Navios Maritime Partners LP

Thank you for joining us for Navios Maritime Partners' Third Quarter 2020 Earnings Conference Call. With us today from the company are Chairman and CEO, Ms. Angeliki Frangou, Chief Financial Officer, Mr. Stratis Esipris, and Executive Vice President of Business Development, Mr. George Akhniotis. As a reminder, this conference call is in webcast. To access the webcast, please go to the investor section of Navios Partners website at 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 call will also be found there. Now, I will review the safe harbor statement. This conference call could contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about nervous patterns. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of nervous patterns 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 NAVIUS Partners' filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks. NAVIUS 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. Rambo will offer opening remarks. Next, Mr. De Flippis will give an overview on NAVIUS Partners' financial results Then, Mr. Afnotis 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 Navis Partners Chairman and CEO, Mrs. Angeliki Frambouf.

Angeliki? Thank you, Doris, and good morning to all of you joining us on today's call. Given the difficulties associated with the pandemic, I am pleased with the results for the third quarter of 2020. During the third quarter, Navios Partners reported revenue of $64.5 million and adjusted the bedrock of $30.9 million. Although dry-bite demand in the first half of 2020 was hurt by the global shutdowns, fiscal stimulus and other policy measures helped global economies rebound in Q3 and continue to rebound in Q4. We believe that this improvement is attributable to the exit from quarantines, food security consideration, and new purchasing patterns in the pandemic economy. Consequently, we are optimistic about the expected growth in demand throughout Q4 in 2021. As you can see from slide 5, NMM's fleet is currently 55 vessels. NMM holds a 35.7% interest in Navios maritime containers. On slide 6, you can see why Navios Partners is a premium dry bulk shipping platform. We maintain a strong balance sheet with low leverage. Our net debt to capitalization is 39.2%. We have staggered debt maturities and not committed growth capex requirements. We also have about $465 million in remaining contracted revenue and a low breakeven of $5,365 per open day for Q4 2020. Slide 7 details the pandemic impact on global trade. Obviously, GDP for the first half of 2020 was weak given the global shutdown. However, the economic outlook for 2021 is favorable. The IMF expects global GDP to grow by 5.2%, led mainly by China, and an expected GDP growth of 8.2% next year. As a result of the disruption to economic activity during the first half of 2020, dry bulk trade is expected to contract by 2.7% in 2020. However, as economies continue to recover, dry bulk trade is projected to increase by 3.9% in 2021. Slide 8 shows a recent development during the third quarter of 2020. For Q3, we generated 30.9 million in adjusted EBITDA and 8.8 million in adjusted net income. After our fleet update, we continue to renew our fleet and improve its age profile. We acquired two dry bulk vessels with an average age of six years for $51 million. We also agreed to sell two of our older vessels with an average age of 12 years for about $13 million. The acquisition of the two dry bulk vessels was partially financed with a $33 million loan from a commercial bank. The terms of the loan include a maturity in Q3 of 2025, amortization profile of 9.7 years, and an interest rate of 3.25 above LIBOR. Our operating break given for the fourth quarter of 2020 remains low. About 70% of our available days are fixed at about $14,000 net per day, and the remaining 30% of our open and index linked days provide us with a low break even of $5,365 per open and index day, excluding distributions and capex. Slide 9 further details a Q4 operating breakeven. 69.6% of our available days are fixed at an average rate of $14,170 net per day. Our 1,481 open plus index linked days provided with flexibility and cash flow potential with a low break even estimated at $5,365 per day. Assuming one year time charter rate, we should be able to generate about $11.7 million in free cash flow for the fourth quarter of 2020. Slide 10, social liquidity. As of September 30, 2020, we had a total cash of $30.6 million, a total balance of $505.7 million, and a debt to book capitalization is 39.2%, and we have striker dead majorities and no committed growth capex. At this point, I would like to turn the call over to Mr. Stratos Desipris, Navios Partners CFO, who will take you through the results of the third quarter of 2020. Stratos?

Thank you, Eligine. Good morning, all. I will briefly review our noted financial results for the third quarter and nine months ended September 30, 2020. The financial information is included in the press release. and summarizing 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 one-off items listed in these slides. Moving to the financial results, as shown in slide 11, Our revenue for the third quarter of 2020 increased by 1 million to 64.5 million compared to 63.5 million for Q3 of 2019. The increase was mainly due to the 39% increase in available days in 2020. The increase was mitigated by 27% decrease in the time charter equivalent rate achieved in the third quarter of 2020. Adjusted EBITDA for the third quarter of 2020 was $30.9 million, compared to $41.3 million in the third quarter of 2019. However, compared to the second quarter of 2020, adjusted EBITDA increased by 116%, reflecting the significantly improved rate environment. Adjusted net income for the quarter amounted to $8.8 million. Operating surplus for the third quarter of 2020 amounted to $16 million, and replacement and maintenance capacity reserve was $9.5 million. Fleet utilization for the third quarter of 2020 was over 99%. Moving to the nine-month operations, time charter revenue for the nine months of 2020 decreased by 0.6 million to 157.5 million compared to 158.1 million in 2019. The decrease was mainly due to the 22% decrease in the time charter equivalent achieved in the nine months of 2020. This decrease was partially mitigated by the 30% increase in our available days. Adjusted EBITDA for the 9 months of 2020 amounted to 64.3 million, compared to 86.3 million in the same period of last year, mainly due to the 0.6 million decrease in revenues discussed above, an 18.6 million increase in vessel operating expenses due to our increased split, a 1 million decrease in equity net earnings of affiliated companies, and 1 million increase in net all other expenses. Adjusted net loss for the 9 months of 2020 amounted to 2.9 million. Operating share class for the nine months ended September 30, 2020 was 19.3 million. Turning to slide 12, I will briefly discuss some key balancing data as of September 30, 2020. Cash and cash equivalents was 30.6 million. Long-term borrowings, including the current portion, net of defect fees, amounted to 505.7 million. Our cost of debt has been significantly reduced as a result of refinancing the term loan bill last year, as well as the decrease in LIBOR rates. This resulted in a reduction of interest expense and final costs for the first nine months of 2020 by approximately 16.6 million compared to the same period of 2019. Net debt to book capitalization was 39.2% at the end of the quarter. Moving to slide 13, we declared the cash distribution for the third quarter of 2020 was $0.05 per unit, equivalent to $0.20 per unit over nine days. Our current annual distribution provides for an effective yield of approximately 3.2% based on yesterday's closing price. The record date is November 9, and the payment date is November 15, 2020. Total cast distributions for the quarter are 1.6 million. Slide 14 shows the details of our fleet. We have a large, modern, and best fleet with a total capacity of 5.5 million deadweight drones and a married date of 11 years. Our fleet consists of 55 vessels, 15 cage sizes, 24 panamaxes, 6 filter handmaids, 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. Currently, we have contracted 98.7% of our available days for 2020 and 45.5% for 2021, including days contracted by index-linked charters. The expiration dates extend to 2028. In slide 16, you can see the details of Navios Containers. Currently, it controls 29 container ships. Navios Partners has a 35.7% ownership interest in Navios Containers. I now pass the call to George Akhioutis, Executive Vice President of Business Development, to discuss the industry section. George?