Q2 2022 shipping preview: NMM

Navios Maritime Partners (NMM) reported their Q2 2022 results on 07/28/22.
A year ago, NMM wasn’t that great a candidate as a shipping sector bellwether. This time last year, the company had completed a merger with its container segment, so it was a two-pronged entity with interests
in both dry bulk shipping and container shipping. I will spare you the gory details, but NMM is now
a three-pronged shipping entity (dry bulk, container and tankers) with a fleet of over 160 on-the-water vessels currently and another 22 vessels on order. For a US-listed shipping company, that makes NMM quite large in vessel count.

Usually a glossy slide presentation with a fair amount of “spin”. So, let’s jump to the Macro part first which starts on Slide 19

Slide 20 - expected increase in dry bulk shipping trade
Slide 22 - interesting iron ore and steel annual data
Slide 23 - “new” grain trade routes
Slide 27 - Container orderbook weighted towards the larger vessel sizes (bodes well for the smaller vessel sizes)
Slides 29-31 - Meh! Maybe the IEA projections of increased demand in future years.

Circling back to NMM as a shipping investment. For much of 2021, NMM was my largest shipping stake. That changed during the second half of 2021 when dry bulk pure-plays like Star Bulk (SBLK) and Golden Ocean (GOGL) became more shareholder friendly investments (and remain that way in 2022). NMM is in a
strong position because of its container fleet’s revenue (over 80% of NMM’s contract backlog) and low leverage (currently). The dry bulk and tanker fleet are definitely more levered (that’s one aspect of the NMM “spin” story)