Posted on August 24, 2015
Navios Maritime Holdings Inc. (BULK) (NYSE: NM)
- $11 9 . 8 million revenue for Q 2 2015
- Dividend of $0.06 per share for Q 2 2015
Chartering captures recovery from first half low- Strong balance sheet – $ 181 . 3 million of cash
- Low o perating expenses – significantly below industry average
Diversified investment vehicle – multiple avenues of growth- Closed s econd t ransaction w ith
HSH Nordbank AG – Navios Europe II Inc.
Navios Maritime Holdings Inc. (“Navios Holdings” or “the Company”) (NYSE: NM), a global, vertically integrated seaborne shipping and logistics company, today reported financial results for the second quarter and six months ended June 30, 2015.
Angeliki Frangou continued, “Our chartering is benefiting from a dry bulk recovery. We experienced a structural low in the first quarter of 2015, during which time the spot market rates were below operating costs and the period charter market was non-existent. We thought this to be a rare event, unlikely to be sustained. During the second and third quarters of 2015, charter rates improved across all dry bulk asset classes, although charter rates remain well below long-term averages.”
HIGHLIGHTS — RECENT DEVELOPMENTS
Dividend Policy
On August 17, 2015, the Board of Directors declared a quarterly cash dividend for the second quarter of 2015 of $0.06 per share of common stock. The dividend is payable on September 25, 2015 to stockholders of record as of September 18, 2015. The declaration and payment of any further dividends remain subject to the discretion of the Board and will depend on, among other things, Navios Holdings’ cash requirements after taking into account market opportunities, restrictions under its credit agreements, indentures and other debt obligations and such other factors as the Board may deem advisable.
Navios Europe II Inc.
Navios Holdings, Navios Maritime Acquisition Corporation (NNA) (“Navios Acquisition”) and Navios Maritime Partners L.P. (NMM) (“Navios Partners”) formed Navios Europe II Inc. and completed the transaction for the acquisition of 14 vessels from debtors of HSH Nordbank AG.
The 14 vessels include seven dry bulkers and seven container vessels with an average age of approximately four years and a current fair market value of approximately $225.0 million. All of the vessels have been delivered, except for one that is expected to be delivered within Q3 2015.
Navios Partners
On August 14, 2015, Navios Holdings received $8.1 million from Navios Partners representing the cash distribution for the second quarter of 2015.
Navios Acquisition
On July 2, 2015, Navios Holdings received $3.6 million from Navios Acquisition representing the cash dividend for the first quarter of 2015.
Navios South American Logistics Inc. (“Navios Logistics”)
Extension of the Capital Leases of two Cabotage Vessels for four years
On June 30, 2015, Navios Logistics agreed to extend the repayment period of its capital leases of the vessels Ferni H and San San H for four years up to January 2020 and April 2020, respectively. As a result, Navios Logistics deferred its obligation to purchase the two vessels from 2016 to 2020.
Time Charter Coverage
Navios Holdings controls a fleet of 63 vessels totaling 6.3 million dwt, of which 40 are owned and 23 are chartered-in under long-term charters (collectively, the “Core Fleet”). Navios Holdings currently operates 57 vessels (17 Capesize, 19 Panamax, 19 Ultra Handymax and two Handysize) totaling 5.6 million dwt. The current average age of the operating fleet is 7.8 years. Additionally, Navios Holdings has (i) four newbuilding charter-in vessels expected to be delivered at various dates through 2016; and (ii) two newbuilding owned vessels which are expected to be delivered in the first quarter of 2016.
As of August 3, 2015, Navios Holdings has chartered-out 86.3% and 11.1% of available days for 2015 and 2016, respectively (including index-linked charters), which are expected to generate $118.3 million and $17.4 million in revenue, respectively. The average daily charter-out rate for the Core Fleet is $8,388 and $18,701 for 2015 and 2016, respectively. The average daily charter-in rate for the active long-term charter-in vessels for 2015 is $13,312.
The above figures do not include the fleet of Navios Logistics and vessels servicing contracts of affreightment.
Exhibit II provides certain details of the Core Fleet of Navios Holdings. It does not include the fleet of Navios Logistics.
Earnings Highlights
As of June 30, 2015:
- Net Debt to Total Capitalization of 52.6%.
- Cash of $181.3 million.
EBITDA, Adjusted EBITDA, Adjusted Net Loss and Adjusted Basic Loss per Share are non-U.S. GAAP financial measures and should not be used in isolation or as substitution for Navios Holdings’ results calculated in accordance with U.S. GAAP.
See Exhibit I under the heading “Disclosure of Non-GAAP Financial Measures” for a discussion of Adjusted EBITDA of Navios Holdings (including Navios Logistics), and Navios Logistics (on a stand-alone basis), and a reconciliation of such measures to the most comparable measure calculated under U.S. GAAP.
Revenue from the logistics business was $66.2 million for the three months ended June 30, 2015 as compared to $70.0 million for the same period of 2014. This decrease was mainly attributable to the decrease in sales of products in the liquid terminal.
Adjusted EBITDA of Navios Holdings for the three months ended June 30, 2015 decreased by $18.7 million to $32.7 million as compared to $51.4 million for the same period of 2014. The $18.7 million decrease in Adjusted EBITDA was primarily due to (i) a $25.6 million decrease in revenue; (ii) a $1.6 million increase in direct vessel expenses (excluding the amortization of deferred drydock and special survey costs); (iii) a $7.4 million increase in other expense, net; and (iv) a $1.2 million increase in net income attributable to the noncontrolling interest. This decrease of $35.8 million was mitigated by (i) a $5.6 million decrease in time charter, voyage and logistics business expenses; (ii) a $0.6 million decrease in general and administrative expenses (excluding share-based compensation expenses); and (iii) a $10.9 million increase in equity in net earnings from affiliated companies.
Adjusted EBITDA of Navios Logistics was $22.7 million for the three month period ended June 30, 2015 as compared to $21.4 million for the same period in 2014.
Adjusted Net Loss of Navios Holdings for the three months ended June 30, 2015 was $24.8 million as compared to $7.7 million for the same period of 2014. The $17.1 million increase in Adjusted Net Loss was mainly due to (i) a $18.7 million decrease in Adjusted EBITDA; (ii) a $1.7 million increase in depreciation and amortization; and (iii) a $0.2 million increase in amortization for deferred drydock and special survey costs. This increase in Adjusted Net Loss was partially mitigated by (i) a decrease in interest expense and finance cost, net of $0.7 million; (ii) a decrease in share-based compensation expense of $0.3 million; and (iii) an increase in income tax benefit of $2.5 million.
Revenue from dry bulk vessel operations for the six months ended June 30, 2015 was $106.8 million as compared to $152.0 million for the same period during 2014. The decrease in drybulk revenue was mainly attributable to a decrease in the TCE rate per day by 40.8% to $7,332 per day in the first half of 2015, as compared to $12,389 per day in the same period of 2014, which was primarily due to the decline in the freight market during 2015, as compared to the same period in 2014. This decrease was partially mitigated by a net increase in available days of our fleet by 604 days.
Revenue from the logistics business was $131.3 million for the six months ended June 30, 2015 as compared to $115.6 million for the same period of 2014. This increase was mainly attributable to (i) an increase in sales of products in the liquid terminal; (ii) an increase in products transported and rates charged in both the dry and the liquid port terminals; and (iii) an increase in the cabotage fleet’s operating days and the higher time-charter rates achieved.
Adjusted EBITDA of Navios Holdings for the six month period ended June 30, 2015 decreased by $52.3 million to $58.9 million as compared to $111.2 million for the same period of 2014. The $52.3 million decrease in Adjusted EBITDA was primarily due to (i) a $29.5 million decrease in revenue; (ii) a $13.1 million increase in time charter, voyage and logistics business expenses; (iii) a $3.9 million increase in direct vessel expenses (excluding the amortization of deferred drydock and special survey costs); (iv) a $11.4 million increase in other expense, net; and (v) a $1.4 million increase in net income attributable to the noncontrolling interest. This overall decrease of $59.3 million was partially mitigated by (i) a $4.6 million decrease in general and administrative expenses (excluding share-based compensation expenses); and (ii) a $2.4 million increase in equity in net earnings from affiliated companies.
Adjusted EBITDA of Navios Logistics was $38.3 million for the six month period ended June 30, 2015 as compared to $35.4 million for the same period in 2014.
Adjusted Net Loss of Navios Holdings for the six months ended June 30, 2015 was $51.5 million as compared to $5.7 million for the same period of 2014. The $45.8 million increase in Adjusted Net Loss was mainly due to (i) a decrease in Adjusted EBITDA of $52.3 million; and (ii) an increase of $0.5 million in amortization for deferred drydock and special survey costs. This increase in Adjusted Net Loss was partially mitigated by (i) a decrease in interest expense and finance cost, net of $0.7 million; (ii) a decrease in depreciation and amortization of $2.8 million; (iii) an increase in income tax benefit of $2.9 million; and (iv) a decrease of $0.6 million in share-based compensation expense.
About Navios Maritime Holdings Inc. Navios Maritime Holdings Inc. (NYSE: NM) is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of dry bulk commodities including iron ore, coal and grain. For more information about Navios Holdings please visit our website:www.navios.com.
About Navios South American Logistics Inc. Navios South American Logistics Inc. is one of the largest logistics companies in the Hidrovia region of South America, focusing on the Hidrovia region river system, the main navigable river system in the region, and on cabotage trades along the eastern coast of South America. Navios Logistics serves the storage and marine transportation needs of its petroleum, agricultural and mining customers through its port terminals, river barge and coastal cabotage operations. For more information about Navios Logistics please visit its website: www.navios-logistics.com.
About Navios Maritime Partners L.P. Navios Partners (NYSE: NMM) is a publicly traded master limited partnership which owns and operates dry cargo vessels. For more information, please visit its website: www.navios-mlp.com.
About Navios Maritime Acquisition Corporation Navios Acquisition (NYSE: NNA) is an owner and operator of tanker vessels focusing in the transportation of petroleum products (clean and dirty) and bulk liquid chemicals. For more information about Navios Acquisition, please visit its website: www.navios-acquisition.com.
