Q1 2021 Navios Maritime Holdings Inc Earnings Call
Good morning, and thank you for joining Navios Maritime Holdings first quarter 'twenty 'twenty 1 earnings conference call. We're pleased to host this call from Georgetown and the Cayman Islands with US today from the company on Chairman and CEO, Mrs. Angeliki, <unk>, Vice chairman, Mr. Ted could try and Chi.
Financial and Mr. Jordan, Thanks Neal.
VP of strategic planning Mr. Yannick carry on.
I will now turn the call to MS. Lori Aikman, who will take you through the conference call details and Safe Harbor statement. Thank you Michael as a reminder, this conference call is being webcast to access the webcast. Please go to the investors section of Navios Maritime Holdings website, Www Dot Navios dot com, you'll see the webcast link in the middle of the page and a copy.
The presentation referenced in todays earnings conference call can also be from.
And now I'll review, the Safe Harbor statement.
Conference call could contain forward looking statements and the meaning of the private Securities Litigation Reform Act of 1995 about Navios holdings.
And looking statements are statements and are not historical facts such forward looking statements are based upon the current beliefs and expectations of Navios Holdings management and are subject to risks and uncertainties, which could cause actual results to differ.
Statements.
Such risks are more fully discussed in Navios holdings filings with Securities and Exchange Commission, the information and support should be understood in light of such risks Navios holdings does not assume any obligation to update the information contained on this call.
The agenda for todays conference call is as full as we will begin this morning's conference call with formal remarks from the management team and that's debt we relate to schools and take questions now and went to and the correlated to Navios Holdings, Chairman and C. I mean, essentially frankly.
Thank you Michael and good Monotonal here and joining us on today's call and I am pleased with that accounts for the first quarter of 2021, and the first quarters and average Continental reported that Avenue on the $117 million and then.
Adjusted EBITDA of $48.6 million net.
And then it continues to show upside as vaccine and rollout.
We believe these developments along with our consolidated fiscal and monetary policy measures.
Economic activity in April the IMF increase each 1 on cash flow 'twenty 'twenty, 1 GDP growth 2.6 per se.
Optimism about demand for dry bulk vessels for 'twenty 'twenty 1.
Please turn to slide 4 and.
Navios logistics and thereon.
Both business developed and political interest and actual fulltime sleeping mineral and grain Navios logistics, and Lindsay and leading interested actual and logistics company and the Heathrow via an aged debt.
Company maintains a 60% net debt to book capitalization.
<unk> 2021.
And the stability of land and land business can be seen in the trading level of the bone.
And at a premium to him and 6.6% Inc.
Q1, 2021, Navios partners completed the acquisition of Navios containers and <unk>.
And our supply company easy and the top 10 on publicly listed company in terms of dry cargo fleet.
And then men.
It sounds and interest in medium and in.
Painting contractors do they have and you and low leverage on Thursday.
8.3% net debt to book up of <unk> as of Q1.
And our visual condition and tanker company than it is about 119 million Inc..20.
2020 and did that and has about 5 standard medium and long term contract and anything else.
On slide 5 we show what is it the big gross and 1970 as you kind of seem to jump on GDP growth is projected to be 6% in 2020..1 non totally is the highest growth rate in the past 50 years, but we believe that the percentage increased masks implementation impact.
Non momentum global GDP in 2019 was about $88 million.
This is almost 30 times larger and the global GDP for the Dalian and 1970.
Stated another way they expected 22 and 2 on GDP growth is almost 2 times then die on GDP over the wall and 1970, Consequently, we and optimistic about demand for dry bulk vessels for the remainder of 2021.
Slide 6 go lives on.
Research and development.
And in Q1, we generated $17 million, and then anything new and $48.6 million and adjusted EBITDA.
Also on deep and novel.
And I am charter rate than day of $17864.4 on it.
Capesize vessels and $10091, 1 on panamax vessels and $11500 flat older and had the Max vessels.
And then update on S&P and does it is here today and 2021, we agreed to sell 5 vessels for $65.1 million per.
Any views on the slide for the details of the vessels shown at year to date, we have already paid 71 million on debt facilities.
And lastly, and an update on Navios partners and the company has a benign the inverse of that day.
And he is 1 of the adult and publicly listed dry cargo fleet no money on.
And May 'twenty, 1 on ownership and then and then Inc was 11% 184 and $5 million.
Slide 7 goes through on chartering strategy and potential operating cash flow.
And in Asia for the remaining 9 months of 'twenty 'twenty, 1, Unfortunately, vas and sleep and $11443 and total available days for the remaining 9 months of 'twenty 'twenty 1.
Operating breakeven is estimated and $17317 then open index linked day, they don't and weighted average age for on sleep open and index data.
Based on guidance and market demand is.
<unk> $9014 per day.
<unk>, 4 and 8% mainly on Mondays on exposed on the spot market. So that we can capture margin I'm sorry.
Slide 8 highlights and liquidity position average.
As of March 31st 2021, and then to become and dial Aviation was 98, 2% and we will have cash of $61 million.
I'd like now to turn the call over to me and Georgetown and you're all these Navios holdings CFO George Thanks, Angeliki. Please turn to slide 9 for a review of the financial highlights of the first quarter of 2021.
Adjusted EBITDA for the quarter increased by almost events per cent to $48.6 million compared to adjusted EBITDA of $28.7 million and Q1 of 2020.
EBITDA and net income for Q1 of 2021 were adjusted to exclude a gain of $26.4 million relating to the merger of Navios partners, Navios containers, and and impairment of 25 million relating to the sale of 3 vessels.
The increase and adjusted EBITDA is mainly attributable to the increasing the PC era and achieved in the period, which more than doubled compared to Q1 of 2020.
Adjusted net loss for the period was 5.8 million compared to on adjusted net loss of $23.8 million net and 2020.
The 75% improvement is mainly due to the improvement and adjusted EBITDA and English, partly mitigated by about a 4.6 million increase and interest expense, mainly due to the new bond of NAV yourself on making on logistics.
Please turn now to slide 10, where the balance sheet highlights are presented.
As of March 31st 'twenty, and 'twenty, 1 we have $60 million and cash compared $211.2 million at December 31st 2000 and trend.
During the quarter, we reclassified the junior and a ship mortgage notes from long term liabilities to current liabilities and boost you within less than 12 months.
Over the next few slides I will briefly review our affiliates.
Please turn to slide 11.
The merger between Navios partners with novel containers was completed on March 31st part of 'twenty 1.
Transaction be scaled to a larger diversified asset base with an increased earnings and earnings capacity and.
And it now has a fleet of 89 vessels and he's 1 of the top 10 dry cargo publicly listed companies.
Approximately half of the fleet is dry bulk vessels and other harvest container ships.
The enlarged entity will also benefit from and simplified capital and organization on a sexual and thereby reducing costs.
Following the merger and Navios holdings owns 11% of Navios partners.
Turning to slide 12, Navios holdings owns about 29% of Navios acquisition.
And then <unk> has a fleet of 45 tankers, including 12 instances.
Pandemic has had a material impact on the tanker simple early in 2020 the need for storage and drove tanker charter rates higher.
And as the pandemic progressed, the recession and the travel industry, which drives significant volume demand affected on transportation.
While the outlook as much bread and now with countries willing to vaccination programs and the travel industry is showing signs of revival and the market still remains difficult today.
And this concludes my presentation at this point I will turn on the call over to Jan is guidance for his review of the Navy yourself on medical logistics results and Janice.
Thank you Joe.
Slide 15 provides an overview of Navios logistics, which as you know is a consolidated subsidiary and other holdings and a reportable segment and Navios Holdings financial statements and <unk>.
And just logistics operates 3 port terminals, which are complemented by our barge fleet for EBIT per patient and product tanker fleet on Costa Rica per state.
Our last 12 month, adjusted EBITDA was 93 and media.
And you know we commenced the process for a potential and registered public offering in the United States and in Brazil and South.
Due to market conditions and other factors in each of those markets.
And the results were in a quiet period and will not be answering questions with respect to navios logistics business or financial results.
Please turn to page 14 in the first quarter of 2021, and EBITDA increased by 5% to $23.6 million from $22.5 million in the same period last year.
Do you want to perfect Glenn for you on Port segment, EBITDA increased by 29% to $17.8 million. The increase was mainly attributed to higher throughput and the grain and setting that.
During the quarter, we moved 519.83000 tone from gains compared to Jack and Hamilton 94000.
And the same period last year.
On the iron ore side Vale did not move cargo through our bedroom and then during the quarter and we understand they are selling more iron ore to Argentina, However, and then I'll take or pay contract with violent weird and Adam and good Avenue and at a minimum guaranteed quantity of 4 million tons per year violent and assume cash shipments in and out there.
And then inadequate AP Vito.
And with Odeon and resumed operations and marked moving 116000 tones after having suspended shipments due to low water levels and delivery system in the prior period.
Amit strong demand for iron ore in the current environment, when receiving inquiries from potential clients fortress shipment of iron ore and that originates from Colombia, and Brazil and Bolivia.
In the bulk segment Q1, 2021, EBITDA was 4 million compared to $4.7 million in Q1.2020.
The decrease is attributed to higher operating costs from increased utilization of our own employees to share to be contra.
Next on tradesmen and volume doctors does that replace had been legacy time charter contracts that expired till 2020.
During the first quarter on newly built 6 liquid barges combat commenced their 5 year time charter contracts from which we expect to generate approximately $4.7 million on your EBITDA in.
In March 2021, we acquired 3 push boats and a think tank barges and command and associated with 5 year and take or pay contracts of affreightment or transporting fewer and we expect to generate approximately 8 million on your on EBITDA from this contract.
And our copper cash business do you want to talk on 'twenty, 1 and EBITDA decreased $1.8 million and 4 million and the same period last year, mainly attributable to lower time charter and 8 and fewer operating days due to market conditions.
For Q4.
And for Q1.2021 brokerage for the quarter was $2.5 million compared to $6.9 million in the first quarter of Tucson and planting this day.
Greece was mainly attributable to $5.1 million higher finance costs, mainly due to the new senior notes.
Please turn to slide 16, Navios logistics kind of strength balance sheet with no significant maturities until 2025 on.
Our bond is trading above par, yielding 6.6% cash and cash equivalents at the answer on the first quarter of 2021 were $40.3 million compared to $74.9 million at the end of 2020 during the quarter, we paid 15 million day native to the 30 million acquisition on.
People's boat and 18 tank barges with a balance to be paid in 3 equal annual installments.
Net debt to book capitalization was at 6%.
I would now like to turn the call over to debt per tonne.
Thank you, yes, please turn to slide 16.
Slide 16 presents our diversified dry bulk fleet, consisting of 43 vessels totaling $4.8 million deadweight just in.
Capes twenty-three Panamaxes force Supermaxilla on handy size and continue to be 1 of the largest U S and what's the Drybulk fleets established over 65 years ago. The average age of the fleet is 8.3 years, 22% younger than the industry average average.
Group's total fleet of 185 vessels includes 94 dry bulk vessels 53 tankers and 38 container vessels Navios is a highly diversified public shipping company.
Turning to slide 17.
Slide 17 highlights our E. S. G initiatives maritime shipping is the most environmentally friendly means of transportation.
And as it is the most energy and carbon efficient mode of transport.
Zero emissions by 2050.
And this process, we have been pioneering and are adopting certain environmental regulations up to 2 years in advance and we.
Aimed to be 1 of the first fleets to achieve full compliance.
Navios is socially conscious group, whose core values and include diversity inclusion and safety and we maintain policies and procedures to provide effective corporate governance and a clearer code of ethics our borders.
And what is composed of a majority of independent directors and independent committees and all.
See our management and operations.
Please turn to slide 19.
Q1 of 'twenty 'twenty, 1 was the strongest opening for any year and the last 10 years counter seasonal demand and restocking drove exports, which propelled and VDI Q on average to 17.39 3 times the level of the same quarter last year.
And as of yesterday, and the BD I stand at 27 and 54.
Year to date average up over 250 per cent compared to the same period last year.
And the recent strength and capes rates can be attributed to increased iron ore and coal exports. Additionally, surging oil trade driven by strong demand for both major and minor bulk commodities and supporting rates and all asset classes.
Government and emergency monetary intervention and the evolving vaccine rollout has kick started a fast and unexpected recovery and all of the economy.
He was elected Elliot and I have to increase its 2021 GDP growth projections to 6% the highest and 50 years led by an 8.6% expansion and China, India and developing Asia.
'twenty 'twenty, 1 dry bulk trade is expected projected to increase by 3.7%.
Please turn to slide 20.
Slide 20 shows demand is forecast to outpace net fleet growth and both 'twenty 'twenty, 1 and 'twenty 'twenty 2 and Greg.
On the left shows after 2020, 1 dry bulk demand for the 3 major cargoes and mine or coal and grain is forecast to increase by $3.7 per cent compared to 2020.
And you look at the graph on the right net free.
The growth is forecast to be $3, 1 per cent this year and only 1.2% for 2020.2.
Net fleet growth is expected to remain low over the next few years as the order book is the lowest on record.
Turning to slide 21, despite the pandemic global iron ore demand is expected to increase by 3.3 per cent. This year. Additionally, availability of iron ore shipments to China are expected to increase our steel mills, and replenish stockpiles and driving demand for capesize vessels.
Key source of additional ton mile trade will come from Brazil, which is forecast to increase exports by 9.7% or 33 million metric tons after hitting a 6 year low in 2020.
Forecasts are also for girls and iron ore imports around the world.
Facts of the pandemic recede.
Europe's imports are expected to grow by 70 per cent and Asia, Excluding China is expected to import 13% more iron ore in 2020, 1 and then in 2020.
Please turn to slide 22.
Asian coal imports, which account for over 80 per cent of world seaborne coal trade are expected to increase by 3.8 per cent and 2021 filing and declined to $6.30 per cent and 2020.
2020 decrease was mainly attributed to India, and Chinese coal imports declining by 11% and 8% respectively.
And other southeast Asian countries increased coal imports by 11% and 2020 on expected to further increase in force by 8% this year.
Turning to slide 23.
And ever increasing world population.
Security issues, driven by the pandemic as well as increasing protein demand worldwide.
New support the global brain right.
Grain production this year will reach a record according to international grain Council and the USDA.
Worldwide grain trade has been growing at 5% CAGR since 2008, mainly driven by Asian demand, which increased by 15, 5% and 2020 is expected to increase a further 5.8% in 2020.1.
<unk> total world grain trade increased by 7% and 2020 and is expected to increase by 2.5% 'twenty 'twenty 1.
Please turn to slide 24.
The current order book stands at a low 5.8 per cent of the fleet Newbuild. The contracting was down 43 per cent in 2020 compared to 2019.
Accordingly, 2020, 1 net fleet growth is expected at 3.1% and only 1.2 per cent for 2020.2.
The projected increase and dry bulk demand from both years.
Turning to slide 25 vessels over 20 years of age are about 7.5 per cent of the total fleet, which compares favorably with the previously mentioned record low order book scrapping totaled $15.8 million tonnes in 2020 on there.
Just double the 2019 totaled.
Year to date scrapping has totaled $4.5 million tonnes, which is on pace for total about 11 million tons.
In conclusion positive demand fundamentals, mainly due to strong restart of economic activity and round the world along with reduced fleet availability should continue to support the dry bulk industry and its continuing effort to navigate through this easing pandemic storm.
This concludes my presentation I would now like to turn the call over to Andrew Linky for her final comments.
And you're lucky.
Thank you.
This completes our formal presentation, we open the call to questions.
Thank you the floor is now open for questions. He wish to ask a question at this time simply press Star then the number 1 on your telephone keypad again that is star 1.
And at this time I'm showing no questions I'd like to turn the floor back over to MS. Angeliki. Thank you for any additional or closing remarks.
Thank you.
And.
Yeah.
And with him.
Cool.
And the market and.
Q1, 'twenty 'twenty 1.
Sure.
And on that 1.
And Q4 Q on them.
'twenty 'twenty 1.
Yeah.
90% and income.
And is there any more to that.
On a quarter.
And over 50% increase from the BVI, so with it and.
Uh huh.
Often inc.
Next day.
11004 hundred days.
9 months.
And we'd be able to capture a lot of day upsides.
Thank you very much based on planes.
And any time.
Thank you ladies and gentlemen, this does conclude today's call you may now disconnect.
Yes.
Okay.
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