Market Overview

Navios Maritime Holdings Inc. Reports Financial Results for the Third Quarter and Nine Months Ended September 30, 2019

Share:

Revenue

  • $363.6 million for 9M 2019
  • $141.6 million for Q3 2019

Cash from operating activities

  • $80.8 million for 9M 2019
  • $38.1 million for Q3 2019

Adjusted EBITDA (a non-GAAP measure)

  • $233.2 million for 9M 2019
  • $98.8 million for Q3 2019

Fleet renewal (2017-2019YTD)

  • 26% decrease in average age
  • 8% increase in dwt capacity

Liquidation of Navios Europe I

  • $13.1 million receivable as of September 30, 2019
  • Liquidation expected to occur by 2019 YE

MONACO, Nov. 25, 2019 (GLOBE NEWSWIRE) -- Navios Maritime Holdings Inc. ("Navios Holdings" or "the Company") (NYSE:NM), a global seaborne shipping and logistics company, today reported financial results for the third quarter and nine month period ended September 30, 2019.

Angeliki Frangou, Chairman and Chief Executive Officer, stated, "I am pleased with the results of the third quarter of 2019. We reported revenue of $141.6 million, Adjusted EBITDA of $98.8 million and Adjusted Net Income of $35.65 million."

Angeliki Frangou continued, "Charter rates in the dry bulk sector are healthy with the capesize 5TC rate around $19,000 per day. NM earned a time charter equivalent rate of $15,534 per day for the third quarter of 2019. All of our delivered vessels are on the water generating revenue, as we have no vessels being retro-fitted with scrubbers."

HIGHLIGHTS – RECENT DEVELOPMENTS

Sale of Management

In August 2019, Navios Holdings sold its ship management division and certain general partnership interests (the "Transaction") to N Shipmanagement Acquisition Corp. and related entities ("NSM"), affiliated with Company's Chairman and Chief Executive Officer. The Company received aggregate consideration of $20.0 million (including assumption of liabilities) and favorable five-year service agreements under which NSM provides technical and commercial management services at a fixed  rate of $3,700 per day per vessel and administrative services, reimbursed at allocable cost. After the Transaction, the Company owns dry bulk vessels and various investments in maritime and infrastructure assets.

The Company entered into a secured loan agreement with NSM, whereby the Company agreed to repay NSM $141.8 million (including post-closing adjustment) over a five-year period for the net amount of liabilities assumed by NSM in the Transaction. 

Agreement to Liquidate Navios Europe Inc.

As of September 30, 2019, Navios Holdings had a receivable of $13.1 million from Navios Europe Inc. ("Navios Europe I"). On November 22, 2019, an agreement was reached to liquidate Navios Europe I. As a result of this liquidation, it is expected that Navios Holdings will receive the outstanding receivable amount, net of costs, in December 2019.

Fleet Update

In October 2019, the Company agreed to sell to an unrelated third party the Navios Hios, a 2003-built Ultra Handymax vessel of 55,180 dwt, for a sale price of $7.7 million. The vessel is expected to be delivered to the buyers in the first quarter of 2020.

In September 2019, the Company sold to an unrelated third party the Navios Primavera, a 2007-built Ultra Handymax vessel of 53,464 dwt, for a sale price of $10.3 million.

Navios Holdings controls a fleet of 56 vessels (including one vessel agreed to be sold) totaling 6.0 million dwt, of which 30 are owned and 26 are chartered-in under long-term charters (collectively, the "Core Fleet"). The fleet consists of 18 Capesize, 28 Panamax, eight Ultra-Handymax and two Handysize vessels, with an average age of 7.6 years, basis fully delivered fleet.

As of November 18, 2019, Navios Holdings has chartered-out 98.7% of available days for the remaining three months of 2019. Of these available days, 78.5% are chartered-out on fixed rate and 20.2% are chartered-out on index. The average contracted daily charter-in rate for the long-term charter-in vessels for the remaining three months of 2019 is $13,857 per day.

The above figures do not include the fleets of Navios South American Logistics Inc. ("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 fleets of Navios Logistics.

Earnings Highlights

EBITDA, Adjusted EBITDA, Adjusted Net Income/(Loss) attributable to Navios Holdings' common stockholders and Adjusted Basic Earnings/(Loss) attributable to Navios Holdings' common stockholders per Share are non-U.S. GAAP financial measures 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, Adjusted EBITDA, Adjusted Net Income/(Loss) attributable to Navios Holdings' common stockholders and Adjusted Basic Earnings/(Loss) attributable to Navios Holdings' common stockholders per Share of Navios Holdings (including Navios Logistics and Navios Containers), and EBITDA of Navios Logistics and Navios Containers (both on a stand-alone basis) and a reconciliation of such measures to the most comparable measures calculated under U.S. GAAP.

As of November 30, 2018, Navios Holdings obtained control over Navios Containers and consequently consolidated Navios Containers from that date onwards. Following the sale of Navios Containers general partnership interest effected on August 30, 2019, Navios Holdings deconsolidated Navios Containers from that date onwards. The results of operations of Navios Containers for the period consolidated under Navios Holdings have been reported as discontinued operations for all periods presented.

Third Quarter 2019 and 2018 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):

The third quarter 2019 and 2018 information presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

    Three Month Period Ended
September 30, 2019
  Three Month Period Ended
September 30, 2018
    (unaudited)   (unaudited)
Revenue $ 141,609       $ 141,453    
Net Loss attributable to Navios Holdings' common stockholders $ (39,139 )     $ (1,816 )  
Adjusted Net Income attributable to Navios Holdings' common stockholders $ 35,650   (1)   $ 944   (3)
Net cash provided by operating activities $ 38,117       $ 10,077    
EBITDA $ 24,011       $ 60,047    
Adjusted EBITDA $ 98,800   (1)   $ 62,807   (3)
Basic Loss attributable to Navios Holdings' common stockholders per Share(4) $ (3.16 )     $ (0.37 )  
Adjusted Basic Earnings/(Loss) attributable to Navios Holdings' common stockholders per Share(4) $ 2.77   (2)   $ (0.14 ) (3)


(1) Adjusted EBITDA and Adjusted Net Income attributable to Navios Holdings' common stockholders for the three month period ended September 30, 2019 exclude (i) a $61.7 million loss on loss of control of Navios Containers, (ii) a $10.6 million write-off of intangible assets incurred by one of our affiliates, (iii) a $1.7 million impairment loss relating to the sale of one drybulk vessel and (iv) a $0.8 million net loss from discontinued operations of Navios Containers.
(2) Adjusted Basic Earnings attributable to Navios Holdings' common stockholders per Share for the three month period ended September 30, 2019 exclude the items referred in footnote (1) as well as a gain of $1.4 million related to the conversion of accrued dividends on private preferred stock to common stock.
(3) Adjusted EBITDA, Adjusted Net Income and Adjusted Basic Loss per Share for the three month period ended September 30, 2018 exclude a $2.8 million impairment loss relating to the sale of Navios Mars and Navios Sphera.
(4) Basic and Adjusted Basic Earnings/(Loss) attributable to Navios Holdings' common stockholders per Share post reverse stock split adjusted for all periods presented.
   

Revenue from dry bulk vessel operations for the three month period ended September 30, 2019 decreased by $8.1 million, or 9.5%, to $77.5 million, as compared to $85.6 million for the same period during 2018. The decrease in dry bulk revenue was mainly attributable to a decrease in available days by 18.5%, due to the vessels sold and certain charter-in vessels that were redelivered, partially mitigated by an increase in TCE per day by 9.3% to $15,534 per day in the three month period ended September 30, 2019 as compared to $14,210 per day in the same period in 2018.

Revenue from the logistics business was $64.1 million for the three month period ended September 30, 2019 as compared to $55.9 million for the same period in 2018. The increase was mainly attributable to (i) a $8.0 million increase in revenue from the port terminal business mainly due to higher volumes transshipped in the grain port terminal, (ii) a $3.6 million increase in revenue from the barge business mainly due to higher volumes of liquid cargo transported and (iii) a $1.6 million increase in revenue from the cabotage business mainly due to more operating days of the cabotage fleet. The overall increase was partially mitigated by a $5.0 million decrease in sales of products mainly due to a decrease in the Paraguayan liquid port's volumes of products sold.

Revenue of Navios Containers for the period from July 1, 2019 to August 30, 2019 (deconsolidation effective date) was $24.4 million. Navios Containers' results of operations were not included in the Company's consolidated results of operations for the three month period ended September 30, 2018.

Net Loss attributable to Navios Holdings' common stockholders was $39.1 million for the three month period ended September 30, 2019, as compared to $1.8 million Net Loss attributable to Navios Holdings' common stockholders for the same period in 2018. Net Loss attributable to Navios Holdings' common stockholders was affected by items described in the table above. Excluding these items, Adjusted Net Income attributable to Navios Holdings' common stockholders for the three month period ended September 30, 2019 was $35.7 million, as compared to $0.9 million Adjusted Net Income attributable to Navios Holdings' common stockholders for the same period in 2018. This increase in Adjusted Net Income was mainly due to (i) a $36.0 million increase in Adjusted EBITDA, (ii) a $0.8 million decrease in amortization for deferred drydock and special survey costs from continuing operations, (iii) a $0.4 million decrease in share-based compensation expense, (iv) a $4.5 million decrease in depreciation and amortization from continuing operations and (v) a $2.7 million decrease in interest expense and finance cost, net from continuing operations. This overall increase of $44.4 million was partially mitigated by (i) $5.8 million depreciation and amortization of Navios Containers for the period from July 1, 2019 to August 30, 2019, (ii) $2.9 million interest expense and finance cost, net of Navios Containers for the period from July 1, 2019 to August 30, 2019, (iii) a $0.7 million increase in income tax expense and (iv) $0.2 million amortization for deferred drydock and special survey costs of Navios Containers for the period from July 1, 2019 to August 30, 2019.

Net Income of Navios Logistics, on a standalone basis, was $14.3 million for the three month period ended September 30, 2019 as compared to $6.7 million of Net income for the same period in 2018.

Net Loss of Navios Containers, on a standalone basis, was $0.8 million for the period from July 1, 2019 to August 30, 2019 (deconsolidation effective date). Navios Containers' results of operations were not included in the Company's consolidated results of operations for the three month period ended September 30, 2018.

Adjusted EBITDA of Navios Holdings for the three month period ended September 30, 2019 increased by $36.0 million to $98.8 million, as compared to $62.8 million for the same period in 2018. The increase in Adjusted EBITDA was primarily due to (i) a $0.1 million increase in revenue from continuing operations and $24.4 million revenue of Navios Containers for the period from July 1, 2019 to August 30, 2019, (ii) a $9.8 million  gain on sale of business recorded in the three month period ended September 30, 2019, (iii) a $8.8 million increase in other income, net from continuing operations, (iv) a $5.9 million increase in gain on bond extinguishment, (v) a $4.1 million decrease in time charter, voyage and logistics business expenses from continuing operations, (vi) a $0.8 million net loss from discontinued operations and (vii) a $7.4 million increase in equity in net earnings from affiliated companies. This overall increase of $61.3 million was partially mitigated by (i) a $2.8 million increase in direct vessel expenses from continuing operations (excluding the amortization of deferred drydock and special survey costs) and $11.1 million direct vessel expenses of Navios Containers (excluding the amortization of deferred drydock and special survey costs) for the period from July 1, 2019 to August 30, 2019, (ii) a $4.2 million increase in general and administrative expenses (excluding share-based compensation expenses) from continuing operations and $1.6 million general and administrative expenses of Navios Containers for the period from July 1, 2019 to August 30, 2019, (iii) $2.6 million other expense, net of Navios Containers for the period from July 1, 2019 to August 30, 2019, (iv) a $2.0 million increase in net income attributable to noncontrolling interest and (v) $1.0 million time charter and voyage expenses of Navios Containers for the period from July 1, 2019 to August 30, 2019.

EBITDA of Navios Logistics, on a standalone basis, was $32.5 million for the three month period ended September 30, 2019, as compared to $25.5 million for the same period in 2018.

EBITDA of Navios Containers, on a standalone basis, was $8.0 million for the period from July 1, 2019 to August 30, 2019.

Nine Months Ended September 2019 and 2018 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):

The information for the nine month period ended September 30, 2019 and 2018 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

    Nine Month Period Ended
September 30, 2019
    Nine Month Period Ended
September 30, 2018
    (unaudited)     (unaudited)
Revenue $ 363,568       $ 390,386    
Net Loss attributable to Navios Holdings' common stockholders $ (80,874 )     $ (67,965 )  
Adjusted Net Income/(Loss) attributable to Navios Holdings' common stockholders $ 34,536   (1)   $ (51,895 ) (3)
Net cash provided by operating activities $ 80,793       $ 39,591    
EBITDA $ 117,796       $ 118,066    
Adjusted EBITDA $ 233,206   (1)   $ 134,136   (3)
Basic Loss attributable to Navios Holdings' common stockholders per Share(4) $ (3.35 )     $ (6.33 )  
Adjusted Basic Earnings/(Loss) attributable to Navios Holdings' common stockholders per Share(4) $ 2.33   (2)   $ (4.99 ) (3)


(1) Adjusted EBITDA and Adjusted Net Income attributable to Navios Holdings' common stockholders for the nine month period ended September 30, 2019 exclude (i) a $61.7 million loss on loss of control of Navios Containers, (ii) a $25.5 million of impairment losses related to the sale of six drybulk vessels, (iii) a $13.5 million of other-than-temporary impairment ("OTTI") loss onrelated to our investment in Navios Acquisition, (iv) a $10.6 million write-off of intangible assets incurred by one of our affiliates and (v) a $4.1 million net loss from discontinued operations of Navios Containers.
(2) Adjusted Basic Earnings attributable to Navios Holdings' common stockholders per Share for the nine month period ended September 30, 2019 exclude items referred in footnote (1) as well as a gain of $45.7 million related to the tender offer for the Company's preferred stock and the conversion of accrued dividends on private preferred stock to common stock.
(3) Adjusted EBITDA, Adjusted Net Loss and Adjusted Basic Loss per Share for the nine month period ended September 30, 2018 exclude a $16.1 million impairment loss relating to the sale of Navios Herakles, Navios Achilles, Navios Mars and Navios Sphera.
(4) Basic and Adjusted Basic Earnings/(Loss) attributable to Navios Holdings' common stockholders per Share post reverse stock split adjusted for all periods presented.
   

Revenue from dry bulk vessel operations for the nine month period ended September 30, 2019 decreased by $39.0 million, or 17.6%, to $183.1 million, as compared to $222.1 million for the same period in 2018. The decrease in dry bulk revenue was mainly attributable to: (i) a decrease in available days by 12.3%, due to the vessels sold and certain charter-in vessels that were redelivered and (ii) a decrease in TCE per day by 4.7% to $11,784 per day in the nine month period ended September 30, 2019 as compared to $12,368 per day in the same period in 2018.

Revenue from the logistics b

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