Q1 2020 Navios Maritime Holdings Inc Earnings Call

It does today from the company Chairman and CEO Mr., Angeliki, Frangou, Chief Financial Officer, Mr., Georgia, Nowadays, Vice Chairman Mr. Jones, and senior Vice President strategic planning, Sir Your line is cutting out.

As a reminder, this conference call it has been what can.

Just a webcast. Please go to the they sit section this holdings website at <unk>.

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No I will review the Safe Harbor statement.

This call Tesco contain forward looking statements within the meaning to the private Securities Litigation Reform Act 1990.

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Hi, Skalicky say Atlanta based upon the Grand beliefs, and expectations is clinics management and subject to risk and uncertainties, which could cause actual results to differ from the forward looking statements.

Such risks are fully disgusted Navios holdings filings with the Securities Exchange Commission the information Sikorsky didn't should be understood in light of such risks.

Well do not assume any obligation to update the information contained in today's conference call.

The agenda for today's call preschool <unk>.

Well the game this morning's call school with all my remarks on the management team and afterwards, we'll open to go to take questions no tend to grow overtime. This whole dates chairman and CEO essentially.

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I am proud of them.

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We'll have begun the necessary measures to ensure safety or what exactly why keeping athlete functioning.

Moving to a financing the job.

Now this condensate bought the revenue 91.1 meal.

Dollarstwenty 8.7 meal.

Time charter anyway.

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Second quarter.

For example, you have to date.

When do they gave <unk> D C.

I don't $5000 per day that's.

2019, Oh.

Well, they do $1000 per day.

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Let's turn to slide for you guys see.

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Born business continued to grow.

It's great Danes.

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Hi, Good company, then if they did too robust market fundamentals [laughter] bye bye.

About 450 million in long term contracted did anything.

And do not respond.

It's kinda about 498 million of contract revenue.

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Finally, the days above.

But I don't know by Great. Yeah, I have met pro Dex City, but then degrees in globally. The big growth for 220, mostly driven by a six month and decline in at the time economy as they say well they just happen to one economic activity.

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We believe that we have much of this in but he had to date comedy show.

Extended downtime looking for what's going on.

Objected to recover the single haven't started to 20.

2021 related to diesel cost decreased by 5.8, but then and but they still objected to increased by 4.7%.

Slide six big so they didn't drive by demand expected to the second half of 20 painting and they sitting in Capesize fleet. They demand in the second half of Twentytwenty is expected to outpace the demand in the first time buyers for the told me that they don't.

Slide, 9%, Oh that demand by God.

No not just forgot to engage all about how the meal metric tones or 14.1%. Additionally, the damage.

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Oh, gosh, if not the least scrapping.

Now that they south of the remaining 25, the all the time most the idea they effectively data for the Capesize fleet for two and a 20 year to date is about one question.

All the time by fleet is expected to go.

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Slide seven high <unk>.

Right. So we expect to liquidate that investment at least not just do during the second quarter of Twentytwenty anything that the 1.5.

Yes, my down 7.9 meal God.

So on a GAAP, but not much.

Okay. So that's been approved by the Novitas called expression Committee.

We ended the year should go.

Up to 50 meals, so minutes that they know they still five.

And my intuition before Ftwenty plentiful not usually have the option to defend basin by basin. During that first here that there is outstanding well then ended at an eight seven but then on then you said amount.

And then update.

Yes, David usually do believe they have to do I'd be glad to be panamax vessels under bareboat charters.

They did this sales now stands at 2000 I do believe Panamax actually for 6.7 me.

Eight <unk> liquidity position. So that's the first twentytwenty.

Net debt to become.

So was 90.6 machine and we have got 55.2 me.

We have not significant committed shipping girls topics I.

I would like now, but then the going well let them they said George.

Novitas holding CFO John.

Thank you I gave it appears to have to slide nine for the review of the financial highlights.

First quarter after any trends.

Adjusted EBITDA for the Board there was 28.7, New York compared to adjusted EBITDA of 56 and me on incremental 19.

Every time, they didn't council coupon of 22 and people are adjusted to exclude.

I was hoping 11.2 me young relating to this deal to this is an 18.3 million impairment relating to Navios Europe to both basically in Florida fees.

Every time that income for 219, when adjusted to exclude driving it happened, we don't book losses relating to the <unk> Im told me it'll be die from I guess one thing.

The decrease in adjusted EBITDA as many attributable to that end use Tc rate achieved in that period compared to 219 due to their brain damage.

The available days that legal or sort of use by approximately 13% due to this eight of our older vessels.

Adjusted net loss for the beauty was 23.8 million compared to one adjusted net income.

466009 2019.

That's really is mainly due to the reduction in adjusted EBITDA named was partly mitigated by about 3 million already that train depreciation and amortization, mainly due to the sale of our older vessels.

Please turn now to slide 10, where the balance sheet.

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Long term debt, including cardboard <unk> increased by 54 million only the board.

Mainly due to this aimed at least bubbles to capesize vessels delivered into our own fleet in Q1.

Well the next few slides I will briefly review our affiliates, please turn to slide 11.

Navios Holdings owns 18 in personal Navios partners Navios partners also if you. The 48 vessels 58 dry bulk in a 10 containerships and M.M. shown up owns about 34% mothers containers.

Based on the company's current distribution, we expect to receive about 20 million I know the dividends.

He's made what do you see about 200 metering dividends from animal.

Turning to slide 12, Navios holdings owns about 31 personal Navios acquisition and then they had shifted a 46 tankers, including 13 VNC says.

The company's and drawing that he covered in the back your market. It has gotten significantly improved revenue compared to Q1 of 19.

Based on the company's kind distribution, we expect to receive about I pointed me doing on dividends.

His closing them anyway received about 96 million in dividends from and then they.

Moving to slide 15.

Holdings owns about 4% of another one day.

NMC I guess, if we don't 29 Containerships. The company was established in early 2017.

I wish that weakness in the containership sector is getting gabi, each keep quickly and efficiently.

Since December of 2019 obvious one Danish units have been trading on NASDAQ Global select pocket.

This concludes my presentation at this point I will turn the call over the youngest got to grow. This four keys revealed that I just don't make logistics results. Thank you George.

Slide 14 provides an overview then obviously all these things.

And obviously a de CIX <unk> report better <unk>, which are complemented by a box skied 40 passport base.

Thank you fleet cost recovery that's great.

During 2019 lobbying Navios logistics EBITDA has grown.

Gig.

Our EBITDA for the last three months was accounted to me.

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Do you spend a basic thing.

We focus on growing our board business never ending August <unk> and developing new infrastructure.

In May we signed a contract who had three argument that account for that I can see clinical why don't you know the board Paramount in order wine with an undertaking from cocky the bottom of the cargo Bay I speak directly onto that ventral these calls.

Our intention is to enter into a long term agreements for the time seeking to fight on or what do you didn't anything from the mindful that Tony Hawk and go to Bob Ramsey.

Oh, I don't know, but there may not be capacity to copy volumes above and beyond the wants I mean, I'm going to <unk> and.

And we believe it offers the most cost effective logistic solution one of the time segment <unk> exports from the Golden body journey. We're currently developing <unk> seem to be Mato Grosso. This.

Moreover, we're also exploring additional growth opportunities, including the development Newport Beach stocks or what exactly 45 petroleum products, you're not available on inside they might not be made assays on into the wine.

With regards to the Golden I think on them onboard Bart gone with the suites.

Well that's out offices remain open days.

Update the parents in safety protocols.

Instead of basic Steve.

In the first quarter of 2020 EBITDA decreased by 8% to 22.2, New York completed before going to me on in the same period last year.

Do you want granted port segment EBITDA decreased by 7% to 15.7 me.

The decrease was attributed to know what a throughput in our great.

Total white boxing mitigated by a these first daughter speech no I don't know better.

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I'd like to point out that we're seeing increased throughput so far in the second quarter compared to good doors Lucky here.

Either by segment Q1 thousand 20, EBITDA reached 4.6 million some six meat on the same period last year. The decrease was mainly attributable to higher I'm talking in one is expenses related to disagree navigational going de <unk> do you know wear to work at 11 see Mehdi.

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For Q1, granting net income was 7 million compared to 5.3 meat on the same period last year. The increase is mainly attributable to higher interest income no what I want to based on expenses and income tax benefit compared to expense like you.

Instead of just like 70.

Now this reduced expenses a strong balance sheet.

Got you have to coupons doesn't Blackie was 53.6 me.

Net debt to capitalization, almost 59% compared to 56 at the end of 2019.

I would now like to data going over to that.

The year on please turn to slide 18.

Slide 18 presents a diversified drybulk fleet, consisting of 52 drybulk vessels totaling 5.6 million deadweight 17, Capes 27, Panamaxes six supramaxes and two handysize.

We continue to be one of the largest U.S. list a dry bulk fleet established over 65 years ago. The average age of the fleet, a 7.6 years, 26% younger than the industry average.

That was group total fleet of 197 vessels includes 97, Drybulk vessels 54 tankers and 46 container vessels now this is a highly diversified public shipping group.

Please turn to slide 20 <unk>.

The entire globe affected by the pandemic world economies was severely constrained as governments put in confinement guidelines in place well stay now just starting to open in April the IMF projected global GDP contraction that 3% for 2020 led by a 6.1% contraction at advanced economies to split their economies governments have put in play.

It's unprecedented emergency monetary and fiscal plans central banks have embarked on huge monetary stimulus programs in light of this the IMF projects.

5.8% global GDP growth in 2021.

Q2 is expected to be the lowest point in the contraction, we should begin to see the results other measures taken from Q3 onwards.

As a result, as the above seaborne drybulk trade is projected to contract by 4.3% in 2020 and grow by 4.7% and 2021.

Turning to slide 21, Chinese iron ore imports were flat last year, but expected to increased by 3.4% and 2020.

To approximately 1.083 billion metric tons spike the lock down in China in Q1.

Imports increased by about 5% to April 2020, compared to the same period in 19.

Chinese steel mills have reduced the iron ore stockpiles since they're all time high by about 52, and a half million tons to 109.5.

Metric tons, which is the lowest since November of 2016.

With additional availability of online or in the second half of <unk> 2020 shipments from Brazil, and Australia, China are expected to increase by about 45 million tons per quarter.

Steel mills, replenish stockpiles driving demand for Capesize vessels.

Chinese fiscal <unk> fiscal stimulus should support steel production, and then turn Drybulk trade going forward.

Moving to slide 22, the combination of the worldwide Lockdowns do the pandemic in this significant drop and the price of oil has resulted in reduced coal trade globally.

Asian coal imports, which account for over 80% of the world Seaborne trade are expected to decrease in 2020 by 6%, but increased by 5% and 2021.

With regard to China coal imports held up well in Q1 in spite of weak industrial power usage associated with covert 19.

End of May the coal burn at trying to six major coastal power plants rebounded to 674000 tons per week significantly higher than the February low a 370000 ton burn per week rate.

Coal stockpiles at the major Transhipment Port of quick one Doe ended last week at approximately 3.9 million tons down year on year by 2.4 million tons or about 38%.

Turning to slide 23 worldwide grain trade has been growing at approximately 5% CAGR since 2008, mainly driven by Asian demand.

An ever increasing world population as well as increasing protein demand worldwide continues to support the global grain trade, which have been demick disruptions, causing minimal grain trade disruptions international grain council projects record shipments of wheat, corn and soybeans for the 2020 copier.

Please turn to slide 20 for the current order book is just over 8% of the fleet, which is historically low newbuilding contraction contracting has collapsed and year to date is down by about 70% compared to 2019.

In the aftermath of the pandemic outbreak the pace of non deliveries has increased dramatically.

After near normal deliveries in January the average of non deliveries from February to me was about 30%.

This has resulted in year to date non deliveries of 22%.

Quarterly net fleet growth is expected to remain low at about 2% for 2020, we also know that falling valleys announcement for the phase out of ads B L. O C fleet.

The Capesize net fleet growth is expected to be minimal at about 1%.

Turning to slide 25.

So over 20 years of age or about 7.2% of the total fleet, which compares favorably with the previously mentioned record low order book.

Scrapping year to date of 7.3 million deadweight tons are about 90% of the total for the whole of last year.

Currently do the pandemic lock down in Southeast Asia, There was a temporary halt on scrapping once the current restrictions are completely lifted scrapping is expected to restart.

Increased pace.

In conclusion positive demand fundamentals, along with reduced fleet availability due to the valley phase out of its below sea fleet should provide support for the Drybulk market in the second half of 2020, it's effort to navigate through this pandemic storm.

This concludes my presentation I would now like to turn the call over the Angeliki for final comments.

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Thank you this floors not open for questions to ask a question at this time. Please press Star then the number one on your telephone keypad again, not a star one.

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I'm showing no questions at this time I'd like to turn the floor back overtime.

Thank you. Thank you for any additional or closing remarks.

Thank you.

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Thank you.

Thank you ladies and gentlemen, this does conclude today's conference call you may now disconnect.

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