Navios Maritime Partners LP

Thank you for joining us for Navios Maritime Partners 4th Quarter and Full Year 2021 Earnings Conference Call. With us today from the company are Chairwoman and CEO, Ms. Angeliki Frangou, Chief Operating Officer, Mr. Strato Desypris, Chief Financial Officer, Ms. Eri Tsironi, and Executive Vice President of Business Development, Mr. George Akhniotis. As a reminder, this conference call is being webcast. To access the webcast, please go to the investor section of Navios 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 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 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 NAVI's 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. Frangou will offer opening remarks. Next, Mr. Desypris will provide a Navios Partners operational and fleet update overview. Next, Mr. Roni will give an overview of Navios Partners financial results. Then, Mr. Akhniotis Angeliki Frangou

Thank you, Daniela, and good morning to all of you joining us on today's call. I am pleased with our outstanding results for the fourth quarter and full year of 2021. During Q4, Navios Partners recorded revenue of $268.1 million, adjusted EBITDA of $156.6 million, adjusted net income of $121.8 million, and for the full year of 2021, Navios Partners recorded revenue of $713.2 million, adjusted EBITDA of $426.5 million and adjusted net income of $364.1 million. Please turn to slide 3. In 2021, We reimagined what a public shipping company could be like and took actions to make this a reality. Today Navios Partners is not only one of the leading US publicly listed companies based on the number of vessels but is also diversified across 15 vessel types in 3 segments servicing more than 10 end markets. About 1 third of our fleet operates in each dry bulk, container ship and tanker segments. We will discuss why we believe that this new structure offers a stronger, more resilient entity. Slide 4 presents some recent segment data. Navios Partners fleet of 146 vessels has an average age of 9.6 years and a loan-to-value of 32.5%. We have built 2.7 million in contracted revenue, of which 2.2 billion is from the container sector. Over approximately 47,000 available days, almost half are exposed to market rates. This provided upside through recovering charter rates in the dry bulk and tanker markets, which we expect in the near term. Slide 5 summarizes the basic principles behind the strength of a diversified platform. 1. A diversified platform allows us to optimize our chartering strategy. Fundamentally, this means that we can consider long-term charters in segments that offer attractive returns while allowing vessels in underperforming segments to be chartered for short-term or at index rates. Diversification allows the luxury of managing a chartering policy to our benefit without any balance sheet compulsion. 2. The segments have some counter-cyclicality building. This creates the opportunity of redeploying the strong cash flow from performing segments into asset purchases in underperforming segments where we believe attractive acquisition opportunities exist. Ultimately, we believe that this allows for optimal capital allocations. 3. Asset values themselves can be volatile. We have seen a significant appreciation in the container sector recently and have lived through significant depreciation of asset values in the past. We expect this will continue. Leverage rates can remain low only if asset values cooperate and we believe that by diversifying our asset base, the balance sheet impact of asset value volatility will be muted. Consequently, our balance sheet strength will be generated in part from this diversity of assets. Together, this diversification creates resiliency in the overall business model. Each segment works independently to mitigate volatility from the other segments. While we don't expect this to work perfectly, we think that it will reduce volatility sufficiently to allow latitude to leverage market opportunity because the overall structure is inherently more stable. We will have flexibility in our operational and financial activities and decision making process as we charter, sell and purchase vessels and obtain debt finance within this context. We believe that the net result is that we should have more predictable entity level returns. On slide 6 We drill down into how we optimize our chartering. As you can see from the chart on the top right, the container segment is enjoying historically high charter rates. Operating in this backdrop, we have opted to fix our container fleet on long-term charters with almost 100% of our available container ship days fixed for 2022. Thank you for watching. In our dry bark segments, we benefit from a market where rates are recovering to their historical 20-year averages. We have fixed only 24% of our available dry bark fleet days for 2022 and have opted to keep 76% of our 2022 available days exposed to market rates to capture any available upside. Our chartering strategy also allows us to fix our dry park fleet on long-term charters when rates do improve. Lastly, within tankers, current charter rates are 80% below their 20-year average levels. We have 46.8% of our 2022 available tanker days fixed, many with favorable legacy charters. We anticipate running this fleet Thank you very much. Thank you very much. Details our approach to capturing the unique opportunity of each segment. NMM made $1 billion investment in 18 new building vessels that will deliver to our fleet through 2024. Of this acquisition, we used the gathering strength of the container market to acquire 10 container ships, We hedge our financial investment by entering into long-term credit water charters for these vessels. We also engage in the routine and continuous management of our fleet aid profile in the dry bulk and target space. Seven dry bulk vessels and one VLCC were acquired at prices below their long-term averages. In our container ship segment, we renew our fleet by acquiring 10 5,300 EU building container ships for approximately 620 million dollars. The current market value of these vessels is estimated at 720 million dollars. These 10 container ships will earn about 710 million in contracted revenue for the 5.2 years duration of the related charters. We also capitalized on their strength in container ship values by selling two 16-year-old vessels for $220 million. Their sale was executed at historically high values and is expected to be completed in the second half of 2022. Moving on to our dry bulk segment, fleet expansion was executed at a drastic price. As you can see, Navios Partners, $332 million investment in seven new building vessels, orders when vessel values were challenged in the first half of 2021, is worth approximately $372 million today. Lastly, for the tanker segment, we are seeing a dichotomy in asset values versus charter rate, whereby values anticipate a recovering charter rate market. In fact, a new building VLCC vessel has already appreciated 36%. Slide 8 lays out how Navios Partners intends to counter volatility existing in specific segments. Navios Partners' diversified asset portfolio provides balanced stability from the idiosyncrasies of specific sectors, as you can see from the charts on the slide. Navios Partners' fleet in aggregate is currently valued at approximately $5.2 billion. While container ship values are at a historical high, dry bulk vessels values are only 25% of their all-time highs and tiger values are about 40% of their all-time highs. This variation in asset values balances out through our diversified segment results in a 32.5% loan-to-value for Navios Partners on December 31, 2021. As you can also see from the chart to the bottom left, NMM has about 3.5 billion in net equity value in these vessels. Slide 9 reviews our recent developments. During the fourth quarter Navios Partners generated 268.1 million in revenue, 156.6 million in adjusted EBITDA and 121.8 million in adjusted net income. For the full year of 2021, Maritime Partners generated 713.2 million in revenue, 426.5 million in adjusted EBITDA and 364.1 million in adjusted net income. The P&L is healthy and average balance sheet remains strong. As of December 31, 2021, we have about $130 million in cash. The size of our balance sheet cash has a number of considerations, including capital commitment for new vessels and working capital for the fleet. Consequently, I will expect that we will hold considerably more than our current cash balance. Considering only working capital for our fleet size, we estimate an approximate cash balance would be about 2 million per vessel. Leverage is 32.5% LPV as of December 31st 2021 and we have a target debt maturity profile. As an update to our S&P activity since the first quarter of 2021, We agreed to acquire 5,300 new building container ships with the deliveries expected in 2024 for $251.3 million. To sell two 16-year-old container ships for $220 million with a closing expected in the second half of 2022. An update to our chartering activity. We secure new long-term charters for 11 of our container ships that we expect to generate 670 million in revenue as follows. About 290 million through the 4 5300 TEU new building container ships charter out for an average period of 5.3 years at an average net rate of $37,282 per day and about 380,000,000 to 4,250 TEU container ships chartered out for an average period of 3.3 years and an average net rate of $45,927 per day. We continue to take advantage of robust markets. Navios Partners has $2.7 billion in contracted revenue. For 2022, our contracted revenue already exceeds forecasted expenses by almost $50 million. Moreover, out of our 46,905 available days, 21,966 of these days are exposed to market rates. allowing for significant potential cash flow generation. At this point, I would like to turn the call over to Mr. Stratos Desypris, who will take you through the next few slides. Stratos?

Thank you, Angeliki, and good morning all. Navius Partners is differentiated by its industry-leading scale and diversified sector exposure. Slide 10 details our strong operating free cash flow potential. Currently, we have contracted 53.2% of our about 47,000 available days at an average rate of $20,957 net per day. For 2022, our contracted revenue exceeds total cash expenses by almost 50 million and we still have about 22,000 days with market exposure that can provide additional operating costs. The majority of our market exposure comes from our dry bulk vessels where we have fixed approximately 24% of our available days. On slide 11, you can see our fleet profile. 2021 was a transformational year for Maritime Partners. Our fleet increased by 170% by entering into new segments and expanding our presence in the segments we were already operating. More specifically, we increased our dry bulk fleet capacity by 36% and our container ships by 370%. Additionally, we entered into the tanker segment by acquiring a 45 vessel tanker fleet. We have also been very active in renewing our fleet and reducing its average age. Since 2020, we have reduced the average age of our driver by 18% and of our container ships by 31%. The renewal process is a constant balancing effort. We like to be proactive and capture cyclical opportunities while allocating capital. As you can see at the bottom of the slide, we have 21 vessels that are over 15 years of age While at the same time, we have 18 new building vessels to be delivered from the third quarter of 2022 till 2024. Turning to slide 12, you can see some recent updates. We continue to secure long-term employment for our container ships and we have fixed 11 vessels, creating approximately 670 million in contracted revenue. More specifically, we have contracted 4 new building container ships, delivering in 2024, for over 5 years at an average rate of $37,282 net per day. Generating about 290 million of contracted revenue. These vessels were acquired for an aggregate purchase price of 251.3 million. We have also chartered out 7 containerships for periods between 3 and 3.8 years, generating revenues of approximately 380 million. These charters represent a 2.8 times increase compared to the current contracted rates of these vessels. On the S&P front, we capitalized on the strength of the container ship values by selling two 16-year-old 8200 TU container ships for 220 million. The sale was executed at historically high prices and is expected to be completed in the second half of 2022. We have also completed the sale of a 2006 Panamax vessel for 14 million. We are constantly working on refinancing and extending maturities. We have completed our second sustainability limit financing, demonstrating our commitment on ESG principles. Additionally, we are in advance discussions for a new 55 million facility for the refinance of two existing facilities. In slide 13, you can see the breakdown of our 2.7 billion contracted revenue. About 1.2 million or 45% of our contracted revenue will be earned in 2022 and 2023. 81% of our contracted revenue comes from our container ships with charters extending through 2030 with a diverse group of quality counterparts. I now pass the call to Erif Tsironi our CFO who will take you through the financial highlights.