Navios Maritime Partners LP

Thank you for joining us for NAVIOS Maritime Partners Second Quarter 2020 Earnings Conference Call. With us today from the company are Chairman and CEO, Ms. Angeliki Frangou, Chief Financial Officer, Mr. Stratios Desypris, and Executive Vice President of Business Development, Mr. George Akhniotis. www.navios-mlp.com You'll see the webcast link in the middle of the page and a copy of the presentation referenced in today's earnings conference goal will also be found there. Now I will review the safe harbour statements. This conference goal could contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios Partners. Forward-looking statements are statements that do not have historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Maritime Partners management and are subject to risks and uncertainties which could cause actual results to differ materially from the forward-looking statements. Such risks are not fully discussed in Maritime Partners filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks. Maritime 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. Frangou will offer opening remarks. Next, Mr. Desypris will give an overview of Navios Partners' financial results. Then, Mr. Akhniotis 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 Navios Partners Chairman and CEO, Ms. Angeliki Frangou.

Thank you Doris and good morning to all of you who join us on today's call. While the pandemic has greatly affected business, countries and people all over the world, the Navios family continues to persevere. We take great pride in the safety of our employees and we have adapted to this ever-changing environment. Despite the pandemic, I am pleased with the results for the second quarter of 2020. Navios Partners reported 46.5 million in revenue and 14.3 million in adjusted EBITDA. Navios Partners also declared a quarterly distribution of 5 cents per unit, representing an annual distribution of 20 cents per unit. This distribution represents a reduction from the previous quarterly distribution. We choose to reduce our distribution in light of the combination of challenges and opportunities from the ongoing pandemic. The pandemic negative effect on global economic activity can be seen in the duration of the downturn in charter rates. Year to date 2020, the Cape size 5TC rate is averaging around $9,700 per day. Even with rates recovering in the past month, as countries emerge from quarantine and attempt to normalize ways of doing business, the charter rate is still 50% less than the 2019 average of $18,000. As you can see from slide 5, NMM's fleet is currently 53 vessels. In December 2019 we liquidated Navios Europe 1 and during the second quarter of 2020 we liquidated Navios Europe 2. NMM holds 33.5% increase in Navios maritime containers. On slide 6 you can see why Nardios Partners is a premier dry bike shipping platform. We have a strong buy-on-sit with low leverage. A net debt capitalization is 38.7%. We have staggered debt maturities and non-significant committed growth capex requirements. We have cash flow capability with about 500 million in remaining contracted revenue. For the second half of 2020, approximately 39% open and index-linked days have a manageable breakeven of $8,801 per open day. Slide 7 details the pandemic's impact on global trade. The IMF projects 4.9% decrease in 2020 global GDP, mostly driven by the 8% decline in advanced economies. As a result of the disruption to world economic activity, dry bark trade is expected to contract by 4.5% in 2020. We may have felt much of this negative impact in the first half of 2020 as countries observed extensive lockdowns. Looking forward, economies are projected to recover in the second half of 2020 and dry bulk trade is projected to increase by 4.6% in 2021. Moreover, global GDP is expected to increase by 5.4% in 2021. which we would expect to be positive for the dry bark trade. Slide 8 shows how NMM has weathered the storm during the on-going market disruption. For the second quarter of 2020, we generated 14.3 million in adjusted EBITDA and earned a time charted equivalent rate of $11,202 per day. As to our chartering activities, the vessels with which long-term provided us with protection against the ongoing market downturn. We have 61.2% of our days fixed for the second half of 2020 at an average charter rate of $13,667 per net per day and the remaining open days provide us with a break-even of $8,801 per open day. As to refinancing activities, we entered into approximately 50 million of new commercial bank facilities, which included a 17 million dollar facility to refinance 4 container ships and 29.5 million new loan to finance 5 dry-bite vessels acquired from Navios Europe 2. We also completed a liquidation of Navios Europe 2 during the second quarter. A net receivable of 17.3 million was settled through a 2.7 million in cash and the balance with a still value of 5 dry bulk vessels, including assumption of loans and working capital. Slide 9 details our cost structure. For the remaining 6 months of 2020, 61.2% of our available days are fixed at an average rate of $13,667 net per day. Our 3,641 open plus index blink days provide us with a break-even of $8,801 per open day, but also allow us to generate $16.6 million assuming current rates. Slide 10 Social Equity As of June 30, 2020, we had total cash of $29.8 million and total borrowings of $488.2 million. Our net debt to book of capitalization is 38.7%. We have staggered debt maturities and non-committed growth capex. At this point, I would like to turn the call to Stratos Desypris, Navios Partners CFO, who will take you through the results of the second quarter of 2020.

Thank you, Angeliki, and good morning all. I will briefly review our annuity financial results for the second quarter ended June 30, 2020. The financial information is included in the present list and is summarized in the slide presentation available on the company's website. Before I start discussing our financial highlights, I would like to draw your attention to certain one-off items that are listed in slide 11. For simplicity, the discussion of the financial results below exclude the effect of the one-off items listed in this slide. Moving to slide 11, revenue for the second quarter of 2020 decreased by 2.5% to 46.5 million compared to 47.7 million for Q2 of 2019. The decrease was mainly due to the 20.7% decrease in the time charter equivalent rate achieved in the second quarter of 2020. This decrease was mitigated by the 25.8% increase in our available days. Adjusted EBITDA for the second quarter of 2020 decreased to 14.3 million compared to 22.3 million in the second quarter of 2019, primarily due to a 5.4 million increase in operating expenses due to our larger fleet, and a 0.9 million decrease in equity in earnings for Monavios containers. Adjusted Net Loss for the quarter amounted to 7.8 million. During the second quarter of 2020, we reported a negative operating surplus of 1.1 million. Replacement and maintenance capex reserve was 8.6 million. Plit utilization for the second quarter was almost 99%. Moving to the six-month operations, time charter revenue for the six months decreased by 1.6 million to 93 million, compared to 94.6 million in the first half of 2019. The decrease was mainly due to the 19.8% decrease in the time charter equivalent rate achieved in the second half of 2020. This decrease was mitigated by the 25.4% increase in our availability days. Adjusted EBITDA for the first half of 2020 amounted to 33.4 million compared to 45 million in the same period of last year, primarily due to an 11 million increase in operating expenses due to our larger fleet, which was partially mitigated by a 0.8 million increase in equity in earnings from various containers. Adjusted net loss for the first half of 2020 amounted to 11.7 million. Operating share plus for the 6 months ended June 30, 2020 was 3.3 million. Turning to slide 12, I will briefly discuss some key balancing data as of June 30, 2020. Cash and equivalents was almost 30 million. Long-term borrowings including the current portion, net of deferred fees amounted to 488.2 million. Our cost of debt has been significantly reduced as a result of the refinancing of the term loan bill last year, as well as the decrease in LIBOR rates. This resulted in a reduction in fee interest expense for the first half of 2020 of approximately 9 million compared to the same period of 2019. Net debt to book capitalization was 38.7% at the end of the quarter. Moving to slide 13, we declared a cash distribution for the second quarter of 2020 of 5 cents per unit equivalent to 20 cents per unit on an annual basis. Our current annual distribution provides for an effective yield of approximately 2.5% based on yesterday's closing price. The record date is August 10 and the payment date is August 13, 2020. Total cash distributions for the quarter amount 2.6 million. Slide 14 shows the details of our fleet. We have a large modern diverse fleet with a total capacity of 5.3 million deadweight tone and an average age of 11 years. Our fleet consists of 53 vessels, 14 cape sizes, 23 panamaxes, 6 ultra-handimax and 10 container ships. In slide 15 you can see the list of our fleet with the contracted rates and the respective expiration dates per vessel. Our charters have an average remaining contract duration of approximately 2 years. Currently, we have contracted 95% of our available days for 2020 and 31.5% for 2021, including days contracted at index link chapters. The expiration days extend to 2028. In slide 16, you can see the details of Navios Containers. Currently, it controls 29 container ships. Navios Partners has a 33.5% ownership interest in Navios Containers. I now pass the call to Georgios Akhniotis, Executive Vice President of Business Development, to discuss the industry section.