Navios Maritime Partners L.P., an international owner and operator of dry cargo vessels, reported its financial results for the second quarter and six month period ended June 30, 2021.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Partners stated, “I am pleased with the results for the second quarter of 2021. During the second quarter, Navios Partners recorded revenue of $152.0 million and net income of $99.9 million.”
Angeliki Frangou continued, “Navios Partners is a top-10 US publicly listed shipping company with a dry cargo fleet of 98 vessels. Of our fleet, 56% are dry bulk vessels and 44% are containerships. This diversified fleet should not only insulate us from normal industry cyclicality, but create optionality as we leverage fundamentals across sectors and reduce cost of capital. Our balance sheet is also strong, with 27.3% net debt to book capitalization and no near term debt maturities.”
Fleet Update
Acquisition of six 5,300 TEU Newbuilding Containerships (four plus two on Navios Partners’ option)
In July 2021, Navios Partners agreed to purchase six 5,300 TEU newbuilding containerships (four plus two optional) for a purchase price of $61.6 million each. The vessels are expected to be delivered into Navios Partners’ fleet during the second half of 2023 and 2024.The closing of the transaction is subject to completion of customary documentation.
Acquisition of one Newbuilding Capesize Vessel
In June 2021, Navios Partners agreed to bareboat charter-in one Japanese newbuilding Capesize vessel from an unrelated third party. The vessel has approximately 180,000 dwt and is being bareboat chartered-in for 10 years. Navios Partners has the option to acquire the vessel starting at the end of year four until the end of the tenth year. The implied acquisition price is approximately $60.0 million and the annual effective interest rate is approximately 4.3%. The vessel is expected to be delivered into Navios Partners’ fleet during the second half of 2022.
Acquisition of one Newbuilding Kamsarmax Vessel
In June 2021, Navios Partners agreed to acquire from an unrelated third party a newbuilding Kamsarmax vessel for a purchase price of $34.3 million. The vessel has approximately 81,000 dwt and is expected to be delivered into Navios Partners’ fleet during the first half of 2023.
Acquisition of three Capesize Vessels
In June 2021, Navios Partners agreed to acquire from Navios Maritime Holdings Inc. (“Navios Holdings”) (NYSE:NM) the Navios Azimuth, a 2011-built Capesize vessel of 179,169 dwt, the Navios Ray, a 2012-built Capesize vessel of 179,515 dwt, and the Navios Bonavis, a 2009-built Capesize vessel of 180,022 dwt for an aggregate purchase price of $88.0 million. The Navios Bonavis and the Navios Ray were delivered into Navios Partners’ fleet in June 2021 and the Navios Azimuth was delivered in July 2021. The acquisition of these vessels was approved by the Conflicts Committee of the Board of Directors of Navios Partners.
Sale of Two Vessels
In July 2021, Navios Partners agreed to sell the Harmony N, a 2006-built Containership of 2,824 TEU, to an unrelated third party for a net sale price of $28.7 million. The sale is expected to be completed during the third quarter of 2021.
In July 2021, Navios Partners agreed to sell the Navios Azalea, a 2005-built Panamax vessel of 74,759 dwt, to an unrelated third party for a net sale price of $12.7 million. The sale is expected to be completed during the third quarter of 2021.
Current Fleet
Following the above transactions, on a fully delivered basis, our fleet would consist of 98 vessels, 55 dry bulk vessels and 43 containerships with a total capacity of 9.3 million dwt.
Financing Update
In March 2021, Navios Partners entered into a new credit facility with a commercial bank for a total amount of $58.0 million in order to refinance two dry bulk vessels and to finance the acquisition of the Navios Avior and the Navios Centaurus. The credit facility has an amortization profile of 8.8 years, matures in March 2026 and bears interest at LIBOR plus 3.0% per annum.
In January and March 2021, Navios Partners entered into bareboat charter-in agreements for four Japanese newbuilding Capesize vessels. The total implied amount financed for the three vessels is approximately $144.0 million and for the fourth is approximately $48.0 million and the implied effective interest rate is 4.4% and 5.0%, respectively.
In April 2021, Navios Partners entered into a new credit facility with a commercial bank for a total amount of $40.0 million in order to refinance the existing facility of two dry bulk vessels and to finance the acquisition of two containerships. The facility has an amortization profile of seven years, matures in the second quarter of 2025 and bears interest at LIBOR plus 2.85% per annum.
In April 2021, Navios Partners entered into a new credit facility with a commercial bank for a total amount of $8.9 million in order to finance the acquisition of one containership. The facility has an amortization profile of approximately seven years, matures in the fourth quarter of 2024 and bears interest at LIBOR plus 3.0% per annum.
In May 2021, Navios Partners entered into a new credit facility with a commercial bank for a total amount of up to $160.0 million in order to: (i) refinance its existing facility maturing in August 2021; (ii) refinance one dry bulk vessel; and (iii) finance the acquisition of one dry bulk vessel. The new facility has an amortization profile of approximately eight years, matures in the second quarter of 2025 and bears interest at LIBOR plus 3.10% per annum.
In June 2021, Navios Partners entered into a new credit facility with a commercial bank for a total amount of up to $43.0 million, in order to refinance the existing credit facilities of six dry bulk vessels. The facility has an amortization profile of approximately eight years, matures in the second quarter of 2026 and bears interest at LIBOR plus 300 bps per annum.
As discussed above, in June 2021, Navios Partners entered into a bareboat charter-in agreement for one Japanese newbuilding Capesize vessel. The implied amount financed for the vessel is approximately $48.0 million and the implied effective interest rate is 4.3%.
In June 2021, Navios Partners completed an $18.5 million sale and leaseback transaction with an unrelated third party, for a 2012-built Capesize vessel. The sale and leaseback transaction has a duration of nine years and an implied fixed interest rate of approximately 5.8%. Navios Partners has the option to buy the vessel at maturity.
In June 2021, Navios Partners completed a $15.0 million sale and leaseback transaction with an unrelated third party, for a 2009-built Capesize vessel. The sale and leaseback transaction has a duration of six years and an implied fixed interest rate of approximately 6.1%. Navios Partners has the option to buy the vessel at maturity.
In July 2021, Navios Partners agreed to enter into a $15.0 million sale and leaseback transaction with an unrelated third party, for a 2009-built Capesize vessel. The sale and leaseback transaction has a duration of six years and an implied fixed interest rate of approximately 6.1%. Navios Partners has the option to buy the vessel at maturity. The transaction remains subject to completion of definitive documentation and is expected to close in the third quarter of 2021. No assurance can be provided that the transaction will be completed in full or in part.
In July 2021, Navios Partners agreed to enter into a new credit facility with a commercial bank for a total amount of up to $18.0 million in order to finance the acquisition of one dry bulk vessel. The new facility will have an amortization profile of seven years and will mature in the third quarter of 2026 and will bear interest at LIBOR plus 2.85% per annum. The facility remains subject to completion of definitive documentation and is expected to close in the third quarter of 2021. No assurance can be provided that the transaction will be completed in full or in part.
Cash Distribution
The Board of Directors of Navios Partners declared a cash distribution for the second quarter of 2021 of $0.05 per unit. The cash distribution is payable on August 12, 2021 to all unitholders of record as of August 9, 2021. 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.
Long-Term Cash Flow
Navios Partners has entered into medium to long-term time charter-out agreements for its vessels with a remaining average term of approximately 1.5 years. Navios Partners has currently contracted out 85.8% of its available days for the second half of 2021, 44.0% for 2022 and 25.6% for 2023, including index-linked charters. Excluding index-linked charters, Navios Partners expects to generate revenues of approximately $230.5 million, $349.0 million and $230.7 million, respectively. The average contracted daily charter-out rate for the fleet is $22,919 for the second half of 2021, $30,091 for 2022 and $32,420 for 2023.
Three month periods ended June 30, 2021 and 2020
Time charter and voyage revenues of Navios Partners for the three month period ended June 30, 2021 increased by approximately $105.5 million, or 226.6%, to $152.0 million, as compared to $46.5 million for the same period in 2020. 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, 2021, TCE rate increased by 81.2% to $20,296 per day, as compared to $11,202 per day in the same period in 2020. The available days of the fleet increased by 79.7% to 7,242 days for the three month period ended June 30, 2021, as compared to 4,029 in the same period in 2020.
EBITDA of Navios Partners for the three month period ended June 30, 2020 was affected by items described in the table above. Excluding these items, Adjusted EBITDA increased by approximately $76.1 million to $90.4 million for the three month period ended June 30, 2021, as compared to $14.3 million for the same period in 2020. The increase in Adjusted EBITDA was primarily due to a: (i) $105.5 million increase in time charter and voyage revenues; and (ii) $0.7 million decrease in equity in net loss of affiliate companies recorded in the second quarter of 2020. The above increase was partially mitigated by: (i) a $19.8 million increase in vessel operating expenses, mainly due to the increased fleet; (ii) a $3.9 million increase in time charter voyage expenses; (iii) a $3.3 million increase in general and administrative expenses, mainly due to the increased fleet; (iv) a $2.8 million increase in other expense, net; and (v) an approximately $0.3 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 three month period ended June 30, 2021 was approximately $99.9 million as compared to $14.6 million net loss for the same period in 2020. Net income for the three month period ended June 30, 2020, was affected by items described in the table above. Excluding these items, adjusted net income for the three month period ended June 30, 2021 amounted to $99.9 million as compared to $7.8 million loss for the three month period ended June 30, 2020. The increase in adjusted net income of approximately $107.8 million was due to: (i) an approximately $76.1 million increase in Adjusted EBITDA; (ii) a $42.0 million income from the amortization of the unfavorable lease terms recorded in the three month period ended June 30, 2021; and (iii) a $0.6 million increase in interest income. The above increase was partially mitigated by: (i) an $8.5 million increase in depreciation and amortization expense; (ii) a $1.4 million increase in amortization for deferred drydock, special survey costs and other capitalized items; and (iii) an approximately $1.0 million increase in interest expense and finance cost.
Six month periods ended June 30, 2021 and 2020
Time charter and voyage revenues of Navios Partners for the six month period ended June 30, 2021 increased by approximately $124.0 million, or 133.3%, to $217.1 million, as compared to $93.0 million for the same period in 2020. 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, 2021, TCE rate increased by 66.8% to $18,276 per day, as compared to $10,957 per day in the same period in 2020. The available days of the fleet increased by 41.4% to 11,494 days for the six month period ended June 30, 2021, as compared to 8,126 in the same period in 2020.
EBITDA of Navios Partners for the six month period ended June 30, 2021 and 2020 was affected by items described in the table above. Excluding these items, Adjusted EBITDA increased by $90.7 million to $124.1 million for the six month period ended June 30, 2021, as compared to $33.4 million for the same period in 2020. The increase in Adjusted EBITDA was primarily due to an approximate $124.0 million increase in time charter and voyage revenues. The above increase was partially mitigated by a: (i) $20.6 million increase in vessel operating expenses, mainly due to the increased fleet; (ii) $4.1 million increase in general and administrative expenses, mainly due to the increased fleet; (iii) $3.6 million increase in other expense, net; (iv) $3.3 million increase in time charter voyage expenses; (v) $1.0 million equity in net earnings of affiliate companies, recorded in the first half of 2020; (vi) $0.5 million net loss on sale of vessels; and (vii) $0.2 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, 2021 was approximately $236.6 million as compared to $25.4 million net loss for the same period in 2020. Net income was affected by items described in the table above. Excluding these items, adjusted net income for the six month period ended June 30, 2021 amounted to $111.7 million compared to $11.7 million loss for the six month period ended June 30, 2020. The increase in adjusted net income of approximately $123.4 million was due to a: (i) $90.7 million increase in Adjusted EBITDA; (ii) $42.0 million income from the amortization of the unfavorable lease terms recorded in the six month period ended June 30, 2021; and (iii) $0.5 million increase in interest income. The above increase was partially mitigated by: (i) a $7.9 million increase in depreciation and amortization expense; and (ii) an approximately $1.9 million increase in amortization for deferred drydock, special survey costs and other capitalized items.
Source: Navios Maritime Partners L.P.