Navios Maritime Acquisition Corporation (NYSE:NNA) Q1 2020 Earnings Conference Call - Final Transcript

May 06, 2020 • 08:30 am ET


Navios Maritime Acquisition Corporation (NYSE:NNA) Q1 2020 Earnings Conference Call - Final Transcript


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Differ from the forward-looking statements. Such risks are more fully discussed in Navios Acquisition's filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks. Navios Acquisition does not assume any obligations to update the information contained in this conference call.

The agenda for today's conference call is as follows, Mrs. Frangou will offer opening remarks; then Mr. Petrone will give an operational update and industry overview; next, Mr. Korres will review Navios Acquisition's financial results; and lastly, we will open the call to take questions.

Now I turn the call over to Navios Acquisition's Chairman and CEO, Mrs. Angeliki Frangou. Angeliki?

Angeliki N. Frangou

Thank you, Doyce, and good morning to all of you joining us on today's call. I begin by saying how proud I'm of the entire Navios family during the fearful time of uncertainty. We provide an essential service. At any given time, our vessels at sea carry over 1,000 people, keeping these vessels moving in and out of granting countries with an ever-changing set of rules and problems, often requires immediate input for many disciplines.

The manager of our vessels has done a magnificent job keeping our fleet functioning during this time of crisis, while also taking the necessary measures to ensure safety of its employees.

I'm pleased with our results for the first quarter of 2020. During the quarter, Navios acquisition recorded revenue of $97.9 million and adjusted EBITDA of $56.2 million. Representing increases of about 27% and 36%, respectively, over Q1 2019. NMA also reported adjusted net income of $14.9 million or $0.95 per share for the first quarter. We declared a quarterly distribution of $0.30 per share for the first quarter.

The oil markets have been significantly impacted by large supply shock due to the recently resolved oil price war between Russia and Saudi Arabia, and unpresented demand shock related to the ongoing COVID-19 pandemic. Stay at home orders have later decreased global demand and increase in floating storage, not only on the crude oil, but also for products. Our chartering strategy is protect -- is focused on protecting the downside, while capturing as much upside as possible. Our tactics evolve as what we were able to fully obtain in the past such as profit sharing is no longer easily available today.

Further, fixed investment we've made today reduces the proportion of upside we are able to capture, which we estimate to be about 55% to a market rate at above $40,000 per day.

Slide four presents some of the company highlights. NMA has a core fleet of 46 diverse tankers and an average age of 10 years. We recently added five vessels to our fleet by liquidating Navios Europe I. We also have an investment in Navios Europe II, which owns 14 vessel fleet and is expected to be liquidating in Q2 of 2020. Our receivables of Navios Europe II, are expected to be transformed into steel and cash.

Slide five highlights a fragile