Navios Maritime Partners, a maritime juggernaut with 175 ships on the water or under construction, maintained profit at elevated levels in the second quarter, helped by strong tanker and container ship earnings.
Angeliki Frangou’s US-listed shipping owner and operator reported net income of $112.3m for the period, up 13% from the previous quarter and down 5% year-on-year.
About $10m of that profitability came from the sale of four ageing vessels TradeWinds has already reported on.
As part of its large-scale fleet recycling drive with newbuildings and younger secondhand tonnage, the company revealed on Wednesday ordering two 52,000-dwt tanker newbuildings and the $28m acquisition of the 81,700-dwt Navios Horizon I (built 2019) — a Japanese-owned kamsarmax bulker it already had in its fleet as a chartered-in vessel.
Amid rising geopolitical and economic uncertainty across the world, Frangou said her company will stick to its guns.
“We continue to focus on things that we can control, such as reducing our leverage rate and replacing older vessels with younger, more technologically advanced vessels in sectors that provide adequate returns,” she said in the earnings statement.
Navios Partners became a shipping behemoth in 2021 after absorbing its then standalone affiliates Navios Maritime Containers and Navios Maritime Acquisition.
Another 36 Navios Holdings bulkers were acquired in the summer of 2022.
As part of its strategy, Navios Partners has confirmed the sale of about 20 bulkers, tankers and boxships since June last year.
Its current, mixed fleet is geared towards bulkers, of which it has 81 units, alongside 47 boxships and 47 tankers, with total contracted revenue of $3.3bn.
These fleet numbers include 22 newbuildings — mostly LR2 tankers and intermediate-size container ships due for delivery through to the first half of 2027.
Its two latest MR2 newbuildings will be taken in 10-year bareboat-in deals with an option to acquire them four years into their charters. “Assuming the exercise of the option at the end of the 10-year period, the bareboat agreements reflect an implied price of approximately $40.2m per vessel and an implied effective interest of approximately 7%,” the company said.
Financial whizz-kid
Navios Partners funds those newbuildings through elaborate financial transactions.
On Wednesday, Navios Partners unveiled concluding four separate loans with banks worth about $290m in June alone to refinance 36 of its vessels.
As finance costs more than doubled year-on-year to $68.9m in the first half, amid higher interest rates, chief executive Frangou reiterated a pledge to continue reducing the company’s leverage.
Time charter equivalent earnings for tankers and container ships rose to their highest level on record for the company, at $30,947 and $35,466 per day respectively.
Bulkers also rebounded from a two-year low they had dropped in the first quarter, rising by 43% to $15,715 per day. The reading, however, was still 36% down year-on-year.
Navios Partners maintained its dividend steady for the 13th consecutive quarter at $0.05 per common unit.
Major unitholders of the company as of mid-March were affiliated with Navios Holdings with a 10.5% stake, Frangou herself with 5.1% and private equity fund Pilgrim Global ICAV with 10.2%.
The company’s share closed trading at $22.69 in New York on Tuesday, giving it a market capitalisation of $685m. That is far below the $3.73bn net asset value of the company’s fleet as of the end of June.
