Navios Maritime Partners swelled its fleet of 150 vessels after swallowing up its sister companies in the tanker and container ship spaces.

But one thing about the company has not grown: its quarterly dividend, which stands at just a nickel per share.

Navios Partners’ earnings decline due to larger fleet costs
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Asked about the potential for growing these payments on Tuesday, chief executive Angeliki Frangou pointed to other priorities: low debt, a major newbuilding programme and acting on opportunities that arise in the market.

Questions over whether New York-listed Navios Partners should hi ke its payout came after the owner of bulkers, tankers and container ships reported a lower-than-expected, $85.7m profit for the first quarter.

“The container ship and dry bulk markets remain firm, tanker rates are on the rise and NMM has $2.8bn in contracted revenue,” said Jefferies analyst Chris Robertson in an earnings call, referring to Navios Partners by its ticker symbol.

And yet the 5-cent quarterly dividend that the company has paid out since the middle of 2020 represents just 1.8% of the company’s earnings per share.

“With units trading well below NAV [net asset value], how are you thinking about returning capital to unitholders at this point?” he asked, referring to Navios Partners’ investors as unitholders rather than shareholders because of its master limited partnership structure.

Rather than focusing on a big dividend, Navios is focused on “total return”, Frangou said.

Low debt, big orderbook

She said that what the company provides is a low loan-to-value ratio and a $1.3bn newbuilding orderbook with the potential to essentially replace the company’s entire fleet, which currently includes two dozen ships that are 15 to 20 years old.

The executive and major shareholder also pointed to Navios Partners’ ability, because of its diversified fleet, to allocate resources opportunistically, as with its April deal to acquire four LR2 product tanker newbuildings for $58.5m each.

Navios Partners earnings snapshot


 Q1 2022 Q1 2021
Revenue $237m $65.1m
Net income $85.7m $137m
Adjusted net income $85.7m $11.8m

“We are doing that constantly,” she said of the opportunistic use of capital. “We have been doing it across the board in the different segments, providing a total return to our investors.”

But Robertson still wanted to know whether the company, if its newbuilding ordering is done, might be in a position to eventually return capital to investors as it reaps the rewards of hot markets.

“Are you going to be more in cash harvesting mode now that the kind of firing on all three cylinders, and that could potentially be used for more capital returned to the unitholder?” he asked. “Or do you think there’s more growth from here in terms of the fleet?”

But with Frangou pointed to the importance of managing the 22-vessel newbuilding programme in its current shape and keeping a loan-to-value ratio low at a time when the Russia-Ukraine invasion, high interest rates and continued Covid-19 impacts are providing a backdrop of uncertainty.

“We need to be prudent because we are really at the crossroads of different events. Our priorities are low leverage that will allow us to have the flexibility and to act on different opportunities,” she said.

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