Navios Maritime Containers L.P. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2020
Revenue
$95.4 million for 9M 2020
$26.4 million for Q3 2020
Cash provided by operating activities
$2.6 million for 9M 2020
$7.1 million for Q3 2020
EBITDA
$30.7 million for 9M 2020
$5.8 million for Q3 2020
Net income/(loss)
$1.8 million for 9M 2020
$(1.1) million for Q3 2020
Time charter contracts
Five containerships fixed at a net daily rate of above $18,000 for over a year
Debt maturities
No significant debt maturities until 2023
MONACO, Nov. 03, 2020 (GLOBE NEWSWIRE) -- Navios Maritime Containers L.P. (“Navios Containers” or the “Company”) (NASDAQ: NMCI), a growth vehicle dedicated to the container sector of the maritime industry, today reported its financial results for the third quarter and nine months ended September 30, 2020.
Angeliki Frangou, Chairman and Chief Executive Officer, stated, "The pandemic continues to disrupt businesses all over the world. Given the volatile market environment, I am pleased with our results for the third quarter of 2020. During the third quarter, Navios Containers reported revenue of $26.4 million and EBITDA of $5.8 million."
Angeliki Frangou continued, "Consumer demand in the first half of 2020 was hurt by the global economic shut down and quarantine measures. However, with the assistance of fiscal stimulus and other policy measures, consumer demand and container trade rebounded throughout the third quarter of 2020 and continues to show strength. This velocity in trade plus new purchasing patterns in the pandemic economy have been big drivers for the current rates, and we expect them to moderate in coming quarters."
HIGHLIGHTS -- RECENT DEVELOPMENTS
Time charter contracts
In October 2020, Navios Containers has entered into five time charter-out contracts with an average term of over a year at a net daily rate of (i) $18,121 for two 4,000-5,000 TEU containerships and (ii) $18,022 for three 4,000-5,000 TEU containerships.
Units repurchase program
As of November 2, 2020, Navios Containers had repurchased 2,157,523 common units, at a total cost of approximately $1.8 million.
NASDAQ notification of compliance
On October 15, 2020 Navios Containers received a notice from The Nasdaq Stock Market (“Nasdaq”), that it is once again in compliance with the Nasdaq’s Listing Rules continued listing requirement of maintaining a minimum closing price of $1.00 per share.
Fleet Employment
Navios Containers owns a fleet of 29 vessels, totaling 142,821 TEU. The current average age of the fleet is 12.3 years (See Exhibit II). As of November 2, 2020, Navios Containers has chartered-out 90.6% and 33.2% of its available days for the remaining three months of 2020 and for the full year 2021, respectively (including index-linked charters). Excluding index-linked charters, Navios Containers has chartered-out 89.5% and 31.5% of its available days for the remaining three months of 2020 and for the full year 2021, respectively, which are expected to generate $28.7 million and $63.7 million in revenue, respectively. The average expected daily contracted charter-out rate for the fleet is $12,024, net and $19,094, net for the remaining three months of 2020 and for the full year 2021, respectively (excluding index-linked charters), and the total expected available days for the remaining three months of 2020 and for the full year 2021, are 2,668 and 10,585 days, respectively.
Earnings Highlights
EBITDA is a non-U.S. GAAP financial measure and should not be used in isolation or as a substitute for Navios Containers’ results calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
See Exhibit I under the heading, “Disclosure of Non-GAAP Financial Measures,” for a discussion of EBITDA of Navios Containers and a reconciliation of such measure to the most comparable measures calculated under U.S. GAAP.
Third Quarter 2020 and 2019 Results
The third quarter of 2020 and 2019 information presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.
Three Month Period Ended | Three Month Period Ended | |||||
(in thousands of U.S. dollars, except per unit data) | (unaudited) | (unaudited) | ||||
Revenue | $ | 26,381 | $ | 37,031 | ||
Net (Loss)/Income | $ | (1,070 | ) | $ | 4,071 | |
Net cash provided by operating activities | $ | 7,126 | $ | 14,988 | ||
EBITDA | $ | 5,791 | $ | 16,641 | ||
Net (Loss)/Earnings per common unit (basic and diluted) | $ | (0.03 | ) | $ | 0.12 | |
Revenue for the three months ended September 30, 2020 was $26.4 million, as compared to $37.0 million for the same period during 2019. The decrease of $10.6 million was mainly due to a decrease in time charter rates partially offset by the increase in the number of available days from 2,646 for the three months ended September 30, 2019, to 2,668 for the three months ended September 30, 2020. Time charter equivalent, or TCE, per day decreased from $13,453 for the three months ended September 30, 2019 to $9,639 for the same period during 2020.
Net Loss for the three months ended September 30, 2020 was $1.1 million compared to $4.1 million Net Income for the same period in 2019. The $5.2 million decrease in Net Income was mainly due to a $10.8 million decrease in EBITDA and a $0.2 million increase in amortization of deferred drydock and special survey costs. This overall increase of $11.0 million was partially offset by a: (i) $4.6 million decrease in depreciation and amortization, relating mainly to the lower amortization of intangible assets; and (ii) $1.2 million decrease in interest expense and finance cost, net.
EBITDA for the three months ended September 30, 2020 decreased by $10.8 million to $5.8 million as compared to $16.6 million for the same period in 2019. The decrease in EBITDA was primarily due to a: (i) $10.6 million decrease in revenue; (ii) $0.6 million increase in vessel operating expenses mainly due to the increase in the number of available days and the vessel operating expenses as per the management agreement; and (iii) $0.4 million decrease in other income, net. This overall decrease of $11.6 million was partially offset by a: (i) $0.7 million decrease in time charter and voyage expenses; and (ii) $0.1 million decrease in general and administrative expenses.
Nine Months Ended September 30, 2020 and 2019 Results
The information for the nine month periods ended September 30, 2020 and 2019 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.
Nine Month Period Ended | Nine Month Period Ended | ||||
(in thousands of U.S. dollars, except per unit data) | (unaudited) | (unaudited) | |||
Revenue | $ | 95,432 | $ | 102,541 | |
Net Income | $ | 1,820 | $ | 4,572 | |
Net cash provided by operating activities | $ | 2,621 | $ | 24,309 | |
EBITDA | $ | 30,657 | $ | 41,419 | |
Net Earnings per common unit (basic and diluted) | $ | 0.05 | $ | 0.13 | |
Revenue for the nine months ended September 30, 2020 was $95.4 million, as compared to $102.5 million for the same period during 2019. The decrease of $7.1 million was mainly due to a decrease in time charter rates partially offset by the increase in the number of available days from 7,685 for the nine months ended September 30, 2019, to 7,905 for the nine months ended September 30, 2020. TCE per day decreased from $12,768 for the nine months ended September 30, 2019 to $11,352 for the same period during 2020.
Net Income for the nine months ended September 30, 2020 was $1.8 million compared to $4.6 million for the same period in 2019. The $2.8 million decrease in Net Income was mainly due to a: (i) $10.7 million decrease in EBITDA; and (ii) $1.2 million increase in amortization of deferred drydock and special survey costs. This overall decrease of $11.9 million was partially offset by a: (i) $7.4 million decrease in depreciation and amortization relating mainly to the lower amortization of intangible assets; and (ii) $1.7 million decrease in interest expense and finance cost, net.
EBITDA for the nine months ended September 30, 2020 decreased by $10.7 million to $30.7 million as compared to $41.4 million for the same period in 2019. The decrease in EBITDA was primarily due to a: (i) $7.1 million decrease in revenue; (ii) $2.9 million increase in vessel operating expenses mainly due to the increase in the number of available days and the vessel operating expenses as per the management agreement; and (iii) $1.3 million increase in time charter and voyage expenses. This overall decrease of $11.3 million was partially offset by a: (i) $0.3 million increase in other income, net; (ii) $0.2 million decrease in general and administrative expenses; and (iii) $0.1 million decrease in other direct vessel expenses.
Fleet Summary Data:
The following table reflects certain key indicators indicative of the performance of the Navios Containers' operations and its fleet performance for the three and nine months ended September 30, 2020 and 2019.
Three Month | Three Month | Nine Month | Nine Month | ||||||||||||
Period Ended | Period Ended | Period Ended | Period Ended | ||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
Available Days (1) | 2,668 | 2,646 | 7,905 | 7,685 | |||||||||||
Operating Days (2) | 2,658 | 2,632 | 7,883 | 7,658 | |||||||||||
Fleet Utilization (3) | 99.6 | % | 99.5 | % | 99.7 | % | 99.6 | % | |||||||
Vessels operating at period end | 29 | 29 | 29 | 29 | |||||||||||
TCE (4) | $ | 9,639 | $ | 13,453 | $ | 11,352 | $ | 12,768 | |||||||
(1) | Available days for the fleet are total calendar days the vessels were in Navios Containers' possession for the relevant period after subtracting off-hire days associated with scheduled repairs or repairs under guarantee, vessel upgrades, drydocking or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which vessels should be capable of generating revenues. |
(2) | Operating days are the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire. Operating days include ballast days between voyages. |
(3) | Fleet utilization is the percentage of time that Navios Containers' vessels were available for generating revenue, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. |
(4) | TCE per day is defined as voyage and time charter revenues less voyage expenses during a relevant period divided by the number of available days during the period. |
Conference Call:
As previously announced, Navios Containers will host a conference call on Tuesday, November 3, 2020, at 8:30 am ET, during which time Navios Containers’ senior management will provide highlights and commentary on earnings results for the third quarter and nine months ended September 30, 2020.
A supplemental slide presentation will be available on the Navios Containers website at www.navios-containers.com under the "Investors" section by 8:00 am ET on the day of the call.
Conference Call details:
Call Date/Time: Tuesday, November 3, 2020 at 8:30 am ET
Call Title: Navios Containers Q3 2020 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 827 9439
The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:
US Replay Dial In: +1.800.585.8367
International Replay Dial In: +1.404.537.3406
Conference ID: 827 9439
This call will be simultaneously Webcast. The Webcast will be available on the Navios Containers’ website, www.navios-containers.com under the "Investors" section. The Webcast will be archived and available at the same Web address for two weeks following the call.
About Navios Maritime Containers L.P.
Navios Maritime Containers L.P. is a growth-oriented international owner and operator of containerships. For more information, please visit our website at www.navios-containers.com.
Forward Looking Statements - Safe Harbor
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events, including future contracted revenues and rates, EBITDA, future available days, future financial performance of the fleet, timing of vessel deliveries, vessel acquisitions, financing activities, and Navios Containers' growth strategy and measures to implement such strategy, including future vessel acquisitions and the ability to secure or refinance related financing, the further growth of our containership fleet, and entering into further time charters. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Navios Containers at the time these statements were made. Although Navios Containers believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Containers. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, risks relating to: global and regional economic and political conditions including the impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of the products we ship, the ability and willingness of charterers to fulfill their obligations to us and prevailing charter rates, shipyards performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing; potential disruption of shipping routes due to accidents, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it; the favorable timing for acquisitions and chartering opportunities in the container shipping sector and Navios Containers’ ability to take advantage of such opportunities; the value of container shipping vessels; Navios Containers’ ability to identify container shipping vessels for acquisition at attractive prices, if at all, including the availability of distressed acquisition opportunities in the container shipping industry; Navios Containers’ ability to execute on a low-cost operating structure; Navios Containers’ ability to achieve a return on investment for and to pay cash distributions to our unitholders or make common unit repurchases from our unitholders; any advantages resulting from Navios Containers’ strategic focus on intermediate-size containerships; Navios Containers’ ability to leverage the scale, experience, reputation and relationships of the Navios Group, consisting of Navios Maritime Holdings Inc., Navios Maritime Acquisition Corporation, Navios Maritime Partners L.P., and any one or more of their subsidiaries and affiliates. Navios Containers’ future financial condition or results of operations and its future revenues and expenses, including its estimated adjusted cash flow; the loss of any customer or charter or vessel; the aging of Navios Containers’ vessels and resultant increases in operation and drydocking costs; Navios Containers’ ability to maintain long-term relationships with major liner companies; Navios Containers’ ability to access debt, credit and equity markets; potential liability from litigation and our vessel operations, including discharge of pollutants; Navios Containers’ and the Navios Group’s performance in safety, environmental and regulatory matters; increases in costs and expenses, including but not limited to, crew wages, insurance, technical maintenance costs, spares, stores and supplies, charter brokerage commissions on gross voyage revenues and general and administrative expenses; the changes to the regulatory requirements applicable to the shipping and container transportation industry, including, without limitation, stricter requirements adopted by international organizations, such as the International Maritime Organization and the European Union, or by individual countries or charterers and actions taken by regulatory authorities and governing such areas as safety and environmental compliance; the anticipated taxation of Navios Containers and its unitholders; and the effects of increasing emphasis on environmental and safety concerns by customers, governments and others, as well as changes in maritime regulations and standards. Navios Containers expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Containers' expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Navios Containers makes no prediction or statement about the performance of its common units.
Contact:
Navios Maritime Containers L.P.
+1.212.906.8648
investors@navios-containers.com
EXHIBIT I | |||||||||||||||
NAVIOS MARITIME CONTAINERS L.P. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(Expressed in thousands of U.S. dollars - except for unit and per unit data) | |||||||||||||||
Three Month | Three Month | Nine Month | Nine Month | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
Revenue | $ | 26,381 | $ | 37,031 | $ | 95,432 | $ | 102,541 | |||||||
Time charter and voyage expenses | (666 | ) | (1,431 | ) | (5,689 | ) | (4,413 | ) | |||||||
Direct vessel expenses | (1,322 | ) | (974 | ) | (3,994 | ) | (2,796 | ) | |||||||
Vessel operating expenses (management fees) | (17,381 | ) | (16,754 | ) | (51,765 | ) | (48,885 | ) | |||||||
General and administrative expenses | (2,481 | ) | (2,623 | ) | (7,576 | ) | (7,687 | ) | |||||||
Depreciation and amortization | (2,582 | ) | (7,229 | ) | (14,017 | ) | (21,402 | ) | |||||||
Interest expense and finance cost, net | (3,053 | ) | (4,367 | ) | (10,983 | ) | (12,851 | ) | |||||||
Other income, net | 34 | 418 | 412 | 65 | |||||||||||
Net (loss)/ income | $ | (1,070 | ) | $ | 4,071 | $ | 1,820 | $ | 4,572 | ||||||
Net (loss)/ earnings per unit, basic and diluted | $ | (0.03 | ) | $ | 0.12 | $ | 0.05 | $ | 0.13 | ||||||
Weighted average number of units, basic and diluted | 34,392,038 | 34,603,100 | 34,532,232 | 34,603,100 | |||||||||||
NAVIOS MARITIME CONTAINERS L.P. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Expressed in thousands of U.S. dollars – except for unit data) | |||||
September 30, | December 31, | ||||
(unaudited) | (unaudited) | ||||
ASSETS | |||||
Cash and cash equivalents, including restricted cash | $ | 8,293 | $ | 18,109 | |
Vessels and deferred dry dock and special survey costs, net | 406,902 | 415,143 | |||
Other assets (including current and non-current) | 19,616 | 20,762 | |||
Intangible assets | — | 6,288 | |||
Total assets | $ | 434,811 | $ | 460,302 | |
LIABILITIES AND PARTNERS’ CAPITAL | |||||
Other current liabilities | $ | 4,568 | $ | 24,664 | |
Current portion of long term borrowings, net | 32,590 | 46,733 | |||
Long-term borrowings, net of current portion | 207,636 | 198,925 | |||
Total Partners’ capital | 190,017 | 189,980 | |||
Total liabilities and Partners’ capital | $ | 434,811 | $ | 460,302 | |
Disclosure of Non-GAAP Financial Measures
EBITDA is a “non-U.S. GAAP financial measure” and should not be used in isolation or considered a substitute for net income/(loss), cash flow from operating activities and other operations or cash flow statement data prepared in accordance with generally accepted accounting principles in the United States.
EBITDA represents net income/(loss) attributable to Navios Containers’ common unitholders before interest and finance costs, before depreciation and amortization and before income taxes. Navios Containers uses EBITDA as a liquidity measure and reconciles EBITDA to net cash provided by/(used in) operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA is calculated as follows: net cash provided by/(used in) operating activities adding back, when applicable and as the case may be, the effect of: (i) net increase/(decrease) in operating assets; (ii) net (increase)/decrease in operating liabilities; (iii) net interest and finance cost; (iv) amortization and write-off of deferred financing costs; and (v) payments for drydock and special survey costs. Navios Containers believes that EBITDA is a basis upon which liquidity can be assessed and represents useful information to investors regarding Navios Containers’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay distributions. Navios Containers also believes that EBITDA is used: (i) by prospective and current lessors as well as potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
EBITDA is presented to provide additional information with respect to the ability of Navios Containers to satisfy its respective obligations, including debt service, capital expenditures, working capital requirements and pay distributions. While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.
EBITDA has limitations as an analytical tool, and therefore, should not be considered in isolation or as a substitute for the analysis of Navios Containers’ results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA does not reflect changes in, or cash requirements for, working capital needs; (ii) EBITDA does not reflect the amounts necessary to service interest or principal payments on our debt and other financing arrangements; and (iii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA does not reflect any cash requirements for such capital expenditures. Because of these limitations, among others, EBITDA should not be considered as a principal indicator of Navios Containers’ performance. Furthermore, Navios Containers’ calculation of EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.
Reconciliation of EBITDA to Cash from Operations | ||||||||||||
Three Month | Three Month | Nine Month | Nine Month | |||||||||
Expressed in thousands of U.S. dollars | ||||||||||||
Net cash provided by operating activities | $ | 7,126 | $ | 14,988 | $ | 2,621 | $ | 24,309 | ||||
Net (decrease)/increase in operating assets | (5,106 | ) | (1,259 | ) | (1,703 | ) | 4,969 | |||||
Net decrease /(increase) in operating liabilities | 664 | (3,965 | ) | 16,191 | (5,249 | ) | ||||||
Net interest and finance cost | 3,053 | 4,367 | 10,983 | 12,851 | ||||||||
Amortization and write-off of deferred financing costs | (342 | ) | (424 | ) | (2,009 | ) | (1,569 | ) | ||||
Payments for dry dock and special survey costs | 396 | 2,934 | 4,574 | 6,108 | ||||||||
EBITDA | $ | 5,791 | $ | 16,641 | $ | 30,657 | $ | 41,419 | ||||
Expressed in thousands of U.S. dollars | Three Month | Three Month | Nine Month | Nine Month | ||||||||
Net cash provided by operating activities | $ | 7,126 | $ | 14,988 | $ | 2,621 | $ | 24,309 | ||||
Net cash used in investing activities | $ | (5 | ) | $ | (4,251 | ) | $ | (3,212 | ) | $ | (60,898 | ) |
Net cash (used in)/provided by financing activities | $ | (10,184 | ) | $ | (10,443 | ) | $ | (9,225 | ) | $ | 34,846 | |
EXHIBIT II | ||||||
Owned Vessels | ||||||
Vessel Name | TEU | Year | ||||
Navios Summer (1) | 3,450 | 2006 | ||||
Navios Verano (1) | 3,450 | 2006 | ||||
Navios Spring (1) | 3,450 | 2007 | ||||
Navios Amaranth (1) | 4,250 | 2007 | ||||
Navios Indigo (1) | 4,250 | 2007 | ||||
Navios Vermilion (1) | 4,250 | 2007 | ||||
Navios Verde (1) | 4,250 | 2007 | ||||
Navios Amarillo (1) | 4,250 | 2007 | ||||
Navios Azure (1) | 4,250 | 2007 | ||||
Navios Domino (1) | 4,250 | 2008 | ||||
Navios Delight (1) | 4,250 | 2008 | ||||
Navios Dedication (1) | 4,250 | 2008 | ||||
Navios Devotion (1) | 4,250 | 2009 | ||||
Navios Destiny (1) | 4,250 | 2009 | ||||
Navios Lapis | 4,250 | 2009 | ||||
Navios Tempo | 4,250 | 2009 | ||||
Navios Dorado | 4,250 | 2010 | ||||
Navios Felicitas | 4,360 | 2010 | ||||
Bahamas | 4,360 | 2010 | ||||
Bermuda | 4,360 | 2010 | ||||
Navios Miami | 4,563 | 2009 | ||||
Navios Magnolia | 4,730 | 2008 | ||||
Navios Jasmine | 4,730 | 2008 | ||||
APL Denver | 4,730 | 2008 | ||||
Navios Nerine | 4,730 | 2008 | ||||
Navios Utmost (1) | 8,204 | 2006 | ||||
Navios Unite (1) | 8,204 | 2006 | ||||
Navios Unison (2) | 10,000 | 2010 | ||||
Navios Constellation (2) | 10,000 | 2011 |
(1) | The vessel is subject to a sale and leaseback transaction for a period of up to five years, at which time Navios Containers has an obligation to purchase the vessel. |
(2) | The vessel is subject to a sale and leaseback transaction for a period of up to seven years, at which time Navios Containers has an obligation to purchase the vessel. |
