Navios Maritime Midstream Partners L.P. Reports Financial Results for the Second Quarter and Six Months Ended June 30, 2015
- Quarterly Cash Distribution of
$0.4125 per unit;$1.65 per unit annualized - 10% expected increase in Cash Distribution to
$0.4525 per unit per quarter through mid-2016;$1.81 per unit annualized - Net Income:
$5.4 million in Q2;$11.7 million for the six months - EBITDA:
$14.0 million in Q2;$26.6 million for the six months - Operating Surplus:
$10.3 million in Q2;$19.7 million for the six months - Profit sharing:
$1.4 million of profit sharing in Q2;$2.4 million for the six months - Acquired two VLCCs with long-term employment
RECENT DEVELOPMENTS
Quarterly Cash Distribution
The Board of Directors of Navios Midstream declared a cash distribution for the second quarter of 2015 of
Cash Distribution growth
Following the acquisition of the two VLCCs discussed below, Navios Midstream anticipates increasing cash distribution for the third quarter of 2015 by 2.4% to
The total unit distribution coverage is expected to be about 1.1x with significant upside through profit sharing arrangement on five of six of our vessels.
Term Loan B: In
The net proceeds of the Term Loan B were used as follows: i)
Vessel Acquisitions: Concurrently with the closing of the Term Loan B, Navios Midstream took delivery of two VLCCs, the C. Dream, a 2000-built VLCC of 298,570 dwt and the Nave Celeste, a 2003-built VLCC of 298,717 dwt, for an aggregate purchase price of
The Nave Celeste is employed at a net charter rate of
Profit Share
During the second quarter of 2015, Navios Midstream benefited from the improved VLCC spot market and recognized
Long-Term Cash Flow
Navios Midstream has entered into long-term time charter-out agreements for its vessels with a remaining average term of 5.8 years, which are expected to provide a stable base of revenue and distributable cash flow. Navios Midstream has currently contracted out 100% of its available days for each of the years 2015 and 2016, expecting to generate revenues of approximately
EARNINGS HIGHLIGHTS
For the following results and the selected financial data presented herein, Navios Midstream has compiled condensed consolidated and combined statements of operations for the three and six months ended
(in $'000 except per unit data) | Three Month Period ended June 30, 2015 (unaudited) |
Three Month Period ended June 30, 2014 (unaudited)(1) |
Six Month Period ended June 30, 2015 (unaudited) |
Six Month Period ended June 30, 2014 (unaudited)(1) |
||||||||||||
Revenue | $ | 18,350 | $ | 15,695 | $ | 35,053 | $ | 31,352 | ||||||||
Net income/(loss) | 5,394 | (679 | ) | 11,706 | (1,416 | ) | ||||||||||
Adjusted net income/(loss)(2) | 7,079 | (679 | ) | 13,391 | (1,416 | ) | ||||||||||
EBITDA | 13,987 | 11,603 | 26,600 | 23,267 | ||||||||||||
Earnings per common unit (basic and diluted) | 0.26 | -- | 0.59 | -- | ||||||||||||
Adjusted earnings per common unit (basic and diluted)(2) | 0.34 | -- | 0.67 | -- | ||||||||||||
Operating Surplus | 10,299 | -- | 19,723 | -- | ||||||||||||
Maintenance and replacement capital expenditure reserve | (2,354 | ) | -- | (4,502 | ) | -- |
(1) Prior to the IPO in November 2014, Navios Midstream's four VLCC fleet was part of Navios Acquisition's fleet. All figures prior to the IPO are not directly comparable to periods after the IPO. |
(2) Net income and Earnings per common unit (basic and diluted) for the three and the six month periods ended June 30, 2015 have been adjusted to exclude the amount of $1,685 representing a write-off of deferred finance cost associated with debt prepayment. |
Three month periods ended
Revenue for the three month period ended
EBITDA increased by
The reserve for estimated maintenance and replacement capital expenditures for the three month period ended
Navios Midstream generated an Operating Surplus for the three month period ended
Net income for the three month period ended
Six month periods ended
Revenue for the six month period ended
EBITDA increased by
The reserve for estimated maintenance and replacement capital expenditures for the six month period ended
Navios Midstream generated an Operating Surplus for the six month period ended
Net income for the six month period ended
Fleet Employment Profile
The following table reflects certain key indicators of Navios Midstream's core fleet performance for the three and six month periods ended
Three Month Period ended June 30, 2015 (unaudited) |
Three Month Period ended June 30, 2014 (unaudited) |
Six Month Period ended June 30, 2015 (unaudited) |
Six Month Period ended June 30, 2014 (unaudited) |
|||||||||||||
FLEET DATA | ||||||||||||||||
Available Days(1) | 390 | 364 | 750 | 724 | ||||||||||||
Operating Days(2) | 390 | 364 | 750 | 722 | ||||||||||||
Fleet Utilization(3) | 100.0 | % | 100.0 | % | 100.0 | % | 99.7 | % | ||||||||
Vessels operating at period end | 6 | 4 | 6 | 4 | ||||||||||||
AVERAGE DAILY RESULTS | ||||||||||||||||
Time Charter Equivalent (per day)(4) | $ | 46,545 | $ | 42,379 | $ | 46,234 | $ | 42,738 | ||||||||
(1) | Available days for the fleet represent total calendar days the vessels were in Navios Midstream's possession for the relevant period after subtracting off-hire days associated with scheduled repairs, dry dockings or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which a vessel is capable of generating revenues. | |
(2) | Operating days is the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues. | |
(3) | Fleet utilization is the percentage of time that Navios Midstream's vessels were available for revenue generating available days, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure efficiency in finding employment for vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs, drydockings or special surveys. | |
(4) | Time Charter Equivalent ("TCE") rates: TCE rates are defined as voyage and time charter revenues less voyage expenses during a period divided by the number of available days during the period. The TCE rate is a standard shipping industry performance measure used primarily to present the actual daily earnings generated by vessels on various types of charter contracts for the number of available days of the fleet. | |
Conference Call details:
Navios Midstream's management will host a conference call today,
Conference Call details:
Call Date/Time:
Call Title: Navios Midstream Q2 2015 Financial Results Conference Call
US Dial In: +1.866.703.4207
International Dial In: +1.636.692.6440
Conference ID: 7509 0421
The conference call replay will be available two hours after the live call and remain available for one week at the following numbers:
US Replay Dial In: +1.800.585.8367
International Replay Dial In: +1.404.537.3406
Conference ID: 7509 0421
Slides and audio webcast:
There will also be a live webcast of the conference call, through the Navios Midstream's website (www.navios-midstream.com) under "Investors". Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
A supplemental slide presentation will be available on the Navios Midstream's website under the "Investors" section by
About
Forward-Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Navios Midstream's growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as "may", "expects", "intends", "plans", "believes", "anticipates", "hopes", "estimates", and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenue and time charters. Although the Navios Midstream believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Midstream. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the creditworthiness of our charterers and the ability of our contract counterparties to fulfill their obligations to us, tanker industry trends, including charter rates and vessel values and factors affecting vessel supply and demand, the aging of our vessels and resultant increases in operation and drydocking costs, the loss of any customer or charter or vessel, our ability to repay outstanding indebtedness, to obtain additional financing and to obtain replacement charters for our vessels, in each case, at commercially acceptable rates or at all, increases in costs and expenses, including but not limited to: crew wages, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance and general and administrative expenses, the expected cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business, potential liability from litigation and our vessel operations, including discharge of pollutants, general domestic and international political conditions, competitive factors in the market in which Navios Midstream operates; risks associated with operations outside
EXHIBIT 1 | ||||||
NAVIOS MARITIME MIDSTREAM PARTNERS L.P. | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(Expressed in thousands of U.S. Dollars) | ||||||
June 30, 2015 |
December 31, 2014 |
|||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 34,425 | $ | 30,877 | ||
Accounts receivable, net | 3,618 | 653 | ||||
Due from related parties | 3,800 | -- | ||||
Prepaid expenses and other current assets | 83 | 212 | ||||
Total current assets | 41,926 | 31,742 | ||||
Vessels, net | 411,282 | 320,229 | ||||
Intangible assets | 30,093 | 31,736 | ||||
Deferred dry dock and special survey costs, net | 1,475 | 1,955 | ||||
Total non-current assets | 442,850 | 353,920 | ||||
Total assets | $ | 484,776 | $ | 385,662 | ||
LIABILITIES AND PARTNERS' CAPITAL | ||||||
Current liabilities | ||||||
Accounts payable | $ | 942 | $ | 1,243 | ||
Accrued expenses | 1,984 | 4,174 | ||||
Due to related parties | -- | 736 | ||||
Deferred revenue | 2,494 | 1,938 | ||||
Current portion of long-term debt, net of deferred finance costs and discount | 636 | 10,022 | ||||
Total current liabilities | 6,056 | 18,113 | ||||
Long Term Debt, net of current portion, net of deferred finance costs and discount | 197,495 | 114,065 | ||||
Total non-current liabilities | 197,495 | 114,065 | ||||
Total liabilities | $ | 203,551 | $ | 132,178 | ||
Commitments and contingencies | -- | -- | ||||
Total partners' capital | ||||||
Common Unitholders (9,342,692 units issued and outstanding at June 30, 2015 and December 31, 2014) | 127,181 | 127,350 | ||||
Subordinated Series A Unitholders (1,592,920 units issued and outstanding at June 30, 2015 and none at December 31, 2014 ) | 27,526 | -- | ||||
Subordinated Unitholders (9,342,692 units issued and outstanding at June 30, 2015 and December 31, 2014) | 121,018 | 121,187 | ||||
General Partner (413,843 units issued and outstanding at June 30, 2015 and 381,334 issued and outstanding at December 31, 2014) | 5,500 | 4,947 | ||||
Total partners' capital | 281,225 | 253,484 | ||||
Total liabilities and partners' capital | $ | 484,776 | $ | 385,662 | ||
NAVIOS MARITIME MIDSTREAM PARTNERS L.P. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Expressed in thousands of U.S. Dollars, except per unit amounts) | ||||||||||||||||
Three Month Period ended June 30, 2015 (unaudited) |
Three Month Period ended June 30, 2014 (unaudited) |
Six Month Period ended June 30, 2015 (unaudited) |
Six Month Period ended June 30, 2014 (unaudited) |
|||||||||||||
Revenue | $ | 18,350 | $ | 15,695 | $ | 35,053 | $ | 31,352 | ||||||||
Time charter expenses | (197 | ) | (269 | ) | (377 | ) | (409 | ) | ||||||||
Direct vessel expenses | (289 | ) | (289 | ) | (578 | ) | (705 | ) | ||||||||
Management fees (entirely through related party transactions) | (3,705 | ) | (3,574 | ) | (7,125 | ) | (7,174 | ) | ||||||||
General and administrative expenses | (482 | ) | (249 | ) | (1,017 | ) | (502 | ) | ||||||||
Depreciation and amortization | (5,076 | ) | (4,878 | ) | (9,953 | ) | (9,755 | ) | ||||||||
Interest expenses and finance cost | (3,228 | ) | (7,115 | ) | (4,363 | ) | (14,223 | ) | ||||||||
Other income, net | 21 | -- | 66 | -- | ||||||||||||
Net income/ (loss) | $ | 5,394 | $ | (679 | ) | $ | 11,706 | $ | (1,416 | ) | ||||||
Net income | $ | 5,394 | $ | 11,706 | ||||||||||||
Earnings per unit (basic and diluted) | ||||||||||||||||
Common unitholders: | $ | 0.26 | $ | 0.59 | ||||||||||||
Subordinated Series A unitholders: | $ | 1.82 | $ | 3.63 | ||||||||||||
Subordinated unitholders: | $ | 0.26 | $ | 0.59 | ||||||||||||
NAVIOS MARITIME MIDSTREAM PARTNERS L.P. | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(Expressed in thousands of U.S. Dollars) | |||||||||
Six Month Period Ended June 30, 2015 (unaudited) |
Six Month Period Ended June 30, 2014 (unaudited) |
||||||||
OPERATING ACTIVITIES | |||||||||
Net income/ (loss) | $ | 11,706 | $ | (1,416 | ) | ||||
Adjustments to reconcile net income/ (loss) to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 9,953 | 9,755 | |||||||
Amortization of deferred finance fees and bond premium | 1,964 | 364 | |||||||
Amortization of dry dock and special survey costs | 578 | 705 | |||||||
Changes in operating assets and liabilities: | |||||||||
Decrease in prepaid expenses and other current assets | 129 | 142 | |||||||
Payment for Drydocking | (99 | ) | -- | ||||||
Increase in accounts receivable | (2,965 | ) | (51 | ) | |||||
Increase / (decrease) in accounts payable | 220 | (101 | ) | ||||||
(Decrease)/ increase in accrued expenses | (135 | ) | 152 | ||||||
(Decrease)/ increase in due to related parties | (4,190 | ) | 390 | ||||||
Increase in deferred revenue | 556 | -- | |||||||
Net cash provided by operating activities | 17,717 | 9,940 | |||||||
INVESTING ACTIVITIES | |||||||||
Acquisition of vessels | (72,252 | ) | -- | ||||||
Increase in due from related parties | -- | (30,395 | ) | ||||||
Net cash used in investing activities | (72,252 | ) | (30,395 | ) | |||||
FINANCING ACTIVITIES | |||||||||
Proceeds from Long term debt, net of deferred finance costs and discount | 198,081 | -- | |||||||
Loan repayment | (126,000 | ) | -- | ||||||
IPO expenses | (2,922 | ) | -- | ||||||
Dividend paid | (11,627 | ) | -- | ||||||
Proceeds from issuance of general partner units | 551 | -- | |||||||
Owner's net investment | -- | 13,854 | |||||||
Net cash provided by financing activities | $ | 58,083 | 13,854 | ||||||
Net increase/ (decrease) in cash and cash equivalents | 3,548 | (6,601 | ) | ||||||
Cash and cash equivalents, beginning of year | $ | 30,877 | 9,152 | ||||||
Cash and cash equivalents, end of year | $ | 34,425 | 2,551 | ||||||
Supplemental disclosures of cash flow information | |||||||||
Cash interest paid | $ | 2,375 | 14,008 | ||||||
Non-cash financing activities | |||||||||
Accrued IPO expenses | $ | 430 | -- | ||||||
EXHIBIT 2 |
Owned Vessels | Type | Built | Capacity (DWT) |
|||
Shinyo Kieran | VLCC | 2011 | 297,066 | |||
Shinyo Saowalak | VLCC | 2010 | 298,000 | |||
Shinyo Kannika | VLCC | 2001 | 287,175 | |||
Shinyo Ocean | VLCC | 2001 | 281,395 | |||
C. Dream | VLCC | 2000 | 298,570 | |||
Nave Celeste | VLCC | 2003 | 298,717 | |||
Option Vessels(1) | Type | Built | Capacity (DWT) |
|||
Nave Buena Suerte | VLCC | 2011 | 297,491 | |||
Nave Quasar | VLCC | 2010 | 297,376 | |||
Nave Galactic | VLCC | 2009 | 297,168 | |||
Nave Neutrino | VLCC | 2003 | 298,287 | |||
Nave Electron | VLCC | 2002 | 305,178 | |||
(1) | Navios Midstream has options, exercisable through November 18, 2016, to acquire up to five VLCCs at fair market value from Navios Maritime Acquisition Corporation. | |
EXHIBIT 3 |
Disclosure of Non-GAAP Financial Measures
1. EBITDA
EBITDA represents net income plus interest and finance costs plus depreciation and amortization and income taxes.
EBITDA is presented because Navios Midstream believes that EBITDA is a basis upon which liquidity can be assessed and present useful information to investors regarding Navios Midstream's ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. EBITDA is a "non-GAAP financial measure" and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in
While EBITDA is frequently used as a measure of operating results and the ability to meet debt service requirements, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.
2. Operating Surplus
Operating Surplus represents net income adjusted for depreciation and amortization expense, non-cash interest expense and estimated maintenance and replacement capital expenditures. Maintenance and replacement capital expenditures are those capital expenditures required to maintain over the long term the operating capacity of, or the revenue generated by, Navios Midstream's capital assets.
Operating Surplus is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in
3. Available Cash
Available Cash generally means for each fiscal quarter, all cash on hand at the end of the quarter:
- less the amount of cash reserves established by the Board of Directors to:
- provide for the proper conduct of Navios Midstream's business (including reserve for maintenance and replacement capital expenditures);
- comply with applicable law, any of Navios Midstream's debt instruments, or other agreements; or
- provide funds for distributions to the unitholders and to the general partner for any one or more of the next four quarters;
- provide for the proper conduct of Navios Midstream's business (including reserve for maintenance and replacement capital expenditures);
- plus all cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made after the end of the quarter. Working capital borrowings are generally borrowings that are made under any revolving credit or similar agreement used solely for working capital purposes or to pay distributions to partners.
Available Cash is a quantitative measure used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Available cash is not required by accounting principles generally accepted in
4. Reconciliation of Non-GAAP Financial Measures
Three Month Period ended June 30, 2015 ($ '000) (unaudited) |
Three Month Period ended June 30, 2014 ($ '000) (unaudited) |
Six Month Period ended June 30, 2015 ($ '000) (unaudited) |
Six Month Period ended June 30, 2014 ($ '000) (unaudited) |
|||||||||||||
Net cash provided by operating activities | $ | 8,011 | $ | 5,055 | $ | 17,717 | $ | 9,940 | ||||||||
Net increase/(decrease) in operating assets | 1,935 | 224 | 2,935 | (91 | ) | |||||||||||
Net decrease / (increase) in operating liabilities | 2,654 | (606 | ) | 3,549 | (441 | ) | ||||||||||
Net interest cost | 3,228 | 7,115 | 4,363 | 14,223 | ||||||||||||
Amortization of deferred finance cost and bond premium | (1,841 | ) | (185 | ) | (1,964 | ) | (364 | ) | ||||||||
EBITDA | $ | 13,987 | $ | 11,603 | $ | 26,600 | $ | 23,267 | ||||||||
Net cash provided by operating activities | $ | 8,011 | $ | 5,055 | $ | 17,717 | $ | 9,940 | ||||||||
Net cash used in investing activities | $ | (72,252 | ) | $ | (18,823 | ) | $ | (72,252 | ) | $ | (30,395 | ) | ||||
Net cash provided by financing activities | $ | 65,935 | $ | 6,927 | $ | 58,083 | $ | 13,854 | ||||||||
Three Month Period ended June 30, 2015 ($ '000) (unaudited) |
Six Month Period ended June 30, 2015 ($ '000) (unaudited) |
|||||||
EBITDA | $ | 13,987 | $ | 26,600 | ||||
Cash interest paid | (1,334 | ) | (2,375 | ) | ||||
Maintenance and replacement capital expenditures | (2,354 | ) | (4,502 | ) | ||||
Operating Surplus | $ | 10,299 | $ | 19,723 | ||||
Cash distribution paid relating to the first quarter | -- | (7,865 | ) | |||||
Cash reserves | (1,763 | ) | (3,322 | ) | ||||
Available cash for distribution | $ | 8,536 | $ | 8,536 | ||||
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