Navios Maritime Holdings' President Presents At JPMorgan Aviation, Transportation & Defense Conference Call (Transcript)

Navios Maritime Holdings Inc. ( NM)

JPMorgan Aviation, Transportation & Defense Conference Call

March 15, 2012 8:45 am ET


Ted C. Petrone – President

George Achniotis – Chief Financial Officer


Unidentified Analyst

All right, well good morning everyone. For those of you that don’t know me, my name is (inaudible), I work in the high-yield credit research side covering Navios and shipping industry in general. So our first presentation this morning will be from Navios Maritime Holdings.

And with us, we have presenting Ted Petrone, President of Navios Holdings and George Achniotis, CFO of the company. So thank you guys for being here. I appreciate your time and I will turn it over to you. Thanks.

Ted C. Petrone

Thank you [Janet], it’s always a pleasure to be here to be associated with JPMorgan. It’s a privilege for the Navios Group. My name is Ted Petrone, I’m the President of Navios. With me is George Achniotis, the CFO.

We will do some slides, I will take the first half, George will take the more important financials on the second half. You can see the management team Angeliki Frangou, our CEO and Chairman is in Athens. Unfortunately, couldn’t make it. George [Achniotis], we have [Stratos] our Chief Financial Officer, myself, Leonidas Korres is also here. You will be seeing Navios if you stay in this room all through the morning. We blocked up the morning, so you get to see all the Navios Group.

And it’s a seasoned team, we realize shipping is a not a 100 yard dash, but it’s a marathon. It’s seasonal, it’s cyclical, it was our job to first build an industry of cooperation that can make profits in all parts of the cycle and then to explain that to you.

Navios started in 1954, we’ve created a very strong brand name and through those years in 2005 is an important year when we went public. We have accretively grown our fleet from six owned vessels and 22 charter to if you include the South American operations, over 110 vessels today, dry and wet.

We’ve raised over $2.3 billion in debt. Since 2008, we have proven access to the markets, capital markets. The policy again of the Navios Group of companies and specifically Navios Holdings is to secure long-term cash flow. We don’t play the spot market with our ships. We take that cash flow which reduces volatility and brings us fuel for future growth.

Here is a quick picture of the Navios Group of companies. On top you will see Navios Holdings and below is the three other associated companies in the Group. Navios Maritime Holdings gets its value from one, the core fleet that sits within Navios Holdings. 28 owned and 17 long-term charters and many of the above market leases that go along with this field that we control.

You can see that the other public companies we have number one, Navios Partners which is our MLP, a high dividend yielding product. The acquisition was – both of these you will be hearing about, no need to go into detail. We have the South American Logistics operations which we’re quite confident and pleased about going forward.

If you take a look at the numbers there in the circles and you see if you add up the ownership that we have and the value of the shares and do some multiples on South America, to a certain extent anybody who buys Navios at today’s levels is getting the Navios fleet and all the future earnings for free.

In uncertain economic times, our conservative approach has positioned us very well. We believe that what’s going on in South East Asia were a growth story. We have very high fleet coverage, as you can see almost 80% in 2012 already. We have been strengthening our balance sheet. We’ve been bringing down our leverage. We’ve been looking, because we feel there is a landscape here this year that brings itself to distressed deals.

We’ve been involved in distressed deals since 2009 on both the dry and the wet side. We’d like to be involved on the positive side on distress deals, but let see we are just not going to do a deal just for the sake of doing a deal.

I’d like to draw your attention to specifically the box in the center. Basically what is telling you is that our fixed revenue is already today greater than our total cost for the year. So we could take the 23% of our fleet, and not prudently but we can anchor it for the rest of the year not do anything and not burn cash. You will find the same thing on the acquisition side and the partners. It’s something that no other group of companies or no other company I think in shipping can actually talk about.

Our CapEx is fully funded, as a matter of fact, we are going to get inflow of almost $6 million in the two Kamsarmax delivered in the spring and we get, again that’s accretive that comes up from the subsidiaries that we have, on the partners side we have dropped down two vessels we received a $130 million and the dividends we receive from those two companies are about 125% of the dividends of what Navios Holdings put out in any current year. So you see we’re sort of well subsidized from our subsidiaries.

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