Navios Maritime Partners L.P.(NMM) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $346.9 million, an increase of 1.8% compared to $341 million in Q3 2024, driven by higher fleet combined time charter equivalent (TCE) rates despite lower available days [16] - EBITDA for Q3 2025 was $193.9 million, while net income was $56.3 million, with earnings per common unit at $1.90 [4][18] - For the first nine months of 2025, total revenue decreased by $23 million to $978.6 million, with adjusted EBITDA down by $29 million to $519.8 million and adjusted net income down by $67 million to $196 million compared to the same period in 2024 [19][20] Business Line Data and Key Metrics Changes - The TCE rate for the combined container and tanker fleet increased by 3.7% and 1.7% to $31,832 and $26,238 per day, respectively, while the TCE rate for the dry bulk fleet decreased by 3.5% to $17,976 per day [17] - The company added $745 million of long-term contracted revenue during the quarter, with total contracted revenue amounting to $3.7 billion, including $1.3 billion from tankers, $0.2 billion from dry bulk, and $2.2 billion from containerships [15][16] Market Data and Key Metrics Changes - The geopolitical environment has shifted trading routes, impacting the tanker and dry bulk markets positively due to sanctions on Russian, Venezuelan, and Iranian oil [22][26] - The dry bulk market is expected to benefit from strong Atlantic basin iron ore growth, with significant new projects in Guinea and Brazil anticipated to create demand for additional vessels [24][25] Company Strategy and Development Direction - The company is focused on modernizing its fleet, with an average fleet age of 9.7 years compared to the industry average of 13.5 years, and aims to maintain a low net loan-to-value (LTV) ratio of 20.5% [4][5][7] - The company has a strong risk management culture, continuously monitoring and assessing risks while maintaining a diversified fleet [5][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the prospects for 2026, with 58% of available days fixed and a reduced cost break-even of $894 per day [8][12] - The company remains focused on capital allocation and opportunistic purchases, with a strong backlog of contracted revenue providing visibility in an uncertain environment [11][15] Other Important Information - The company completed a $300 million senior secured bond issuance at a coupon of 7.75%, which will be used to refinance existing floating rate debt, thereby reducing interest rate risk [9][21] - The company has returned $42.2 million under its dividend and unit repurchase programs, with a remaining purchase power of $37.3 million [10] Q&A Session Summary Question: How does the company plan to fix its vessels going forward into 2026? - Management indicated that they are using maximum flexibility, with the majority of open vessels being dry bulk, and they are comfortable with fixing the fleet based on market assumptions [31][32] Question: Is there an opportunity to build smaller ships against contracts? - Management noted increased activity in the market for smaller vessels, emphasizing the importance of counterparty and duration in such projects [36][37] Question: How will the proceeds from the recent bond issue be deployed? - The proceeds will enhance optionality, as the company has $1.2 billion of debt-free vessels, maintaining the same net debt before and after the bond issuance [39]