NMM Q4 2022 earnings

Navios Maritime Partners (NMM) released their Q4 2022 results on 2/21/23. The entity is now a consolidation of all ocean going vessels in Navios Group fleets after consolidating the fleets of NMCI (container vessels), NNA (tankers) and NM (dry bulk vessels). Including newbuilds, the NMM fleet has over 175 vessels.

Yes, the huge fleet adds complexity. But furthermore, one has to deal with “spin” from NMM management (primarily the CEO). For instance, about 6 months ago, to soften the impact of the acquisition of the NM fleet, the CEO claimed NMM would implement a major share buy-back. Did that happen? Nope.

Needless to say, NMM takes time to decipher.
Start with the high level Q4 numbers (slide 12)

  • rev of $370.9M
  • EBITDA of $206.2M
  • Net income of $118.2M
  • 162 active vessels
  • Combined TCE of $23.84K is quite good.
  • NMM sold more than a few vessels (11 vessels) during Q4

PowerPoint Presentation (navios-mlp.com)

The combined TCE looks good for Q4 2022. However, there was no change in distribution or no major share buy-back. Q1 2023 will see downward pressure of rates in both the dry bulk and container segments.

Fleet renewal is good. But NMM still has a lot of old bulker vessels and some old container vessels.

To be continued …


Parsing further -
In 2021, there were gains due to acquiring the fleets of NMCI and NNA
In 2022, there were gains due to sale of 10 vessels (in particular, 2 container vessels)
in 2023, gains from ???
Well, there is a reported sale of an older VLCC which should mean $5M - $8M for NMM. The tanker segment is the hot sector currently. Will NMM take advantage of the market & sell any more tanker vessels? Don’t know.

Contracted backlog - in particular, the container vessels and to a lesser degree, the tankers, put NMM in good position to cover fleet operating costs. The index charter vessels and spot vessels need very low rates for NMM to break even. The danger here is not immediate, but on the horizon.
The container fleet backlog is $2.2B, and about 40% (actual 39.3%) is from vessels chartered to Zim Integrated (ZIM), most of which are newbuilds and have not delivered yet.

Currently, the dry bulk is somewhat muted. I suspect NMM will continue to sell older dry bulk tonnage, and possibly redeploy capital (there are purchase options on many of the charter-in vessels) and tanker sector offers upside in either charters or vessel sales.