Frangou increases revenue but suffers loss

Nov 08 2019


Navios Maritime Acquisition Corp saw an increase in revenue of $17.4 mill to $59 mill during the third quarter of this year, compared to $41.6 mill recorded for the same period of 2018.

The revenue rise was mainly attributable to an: (i) increase in revenue by $12.8 mill due to the acquisition and resulting consolidation of Navios Midstream; and (ii) increase in market rates during 3Q19, compared to the same period last year.

However, the company suffered a net loss of $56.4 mill in 3Q19, compared to a $23.4 mill loss for the same period last year. Adjusted net loss for the three month period was $16.2 mill,  compared to $23.1 mill for 3Q18.

The adjusted net loss decrease was mainly attributable to a: (a) $14 mill increase in adjusted EBITDA; and (b) $0.3 mill increase in interest income, partially mitigated by a: (i) $3.6 mill increase in interest expense and finance cost; (ii) $3.4 mill increase in depreciation and amortisation, due to the acquisition of Navios Midstream in December, 2018; and (iii) $0.4 mill increase in direct vessel expenses.

Available days of the fleet increased to 3,491 days for 3Q19,  compared to 3,178 days for 3Q18, mainly as a result of the merger with Navios Midstream effective from 13th December, 2018.

The average daily TCE rate increased to $15,349 for 3Q19, from $12,394 for 3Q18.

Adjusted EBITDA increased by about $14 mill to $23.9 mill, compared to $9.9 mill for 3Q18. This increase was mainly due to a: (a) $17.4 mill increase in revenue; (b) $4.2 mill decrease in timecharter and voyage expenses; and (c) $0.2 mill decrease in other expense; partially mitigated by a: (i) $3.5 mill increase in management fees due to the acquisition of Navios Midstream and to the amendment of the fees under the Management Agreement in May, 2018; (ii) $3.6 mill decrease in equity/ (loss) in net earnings of affiliated companies; and (iii) $0.6 mill increase in general and administrative expenses (excluding stock-based compensation) mainly due to the acquisition of Navios Midstream.

Revenue for the nine month period ended 30th September, 2019 increased by $65.5 mill to $194.7 mill, compared to $129.2 mill for the same period in the previous year.

This increase was mainly attributable to an: (i) increase in revenue by $46 mill, due to the acquisition and resulting consolidation of Navios Midstream; and (ii) increase in market rates during the nine month period, compared to the same period in 2018.

The average daily TCE rate increased from $13,287 to $16,888 for the first nine months of this year.

Net loss for the period was $72.1 mill, compared to $69.9 mill loss for the same period of 2018. Adjusted net loss was $34.2 mill, compared to $62.8 mill for the same period of 2018.

The adjusted net loss decrease was mainly due to a: (a) $51.4 mill increase in adjusted EBITDA; and (b) $1 mill increase in interest income, partially mitigated by: (i) an $11.4 mill increase in interest expense and finance cost; (ii) a $10.5 mill increase in depreciation and amortisation, due to the acquisition of Navios Midstream; and (iii) a $1.9 mill increase in direct vessel expenses.

Adjusted EBITDA for the nine month period increased by $51.4 mill to $87.3 mill, compared to $35.9 mill for the same period of 2018.

Chairman and CEO, Angeliki Frangou, stated, “I am pleased with our results for the third quarter of 2019. Navios Acquisition recorded revenue of $59 mill and Adjusted EBITDA of $23.9 mill, reflecting increases of about 42% and 142%, respectively, over the third quarter of 2018. We declared a quarterly distribution of $0.3 cents per share for the third quarter of 2019, for a current yield of about 16%.

“In a robust tanker rate market, we have a good mix of fixed revenue and market exposure. We have cash flow visibility from $430 mill in long-term contracted revenue. About 43% of available days in 2020 are fixed, almost half of which with profit sharing.

“At the same time, we are positioned to capture upside, as 61.7% of available days in 2020 are open or on floating rates. All of our delivered tankers are on the water generating revenue, as we have no tankers now being fit with scrubbers,” she said.

In August, 2019, Navios Acquisition extended the duration of its existing management agreement with Navios Tankers Management until 1st January, 2025.

In addition, management fees were fixed for two years commencing from 1st January, 2020 at: (a) $6,825 per day per MR2; (b) $7,225 per day per LR1; and (c) $9,650 per day per VLCC.

The agreement also provides for a technical and commercial management fee of $50 per day per vessel and an annual increase of 3% after 1st January, 2022 for the remaining period unless agreed otherwise. Drydocking expenses are reimbursed at cost for all vessels.

At the same time, the existing administrative services agreement was extended with the manager until 1st January, 2025, which provides for allocable general and administrative costs.

Currently, Navios Acquisition has contracted 42.7% of its available days on a charter-out basis for 2020, which are expected to generate revenues of approximately $112.1 million. The average base contractual net daily charter-out rate for the 38.3% of available days that are contracted on base rate and/or base rate with profit sharing arrangements is expected to be $20,917.

 



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