving the acquisition of a 36-vessel drybulk fleet for $835.0 million. Navios Partners is the second largest US-listed maritime company and the third largest US-listed drybulk company, by number of vessels.”
Angeliki Frangou also stated, “Our board authorized a unit repurchase program for up to $100.0 million. At current prices, this program would cover approximately 17% of the public float. The timing of the repurchases and the exact number of units to be repurchased shall be determined by the Company based on market conditions and financial and other considerations, including working capital and planned or anticipated growth opportunities. Total return to investors, we believe, is the way to measure our success, and will use this tool as a means of achieving this result for our unitholders.”
Fleet Update
- Acquired a 36-Vessel Drybulk Fleet for $835.0 million
- On July 26, 2022 Navios Partners agreed to acquire a 36-vessel drybulk fleet for a gross purchase price of $835.0 million, including the assumption of $441.6 million of bank liabilities, bareboat obligations and finance leasing obligations, subject to debt and working capital adjustments (the “Transaction”), from Navios Maritime Holdings Inc. (“Navios Holdings”) (NYSE:NM).The fleet consists of 26 owned vessels and 10 chartered-in vessels (all with purchase options) with a total capacity of 3.9 million dwt and an average age of 9.6 years.
Following the completion of the Transaction, Navios Partners will own and operate a fleet comprised of 90 drybulk vessels, 49 containerships and 49 tanker vessels, including 22 newbuilding vessels to be delivered through the first quarter of 2025.
Approvals
The Transaction was negotiated and unanimously approved by the Conflicts Committee of Navios Partners. The Transaction was also unanimously approved by full board of directors of Navios Partners.
Advisors
Jefferies LLC and S. Goldman Advisors LLC served as financial advisors to the Conflicts Committee of Navios Partners. Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor.
Acquisition of Two Newbuilding LNG Dual Fuel 7,700 TEU Containerships
In June 2022, Navios Partners agreed to purchase two newbuilding liquified natural gas (LNG) dual fuel 7,700 TEU containerships, for an aggregate purchase price of $241.2 million.
The vessels have the ability to operate on either LNG or conventional marine fuels. They are expected to be delivered into the fleet in the fourth quarter of 2024. The closing of the transaction is subject to completion of customary documentation. Navios Partners has been granted a two-month option for two additional LNG dual fuel 7,700 TEU containerships at the same terms, delivering in the second quarter of 2025.
Vessel charters
The two containerships, have been chartered-out for 12 years, at an average net rate of $42,288 per day. The charter agreement provides for de-escalating payments as follows:
Year 1-3 : USD 57,213 net per day
Year 4-6 : USD 52,238 net per day
Year 7-8 : USD 37,313 net per day
Year 9-10 : USD 27,363 net per day
Year 11-12 : USD 24,875 net per day
The charterer has an option to extend the charter for an additional two years at a net rate of $24,875 per day.
In connection with this transaction, the charterer agreed to amend existing charters on two 6,800 TEU containerships currently expiring in the fourth quarter of 2023. Under the amended terms, the charter period will be extended for seven months at $43,944 net per day. However, if Navios Partners exercises its existing option to extend the charter term for five years (at a net rate of $21,083 per day) the charter period will also be extended for eight- and one-half months at $30,119 net per day.
$100.0 million unit repurchase program
In July 2022, the Board of Directors of Navios Partners authorized a common unit repurchase program for up to $100.0 million of the Company’s common units. Common unit repurchases will be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of repurchases under the program will be determined by Navios Partners’ management based upon market conditions and financial and other considerations, including working capital and planned or anticipated growth opportunities. The program does not require any minimum repurchase or any specific number of common units and may be suspended or reinstated at any time in the Company’s discretion and without notice. The Board of Directors will review the program periodically.
Financing Update
In July 2022, Navios Partners agreed to enter into a new credit facility with a leading European commercial bank for a total amount of up to $86.2 million in order to finance the acquisition of two newbuilding 5,300 TEU containerships. The credit facility: (i) has an amortization profile of approximately 16 years; (ii) matures seven years after the drawdown; and (iii) bears interest at Secured Overnight Financing Rate (“SOFR”) plus 200 bps per annum. The facility remains subject to completion of definitive documentation and is expected to close in the third quarter of 2022.
In June 2022, Navios Partners entered into a new credit facility with a commercial bank for a total amount of up to $55.0 million in order to refinance the existing indebtedness of four of its vessels and for general corporate purposes. The credit facility: (i) has an amortization profile of approximately seven years; (ii) matures in the second quarter of 2027; and (iii) bears interest at SOFR plus 225 bps per annum.
Cash Distribution
The Board of Directors of Navios Partners declared a cash distribution for the second quarter of 2022 of $0.05 per unit. The cash distribution will be payable on August 12, 2022 to all unitholders of record as of August 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.
Operating Highlights
Navios Partners has entered into short, medium and long-term time charter-out and freight agreements for its vessels with a remaining average term of approximately 1.6 years. Navios Partners has currently fixed 51.3% of its available days for the remaining six months of 2022 and 24.9% for 2023. Navios Partners expects to generate contracted revenue of approximately $427.7 million and $564.6 million for the remaining six months of 2022 and for 2023, respectively. The average expected daily charter-out rate for the fleet is $28,966 and $36,822 for the remaining six months of 2022 and for 2023, 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 and six month periods ended June 30, 2022 and 2021. 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”).
Upon completion of the merger (“NMCI Merger”) with Navios Maritime Containers L.P. (“Navios Containers”) on March 31, 2021, beginning from April 1, 2021, and obtaining control over Navios Maritime Acquisition Corporation (“Navios Acquisition”) on August 25, 2021, beginning from August 26, 2021, the results of operations of Navios Containers and Navios Acquisition are included in Navios Partners’ Consolidated Statements of Operations. On October 15, 2021, Navios Partners completed its merger (“NNA Merger”) with Navios Acquisition.
Three month periods ended June 30, 2022 and 2021
Time charter and voyage revenues for the three month period ended June 30, 2022 increased by $128.7 million, or 84.7%, to $280.7 million, as compared to $152.0 million for the same period in 2021. 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 June 30, 2022, the time charter and voyage revenues are affected by $11.8 million relating to the straight line effect of the containerships charters with de-escalating rates. The TCE rate increased by 17.4% to $23,823 per day, as compared to $20,296 per day for the same period in 2021. The available days of the fleet increased by 55.6% to 11,269 days for the three month period ended June 30, 2022, as compared to 7,242 days for the same period in 2021 mainly due to the NMCI Merger and the NNA Merger.
EBITDA for the three month period ended June 30, 2022 amounted to $163.5 million as compared to $90.4 million for the same period in 2021. The increase in EBITDA was primarily due to a: (i) $128.7 million increase in time charter and voyage revenues; and (ii) $2.3 million decrease in other expense, net. The above increase was partially mitigated by a: (i) $32.2 million increase in vessel operating expenses, mainly due to the increased fleet; (ii) $15.8 million increase in time charter and voyage expenses; (iii) $6.0 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items); and (iv) $3.9 million increase in general and administrative expenses, mainly due to the increased fleet.
Net Income for the three month period ended June 30, 2022 amounted to $118.2 million as compared to $99.9 million for the same period in 2021. The increase in Net Income was primarily due to a $73.1 million increase in EBITDA. The above increase was partially mitigated by a: (i) $24.4 million decrease in the amortization of the unfavorable lease terms; (ii) $19.6 million increase in depreciation and amortization expense; (iii) $7.2 million increase in interest expense and finance cost, net; (iv) $2.9 million increase in amortization of deferred drydock, special survey costs and other capitalized items; and (v) $0.7 million decrease in interest income.
Six month periods ended June 30, 2022 and 2021
Time charter and voyage revenues of Navios Partners for the six month period ended June 30, 2022 increased by $300.2 million, or 138.3%, to $517.3 million, as compared to $217.1 million for the same period in 2021. 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 six month period ended June 30, 2022, the time charter and voyage revenues are affected by $16.5 million relating to the straight line effect of the containerships charters with de-escalating rates. The TCE rate increased by 21.0% to $22,107 per day, as compared to $18,276 per day in the same period in 2021. The available days of the fleet increased by 95.7% to 22,497 days for the six month period ended June 30, 2022, as compared to 11,494 days in the same period in 2021.
EBITDA of Navios Partners for the six month period ended June 30, 2022 and 2021 was affected by items described in the table above. Excluding these items, Adjusted EBITDA increased by $165.5 million to $289.6 million for the six month period ended June 30, 2022, as compared to $124.1 million for the same period in 2021. The increase in Adjusted EBITDA was primarily due to a: (i) $300.2 million increase in time charter and voyage revenues; (ii) $1.5 million decrease in other expense, net; and (iii) $0.5 million decrease in net loss on sale of vessels. The above increase was partially mitigated by: (i) an $82.5 million increase in vessel operating expenses, mainly due to the increased fleet; (ii) a $30.5 million increase in time charter voyage expenses; (iii) a $12.9 million increase in general and administrative expenses, mainly due to the increased fleet; and (iv) a $10.8 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items).
Net Income of Navios Partners for the six month period ended June 30, 2022 and 2021 was affected by items described in the table above. Excluding these items, adjusted net income for the six month period ended June 30, 2022 amounted to $203.8 million compared to $111.7 million for the six month period ended June 30, 2021. The increase in Adjusted Net Income of $92.1 million was due to a $165.5 million increase in Adjusted EBITDA. The above increase was partially mitigated by a: (i) $49.4 million increase in depreciation and amortization expense; (ii) $14.5 million increase in interest expense and finance cost, net; (iii) $6.0 million increase in amortization for deferred drydock, special survey costs and other capitalized items; (iv) $2.6 million decrease in the amortization of the unfavorable lease terms; and (v) $0.9 million decrease in interest income.
Fleet Employment Profile
The following table reflects certain key indicators of Navios Partners’ core fleet performance for the three and six month periods ended June 30, 2022 and 2021 (including the Navios Containers’ fleet and Navios Acquisition’s fleet beginning from April 1, 2021 and August 26, 2021, respectively).
