Q2 2020 Navios Maritime Partners LP Earnings Call
Thank you for just one Navios Maritime partners second quarter Twentytwenty earnings Conference call, we yesterday from the company.
I didn't see own essentially.
Chief Financial Officer, Mr. status, the Sheepish and executive Vice President of business development to Georgia No.
As a reminder is going to school is being webcast taxes to what does this coach in the past a section of Navios partners website, www dot obvious dash and not be dot com.
See the webcast link and looked at the age and a copy of the consolidation referenced in todays earnings conference call philosophy.
Now I will review the shape because they.
This call for school could contain forward looking statements within the meaning of private Securities Litigation Reform Act opened 1995 about <unk>.
So we're looking statements such statements that did not destock attacks.
Forward looking statements are based upon the current beliefs and expectations with my this patent response.
Subject to risks and uncertainties, which could cause actual results to differ materially from to forward looking statements.
Such risks fully discussed in Navios partners' filings with the Securities and Exchange Commission.
The information Sep 14 should be I understood in light of such risks.
Scott This is not assume any obligation to update the information contained in these conference calls.
The agenda for today's call is phones first response.
Remarks.
Mrs. Sheepish will give an overview of Navios partners, such as that Dan myself and others will provide an operational update can didn't need to see Korea, and lastly wouldn't go to take questions no technical over to Navios partners, Chairman and CEO actually came from Chile, They could always.
Good morning to join Us on todays call right up on Democrats greatly affected leases competitions people on over the wall, they're not respond <unk> Oh, the newest, especially the it would take great pride and they say steel frankly.
Adapted to this ever changing environment.
Despite the but they may I am pleased with a Johnson, a hiccup or kind of twentytwenty.
Now there's <unk> 40, 615, maybe on the revenue and four different I mean, I've got to dividends.
Now this Bartlett also declared a quarterly distribution of five cents a unique any presenting and mine you want a distribution.
50 cents pretty good.
[laughter] abuse liability is that any data from that leave this important NBC really we currently do is a distribution you mean like it was a combination giant is integral to and from the ongoing funding.
And then make negative if they don't go by going all the connectivity gum disease and they do they show that delta in jobs every year to date Twentytwenty. They gave us ice class B C. They get averaging around $9700 that day.
Even with a gathering, thereby [laughter] comedy emotional guns, and then to normalize ways of doing business the candidate to 50, but.
That that 2019 average delayed due $2000.
As you can see slide five.
And then maybe see scan to 50 cities.
On December 29, being liquidated nontraditional work and during the second quarter 2020 weekly data is not an issue.
And then that caused that visiting one final question in do not wish my my time going David.
I see you can see why not in the spot because if he has it been yesterday boxy they've got.
We have a strong biopsy was only up.
Our net debt because that is easily 17.7, but then we have I get that maturity and not nave and go make it goes up that's why.
We have got spoke about the <unk> with about 500 million any maybe contracted revenue for the shekel House Twentytwenty approximately 79% open and index linked they have in mind devoted breakeven 8008 founded in one area that open day.
Slide seven seemed very different than in but Oh, no body, great. Yeah, I am that projects for when I personally think could eat into interest Wendy diddell, but you need to be mostly driven by 8% decline in that zone is gone.
I think he's out of it is an option to what's going on we kept David.
Okay, great expected to congrats Mike.
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2020.
We may have very much of this negative impact that first time, most like 20.
Got official jazz extend no doubt looking for one quarter example, objected to the Gulf. It in the second half Twentytwenty and dry bulk trade is projected to increase by four points expression in twentytwenty want more although no Boise disease expected doing days by 5.4.
My sense in 2021.
We would expect to be boy did for the died by great.
Slide eight shown in house, and then man has weathered the storm agenda on buying market. This out.
The second quarter Twentytwenty, we didn't anything.
Im glad to their media in adjusted EBITDA and and at times are they clearly after they have $11202 that day.
Asked watch our bidding activity that goes with it helped us provided us with booked action against them going marketing Donald.
We have 61.2 books and all that day seeks to for the second cost.
Twentytwenty it did not good job to a.
10000, 6067, daughter <unk>.
Net but they and their remaining open days provide us with it they keep it.
8008 sound and Landata that open day.
I do any financing activities, we entered into abduction like existing maybe Oh, no imaginary bump I see it was included $17 million machine, Pete Doherty finance for Dana shape and Glenn denied on five media noted on to find them five.
No I bought but actually acquired from Nashville up too.
We also completed they liquidation Navios Europe do during the second quarter and that they see bubbled up 17.3 media will shed business at all at the 0.7, maybe on a GAAP and that violence when they do in volume flights a day bye bye.
Do they not section of long and walk concocting.
90 days have cost that option for the remaining six mom or dad doing 61.2% or a very important data I think so they're not very today that didn't thousand six down to $67 next but they are 3006 done in a 41 open black index billing days.
Well why this was a big even over 8008 founded in one dollar that open day, but also allows to generate a $16.6 million I show me guys great.
Hi, Dan shows anybody as of June Thirtyth Plenti branding, we have thought that gospel spending 9.8 media and thought that it but one of $488.2 million.
Net debt to become the dice Asian 78.7, but that would have died get deadlocked toys and not for me to girls Capex.
At this point I would love to them, that's going to stop of the CP Novitas botanist she had full wouldn't bankers, who they josh when they second quarter of Twentytwenty thinking really getting good morning.
I will briefly review on the lead for initially this one's for the second quarter that ended June 30 closing drinking.
If I Miss any formations, including the businesses and you summarized in the slide presentation available in the company's website.
Before I start discussing our financial highlights I would like to draw your attention because I didn't want to fight them look at least at in slide 11.
For simplicity, the discussion with different council itself.
Excluding the effect of the woman findings leaves a condition right.
Moving to slide 11.
A couple of a second quarter the fulfillment Wendy decreased by doing a person four to six in the helped me on the book for the 70.7 million put it could go through whos willing to him.
The decrease was mainly due to the principal in 7% degrees and the things out that equivalent that even cheaper in the second quarter 2000 drinking.
This decrease was mitigated by the 25.8 question can you just over 11 days.
Adjusted EBITDA for the second important it wasn't Wendy decreased 1.3 million compared to 20.3 million in the second quarter two pushing it made him, but he might lead you to 5.4 million in conditional but at the expense is your door loves this clean and the point 9 million because he is an equity in an explosion lavish lumpiness.
Adjusted net loss.
Among the driven Greentech media during the second we'll get sufficient Wendy we reported a net they will be extended plus 1.1 week.
Replacement and maintenance got because it was 8.6 weeks.
Let utilization for the certainly walking away from almost 99%.
Moving to the six month financial backing shot that every new probably six months because by 1.6 million Glenn considerably.
We have to 94.6 million defense counsel to Washington.
The decrease was mainly due to their main pinpointed person decreasing the things had that equivalent that he does it fit into the second half dozen drink.
This decrease was mitigated by the 25.4 person who can is not over doubled the days.
Adjusted EBITDA for the fiscal 2000, Wendy amounted to 33.4 million compared to 45 million at the same Peter Blessed.
Hi, mindedly due to an 11 million increase in operating expenses due to at legitimately, which was partially mitigated by point 8 million increase in equity medical numbers one payments.
Adjusted in the global defense comfortable from Greenfield amounted to 11.7 million.
Operating surplus for the six months ended June Finfet between 24 sequencing become then interest like route I will briefly discuss them keep on Sunday. It doesn't you intend to closer grant.
Gosh, I think we well into was interested to medium long term borrowings, including the kind of portion mentally fund fees amounted to 488.2 medium.
Of course of this has been significant degree obviously these under with any financing the terminal.
It really was a decrease in like wage.
This is I didnt reduction if interest expense for the fiscal 2000, grandee, approximately 9 million compared to the same Peter because as you might be.
Net debt to capitalization was 58.7% of the ended the quarter moving to slide 15, we declared a cash distribution for the second quarter 2025 cents, particularly if we want to degrade the since but a unit on an annual basis.
Regarding dynamics that fusion provides for an effective use of approach when didn't have person Muslim yesterdays closing price.
Medical need is a wish them and the Freeman day, because or was that in 2000 drinking.
I will discuss distributions for the quarter them under point Sixmillion.
Slide 14 chose the details or.
We have a large modern divestment good would it will in capacity, probably 43 million did we do an individual eliminate yes.
Our political uncertainty presence within Capesizes Squinty Panamaxes six really doesn't do much inteliquent investors. It's like interesting you can see the least amount uplift with the conducted the reason that perspective expediential data premise.
Our toughest coming over the remaining contract duration of approximately two years.
Currently we have complex, 95% or whatever 11 days will come in printing and good wondering how person for profession grinned, one including days conducted an index linked charters.
Explanation days extended Washington DC.
In slide 16, your country, the danger and I wish Lumpiness.
I think lead conversion to nine Containerships Navios partners has affected in half percent ownership interest in numbers when things.
I know part of the Golden George Achniotis Executive Vice President business development, because neither protection tankers Druthers. Please turn to slide 18 in the last few months, we have seen excellent inadequate up he'd be that age is first half cargo demand slots on the back of the but don't they stay trumps caused by the time damage.
However, the Chinese economy, which accounts for approximately 40% to 40%.
Well, Brian drab I paid intend to positive growth in Q2 on the back of government stimulus, particularly aimed at infrastructure spending.
The BP I reflected these unusual should seasonality by reaching a year to date, all see IP, but he made me before turning around to reach a nine month hi for 1950 shakes in early July on tobacco were stronger recovery in demand.
By Brazilian iron ore exports about shared capesize rates reached close to $4000 before handing over the last few weeks.
With the entire no continuing to be affected by that amount. They make the IMF project as global GDP contraction of 4.9% for kind of tricky.
Right, 8% contraction in advanced economies.
Governments have put in place unprecedented emergency monetary and fiscal classes to support their economies.
Neither of these projects the 5.4% globally GDP growth in 20 tried to us.
As there is not all the above seaborne dry bulk trade is projected to contract by foreign have presented transatlantic and grow by 4.6% in 21.
Turning to slide maintain the graph on the left shows stuff within several couple of at year end product demand for the three major most admired more coal and grain is focused a lot piece the first half by about 8%.
These increases led by I don't know, which is expected to grow by about 8%. What did you 5 million times module, which would come from breast. So you adding to turn Max.
If you look at the graph on the right net fleet growth is focused would be 3% is here.
Several truck deliveries are expected to be 4% to 4% lawyers on their first though there is nothing less than 1% expected netscape goals in the second half.
Turning to slide 20, Chinese iron ore imports were flat last year, but then expected to increase by 4.4% in turn into.
Chinese steel makers have reduced and I are most sometimes by about four to 7 million times between June 18, and Tonight and dressing.
Without additional every lever you doing my on boarding to seven have often in Turkey.
Shipments from Brazil, Mr. any other China I expected to increase by about 40 million transcript border teammates or Blendstocks binds driving demand demand for capesize vessels.
The Chinese fiscal stimulus and infrastructure spending should support seed production in the <unk>.
And it turns I have been paid going forward.
Moving to slide 21.
Combination of different damaged and a significant dropping the price of oil and gas has resulted in the U.S concrete.
Asian coal imports, which accounted for over 80% of their world seaborne trade unexpected to decrease in 2020 by 6.4% by the increased by 5.2 percentage anyone.
This reduction I started adventure on this one or size vessels, which has been partially offset by increased demand for grain to discuss wonderful next slide.
Thank you try to.
When working today has been growing by approximately 5% I guess since 1008, mainly driven by Asian demand.
Recently, China has been a major bio soybeans and corn is it seeks to really big piece right here.
I never increasing one population as well as increasing protein demand worldwide continues to support the global grain trade.
With a pandemic disruptions closing we knew my grain trade disruptions the international grain Commsuite projects, Anguishing pencil with corn and soybean fluent they're trying to trendy grew up in Korea.
Please turn to slide 23.
The current order books that are doing you for 7.4% of their fleet, which is the second lowest since the 7.2% of course, they may pretty production in two.
Newbuilding contracting has collapsed in here today is down by about 66% compared to 2019.
With the order book being front loaded this year and scrapping expected to accelerated in the second half due to their phase out of their Bolivia overseas net fleet growth is expected to remain low at about 3% in driving traffic.
Turning to slide 24.
This is over 20 years of age or about 70% of that product fleet, which compares favorably with a previously mentioned low order book.
Scrapping were started slowly due to a combination of the pandemic look down and logistic I could change challenges now stands at 9.6 million tons year to date.
This amount already exceeds the dollar for the whole of 2019 any piece it makes sense a 1% of the fleet.
In conclusion positive demand fundamentals, mainly due to the easing of looked arms around the world and the restart of economic activity along with reduced credit availability of course by their balances out of its via losses.
Should provide support to the dry bulk market. He means continuing therefore to navigate through the pandemic store.
This concludes my that my presentation I will now I'd like to turn the call over time getting geared towards your final comments.
Thank you George.
That completes our form an opinion.
And of course.
The floor is an open for questions. If you wish to ask question at this time. Please press Star then the number one on your telephone keypad. If at any point. Your question has been answered on you wish to remove yourself I look you press the pound key.
Our first question comes from one of Randy Givens of Jefferies.
How do you clean obvious how are you.
Good morning.
Good good.
First question, obviously on the distribution card.
Why would that cut from 30 cents for five cents.
Come up for that number and then now that the Drybulk market has materially improved in her presentation, that's pretty bullish for that philosophy or any chance. The distribution. Good increase next quarter or soon thereafter, but we expect to eat or kind of positive income.
Very good question.
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So basically.
Well not that environment.
No.
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I mean there.
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Not much deeper.
I mean.
Last quarter I mean it was.
Hi, guys.
Right.
But uh huh.
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Okay I was there any.
No specific benchmark to look that's a cut it down to five cents instead of than 10 or zero.
I think what I'm in knowledge around that gotten everywhere.
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Yeah.
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Gotcha.
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Okay.
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So basically.
Me too.
He.
Sustainability Ghobadi.
Okay, and then looking at Navios Europe to secure receives 2.7 million in cats.
And that's what was the total equity value in the vessels you receive no net of debt and then also on that it looks like you raised the school $29.5 million known for those vessels, but it matures and less than a year. So that's what are the plans for those vessels I notice that loan that's here.
We've got a short.
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Sounds good.
So we.
Don.
But.
I mean, it's just thinking about your confidence.
You know what haven't raised.
Good to my true.
Yeah.
Got it back up so.
Oh, we didn't mind.
Okay.
At least that absent some a lot of that.
Greetings and your bike.
So one thing I'd say here.
And then ma'am.
Good day.
We have a company would it make no breakeven nobody after that.
I get that much so yeah, they bought it oh.
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Environment as we see.
And one thing that I see that.
Yes, it does.
The second time for that I bought.
Why don't we see.
Well that's helpful.
That being said.
Uh huh.
Yeah.
There's no. Good then.
You know still good luck.
Yep.
I couldn't give some contracts around the I couldn't value of those five vessels none of the debt.
Hi, My presentation that we fundamentally seem a little funds have been didn't have to me.
Yeah against up this year, we got that only 2.7 million cultural that is towards the mid value over the message was emissions.
So.
Got it.
As I look as I said you know.
Because that came with a licensing usually when you finance.
With this facility.
And Tonight.
Oh I thought it was it as much routing mixed.
And now this facility effectively.
Most coveted the balloon up as much but there's nothing that these are just haven't made its kind of.
Right.
Yes.
Got it right and I guess, a quick strategy question about on my one question for you know looking at the unit price now oxy two that are pretty steep discounts and then he you also have a lot of vessels over call. It 15 years of age. So I just wanted your thoughts on those two selling vessels and repurchase.
Either simultaneously or broke separately.
Actually that's a very very very good question or not I think part of that God. They did their balance sheets.
The company I mean father, what Oh, I'm going to some of them.
Only live activity.
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I guess I shouldn't do not Oh two times.
You know these can be.
You know are going to keep I've seen young and they didn't ongoing.
And.
You know, we need that not a couple of years ago and this is an ongoing bonuses.
And Oh.
Let's see.
Bob.
I don't want ongoing.
Strong.
Sure and repurchasing units.
[laughter] bonds or I mean.
Yeah.
Five though.
Todd.
GAAP income.
Exactly.
So I think nowadays now adding that.
Right.
It's really made week.
Hi, I'm going to just lastly, just a quick modeling question.
No the mix in terms of or you asked and then I was in line up.
Could you give jump in G. I know there was partially offset by a drop in interest expense right. That's what cards that gene another increase and work run rate.
Use for these two expenses going forward.
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As a directly linked quarter and I'm going over the vessel.
That makes sense.
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A quick DNA did nothing.
Since because.
And I wouldn't sit by somebody could easy is.
That is part of that.
So I don't see you must be doing it.
Yes.
I think this is a good that somebody is going forward given of course, they could easily have today.
So the almost 7 million because it was 4 million first quarter right, then and he's just seasonality on the GMH six your seizure study.
Well this.
Yep.
Yeah, So I would say that fortitude doing before the 7 million these numbers.
But they can go countries on balance sheet could do you want him to see you have to expected to be losing again.
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No I just made sure that and then on the.
Interest expense.
Interest expense I think this is a good run rate I mean this is a combination of called it works unless you have to be fine wasn't Eminem.
Sure we did you significantly.
But fortunately its a.
It's a month it'll probably be could isn't the LIBOR rates et cetera.
Absent the nine month, we have approximately 9 million in big cities in maintenance expense and I think this is.
Something that you should keep a country that is one of the future I mean, just I'd do of course thinking facility.
But ahead on that.
Say it should be.
They do you that doesn't.
Sorry.
All right well that's it for me if that's correct.
Thank you. Thank you.
I'm showing no further questions at this time I'd like to turn the call back to this angeliki frangou for any additional for closing remarks.
Thank you this completes our quarterly.
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Thank you ladies and gentlemen, this does conclude today's conference call you may now disconnect.
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