Q4 2021 Navios Maritime Partners LP Earnings Call
Thank you for joining us for Navios Maritime partners fourth quarter and full year 2021 earnings conference call.
With us today from the company are chairwoman and CEO Ms Angela Tucci from them.
<unk> operating officer, Mr. Stratos, <unk>, Chief Financial Officer, Arie, Simoni, and executive Vice President of business development, Mr. George any O two.
As a reminder, this conference call is being webcast taxes. The webcast. Please go to the investors section of Navios Partners' website at Www Dot Navios Dash MLP dotcom.
Youll see the webcasting link in the middle of the page and a copy of the presentation referenced in todays earnings conference call will also be found there now.
Now I will review the Safe Harbor statement. This conference call could contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 about Navios partners.
Forward looking statements are statements that are not historical facts.
Such forward looking statements are based upon the current beliefs and expectations of Navios partners management and are subject to risks and uncertainties, which could cause actual results to differ materially from the forward looking statements.
Such risks are more fully discussed in Navios partners filings with the Securities and Exchange Commission.
The information set forth herein should be understood in light of such risks.
These partners does not assume any obligation to update the information contained in this conference call.
The agenda for todays call is as follows first Ms. NGO will offer opening remarks.
Next Mr to see basically providing navios partners operational and fleet update overview.
Next Mr. Mahoney will give an overview of Navios partners financial results.
Then Mr. I've Youtube will provide an industry overview.
And lastly, well open the call to take questions.
Now I turn the call over to Navios partners' chairwoman and CEO Ms. Angela <unk> find out.
Leaky.
Thank you Dan and good morning to all of you join us on today's call I am pleased with our outstanding results for the fourth quarter and full year of 2021 do you think you for Navios partners reported revenue of 268 $41 million adjusted EBITDA of 150.
$6 $6 million.
Adjusted net income of $121.8 million.
Therefore for the full year of 2021, not really partners recorded revenue of 700 to pinpoint $2 million.
The EBITDA of $426 $5 million and adjusted net income.
The $64 1 million.
Let's turn to slide three in 'twenty, two Anti-war weedy Martin what is public shipping company it could be life and took actions to make this a reality.
Navios partners is not the only one of the leading U S publicly listed companies based on the number of vessels, but it is also diversified.
15 dives in three segments servicing more than end market about one third of our fleet operates in each dry bulk container and think a settlement.
This guy why we believe that these new structure of it is through and get more of the helium MTB.
Good for present some.
Segment that Navios partners fleet, although Honda 46 vessels.
Number of days of nine six years, and a loan to value of 32, 5%.
I believe $2 7 million and contracted revenue of which $2 2 billion from the container sector.
Approximately 47000 available days almost half an exposed to market rate.
I think the upside through recovering charter rates in the dry bulk and tanker markets, which we expect in the near term.
Slide five summarizes the basic principles behind the strength of our diversified platform.
Number one a diversified platform allow us to optimize our chartering strategy.
Demand. There is these means that we can consider long term charters in segments that offer attractive returns why while allowing vessels in underperforming segments to be chartered for a short term or index at eight.
Diversification allows us the luxury of managing a.
Paul if you do a benefit without any biologic compulsion.
Number two the silicon that's got some counter cyclicality BBB this creates the opportunity of redeploying.
Cash flow from performing segment into asset purchases in underperforming.
And what we believe are attractive acquisition opportunities exist.
Ultimately, we believe that these are now for optimal capital allocation.
Number three asset values themselves can be volatile we have seen a significant appreciation in the container sector recently.
Through significant depreciation of asset values in the past.
We accept we expect these will continue leverage rates remain low only if asset values cooperate and we believe that by diversifying I had made the burner sheep impact of asset value volatility will be muted cautious gladly and balance sheet strength will be the entity.
The impact from this.
The diversity of assets.
Together. These days this is geisha.
See in they'll have their own business model at segmental works independently to mitigate volatility from the other segment. While we don't expect these to work perfectly what are you seeing that it will reduce volatility be sufficiently to allow us largely due to leverage market opportunities because they'll roll extraction.
Is it really more stable, we will have flexibility in that operational and financing activities.
And decision, making process as we got to sell it in person classes and obtain the time not within this context, we believe that the net net result is that we should have more predictable.
<unk> 11 is done.
On slide six we drew down into how we optimize our chartering as you can see from the chart on the top right. The container segment is enjoying historically high charter rate.
Anything in this backdrop, we have opted to fix.
Dana fleet on long term charter with almost a 100 person over and available container ship days fixed for 2022.
This reduces market and as each one of these for these vessels. We mine is the greatest risk of a long term charter independently to ensure that we are not simply trading one for another.
In a dry bulk segments would benefit from a market whether they are recovering to that historical 'twenty yet averages. We have only 24 per handle what I find the body Bedbug fleet base for 2022 and have opted to keep 76% of our 2022 available big exposed to Mark.
It trades to cob and the available upside down.
<unk> strategy also allow us to fix our dry bulk fleet on long term charters when rates do improve.
It was in Doncaster guidance after AIDS.
Our 80% below their 20 year average level, we have 46, 8% of R. 22 had to do a whole lot banking they fix many with favorable at legacy charter.
We anticipate that I mean, the split on market rate.
See some healthier age that will allow us to go see their other options.
We expect the tanker fleet will generate strong returns was a markedly Gaba.
But to observe that we will have the luxury.
And who are waiting for the Guy who given the strength of our other segments slide seven.
Our approach to capturing the unique opportunity.
Segment.
The man made 1 billion investment in a new building vessels that will deliver to our fleet through 'twenty 'twenty four.
These acquisition, we used a gathering stance over the container market to acquire 10 container ships.
I find naturally investment by entering into long term credit Walther charters for these vessels.
We also engaged in the routine and continuous management of our fleet age profile and the dry bulk and bag of space.
Seven dry bulk vessels and one VLCC acquired at prices below their long term averages.
Yeah.
In our container segment within your fleet by acquiring and then 5000 until they found anti Union building container ships for approximately $620 million that guy with a market value of these vessels is estimated at $720 million.
The container ships, we learned about the 710 million and contracted revenue.
For the 5.2 years duration of the related charters.
We also capitalized on the strength and containership values by selling 216 year old vessel for $220 million. The sale was actually good at a historically high volumes and is expected to be completed in the second half of 'twenty to 'twenty two.
Moving onto our diabetic segment fleet expansion was executed at attractive prices.
As you can see Navios partners, because they found another $32 million investment in seven new building vessels ordered when vessel values.
In the first half of 2021 is worth approximately 372 million today lastly for the tanker segment, we're seeing a economy in asset values versus not.
Right, whereby violence anticipate any gosling chartering market in fact, a new building and VLCC vessel has already appreciated.
36%.
Like eight lays out how navios partners intends to counter all IBP existing in this specific segment Navios partner.
First if I I hope out of all new provides balance sheet stability from the idiosyncrasies specific sectors. As you can see from the chart on this slide Navios partners fleet in aggregate is currently valued at approximately $5 2 billion, while containership values are there.
He started in high <unk>.
Bulk vessels values I don't know 20, hospice and all that all time highs and I get bodies at about 40% of the all time highs.
These aviation enough advanced balances out through our diversified segment results in a 32, 5% loan to value for Navios partners on December 31st 2021.
As you've got.
Also see from the chart to the bottom left and the men has about $3 5 billion in net equity volume in these verses.
Slide nine these are these in development during the fourth quarter Navios partners generated 268 1 million in revenue and $156 6 million in adjusted EBITDA and the hammerhead two and you aren't one 8 million in adjusted net income for the full year of 2021.
Partners generated 700, pinpoint 2 million being the revenue 426 5 million in adjusted EBITDA and $364 1 million in adjusted net income.
The P&A is kathie and others, but the balance sheet remained strong as of December 31st 2021 we have about the Honda.
Median income.
The size of our balance sheet gosh, there's a number of course that Asia, including Gupta and commitment for new vessels and working capital for the fleet. Consequently, I will expect that we will hold considerably more than our current cash balance considering only work and got it done.
Our fleet size, we estimate an approximate cost model would be about.
2 million per vessel.
Leverage is 32, 5% LTV as of December 31st 2021, and we'll have a staggered debt maturity profile.
As an update to what I shouldn't be actively this is the fourth quarter of 2021, we agreed to acquire four 5800, <unk> new building container ships with deliveries expected in 2024, four $251.3 million.
Two surety to 60 year old container ships for 'twenty 'twenty $220 million with the closing expected in the second half of 'twenty to 'twenty two.
An update of our chartering activity, which had good new long term charters for 11 of our container ships that we expect to generate $670 million in revenue as follows.
$290 million through this for 5300 do you in your building container ships chartered out for an average period of five three years.
Now there's no debate that'd be seven.
$282 per day, and about 300, and making me one through seven.
2000, and 752 4250, Du container ships chartered out for a novel expedient three points, a year and an average net rate of $45927 per day.
We continued to take advantage of robust market Navios partners. Two 7 billion in contracted revenue for 2020 do a contract with revenue already exceeds forecasted expenses by almost $50 million more over the.
46905 available days 21966 of these days are exposed to market the way, allowing for significant potential cash flow generation.
At this point I would like to turn the call over to Mr. Stratos <unk>, who will take you through the next two slides.
Good morning.
Let me start this is differentiated by its industry, leading scale and diversified secular exposure.
Tim We did have strong operating free cash flow potential.
Currently we have contracted.
Two questions one about 47000 available days.
$30957.
For 2022.
I'd like to bring your extreme still discuss expenses by almost $50 million and we still have about 22000 days with market exposure with them.
Providing additional operating costs.
The majority of our market exposure and for more dry bulk vessels, where we have fixed approximately 4% of all available days.
On Slide 11, you can see our fleet profile.
One was a control imation for leverage partners.
Our fleet increased by 170% by entering two new shipments and expanding our presence in the seconds you went on the radio but anything.
More specifically, we increased our drybulk fleet capacity by 36% and our container ships might be happening.
80%.
Additionally, we entered into the tanker segment by acquiring a 45 basis. Thank you.
We have also been very active in renewing our fleet and reducing your target at <unk> Suisse.
And Randy we have reduced the average age of our global fleet by 18%.
Cohort containers by 51%.
Bruce This is a constant balancing effort, we'd like to be proactive and got some cyclical opportunities while keeping capital.
As you can see at the bottom of the slide we have 21 vessels.
15.
Yes.
One of the same time everything will be the vessels can be delivered from the third quarter of 2022.
<unk> 24.
Turning to slide you can see some recent updates we continue to secure long term employment for container ships and we have fixed 11 vessels, creating approximately $670 million.
More specifically, we have contracted 40 really container ships delivering in 2020 food for over five years with an average rate of $57282 per day generating about $290 million of competitive driven.
These vessels were like one point I'm not going to get the purchase price of 251 3 million.
We have also talked about seven container ships for periods between three and three eight years generating revenues of approximately $380 million.
This conference we presented 2.8 times increase compared to the current contracted rates of these vessels.
On the S&P front, we capitalize on listening to the containership Bye bye bye.
<unk> 8200, Teu container ships for $220 million.
<unk> was executed at historically high prices and is expected to be completed in the second half of 2022.
We have also completed the sale of a 2006 panamax vessel for $14 million.
We are constantly working on refinancing and extending maturities. We have completed our second sustainability linked financing demonstrating our commitment on ESG principles.
Additionally, we are in advanced discussions, putting the 55 million facility for leading financial through existing procedure.
On slide 15, you can see the breakdown.
<unk> 7 billion compared to <unk>.
About $1 2 billion or 45% of our contracted revenue will be ending 2022 and 2023.
81% of our contract revenue comes from more container ships with.
Charters extending through 2015.
With a diverse group of quality counterparts.
I now pass the call to eight excuse me, our CFO , who will take you through the financial highlights.
Thank you Scott and good morning, all I will briefly review our unaudited financial results for the fourth quarter and full year ended December 31st 2021.
Financial information is included in the press release and summarized in the slide presentation available on the company's website.
Upon completion of the merger with Navios Maritime containers L. P. On March 31st 2021, and obtain control over Navios Maritime acquisition Corporation on August 25th 2021. There is also a preparation of these companies are included in Navios partners. These consolidated statement of operations.
Yes.
On October 15th 2021, Navios partners completed its merger with Navios acquisition.
I would like also to highlight that 'twenty 'twenty. One results are not comparable to plan to 'twenty and 2021 and then them acquired two companies and increases available days by 83% to 31808 before compared to 17434 the previous year.
Moving to the earnings highlights on Slide 14 total revenue for the fourth quarter of 2021 was $268 1 million compared to $69 2 million for the same period last year due to the expansion of our fleet and they improved time charter equivalent rates for both container sand.
Okay.
The available days in Q4, 2021 increased by 136, 5% to 11363 days compared to 4805 for the same build in 2020.
Our time charter equivalent rate increased by 64, 1% to $23005 per day compared to $14021 per day for the same periods implanted ramping.
The average Q4, 2021 time charter equivalent, let's see by sector was bikers $29548 per day containers $23765 per day and tankers $15426 per day.
EBITDA and net income for Q4 'twenty 'twenty. One include a $3 3 million gain related to sale of one basin and a $7 6 million.
And of transaction costs in relation to them and they married sooner.
Excluding these items adjusted EBITDA increased by approximately $1 1 million to $156 6 million for the three months period ending December 31st 2021.
Compared to $35 5 million for the same period in 2020.
The increase in adjusted EBITDA was primarily due to a $198 9 million increase in time charter and vote against the revenues and the $1 1 million increase in net loss attributable to Noncontrolling interest the above increase was partially mitigated by a $47 5 million increase in the bathroom.
Operating expenses and $13 9 million increase in time charter and voyage expenses.
And $8 5 million and could even turn our administrative expenses, a $6 3 million increase in direct vessel expenses, excluding the amortization of deferred Drydock Special survey cost and other capitalized items.
$2 2 million increase in other income and the 0.5 million decrease in equity net earnings.
Affiliated companies the above increases in expenses were mainly due to the expansion of our fleet.
Total adjusted net income amounted to $121 8 million compared to the three months period ended December 31st 2020. The increase in adjusted net income was primarily due to a $121 1 million increase in adjusted EBITDA and a 39 million increase in amortization.
Some of the favorable lease terms now.
Both increases were partially mitigated by $30 9 million increase in depreciation and amortization expenses and $9 6 million increase in interest expense and finance cost net and $2 4 million increase in amortization.
Oh deferred drydock space I'll say, it would be of course, and other capitalized items and the ZIP on 1 million decrease in interest income.
Moving to the 12 month 2021 period time charter revenue reached $713 2 million compared to $226 8 million in 'twenty 'twenty.
The result was a combination of the expansion of our fleet and the improved time charter equivalent rates as mentioned they are available days increased by 83%, while our fleet time charter equivalent rate increased by 73, 7%.
To 21 $709 per day compared to $12497 per day for the same periods in 2020.
The address 2021 time charter equivalent rate achieved by sector was bankers $33331 per day container $22435 per day and bankers $15336 per day.
Fleet utilization was approximately 99%.
EBITDA and net income in 2021 include an 88 million gain in equity in earnings of affiliated companies and 48 million bargain gain upon obtaining controlling over and I wish I could loosen and upon completion of the N and M. C. I can merger and $33 6 million gain.
Related to the sale of eight of our vessels and $10 4 million.
And $10 4 million of transaction cost in relation to Mci and then the name out there.
Excluding these items adjusted EBITDA increased by $326 7 million to $426 5 million in 2021 compared to $99 8 million in 2020.
The increase in adjusted EBITDA was primarily due to a $486 4 million increase in time charter is expenses.
The $4 9 million increase in net loss attributable to Noncontrolling interest.
Both increases were partially mitigated by a 97 7 million increase in vessel operating expenses at $25 1 million increase in time charter and voyage expenses.
$17 5 million increase in general and administrative expenses.
<unk>.
$10 million increase in direct vessel expenses.
Excluding the amortization of deferred drydocks, but as I say that because the other capitalized items and $10 2 million increase in other expenses net and the one.
$1 million decrease in equity in net earnings from affiliated companies.
The above increases in expenses were mainly due to the expansion of our fleet.
Net income for 2021 exceeded half a billion, whereas on an adjusted basis. It is $364 1 million compared to $9 9 million for the year ended.
At December 31st 'twenty 'twenty the increase in adjusted net income was primarily due to a $3 $326 7 million increase in adjusted EBITDA.
And $108 5 million increase in amortization of a favorable lease terms three recorded in the year ended December 31st but it wouldn't be one.
And the 0.3 million increase in interest income, they're both increase were partially mitigated by $56 7 million increase in depreciation and amortization expense and $18 6 million increase in interest expense and finance cost net and a $6 million increase in amortization of deferred drydocks vessels.
Cost and other capitalized items.
Turning to slide 15, I will briefly discuss some key balance sheet data as of December 31st 'twenty, 'twenty, one cash and cash equivalents were $169 million.
Long term borrowings, including the current portion net of deferred fees amounted to $1 36 billion net debt to book capitalization was it.
Comparable level of 38%.
Slide 16 highlights our balances our debt is three five times covered by the value of our fleet based on publicly available valuations. Following the completion of the new 55 million facility mentioned early that we would have minimal debt maturities in 2022, while our current maturity profile staggered with no significant.
Balloons, you in any single year.
Turning to slide 17, you can see our ESG initiatives my fans shaping is the most environmentally friendly means of transportation.
The most carbon efficient mode of transport, we aspire to have zero emissions by 2050 in this process, we have been by your meeting and adopting certain environmental regulations. After two years in advance aiming to be one of the first fleets to achieve full compliance.
And obviously the socially conscious group, whose core visors include diversity inclusion and safety.
Very strong corporate governance, and a clear code of ethics. Our board is composed by majority of independent directors and independent committees that oversee our management and operations.
Slide 18.
Take our company highlights Navios partners, one of the largest U S publicly listed companies shipping companies are they just litigation strategy creates resiliency and enables us to meet the gate individually segment volatility.
There's a vacation scale and financial strength should make any man and attractive investment platform as we take advantage of global trade patterns and now pass the call to Georgia Nowadays.
The vice President of business development to discuss the English section George.
Thank you Ed Please turn to slide 20 for the review of the dry bulk industry.
The IMF projects global GDP growth of four 4% for 2022 led by a five 9% expansion in China, India and developing Asia.
2022, dry bulk trade is projected to increase by 2%.
Similar to last year most of the increase is expected to happen in the second half of the year.
In all asset classes at each 10 year highs in 2021, reflecting strong demand for bulk commodities aided by flipping the efficiencies due to the pandemic.
<unk> peaked at 5650 on October seven the highest level since 2008.
The market then repeated on the back of Chinese winter steel production limits.
Uprising temporary ban on Indonesian coal exports.
The BD I continue to retreat at the start of 2022 falling back below 1500 for the first time in 12 months.
We are very sound airports by the Chinese government to stimulate the economy and the expectation of increased steel production along with commencement of the South American grain export season should provide the market out there.
Turning to slide 21.
Pandemic stimulus measures in the advanced economies and increasing industrial production demand.
For the three major bulk cargoes, specifically seaborne iron ore trade is expected to increase by one 2% in 2022.
<unk> second half 'twenty to enforce the increasing eight 7% over the first half has reduced pollution restrictions allow an increase.
Chinese steel production.
Gas prices have exceeded coal price since August 2021.
The trend is expected to continue.
In spite of stated goal of carbon neutrality.
Gas price surge has driven power plants to switch back to coal fired power generation.
Accordingly, seaborne coal imports are expected to grow by two 4% in 'twenty two.
With the same seasonal pattern as iron ore and oil in play because second half 'twenty two coal demand is expected to grow by eight 2% over the first half.
On the grain side, the global grain trade continues to be supported by an ever increasing world population.
Security issues, driven by the pandemic as well as an increase in protein demand worldwide.
Growing production for the <unk> 2021 'twenty two crop year will reach a record according to the USDA.
Global grain trade has been growing by about 5% CAGR since 2008, mainly driven by Asian demand.
Please turn to slide 10 into the.
The current order book stands at six 7% of the fleet one of the lowest on record net fleet growth for 2022 is expected at only 2%.
Vessels over 20 years of age are about $8, 5% of the total fleet, which compares favorably with a historically low order book.
In concluding our dry bulk third party view strong demand for natural resources combined with continued corporate related logistical disruptions and a slowing pace of new building deliveries all support healthier freight rates.
Fleet growth is expected to decline further trying to 'twenty three as owners of the move tonnage that will be uneconomic.
As they are you more 2023 C O two rules come into force.
Please turn to slide 24% of the container industry.
Demand for goods in the U S and Europe continue to rise in the latter part of 2021, increasing both container trade and supply chain bottlenecks at the start of 2020 to freight rates.
Rod or near record levels, allowing allowing us to lock in long term contracts at historically high rates.
As you can see in the Blue box on the lower right.
Consistent demand for goods port congestion and the restocking led to containership demand growth of six 1% in 2021 with further growth of three 8% expected in 2022.
Turning to slide 25, net fleet growth is expected to be three 6% for 2022.
Even with the increase in new building orders demand is forecast to outpace net fleet growth.
It should be noted that about 72% of the order book is 413000 teu vessels or larger.
In addition, 10, 3% of the fleet is currently 20 years of age or older and.
In conclusion positive demand fundamentals, mainly due to the change in consumer purchasing patterns.
And the resulting supply chain bottlenecks, along with reduced fleet availability should continue to support the container shipping industry in 2022.
Please turn now to slide 27 for the review of the industry.
Global oil consumption is recovering although with modest growth due to the continued pandemic disruptions.
However, OPEC plus continues to increase supply bass pro hundred thousand barrels per day on a monthly basis until midyear, where non production costs are eliminated.
The IEA projects oil demand to exceed pre pandemic levels by Q3 turning to <unk>.
The recovery in the travel industry spreads I, just kind of fuel consumption.
Ladies and approximate 90% correlation of ongoing demand with global GDP growth and about two thirds of seaborne product paid is related to transportation.
Turning to slide 28 <unk>.
<unk> net fleet growth is projected at only one 8% for China trying to do.
This decline can be partially attributable to owners has he done store, they're expensive long live assets in light of macroeconomic uncertainty and engine technology concerns due to upcoming show to restrictions.
The current order book is only seven 5% of the fleet vessels over 20 years of age or 11, 1% of the total fleet, which compares favorably with the low order book.
Finally, turning to slide 29 product tanker net fleet growth projected I was only 6% of for 2022.
The current product tanker order book is five 2% of the fleet one of the lowest on record and it compares favorably with the seven 8% of the fleet, which is 20 years of age or older.
We believe that the overall tanker order book and fleet I will balance as they are more 2020 and ballast water management regulations will lead to some vessel retirements in the coming months.
In concluding that the tanker market continues to remain challenged in Q1. However, the combination of global oil demand returning to pre pandemic levels by mid year.
OPEC plus increasing production OECD inventories trading below their five year average and the lowest order book in three decades should provide for for example tanker earnings in the near term.
This concludes my presentation I would now like to turn the call over to <unk> for his final comments I'm guilty.
Thank you George this completes our formal presentation and we open the call for questions.
At this time, if you would like to ask a question. Please press star one now on your telephone keypad to withdraw yourself from the queue. You May press the pound key once again that is star one on your telephone keypad, we will take our first question from Randy Gibbons of Jefferies.
How do you think Navios has it gone.
Good morning.
Good morning.
So you've been fairly active as both a buyer and a seller here in the container S&P market. How do you view your tanker and Drybulk fleets and you know.
How do you balance buying new assets and selling some of those older ones.
Very good question.
And this is about you know this is a.
Also the first quarter that we did that's a diversified.
And what you have seen it.
Right.
We took advantage of that.
Well Dana sector.
Brian .
Right.
Thank God.
And the cash flows.
Yeah.
Right.
And having young assets and also creating and five or seven year gas flows.
$2 million.
If you look now on the die.
We have a very nice blade.
And we are looking at the market that the Gaba. So we have 75% on our end market exposure.
But we see that.
Let me say that the market is going to be strong.
So we're going to see if.
If we have any things like.
That creates a very strong cash flows and we have the luxury because of that.
Contracted fleet in the container.
Our sector to really get the spot market because we have.
All other expenses.
Yeah.
So and.
Don't get on the other side.
That are the kind of fleet we have.
I've seen that.
<unk> got a fleet age.
Yeah, so the $200 million of a bad debt so that can be.
In addition.
Shrink.
Of course, that's only gone and then kind of event that happened.
They don't get and he gave me and that's why we have seen that and now we are in.
Situations.
I'll check that.
Paul.
Good.
The donkeys.
And so it's all about driving the Navy, which will drive our stock price.
Yes.
Got it alright that makes sense and I guess the most important question right you are.
Our revenue backlogs massive EBITDA is going to exceed.
$600 million could be closer to $700 million, both this year and next.
However, your current distribution is about 1% of that $6 million on an annual basis. So when should we expect to see an increase to the distribution and then secondly, as you mentioned NAV accretion right.
You're now is north of $60, probably closer to $80. However, your shares are trading at 30, so why not repurchase units at these levels.
We have created we are busy creating a daisy and unlike other companies and they have which is a product of the market or the navy is a product of our activities and you'll have seen.
Yes.
Doing this from last year, and we are Oh, we have a stock price has been that the best performing last year not only on the stock price, but also if you take the adult at Mcdonalds.
So this is an ongoing process.
And it's important to take advantage of the different segments. What we did is take advantage over the container.
Segment, where we are.
These cash flows.
We bought the vessels at attractive rates and we saw that he is still like that so we are not shy on that it's always about creating.
And the growth of I've got skills, and we that we see our stock price will fall.
If.
We have sufficient working capital as we have stated that we have.
That's not got back this is not about growth.
That's about the number of vessels.
<unk>.
Is that about it gas blow it out so we cannot see adaptive in this way we of course are what we see.
Folio in the air.
Yeah.
Okay.
Well, we follow with that and are indifferent.
Buying back so.
We have a fleet of 145 dressings.
And working capital.
Our investments Capex, which we would have already actually.
And a lot of that right.
And also we are seeing a solid week 88 odd duck. These cash flows and then he does you'll have seen it from our new building, you'll have seen and how that translates to watch on cash flows.
Do it.
Got it alright, we are definitely looking forward to seeing that return on capital, but thanks again.
Thank you.
We'll take our next question from Omar knockdown of Clarksons Securities.
Thank you hi, guys good afternoon, and good morning.
Yes, thanks for the update.
I just wanted to ask.
About where you've been fairly active here recently on the on the container side.
First off just want to double check in your last quarterly report if I recall you.
You mentioned have been taking your your new building order book for the 5300 to use to fix ships and those are fully chartered just want to confirm that that order is now up to 10 ships as of today also fully contracted is that correct.
Yes and no.
I remember the last call.
Thinking that that would not be you know.
We'd be very possible to extend but you know what.
No.
How should we learn that straight to site and we managed to totally hedged position.
EV battery and we've seen that.
He's already.
So yes, we now have a 10 fleet, which gives us the.
Yeah.
Sure.
Would you say a very important issue on Oh, I really moved in.
Yeah.
The vessels have an average age.
We have not seen the mountain.
The study.
Let's just say indefinitely.
Right, Yes, I mean definitely a unique unique opportunity to to order. These vessels against long term charters, but as you say basically remove the residual risk at the end of the contract.
And just maybe generally in terms of where the market is today for further new buildings and your appetite and could you maybe just give us some color because the liners last year were quite active securing long term charters against new buildings for large and mid sized ships that.
That seems to maybe have slowed recently.
But there really is no.
A big focus on chartering, what's available again in the market today as you know you've highlighted here in your report today.
Can you maybe give just some color on what youre seeing from this point on the new building front are there still opportunities like.
The one that you.
You've done here on the 5300 <unk> is there still an appetite for that or liners I'm looking for that vessel class now in larger numbers or are they still kind of fixated on the on the bigger side or is there kind of maybe just quieted overall and any color you can give on that book.
Yeah.
We said that we never say never because.
As I noted last quarter, and there's going to be opportunities.
And there is different needs on the line. We have also seen that because they want the vessel.
Uh huh.
They want their I suppose.
Is it.
Part of the things, we have seen where they're not always easy say she started.
Same as we did it.
That's $220 million for 16.
We've been delivering.
The second half so basically the line as well.
So.
As soon as possible and the alliance is different.
Segments out there, where I was going to have ownership over there very soon.
Yes.
And more than depending on the liner.
And then is this today and of course at one point, we have to say that.
The pandemic.
Yeah.
And at one point of view this as kind of a.
They've got no about 'twenty, but it seems that there is growing very strong.
Yes, I think about the value that we saw that it was worth.
The market got more than their market caps that we have.
At a loss.
Two four.
In 2020 in the last quarter. So you see what kind of a situation can be but I think that the new build.
Things would be.
Less of an issue right now I think it's more of a.
And they loved it.
Okay.
Thanks Angela.
Just a follow up and maybe just kind of speaks to the re imagined public shipping company.
Navios in case with the diversification strategy.
Speaking of the 80 to 100 Teu shifts that you've sold.
$220 million that cash starts to come in the second half.
How should we think about where that capital will be redeployed I know you touched on it in your opening comments and I think in response to Randy's question, but as you.
Think about that capital and maybe future sale on the older side as you kind of replace with the new builds.
Where do you think you know right now you want to put that capital does that roll into tankers and taking advantage of a depressed environment. There is that where you see the opportunity at the moment to invest excess cash.
Yeah.
I think the issue is that the beauty of the difference.
Location is that you can do it in every sector. This depends on the market opportunity one thing I'll tell you is that.
Take for example.
I want to touch again on the new buildings on the container segment, we are not there to take a speculative.
On the on where the market is.
A speculative order.
We've all been on the vessel because I think they call them.
And you have seen that where the container sector is an all time high that would be an extremely risky.
Yeah.
Now the beauty is that we can always do.
Dry bulk and they.
And he is purely about their opportunity is about where you can either say.
And some.
However, the upside where he can give you a four times.
Sure.
Yeah.
Cash flows or all of it.
I don't really think so this is this is what we like to do.
Understood very clear thanks Angela.
I'll turn it over.
Thank you.
And once again, if you'd like to ask a question that is star one now on your telephone keypad will move next to Chris Wetherbee Citigroup.
Hey, Thanks. Good morning, this is Ely with King on for Chris.
We just go back to the sales on the containership side. So 10, 3% of the container ships are over 20 years old you guys. Just sold two of them by about 16 years old just curious if you guys have any more appetite for sales and containership and then going off of that.
Further sales there what it wouldnt help play into the strategy of our fuel efficiency regulation.
Yeah.
Okay.
Nothing to exit things and they said what that I wouldn't say that.
That's an opportunity on the segment and we have a strong.
For myself the segment.
Is it.
Celebration.
That debate.
Is it better than it is a decision we make with it taken some cash flows and credit worthiness.
Their party.
That's exactly what we're doing constantly and we get about is the government positions.
In the future.
That is how we work out for the full year.
So I mean.
And of course, what we are doing and this is you got to see it or not.
What we're doing we are getting the younger generation.
So for that.
It's a win win situation.
I'm going to dispose of all the dressings and that's getting into younger vessels.
Situations and you outlined that to do it at any point in there and basically it's an ongoing process.
If you look on our presentations we have.
Senior breathing while their vaccines.
So the rest is about 15%.
So this is an ongoing process that will be.
Doing.
That makes sense and then I just need to ask about congestion you guys talked about it at the top of the call, but just digging in on the West coast to the U S. We've seen ships moved downwards off the coast.
Shifts in transit from Asia over it seems to be relatively steady do you think we could have reached a inflection downwards are there is there something else I'm not thinking of right now on that side from from Asia to the U S.
I think that's unique I think that Oh my God.
You know.
And get these experts that can give you on the floor.
And I think when and Wall Street Journal, you'll have a CPE being the in the frontline of the Washington General and congestion.
And I am sure there is a lot of information on that.
The important issue that if we see in the macro level and we have to think about in January we have an outbreak was only gone, but you'll have more sick people around the planet.
Got it.
The period of the Spanish flu, so basically that delay.
Got it.
The whole process. So we see that containers will continue to have a strong market.
The genes into the penchant to some set of issues.
Products too.
Got it.
That is definitely something that is playing right now except of course of their geopolitical issues that we see.
That makes sense. Thank you Angela and thank you all.
And this does conclude our question and answer session for today I'd be happy to return the call to answer leaky for any concluding remarks.
Thank you this completes as before.
Thank you.
This does conclude our conference for today you may now disconnect your lines and everyone have a great.
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Altogether Navios Maritime Partners' call has concluded you may now disconnect your lines.
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