SOURCE: Navios Maritime Holdings Inc.

Navios Maritime Holdings Inc.

May 21, 2015 07:43 ET

Navios Maritime Holdings Inc. Reports Financial Results for the First Quarter Ended March 31, 2015

MONACO--(Marketwired - May 21, 2015) - Navios Maritime Holdings Inc. (NYSE: NM)

  • $118.3 million revenue for Q1 2015
  • Dividend of $0.06 per share for Q1 2015
  • Letter of Intent for a second deal with HSH Nordbank AG to acquire 14 vessels
    • Seven container and seven drybulk vessels
    • Average age of approximately four years
  • Positioned to leverage stable platform in changing market conditions
    • $200.5 million of cash
    • Operating expenses significantly below industry average
    • Diversified investment vehicle with multiple avenues of growth

Navios Maritime Holdings Inc. ("Navios Holdings" or "the Company") (NYSE: NM), a global, vertically integrated seaborne shipping and logistics company, today reported financial results for the first quarter ended March 31, 2015.

Angeliki Frangou, Chairman and Chief Executive Officer, stated, "We are pleased to report revenue of $118.3 million and EBITDA of $26.2 million for the first quarter of 2015. We also announced a six cent dividend, representing a yield of about 6.8%."

Angeliki Frangou continued: "We are in a difficult market, perhaps one of the most difficult in the past 30 years. While rates are still low, we have seen them improve about 20% in the past three months. In the meantime, we have been positioning Navios Holdings to leverage its stable platform to changing market conditions by maintaining a strong balance sheet, pursuing operating efficiencies through our economies of scale and seeking unique opportunities emerging from this market."

HIGHLIGHTS -- RECENT DEVELOPMENTS

Letter of Intent for a Second Deal with HSH Nordbank AG to Acquire 14 Vessels

In April 2015, Navios Holdings, Navios Maritime Acquisition Corporation ("Navios Acquisition") and Navios Maritime Partners L.P. ("Navios Partners") executed a binding letter of intent to acquire 14 vessels from debtors of HSH Nordbank AG ("HSH") through a new joint venture ("Navios JV").

The 14 vessels include seven dry bulkers and seven container vessels with an average age of approximately four years. The transaction is expected to close in the second quarter of 2015.

It is estimated that the purchase price to be paid to HSH will consist of cash and the assumption of the HSH Subordinated Participating Loans. It is anticipated that the cash payment will be funded as follows:

  • Senior bank financing of 60% of fair market value of the vessels at closing, secured by a first-priority mortgage on the vessels; and
  • $14.0 million, from an investment by Navios JV funded by Navios Holdings, Navios Acquisition and Navios Partners.

The Navios JV will not be consolidated into any of the Navios public entities. The closing of the transaction is subject to certain conditions, and no assurance can be provided that the transaction will be concluded as contemplated, if at all.

Dividend Policy

On May 18, 2015, the Board of Directors declared a quarterly cash dividend for the first quarter of 2015 of $0.06 per share of common stock. The dividend is payable on June 26, 2015 to stockholders of record as of June 18, 2015. The declaration and payment of any further dividends remain subject to the discretion of the Board and will depend on, among other things, Navios Holdings' cash requirements after taking into account market opportunities, restrictions under its credit agreements, indentures and other debt obligations and such other factors as the Board may deem advisable.

Navios Partners

On May 14, 2015, Navios Holdings received $8.1 million from Navios Partners representing the cash distribution for the first quarter of 2015.

Navios Acquisition

On April 2, 2015, Navios Holdings received $3.6 million from Navios Acquisition representing the cash dividend for the fourth quarter of 2014.

Time Charter Coverage

Navios Holdings controls a fleet of 66 vessels totaling 6.6 million dwt, of which 40 are owned and 26 are chartered-in under long-term charters (collectively, the "Core Fleet"). Navios Holdings currently operates 59 vessels (17 Capesize, 20 Panamax, 20 Ultra Handymax and two Handysize) totaling 5.8 million dwt. The current average age of the operating fleet is 7.7 years. Additionally, Navios Holdings has (i) five newbuilding charter-in vessels expected to be delivered at various dates through 2016; and (ii) two newbuilding owned vessels which are expected to be delivered in the third and fourth quarter of 2015, respectively.

As of April 23, 2015, Navios Holdings has chartered-out 59.4% and 5.3% of available days for 2015 and 2016, respectively (including index-linked charters), which are expected to generate $75.2 million and $11.9 million in revenue, respectively. The average daily charter-out rate for the core fleet is $9,424 and $26,007 for 2015 and 2016, respectively. The average daily charter-in rate for the active long-term charter-in vessels for 2015 is $13,408.

The above figures do not include the fleet of Navios Logistics and vessels servicing contracts of affreightment.

Exhibit II provides certain details of the "Core Fleet" of Navios Holdings. It does not include the fleet of Navios Logistics.

Earnings Highlights

As of March 31, 2015:

  • Net Debt to Total Capitalization of 51.2%.
  • Cash of $200.5 million.

EBITDA is a non-U.S. GAAP financial measure and should not be used in isolation or as substitution for Navios Holdings' results calculated in accordance with U.S. GAAP.

See Exhibit I under the heading, "Disclosure of Non-GAAP Financial Measures," for a discussion of EBITDA of Navios Holdings (including Navios Logistics), and Navios Logistics (on a stand-alone basis), and a reconciliation of such measures to the most comparable measure calculated under U.S. GAAP.

First Quarter 2015 and 2014 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):

The first quarter 2015 and 2014 information presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

           
    Three Month Period     Three Month Period
    Ended     Ended
    March 31,     March 31,
    2015     2014
    (unaudited)     (unaudited)
           
Revenue   $ 118,280     $ 122,191
EBITDA   $ 26,241     $ 59,780
Net (loss)/income   $ (26,678 )   $ 2,053
Basic (Loss)/Earnings Per Share   $ (0.29 )   $ 0.01
               

Revenue from drybulk vessel operations for the three months ended March 31, 2015 was $53.2 million as compared to $76.6 million for the same period during 2014. The decrease in drybulk revenue was mainly attributable to a decrease in the time charter equivalent rate ("TCE") per day by 43.4% to $7,196 per day in the first quarter of 2015, as compared to $12,709 per day in the same period of 2014. This decrease was partially mitigated by a net increase in available days of our fleet by 86 days.

Revenue from the logistics business was $65.1 million for the three months ended March 31, 2015 as compared to $45.6 million for the same period during 2014. The increase of $19.5 million was mainly attributable to (i) the increase in sales of products in the liquid terminal; (ii) the increase in products transported and rates charged in the dry and liquid port terminals; and (iii) the operation of three additional convoys under time charter contracts.

EBITDA of Navios Holdings for the three months ended March 31, 2015 decreased by $33.6 million to $26.2 million as compared to $59.8 million for the same period of 2014. The $33.6 million decrease in EBITDA was primarily due to (i) a $3.9 million decrease in revenue; (ii) a $18.7 million increase in time charter, voyage and logistics business expenses; (iii) a $2.2 million increase in direct vessel expenses (excluding the amortization of deferred drydock and special survey costs); (iv) a $0.2 million increase in net income attributable to the noncontrolling interest; (v) a $8.5 million decrease in equity in net earnings from affiliated companies; and (vi) a $4.0 million increase in other expense, net. This overall decrease of $37.5 million was mitigated by a $3.9 million decrease in general and administrative expenses (excluding share-based compensation expenses).

EBITDA of Navios Logistics was $15.6 million for the three month period ended March 31, 2015 as compared to $14.0 million for the same period in 2014.

Net Loss of Navios Holdings for the three months ended March 31, 2015 was $26.7 million as compared to income of $2.1 million for the same period of 2014. The $28.8 million increase in Net Loss was mainly due (i) a decrease in EBITDA of $33.6 million; and (ii) an increase in amortization for deferred drydock and special survey costs of $0.4 million. This overall decrease was partially offset by (i) a decrease in depreciation and amortization of $4.5 million; (ii) an increase in income tax benefit of $0.4 million; and (iii) a decrease in share-based compensation expense of $0.3 million.

Fleet Summary Data:

The following table reflects certain key indicators indicative of the performance of the Navios Holdings' drybulk operations (excluding the Navios Logistics fleet) and its fleet performance for the first quarter ended March 31, 2015 and 2014, respectively.

             
    Three Month Period Ended March 31, 2015     Three Month Period Ended March 31, 2014  
    (Unaudited)     (Unaudited)  
                 
Available Days (1)     5,339       5,253  
Operating Days (2)     5,289       5,232  
Fleet Utilization (3)     99.1 %     99.6 %
Equivalent Vessels (4)     59       58  
TCE (5)   $ 7,196     $ 12,709  
   
(1) Available days for the fleet are total calendar days the vessels were in Navios Holdings' possession   for the relevant period after subtracting off-hire days associated with major repairs, 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 Holdings' 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) Equivalent Vessels is defined as the total available days during a relevant period divided by the number of days of this period.          
(5) 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 Holdings will host a conference call today, May 21, 2015, at 8:30 am ET, at which time Navios Holdings' senior management will provide highlights and commentary on earnings results for the first quarter ended March 31, 2015.

A supplemental slide presentation will be available on the Navios Holdings website at www.navios.com under the "Investors" section by 8:00 am ET on the day of the call.

Conference Call details:

Call Date/Time: Thursday, May 21, 2015, at 8:30 am ET
Call Title: Navios Holdings Q1 2015 Financial Results Conference Call
US Dial In: +1.877.480.3873
International Dial In: +1.404.665.9927
Conference ID: 2294 6342

The conference call replay will be available shortly 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: 2294 6342

This call will be simultaneously Webcast. The Webcast will be available on the Navios Holdings website, www.navios.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 Holdings Inc.

Navios Maritime Holdings Inc. (NYSE: NM) is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of drybulk commodities including iron ore, coal and grain. For more information about Navios Holdings please visit our website: www.navios.com.

About Navios South American Logistics Inc.

Navios South American Logistics Inc. is one of the largest logistics companies in the Hidrovia region of South America, focusing on the Hidrovia region river system, the main navigable river system in the region, and on cabotage trades along the eastern coast of South America. Navios Logistics serves the storage and marine transportation needs of its petroleum, agricultural and mining customers through its port terminals, river barge and coastal cabotage operations. For more information about Navios Logistics please visit its website: www.navios-logistics.com.

About Navios Maritime Partners L.P.

Navios Partners (NYSE: NMM) is a publicly traded master limited partnership which owns and operates drycargo vessels. For more information, please visit its website: www.navios-mlp.com.

About Navios Maritime Acquisition Corporation

Navios Acquisition (NYSE: NNA) is an owner and operator of tanker vessels focusing in the transportation of petroleum products (clean and dirty) and bulk liquid chemicals. For more information, please visit its website: www.navios-acquisition.com.

About Navios Maritime Midstream Partners L.P.

Navios Maritime Midstream Partners L.P. (NYSE: NAP) is a publicly traded master limited partnership which owns and operates crude oil tankers under long-term employment contracts. For more information, please visit its website: www.navios-midstream.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 and expectations and Navios Holdings' growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters. Words such as "expects," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenues and time charters. Although Navios Holdings believes that the expectations reflected in such forward-looking statements are reasonable at the time made, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Holdings. 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 changes in charter demand and/or charter rates; production or the demand for the types of drybulk products that are transported by Navios Holdings' vessels, the aging of our fleet and resultant increases in operations costs, the loss of any customer or charter or vessel, changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors, increases in costs and expenses, including but not limited to changes in crew salaries, insurances, provisions, repairs, maintenance, overhead expenses, general and administrative expenses and changes in interest costs, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, general domestic and international political conditions, competition in the market in which Navios Holdings operates; risks associated with operations outside the United States; and other factors listed from time to time in Navios Holdings' filings with the Securities and Exchange Commission. Navios Holdings 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 Holdings' expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

   
EXHIBIT I  
   
NAVIOS MARITIME HOLDINGS INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Expressed in thousands of U.S. dollars -- except share and per share data)  
   
             
    Three Month     Three Month  
    Period Ended     Period Ended  
    March 31, 2015     March 31, 2014  
    (unaudited)     (unaudited)  
Revenue   $ 118,280     $ 122,191  
Administrative fee revenue from affiliates     3,922       3,379  
Time charter, voyage and logistics business expenses     (69,934 )     (51,178 )
Direct vessel expenses     (30,817 )     (28,328 )
General and administrative expenses incurred on behalf of affiliates     (3,922 )     (3,379 )
General and administrative expenses     (6,811 )     (11,031 )
Depreciation and amortization     (21,205 )     (25,674 )
Interest income/(expense) and finance cost, net     (28,038 )     (28,046 )
Other income/(expense), net     (1,914 )     2,066  
Loss before equity in net earnings of affiliated companies     (40,439 )     (20,000 )
Equity in net earnings of affiliated companies     13,912       22,418  
(Loss)/income before taxes   $ (26,527 )   $ 2,418  
Income tax benefit/(expense)     148       (288 )
Net (loss)/income     (26,379 )     2,130  
Less: Net income attributable to the noncontrolling interest     (299 )     (77 )
Net (loss)/income attributable to Navios Holdings common stockholders   $ (26,678 )   $ 2,053  
(Loss)/income attributable to Navios Holdings common stockholders, basic and diluted   $ (30,751 )   $ 826  
Basic (loss)/earnings per share attributable to Navios Holdings common stockholders   $ (0.29 )   $ 0.01  
Weighted average number of shares, basic     105,099,690       102,486,242  
Diluted (loss)/earnings per share attributable to Navios Holdings common stockholders   $ (0.29 )   $ 0.01  
Weighted average number of shares, diluted     105,099,690       104,927,563  
                 
                 
   
NAVIOS MARITIME HOLDINGS INC.  
Other Financial Data  
   
    March 31,
2015
(unaudited)
    December 31,
2014
(unaudited)
 
ASSETS                
Cash and cash equivalents   $ 199,777     $ 247,556  
Restricted cash     736       2,564  
Other current assets     135,013       167,011  
Deposits for vessel acquisitions, port terminals and other fixed assets     48,309       45,365  
Vessels, port terminal and other fixed assets, net     1,889,865       1,911,143  
Other non current assets     417,015       404,230  
Goodwill and other intangibles     345,270       349,828  
Total assets   $ 3,035,985     $ 3,127,697  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current liabilities, including current portion of long-term debt, net     161,694       198,334  
Senior and ship mortgage notes, net     1,348,187       1,347,316  
Long-term debt, net     230,565       242,291  
Other noncurrent liabilities     65,335       73,246  
Total stockholders' equity     1,230,204       1,266,510  
Total liabilities and stockholders' equity   $ 3,035,985     $ 3,127,697  
                 
             
             
    Three Month Period Ended March 31, 2015
(unaudited)
    Three Month Period Ended March 31, 2014
(unaudited)
 
                 
Net cash provided by operating activities   $ 10,046     $ 29,552  
Net cash provided used in investing activities   $ (17,699 )   $ (48,333 )
Net cash (used in)/provided by financing activities   $ (40,126 )   $ 49,915  
                 

Disclosure of Non-GAAP Financial Measures

EBITDA represents net income/(loss) attributable to Navios Holdings' common stockholders before interest and finance costs, before depreciation and amortization, before income taxes and before stock-based compensation. EBITDA is a "non-GAAP financial measure" and should not be 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. Navios Holdings believes that EBITDA is a basis upon which liquidity can be assessed.

EBITDA is presented to provide additional information with respect to the ability of Navios Holdings 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.

Navios Logistics EBITDA is used to measure the company's operating performance.

The following tables provide a reconciliation of EBITDA of Navios Holdings (including Navios Logistics) and EBITDA of Navios Logistics on a stand-alone basis:

Navios Holdings EBITDA Reconciliation to Cash from Operations 

             
    March 31,     March 31,  
Three Months Ended   2015     2014  
(in thousands of U.S. dollars)   (unaudited)     (unaudited)  
                 
Net cash provided by operating activities   $ 10,046     $ 29,552  
Net decrease in operating assets     (42,340 )     (348 )
Net decrease/(increase) in operating liabilities     18,287       (10,803 )
Net interest cost     28,038       28,046  
Deferred finance charges     (1,109 )     (891 )
Provision for losses on accounts receivable     (66 )     (181 )
Equity in affiliates, net of dividends received     5,053       11,758  
Payments for drydock and special survey     8,631       2,724  
Noncontrolling interest     (299 )     (77 )
EBITDA   $ 26,241     $ 59,780  
                 

Navios Logistics EBITDA Reconciliation to Net Income/(Loss) attributable to Navios Logistics stockholders

             
    March 31,     March 31,  
Three Months Ended   2015     2014  
(in thousands of U.S. dollars)   (unaudited)     (unaudited)  
                 
Net income/(loss) attributable to Navios Logistics stockholders   $ 826     $ (177 )
Depreciation and amortization     6,467       6,067  
Amortization of deferred drydock and special survey costs     1,711       1,156  
Interest expense and finance cost, net     6,813       6,716  
Income tax (benefit)/expense     (218 )     200  
EBITDA   $ 15,599     $ 13,962  
                 
 
            EXHIBIT II
             
Owned Vessels            
Vessel Name   Vessel Type   Year Built   Deadweight
(in metric tons)
Navios Serenity   Handysize   2011   34,690
Navios Ionian   Ultra Handymax   2000   52,067
Navios Horizon   Ultra Handymax   2001   50,346
Navios Herakles   Ultra Handymax   2001   52,061
Navios Achilles   Ultra Handymax   2001   52,063
Navios Vector   Ultra Handymax   2002   50,296
Navios Meridian   Ultra Handymax   2002   50,316
Navios Mercator   Ultra Handymax   2002   53,553
Navios Arc   Ultra Handymax   2003   53,514
Navios Hios   Ultra Handymax   2003   55,180
Navios Kypros   Ultra Handymax   2003   55,222
Navios Astra   Ultra Handymax   2006   53,468
Navios Ulysses   Ultra Handymax   2007   55,728
Navios Celestial   Ultra Handymax   2009   58,063
Navios Vega   Ultra Handymax   2009   58,792
Navios Magellan   Panamax   2000   74,333
Navios Star   Panamax   2002   76,662
Navios Northern Star   Panamax   2005   75,395
Navios Amitie   Panamax   2005   75,395
Navios Taurus   Panamax   2005   76,596
Navios Asteriks   Panamax   2005   76,801
Navios Galileo   Panamax   2006   76,596
N Amalthia   Panamax   2006   75,318
N Bonanza   Panamax   2006   76,596
Navios Avior   Panamax   2012   81,355
Navios Centaurus   Panamax   2012   81,472
Navios Stellar   Capesize   2009   169,001
Navios Bonavis   Capesize   2009   180,022
Navios Happiness   Capesize   2009   180,022
Navios Phoenix   Capesize   2009   180,242
Navios Lumen   Capesize   2009   180,661
Navios Antares   Capesize   2010   169,059
Navios Etoile   Capesize   2010   179,234
Navios Bonheur   Capesize   2010   179,259
Navios Altamira   Capesize   2011   179,165
Navios Azimuth   Capesize   2011   179,169
Navios Ray   Capesize   2012   179,515
Navios Gem   Capesize   2014   181,336
             

Long term Chartered-in Fleet in Operation

                 
Vessel Name   Vessel Type   Year
Built
  Deadweight
(in metric tons)
  Purchase
Option(1)
Navios Lyra   Handysize   2012   34,718   Yes (2)
Navios Apollon   Ultra Handymax   2000   52,073   No
Navios Primavera   Ultra Handymax   2007   53,464   Yes
Navios Armonia   Ultra Handymax   2008   55,100   No
Navios Oriana   Ultra Handymax   2012   61,442   Yes
Navios Mercury   Ultra Handymax   2013   61,393   Yes
Navios Venus   Ultra Handymax   2015   61,000   Yes
Navios Libra II   Panamax   1995   70,136   No
Navios Altair   Panamax   2006   83,001   No
Navios Esperanza   Panamax   2007   75,356   No
Golden Heiwa   Panamax   2007   76,662   No
Navios Marco Polo   Panamax   2011   80,647   Yes
Navios Southern Star   Panamax   2013   82,224   Yes
Navios Prosperity   Panamax   2007   82,535   Yes
Navios Aldebaran   Panamax   2008   76,500   Yes
Navios Sky   Panamax   2015   82,000   Yes
Beaufiks   Capesize   2004   180,310   Yes
Rubena N   Capesize   2006   203,233   No
King Ore   Capesize   2010   176,800   No
Navios Koyo   Capesize   2011   181,415   Yes
Navios Obeliks   Capesize   2012   181,415   Yes
                 

Owned Fleet to be Delivered

             
Vessels   Vessel Type   Delivery Date   Deadweight
(in metric tons)
Navios Sphera   Panamax   Q3 2015   84,000
Navios TBN   Capesize   Q4 2015   180,600
             

Long-term Chartered-in Fleet to be Delivered

               
      Vessel     Delivery     Deadweight   Purchase
  Vessels     Type     Date     (in metric tons)   Option
  Navios Amber     Panamax     Q2 2015     80,000   Yes
  Navios Felix     Capesize     Q1 2016     180,000   Yes
  Navios TBN     Panamax     Q4 2016     81,000   Yes
  Navios TBN     Panamax     Q4 2016     81,000   Yes
  Navios TBN     Panamax     Q4 2016     84,000   Yes
   
(1) Generally, Navios Holdings may exercise its purchase option after three to five years of service.
(2) Navios Holdings holds the initial 50% purchase option on the vessel.

Contact Information