Navios Maritime Containers L.P. Reports Financial Results for the First Quarter Ended March 31, 2020

May 7, 2020 at 7:37 AM EDT
  • $40.3 million revenue
  • $5.0 million net income
  • $17.8 million EBITDA
  • No significant debt maturities until 2023

MONACO, May 07, 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 first quarter ended March 31, 2020.

Angeliki Frangou, Chairman and Chief Executive Officer, stated, "While the humanitarian crises caused by the pandemic has been heart breaking, we have also been strengthened by the courage and compassion of the first responders, particularly the many dedicated health care workers. At any given time, our vessels carry about 1,000 people. Keeping these people safe and these vessels moving in and out of quarantined countries, with ever-changing rules and challenges, requires the immediate input of many disciplines. I am proud of the members of the Navios family as they have shown admirable resilience during this unprecedented time of uncertainty, and we have taken the necessary measures to ensure the safety of our people while keeping our fleet functioning."

Angeliki Frangou continued, "I am pleased with our results for the first quarter of 2020. For the first quarter, Navios Containers reported $17.8 million of EBITDA, $5.0 million of Net Income and $0.14 of Net Earnings per common unit. We entered 2020 relatively well positioned. However, economic activity and global trade in the first half of 2020 is being significantly impacted by the pandemic. The duration of the downturn and timing of the recovery remain uncertain given the unique nature of the pandemic. However, the IMF projects a 5.8% increase in global GDP in 2021 after a 3% decrease in 2020."

HIGHLIGHTS -- RECENT DEVELOPMENTS

New sale and leaseback transaction

On March 11, 2020, the Company completed a $119.1 million sale and leaseback transaction with an unrelated third party to refinance the existing credit facilities of four containerships. The sale and leaseback agreement for: (i) the Navios Unison and the Navios Constellation matures in March 2027 and bears interest at LIBOR plus 310 bps per annum; and (ii) the Navios Unite and the Navios Utmost matures in March 2025 and bears interest at LIBOR plus 335 bps per annum.

Following the closing of the sale and leaseback transaction, the Company has no significant debt maturities until 2023.

Fleet employment

Navios Containers owns a fleet of 29 vessels, totaling 142,821 TEU. The current average age of the fleet is 11.8 years (See Exhibit II). As of May 4, 2020, Navios Containers has chartered-out 44.0% and 10.1% of its available days for the remaining nine months of 2020 and for the full year 2021, respectively (including index-linked charters). Excluding index-linked charters, Navios Containers has chartered-out 39.2% and 8.2% of its available days for the remaining nine months of 2020 and for the full year 2021, respectively, which are expected to generate $48.9 million and $22.7 million in revenue, respectively. The average expected daily contracted charter-out rate for the fleet is $15,632, net and $26,189, net for the remaining nine months of 2020 and for the full year 2021, respectively (excluding index-linked charters), and the total expected available days for the remaining nine months of 2020 and for the full year 2021, are 7,975 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.  

First Quarter 2020 and 2019 Results

The first 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
March 31, 2020
  Three Month Period Ended
March 31, 2019
(in thousands of U.S. dollars, except per unit data)   (unaudited)   (unaudited)
Revenue   $ 40,261     $ 31,832    
Net Income   $ 5,009     $ 53    
Net cash used in operating activities   $ (6,995 )   $ (37 )  
EBITDA   $ 17,831     $ 12,048    
Net Earnings per common unit (basic and diluted)   $ 0.14     $ 0.00    

Revenue for the three months ended March 31, 2020 was $40.3 million, as compared to $31.8 million for the same period during 2019. The increase of $8.5 million was mainly due to the increase in the number of available days from 2,471 for the three months ended March 31, 2019, to 2,639 for the three months ended March 31, 2020. TCE per day increased from $12,217 for the three months ended March 31, 2019 to $14,271 for the same period during 2020.

Net Income for the three months ended March 31, 2020 was $5.0 million compared to $0.1 million for the same period in 2019. The $4.9 million increase in Net Income was mainly due to a $5.8 million increase in EBITDA. This overall increase of $5.8 million was partially offset by a: (i) $0.5 million increase in interest expense and finance cost, net; and (ii) $0.4 million increase in amortization of deferred drydock and special survey costs.

EBITDA for the three months ended March 31, 2020 increased by $5.8 million to $17.8 million as compared to $12.0 million for the same period in 2019. The increase in EBITDA was primarily due to a $8.5 million increase in revenue. This overall increase of $8.5 million was partially offset by a: (i) $1.5 million increase in management fees mainly due to the increase of the available days from 2,471 days for the three months ended March 31, 2019, to 2,639 days for the three months ended March 31, 2020; (ii) $1.0 million increase in time charter and voyage expenses; and (iii) $0.2 million increase in other expense, net.

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 months ended March 31, 2020 and 2019.

    Three Month   Three Month
    Period Ended   Period Ended
    March 31,   March 31,
    2020    2019
    (unaudited)   (unaudited)
Available Days (1)     2,639       2,471  
Operating Days (2)     2,628       2,463  
Fleet Utilization (3)     99.6 %     99.7 %
Vessels operating at period end     29       28  
TCE (4)   $ 14,271     $ 12,217  


(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 due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.
(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. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels.
(4 ) TCE 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 Thursday, May 7, 2020, at 8:30 am ET, during which time Navios Containers’ senior management will provide highlights and commentary on earnings results for the first quarter ended March 31, 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: Thursday, May 7, 2020 at 8:30 am ET
Call Title: Navios Containers Q1 2020 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 389 6344

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: 389 6344

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 INCOME
(Expressed in thousands of U.S. dollars - except for unit and per unit data)

  Three Month
 Period Ended
 March 31,
2020
 

 
Three Month
 Period Ended
March 31,
2019
 

 
  (unaudited)   (unaudited)  
Revenue   $ 40,261       $   31,832     
Time charter and voyage expenses     (2,601 )       (1,647 )  
Direct vessel expenses     (1,199 )       (788 )  
Management fees     (17,192 )       (15,723 )  
General and administrative expenses     (2,543 )       (2,494 )  
Depreciation and amortization     (7,058 )       (7,109 )  
Interest expense and finance cost, net     (4,564 )       (4,098 )  
Other (expense)/ income, net     (95 )       80    
Net income   $ 5,009       $   53     
Net earnings per unit, basic and diluted   $ 0.14       $   0.00    
Weighted average number of units, basic and diluted     34,603,100         34,603,100    

 
NAVIOS MARITIME CONTAINERS L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. dollars – except for unit data)

    March 31,
2020
    December 31,
2019
    (unaudited)     (unaudited)
ASSETS          
Cash and cash equivalents, including restricted cash $ 20,623   $ 18,109
Vessels and deferred dry dock and special survey costs, net   411,614     415,143
Other assets (including current and non-current)   27,243     20,762
Intangible assets   1,801     6,288
Total assets $ 461,281   $ 460,302
LIABILITIES AND PARTNERS’ CAPITAL          
Other current liabilities $ 9,619   $ 24,664
Current portion of long term borrowings, net   32,565     46,733
Long-term borrowings, net of current portion   224,108     198,925
Total Partners’ capital   194,989     189,980
Total liabilities and Partners’ capital $ 461,281   $ 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. 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 cost; (iv) deferred finance charges; 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 dividends. 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 dividends. 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, our 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
Period Ended
March 31,
2020
    Three Month
Period Ended
March 31,
2019
    (unaudited)       (unaudited)
Expressed in thousands of U.S. dollars             
Net cash used in operating activities $ (6,995 )     $ (37 )
Net increase in operating assets    6,482         607  
Net decrease in operating liabilities   14,140         5,277  
Net interest and finance cost    4,564         4,098  
Amortization and write-off of deferred financing costs charges    (1,314 )       (604 )
Payments for dry dock and special survey costs   954         2,707  
EBITDA $   17,831       $ 12,048  


    Three Month
Period Ended
March 31,
2020
    Three Month
Period Ended
March 31,
2019
      (unaudited)     (unaudited)
Net cash used in operating activities   $ (6,995 )   $ (37 )
Net cash used in investing activities   $ (191 )   $ (1,755 )
Net cash provided by/(used in) financing activities   $ 9,700     $ (2,499 )




            EXHIBIT II
Owned Vessels            
             
Vessel Name   TEU   Year Built    
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    
APL Oakland   4,730   2008    
APL Los Angeles   4,730   2008    
APL Denver   4,730   2008    
APL Atlanta   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.    

 

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Source: Navios Maritime Containers L.P.