Navios Maritime Containers L.P. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2020

July 23, 2020 at 7:05 AM EDT

Revenue

  • $69.1 million for H1 2020
  • $28.8 million for Q2 2020

Cash (used in)/provided by operating activities

  • $(4.5) million for H1 2020
  • $2.5 million for Q2 2020

EBITDA

  • $24.9 million for H1 2020
  • $7.0 million for Q2 2020

Net income/(loss)

  • $2.9 million for H1 2020
  • $(2.1) million for Q2 2020

Charter Extensions

  • Time charters of two 10,000 TEU vessels extended through 2026

Debt Maturities

  • No significant debt maturities until 2023

MONACO, July 23, 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 second quarter and six months ended June 30, 2020.

Angeliki Frangou, Chairman and Chief Executive Officer, stated, "I am pleased with our results for the second quarter of 2020. The container trade was severely hurt by global quarantine in place for much of the second quarter of 2020. Yet, Navios Containers reported revenue of $28.8 million and EBITDA of $7.0 million for the second quarter of 2020."

Angeliki Frangou continued, "The timing of the recovery remains uncertain given the unique nature of the pandemic. Consumer demand has been understandably weak because of health and employment fears and general immobility arising from the pandemic. However, as people gradually return to a more normalized life, we expect that the economy will heal in the second half of 2020, with growth accelerating in 2021."

HIGHLIGHTS -- RECENT DEVELOPMENTS

Time charters of two 10,000 TEU vessels extended through 2026

In June 2020, Navios Containers agreed to extend the time charters at a net daily rate of $26,276 until May 2026 for each of the Navios Unison, a 2010-built 10,000 TEU containership, and the Navios Constellation, a 2011-built 10,000 TEU containership. The charter extensions were agreed in return for a charter hire reduction of $1,050 per day per vessel until May 2024. Following the extensions, an additional cumulative EBITDA of approximately $22.0 million is expected for both vessels.

The vessels cumulative additional EBITDA is calculated as follows: revenue at contracted net charter rate per day based on 360 days less, (i) operating expenses based on fixed rates as per the management agreement and (ii) general and administrative expenses equal to approximate current costs based on 365 days.

Fleet Employment

Navios Containers owns a fleet of 29 vessels, totaling 142,821 TEU. The current average age of the fleet is 12 years (See Exhibit II). As of July 21, 2020, Navios Containers has chartered-out 72.9% and 11.1% of its available days for the remaining six months of 2020 and for the full year 2021, respectively (including index-linked charters). Excluding index-linked charters, Navios Containers has chartered-out 69.3% and 9.3% of its available days for the remaining six months of 2020 and for the full year 2021, respectively, which are expected to generate $39.0 million and $22.8 million in revenue, respectively. The average expected daily contracted charter-out rate for the fleet is $10,556, net and $23,289, net for the remaining six months of 2020 and for the full year 2021, respectively (excluding index-linked charters), and the total expected available days for the remaining six months of 2020 and for the full year 2021, are 5,336 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.

Second Quarter 2020 and 2019 Results

The second 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

June 30, 2020
  Three Month Period
Ended

June 30, 2019
(in thousands of U.S. dollars, except per unit data)   (unaudited)   (unaudited)
Revenue   $ 28,790     $ 33,678  
Net (Loss)/Income   $ (2,119 )   $ 448  
Net cash provided by operating activities   $ 2,490     $ 9,358  
EBITDA   $ 7,035     $ 12,730  
Net (Loss)/Earnings per common unit (basic and diluted)   $ (0.06 )   $ 0.01  

Revenue for the three months ended June 30, 2020 was $28.8 million, as compared to $33.7 million for the same period during 2019. The decrease of $4.9 million was mainly due to a decrease in time charter rates partially offset by the increase in the number of available days from 2,568 for the three months ended June 30, 2019, to 2,598 for the three months ended June 30, 2020. Time charter equivalent, or TCE per day decreased from $12,594 for the three months ended June 30, 2019 to $10,148 for the same period during 2020.

Net Loss for the three months ended June 30, 2020 was a $2.1 million compared to $0.4 million Net Income for the same period in 2019. The $2.5 million decrease in Net Income was mainly due to a $5.7 million decrease in EBITDA and $0.6 million increase in amortization of deferred drydock and special survey costs. This overall increase of $6.3 million was partially offset by a: (i) $2.7 million decrease in depreciation and amortization, relating mainly to the lower amortization of intangible assets; and (ii) $1.1 million decrease in interest expense and finance cost, net.

EBITDA for the three months ended June 30, 2020 decreased by $5.7 million to $7.0 million as compared to $12.7 million for the same period in 2019. The decrease in EBITDA was primarily due to a: (i) $4.9 million decreased in revenue; (ii) $1.1 million increase in time charter and voyage expenses; and (iii) $0.8 million increase in management fees due to the increase in the number of available days and the increase in the fee for the ship management services, as per the management agreement. This overall decrease of $6.8 million was partially offset by a: (i) $1.0 million increase in other income, net; and (ii) $0.1 million decrease in other direct vessel expenses.

First Half of 2020 and 2019 Results

The information for the six month periods ended June 30, 2020 and 2019 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

    Six Month Period
Ended

June 30, 2020
  Six Month Period
Ended

June 30, 2019
(in thousands of U.S. dollars, except per unit data)   (unaudited)   (unaudited)
Revenue   $ 69,051     $ 65,510  
Net Income   $ 2,890     $ 501  
Net cash (used in)/provided by operating activities   $ (4,505 )   $ 9,321  
EBITDA   $ 24,866     $ 24,778  
Net Earnings per common unit (basic and diluted)   $ 0.08     $ 0.01  

Revenue for the six months ended June 30, 2020 was $69.1 million, as compared to $65.5 million for the same period during 2019. The increase of $3.6 million was mainly due to the increase in the number of available days from 5,039 for the six months ended June 30, 2019, to 5,237 for the six months ended June 30, 2020. TCE per day decreased from $12,409 for the six months ended June 30, 2019 to $12,225 for the same period during 2020.

Net Income for the six months ended June 30, 2020 was $2.9 million compared to $0.5 million for the same period in 2019. The $2.4 million increase in Net Income was mainly due to a: (i) $2.8 million decrease in depreciation and amortization relating mainly to the lower amortization of intangible assets; (ii) $0.5 million decrease in interest expense and finance cost, net; and (iii) $0.1 million increase in EBITDA.  This overall increase of $3.4 million was partially offset by a $1.0 million increase in amortization of deferred drydock and special survey costs.

EBITDA for the six months ended June 30, 2020 increased by $0.1 million to $24.9 million as compared to $24.8 million for the same period in 2019. The increase in EBITDA was primarily due to a: (i) $3.6 million increase in revenue; (ii) $0.7 million increase in other income, net; and (iii) $0.1 million decrease in other direct vessel expenses.  This overall increase of $4.4 million was partially offset by a: (i) $2.3 million increase in management fees due to the increase in the number of available days and the increase in the fee for the ship management services, as per the management agreement; and (ii) $2.0 million increase in time charter and voyage 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 six months ended June 30, 2020 and 2019.

    Three Month   Three Month   Six Month   Six Month
    Period Ended   Period Ended   Period Ended   Period Ended
    June 30,   June 30,   June 30,   June 30,
    2020
  2019
  2020
  2019
    (unaudited)   (unaudited)   (unaudited)   (unaudited)
Available Days (1)     2,598       2,568       5,237       5,039  
Operating Days (2)     2,597       2,563       5,225       5,026  
Fleet Utilization (3)     100.0 %     99.8 %     99.8 %     99.7 %
Vessels operating at period end     29       29       29       29  
TCE (4)   $ 10,148     $ 12,594     $ 12,225     $ 12,409  


(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 Thursday, July 23, 2020, at 8:00 am ET, during which time Navios Containers’ senior management will provide highlights and commentary on earnings results for the second quarter and six months ended June 30, 2020.

A supplemental slide presentation will be available on the Navios Containers website at www.navios-containers.com under the "Investors" section by 7:30 am ET on the day of the call.

Conference Call details:
Call Date/Time: Thursday, July 23, 2020 at 8:00 am ET
Call Title: Navios Containers Q2 2020 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 637 1907

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: 637 1907

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
 Period
 Ended
 June 30, 2020
  Three Month
 Period
 Ended
 June 30, 2019
  Six Month
 Period
 Ended
 June 30, 2020
  Six Month
 Period
 Ended
 June 30, 2019
  (unaudited)   (unaudited)   (unaudited)   (unaudited)
Revenue $ 28,790     $ 33,678     $ 69,051     $ 65,510  
Time charter and voyage expenses   (2,422 )     (1,335 )     (5,023 )     (2,982 )
Direct vessel expenses   (1,473 )     (1,034 )     (2,672 )     (1,822 )
Management fees   (17,192 )     (16,408 )     (34,384 )     (32,131 )
General and administrative expenses   (2,552 )     (2,570 )     (5,095 )     (5,064 )
Depreciation and amortization   (4,377 )     (7,064 )     (11,435 )     (14,173 )
Interest expense and finance cost, net   (3,366 )     (4,386 )     (7,930 )     (8,484 )
Other income/ (expense), net   473       (433 )     378       (353 )
Net (loss)/ income $ (2,119 )   $ 448     $ 2,890     $ 501  
Net (loss)/ earnings per unit, basic and diluted $ (0.06 )   $ 0.01     $ 0.08     $ 0.01  
Weighted average number of units, basic and diluted   34,603,100       34,603,100       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)
               
   June 30,
2020

   December 31,
2019

   (unaudited)
   (unaudited)
ASSETS              
Cash and cash equivalents, including restricted cash $ 11,356     $ 18,109  
Vessels and deferred dry dock and special survey costs, net   410,867       415,143  
Other assets (including current and non-current)   24,164       20,762  
Intangible assets         6,288  
Total assets $ 446,387     $ 460,302  
LIABILITIES AND PARTNERS’ CAPITAL              
Other current liabilities $ 5,233     $ 24,664  
Current portion of long term borrowings, net   32,403       46,733  
Long-term borrowings, net of current portion   215,881       198,925  
Total Partners’ capital   192,870       189,980  
Total liabilities and Partners’ capital $ 446,387     $ 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
Period
Ended
June 30, 2020
(unaudited)
  Three Month
Period
Ended
June 30, 2019
(unaudited)
  Six Month
Period
Ended
June 30, 2020
(unaudited)
  Six Month
Period
Ended
June 30, 2019
(unaudited)
Expressed in thousands of U.S. dollars                
Net cash  provided by/ (used in) operating activities $ 2,490     $ 9,358     $ (4,505 )   $ 9,321  
Net (decrease)/increase in operating assets   (3,079 )     5,621       3,403       6,228  
Net  decrease /(increase)  in operating liabilities   1,387       (6,561 )     15,527       (1,284 )
Net interest and finance cost   3,366       4,386       7,930       8,484  
Amortization and write-off of deferred financing costs   (353 )     (541 )     (1,667 )     (1,145 )
Payments for dry dock and special survey costs   3,224       467       4,178       3,174  
EBITDA $ 7,035     $ 12,730     $ 24,866     $ 24,778  


Expressed in thousands of U.S. dollars Three Month
Period
Ended
June 30, 2020
(unaudited)
  Three Month
Period
Ended
June 30, 2019
(unaudited)
  Six Month
Period
Ended
June 30, 2020
(unaudited)
  Six Month
Period
Ended
June 30, 2019
(unaudited)
Net cash  provided by/(used in) operating activities $ 2,490     $ 9,358     $ (4,505 )   $ 9,321  
Net cash used in investing activities $ (3,016 )   $ (54,892 )   $ (3,207 )   $ (56,647 )
Net cash (used in)/provided by financing activities $ (8,741 )   $ 47,788     $ 959     $ 45,289  
                               


            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    
Navios Magnolia (ex APL Oakland)   4,730   2008    
Navios Jasmine (ex APL Los Angeles)   4,730   2008    
APL Denver   4,730   2008    
Navios Nerine (ex APL Atlanta)   4,730   2008    
Navios Utmost (ex YM 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.