Navios Maritime Acquisition Corporation (“Navios Acquisition”) (NYSE: NNA), an owner and operator of tanker vessels, reported its financial results today for the fourth quarter and the year ended December 31, 2019.
Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition stated, “I am pleased with our results for the fourth quarter and full year of 2019. For the fourth quarter, Navios Acquisition recorded revenue of $85.4 million and EBITDA of $45.9 million, representing increases of about 46% and 149%, respectively, over the fourth quarter of 2018. For the full year of 2019, Navios Acquisition recorded revenue of $280.1 million and EBITDA of $128.4 million, representing increases of about 49% and 170%, respectively, over 2018. We declared a quarterly distribution of $0.30 cents per share for the fourth quarter. ”
Angeliki Frangou continued, “We believe that Navios Acquisition is well positioned for 2020. We have visibility on revenue through our chartering activities, with 69% of available days fixed in 2020 and about $400 million in long-term contracted revenue overall. We also have visibility on cost through the management agreement. However, we cannot determine the impact of the coronavirus in China on our market, as the fluid situation makes it impossible to assess accurately potential ramifications. “
HIGHLIGHTS — RECENT DEVELOPMENTS
Quarterly dividend: $0.30 per share
On January 22, 2020, the Board of Directors declared a quarterly cash dividend in respect of the fourth quarter of 2019 of $0.30 per share of common stock which will be paid on April 7, 2020 to stockholders of record as of March 5, 2020. The declaration and payment of any further dividends remain subject to the discretion of the Board of Directors and will depend on, among other things, Navios Acquisition’s cash requirements as measured by market opportunities and restrictions under its credit agreements and other debt obligations and such other factors as the Board of Directors may deem advisable.
Liquidation of Navios Europe Inc. (“Navios Europe I”)
During the quarter ended December 31, 2019, Navios Acquisition acquired five product tankers, two Long Range one (“LR1”) product tankers and three Medium Range one (“MR1”) product tankers for an acquisition cost of approximately $84.4 million in total, following the liquidation of Navios Europe I.
Debt developments
In December 2019, Navios Acquisition entered into a loan agreement with Deutsche Bank AG Filiale Deutschlandgeschäft of up to $32.5 million in order to finance two MR1s and one LR1 acquired from Navios Europe I. The facility is repayable in one single repayment on the last repayment date. The facility matures in June 2020 and bears interest at LIBOR plus 400 bps per annum.
Following the acquisition of the Star N and the Hector N MR1 product tankers from Navios Europe I, the vessels were offered as collateral under its ship mortgage notes , in substitution of an amount of $25.4 million that was held as cash collateral from the sale proceeds of the Nave Electron.
Continuous Offering Program
On November 29, 2019, Navios Acquisition entered into a Continuous Offering Program Sales Agreement, pursuant to which Navios Acquisition issued and sold from time to time through the sales agent common shares having an aggregate offering price of up to $25.0 million. As of December 31, 2019, Navios Acquisition issued 270,020 common shares and received net proceeds of $2.1 million.
Fleet employment
As of Februray 6, 2020, Navios Acquisition’s fleet consisted of a total of 46 vessels, of which 13 are VLCCs (including three bareboat chartered-in VLCCs expected to be delivered in the third and fourth quarters of 2020 and the third quarter of 2021), 31 are product tankers, two are chemical tankers.
Following the liquidation of Navios Europe I, Navios Acquisition acquired three MR1 product tankers and two LR1 product tankers. As per management agreement, management fees are fixed for two years commencing from January 1, 2020 at: (a) $6,825 per day per MR1 product tanker; and (b) $7,225 per day per LR1 product tanker vessel. The agreement also provides for a technical and commercial management fee of $50 per day per vessel and an annual increase of 3% after January 1, 2022 for the remaining period unless agreed otherwise. Drydocking expenses are reimbursed at cost for all vessels.
Currently, Navios Acquisition has contracted 68.8% of its available days on a charter-out basis for 2020, which are expected to generate revenues of approximately $179.2 million. The average base contractual net daily charter-out rate for the 58.6% of available days that are contracted on base rate and/or base rate with profit sharing arrangements is expected to be $19,334.
FINANCIAL HIGHLIGHTS
For the following results and the selected financial data presented herein, Navios Acquisition has compiled its consolidated statements of operations for the three month periods and years ended December 31, 2019 and 2018. The quarterly information for 2019 and 2018 was derived from the unaudited condensed consolidated financial statements for the respective periods.
Three month periods ended December 31, 2019 and 2018
Revenue for the three month period ended December 31, 2019 increased by $26.7 million, or 45.5%, to $85.4 million, as compared to $58.7 million for the same period of 2018. The increase was mainly attributable to an: (i) increase in revenue by $16.1 million due to the acquisition and resulting consolidation of Navios Midstream; (ii) increase in revenue by $1.0 million due to the acquisition of five product tankers of Navios Europe I in December 2019; and (iii) increase in market rates during the three month period ended December 31, 2019 as compared to the same period of 2018. Available days of the fleet increased to 3,429 days for the three month period ended December 31, 2019, as compared to 3,297 days for the three month period ended December 31, 2018, mainly as a result of the merger with Navios Midstream effective as of December 13, 2018 and as a result of the acquisition of five product tankers of Navios Europe I in December 2019. The time charter equivalent rate, or TCE Rate, increased to $22,484 for the three month period ended December 31, 2019, from $15,483 for the three month period ended December 31, 2018.
Time charter and voyage expenses for the three month period ended December 31, 2019 decreased by $1.5 million, or 15.2%, to $8.4 million, as compared to $9.8 million for the same period of 2018. The decrease was mainly attributable to approximately $2.2 million of backstop commitment incurred in the three month period ended December 31, 2018; partially mitigated by a: (i) $0.4 million increase in bunkers consumption and voyage expenses due to spot voyages incurred in the three month period ended December 31, 2019; and (ii) $0.4 million increase in brokers’ commission.
Net earnings for the three month period ended December 31, 2019 was $6.6 million as compared to $16.4 million loss for the same period of 2018. Net earnings was affected by the items described in the table above. Adjusted net earnings for the three month period ended December 31, 2019 was $5.0 million as compared to $14.0 million adjusted net loss for the same period of 2018. The increase in adjusted net earnings was mainly attributable to a $23.3 million increase in adjusted EBITDA; partially mitigated by a: (i) $1.9 million increase in interest expense and finance cost; (ii) $1.2 million decrease in interest income; (iii) $0.9 million increase in depreciation and amortization, due to the acquisition of Navios Midstream in December 2018 and $0.2 million increase in depreciation and amortization, due to the acquisition of five product tankers of Navios Europe I in December 2019; and (iv) $0.1 million increase in direct vessel expenses (in relation to amortization of dry dock and special survey cost).
Adjusted EBITDA affected by the items described in the table above, for the three month period ended December 31, 2019 increased by approximately $23.3 million to $44.2 million, as compared to $20.9 million for the same period of 2018. The increase in Adjusted EBITDA was mainly due to a: (a) $26.7 million increase in revenue; (b) $1.5 million decrease in time charter and voyage expenses; and (c) $1.5 million decrease in other expense; partially mitigated by a: (i) $2.9 million decrease in equity in net earnings of affiliated companies; (ii) $1.7 million increase in management fees mainly due to the acquisition of Navios Midstream in December 2018 and $0.5 million increase in management fees due to the acquisition of five product tankers of Navios Europe I in December 2019; (iii) $0.9 million increase in general and administrative expenses (excluding stock-based compensation and transaction costs in relation to the merger of Navios Midstream in the fourth quarter of 2018); and (iv) $0.5 million increase in direct vessel expenses (other than amortization of dry dock and special survey cost).
Year ended December 31, 2019 and 2018
Revenue for the year ended December 31, 2019 increased by approximately $92.2 million, or 49.0%, to $280.1 million, as compared to $188.0 million for the same period of 2018. The increase was mainly attributable to an: (i) increase in revenue by $62.2 million due to the acquisition and resulting consolidation of Navios Midstream; (ii) increase in revenue by $1.0 million due to the acquisition of five product tankers of Navios Europe I; and (iii) increase in market rates during the year ended December 31, 2019 as compared to the same period of 2018. Available days of the fleet increased from 12,735 days for the year ended December 31, 2018, to 14,107 days for the year ended December 31, 2019. The TCE Rate increased from $13,855 for the year ended December 31, 2018, to $18,248 for the year ended December 31, 2019.
Time charter and voyage expenses for the year ended December 31, 2019 decreased by $8.9 million to $22.7 million as compared to $31.6 million for the year ended December 31, 2018. The decrease was attributable to $20.1 million of backstop commitment to Navios Midstream incurred in the year ended December 31, 2018; partially mitigated by a: (i) $9.7 million increase in bunkers consumption and voyage expenses due to spot voyages incurred in the year ended December 31, 2019; and (ii) $1.7 million increase in broker commission costs.
Net loss for the year ended December 31, 2019 was $65.4 million as compared to $86.4 million loss for the same period of 2018. Net loss was affected by the items described in the table above. Adjusted net loss for the year ended December 31, 2019 was $29.3 million as compared to $76.8 million for the same period of 2018. The decrease in adjusted net loss was mainly due to a $74.7 million increase in adjusted EBITDA; partially mitigated by: (i) a $13.3 million increase in interest expense and finance cost; (ii) an $11.4 million increase in depreciation and amortization, due to the acquisition of Navios Midstream in December 2018 and $0.2 million increase in depreciation and amortization, due to the acquisition of five product tankers of Navios Europe I in December 2019; (iii) a $1.9 million increase in direct vessel expenses (in relation to amortization of dry dock and special survey cost); and (iv) a $0.3 million decrease in interest income.
Adjusted EBITDA affected by the items described in the table above, for the year ended December 31, 2019 increased by $74.7 million to $131.5 million, as compared to $56.8 million for the same period of 2018. The increase in Adjusted EBITDA was mainly due to: (a) a $92.2 million increase in revenue; (b) an $8.9 million decrease in time charter and voyage expenses; (c) a $2.7 million decrease in other expense; and (d) a $1.3 million increase in other income; partially mitigated by: (i) a $13.2 million increase in management fees due to the acquisition of Navios Midstream in December 2018 and to the amendment of the fees under the Management Agreement in May 2018 and $0.5 million increase in management fees due to the acquisition of five product tankers of Navios Europe I in December 2019; (ii) a $10.7 million decrease in equity in net earnings of affiliated companies (excluding the $6.0 million of negative effect on equity/ (loss) in net earnings of affiliated companies, relating to the sale of the Shinyo Kannika by Navios Midstream); (iii) a $5.5 million increase in general and administrative expenses (excluding stock-based compensation) and transaction costs in relation to the merger of Navios Midstream in the fourth quarter of 2018); and (iv) $0.5 million increase in direct vessel expenses (other than amortization of dry dock and special survey cost).
Source: Navios Maritime Acquisition Corporation
