In Hellenic Shipping News 22/05/2015
Navios Maritime Holdings Inc., a global, vertically integrated seaborne shipping and logistics company, reported financial results for the first quarter ended March 31, 2015.
Angeliki Frangou, Chairman and Chief Executive Officer, stated, “We are pleased to report revenue of $118.3 million and EBITDA of $26.2 million for the first quarter of 2015. We also announced a six cent dividend, representing a yield of about 6.8%.”
Angeliki Frangou continued: “We are in a difficult market, perhaps one of the most difficult in the past 30 years. While rates are still low, we have seen them improve about 20% in the past three months. In the meantime, we have been positioning Navios Holdings to leverage its stable platform to changing market conditions by maintaining a strong balance sheet, pursuing operating efficiencies through our economies of scale and seeking unique opportunities emerging from this market.”
HIGHLIGHTS — RECENT DEVELOPMENTS
Letter of Intent for a Second Deal with HSH Nordbank AG to Acquire 14 Vessels
In April 2015, Navios Holdings, Navios Maritime Acquisition Corporation (“Navios Acquisition”) and Navios Maritime Partners L.P. (“Navios Partners”) executed a binding letter of intent to acquire 14 vessels from debtors of HSH Nordbank AG (“HSH”) through a new joint venture (“Navios JV”).
The 14 vessels include seven dry bulkers and seven container vessels with an average age of approximately four years. The transaction is expected to close in the second quarter of 2015.
It is estimated that the purchase price to be paid to HSH will consist of cash and the assumption of the HSH Subordinated Participating Loans. It is anticipated that the cash payment will be funded as follows:
- Senior bank financing of 60% of fair market value of the vessels at closing, secured by a first-priority mortgage on the vessels; and
- $14.0 million, from an investment by Navios JV funded by Navios Holdings, Navios Acquisition and Navios Partners.
The Navios JV will not be consolidated into any of the Navios public entities. The closing of the transaction is subject to certain conditions, and no assurance can be provided that the transaction will be concluded as contemplated, if at all.
Dividend Policy
On May 18, 2015, the Board of Directors declared a quarterly cash dividend for the first quarter of 2015 of $0.06 per share of common stock. The dividend is payable on June 26, 2015 to stockholders of record as of June 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 Partners
On May 14, 2015, Navios Holdings received $8.1 million from Navios Partners representing the cash distribution for the first quarter of 2015.
Navios Acquisition
On April 2, 2015, Navios Holdings received $3.6 million from Navios Acquisition representing the cash dividend for the fourth quarter of 2014.
Time Charter Coverage
Navios Holdings controls a fleet of 66 vessels totaling 6.6 million dwt, of which 40 are owned and 26 are chartered-in under long-term charters (collectively, the “Core Fleet”). Navios Holdings currently operates 59 vessels (17 Capesize, 20 Panamax, 20 Ultra Handymax and two Handysize) totaling 5.8 million dwt. The current average age of the operating fleet is 7.7 years. Additionally, Navios Holdings has (i) five 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 third and fourth quarter of 2015, respectively.
As of April 23, 2015, Navios Holdings has chartered-out 59.4% and 5.3% of available days for 2015 and 2016, respectively (including index-linked charters), which are expected to generate $75.2 million and $11.9 million in revenue, respectively. The average daily charter-out rate for the core fleet is $9,424 and $26,007 for 2015 and 2016, respectively. The average daily charter-in rate for the active long-term charter-in vessels for 2015 is $13,408.
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 March 31, 2015:
- Net Debt to Total Capitalization of 51.2%.
- Cash of $200.5 million.
EBITDA is a non-U.S. GAAP financial measure and should not be used in isolation or as substitution for Navios Holdings’ results calculated in accordance with U.S. GAAP.
Revenue from drybulk vessel operations for the three months ended March 31, 2015 was $53.2 million as compared to $76.6 million for the same period during 2014. The decrease in drybulk revenue was mainly attributable to a decrease in the time charter equivalent rate (“TCE”) per day by 43.4% to $7,196 per day in the first quarter of 2015, as compared to $12,709 per day in the same period of 2014. This decrease was partially mitigated by a net increase in available days of our fleet by 86 days.
Revenue from the logistics business was $65.1 million for the three months ended March 31, 2015 as compared to $45.6 million for the same period during 2014. The increase of $19.5 million was mainly attributable to (i) the increase in sales of products in the liquid terminal; (ii) the increase in products transported and rates charged in the dry and liquid port terminals; and (iii) the operation of three additional convoys under time charter contracts.
EBITDA of Navios Holdings for the three months ended March 31, 2015 decreased by $33.6 million to $26.2 million as compared to $59.8 million for the same period of 2014. The $33.6 million decrease in EBITDA was primarily due to (i) a $3.9 million decrease in revenue; (ii) a $18.7 million increase in time charter, voyage and logistics business expenses; (iii) a $2.2 million increase in direct vessel expenses (excluding the amortization of deferred drydock and special survey costs); (iv) a $0.2 million increase in net income attributable to the noncontrolling interest; (v) a $8.5 million decrease in equity in net earnings from affiliated companies; and (vi) a $4.0 million increase in other expense, net. This overall decrease of $37.5 million was mitigated by a $3.9 million decrease in general and administrative expenses (excluding share-based compensation expenses).
EBITDA of Navios Logistics was $15.6 million for the three month period ended March 31, 2015 as compared to $14.0 million for the same period in 2014.
Net Loss of Navios Holdings for the three months ended March 31, 2015 was $26.7 million as compared to income of $2.1 million for the same period of 2014. The $28.8 million increase in Net Loss was mainly due (i) a decrease in EBITDA of $33.6 million; and (ii) an increase in amortization for deferred drydock and special survey costs of $0.4 million. This overall decrease was partially offset by (i) a decrease in depreciation and amortization of $4.5 million; (ii) an increase in income tax benefit of $0.4 million; and (iii) a decrease in share-based compensation expense of $0.3 million.
Full Report
Source: Navios Maritime Holdings
