Navios Maritime reports surge in third quarter profits

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2007

Navios Maritime Holdings Inc., a leading vertically integrated global shipping company specializing in the dry-bulk shipping industry, today reported its financial results for the quarter ended September 30, 2007.Ms. Angeliki Frangou, Chairman and CEO of Navios, stated: ''In the third quarter, we delivered strong financial performance, increasing EBITDA by 65%, net income by 116% and revenue by 318%. We also added significantly to the Navios group fleet by committing to acquire five capesize vessels, two of which have already been chartered out for five years, and securing 13 vessels on long-term charter-in contracts. ''Financial HighlightsNavios grew EBITDA by 65%, to $57.9 million in the third quarter of 2007 from $35.0 million in the third quarter in 2007. Net income grew by 116% to $36.5 million from $16.9 million. Revenue grew by 318% to $212.9 million from $50.9 million.Revenue: Revenue increased to $212.9 million for the three month period ended September 30, 2007 as compared to the $50.9 million for the same period of 2006. Revenue from vessel operations increased by approximately $162.4 million, or 340%, to $210.1 million for the three month period ended September 30, 2007 from $47.7 million for the same period of 2006. This increase is mainly attributable to (a) an increase in the number of operating days, (b) improvement in the market resulting in higher charter-out daily hire rates in the third quarter of 2007 as compared to the same period of 2006, and (c) an increase in the number of Contracts of Affreightment (''COAs'') serviced by Navios (acquired as part of the acquisition of Kleimar).Revenue from the port terminal decreased by $0.4 million to $2.8 million for the three month period ended September 30, 2007 as compared to $3.2 million in the same period of 2006. This is due to port terminal throughput volume decrease of approximately 13% to 676,000 tons for the three month period ended September 30, 2007 from 777,000 tons for the same period in 2006.Gains on FFAs: Income from Forward Freight Agreements (''FFAs'') decreased by $5.2 million to a gain of $10.2 million during the three month period ended September 30, 2007 as compared to $16.0 million gain for the same period in 2006.EBITDA: EBITDA increased by $22.9 million to $57.9 million for the three month period ended September 30, 2007 as compared to $35.0 million for the same period of 2006. The increase is mainly attributable to the increase in Revenue by $162.0 million from $50.9 million in the third quarter of 2006 to $212.9 million in the same period of 2007. The above increase was mitigated mainly by the (a) decrease in FFA gains by $5.8 million from $16.0 million in the third quarter of 2006 to $10.2 million in the same period of 2007, (b) increase in time charter and voyage expenses by $132.6 million from $21.8 million in the third quarter of 2006 to $154.4 million in the same period of 2007, (c) increase in the direct vessels expenses by $1.3 million due to the expansion of the owned fleet from 16 vessels in the third quarter of 2006 to 19 vessels in the same period of 2007, and (d) increase in general and administrative expenses by $0.9 million. Other categories (other income/expenses, income from investments in finance leases, income from affiliate companies, etc.) reflected a positive variance of $1.5 million in the third quarter of 2007 relative to the same period in 2006.Net Income: Net income for the third quarter ended September 30, 2007 was $36.5 million as compared to $16.9 million for the comparable period of 2006. The resultant increase of Net income was primarily due to the $22.9 million increase in EBITDA partially mitigated by a $1.0 million increase in net interest expense, a $0.1 increase in amortization of deferred dry dock and special survey costs and a $2.2 million increase in deferred income taxes calculated for Kleimar.Liquidity: Navios' cash and cash equivalents balance (including restricted cash) on September 30, 2007 was $291.6 million. Navios also has the ability to draw up to $120 million on its revolving credit facility.Navios earns revenue from owned and chartered-in vessels, COAs and port terminal operations.Revenue for the nine month period ended September 30, 2007 was $449.9 million as compared to $153.6 million for the same period of 2006. Revenue from vessel operations increased by approximately $295.8 million or 202% to $442.2 million for the nine months ended September 30, 2007 from $146.4 million for the same period of 2006. This increase is mainly attributable to the (a) increase in the operating days, (b) improvement in the market resulting in higher charter-out daily hire rates in the first nine months of 2007 as compared to the same period of 2006, and (c) increase in the number of COAs serviced by Navios (acquired as part of the acquisition of Kleimar).Revenue from port terminal operations for the nine months ended September 30, 2007 was $7.7 million as compared to $7.2 million in the same period of 2006. This increase in Revenue is attributable to increased throughput for the nine months ended September 30, 2007 of 1.9 million tons as compared to 1.8 million tons in the same period of 2006.EBITDA was $135.1 million for the first nine months ended September 30, 2007 as compared to $84.2 million for the same period of 2006. This $50.9 million increase in EBITDA is mainly attributable to the (a) gain in FFA trading of $20.3 million in the first nine months of 2007 versus a $19.4 million gain in the same period last year, resulting in a favorable FFA variance of $0.9 million and (b) increase in revenue by $296.3 million from $153.6 million in the first nine months of 2007 to $449.9 million in the same period of 2007. The above increase was mitigated mainly by the (a) increase in time charter and voyage expenses by $239.8 million from $65.2 million in the first nine months of 2007 to $305.0 million in the same period of 2007, (b) increase in the direct vessels expenses by $6.6 million due to the expansion of the owned fleet from 16 vessels in the first nine months of 2007 to 19 vessels in the same period of 2007, and (c) increase in general and administrative expenses by $2.2 million. Other categories (other income/expenses, income from investments in finance leases, income from affiliate companies, etc.) reflected a positive variance of $2.3 million in the first nine months of 2007 relative to the same period in 2006.Net income for the nine month period ended September 30, 2007 was $74.5 million as compared to $26.8 million for the comparable period of 2006. The resultant increase of Net income was primarily due to the $50.9 million increase in EBITDA and a $6.1 million decrease in depreciation and amortization. This was mitigated by a $5.0 million increase in net interest expense, a $4.0 million increase in deferred income taxes calculated for Kleimar and a $0.3 million increase in amortization of deferred dry dock and special survey costs.Time Charter CoverageNavios has extended its long-term fleet employment by recently agreeing to charter out vessels for periods ranging from three to ten years. As a result, Navios has currently fixed 100.0%, 91.6%, 54.0% and 32.0% of available days in 2007, 2008, 2009 and 2010, respectively, of its fleet (excluding Kleimar's vessels, which are primarily utilized to fulfill COAs). This represents contracted revenue (net of commissions) from the current charter agreements of $224.0 million, $254.0 million, $170.9 million and $138.8 million, for 2007, 2008, 2009 and 2010, respectively. Although these charter payments are based on contractual charter rates, the contracts are subject to performance and reflect an estimate of off-hire days for periodic maintenance.The average contractual daily charter-out rate for the core fleet (excluding Kleimar's vessels, which are primarily utilized to fulfill COAs) is $21,479, $24,044, $25,780 and $28,455 for 2007, 2008, 2009 and 2010, respectively. The average daily charter-in rate for the active long-term charter-in vessels for the first nine months of 2007 was $9,519 (excluding Kleimar's vessels). Navios's board of directors declared a quarterly cash dividend for the period ended September 30, 2007 of $.0666 per share, payable on December 3, 2007 to record holders on November 19, 2007.