New York-listed Navios Maritime Acquisition cut its dividend payment to shareholders on Tuesday, while working to reduce its debt and push back maturing loan obligations.
The Angeliki Frangou-led company, a tanker spin-off of Navios Maritime Holdings, said it would pay shareholders 5 cents per share on its third-quarter earnings.
That's down from the 30 cents it paid in each of the seven previous quarters.
“In light of continuing uncertainties, we are determined to preserve cash," the company's principal and chief executive officer Angeliki Frangou told analysts in a conference call.
In its earnings release, the company said that further dividends will depend on conditions and cash requirements going forward. Navios Acquisition's share closed the day 17% lower at $3.80 apiece, its lowest level since 5 November.
Navios Acquisition, which has a market capitalisation of $65m with a fleet of 47 tankers and seven containerships, posted bottom-line net income of $3.2m in the third quarter. That compares favourably with a net loss of $56.4m in the same period last year, when the result was weighed down by impairments and accounting losses from the accelerated amortisation of intangible assets.
Net income between January and September came in at $35.1m, from a loss of $72.1m in the same period of 2019.
Helped by a short-lived freight rate boom in the spring, Navios Acquisition reported in the second quarter its best result since it merged with Navios Midstream Partners, another Frangou spin-off.
Tanker freight rates, however, have suffered since, amid a global recession due to the Covid-19 pandemic. Frangou said that the recently announced vaccines against the disease will help markets rebounce.
"Vaccination should propel all forms of economic activity, including oil transportation at a time in which the VLCC orderbook is historically low," she said in the conference call.
Navios Acquisition has 14 VLCCs in its fleet, including four newbuildings on bareboat charters - one delivered in October and three more due for delivery in 2021 and 2022.
Cutting the debt
During the third quarter, Navios Acquisition continued on a focus to reduce and manage its debt. The company said it repurchased $55.4m of ship mortgage notes recently, for a cash consideration of $39.4m.
"We reduced our debt by $81.3m [or 7% of the total outstanding] while we also continued to expand our fleet with no capex," chief executive Frangou said in the results release.
In October, the Greek company pushed back to 2021 and 2024 the maturity of existing bank loans with a total outstanding amount of about $46m. At the same time, Navios Acquisition concluded new bank financing of up to $95.8m in order to refinance one VLCC, two chemical tankers and seven containerships.
Navios Acquisition holds all these containerships for sale.
Navios also said that it embarked on 29 November on a programme to issue and sell from time to time up to $25m worth of common stock. In the two days since, the company already issued 956,110 shares of common stock under the programme, receiving a net $5.3m in the process.
This article was updated after original publication to include comments Frangou made in a conference call with analysts
