Navios Maritime Partners (NMM) reported their Q3 2022 results about 11 days ago. There was a lot going on at the time, so I only perused their results, and then put the name on the back-burner.
NMM became more complicated in 2021, after absorbing one sister entity (Navios Maritime Containers), a container shipping entity. Later in 2021, NMM acquired a second sister entity (Navios Maritime Acquisition Corp (NNA)), a tanker focused subsidiary. In Q3 2022, NMM acquired the dry bulk fleet of parent company, Navios Maritime Holding (NM). In 2022, the company has also acquired tanker vessels in a new category (Aframax/LR2). Including newbuilds, the company has a fleet of over 180 vessels. Actual fleet size is actually a moving target - delivery of existing vessels to fleet, delivery of newbuilds to fleet, and sale of older tonnage (dry bulk and container)
- Rev of $322.4M
- Net income of $257.2M*
- *High net income is not a typo, if one factors a huge gain of $143.8M from a timely sale of two container vessels
- Q3 2022 dividend of 5c/unit.
- $3.2B in contracted revenue
When the deal to acquire the NM fleet was announced, NMM’s CEO tossed a bone to shareholders/unitholders with a planned buy-back of $100M in shares.
Does one see any mention of share/unit buy-back in the Q3 2022 report?
Ah! See, now you can see why parsing thru NMM was delayed. I like to term Navios presentation material as AF spin (AF being the initials of NMM CEO Angeliki Frangou). Any Navios entity transaction should be viewed from the angle - how does this benefit AF?
As noted earlier, there was a very timely sale of two container vessels. NMM has very good contract coverage on the container vessels in the fleet (abt 72% of the contracted backlog is from the container fleet). The other two segments, dry bulk and tankers, only have “localized” vessel groupings of upside e.g. a few of the VLCCs have nice multi-year charters, a trio of Cape vessels have multi-year charters, etc.
Is NMM prepared for IMO 2023? NMM has been “cleaning up” its fleet and selling some of its older dry bulk vessels. But, in my mind, I think a lot of that has to do with needing to raise the cash portion of the NM fleet acquisition, and cover the newbuild equity payments.
Have a small NMM stake. But, at current NMM price, there are more appealing and/or shareholder-friendly shipping ideas.