Navios Maritime Acquisition suffers loss

May 11 2018

Navios Maritime Acquisition Corp suffered a revenue fall of $18.3 mill, or 28.4%, to $46.2 mill, in the first quarter of this year, compared to $64.5 mill for the same period of 2017.

The fall was mainly attributable to a drop in the market rates during 1Q18, compared to 1Q17.

The average daily TCE rate, decreased to $14,205 for 1Q18, from $19,475 for 1Q17.

The company suffered a 1Q18 net loss of $24.5 mill, compared to a net income of $5.6 mill for 1Q17.

This decrease was mainly due to a: (a) $22.4 mill fall in Adjusted EBITDA; (b) $6 mill of negative effect on equity/ (loss) in net earnings of affiliated companies, relating to the sale of the ‘Shinyo Kannika’ by Navios Midstream; (c) $0.7 mill increase in direct vessel expenses; (d) $0.4 mill drop in interest income; (e) $0.3 mill of non-cash stock-based compensation; (f) $0.3 mill write-off of deferred finance costs; and (g) $0.1 mill increase in interest expense and finance cost.

Adjusted EBITDA fell by about $22.4 mill to $15.0 mill for 1Q18, compared to $37.4 mill for the same period of 2017.

The drop was mainly due to: (a) an $18.3 mill decrease in revenue; (b) a $2.6 mill increase in timecharter expenses mainly due to the accrued backstop commitment to Navios Midstream; (c) a $1.1 mill decrease in equity /(loss) in net earnings of affiliated companies (excluding the $6 mill of negative effect on equity/ (loss) in net earnings of affiliated companies, relating to the sale of the ‘Shinyo Kannika’; (d) a $0.2 mill increase in other expense, net; and (e) a $0.1 mill increase in general and administrative expenses, excluding stock-based compensation.

Angeliki Frangou, chairman and CEO, said, “I am pleased with the results of the first quarter. In a difficult market, we took measures to preserve and increase our liquidity, reduce operating costs and position our company for the eventual upturn in rates. Our operating initiatives created about $35 mill in 2018 liquidity, including the net proceeds from a $44.5 mill sale of a VLCC and a refinancing that resulted in the elimination of debt maturities for the next 13 months.

“In addition, we fixed 77.2% of our available days for the year, of which 32.3% include upside through profit sharing arrangements. We are also returning capital to stockholders, both through a dividend, providing a 11% current yield, and share repurchases, which year to date provided an additional 4% return,” she said.

On 31st March, 2018, Navios Acquisition agreed a $71.5 mill sale and leaseback to refinance the outstanding balance on the existing facility on four product tankers. The proceeds were received in April, 2018 and have been used to extinguish $69.25 mill of debt.

This agreement provides for 24 quarterly payments of $1.5 mill each, plus interest at LIBOR plus 305 bps per annum. Navios Acquisition has an obligation to purchase the vessels at the end of the sixth year for a total of $35.8 mill.

The company claimed that it had no further maturities on its credit facilities for the next 13 months.

Navios Acquisition also fixed its vessel fees under its existing management agreement with Navios Tankers Management, a wholly-owned subsidiary of Navios Maritime Holdings, for an additional two-year period until 28th May, 2020, following the expiration of the current fixed fee period.

The daily fee agreed was: (a) $6,500 per MR2; (b) $7,150 per LR1; and (c) $9,500 per VLCC. The increase represents a weighted average increase of 1.2% in the management fees of the fleet. Drydocking expenses are reimbursed at cost for all vessels.

On 29th March, 2018, the company sold the 2009-built VLCC ‘Nave Galactic’ to Navios Maritime Midstream Partners for $44.5 mill. The gain on sale of the vessel amounted to $0.03 mill.

As a result of this transaction, ‘Nave Galactic’ has been substituted by ‘Nave Equinox’ and ‘Nave Pyxis’, two MR2s, as collateral under the 8 1/8% secured bond due 2021. On 23rd March, 2018, Navios Acquisition prepaid $26.8 mill, being the respective tranche of the facility for the two MRs.


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