Navios Reports Q4 Results

Tuesday, February 23, 2010

Maritime Holdings Inc. (NYSE:NM) , a global, vertically integrated seaborne shipping and logistics company, reported financial results for the fourth quarter and year ended December 31, 2009. Angeliki Frangou, Chairman and CEO of Navios Holdings, said, "Our industry entered 2009 facing challenges virtually without precedent. The economic crisis required that Navios focus on its balance sheet, which we did by raising more than $1.3 billion in a mix of equity and long-term debt from the capital markets and commercial banks. Part of these proceeds were used to acquire seven capesize vessels, delivering in 2010, with secured cash flows for the next ten years.
"With our capital expenditures fully funded and less than $60 million of debt maturing in 2010, Navios is well capitalized and positioned to take advantage of opportunities that may develop."

2009 HIGHLIGHTS -- RECENT DEVELOPMENTS
Debt
$400.0 million of 8.875% First Preferred Mortgage Notes due 2017
$545.0 million new bank debt
Long-term debt financing secured for the entire new building program
Achieved favorable borrowing terms in difficult environment

Equity
$221.1 million mandatorily convertible preferred stock (MCPS)
Preferred stock issued for acquiring vessels having significant cash flow
$87.0 million issued in 2009
$134.1 million to be issued in 2010/2011
357,142 common shares issued on converting preferred stock in December2009 at $14.0 per share
No common shares issued in the market during credit crisis
Shareholders protected from undue dilution - 14% dilution scheduled over a ten-year period.

Liquidity
Navios Holdings received approximately $130.0 million from dropdown of vessels to Navios Maritime Partners L.P. These transactions allowed Navios Holdings to monetize certain tangible and intangible assets in "all cash" transactions while keeping a residual interest in the vessels through its ownership interest in Navios Partners.

Navios Holdings' Core Fleet Highlights
Expected EBITDA figures assume 360 revenue days and $5,000/$4,500 operating expenses per day for Capesize/Ultra-Handymax, respectively.


During 2009 Navios Holdings took delivery of eight Capesize and two Ultra-Handymax vessels.

The Capesize vessels have an average charter out period of about 6.4 years and are expected to generate annual EBITDA of approximately $106.1 million. The two Ultra-Handymaxes have an average charter out term of two years and are expected to generate annual EBITDA of approximately $7.4 million.

As part of its new building program, Navios Holdings expects the delivery of seven Capesize vessels in 2010 and 2011.

The effective acquisition price, considering the use of MCPS was $423.1 million or $60.4 million per vessel, and the total acquisition price is completely funded. These vessels have been chartered to creditworthy parties for an average term of more than 10 years and are expected to generate annual EBITDA of $68.0 million, or $630.0 million during the term of the charters. These charters are insured by an AA+ rated EU governmental agency.

Sale of Navios Hyperion
On January 8, 2010, Navios Holdings sold the Navios Hyperion, a Panamax vessel to Navios Partners for $63.0 million in cash.

Delivery of Navios Antares
On January 20, 2010, the Navios Antares, a 169,059 dwt Capesize vessel, was delivered to Navios Holdings' owned fleet from a South Korean Shipyard.
Agreement to Acquire New Capesize Vessel.

In February 2010, Navios Holdings agreed to acquire a new build 180,000 dwt Capesize vessel for a nominal price of $55.5 million, payable $52.5 million in cash and $3.0 million in the form of mandatorily convertible preferred stock. The vessel is under construction with a South Korean Shipyard and scheduled for delivery in the first quarter of 2011. The vessel is subject to a 12-year charter to a quality counter party for $27,431 (net) daily rate. It is anticipated that this charter will generate annual EBITDA of $8.1 million and cumulative EBITDA of $92.6 million.

Liquidity
Net Debt to Total Capitalization was 52.6% on December 31, 2009. Navios Holdings' total liquidity, including bank lines, at December 31, 2009 was approximately $382.1 million. Navios Holdings has no unfunded capital expenditures for either 2010 or 2011. In addition, its debt maturities are less than $65.0 million and $130.0 million in 2010 and 2011, respectively.

Time Charter Coverage
Navios Holdings has extended its long-term fleet employment by entering into agreements to charter-out vessels for periods ranging from one to 12 years. As of February 19, 2010, Navios Holdings had contracted 89.4%, 65.9%, 57.0% and 47.9% of its available days on a charter-out basis for 2010, 2011, 2012 and 2013, respectively, equivalent to $303.1 million, $300.3 million, $284.6 million and $246.8 million in revenue, respectively. The average contractual daily charter-out rate for the core fleet is $28,313, $32,913, $34,118 and $35,006 for 2010, 2011, 2012 and 2013, respectively. The average daily charter-in rate for the active long-term charter-in vessels for 2010 is $10,079.

The above figures do not include vessels servicing the Contracts of Affreightment (COA) and Logistics businesses.

Fleet Profile
Navios Holdings controls a fleet of 60 vessels totaling 6.6 million dwt, of which 33 are owned and 27 are chartered-in under long-term charters. Navios Holdings currently operates 43 vessels (14 Capesize, 12 Panamax, 16 Ultra Handymax and one Handysize product tanker vessel) totaling 4.3 million dwt and has 17 newbuildings to be delivered. These vessels are expected to be delivered at various dates through 2013. The average age of the operating fleet is 4.4 years.

Navios South American Logistics Inc. ("Navios Logistics") Highlights
In June 2009, Navios Logistics took delivery of Makenita H, a 17,000 dwt double hulled product oil tanker which was chartered out for three years which commenced on its delivery. In February 2010, Navios Logistics took delivery of Sara H, a 9,000 dwt double hulled product oil tanker, which is chartered out for three years commencing on delivery.

Navios Logistics' dry port terminal in Uruguay recorded a record level of throughput for the fiscal year 2009 which amounted to 3,055,400 metric tons.

Navios Partners Highlights
On February 11, 2010, Navios Holdings received $4.6 million which represents the cash distribution for the fourth quarter of 2009 from Navios Partners. The total cash distribution received during the fiscal year 2009 was $18.1 million.

Financial Highlights
Adjusted EBITDA increased by 99.4% to $51.3 million in the fourth quarter of 2009 from $25.7 million in the same period in 2008
Adjusted EBITDA increased by 39.2% to $193.7 million in the year ended December 31, 2009 from $139.2 million in the same period in 2008
Adjusted net income increased by 350.9% to $10.5 million in the fourth quarter of 2009 from $4.2 million loss in the same period in 2008.
Stockholders' Equity increased by 14.9% to $925.5 million at December 31, 2009 compared to $805.8 million at December 31, 2008

Dividend Policy
The Board of Directors declared a quarterly cash dividend for the fourth quarter of 2009 of $0.06 per share of common stock. This dividend is payable on April 8, 2010 to stockholders of record as of March 16, 2010. The declaration and payment of any further dividend remains subject to the discretion of the Board and will depend on, among other things, Navios Holdings' cash requirements as measured by market opportunities and restrictions under its credit agreements.

Financial Results
For the following results and the selected financial data presented herein, Navios Holdings has compiled consolidated statements of income for the three and twelve month periods ended December 31, 2009 and 2008. The information was derived from the unaudited consolidated financial statements for the respective periods. EBITDA is a non-US GAAP financial measure and should not be used in isolation or substitution for Navios Holdings' results.

Revenue from vessel operations for the three months ended December 31, 2009 was $113.6 million as compared to $187.0 million for the same period during 2008. The decrease in revenue was mainly attributable to a) the decrease in Time Charter Equivalent ("TCE") per day by 33.2% to $24,120 per day in the fourth quarter of 2009 from $36,088 per day in the same period of 2008 and b) the decrease in the available days for the fleet by 17.1% to 4,068 in the fourth quarter of 2009 from 4,910 days in the same period of 2008. The decrease in available days was mainly attributable to the significantly reduced short term fleet activity by 1,322 days, from 1,885 days in the fourth quarter of 2008 to 563 days in the fourth quarter of 2009. This decrease was mitigated by an increase in available days of the owned fleet by 484 days mainly due to the new Capesize deliveries in the fourth quarter of 2009 compared to the same period in 2008.

Revenue from the logistics business was $35.1 million for the three months ended December 31, 2009 as compared to $27.2 million during the same period of 2008. This increase was mainly due to the increased fleet of Navios Logistics and the increased operations of its liquid port compared to the same period of 2008.

EBITDA for the three months of 2009 increased by $30.9 million to $55.3 million compared to $24.4 million for the fourth quarter of 2008. The $30.9 million increase in EBITDA was primarily due to a decrease in time charter, voyage and logistic business expenses by $84.9 million from $168.7 million in the fourth quarter of 2008 to $83.8 million in the same period in 2009, a decrease in losses from derivatives by $3.1 million from $5.5 million loss for the fourth quarter of 2008 to $2.4 million loss for the same period in 2009, an increase in equity in net earnings from affiliated companies by $4.1 million, an increase in gain on sale of assets by $3.9 million, a decrease in net other expenses by $1.2 million. This overall variance of $97.2 million was mitigated by a decrease in revenue by $65.4 million from $214.2 million in the fourth quarter of 2008 to $148.7 million for the same period in 2009, an increase in direct vessel expenses (excluding the amortization of deferred dry dock and special survey costs) by $0.6 million from $7.1 million in the fourth quarter of 2008 to $7.7 million for the same period in 2009, and a decrease in noncontrolling interests by $0.3 million.

EBITDA of Navios Logistics was $3.8 million for the three months ended December 31, 2009 as compared to $3.2 million during the same period in 2008.

Net income for the three months ended December 31, 2009 was $12.5 million as compared to $5.6 million loss for the comparable period of 2008. The increase of net income by $18.1 million was mainly due to the increase by $30.9 million of EBITDA discussed above, and $1.0 million decrease in income tax. These were mitigated by an increase of depreciation and amortization by $7.0 million, the increase in net interest expense by $6.5 million, the increase in amortization for drydock and special survey costs by $0.2 million, and a $0.1 million increase in share-based compensation.

Revenue from vessel operations for the year ended December 31, 2009 was $459.8 million as compared to $1,138.3 million for the same period during 2008. The decrease in revenue was mainly attributable to a) the decrease in TCE per day by 43.3% to $25,821 per day in 2009 from $45,566 per day in the same period of 2008 and b) the decrease in the available days for the fleet by 31.7% to 15,588 in 2009 from 22,817 days in the same period of 2008. The decrease in available days was mainly attributable to the significantly reduced short term fleet activity by 8,478 days, from 11,100 days in 2008 to 2,622 days in 2009. This decrease was partially mitigated by an increase in available days of the owned fleet by 1,181 days mainly due to the new Capesize deliveries in 2009 compared to the same period in 2008.

Revenue from the logistics business was $138.9 million in 2009 as compared to $107.8 million during the same period of 2008. This increase was mainly due to the increased fleet of Navios Logistics (which commenced operations in the fourth quarter of 2008) compared to the same period of 2008.

EBITDA for the year ended December 31, 2009 increased by $41.3 million to $206.8 million compared to $165.5 million for the same period in 2008. The $41.3 million increase in EBITDA was primarily due to a decrease in time charter, voyage and logistic business expenses by $712.4 million from $1,066.2 million in 2008 to $353.8 million in the same period in 2009, an increase in equity in net earnings from affiliated companies by $11.8 million from $17.4 million in 2008 to $29.2 million for the same period of 2009. This overall favorable variance of $724.2 million was mitigated mainly by a decrease in revenue by $647.4 million from $1,246.1 million in 2008 to $598.7 million for the same period in 2009, an increase in direct vessel expenses (excluding the amortization of deferred dry dock and special survey costs) by $4.3 million from $24.7 million in 2008 to $29.0 million for the same period in 2009, an increase in general and administrative expenses by $4.4 million from $37.3 million in 2008 to $41.7 million for the same period in 2009 (excluding $2.2 million and $2.7 million share-based compensation for 2009 and 2008, respectively), a decrease in gain from derivatives by $7.7 million from $8.1 million in 2008 to $0.4 million for the same period in 2009, an increase in net other expenses by $10.8 million, an increase in income attributable to noncontrolling interests by $1.3 million, and a decrease in gains from sale of assets by $7.0 million.

EBITDA of Navios Logistics was $29.6 million for the year ended December 31, 2009 as compared to $27.0 million during the same period in 2008.

Net income for the year ended December 31, 2009 was $67.9 million as compared to $118.5 million for the comparable period of 2008. The decrease of net income by $50.6 million was mainly due to the increase in depreciation and amortization by $16.8 million, the increase in net interest expense by $20.6 million, the increase in drydock amortization by $0.5 million and the decrease in income taxes by $54.5 million mainly due to the write-off of deferred income taxes of $57.2 million in 2008. These were mitigated by the increase of $41.3 million in EBITDA discussed above, as well as the $0.5 million decrease in share-based compensation.

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