Q4 2021 Navios Maritime Holdings Inc Earnings Call

Star Zero.

Yeah.

Good morning, and thank you for joining Navios Maritime Holdings fourth quarter 2020 earnings Conference call. We are pleased to host this call from the Cayman Islands.

With us today from the company chairwoman and see a mix underneath you Frankie Vice chairman Mr. Ted Petrone.

Chief Financial Officer, Mr. George <unk>.

And senior Vice President of strategic planning Mr.

Mr Yannick <unk> carrier.

I will now turn the call at this time yellow Red light he will take you to conference Colby.

Safe Harbor statement Daniela.

Thank you as a reminder, this conference call is being webcast to access the webcast. Please visit the investors section of Navios Maritime Holdings website.

W. W. W. Dot navios dot com, you'll see the webcast 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 I'll review the Safe Harbor statement. This conference call could contain forward looking statements under the meaning of the private Securities Litigation Reform Act of 1995 about Navios Maritime Holdings.

Forward looking statements are statements that are not historical facts such forward looking statements are based upon the current beliefs and expectations of Navios Maritime Holdings management and are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements.

Such risks are more fully discussed in Navios Maritime Holdings' filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks Navios Maritime holdings does not assume any obligation to update the information contained in this conference call. The agenda for todays conference call is as <unk>.

We will begin this morning's conference call with formal remarks from the management team and we.

We would like to the call to take questions now.

Now I'll turn the call over to Navios Holdings, Chairman and C Leaky Frankie Angeliki.

Thank you Michael and good morning to all of you join us on today's call I am pleased with results for the fourth quarter of 2010.

In the first quarter Navios holdings reported revenue of $156 8 million.

<unk> hundred and the $1 9 million.

Adjusted net income of $45 8 million for.

For the full year of 2021.

Got it.

Revenue of $585 $8 million.

EBITDA $353 $2 million and adjusted net income of $170 7 million.

To Andy too challenging.

Challenging year, we worked hard to lay the groundwork for existing.

Fishing.

Then looming maturities, including 614 <unk>.

Oh ship mortgage notes that were coming.

Coming to you in January 2022.

Assembly, a blanket on five continents and $50 million in that finite.

English is the ship mortgage notes.

And use the payable amount outstanding on our senior secured notes to $155 million.

Today, we have a much improved balance sheet and then on a way to further deleverage in our cooperating CPU market.

Please turn to slide three for another review of the Navios traction as you can see now that is calling on page 36, dry bulk vessels with an average age of $9. One here during the third quarter Navios partners completed its merger with Navios acquisition.

146 gross value segment now Bob is one of the largest U S publicly listed shipping companies.

Navios Holdings owns 10, 3% of Navios partners valued at almost $800 million.

Navios logistics operates mainly infrastructure and logistics company in the end of June Navios Holdings maintained six.

Three 8% ownership in Navios, South America logistics, while the Gundam environment has been challenging in South America will believe this is a prized asset.

Slide four highlights our recent developments.

During the fourth quarter, we generated a $186 8 million in revenue and $101 9 million in adjusted EBITDA and $45 8 million in adjusted.

Thank you.

For the full year of 2021, we generated $585 8 million in revenue $353 2 million in adjusted EBITDA and $130 7 million in adjusted net income during the fourth quarter. We also achieved a time charter rate per day or 40000.

The $3 five capesize vessels.

<unk> 7781, panamax vessels and 20751.

100 <unk> vessels.

As I mentioned earlier.

Please dial $614 3 million of the ship mortgage notes due in January 15 2022.

The social funds was as follows.

$6 7 million drawn under our two credit facilities with commercial banks.

$77 million in lease.

Management on the sale leaseback agreement and $100 million of additional agreed to terminate them.

Cash from balance sheet.

With the collaboration of NSM. We also can say $158 9 million of ship mortgage notes that had been pledged as collateral you can also see the chart at the bottom of this slide and described by bus.

Payment for our senior secured notes over the 155 million balance outstanding as of January 1st 2022.

We expect to repay $75 million in there.

First half of 2022, and 80 million balance at maturity on August 15 2022.

Slide five goes through our chartering strategy and potential operating cash flow generation at current market rates.

Our diverse fleet of 36 version.

<unk> thousand 993 available days for 2022.

File for 2022 we have 33% over available days at an average time charter rate of $25646 per day.

The yield of the big hearing aid is up $8847 per open day.

The total weighted average rate for our fleet open and index days based on current market rate is 28000.

And $90 per day.

67% of whatever level base and exposed to the spot market, we are positioned to capture available market upside.

I would like now to turn the call to Mr. Joseph <unk>, <unk>, CFO , who will take you through the financials George.

Thank you Angeliki, please turn to slide six for a review of the Navios Holdings financial highlights for Q4, and the full year 2021, adjusted EBITDA for the quarter was $101 9 million more than two five times higher than the $37 6 million achieved in Q4.

EBITDA and net income for the fourth quarter were adjusted to exclude 14 million, which is our share of impairment losses incurred by Navios South America logistics.

The increase is mainly attributable to a time charter equivalent rate achieved in the quarter of 31000 to $156 per day, which was almost one five times higher than the Q4 2020 PC.

<unk> thousand $248 per day.

Adjusted net income for the quarter was $45 8 million compared to adjusted net loss of $25 million in 2020.

The increase was mainly due to the increase in EBITDA.

Turning to the full year results adjusted EBITDA for the period was $353 2 million more than double the 2020, adjusted EBITDA of $153 4 million.

Addition to the Q4 adjustment 2020, EBITDA and net income were adjusted to exclude $25 9 million impairment losses relating to seven dry bulk vessels and $25 9 million equity income from affiliate companies due to the merger of Navios partners and Navios containers in Q1.

Similar to the Q4 results the increase in adjusted EBITDA was mainly attributable to the increase in the TCE rate achieved in the period of 2000 $3638 per day.

It was more than doubled in $10543 achieved in 2020.

Adjusted net income for 2021 was $130 7 million compared to an adjusted net loss of $67 $5 million in 2020.

The increase was mainly due to the increase in EBITDA.

Moving to slide seven and our balance sheet highlights.

December 31st 2021, the cash balance was about $137 million compared to about $111 million at the end of December 2028.

The $84 million of cash was received it because it grows deposited with SaaS deal with a senior ship mortgage notes for the repayment of the announced that took place in January .

Senior and ship mortgage notes reduced by about $162 million compared to the 2020 year end balance mainly reflecting the buyback activity during the year.

The chart at the bottom of the slide shows the maturity profile of our debt facilities pro forma for the January repayment of the ship mortgage notes as you can see with the exception of the senior secured notes due in August we don't have any other significant near term maturities.

Now I will turn the call over to John <unk> for his review of the neither South American logistics results Janice.

Thank you George.

Slide eight provides an overview of Navios logistics Navios logistics operates three port terminals, which are complemented by our barge fleet for the transportation and product tanker fleet for corporate.

Please turn to page nine.

Throughout 2021, our operating performance was impacted by a strong potash market contributed to the weak economic environment in Argentina.

Great.

Sure.

For 2021, adjusted EBITDA was $10 5 million, excluding the 22 million impairment loss on <unk>. Thank you to metrics.

Thanks, Andrea and her on board.

Assets in Hawaii.

Or why we think the original <unk> chain has become more apparent.

Now this quarter is located at remarkably Redeemer quarterly loading has been unaffected and we now have approximately.

To maintain.

Alright.

Growth in the region. This.

This is driving additional revenue on onboard permanent through our new top strategies, which partially mitigated the loss of revenue in Q4 from lower order why im grain exports.

<unk> for Q4, 2021, and the pork segment adjusted EBITDA decreased by 3% to $14 6 million. We believe that these competitive advantages will have long lasting effects of complement customers that ANZ manner.

Logistics requirements.

In the bulk segment Q4, 2021, adjusted EBITDA increased by $1 4 million. Despite the continued adverse navigation conditions.

The low water levels are adversely affecting operations and profitability as barges have limited carrying capacity in the U S.

And please take longer to complete.

In our ecommerce business in Q4 2021, adjusted EBITDA was negative $2 5 million due to lack of employment for some of our vessels as a result of the ongoing weak economic environment in Argentina.

Although charter rates remain suppressed recently, we have seen signs of improved demand for tank geared vessels in the Argentinian market.

For Q4 2021, adjusted loss was $20 2 million compared to $9 8 million in the same period last year.

Turning to the financial results for the full year revenue increased 4% to $222 6 million adjusted EBITDA was $79 2 million.

Adjusted loss was $20 7 million.

Please turn to slide 10, Navios logistics, there is no significant debt maturities until 2025 on a bond is trading above par with a yield to worst of seven 9% cash.

Cash and cash equivalents at the end of 2021 were $32 6 million.

I would now like to turn the call over to Ted Petrone.

Thank you Leon.

Please turn to slide 11, which presents our diversified dry bulk fleet, consisting of 36 vessels totaling $3 9 million deadweight of capes.

<unk> thousand 14, Panamaxes four Super Max and one hand, besides the average age of the fleet is nine one years, 18% younger than the industry average.

Turning to slide 12, which highlights our ESG initiatives Maritime shipping is the most environmentally friendly means of transportation as it is the most energy and carbon efficient mode of transport, we aspire to have zero emissions by 2050 and.

In this process, we have been pioneering and are adopting certain environmental regulations.

Up to two years in advance and we aim to be one of the first fleets to achieve full compliance.

<unk> is a socially conscious group, whose core values include diversity inclusion and safety, we maintained policies or procedures that provide effective corporate governance and a clearer code of ethics. Our board is composed of a majority of independent directors and independent committees that oversee our management and operations.

Please turn to slide 14 rates at all asset classes reached 10 year highs in 2021, reflecting strong demand for bulk commodities aided by fleet inefficiencies due to the pandemic.

The BVI peaked at 5650 points on October seven the highest level since 2008.

Market, then retreated and tobacco Chinese went to steel production limits and a surprising temporary ban on Indonesia coal exports.

I continue to retreat at the start of 2022 falling back below 1300 points for the first time in 12 months. However.

However, recent efforts by the Chinese government to stimulate the economy and the.

The expectation of increased steel production, along with the commencement of the South American grain export season has pushed the VDI back above 20 to 100.

The IMF projected global GDP growth of four 4% for 2022 led by five 9% expansion in China, India and developing Asia.

Dry bulk trade is projected to increase by 2% in 2022 similar to last year. Most of the increase is expected to happen in the second half of the year.

Turning to slide 15.

Post pandemic stimulus measures in the advanced economies and increasing industrial production have fueled demand for the three major bulk cargoes, specifically seaborne iron ore trade is expected to increase by one 2% in 2022 with the second half of this year imports, increasing by 67 million metric tons or eight 7%.

Over the first half of 'twenty two.

As increased housing loans and reduce pollution restrictions allow for an increase in Chinese steel production.

Forecast also for growth in global iron ore imports, excluding China as the effects of the pandemic recede.

Europe's imports are expected to grow by about 8% and Asia, Excluding China is expected to import about 7% more iron ore in 'twenty two than in 2021.

Turning to slide 16 gas prices have exceeded coal prices since August 21, and that trend is expected to continue in spite of the stated goals of carbon neutrality of the gas price surge is driven power plants to switch back to coal fired power generation Accordingly.

Accordingly, seaborne coal imports are expected to grow by two 4% in 2022 with the same seasonal pattern in iron ore in play as second half 'twenty two coal demand will grow by about 49 million metric tons or eight eight.

Eight 2% over the first half of 'twenty two.

Please turn to slide 17.

On the grain slide the global grain trade continues to be supported by ever increasing world population food security issues, driven by the pandemic as well as increasing protein demand worldwide.

Well green production for the 'twenty, one 'twenty two crop year will reach a record according to the USDA.

Global grain trade has been growing at four 8% CAGR since 2008, mainly driven by Asian demand overall global seaborne grain trade will grow about three 7% in 'twenty two led by a 6% rise in soybean trade.

Please turn to slide 18.

The current order book stands at six 7% of the fleet one of the lowest on record net fleet growth of 22 is expected at two 1% and only <unk>, 3% for 2023 as owners commenced removal of tonnage that will be uneconomic at the IMO 2023 ratio two rules come into force.

This was over 20 years of age are about eight 5% of the total fleet, which compares favorably with historical low order book.

And concluding strong demand for natural resources combined with continued COVID-19 related logistical disruptions and a slowing pace of new building deliveries all support a healthy level of current and future freight rates.

This concludes my presentation I would now like to turn the call over to Andrew Linky for her final comments Angelica.

Thank you Dan this complete four months presentation, we open the call for questions.

At this time, if you would like to ask a question. Please press the star and one on your Touchtone phone you may remove yourself from the queue at any time by pressing the pound key.

Again that is star one if you would like to ask a question, we'll pause for just a moment to allow questions to queue.

And it appears we have no questions in the queue.

Turn the call back over to Andrew Lee for any additional or closing remarks.

Thank you.

The one thing I'd like to mention that this isn't a bad day for their work and even.

Yeah.

For Europe , and our thoughts are.

Good evening.

We have been watching these situations right.

Sometime.

And next quarter.

Commodities from oil and gas.

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And.

Even though the situation is evolving and the one thing that we know is going to affect that.

I think the consumption.

<unk> bought them and we create innovation.

Now going to Navios Holdings, 2021, <unk> year we.

We worked hard so.

Thanks Kelvin.

Million of senior senior shaping node as well.

And abuse.

Senior notes by $150 million.

With all of these actions what we did is we improve our balance sheet and create the right of way in Oxnard.

Thank you and this is our fourth quarter results. Thank you very much.

Okay.

This does conclude today's program.

Thank you for your participation you may disconnect at any time and have a wonderful day.

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Okay.