Navios Maritime Holdings Inc. Q1 2010 Earnings Call Transcript - TheStreet

Navios Maritime Holdings Inc. Q1 2010 Earnings Call Transcript

Navios Maritime Holdings Inc. Q1 2010 Earnings Call Transcript
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Navios Maritime Holdings Inc. (NM)

Q1 2010 Earnings Call Transcript

May 27, 2010 8:30 am ET


Laura Kowalcyk [ph] – IR

Angeliki Frangou – Chairman and CEO

Ted Petrone – President, Navios Corporation

George Achniotis – CFO


Jon Chappell – JP Morgan

Will Thomson [ph] – FBR Capital Markets

Noah Parquette – Cantor Fitzgerald

John Parker – Jefferies

Justine Fisher – Goldman Sachs

Daniel Burke – Clarkson Johnson Rice



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Good morning. My name is Kelly and I will be your conference operator today. At this time I would like to welcome everyone to the Navios Maritime Holdings Q1 2010 conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator instructions) Thank you. I will now turn the call over to Laura Kowalcyk [ph].

Laura Kowalcyk

Thank you for joining us for this morning’s call. With us today from Navios Maritime Holdings are Ms. Angeliki Frangou, Chairman and CEO, Mr. Ted Petrone, President, and Mr. George Achniotis, Chief Financial Officer.

As a reminder, this conference call is also being webcast. To access the webcast, please go the Investors section on Navios’ Website,


Before I review the structure of this morning's call, I would like to read the Safe Harbor statement. This conference could contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios. Forward-looking statements are statements that are not historical fact. Such forward-looking statements are based upon the current beliefs and expectations of Navios' management and are subject to risks and uncertainties, which could cause actual results to differ from forward-looking statements. Such risks are more fully discussed in Navios' filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks. Navios does not assume any obligation to update the information contained in this conference call. Thank you.

At this time, I would like to outline the agenda for today's call. First, Ms. Frangou will offer opening remarks. Next, Mr. Petrone will provide an operational update and an overview of market fundamentals. Following Mr. Petrone's remarks, Mr. Achniotis will review Navios' first quarter 2010 financial results. Finally, Ms. Frangou will offer concluding remarks. At the completion of Ms. Frangou's remarks, the Company will open the call to take your questions.

At this time, I would like to turn the call over to Ms. Angeliki Frangou, Chairman and CEO of Navios. Angeliki?

Angeliki Frangou

Thank you, Laura and good morning to all of you joining us on today’s call. During the first quarter we benefited from our strategy of keeping us fluid for long term sales with high quality counterparties. As a result, we had $78 million of EBITDA and $31.3 million of net income in the first quarter of 2010. This included one-off items that our CFO George Achniotis will take you through in detail in a moment.

We also declared a $0.06 per share dividend for the first quarter of 2010 payable on July 7 to shareholders of record on June 15.

We have all experienced a great deal of uncertainty including the sovereign debt issues that have marshaled into a tragedy requiring the U.S. to intervene to get about one trillion dollars into the European financial system. The capital market in the absence of (inaudible) has been struggling as most (inaudible) after the European Union (inaudible) the emergency financing.

We can now predict the likelihood of continued volatility in the market. However, we can say that we continue to see strong fundamentals in the industrial production, particularly in emerging markets. Thus, I believe that absent some contingents from the sovereign debt crisis we are optimistic about our industry.

Let’s now start our presentation with slide five, which shows the Navios Group and then (inaudible) value creation for shareholders of the Navios Holdings. Navios Holdings has a developed and stable business model that is reasonably insulated from the market volatility. It has been doing this by entering into long term charters with credit worth counterparties and obtaining AA+ insurance. The net result is a dependable, long term cash flow. For example, in 2010 Navios contracted more than 96% of its fleet base generating about $300 million in gross revenues.

Navios Partners. Navios Holdings own 33% interest in Navios Partners despite difficult amount of times in 2008, 2009, Navios Partners grew actually in the interest distribution. In fact, Navios Holdings anticipating receiving more $21 million in distribution in 2010. Also, our unit in Navios Partners is worth about $210 million as of yesterday’s close.

Navios Logistics. Navios Logistics focuses on the emerging markets in South America, was formed in 2008. We have 65.5% ownership stake. Navios Logistics is a key provider in the integrated logistics in the Hidrovia region, which you will recall is a river network about the size of Mississippi.

Navios Logistics Corporation today includes today includes storage and port terminal facilities, for grain and liquid products by the river transport and a cabotage business. Navios Logistics has had limitedly expanded its barge business and today is one of the few regional providers offering both wet and dry services. Navios Logistics will expand into other related areas such as storage and (inaudible) of mineral commodities. Navios Logistics will seek independent financing and is taking active steps to achieve this currently.

Navios Acquisition. We have pleased to have announced that shareholders approved Navios Acquisition proposed divestment and will look forward to closing the transaction tomorrow. I will discuss impact on Navios Holdings in a moment, but I wanted to take this opportunity and to thank all people involved for their hard work getting this deal done in a very difficult market.

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