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Navios Maritime Partners L.P. (NMM)

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28.76+0.34 (+1.20%)
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  • E
    E A
    A new trade strategy is taking shape with a goal of resetting global manufacturing in response to geopolitical upheaval. The U.S. and its allies are pursuing a refined concept of globalization that seeks to confine a swath of international commerce to a circle of trusted nations, and the WSJ’s Yuka Hayashi writes that fans call the shift “friend-shoring.” It’s a sharp turn from the decadeslong drive toward offshoring and free-trade policies that made moving goods around the world cheaper and faster. Many countries are now supporting new production and trading channels for essential goods that run though friendly nations, and companies including Samsung Electronics and Gap are tapping into the trend. Supporters see the concept as a chance to reduce the reliance of global supply chains on countries with autocratic governments and nonmarket economies. That may have important implications for shipping companies with business built on free trade.

    First-quarter profit at South Korean shipping line HMM rose nearly 20-fold to about $2.4 billion on revenue of $3.8 billion. (Korea JoongAng Daily)

    Container lines say sliding freight rates could cut into their earnings this year. (The Loadstar)

    Orders for new container ships now are equivalent to nearly 30% of the capacity of the existing fleet. (Lloyd’s List)

    WSJ Logistics Report
  • m
    Shipping being a cyclical and capital intensive business (I.e.constant fleet renewall is core to the business), cash and access to cash at low rates is critical. Not to be an apologist for the CEO - I appreciate her perspective to make the best investment of their cash flow at this time, whereby they don’t need to go to banks to finance newbuild but can do so via cash flow - that is a very cost effective way to run their, or any other business.

    It’s worth noting that other companies in this sector that also have diversified fleets, like CPLP (container and LNG carrier), CRME (container and dry bulk) also have invested their cash to modernize fleets, and are likewise paying rather modest dividends (3-4%). So, AF strategy is by no means unique.

    Those company’s share prices trade at discounts to NAV, though not nearly as severe as in the NMM case. But NMM has done many major roll-ups in the last year, and the pricing of shares continues to be a challenge, and the re-establishment of a shareholder base will take more time.

    But it will happen. I think they have secured incredible cash flow for a rather old, and small sized fleet of container ships, which will allow them to renew their fleet across the other sectors. I would also look for AF to opportunistically sell parts for the container fleet, which have incredible market value (far, far above their purchase price), in the coming 6-12 months.

    Then look for them to initiate a special div, perhaps, and/or to initiate a share buyback program which their cash war chest.

    The fact is also that AF is being careful with newbuild, to secure contracts for them in advance, given the inflated costs for those vessels today. The rising cost of capital, and the inflationary pressure on newbuild construction means that the return on equity for such investments is being squeezed. I expect we will see only a few additional opportunistic buys, and more sells of inflated assets by AF.
  • T
    TRM 2020
    Tightening C3 and C5 markets sees continued upwards pressure in the index as Jun’22 trades to a new high of $39,750 and remaining bid supported at time of writing.
  • M
    Disgruntled Navios shareholder Sherwood renews attacks on stalled dividend
    Angeliki Frangou in crosshairs again after telling analysts distribution would remain at $0.05 under “prudent” approach
    After an equity analyst had a crack at Navios Maritime Partners management on Tuesday over a $0.05 dividend that has not grown with profits, an unhappy investor is taking his turn.
    Finance man Ned Sherwood, who once held a 5% stake in the company before dilution, took dead aim at chief executive Angeliki Frangou and not for the first time.
    Sherwood has been a Navios hair-shirt since last July and renewed the attacks after Frangou told analysts her “prudent” approach warranted the status quo despite a growing fleet, profit and revenue book.
    Falling further behind peers
    “While shipping CEOs at Star Bulk, Zim, Danaos and others are balancing distributions and stock buybacks with their companies’ growing earnings and cash flows, Angeliki stubbornly adheres to husbanding NMM’s cash and therefore falls further behind in creating value for shareholders,” Sherwood said in a message to TradeWinds.
    Navios responded to Sherwood’s critique.
    “We are guided by our stakeholders’ long-term interests and focus on total return,” said chief operating officer Stratos Desypris. “Our goal is to do this by compounding our earnings potential. I also note that management’s interest are aligned with the long term interests of our stakeholders, as it owns about 7.5% of the equity in NMM.”
    Navios Partners’ total return has been among shipping's best in 2021 and the last two years, he said. The company's NAV has increased by about 60% over the past six months, he said.
    “We believe that in the medium term, price will rise to meet NAV,” Desypris said.
    Sherwood praised Jefferies equity analyst Chris Robertson for his persistent questions on the Navios earnings call.
    Robertson observed that Navios has favourable dynamics in all three of its operating sectors, $2.8bn in contracted revenue and yet maintains the nickel dividend it has had in place since mid-2020 — at a yield of less than 1%.
    But Frangou cited uncertainties over global geopolitics including the Ukraine crisis as well as the company’s 22-vessel newbuilding programme, along with a desire to keep leverage low.
    “We need to be prudent because we are really at the crossroads of different events. Our priorities are low leverage that will allow us to have the flexibility and to act on different opportunities,” she said.
    But Sherwood was having none of it, calling her responses “a new low” and “unintelligible double-talk”.
    Sherwood, based in Connecticut and Florida, is a longtime finance professional who says he has been involved with more than 100 public companies over the years but made Navios his first shipping investment in 2018.
    The graduate of the University of Pennsylvania's prestigious Wharton School of Business has said Frangou's management practices are responsible for keeping the Navios share at a large discount to its NAV.
    Robertson pointed up the NAV discount in his questions as well and later in a client note.

    Pressure is building on Navios Maritime Partners principal Angeliki Frangou to grow the company's quarterly distribution. Photo: Ilja C. Hendel
    “The question is why do units continue to trade at such a steep discount to NAV and what can management do to address this,” Robertson asked.
    “We believe it comes down to NMM’s focus on proving that its diversified strategy can work over the long term and across different cycles within its three operating segments, while not clearly articulating or executing on a capital return policy similar to several dry bulk and tanker industry peers.”
    Navios trades at a steep 60% discount to NAV compared to dry bulk and tanker peers who trade at a 10% to 20% discount, Robertson reported.
    “We believe unit holders want to see management pursue a clear plan for returning capital to unit holders,” Robertson wrote.
    Desypris countered: “Because we have a mixed fleet, our stock performance, in part, will reflect some average of the constituent parts, so concluding underperformance by comparing to another company that is not similarly situated may lead to inaccurate conclusions.”
    It’s a point that Sherwood has been hammering for months now. He pointed out in a February letter to Frangou that she also stands to benefit as a major shareholder.
    “Your disingenuous mantra of ‘I’m building long term value’ has left you with one of the biggest fleets but one of the smallest personal net worths of your peers,” Sherwood wrote.
    “Continue your mantra and stubbornness and in my opinion, your net worth and those of your shareholders will remain relatively small. Change your ways and share your wealth and you’ll join the ranks of your billionaire industry peers.”
  • G
    NMM has 37 containerships of which 23 are more than 13 years old, including the 2 ships of 8204 TEU's that have been sold for $110M each, with delivery in 3Q22. If AF elects to sell more older container ships, what about the 5 2006 Hyundai ships at 6800 TEU's each. If the market is still tight, those 5 ships could potentially be sold for around $91M each, for a total of $455M, with a net of $300M after paying off any remaining debt. With 10 new build container ships joining the fleet in 2023-24, cash flow lost on the sale of the 7 ships is more than offset with the gains from the sales, and funds are available to reduce any debt coming due in 2023-24.
  • T
    TRM 2020
    ffa's on fire capes up 10%
  • T
    TRM 2020
    from creedhead on gogl board

    •Dry bulk defies global market rout – The Capesize market has finally showed signs of strength, with spot rates doubling over the past few weeks, catching up to what in hindsight was an accurate futures market versus one that at that time seemed way too optimistic. With all major dry bulk segments earning rates in the high-20,000 range, dry bulk is currently thriving relative to a macro backdrop of recessionary fears and gloomy growth forecasts. Indeed, dry bulk is proving to be a non-correlated, safe heaven sector in a rather synchronous drop in risky assets across the globe. As we have stressed many times in the past, it is the idiosyncratic nature of dry bulk fundamentals that is causing such a performance, which combined with the physical nature of freight trading (not really a paper driven market like other commodities) can act as a major diversifier for investors during periods of distress driven by negative investor psychology. But if it is only fears and gloomy predictions that is causing risky assets to decline when real commodity trading activity remains solid, is there something to be told regarding such forecasts or dry bulk will also fold under the weight of a slowing global economy? Only time will tell, but for now, owners and traders are once again enjoying relatively high freight rates with little areas of concern in the near term.

    • China’s dry bulk imports down 9% year-to-date mainly driven by lockdowns – With the YTD average Baltic Dry Index up versus last year, one would have expected a relatively strong (or at best stable) Chinese demand to have acted as support to achieve such a tight market balance. However, the reality is much different this time around. Chinese dry bulk demand, as measured by imports, is down almost 9% year to date. Iron ore imports remain particularly weak, coal imports are down 16% from the previous year, while grain imports are flattish. Such a significant drop in volumes should have naturally led to a decline in freight rates, or at least some moderation. Yet, the substantial dislocation in trade patters combined with a major shift in coal and grain flows due to the ongoing war in Ukraine, have managed to cushion the considerable blow from a fragile Chinese economy. Such a fundamental shift will not last long, but for now (and probably for the next several months), it provides a much needed cushion to the cyclical weakness coming from Asia. If the dry bulk market manages to “bridge” such imbalance until Chinese stimulus efforts come to fruition thus pushing import demand for commodities back up, then an otherwise severe downcycle would have been averted to the benefit of dry bulk owners.

    • Dry bulk upcycle to continue in 2022 – Although the high level of volatility of 2021 might slow down, the dry bulk sector remains in an upcycle driven by relatively low growth in supply, strong demand for bulk commodities, and continuing infrastructure bottlenecks and supply chain constraints that affect the whole shipping universe. We anticipate government actions as it relates to energy security combined with geopolitical developments to drive the flows of commodities transported by dry bulk, and thus, indirectly determine the path of freight rates.
  • f
    How do you compute the NAV of a NMM share?

    A) Total partners capital / n: $61 per share
    B) (Total partners capital +(net vessel equity value minus vessels, net))/n: $103 per share
    C) (Total partners capital +(vessel market value minus vessels, net))/n: $158 per share

    where n is 30,197,087

    My guess would be B), but any help/explanation would be very much appreciated!
  • T
    TRM 2020
    Today: 32,885 +1,734
    MTD avg 25,345
    YTD avg 15,535 vs '21 YTD 21,894
    '22 bal FFA 34K

    Pacific is becoming very tight, and it's positive to see a strong Atlantic despite more potential still left in Brazil.
  • T
    TRM 2020
    Navios Maritime Partners’ revenue has spiked after bringing sister container ship and tanker concerns to into the fold, but costs tied to a much larger fleet did quite a number to its bottom line.
    Angeliki Frangou-led Navios Partners merged with Navios Maritime Containers in late March 2021 and then took control of tanker owner Navios Maritime Acquisition Corp in late August of that same year.
    As a result, Navios Partners’ fleet tripled in size from just 54 bulkers to a 150-vessel armada that also had 47 boxships and 49 tankers.
    Revenue for the huge diversified fleet reached $237m for the first quarter, compared to $65.1m earned a year ago when it just consisted of bulkers.
    Despite nearly quadrupling its revenue with many more vessels across three sectors, the Greek owner’s profit shrank by 37% from a year ago to $85.7m due to much higher costs related to the bigger fleet.
    Most notably, fleet operating expenses soared by 219% to $73.2m from the same period last year, while general and administrative expenses shot up 65% to $13.9m.
  • G
    In 2Q22 NMM has resets on 16 DB, 4 C & 12 T, almost all of these will reset at higher rates. My est is for 2Q22 Rev at $300M+ and 2Q22 expenses at $165M, projected profit of $135M= $4.47/sh.
  • T
    TRM 2020
    Navios Partners tipped for earnings miss as dividend boost delayed
    Fearnley Securities says shareholders need to be patient as cash from contracts takes time to trickle down
    Giant Greek shipowner Navios Maritime Partners (NMM) is expected to miss analysts’ profit consensus for the first quarter.
    The US-listed tanker, bulker and container ship player reports results on Tuesday, and Fearnley Securities is forecasting a performance similar to that of the final three months of 2021.
    Ebitda is predicted to be $150m, against the consensus of $164m, and a fourth-quarter figure of $151m.
    Time charter equivalent (TCE) revenues are forecast to drop from $252m to $246m due to weaker dry bulk earnings.
    This will be partly offset by container vessels beginning to roll off legacy contracts and starting new deals, the investment bank said.
    Net profit should be around the $90m mark.
  • T
    TRM 2020
    So based on the LT debt on the Balance sheet and the 28.5% LTV in presentation the on water fleet value is 4.6B less debt gives NAV of 3.3 or about 100 per share... we trading at 28% NAV horrendous
  • T
    TRM 2020
    Today: 30,151 +2,448
    MTD avg 24,268 FFA 32K
    YTD avg 15,340 vs '21 YTD 21,701
    '22 bal FFA 35K

    FFA is very strong, and tonnage is tight.
    Coal prices flat, while steel and iron in trends down.
  • G
    Wow 6 Navios articles in the TradeWinds in less than a week:

    Navios Partners has grown, but will its dividend? Angeliki Frangou wants to stay ‘prudent’
    Asked about hiking the payout to shareholders, chief executive keeps focus on keeping debt low to pounce on opportunities. [The rest of the article is just a rehash of the conference call.]

    Hopefully at some point the pressure will up the dividend or a buy back.
  • D
    From GNK's earnings call transcript:

    During the first quarter of 2022 freight rates initially came under pressure due to seasonal factors, but remain firm on a relative basis. These factors included weather related cargo disruptions, timing of newbuilding deliveries, as well as the Lunar New Year in China and the Beijing Olympics. Furthermore, in January, Indonesia temporarily banned coal exports to ensure domestic supply. As several of these factors subside Capesize and Supramax rates have increased off the earlier year lows and currently standard over $22,000 and $30,000 respectively.

    As we look ahead, we anticipate an uplift in seaborne iron ore cargo availability as full year guidance from the major iron ore miners, points to a meaningful rise in shipments in Q2 to Q4. We expect this rise in shipments to coincide with China's economic policies moving towards a more accommodative stance as the year progresses. In the very near term, various regions in China remain under lockdown which has impacted demand. However, we do note that steel mill utilization has improved to 87% from as low as 75% in February.

    We continue to see tightness in the energy markets globally as demand was initially driven by low stockpiles and strong economic growth and has now been exacerbated by Russia's war in Ukraine. We have seen a re-routing of coal cargo flows as Russia exports more coal to China and India, while Europe has source more calls from the U.S., Colombia and Australia, which has increased ton miles.

    Regarding the supply side, higher fuel prices have led to a slowdown in the fleet producing available capacity. This reduction together with augmented port congestion, and a low order book bode well for the drybulk supply side of the equation. Our current positive thesis for the dry bulk market is underpinned by the historically low order book. The order book, as a percentage of the fleet is 6.6%, which compares to 7.8% of the fleet that is greater than or equal to 20 years old, implying fleet renewal rather than material net fleet growth in the coming years.

    Overall, we believe these positive supply side dynamics provide a solid foundation for the dry bulk market and lead to a low threshold for demand growth have to exceed in order to improve fleet wide utilization and freight rates.
  • T
    TRM 2020
    Unsustainably low: why an analyst finds Eneti ‘too cheap to ignore’
    13 May 2022 15:39 GMT UPDATED 13 May 2022 15:39 GMT
    By Joe Brady in Stamford
    Offshore wind-market player Eneti is making the case for a substantial ramp-up in valuation as contract coverage grows and funding requirements for its newbuilding programme appear to have been met.

    That was the take from Clarksons Platou Securities analyst Turner Holm on Friday after the New York-listed owner of wind turbine installation vessels (WTIVs) reported first-quarter earnings.

    35% of NAV

    hmmmm NMM is lower thanks AF....
  • T
    So, in 2021 the company had earnings of $14+ yet trades at $31. Well since the market cannot trust AF. It is time for us owners to contact the BOD and Institutional holders to ask why on earth is the distribution so, so low? If the market does not want to reward the company with better pricing the company should issue either a special distribution of say $10 per share or at the least increase the quarterly distribution to 50% of earnings for 2022. A higher distribution would attract more institutions to invest in NMM. All JMHO.
  • C
    I find it interesting that the government is up in arms because shipping is making money. They didn’t care 3 years ago when the shipping industries were going broke due to low prices
  • E
    E A
    And for what it’s worth,I was more than a little disappointed by the Jeffries analyst this morning - the only thrust of his questions was toward the distribution and why it was so low and when will it be bigger.

    While I understand the importance of that, and don’t dismiss the issue, it seemed somewhat pedestrian given the place Jeffries always has had in analyzing this sector and this company. Sorry, I wasn’t impressed…

    I also realize that the analyst community has been playing musical chairs within this sector, so maybe a quarter or two to get things in order might be warranted, but given the gyrations in the current market, the impact of the war in Ukraine, and the Covid lockdown in China, I think something more substantive was warranted.