Q2 2022 Navios Maritime Holdings Inc Earnings Call
Yeah.
Please standby your program is about to begin if you need assistance during the conference today. Please press star zero.
Good morning, and thank you for joining Navios Maritime Holdings second quarter 2022 earnings Conference call. We are pleased to host this call from occurring.
With us today from the company.
<unk> be some Julie <unk>, Chief Financial Officer, Mr. George <unk>, and SVP of strategic planning Mr. <unk> carriers.
Goldman Sydney called payments Ms Daniella correctly.
We'll take you through the conference call details and Safe Harbor statements Daniela.
Thank you.
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 today's 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 1095 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 <unk>.
I've used 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 now give maritime holdings does not assume any obligation to update the information contained in this conference call.
The agenda for todays conference call is as follows.
We'll begin this morning's conference call with formal remarks from the management team and after we will like to Nicole to take questions now.
Now I turn the call late to Navios holdings, chairwoman and CEO , Ms Angelique Trunking and Julie.
Thank you Michael and good morning to all of you join us on today's call I am pleased with our results for the second quarter of 2022 in the second quarter Navios Holdings reported revenue of $159 $2 million EBITDA of $98 $9 million and net income of $45 million.
For the six months of 2022, Navios holdings recorded revenue of $287 million.
EBITDA over $172 $7 million and net income of $40 million. Most importantly, we saw a nice fleet at a good time and use the $835 million of sales proceeds to pay down $784 $2 million of that Joe.
We will address how we use these funds to delever, our balance sheet with the closing of the theory behind US we have exited fleet ownership and now have two Brian made investments.
<unk> is a 63, 8% ownership interest in Navios, South American logistics.
Logistics and infrastructure provided <unk> region of South America.
We've got a focus on the opportunity these unique group of assets provide yeah.
<unk> got to get all this in a moment, but it is down on the company, but I will remind you that our Brian made seaborne asset is located mean that tax free zone in Hawaii at the mouth of the anyway.
Which means that what was that.
Water levels are unaffected by the drought.
Our contract with Vale is unaffected by the recent state of the mine to <unk> net and equally importantly, we believe that demand will increase its volumes.
<unk>, Nevada, new activity in iron ore mining, which positively effect.
Asia.
The second investment is at 10, 3% ownership interest in Navios partners. This investment has excellent potential economically that at the analyst estimated that Navy is well above the current market price. We believe that we are also have some margin of safety as Navios partners is a way.
Diversified my company I would like now to turn the call over to Mr. Georgia, nor Nauseous Gordon CFO , who will take you through.
The financier George.
Thank you Angeliki, please turn to slide five for a review of the Navios Holdings financial highlights for the second quarter and first six months of 2022.
EBITDA for the quarter was $98 9 million compared to $80 5 million in Q2 of 2021 and 23% increase.
Increase is mainly due to a 25% increase in the time charter equivalent rate achieved by the fleet in the quarter.
The 8% increase in the sales of Navios, South America logistics compared to Q2 of 2011.
The improvement is also reflected in the net income of the company. During Q2 2022, we recorded net income of $45 million compared to $24 9 million in 'twenty, one an improvement of 80%.
Moving to the first half financial highlights EBITDA for the first half of 2022 was $172 7 million compared to $135 1 million in the first half of 'twenty, one an improvement of 28%.
The TCE rate achieved in the first six months of 2022 was 37% higher than in 'twenty, one and the results of Navios South America logistics were 24% higher than the first six months of 'twenty one.
Net income for the period was $40 million compared to $25 1 million in the first half of 2021.
Net income for 22 includes 24 million upfront fee paid in the form of convertible debenture for the refinancing of the ship mortgage notes in Q1.
I would like to point out that with the sale of the fleet. The results of the company will be a little noisy initially and then materially different going forward in Q3, we will record the gain from the sale of their feet and some revenue from charters during the period.
However, commencing in Q4, our operating results will not include any revenue from vessels. Instead. They will only include the results from Microsoft and make on logistics, which has always been consolidated.
Moving to slide six in our balance sheet highlights.
As of June 30 of 2022, the cash balance was about $55 million compared to about the 188 million at the end of December 21.
I want to remind you that at the end of December 84 million was restricted cash Michaels deposited with the trustee of the ship mortgage notes in order to facilitate the repayment of the notes in January .
Following the repayment of the ship mortgage notes and the partial repayment of the senior secured notes in the first half of the year. Our bonds are reduced from $1 1 billion at the end of the year.
To $584 million at the end of June 2022.
In August we fully repaid the senior secured notes.
Following the sale of the fleet in Q3, the majority of the proceeds were used to delever the balance sheet by reducing debt and other liabilities as follows $441 6 million bank debt finance lease liabilities and bareboat obligations have been assumed by Navios partners too.
$262 6 million, mainly due to the piano man of loans associated with the manager and $80 million to fully repay the senior secured notes.
The full effect of the sale of the fleet will be more clearly reflected in the Q3 balance sheet and income statement.
Similar to the income statement the consolidated balance sheet going forward will mainly reflect the balance sheet of Navios logistics.
At this point I'll turn the call over to <unk> for his review of the Navios South American logistics results.
Thank you George Slide seven provides an overview of Navios logistics Navios logistics operates three port terminals, which are complemented by our barge fleet fleet for EBIT transportation and product tanker fleet for coastal Cabotage trade. Please turn to slide eight the prospects for Navios logistics have always.
Being good and are improving the global focus on food security because of geopolitical tensions is expected to benefit the exports of agricultural commodities from South America.
In fact in the first half of this year grain export through our port in Uruguay, and 49% higher year on year.
According to USDA, where 2022 23, South American soybean crop is expected to be even stronger and more importantly for our grain terminal Paraguay and grow that face. This year is expected to recover.
We also see a revived interest in the exploitation of the mining assets of gorilla glass with exports through the Heathrow via our <unk> system.
Recently sold its Midwestern system mining assets, which were under utilized for many years to G&A and production should grow under the new ownership.
Meanwhile, veteran Cargill continue to export using our port terminal.
This year, we added the third client to our iron ore Port Birmingham for B Mind me.
<unk> started production and exports this year.
The increase in iron ore export volumes benefits back business and our postpaid imminent.
Yes.
In the last couple of years low water is about a nine Paraguay reverse made navigation conditions difficult affecting the profitability of our box business.
In 2022, so far the water levels have improved compared to both 2020 and 2021, yet is still below the historical average.
Navios logistics, all unique well located modern infrastructure assets with a capacity to service increased demand from our clients. We also have available land to develop new business in a growing part of the world.
Please turn to page nine.
Q2, 2022, EBITDA was 32 million, 48% higher compared to the same quarter last year.
Port segment, EBITDA grew 34% to $24 5 million, mainly driven by a 40% increase in the grain port throughput attributed to Cairo, Hawaiian exports of soybeans and higher studies at the iron ore port terminals.
Yes.
In the bulk segment Q2, 2022, EBITDA increased 36% to $5 3 million, mainly due to higher liquid cargo and higher other income from supporting exchange differences.
In the Cabotage business Q2, 2022, EBITDA increased by $2 7 million to $2 2 million due to more operating days of the fleet at the market environment in Argentina has improved compared to last year.
For Q2, 2022 profit was $6 4 million compared to 0.8 million loss in the same period last year, mainly due to improved performance of the company.
Turning to the financial results for the six months period, ending June 32022 revenue increased 16% to $127 8 million and EBITDA increased 24% to $56 2 million and profit increased by $4 3 million to $6 million compared to the same period last year.
Sure.
Please turn to slide 10 <unk>.
And obviously logistics has no significant debt maturities until 2025 cash and cash equivalents at the end of the second quarter of 2022 were $37 6 million.
This concludes my presentation I would now like to turn the call over to Angeliki for some final comments and <unk>.
Thank you Jan Kees, please complete that four months.
We open the call for questions.
Thank you at this time, if you would like to ask a question. Please press star one on your Touchtone phone you may remove yourself from the question in queue at any time by pressing star to once again that is star one to ask a question.
We will pause for a moment to allow questions to queue.
Again that was star one if you would like to ask a question.
I am showing no questions at this time I would now like to turn the call back over to Angela for closing remarks.
Thank you. This is an important quarter were completed.
Dry bulk fleet.
And we use that basket delever.
Delever.
<unk>.
<unk> hundred $18 million.
The backdrop of the food.
Security and energy cost today center around the world.
Our caution to anything and not really South America.
We controlled costs.
Actual.
It's going to be.
Important favorable we have the debt.
Thank you David.
And the largest independent grades.
He drove yet in an area that there is.
In commodities and.
Great.
Marshall.
We'll see.
Our board is in the mouth of babies.
We have an effect in terms of doubt.
It's actually Joel.
We see that.
These updated denial or not with new players coming.
And in the mines.
Jay.
Therefore, the mine gate.
Right.
Iron ore deliveries and also coming to a port so we bought it.
Good al.
Yes.
This completes.
Yes.
Thank you, ladies and gentlemen, and ladies.
This concludes today's event you may now disconnect.
Okay.
[music].