Earnings Transcript for NM - Q4 Fiscal Year 2020

Operator: Thank you for joining us on Navios Maritime Holdings Fourth Quarter and Full Year 2020 Earnings Conference Call. With us today from the company are Chairman and CEO, Ms. Angeliki Frangou; Chief Financial Officer, Mr. George Achniotis; Vice Chairman, Mr. Ted Petrone; and Senior Vice President of Strategic Planning, Mr. Ioannis Karyotis. As a reminder, this conference call is being webcast. To access the webcast, please go to the Investors section of Navios Maritime Holdings website at www.navios.com. You'll see the webcast link in the middle of the page and a copy of the presentation referenced in today's earnings conference call will also be found there. Now I will review the Safe Harbor statement. This conference call could contain forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995 about Navios Holdings. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Navios Holdings' management and are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements.

Angeliki Frangou: Thank you, Doris, and good morning to all of you joining us on today’s call. I am pleased with the results for the fourth quarter and full year 2020. For the full year of 2020, Navios Holding reported revenue of $416.7 million, and net debt-to-EBITDA of $153.4 million. For the fourth quarter, Navios Holdings reported revenue of $102.4 million and adjusted EBITDA of $37.6 million. Although drybulk demand in the first half of 2020 was hurt by the global pandemic and many economy shutdown, fiscal stimulus and other policy measures helped global economies rebound in the second half of 2020 and throughout Q1 of 2021. As the global vaccine rollout continues, we believe that inoculation along with the policy measures taken to-date with proper economic activity, and indeed the IMF recently increased its forecast for 2021 GDP growth. Consequently, we are optimistic about the demand for drybulk vessels throughout 2021. Please turn to Slide 4. Navios Logistics continued to grow its port business, developing critical infrastructure for transshipping minerals and grain. Navios Logistics has grown into a leading infrastructure and logistics company in the Hidrovia religion. In 2020, the company generated about $92 million in adjusted EBITDA and maintains a 56% net debt-to-book capitalization for the full year of 2020. Navios Logistics also continues to pursue the process of becoming publicly listed. The stability of the underlying business can be seen in the trading levels of the bond, which trade at a premium to par to yield around 6.3%. In 2021, Navios Partners acquired Navios Containers. This large company is a top 10 publicly listed company in terms of dry cargo fleet. NMM has about $900 million in remaining contracted revenue and low level at 40% net debt-to-book capitalization as of Q4. Lastly, Navios acquisition at tanker company generated about $190 million in 2020 EBITDA and has about $500 million in long-term contracted revenue.

George Achniotis : Thank you, Angeliki. Please turn to Slide 9 for a review of the Navios Holdings’ financial highlights for Q4 and the full year 2020. Adjusted EBITDA for the quarter was $37.6 million, compared to $74.7 million in Q4 of ‘19. EBITDA and net loss for the fourth quarter were adjusted to exclude $60.5 million impairment losses relating to some of our vessels and $13.4 million impairment loss relating to our investment in Navios acquisition. EBITDA and net loss for the fourth quarter of 2019 were adjusted to exclude $130.6 million impairment losses relating to some of our vessels. The decrease in adjusted EBITDA is mainly attributable to the lower time charter equivalent rate achieved in the quarter, compared to last year and $13.7 million gained from the repurchase of our bonds in Q4 of 2019. In Q4 of 2020, we also had a lower contribution from our investment in Navios South American Logistics and our affiliates, mainly due to M&A.

Ioannis Karyotis : Thank you, George. Slide 13 provides an overview of Navios Logistics, which as we know is a consolidated subsidiary of Navios Holdings and a reportable segment in Navios Holdings’ financial statements. Navios Logistics operates three port terminals, which are complemented by our barge fleet for river transportation, and product tanker fleet for coastal cabotage trade. As we know from our recent press release, we commenced the process for a potential registered public offering in the United States and the B3 stock exchange in Brazil, subject to market conditions and other factors in each of those markets. As a result, we are in a quiet period and will not be answering questions with respect to Navios Logistics business or financial results. Navios Logistics has transitioned its financial reporting from U.S. GAAP to IFRS starting from the year-ended December 31, 2020. As a result, all of this discussion will be in IFRS. Our 2020 adjusted EBITDA was $91.8 million. Last year, we agreed to transport 1.5 million tons of iron ore per year for Vetorial for a one-year period, and an option to extend for a six-month period. Due to adverse navigation conditions caused by low water levels in the Hidrovia River system last year, only about 62,000 tons were actually transshipped in 2020. This year, since shipments have resumed, as navigation conditions improved. Vale recently notified us that they expect to transship $1.7 million of minerals through our port in 2021, compared to approximately 1.2 million tons moved in 2020. Our contract with Vale guarantees a minimum quantity of 4 million tons annually. We recently loaded the first ever baby Capesize vessel of 120,000 dead weight domes at the Navios iron ore terminal. Our terminal is the only dedicated independent iron ore transshipment facility in the region. In addition, we are the only facility that is capable of receiving a vessel of that size, providing a significant trade cost advantage over other facilities. Management litigation, the Vetorial contract and other discussions we're having for logistic services are signs of increasing exports of minerals through the Hidrovia River System. All of these should benefit or port terminal and the batch business overall.

Ted Petrone : Thank you Ioannis. Please turn to Slide 16. Slide 16 highlights our ESG initiatives. Maritime shipping is the most environmentally-friendly means of transportation. As it is the most energy and carbon-efficient mode of transport, we aspire to have zero emissions by 2050. In this process, we have been pioneering and are adopting certain environmental regulations up to two-years in advance, and we aim to be one of the first fleets to achieve full compliance. Navios is a socially conscious group whose core values include diversity, inclusion and safety.

Angeliki Frangou: Thank you, Ted. This concludes our formal presentation. We open the call to questions.

Operator:

Angeliki Frangou: Thank you. This complete Q4 results. IMF is estimating a strong world growth of about 6% which is going to be very beneficial to commodities iron ore and grain as well as the drybulk. With the 52% open end index days, this provides us a lot of exposure to the market -- to the spot market and we will enjoy market upside for 2021. Thank you. This completes our presentation.

Operator: Thank you. This does conclude today's conference call. You may now disconnect.