Q1 2022 Navios Maritime Holdings Inc Earnings Call
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Good morning, and thank you for joining Navios Maritime Holdings' first quarter 'twenty to 'twenty two earnings conference call. We are pleased to host this cool the case.
With us today from the company.
Sure illuminate C Sam Dubinsky Frankie.
Chairman and Mr. Ted <unk>, Chief Financial Officer, Mr. George <unk> and SVP.
Page strategic plummet.
Let me just caveat.
I'll now turn the call over to Mr.
Do you like to add.
It will take you through the conference call details and Safe Harbor statements 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 at Www 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.
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.
<unk> 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 today's conference call. We will begin this morning's conference call with formal remarks from the management team.
After we like nickel to take questions now.
Chin correlate to Navios holdings, Chairman and CEO makes angelique trendy and jewelry.
Thank you Michael and good morning, total he'll join us on today's call I'm pleased with enhanced for the first quarter of 2022 in the first quarter Navios Holdings reported revenue of 127 28.
$8 million.
$73 8 million done.
The first one of the really big six number in for example ship mortgage notes and so far in 'twenty thing to do we have redeemed 15 million of the senior secured notes.
Today the market is healthy.
For the first quarter of 292.
50% higher than the first quarter of 2021 however headwinds from day, one and Ukrainian rising interest rates and inflation.
We're watching this closely as markets come then queasy.
Please turn to slide three for an overview of an average traction as you can see navios, calling so page 36.
With an average age of nine four years.
Not as Collin Jones, pinpoint, 3% of Navios partners with an approximate value of 19 media.
Bad News is one of the largest U S publicly listed shipping companies with 150 vessels as opposed to the segments.
There's no G suite.
He'd been interested actually in logistics company in Michigan.
Navios holdings maintained at 63, 8% ownership in Navios, South American logistics.
Slide four highlights our recent developments.
During the first quarter, we generated 827 $8 million in revenue and $73 8 million in EBITDA.
During the first quarter, we also.
Sure achieved a time charter rate that day of $15377 for Capesize vessels $25835 four panamax vessels and two ended $2018 per hundred Max vessels.
I think this relates to Navios logistics have either announced they are saying, yeah, which mining and logistics assets and the Midwest system to get in that group.
They say include the food consumption by the buyer of the take or pay.
It's gone down subject to the consent of the applicable.
Got it.
The violence post contract remains in effect and violent is performing each obligations.
Any change to the dams and condition of the body.
Aesop, just with a guy at Google from Novelis.
Well, we I loved who as we know more.
No Theres no gees, it's great for them and it's performing well, but the barge business continues to be negatively impacted by the ongoing contribution of anything with that levels below historic averages youngest guy to go to really grow some of the segment performance in Sweden.
The market backdrop. It was gonna be operates in is dominated by geopolitical and then maintain it driven uncertainties you could anything that I would play a role in that month.
You said, maybe Boston human lives, one China continues to abide by zero public policy. This event as expected.
Having an impact on global seaborne commodities trade.
Commodity demand and supply chains are impacted and promoting being transported over longer distances, thereby adding to ton miles.
The situation is fluid, but gathering lines are satisfying their short term needs.
Slide five goes to our chartering strategy and potential operating cash flow generation at current market rates.
Sleep well.
Expressions.
9873 available.
They fill the remaining nine months of 2020 to Shutterfly is one day maintenance nine months of 'twenty 'twenty. Two we have fixed 40 focus and a lot of valuable data.
I've been average time charter rate of $29622 per day.
For the remaining nine months of 2022 the breakeven rate is up.
$3512 per open day.
The total weighted average age for our fleet open an indexed base based on current market that age is $29774 per day.
As 56%, while our variable base are exposed to the spot market.
Its position to capture available market upside.
Now I would like to turn the corner over to Mr. Joel Jeffrey Nowadays nausea scores and CFO , who will go through the financials George.
Thank you Angeliki, please turn to slide six for a review of the financial highlights of the first quarter of 2022.
EBITDA for the quarter was $73 8 million compared to adjusted EBITDA was $49 2 million in Q1 of 21, an increase of 50%.
The increase in EBITDA is mainly attributable to a 51% increase in the time charter equivalent very loud truth in the period.
Which was $21767 per day.
To $14404 in Q1 of 'twenty one.
Net loss for the period was $5 million.
In Q1, you will recall, we repaid 600 or 14.3 million of ship mortgage notes that were coming due in January 'twenty, two and so far this year, we have redeemed $50 million of the senior secured notes to.
To secure the necessary financing package to repay our maturing debt, we paid 24 million fee in the form of a convertible debenture and that was what caused our net loss for the quarter.
Adjusting for the 24 million net income was 19 million compared to an adjusted net loss of $5 2 million in 'twenty one.
The improvement is mainly due to the improvement in EBITDA.
Please turn now to slide seven where the balance sheet highlights are presented.
As of March 31st plenty of trying to do we got 49 8 million in cash compared to $157 9 million at December 31st 21.
The December balance includes $84 3 million deposited with their pass steel for ship mortgage notes that were repaid in January .
She noticed ship mortgage notes reduced by $478 7 million.
Letting their fully been met over their ship mortgage notes in January and the partial repayment of the senior notes in the quarter.
Long term debt, including current portion increased by $413 5 million, reflecting the new bank debt and the NSM launch obtained to repay our borders.
As you can see on the chart at the bottom of the slide with the exception of the senior secured notes due in August we don't have any other significant near term maturities.
This concludes my presentation at this point I will turn the call over to youngest categories for his review of the lives of South American logistics results.
Thank you George.
Slide eight provides an overview of Navios logistics Navios logistics operates three post merger.
Which are complemented by our barge fleet 40, this transportation and product tanker fleet for coastal comment that state. Please turn to page nine.
Q1, 2022, EBITDA was $24 two young 3% higher compared to the same quarter last year.
Both treatment groups.
<unk> grew 16% to 28 million, mainly driven by a 62% increase in the game board throughput.
This is a pretty busy too.
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You do on location at the mouth of visa and for most of the quarter, we experienced a significant advantage over oven and EBIT ports in the region.
This is driving additional top of revenue four four times and we.
We have now after the peak season for the grain port that coincides with the harvest and exports of soybeans from the region.
<unk> is expected to be stronger than last year and should drive an increase in export volume for our marketing into Manhattan.
On the other hand, the Paraguayan production has been damaged and according to the USDA is expected to decline by 58%, which was adversely impacted as we passed the mortgage.
Actually I don't know if David Manhattan, we only loaded one.
Last quarter, but new cargo started diving and regularly after they had non starting in.
Mainly from bacteria violently performing that'll be gauge ones, and then I'll take or pay contract.
We already discussed the news from Violet related to the sale of that'll be at Athens in the Midwestern system, We will keep you updated on any material developments.
The liquid bonds had a relatively stable performance compared to the first quarter of 2021.
In the bulk segment Q1 two.
To.
EBITDA decreased to $1 6 million on the back of continued difficult navigation condition.
It's really been about remains below historical averages.
The low water levels are adversely affecting operations and profitability.
Margins have been limited carrying capacity in reduce it off and threep take longer to complete.
In addition, the decline in the Paraguayan production of soybeans. This year reduces the demand for EBIT transportation services, which affects the Saint Kate and the employment of our dry cargo barge fleet.
In the government business you want 2022 and did not include a 7% to $1 9 million as the market environment in Argentina has improved compared to last year.
For Q1, 2022 launch was 0.4 million compared to $2 5 million profit in the same theater with last year, mainly due to carrier and finance cost net.
Please turn to slide 10.
Navios logistics has no significant debt maturities until 2025 gas and cash equivalents at the end of the first quarter of 2022 were $33 4 million.
I would now like to turn the call over to Ted Petrone.
Thank you for your honest, please turn to slide 11, which presents our diversified dry bulk fleet consisting of 36 vessels totaling $3 9 million deadweight 12, Capes thinking panamaxes four Super Max and one hand, besides the average age of the fleet is nine four years, 17% younger than the industry average.
Please turn 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.
BARDA has zero emissions by 2050 in this process, we have been pioneering and are adopting certain environmental regulations up to two years in advance.
It used to be one of the first way to achieve full compliance.
This is a socially conscious group, whose core values include diversity inclusion and safety it maintain policies or procedures that provide effective corporate governance.
Our code of Ethics. Our board is composed of a majority of independent directors and independent committees that oversee our management and operations.
Turn to slide 14.
The disruption in trade caused by the war in Ukraine. The BVI achieves the highest Q1 average since 2010, driven mostly by the strength in the sub Cape sectors. In fact, the Supermac sector posted the highest Q1 average since assessments began in 2017 on the back of stronger amount of both demand and an overflow of container cargos.
Dry bulk trade in 2022 is projected to increase by 0.6% similar to last year. Most of the increase is expected to happen in the second half of the year with an additional boost in ton miles as you can.
Training and grain exports are expected to be significantly reduced in Russian grain and coal exports get redirected.
Way from Europe , new longer trade routes emerge on the back of stronger worldwide coal demand as the world seeks to cope with extraordinarily high natural gas prices.
Please turn to slide 15, seaborne iron ore trade is expected to increase by 10, 2% in the second half of 2022 with normal seasonality projecting Brazil, and Australia, increasing exports, China plans for infrastructure investments to maintain the 2022 targeted GDP growth of five five per se.
However, Chinese Covid Lockdowns are currently negatively affecting steel production.
Forecast offer growth and global iron ore imports ex China as the effects of the pandemic recede.
Imports are expected to grow by seven 4% and Asia.
Excluding China is expected to import six 2% more iron ore in 'twenty, two that 2021.
Please turn to slide 16 high gas and oil prices and the warranty and Ukraine support increased coal imports the gas price searches driven power plants have switched back to coal fired power generation, helping 22 ton miles expand and the expected rate of about 4%.
India will increase coal imports by 13 million tons or 6% as current inventories are at a nine year low seaborne coal imports for the second half of 2022 we'll follow the same seasonal pattern as iron ore as coal demand is expected to grow by seven 8% over the first half of 'twenty two.
Please turn to slide 17.
On the grain side, the global grain trade continues to be supported by ever increasing world population rising protein demand worldwide and heightened food security issues initially driven by the pandemic and now by war encroaching on the wheat and corn fields of Eastern Europe .
So the global seaborne trade is expected to decrease in 'twenty two by three 8% due to the Ukraine crisis, New trading patterns will result in a 10 mile decrease of only 0.4%.
Please turn to slide 18, the current order book stands at six 6% of the fleet one of the lowest on record net fleet growth for 'twenty. Two is expected at two 2% and only 0.4% in 'twenty three as owners removed tonnage that will be uneconomic.
Oh 2023 C O two rules come into force vessels over 20 years of age are about eight 3% of the total fleet, which compares quite favorably with data.
Strictly low order book.
And concluding continuing positive demand for natural resources war, and sanction related longer haul trades for coal and grain combined with Covid related fleet inefficiencies.
And a slowing pace of new building deliveries all support healthy freight rates.
This concludes my presentation.
I'd like to turn the call over to Angela Linky for her final comments Angela leaky.
Thank you Dan.
So my presentation, and we open the call for questions.
And at this time, if you would like to ask a question. Please press star one on your Touchtone phone you withdraw your question at any time by pressing the penalty once again that is star one and we'll pause a moment to allow any questions. Thank you.
Okay.
Well it does appear that there are no questions. At this time I will turn the call back over to Andrew <unk> for any closing remarks.
Thank you.
Freshwater in Charlottesville.
The first quarter, we had.
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Got it and they've been wildly.
Of course, we are mindful of it.
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And in China and India.
So no effect in housing.
Mike.
So thank you.
Got it.
Thank you and this does conclude today's program. Thank you for your participation you may disconnect at anytime.
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