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spk00: Thank you for joining us for Navios Maritime Partners 3rd Quarter 2021 Earnings Conference Call. With us today from the company are Chairwoman and CEO, Ms. Angeliki Frango, Chief Operating Officer, Mr. Stratos Desipris, Chief Financial Officer, Ms. Eri Ciceroni, and Executive Vice President of Business Development, Mr. George Agniotis. As a reminder, this conference call is being webcast. To access the webcast, please go to the investor section of Navios Maritime Partners website at www.navios-mlp.com. You'll see the webcasting link in the middle of the page and a copy of the presentation referenced in today's earnings conference call will also be found there. Now, I will review the Safe Harbor Statement. This conference call should contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navia's partners. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Navios Partners management and are subject to risks and uncertainties which would cause actual results to differ materially from the forward-looking statements. Such risks are more fully discussed in Navios Partners filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks. Navios Partners does not assume any obligation to update the information contained in this conference call. The agenda for today's call is as follows. First, Ms. Ferngu will offer opening remarks. Next, Mr. DeCipri will give an overview of Navios Partners segment data. Next, Ms. Cerrone will give an overview of Navios Partners financial results. Then, Mr. Acmiotis will provide an operational update and an industry overview. And lastly, we'll open the call to take questions. Now I turn the call over to Navia's partners, Chairwoman and CEO, Ms. Angeliki Frango. Angeliki?
spk04: Thank you, Daniela, and good morning to all of you joining us on today's call. I am pleased with the results for the third quarter of 2021. During Q3, Navios Partners recorded revenue of $228 million, adjusted EBITDA of $145.2 million, and net income of $162.1 million. Please turn to slide 4. On October 15, 2021, we completed a transformative merger with Navios Acquisition. Today, NMM is one of the largest U.S. publicly listed shipping companies with 15 vessel types diversified across three segments and servicing more than 10 end markets. About a third of our fleet operates in each of the dry bulk container ships and tiger segments. We believe that this combination offers a stronger, more resilient entity, mitigating sector-specific cyclicality. NMM has a solid balance sheet and a modest leverage, a healthy income statement, and a pipeline of about $2.2 billion in contracted revenue. Overall, our diversified platform should provide flexibility, allowing us to capitalize on cross-segment opportunities. We expect to be able to provide more predictable returns to our unit holders despite uneven sector performance. As shown on slide 5, 2021 has been a transformational year as we expanded in new segments. Here today, in 2021, our fleet increased by 163% in terms of number of vessels through 88 net vessel additions. Through these S&P activities, we increased our fleet size and reduced average age for our existing segments. For container ships, we increased fleet size by 330% and reduced average age by 24%. For dry bulk, we increased capacity by 36% and reduced average age by 18%. Of course, we also entered into the crude and product tanker segments. In sum, as shown on the chart on the bottom of the slide, we have increased available days by 171% to 47,268 available days. thereby accumulating significant scale in a short period of time. Slide 6 details our company highlights. As I mentioned previously, Navios Partners is one of the largest U.S. publicly listed companies with over 140 vessels. We operate in three segments, have 15 diversified vessel types, and serve over 10 end markets. Our diversification strategy creates resilience in the overall business model and enables us to mitigate individual segment volatility, while also allowing us to leverage each independent sector's fundamentals. Diversification also provides flexibility in our operational and financial strategies as we charter, sell, and purchase vessels and obtain debt finance. The net result is that we should have more predictable entity leverage returns. We also anticipate that diversification and scale should make NMM a more attractive investment platform as we take advantage of global trade patterns. Our three pillars are now working well. Both dry bulk and container ship sectors are performing and the tanker sector has improved materially in the past few months with more improvement expected. Slide 7 reviews our recent developments. During Q3, NMM generated $228 million in revenue, $145.2 million in adjusted EBITDA, and $162.1 million in net income. For the nine months of 2021, NMM generated $469.8 million in adjusted EBITDA and $398.6 million in net income. In 2021, we completed two mergers, our merger with Navios Containers Increased container ships by 29 vessels. The recently completed merger with Navios Acquisition gave us a strong foothold in the tanker sector with 45 tanker vessels. We also continue to renew and expand our fleet. Year-to-date, we expanded our dry bulk fleet by 10 vessels, increasing dry bulk capacity by 36% and reducing its average age by 18%. The busy acquisition calendar has not distracted us from our balance sheet. We remain disciplined. Our cash balance was $141.2 million as of September 30th, And we have 28.3% in net LTV. About 91% of our debt is covered by the scrap value of our vessels alone. We have been taking advantage of robust markets. NMM has $2.2 billion of contracted revenue. We will be profitable in Q4 as contracted revenue exceeds total expenses by $57 million. Yet, we still have 2,473 open or index-linked days. Our busy acquisition calendar has not distracted us from our balance sheet. We remain disciplined. Our cash balance was $141.2 million as of September 30th, and we have 28.3% in FMTV.
spk07: About 91% of our debt is covered by the value of our vessels alone.
spk04: We have been taking advantage of low-pass markets, and MM has $2.2 billion of contracted revenue. We have been profitable in Q4, as contracted revenue exists, total expenses by $57 million, yet we still have about 2,473 open or index-linked days. For 2022, we expect a historically low break-even of $2,469 per open day, with 58% of 47,268 available days open or intensely linked, providing us with a market exposure. Diversification takes advantage of global trade patterns, and slide eight illustrates this. A balanced exposure across the dry band, container sheet, and tanker segment allow us to mitigate normal industry cyclicality and leverage fundamentals on offer across all sectors through our chartering and capital allocation and financing strategy. Currently, in our container ship segment, given the continuous strength of the market, we have been locking in long-term charters. As a result, we fixed 88.1% of our available container ship days for 2022 and have $1.6 billion in total contracted revenue on charters extending through 2030. Moving from strength to strength in our dry bulk segment, we continue to benefit from a strong spot market with 87% of our 2022 available days exposed to market rates, and we remain positioned to fix vessels when attractive period charters are available. Lastly, within our tanker segment, our long-term contracts provide protection and 65% of our 2022 available days remain open to capture the ongoing market recovery. While we are positioned to capture the market upside through our forward available days, our diversified chartering strategy has enabled us to secure a pipeline of over $2.2 billion of contracted revenue. At this point, I'd like to turn the call over to Mr. Stratos Desibris, our Chief Operating Officer, that will take you through the segment data. Stratos.
spk03: Thank you, Geliki, and good morning all. NMM is differentiated by its industry-leading scale and diversified sector exposure. Please move to slide 9, which provides some selected segment data. Navios Partners controls 142 vessels with balanced exposure to the dry bulk container, ship, and tanker segments. Also, we have strengthened stability in our balance sheet. Net loan-to-value is about 28.3%, in an asset base estimated at over $4.5 billion. Moreover, Navios optimizes its flexible chartering strategy to leverage on fundamentals across its three sectors and calibrate charter terms based upon segment opportunity. We have a contracted revenue pipeline of about $2.2 billion, and about 58% of our 2022 available days are currently exposed to the market. Our market exposure days are calibrated towards dry bulk and tanker vessels while about 88% of our container ships are fixed. Slide 10 details our strong operating free cash flow potential. For Q4 of 2021, our contracted revenue exceeds total expenses by approximately $57 million, and we have around 2,500 days with market exposure that will provide additional operating free cash. For 2022, we have fixed approximately 42% of our open days at $29,350 per day, and our contracted revenue provides for a break-even of $2,469 per open day. We have 27,437 open and index days that can generate significant operating cash. In slide 11, you can see the strength and stability of our balance sheet. As of September 30, we had the total cash of $141.2 million and borrowings of $1.4 billion. Leverage remains very low, and net loan-to-value is 28.3%, in an asset base estimated at over $4.5 billion. Additionally, we have a staggered maturity profile with no significant maturities through 2023. That, together with our contracted revenue of $2.2 billion, provides an enduring platform with significant upside potential. Turning to slide 12, you can see some fleet and debt updates. We have fixed 10 of our container ships for long durations, creating approximately $690 million in contracted revenue. More specifically, we have contracted our six new building container ships, delivering in 2023 and 2024 for five years, at an average rate of $37,050 net per day, generating about $420 million of contracted revenue. These vessels were acquired for an aggregate purchase price of $370 million. We have also chartered out 4,250 TEU container ships for periods between three and a half and four and a half years, generating revenues of approximately $270 million. The current average contracted net rate of the four vessels is approximately $2,600 per day. On the S&P, we have sold the 2006 Panamax vessel for $14 million. We are also constantly working on refinancing and extending maturities. We have arranged a new facility of $72.7 million for the refinancing of three existing facilities with short and medium-term durations. Additionally, we have agreed a new 52.7 million bare boat financing for two capsule max vessels to be delivered in the second half of 2022 and Q1 of 2023. I now pass the call to Erit Cironi, our CFO, which will take you through the financial highlights. Erit.
spk01: Thank you, Stratos, and good morning all. I will briefly review our unnoticed financial results for the third quarter and nine-month end of September 30, 2021. The financial information is included in the press release and is summarized in the slide presentation available on the company's website. On August 25, 2021, Navios Partners acquired 62.4% of the equity interest in Navios Acquisition through the acquisition of 44.1 million Navios Acquisition's common shares for an aggregate investment of $150 million. As a result, the balances of novice acquisition, together with the respective purchase price allocation adjustments, are included in novice partners' balances as at the end of the quarter. However, the results of novice acquisition included in the Q3 novice partners' results are only for the period from August 26 to September 30, 2021. As Angeliki mentioned earlier, the merger with Navios Acquisition was completed on October 15, 2021. I would also like to highlight that 2021 results are not comparable to 2020, as in 2021 NMM acquired two companies and is expected to increase its available days by 85% in 2021 and by 171% in 2022 compared to 2020. Moving to the earnings highlights in slide 13, total revenue for Q3 2021 was $228 million compared to $64 million for the same period last year due to the expansion of our fleet and the improved time charter equivalent rates for both containers and bulkers. EBITDA and net income for Q3 2021 include a $30.9 million gain related to the sale of three vessels, Navios Dedication, Navios Azalea, and Harmony, and a $4 million bargain purchase gain upon obtaining control over Navios Acquisition, and $2.9 million transaction cost in relation to the merger with Navios Acquisition. I note that we were able to sell these vessels for a book gain in this excellent market as we manage our rates profile. Excluding these items, total adjusted EBITDA for Q3 amounted to $145 million compared to $31 million for the same period last year. Total adjusted net income was $130 million compared to $8.8 million for the same period last year. During the quarter ended September 30, 2021, we had 9,027 available days, compared to 4,499 days for Q3 2020. Lead utilization was approximately 99%. The average combined Q3 2021 time chart equivalent rate of our vessels increased by 79%, 24,447 per day. The average Q3 2021 time chart equivalent rate achieved per segment was Bulkers, 28,926 per day. Containers, 22,418 per day. And tankers, 15,066 per day. Moving to the first nine-month 2021 period, time charter revenue reached $445 million compared to $158 million in 2020. The result was a combination of the expansion of our fleet and the improved time charter equivalent rate. Our available days increased by 63% to 20,421, while the average nine months 2021 combined time charter equivalent rate increased by 76% to 20,991. Utilization was approximately 99%. EBITDA and net income for the first nine months of 2021 include a $80.8 million gain from equity in net earnings of affiliated companies, a $48 million bargain purchase gain upon obtaining control of Navios containers and Navios acquisitions, a $30.3 million gain related to the sale of seven of our vessels, and $2.9 million transaction costs in relation to the merger with Navios acquisitions. Excluding these items, adjusted EBITDA for the nine months of 2021 amounted to about $270 million compared to $64 million for the same period last year. Adjusted net income for the first nine months of 2021 amounted to $242 million compared to a $2.9 million loss for the same period last year. Turning to slide 14, I will briefly discuss some key balances data of September 30, 2021. Cash and cash equivalents were 141 million. Long-term borrowings, including the current portion, net of deferred fees, amounted to 1.4 billion. Net debt to book capitalization was at a comparable level of 41.7%. Turning to slide 15, you can see our ESG initiative. Maritime shipping is the most environmentally friendly means of transportation, as it is the most carbon-efficient mode of transport. We aspire to have zero emissions by 2050. In this process, we have been pioneering and are adopting certain environmental regulations up to two years in advance, aiming to be one of the first leads to achieve full compliance. Navios is a socially conscious group whose core values include diversity, inclusion, and safety. It's based on corporate governance and clear code of ethics. Our board is composed by majority independent directors and independent committees that oversee our management and operations. I now pass the call to George Agnotis, Executive Vice President of Business Development, to discuss the industry section. George?
spk02: Thank you, Erin. Please turn to slide 17 for the review of the dry-bark industry. The IMF projects global GDP growth at 5.9% for 2021 and 4.9% for 2022. The rate for 2021 is the highest in almost 50 years, and it is led by a 7.2% expansion in China, India, and developing Asia. Vaccine rollouts, continued fiscal stimulus, and governmental infrastructure projects should continue to support economic growth. 2021 drive-back rate is projected to increase by 4.5% and further increase by 2.9% in 2022. Rates in all asset classes rose sharply reflecting surging trade driven by strong demand for both major and minor bulk commodities. The BDI average for Q3 was 3,732, the highest quarterly average since 2008. In fact, the BDI reached 5,650 on October 7th, the highest level in 13 years, led by increased iron ore exports out of Brazil, pushing capesize rates to just under $90,000 per day in early October. More recently, the freight market has corrected on the bulk of Chinese winter steel production limits and power shortages due to an availability of gas and coal. However, it should be noted that current rates are still about two times the 10-year averages. Then to slide 18, post-pandemic stimulus measures in the advanced economies and increasing industrial production a fuel demand for the three major bulk carbons. Specifically, the iron ore global trade is expected to grow by 3.4% in 2021 and 2.4% in 2022. Additional availability of Atlantic exports to the Far East are expected to increase steel mills replenished stockpiles. Concerning coal, high gas prices have driven power plants to switch back to coal-fired power generation and the IEA estimates that global coal-fired electricity generation is expected to rise by nearly 5% this year and exceed pre-pandemic levels before increasing a further 3% to an all-time high in 2022. On the grain side, global grain trade continues to be supported by an ever-increasing world population, with security issues driven by the pandemic as well as increasing product demand worldwide. global grain trade has been growing by 5% cargo since 2008, mainly driven by Asian demand. This turns to slide 19. The current order book stands at 6.8% of the fleet, one of the lowest on record. Net fleet growth for 2021 is expected at 3.5%, and only 1.5% for 2022, below the projected increase in dry bulk demand for both years. Vessels over 20 years of age are about 8.6% of the total fleet, which compares favorably with the historically low water book. In concluding our driver sector review, demand is forecast to outpace net fleet growth in both 2021 and 22. A strong demand for natural resources combined with continuing COVID related logistical disruptions and a slowing pace of new building deliveries all support healthy levels of current and future freight rates. Please turn to slide 21, focusing on the container industry. Post-COVID stimulus measures have caused a sharp recovery of demand for goods in Western OECD economies, as noted on the two lower charts. This has led to a change in trading patterns for the container ships, which has resulted in a historic turnaround in rates. As you can see in the blue box on the lower right, increases in demand for goods, poor congestion, and restocking will lead to container ship demand growth of 6.3% in 2021 and 3.9% in 2022. Turning to slide 22, fleet growth is expected to be 4.2% this year and 3.8% for 2022. Even with the increase in new building orders, demand is forecast to outpace net fleet growth in both 2021 and 2022. It should be noted that about 73% of the order book is for 13,000 TEU vessels or larger. In addition, 10.4% of the fleet is currently 20 years of age or older. This could lead to a pickup in scrapping in 2022, and sky scrapping prices combined with IMO 2023 CO2 reduction rules may induce a portion of the overage fleet to scrap. Conclusion, positive demand fundamentals, mainly due to the start of economic activity around the world, along with reduced fleet availability, to support the containerized shipping industry. Please turn now to slide 24 for the review of the tanker industry. Governments, having put in place emergency monetary and fiscal plans to support their economies, have kick-started faster-than-expected recovery in the world economy. This has led the IEA to project Q4 2021 oil demand to return close to 2019 levels, which is shown on the graph on the lower left. This increase in demand has led to a decline in OECD crude oil inventories, which have fallen below their five-year average since February, with the largest decline coming in September, as shown on the graph on the lower right. Turning to slide 25, the LCC net fleet growth is projected at 3.6% for 2021 and only 1.6% for 2022. This decline can be partially attributed to owners' hesitance towards the long-lived assets in light of macroeconomic uncertainty and engine technology concerns due to upcoming CO2 restrictions. The current order book is 8.3% of the fleet. Vessels over 20 years of age are 11.3% of the total fleet, which compares favorably with the low order book. Finally, turning to slide 26, Product tanker net fleet growth is projected at 2.4% for 2021 and only 1.9% for 2022. The current product tanker order book is 6% of the fleet, which compares favorably with the 8.4% of the fleet, which is 20 years of age or older. We believe that the overall tanker order book and fleet are well balanced as the IMO 2023 and balanced water management regulations will lead to some vessel retirements in the coming months. In concluding, the tanker market continues to remain challenged following reduced crude and product demand associated with COVID restraints. However, OPEC-class export borders, along with global oil demand returning to 2019 levels, have brought OECD inventories below their five-year average. This, together with near-record low water book, should boost crude and product tanker rates in the near term. This concludes my presentation. I would now like to turn the call over to Angelique for her final comments. Angelique?
spk04: Thank you, George. This completes the formal presentation, and we open the call to questions.
spk06: At this time, if you'd like to ask a question, please press star 1 on your touch-tone phone. You may remove yourself from the queue at any time by pressing the pound key. Once again, that is star and 1 to ask a question. We take our first question from Randy Givens with Jefferies.
spk10: Howdy, Team Navios. Congrats again on the merger.
spk04: Good morning. Good morning. Thank you.
spk10: So starting off with the merger, your fleet is clearly massive. It's diverse. So a few questions around this. You mentioned that you sold a 2006 Panamax, but still have a handful of 2004 and 2005 built vessels. So any plans for further asset sales, especially on those older vessels? And then I guess on the other hand, Any plans for further growth in either of the three sectors that you now have exposure to?
spk04: I think the one issue that I'd say is that no matter what, on a 140-vessel fleet, you will have some replacement. So think about something between five to, you know, ten vessels to minimum per year you will have to replace because either there is a survey or you see that that vessel may have, may come into, you see that potentially 2023 may have more consumption for different technological or commercial reasons or capex that you have to put. So this is an ongoing process that will be going over and over again depending on, and you have seen us doing that. even in the top, every market, in the bottom, on the top, there's a continuous process that will do replacements. It doesn't indicate. Now, on actual investment, you know, we just completed a billion-dollar investment, 45 vessels in the tanker segment, and I think it seems to be that Q3 was the low part of the tanker segment, and we are seeing the market slowly recovering. So this is a big investment for... Q3, and what we're looking is how this investment we did will play. What we have done is that we have created a fortress balance sheet by chartering the container sector, which is extremely strong, and we have seen that we have a billion six contracted revenue on containers, 2.2 overall on the company. The advantage we took on the container vessels gave us a historically low break-even of $2,469 per open day in 2022. So basically, we have a fortress balance sheet. We can be very comfortable watching the dry bulk market develop. We have 86% of our available days in the dry bulk open to the market exposure because we are bullish on that. And we have the tanker sector that we are watching as it recovers. So this is basically what we have been doing and what we are seeing developing.
spk10: Got it. No, yeah, that makes sense. And then you mentioned the word replacement, right? So you have 140 to 150 vessels. Is that the kind of range you want to stay with, or would those kind of asset sales kind of bring down the fleet levels from these numbers?
spk04: There's always a replacement to keep. You know, one of the things that we said from, and I think Stratos also mentioned, we have an average age. We are about two years below industry average. So this portfolio, in order to be kept on the same age, you know, below industry average, and create, you will always have a 10-15 dressing. So it's not that you are basically... It's not a number, but you will need to do, you know, share and manage the technology. If we find opportunities, we can always expand, and that is something that we are not shy doing. But I'm talking about as a portfolio, you like to keep an age profile characteristic somehow on a certain level.
spk10: Yeah, no, that's fair. And I think the sales of the older ones will slowly reduce that or, I guess, keep it relatively young. All right, second question. Looking at slides 11 and 14, you know, clearly showing the strength of your balance sheet. You mentioned earlier in the call your fixed charter backlog is giving you pretty substantial cash flow visibility, very low spot day break-evens. So I guess going forward, is there a specific debt target or leverage ratio you're pursuing before kind of switching to some kind of return of capital, be it either repurchasing units at a massive discount to NAV or increasing the quarterly distribution?
spk04: I think the number one is that what we see is a good positioning on the company. You have this low break even, as you historically the lowest, but don't forget we are 86% of our available days open on dry bulk. And the tanker sector is just coming up from a very low point, which was the lowest point in Q3. So basically what we want to see is, number one, this market, dry bulk to materialize, which we are bullish about it, but also to, you know, a recovery on the target segment. So on that, after these two conditions, we are seeing a total return to our investor as an important part of our strategy.
spk09: Got it. And do you have a maybe preference there in terms of repurchases or distribution increase?
spk07: I think this is something that we are very open to.
spk09: Awesome. Well, that's great to hear. That's it for me. Thank you so much.
spk07: Thank you.
spk06: We'll go next to Omar Noco, Carson Securities.
spk11: Thank you. Hey, guys, good morning. Also, good afternoon and also congratulations on your first call here post-merger. I wanted to Maybe follow up on the commentary you just had with Randy, just in terms of deployment of capital. Right now, you're generating huge sums of cash, and that's likely to grow here as we look ahead with the time charges you just announced on the containers. You can pay down debt aggressively. You can award shareholders aggressively. You can actually acquire assets fairly aggressively. In terms of those sort of three, are you willing to rank at the moment of those three, which is the most appealing, or if one outranks the other two, or any sort of color you can give on how you are thinking strategically about whether you decide to pay down debt, pay back shareholders, or grow the company.
spk04: I mean, when we did the transaction, when we did the transaction, we were about 35%. We increased our debt to about 35%. So the target is always to bring down the debt, and that is to about 20%. But overall, today, the biggest thing that we have to see is that we have created operationally a unique platform. We have the historically low break-even gives us on a 47,000 days, you have a huge fleet and you have a break-even for open day of 2,460. This is unique. But on the other side, we are very exposed to the market. We are 86%, which I think is a rather big percentage for a dry bulk to be open. But we have the luxury. We see good We see a good market potential, but we have to see it realized. And also, we have to see that tankers, which we also see a good potential to actually happen. If these conditions happen, the next thing on the market on the debt, I think we can both allocate on reduction of our debt and also on actually providing to our investors. So this is something that we are focusing very much, but the most important is we need to have the right conditions. We see the potential, but we need to see it materialize.
spk11: Thanks, Angeliki. It definitely sounds like you have the flexibility, you know, across the board with that. And I did want to also just ask about the container ship charters, which I thought were, you know, you ordered those four plus two ships, if I recall, and it was somewhat opportunistic at the time. They were on a speculative basis, I guess, or at least were ordered without charters. Here you fixed them for the $37,000 a day, which As I run the numbers, it looks like a five-year payback, which sounds pretty substantial given these are new buildings. In that context, in thinking of deploying capital in the future, we've talked about how maybe tankers is an appealing asset class to go after because it's the bottom of the market to an extent. But on this container ship opportunity, How repeatable could you say that deal is, where you ordered those ships and then subsequently contracted them, and now you have basically a five, maybe five and a half year payback? Is that a repeatable opportunity, you think?
spk04: You know, it's like arbitrage. If everyone does it, it's not anymore existing. But the reality, just to go back to your question, is the following thing. The capacity of the ship, the shipyard capacity has been full, and also we see that materials may be going up. So you always have to be very alert to see what is the best area where the opportunity lies. Sometimes it's in new buildings, sometimes it's in secondhand vessels in different sectors. That is, that there is no one formula to this, and you need to be always running the different scenarios. We did see one thing that we saw as a great opportunity on the container segment. We saw that the smaller vessels, and this is the wide-body, the 5,500 PEUs, what we like about this vessel is about, in the Asia, flexible vessel, 260 meters, very nice dimensions. You can actually take advantage of the point-to-point transportation that is now developing. The difference on the supply chain is and all these, you know, from Justin in time to Justin K. So all these unique things that we see on the supply chain happening, these vessels we think is a good match. And basically, by ordering these vessels, you go away from the baby Panamax that used to be the vessel that was designed at that time for passing through Panama Canal, but we saw that had a good life afterwards, to something that is particularly built for the necessities of the Indonesia trade.
spk11: Yeah, thank you. Definitely looks, you know, well-timed and a good overall return. You know, maybe just, I know, one final one I did want to ask. I noticed in the release, and you mentioned it also in your comments, just about securing dry-bulk charters in the period market when the time makes sense. Could you just give a flavor of sort of what the liquidity looks like from your perspective in terms of deploying the dry bulk fleet away from spot onto time chargers? What does the liquidity look like across, say, the one-year to three-year time frame?
spk04: I think you can find that one year to versus three year, you are basically today discounting hugely, and you don't see really the three-year market developing. It will take some time. I mean, I mean, we saw volatility. We went to the cage from 80,000. We are down to around 30,000. Now, 30,000 is a very good level, but purely the volatility that we saw creates, you know, people are still waiting to make an assessment on period. You need to wait and see that market develop. We are not shy of actually fixing. If you have seen in the container segment what we did with And it's the example that you see on the chart as we just announced. We were fixing one year, and today we fixed over four years and over two and a half times the rate. So you are actually creating this cash flow when the market is right. So we need to wait for the dry bulk. We enjoy the, we have the luxury because of our balance sheet and our low break even. to really to have the luxury to be open and to capture the export market and wait for the period market to come. And this is the strategy, you know, going forward.
spk11: Yeah, the essence of the diversified fleet. Well, thanks, Angelique, for your comments. I'll turn it over.
spk07: Thank you.
spk06: We'll take the next question from James of Citigroup.
spk08: Hey, guys. Good morning. I just wanted to actually ask about how you're thinking about the capital structure from here.
spk05: I mean, you've got a much larger asset base. It's more diversified. You're thinking about basically moving forward with an even lower level of leverage than you have. Now, is this a point where something like an unsecured piece of debt might make sense, something that basically might be a little bit more permanent piece of the capital. Just trying to understand how you're thinking about the work to be done on that side.
spk04: The big thing is about we're looking at reducing further debt. One other thing we have done is we have about a billion five in, I mean, Eddie will give the exact numbers, but a billion five on debt. We have about commercial banks, about 600 in Japanese and Chinese leases, which provides us more easier governance. So we're creating this with this different two-tier financing, and this is something we like to keep the flexibility of having the Asian leases plus the commercial banks in Europe. And overall, we like to have low leverage. I think the low leverage is a big driver to our model.
spk08: Got it.
spk05: And then separately, congestion and supply chain friction is just generally front and center. And obviously, it's been a large factor in the market. Has that lack of visibility to sort of the core demand created any sort of headwind to getting business done either on the container shipping – this is actually more pertinent to the container shipping side, but created any sort of headwind to getting any sort of incremental business done or extending business? for extending any particular charges of vessels. Trying to understand if that's actually sort of impacting your operations outside of just sort of the rate impact. Just trying to understand how it would be through there.
spk04: Big picture, just you should understand that all the inefficiency is net positive for our business. So basically, we can fix, and you have seen the container segment, we fix multi-year contracts. The announcement we did between the six new buildings that we did for five years and the four other vessels, we did a quite significant number of 690 million of contracted revenue. So this is a net benefit in efficiency, and we always get advantage of this on the long-term period because they need of tonnage.
spk05: I completely understand the benefits to market capacity and rates, but just trying to understand if basically the lack of visibility has been sort of discouraged, sort of incremental ordering or sort of any commitments on your customer's part. It doesn't sound like it has, but just curious if there's any sort of holdback because of that lack of visibility.
spk07: Just curious there. I'm not 100% sure on the question.
spk04: It's a little bit hard to hear you, but one of the things I'll say is that we see visibility on chartering. There's demand for charters, if I answer your question, and we have seen it. And this is something that actually has benefited us quite significantly on this on this market, especially on the container.
spk07: Thank you. Thank you. I'll turn the call back over to Angelique for any closing remarks. Thank you.
spk04: This completes our quarterly results for NMM. Thank you.
spk06: This does conclude today's program. Thank you for your participation. You may disconnect at any time.
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