Q3 2025 Navios Maritime Partners LP Earnings Call

Speaker #3: Please stand by. Your program is about to begin.

Speaker #2: Thank you for joining us for Navios Maritime Partners' third quarter 2025 earnings conference call. With us today from the company are Chairwoman and CEO, Ms. Angeliki Frangou; Chief Operating Officer, Mr. Efstratios Desypris; Chief Financial Officer, Mrs. Erifili Tsironi; and Chief Trading Officer, Mr. Vincent Vandewalle.

Speaker #2: reminder, this conference call is being As a webcast. To access the webcast, please go to the investor section of Navios Partners' website at www.navios-mlp.com.

Speaker #2: You'll see the webcasting link in the middle of the page, and a copy of the presentation referenced in today's earnings conference call will also be found there.

Speaker #2: 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 regarding Navios Partners.

Speaker #2: 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 those statements.

Speaker #2: Such risks are forward-looking and 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.

Speaker #2: Navios Partners does not assume any obligation to update the information contained in this conference call. The agenda for today's call is as follows. First, Ms. Frangou will offer opening remarks.

Speaker #2: Next, Mr. Desypris will give an overview of Navios Partners' segment data. Next, Mrs. Tsironi will give an overview of Navios Partners' financial results. Then, Mr. Vandewalle will provide an industry overview.

Speaker #2: And lastly, we'll open the call to take questions. Now, I turn the call over to Navios Partners' Chairwoman and CEO, Ms. Angeliki Frangou. Angeliki?

Speaker #3: Good morning, and thank you all for joining us on today's call. I am pleased with the results for the third quarter and first nine months of 2025, in which we reported revenue of 346.9 million dollars and 978.6 million dollars respectively.

Speaker #3: We also reported a bed of 193.9 million dollars and 519.8 million dollars respectively. And net income dollars and 168 million respectively. Earnings per common unit were of 56.3 million $1.90 for the quarter and $5.62 for the nine-month period.

Speaker #3: For the past five years, it seems as if we have been addressing constant change in our operating environment driven by geopolitical and other events.

Speaker #3: Yet, we have remained laser-focused on our business, modernizing our fleet. As you can see on slide three, the average age of our fleet is 9.7 years, compared to an industry average of 13.5 years for our three segments.

Speaker #3: Our reinvestment program puts us in a fortunate position of having a fleet that is almost 30% younger than the average and almost half when you look at our tanker fleet.

Speaker #3: Please turn to slide four. Navios is a leading maritime transportation company, chartering a modern fleet of 171 owned and operated vessels across three classes.

Speaker #3: Our fleet is split about one-third in segments and 15 asset each category by vessel number and vessel value. Vessel values are 6.3 billion dollars in gross value and 3.8 billion dollars in net equity.

Speaker #3: We also enjoy a low net LTV of 34.5% and have $412 million in strong credit available liquidity and ratings of Ba3 by Moody's and BB by S&P.

Speaker #3: Please turn to slide five. We believe that diversification is a strength. We're embedded in a culture of risk management. We have a business providing significant optionality in our decision-making process.

Speaker #3: For example, when chartering, if we are unable to secure long-term charters that provide a reasonable return on our investment, we limit our exposure to short-term opportunities while waiting for the sector to improve.

Speaker #3: We approach the allocation of capital similarly, patiently observing the opportunistic purchases or acquisitions that can be hedged by long-term charters with a creditworthy counterparty.

Speaker #3: This activity is accompanied by a deleveraging goals. We maintain a strong balance sheet and a target net LTV of 2025%. I would offer that all these works because of our strong risk management culture.

Speaker #3: We are continuously monitoring and assessing risk. We are evaluating and structuring our transactions with risk management professionals who are equal partners in all our robust insurance coverage for liability and losses.

Speaker #3: And we have implemented many tools to manage operational risk activities and crew training. Please turn to slide six. Our fleet gross LTV was 40.6% at the end of Q3, and the net LTV was 34.5%. We aim to continue to drive net LTV lower.

Speaker #3: We added $745 million of long-term contracted revenue during the quarter, and our revenue backlog is $3.7 billion. Currently, virtually all of the fleet is covered for the fourth quarter of 2025.

Speaker #3: Please turn to slide seven. I would like to focus on the prospects for 2026, which are shaping up nicely. We are covered 58% of our days and the third quarter.

Speaker #3: for the remaining 23,387 open and index days. You can see the breakdown of each segment on the right part of the slide. 92% of our container days and 73% of our tanker days are fixed, with dry bulk days representing most of our market exposure by a number of days.

Speaker #3: Repay $292.3 million of floating rate debt, and the balance for issuance fees and for general corporate purposes. This transaction has no impact on our leverage rate because the proceeds are used to refinance existing debt.

Speaker #3: But we believe opportunistic financing reduces interest rate risk by replacing floating-rate debt with a fixed interest rate. It also releases collateral, and we have around $1.2 billion of debt-free vessels.

Speaker #3: Pro forma for this transaction, we have 41% of our debt fixed at an average interest rate of 6.2%. The bond market is also providing an alternative source of financing.

Speaker #3: Please turn to slide nine, where we outline our return of capital program. As you can see here, to date, we have returned $42.2 million under the dividend and unit repurchase programs.

Speaker #3: Today, we repurchased almost 5% of the number of units outstanding determined as of the date we launched the program. We have 37.3 million units remaining. These purchases, amounting to $4.6 million in purchase power, have resulted in a $4.6 per unit value at creation, assuming the analyst estimate of NAV of around $138 per unit.

Speaker #3: Please turn to slide 10. Navios is a proven platform that has been executing its strategy in a challenging environment. I referenced the many uncertainties when I started this discussion.

Speaker #3: Certainly, the geopolitical risks and regional conflicts changing global tariff regimes and evolving trade patterns are unprecedented in recent history. We have remained focused and over the past four years, we have built a platform with an EBITDA run rate of about 750 million while increasing our book of contracted revenue to 3.7 billion dollars and our vessel value to 6.3 billion dollars.

Speaker #3: At the same time, we have decreased our net LTV by 23% to 34.5%. We have more to do, but we believe that this proven platform, containing a divisive fleet with a risk management culture, is the way to do it.

Speaker #3: I now turn the presentation over to Mr. Stratos Desypris, Navios Partners Chief Operating Officer. Stratos,

Speaker #2: Thank you, Angeliki, and good morning all. Please turn to slide 11, which details our operating free cash flow potential for Q4 of 2025 and 2026.

Speaker #2: For Q4 2025, we fixed 88% of our available days at a net average rate of 24,871 dollars per day. Contracted revenue exceeds estimated total cash operating cost by about 86 million, and we have 1,594 remaining open or index linked days that should provide additional cash flow.

Speaker #2: For 2026, we have fixed about 58% of our available days at a net average rate of $27,088 per day, generating about $860 million in revenue.

Speaker #2: This almost covers our total estimated cash operating cost for the year, resulting in a breakeven of $894 per day on our 23,387 open index days.

Speaker #2: Please turn to slide 12. We are constantly renewing our fleet in order to maintain a young profile. We reduce our carbon footprint by modernizing our fleet, benefiting from newer technologies and advanced environmentally friendly features.

Speaker #2: During Q3, we acquired four new buildings: 8,850 TEU container ships, for a total price of $460 million. These vessels have already been chartered out for a fair period of over five years, at a net rate of $44,145 per day, generating revenues of $336 million.

Speaker #2: We have 25 new building vessels delivering to our fleet through 2028, representing $1.9 billion of investment. Based on our financing, both agreed and in process, we have about $230 million of equity remaining to be paid.

Speaker #2: In container ships, we have eight vessels to be delivered with a total acquisition price of about 0.9 billion. We have mitigated residual value risk with long-term credit-worthy charters, expected to generate about 0.6 billion in revenue, over a five-year average charter duration.

Speaker #2: In tankers, we have 17 vessels to be delivered, for a total price of approximately $1 billion. We charter out 11 of these vessels for an average period of five years, expected to generate aggregate contracted revenue of about $0.6 billion.

Speaker #2: We also continue to opportunistically sell older vessels. In 2025, we sold 12 vessels, six dry bulk, three tankers, and three container ships, with an average age of over 18 years, for a total of about 235 million.

Speaker #2: We continue to maintain a strong backlog of contracted revenue that creates visibility in an uncertain environment. Moving to the next slide, during the quarter, we added $745 million of contracted revenue.

Speaker #2: 595 million from container ships, including the 336 million on the four new building vessels, 138 million on tankers, and 12 million on dry bulk vessels.

Speaker #2: Total contracted revenue amounts to 3.7 billion. 1.3 billion relates to our tanker fleet, 0.2 billion relates to our dry bulk fleet, and 2.2 billion relates to our container ships.

Speaker #2: Charters are extended through 2037, with a diverse group of quality counterparties. I now pass the call to Eric Cironi, our CFO, who will take you through the financial highlights.

Speaker #2: Eric,

Speaker #3: Stratos, and good morning all. I will briefly review our unaudited financial results for the third quarter and the nine months ended September 30, 2025.

Speaker #3: The financial information is included in the press release and is summarized in the slide presentation available on the company's highlights on slide 14. Total revenue for the third quarter of 2025 increased by 1.8% to $347 million, compared to $341 million for the same period in 2024, due to a higher fleet combined time charter equivalent rate, despite lower available days.

Speaker #3: Our combined TCE rate for the third quarter of 2025 increased by 2.4% to $24,167 per day, while our available days decreased by 0.8% to 13,443 days, compared to Q3 '24.

Speaker #3: In terms of sector performance, the TCE rate for our combined container and tanker fleet increased by 3.7% and 1.7% to $31,832 and $26,238 per day, respectively.

Speaker #3: In contrast, our TCE rate for our dry bulk fleet was 3.5% lower at 17,976 per day. EBITDA for the third quarter and first nine months of '25 was adjusted as explained in the slide footnote.

Speaker #3: Adjusted EBITDA for Q3 '25 decreased by 1.4 million to 194 million, compared to Q3 '24. The decrease was primarily driven by a 4.5 million decrease in other income net, mainly due to the decrease in foreign exchange gains and a 3.2 million increase in vessel operating expenses, mainly due to a 3.4 increase in OPEC stays and a 2 million increase in general administrative expenses in accordance with our administrative services agreement.

Speaker #3: The above decrease was partially mitigated by a $6.1 million increase in time charter and voyage revenues and a $2.2 million decrease in time charter and voyage expenses, mainly due to the decrease in banker expenses as a result of lower freight voyage days in the third quarter of '25.

Speaker #3: Our average combined OPEC's rate was $6,798 per day, only $10 more than Q3 '24. Adjusted net income for Q3 '25 was $84 million, compared to $97 million in Q3 '24.

Speaker #3: The decrease is mainly due to a 9 million increase in depreciation and amortization and a 2 million increase in interest expense and finance cost net.

Speaker #3: Adjusted earnings and earnings per common unit for the third quarter of 2025 were $2.8 and $1.9, respectively. For the first nine months of 2025, revenue decreased by $23 million to $979 million, adjusted EBITDA decreased by $29 million to $520 million, and adjusted net income decreased by $67 million to $196 million, compared to the same period in 2024.

Speaker #3: Our combined time charter equivalent (TCE) rate for the first nine months of 2025 was $22,825 per day. In terms of sector performance, the TCE rate for our containers increased by 3.1% to $31,213 per day, compared to the same period in 2024.

Speaker #3: In contrast, our dry bulk and tanker TCE rates were approximately 9.2% and 3.5% lower, respectively. TCE rates for our dry bulk vessels stood at $15,369 per day and for our tankers at $26,290 per day for the first nine months of '25.

Speaker #3: Our average combined OPEC rate was 2.4% higher compared to the first nine months of '24, at 6,961 per day, also as a result of the change in the composition of our fleet.

Speaker #3: Adjusted earnings and earnings per common unit for the first nine months of '25 were 6.6 and 5.6 dollars,

Speaker #1: and cash equivalents , including restricted cash and time deposits in 25 . Cash excess of three months , 382 million . During the first nine were 25 .

Speaker #1: months of We paid 178 million under our program , building net of debt . We concluded the sale of six vessels adding for 75 million , about cash .

Speaker #1: months of We paid 178 million under our program , building net of debt . We concluded the sale of six vessels adding for 75 million , about 49 million debt After repayment .

Speaker #1: Long borrowings , including the term current portion net of fees increased , to 2.2 billion following the delivery of six vessels first during the the year .

Speaker #1: Net debt to book nine months of capitalization improved to 33.8%. Slide 16 highlights our debt profile with the recent $300 million senior unsecured bond.

Speaker #1: Further, we diversify our funding resources. In addition to bank debt and structured leasing, the bond has a fixed interest rate of 7.75%, and pro forma for the bond for 1% of our debt is fixed at an average rate of 6.2%.

Speaker #1: We also have mitigated part of the increased interest rate by cost averaging, reducing the margin for our rate-floating debt and bareboat liabilities for the in-water fleet to 1.8%.

Speaker #1: I would like to note that the average margin for the committed and rate debt floating of our new building program is 1.5%. Our maturity profile is staggered, with no significant balloons due in any single year until 2030, when the bond matures.

Speaker #1: In Q3 25 , Navios partners completed three facilities for a total amount of 246 million . One additional facility of 68 million was signed in October and now pass the call to Vincent Vandewalle Navios partners , Chief Trading Officer to take you through the industry section .

Speaker #1: Vincent .

Speaker #2: Thank you . Eri , please turn to slide 18 . Geopolitical continue developments to shift worldwide route trading by the caused war tariff restricted Suez Canal passages .

Speaker #2: The Ukraine war and port fee impositions by the U.S. and China, along with announced tariffs and the implementation pauses in effect, are not expected to have a significant impact on tankers and dry trade.

Speaker #2: bulk Apart from steel tariff impacts on grain and container , ships are expected reduce to recent following the trade deal between US and China , the Red sea entrance leading to the Suez Canal continues to operate at restricted transit levels , increasing total miles for most vessel types .

Speaker #2: Since the Gaza ceasefire , Houthis announced that they have on attacks shipping , but there were several piracy off incidents Somalia at the beginning of November .

Speaker #2: The Ukraine war is shifting trading patterns , limiting grain exports out of the Black Sea and benefiting exports out of Brazil and . Russian crude and USA exports are adjusting to tighter sanctions on Russian oil producers Rosneft and Lukoil , elevating rates for Non-sanctioned vessels .

Speaker #2: USTR port fees on Chinese vessels and similar Chinese port fee on US vessels have been put on hold for the year , while the two countries negotiate a more permanent solution .

Speaker #2: Please turn to slide 20 for the review of the dry bulk industry. Demand growth for dry bulk has been relatively stable over the last 25 years, at about 4%.

Speaker #2: Average annual ton-mile growth. The current order book stands at about 11% of the total fleet and will remain low due to high new building prices.

Speaker #2: Uncertainty about new fuel regulations and availability , and general market outlook . The fleet is aging quickly , with 39% of the vessels 15 years old , and with the older vessels far exceeding those on order .

Speaker #2: be Supply should constrained over the medium term . Please turn to slide 21 . The main driver of Drybulk demand will be strong .

Speaker #2: Atlantic Basin iron ore growth over the next several new years , with projects in Guinea and Brazil . The biggest new project is Simandou and Guinea starting now , which will ramp up to 120 million by 27 .

Speaker #2: Also , Vale in Brazil has three new projects totaling 50 million tons , expected to start exporting by the end of 26 . The of total all long haul 170 million tons are tone trades , creating demand for additional an 234 capes .

Speaker #2: With the current order book of only 173 capes, a further tightening of demand and supply is expected over the next few years, benefiting rates.

Speaker #2: The dry bulk market looks positive overall, with steady long-term demand growth and a constrained supply of vessels. Please turn to slide 23 for the review of the tanker industry.

Speaker #2: Reviewing the supply side, as in dry, we see a relatively low tanker order book of 16%, with 51% of the fleet already over 15 years old, a figure that is rising quickly in the next few years. Older vessels are exceeding the order.

Speaker #2: And the book arts offering first deliveries in supply is set to late Q4. It will be tight for several years. Please turn to slide 24.

Speaker #2: The Office of Foreign Assets Control (OFAC), the EU, and the UK continue to sanction Russian, Venezuelan, and Iranian oil revenue, as well as the ships delivering their crude and products.

Speaker #2: This type of sanctions have two main effects sanctioned all volumes from these three countries have more difficulty finding willing buyers demand , raising compliant barrels and non-sanctioned vessels to carry that all .

Speaker #2: Secondly , with 785 tankers now sanctioned , the fleet has seen a already significant reduction of about 14% of total capacity . The tanker market also looks positive medium over the term , based on a low order book .

Speaker #2: An aging fleet and a reduced fleet due to sanctions . Please turn now to slide 26 for a review of the container industry .

Speaker #2: The after-Covid pandemic has led to an increase in container ordering, with ships focusing mainly on the biggest units. Fleet expansion and large vessels are set to continue from high levels this year into next.

Speaker #2: Currently, 80% of the order book for bigger ships, with a capacity of 9,000 TEU or greater, and only 70% of the order book is for a capacity of 2,000 to 9,000 TEU, where the most activity was observed.

Speaker #2: Smaller segments of the fleets are well positioned to take advantage of shifting trading patterns , as shown on the right hand graph . Growth in non-mainland trades far exceeds the traditional , mainly trades to the US and Europe due to tariffs and higher growth in developing economies .

Speaker #2: Trades involving the Southern Hemisphere, mostly served by smaller-sized vessels, are expected to see continued healthy growth as this trade shift continues.

Speaker #2: Overall , Navios fleets is well positioned within the container market and continues to benefit from long term employment . With our high quality charters , this concludes our presentation .

Speaker #2: I would now like to turn the call over to Angeliki Frangou for her final comments. Angeliki.

Speaker #3: Thank you, Vincent. This completes our formal presentation, and we open the call to questions.

Speaker #4: And at this time, if you would like to ask a question, please press the star and one on your telephone keypad.

Speaker #4: You may withdraw your question by pressing star 2. Once again, to ask a question, please press the star and 1 on your telephone keypad.

Speaker #4: We'll take our first question from Omar Nokta with Jefferies . Please go ahead . Your line is open .

Speaker #5: Thank you . Hi . Good or good morning afternoon . Angeliki and team , thanks for the update . Slide 11 has a really nice summary .

Speaker #5: High. Angeliki. Yeah. Slide 11 has a really nice summary that shows in 2026 how you have 42% of your available days open to set spot market or index rates.

Speaker #5: Yet , you know , given how much charter have , coverage you you only need $894 to break even on on those ships .

Speaker #5: Clearly, a great place to be gives you plenty of flexibility. You know, with that, how does that shape your fixing interest in your vessels kind of going forward from here, at least into 2026?

Speaker #5: Do you keep what's available now to the spot , to the spot market ? You keep those free and open given you've got that , say , flexibility or do you want to continue to put these ships on on contract and fix your coverage out ?

Speaker #3: Let me take you through, and I think Stratus also would like to add a couple of things. One of the things we are doing is we're using maximum flexibility.

Speaker #3: So you will see that the maximum that the vessels that are open for 2026 is the majority is dry bulk, and basically those vessels are, a lot of them are index-based with the premiums.

Speaker #3: So those we are actually very comfortable of how we are fixing that fleet on the quarter forward , depending on what we assume on the market .

Speaker #3: This is a very nice position. We are in the majority of container vessels that have been fixed, and basically, that is the area where we see a lot of upside.

Speaker #3: We also are seeing for the first time after quite some period that we see also fixed period for dry bulk that we haven't seen for some time .

Speaker #3: And I'd like Stratus to give you a little bit of feedback.

Speaker #6: adding to what Angeliki was saying is that , you know , in 2026 , as we said , virtually all the container ships is So covered .

Speaker #6: there is no sector , exposure on that which is a sector that has , you know , people are discussing a lot and there is uncertainty .

Speaker #6: The majority , I would say more than 50% of the tankers are covered . So the majority of the indeed on exposures are the dry bulk .

Speaker #6: You see that , you know , with the contracted revenue , we only have 20 million to cover for the next year , and we have 23,400 days , approximately , which basically is on the dry bulk sector .

Speaker #6: we have seen a very big strength on the dry sector recently with rates all across the segments , all the sectors of dry bulk being very healthy .

Speaker #6: have seen also the And we forward curves being very healthy . So the exposure that we have today provides a very good opportunity for us .

Speaker #6: And you know, it shows how much of the upside you can have on this portfolio today.

Speaker #5: Got it . Thank you . Stratus and Angeliki . And just a up . You know follow seeing a pretty healthy container ship chartering market .

Speaker #5: And you've been advantage of really good strong . You would say liner interest to build ships against contracts . And you've been fairly recent active in years in that 5000 to maybe say 9000 TEU range .

Speaker #5: There's been some focus recently , or at least it feels like there's been a shift where liners are starting to look more at the feeder size , in that kind of sub 2000 TEU size range , you don't have a big focus on that in today's with your fleet today , but is that something you see an opportunity in ?

Speaker #5: Are there opportunities to build these smaller ships contracts , against or is that more just this point ?

Speaker #3: There is a there is always project and I will tell you we see a that lot of in every activity site . What you have to be very careful is counterparty and duration because you know , new prices remain at the levels we have it's very important the signature seen .

Speaker #3: duration , residual value of the risk . So But we increased see an activity . I mean it is . interesting Quite there is that a see a lot focus .

Speaker #3: of inefficiency market We trading in the patterns . And it seems that the smaller vessels are more give more flexibility to the liners in order to their achieve this very this ever changing trading patterns .

Speaker #3: I almost, on a yearly basis, say you will have new… I mean, we saw China and the United States having a one-year agreement.

Speaker #3: So and basically we see it that will happen in a lot of other areas . So you need to be alert and smaller vessels give that flexibility .

Speaker #5: That makes sense. Thank you. Okay, then, and maybe just finally, you had a successful $300 million bond issue last month.

Speaker #5: Unsecured good rate. How are you thinking about those in terms of how you plan to deploy proceeds from them?

Speaker #3: know , You you know , as you as mean , accessing the market and secure market is quite important . It hasn't been quite open for some time .

Speaker #3: I think almost ten years for the Maritime section . So what we achieved with that is we fixed our interest rate at 41% at 6.2 .

Speaker #3: We got a diversification of sources , but also very importantly , we got 1.2 billion of debt free vessels . Basically , we are net debt is the same before and after .

Speaker #3: And that gives us about of a billion to debt vessels . That gives us the most important thing that we care . Optionality .

Speaker #3: And this is a nice part where we will see how to , you know , you have 1.2 of your of your vessels of 6.6 .

Speaker #3: that are basically mortgage-free.

Speaker #5: Yes , certainly . Thanks Yeah . , Angeliki good . Very . I'll , I'll over turn it .

Speaker #6: you . Thank

Speaker #3: Thank you .

Speaker #4: Thank you . I And will turn the now call back to Angeliki for final comments

Speaker #3: Thank Q3 results completes .

Speaker #3: you .