Navios Maritime Reports Financial Results for the 3rd Quarter & Nine Months Ended September 30, 2022

Source: www.gulfoilandgas.com 11/22/2022, Location: Not categorized

• Net Income
o $39.0 million in Q3 2022
o $78.9 million in 9M 2022

• Cash from operating activities
o $41.3 million cash provided by operating activities in Q3 2022
o $127.4 million cash provided by operating activities in 9M 2022

• EBITDA, a non-GAAP measure
o $149.9 million in Q3 2022
o $322.5 million in 9M 2022

• Completion of Tender Offer for American Depositary Shares (“ADSs”) in respect of the Company’s Series G and H Preferred Stock
o $9.2 million cash consideration paid
o 604,343, or 26.2%, of outstanding Series G and H ADS tendered

• Revenue from Logistics Business
o $74.4 million in Q3 2022 vs $63.5 million in Q3 2021
o $202.8 million in 9M 2022 vs $174.3 million in 9M 2021

• Management Succession for Logistics Business

Navios Maritime Holdings Inc. reported its financial results for the third quarter and nine months ended September 30, 2022. Navios Holdings owns (i) a controlling equity stake in Navios South American Logistics Inc. (“Navios Logistics”), one of the largest infrastructure and logistics companies in the Hidrovia region of South America and (ii) a substantial interest in Navios Maritime Partners L.P. (“Navios Partners”) (NYSE:NMM), a leading United States publicly listed shipping company that owns and operates dry cargo and tanker vessels.

Angeliki Frangou, Chairwoman and Chief Executive Officer, stated, “I am pleased with the results of the third quarter, during which we reported Net Income of $39.0 million.”

Angeliki Frangou, continued, “Because of the renewed global focus on food and energy security, we believe there is a significant commercial opportunity in the Hidrovia region. As a result of this interest, we are focused on growing our regional infrastructure and related logistics assets. We have also implemented our management succession plan. George Achniotis has been appointed as Chief Executive Officer while Ioannis Karyotis and Enrique Ferrando, have been promoted to Chief Operating Officer and Chief Financial Officer, respectively. Claudio Lopez will continue to provide his leadership and experience in his role as Vice Chairman.”

HIGHLIGHTS

Completion of Tender Offer for the Company’s Series G and H Preferred Stock
As of the completion of the Company’s tender offer on October 21, 2022, a total of 20,185 Series G American Depositary Shares (“Series G ADSs”) were validly tendered for a total of $0.3 million in cash consideration and a total of 584,158 Series H American Depositary Shares (“Series ? ADSs”) were validly tendered for a total of $8.9 million in cash consideration. Following the tender offer, Navios Holdings has 514,720 outstanding Series G ADSs and 1,183,944 outstanding Series H ADSs, which represent 1/100th of a share of 8.75% Series G Cumulative Redeemable Perpetual Preferred Stock (the “Series G Preferred Stock”) and 1/100th of a Share of 8.625% Series H Cumulative Redeemable Perpetual Preferred Stock (the “Series H Preferred Stock”), respectively.

Management Succession for Logistics Business
George Achniotis, Chief Financial Officer of Navios Holdings, has been appointed as the new Chief Executive Officer of Navios Logistics. Other changes on the executive team include the promotions of Ioannis Karyotis as Chief Operating Officer, Enrique Ferrando as Chief Financial Officer and Mariana Rebolo as Chief Risk Officer as well as changes in the commercial and business development teams.

Completion of the sale of 36-Vessel Dry Bulk Fleet
In September 2022, the sale of our 36-vessel drybulk fleet (“the Transaction”) was completed. The closing of the Transaction was effected in two tranches. The first tranche, involving the transfer of 15 vessels, was completed on July 29, 2022. The second tranche, involving the remaining 21 vessels, was completed on September 8, 2022. Following the closing of the Transaction, the results of the dry-bulk vessel operations have been reported as discontinued operations for all periods presented.

Revenue from continuing operations, generated solely from Navios Logistics, was $74.4 million for the three month period ended September 30, 2022, as compared to $63.5 million for the same period in 2021. The increase was mainly attributable to (i) a $7.5 million increase in revenue from the port terminal business due to higher volumes transshipped in the grain port terminal mainly due to increased Uruguayan soybean production and exports, and higher tariffs and volumes transshipped in the iron ore port terminal; (ii) a $5.6 million increase in revenue from the cabotage business mainly due to more operating days; and (iii) a $2.6 million increase in revenue from the barge business, mainly due to a $3.5 million increase in CoA/voyage revenues related to higher liquid and dry cargo moved, partially mitigated by a $0.9 million decrease in time charter revenues. The overall increase was partially mitigated by a $4.9 million decrease in sales of products due to the decrease in the Paraguayan liquid port’s volume of products sold.

Net Income attributable to Navios Holdings’ common stockholders was $39.0 million for the three month period ended September 30, 2022, as compared to $59.8 million for the same period in 2021. This decrease in Net Income was mainly due to a $61.7 million prepayment fee paid via increasing the outstanding principal amount of the Convertible Debenture in respect of the repayments of the NSM Loan I and NSM Loan II. This decrease was partially mitigated by (i) a $33.7 million increase in EBITDA as discussed below; (ii) a $4.2 million increase in income tax benefit; (iii) a $1.4 million decrease in depreciation and amortization; (iv) a $1.3 million decrease in interest expense and finance cost, net; (v) a $0.2 million decrease in amortization of deferred drydock, special survey and other capitalized items and (vi) a $0.1 million decrease in stock-based compensation expense.

Net Income of Navios Logistics, on a standalone basis was $1.7 million for the three month period ended September 30, 2022 as compared to $4.4 million of Net Loss for the same period in 2021.

EBITDA of Navios Holdings for the three month period ended September 30, 2022 increased by $33.7 million to $149.9 million, as compared to $116.1 million for the same period in 2021. The increase in EBITDA was primarily due to (i) a $169.6 million gain from discontinued operations, following the completion of the Transaction; (ii) a $15.2 million decrease in time charter, voyage and logistics business expenses mainly as a result of the Transaction; and (iii) a $0.8 million decrease in loss on bond extinguishment, net. This overall increase of $185.6 million was partially mitigated by (i) a $84.5 million net decrease in equity in net earnings from affiliate companies due to a $97.7 million OTTI loss related to our investment in Navios Partners, mitigated by a $13.2 million increase in equity method income from subsidiaries; (ii) a $47.7 million decrease in revenue mainly due to the decrease in revenue from shipping business by $58.6 million as a result of the Transaction partially mitigated by a $10.9 million increase in revenue from Navios Logistics; (iii) a $10.9 million increase in net income attributable to noncontrolling interest; (iv) a $5.1 million increase in other expense, net; (v) a $3.2 million increase in impairment losses incurred by Navios Logistics during the three month period ended September 30, 2022; (vi) a $0.2 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items); and (vii) a $0.2 million increase in general and administrative expenses (excluding stock-based compensation expenses).

EBITDA of Navios Logistics, on a standalone basis, was $25.6 million for the three month period ended September 30, 2022, as compared to $23.1 million for the same period in 2021.

Nine Months Ended 2022 and 2021 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):
The information for the nine months period ended September 30, 2022 and 2021 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

Revenue from continuing operations, generated solely from Navios Logistics, was $202.8 million for the nine month period ended September 30, 2022, as compared to $174.3 million for the same period in 2021. The increase was mainly attributable to (i) a $18.6 million increase in revenue from the port terminal business due to higher volumes transshipped in the grain port terminal mainly due to increased Uruguayan soybean production and exports, and higher tariffs and volumes transshipped at the iron ore terminal; (ii) a $12.3 million increase in revenue from the cabotage business mainly due to more operating days; and (iii) a $4.0 million increase in revenue from the barge business, mainly due to a $7.5 million increase in CoA/voyage revenues related to higher liquid and dry cargo moved, partially mitigated by a $3.5 million decrease in time charter revenues. The overall increase was partially mitigated by a $6.5 million decrease in sales of products due to the decrease in the Paraguayan liquid port’s volume of products sold.

Net Income attributable to Navios Holdings’ common stockholders was $78.9 million for the nine month period ended September 30, 2022, as compared to $84.9 million for the same period in 2021. This decrease in Net Income was mainly due to (i) a $24.0 million upfront fee paid in the form of a Convertible Debenture in respect of NSM Loan I and NSM Loan II drawn down in January 2022; (ii) a $61.7 million prepayment fee paid via increasing the outstanding principal amount of the Convertible Debenture in respect of the repayments of the NSM Loan I and NSM Loan II; and (ii) a $0.4 million increase in amortization of deferred drydock, special survey and other capitalized items. This overall decrease of approximately $86.1 million was partially mitigated by (i) a $71.2 million increase in EBITDA as discussed below; (ii) a $4.5 million decrease in depreciation and amortization; (iii) a $3.2 million decrease in income tax expense; (iv) a $0.8 million decrease in interest expense and finance cost, net; and (v) a $0.3 million decrease in stock-based compensation expense.

Net Income of Navios Logistics on a standalone basis was $7.7 million for the nine month period ended September 30, 2022 as compared to $2.3 million of Net Loss for the same period in 2021.

EBITDA of Navios Holdings for the nine month period ended September 30, 2022 increased by $71.2 million to $322.5 million, as compared to $251.3 million for the same period in 2021. The increase in EBITDA was primarily due to (i) a $169.6 million gain from discontinued operations, following the completion of the Transaction; (ii) a $25.2 million decrease in time charter, voyage and logistics business expenses; and (iii) a $22.7 million decrease in impairment losses relating to the sale of assets. This overall increase of $217.5 million was partially mitigated by (i) a $102.1 million decrease in equity in net earnings from affiliate companies mainly due to a $97.7 million OTTI loss related to our investment in Navios Partners incurred during the nine month period ended September 30, 2022; (ii) a $21.3 million decrease in revenue mainly due to the decrease in revenue from shipping business by $49.7 million as a result of the Transaction partially mitigated by a $28.5 million increase in revenue from Navios Logistics; (iii) a $12.4 million increase in net income attributable to noncontrolling interest; (iv) a $5.2 million increase in other expense; (v) a $3.1 million increase in direct vessel expenses (excluding the amortization of deferred drydock, special survey costs and other capitalized items); (vi) a $1.3 million decrease in gain on bond extinguishment, net; and (vii) a $1.0 million increase in general and administrative expenses (excluding stock-based compensation expenses).

EBITDA of Navios Logistics, on a standalone basis, was $81.2 million for the nine month period ended September 30, 2022, as compared to $67.8 million for the same period in 2021.


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