Navios Maritime Acquisition Corporation Reports Financial Results

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Navios Maritime Acquisition Corporation (“Navios Acquisition”) (NYSE: NNA), an owner and operator of tanker vessels, reported its financial results on Wednesday for the second quarter and six months ended June 30, 2019.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition, stated, “I am pleased to report that for the second quarter of 2019, Navios Acquisition recorded revenue of $58.6 million and EBITDA of $24.5 million, increases of about 40% and 130%, respectively, over the second quarter of 2018. We continue to return capital to our investors and declared a quarterly distribution of $0.30 per share for the second quarter of 2019.”

Angeliki Frangou continued, “Navios Acquisition owns 41 diverse tankers with an average age of 8.1 years. We began renewing our VLCC fleet when values were weak. In 2019, we sold three of our oldest VLCCs and finalized the bareboat charters for three newbuild VLCCs for a 12-year period. These vessels will be delivered in 2020 and 2021. We view these bareboat deals as providing reasonable financing for new vessels, requiring no initial capital outlay. We are also pleased to announce that we expect to prepay the Term Loan B by the end of 2019. In addition to refinancing the Term Loan B, debt reduction is a priority, and we expect to reduce debt by 3%, or $33.4 million.”

HIGHLIGHTS — RECENT DEVELOPMENTS

Quarterly dividend: $0.30 per share

On July 24, 2019, the Board of Directors declared a quarterly cash dividend in respect of the second quarter of 2019 of $0.30 per share of common stock, which will be paid on October 9, 2019, to stockholders of record as of September 25, 2019. 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.

Debt developments

In June 2019, Navios Acquisition prepaid its existing bank financing of $21.5 million that was used to finance one product tanker. In August 2019, Navios Acquisition agreed to enter into certain financing arrangements with the purpose to refinance its Term Loan B facility of $196.8 million outstanding as of June 30, 2019, maturing in June 2020:

  1. $15.0 million sale and lease back arrangement that was drawn in August 2019 to finance one product tanker and has a maturity of five years. The sale and lease back arrangement is repayable over the five years in consecutive monthly installments of $0.2 million each and bears effective interest at LIBOR plus 345 bps per annum. The net proceeds of the sale and lease back arrangement were used to partially prepay the Term Loan B.
  2. up to $90.8 million sale and lease back arrangement that will finance six product tankers and will be repaid through a period of 6.4 years on average, in consecutive quarterly installments of up to $2.8 million each, with a repurchase obligation of up to $25.9 million in total. The sale and lease back arrangement bears interest at LIBOR plus a margin ranging from 335 bps to 355 bps per annum, depending on the vessel financed.
  3. up to $47.2 million sale and lease back arrangement that will finance three product tankers and will be repaid through a period of 5.5 years on average, in consecutive quarterly installments of up to $1.3 million each, with a repurchase obligation of up to $19.2 million in total. The sale and lease back arrangement bears interest at LIBOR plus a margin ranging from 350 bps to 360 bps per annum, depending on the vessel financed.
  4. up to $31.8 million bridge financing currently under discussion with a commercial bank that will finance one VLCC under short term maturity of less than a year.

Upon completion of the above transactions, Navios Acquisition expects to reduce its debt by approximately $33.4 million or 3% of outstanding debt.

Sale of one 2002-built VLCC

In August 2019, Navios Acquisition entered into an agreement to sell the Nave Electron, a 2002-built VLCC vessel of 305,178 dwt to an unaffiliated third party for a sale price of $25.3 million. The vessel is expected to be delivered to its new owners in September 2019.

Fleet employment

As of August 20, 2019, Navios Acquisition’s fleet consisted of a total of 41 vessels, of which 13 are VLCCs (excluding the Nave Electron which has been agreed to be sold and including three bareboat chartered-in VLCCs expected to be delivered in the third and fourth quarters of 2020 and the third quarter of 2021, respectively), 26 are product tankers, two are chemical tankers.

Currently, Navios Acquisition has contracted 83.1% of its available days on a charter-out basis for the second half of 2019, which are expected to generate revenues of approximately $73.6 million. The average contractual net daily charter-out rate for the 57.7% of available days that are contracted on base rate and/or base rate with profit sharing arrangements is expected to be $17,994.

Three month periods ended June 30, 2019 and 2018

Revenue for the three month period ended June 30, 2019 increased by $17.1 million, or 41.2%, to $58.6 million, as compared to $41.5 million for the same period of 2018. The increase was mainly attributable to an: (i) increase in revenue by $12.4 million due to the acquisition and resulting consolidation of Navios Midstream; and (ii) increase in market rates during the three month period ended June 30, 2019 as compared to the same period of 2018. Available days of the fleet increased to 3,503 days for the three month period ended June 30, 2019, as compared to 3,079 days for the three month period ended June 30, 2018, mainly as a result of the merger with Navios Midstream effective as of December 13, 2018. The time charter equivalent rate, or TCE Rate, increased to $15,525 for the three month period ended June 30, 2019, from $13,260 for the three month period ended June 30, 2018.

Time charter and voyage expenses for the three month period ended June 30, 2019 decreased by $2.2 million, or 34.1%, to $4.2 million, as compared to $6.4 million for the same period of 2018. The decrease was mainly attributable to $5.7 million of backstop commitment incurred in the three month period ended June 30, 2018; partially mitigated by a: (i) $2.9 million increase in bunkers consumption and voyage expenses due to spot voyages incurred in the period; and (ii) $0.5 million increase in brokers’ commission.

Net loss for the three month period ended June 30, 2019 was $16.6 million as compared to $22.1 million loss for the same period of 2018. The decrease in net loss was mainly due to a: (a) $13.8 million increase in EBITDA; and (b) $0.3 million increase in interest income; partially mitigated by a: (i) $4.4 million increase in interest expense and finance cost; (ii) $3.5 million increase in depreciation and amortization, due to the acquisition of Navios Midstream in December 2018; and (iii) $0.6 million increase in direct vessel expenses.

EBITDA for the three month period ended June 30, 2019 increased by $13.8 million to $24.5 million, as compared to $10.7 million for the same period of 2018. The increase in EBITDA was mainly due to a: (a) $17.1 million increase in revenue; (b) $2.6 million gain on sale of vessels; (c) $2.2 million decrease in time charter and voyage expenses; and (d) $0.7 million decrease in other expense; partially mitigated by a: (i) $3.6 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; (ii) $3.3 million decrease in equity/ (loss) in net earnings of affiliated companies; and (iii) $1.9 million increase in general and administrative expenses mainly due to the acquisition of Navios Midstream.

Six month periods ended June 30, 2019 and 2018

Revenue for the six month period ended June 30, 2019 increased by $48.1 million, or 54.9%, to $135.7 million, as compared to $87.6 million for the same period of 2018. The increase was mainly attributable to an: (i) increase in revenue by $29.5 million due to the acquisition and resulting consolidation of Navios Midstream; and (ii) increase in market rates during the six month period ended June 30, 2019 as compared to the same period of 2018. Available days of the fleet increased from 6,261 days for the six month period ended June 30, 2018, to 7,187 days for the six month period ended June 30, 2019. The TCE Rate increased from $13,740 for the six month period ended June 30, 2018, to $17,635 for the six month period ended June 30, 2019.

Time charter and voyage expenses for the six month period ended June 30, 2019 decreased by $3.2 million to $9.0 million as compared to $12.2 million for the six month period ended June 30, 2018. The decrease was attributable to $10.6 million of backstop commitment to Navios Midstream incurred in the six month period ended June 30, 2018; partially mitigated by a (ii) approximately $6.3 million increase in bunkers consumption and voyage expenses due to spot voyages incurred in the period; and (ii) a $1.1 million increase in broker commission costs.

Net loss for the six month period ended June 30, 2019 was $15.7 million as compared to $46.5 million loss for the same period of 2018. The decrease in net loss was due to a: (a) $46.7 million increase in EBITDA; and (b) $0.6 million increase in interest income; partially mitigated by: (i) an $8.0 million increase in interest expense and finance cost; (ii) a $7.1 million increase in depreciation and amortization, due to the acquisition of Navios Midstream in December 2018; and (iii) a $1.4 million increase in direct vessel expenses.

EBITDA for the six month period ended June 30, 2019 increased by approximately $46.7 million to $66.1 million, as compared to $19.5 million for the same period of 2018. The increase in EBITDA was mainly due to a: (a) $48.1 million increase in revenue; (b) $3.2 million gain on sale of vessels; (c) $3.2 million decrease in time charter and voyage expenses; (d) $1.8 million increase in equity/ (loss) in net earnings of affiliated companies; (e) $1.3 million increase in other income; and (f) $1.0 million decrease in other expense; partially mitigated by: (i) an $8.1 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; and (ii) a $3.9 million increase in general and administrative expenses.

Sea News, August 22