OREANDA-NEWS. Navios Maritime Holdings Inc. ("Navios Holdings" or "the Company") (NYSE:NM), a global, vertically integrated seaborne shipping and logistics company, today reported financial results for the second quarter and six months ended June 30, 2016.

Angeliki Frangou, Chairman and Chief Executive Officer, stated, "Navios Holdings had a solid second quarter performance, earning $31.0 million in EBITDA, which was relatively in line with 2015. We have $143.2 million of cash as of June 30, 2016 and no material debt maturities until 2019."

Angeliki Frangou continued: "Our scale provides us with significant operating leverage. Navios Holdings’ opex is estimated to be approximately 42% less than the industry average. During the last twelve months, we have also reduced general and administrative expenses by approximately 30%, which we expect to reduce further to a total of 40% by year end. This reduction makes us one of the lowest cost operators among publicly listed dry bulk shipping companies."  

HIGHLIGHTS

Time Charter Coverage

Navios Holdings controls a fleet of 61 vessels totaling 6.3 million dwt, of which 40 are owned and 21 are chartered-in under long-term charters (collectively, the "Core Fleet"). Navios Holdings currently operates 57 vessels (19 Capesize, 18 Panamax, 18 Ultra Handymax and two Handysize vessels) totaling 5.9 million dwt. The current average age of the operating fleet is 7.8 years. Additionally, Navios Holdings has four newbuilding charter-in vessels expected to be delivered at various dates beginning in the fourth quarter of 2016 until 2017.

As of August 22, 2016, Navios Holdings has chartered-out 86.6% and 34.2% of available days for the remaining six months of 2016 and for 2017, respectively (including index-linked charters), which are expected to generate $57.1 million and $20.9 million in base revenue, respectively. The average daily charter-out base rate for the Core Fleet is $8,813 and $15,319 for the remaining six months of 2016 and for 2017, respectively. The average daily charter-in rate for the active long-term charter-in vessels for the remaining six months of 2016 is estimated at $12,421.

The above figures do not include the fleet of Navios South American Logistics Inc. (“Navios Logistics”) and vessels servicing contracts of affreightment.

Exhibit II provides certain details of the Core Fleet of Navios Holdings. It does not include the fleet of Navios Logistics.

Earnings Highlights

See Exhibit I under the heading, "Disclosure of Non-GAAP Financial Measures," for a discussion of EBITDA of Navios Holdings (including Navios Logistics), and of Navios Logistics (on a stand-alone basis), and a reconciliation of such measures to the most comparable measures calculated under U.S. GAAP.

Second Quarter 2016 and 2015 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):

The second quarter 2016 and 2015 information presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

    Three Month Period
Ended		   Three Month Period
Ended
     June 30,    June 30,
    2016   2015
    (unaudited)   (unaudited)
Revenue   $ 105,733     $ 119,839  
Net Loss   $ (26,416 )   $ (24,813 )
Net cash provided by operating activities   $ 11,197     $ 2,095  
EBITDA   $ 31,054     $ 32,705  
Basic Loss per Share   $ (0.29 )   $ (0.27 )
                 

Revenue from dry bulk vessel operations for the three months ended June 30, 2016 was $47.0 million as compared to $53.6 million for the same period during 2015. The decrease in dry bulk revenue was mainly attributable to (i) a decrease in available days of our fleet by 648 days, mainly due to a decrease in short-term charter-in and long-term charter-in fleet available days; and (ii) the decline in the freight market during 2016, as compared to the same period in 2015.

Revenue from the logistics business was $58.8 million for the three months ended June 30, 2016 as compared to $66.2 million for the same period during 2015. The decrease was mainly attributable to (i) a decrease in sales of products in the liquid terminal, due to lower volume and lower price of products sold; (ii) a decrease in products transported in the dry and liquid port terminals; and (iii) a decrease in the number of available days of the cabotage fleet.

EBITDA of Navios Holdings for the three months ended June 30, 2016 decreased by $1.6 million to $31.1 million as compared to $32.7 million for the same period of 2015. The $1.6 million decrease in EBITDA was primarily due to (i) a $14.1 million decrease in revenue; and (ii) a $14.6 million decrease in equity in net earnings from affiliated companies. This overall decrease of $28.7 million was partially mitigated by (i) a $21.8 million decrease in time charter, voyage and logistics business expenses; (ii) a $1.4 million decrease in direct vessel expenses (excluding the amortization of deferred drydock and special survey costs); (iii) a $2.4 million decrease in general and administrative expenses (excluding share-based compensation expenses); (iv) a $0.8 million decrease in other expense, net; and (v) a $0.7 million decrease in net income attributable to the noncontrolling interest.

EBITDA of Navios Logistics was $20.7 million for the three month period ended June 30, 2016 as compared to $22.7 million for the same period in 2015.

Net Loss of Navios Holdings for the three months ended June 30, 2016 was $26.4 million as compared to $24.8 million for the same period of 2015. The $1.6 million increase in Net Loss was mainly due to (i) a decrease in EBITDA by $1.6 million; (ii) a decrease in income tax benefit of $1.0 million; (iii) an increase in amortization for deferred drydock and special survey costs of $0.4 million; and (iv) an increase in share-based compensation expense of $0.1 million. This overall increase was partially mitigated by (i) a decrease in interest expense and finance cost, net by $1.1 million; and (ii) a decrease in depreciation and amortization by $0.4 million.

First Half of 2016 and 2015 Results (in thousands of U.S. dollars, except per share data and unless otherwise stated):

The information for the six month period ended June 30, 2016 and 2015 presented below was derived from the unaudited condensed consolidated financial statements for the respective periods.

    Six Month Period
Ended		   Six Month Period
Ended
     June 30,    June 30,
    2016   2015
    (unaudited)   (unaudited)
Revenue   $ 207,220     $ 238,119  
Net Loss   $ (33,881 )   $ (51,491 )
Net cash provided by operating activities   $ 40,137     $ 1,739  
EBITDA   $ 76,478     $ 58,946  
Basic Loss per Share   $ (0.39 )   $ (0.57 )
                 

Revenue from dry bulk vessel operations for the six months ended June 30, 2016 was $93.3 million as compared to $106.8 million for the same period during 2015. The decrease in drybulk revenue was mainly attributable to the decline in the freight market during 2016, as compared to the same period in 2015.

Revenue from the logistics business was $114.0 million for the six months ended June 30, 2016 as compared to $131.3 million for the same period of 2015. This decrease was mainly attributable to (i) a decrease in sales of products in the liquid terminal, due to lower volume and lower price of products sold; (ii) a decrease in products transported in the dry and liquid port terminals; and (iii) a decrease in the number of available days of the cabotage fleet. This overall decrease was partially mitigated by an increase in dry and liquid cargoes transported in the barge business.

EBITDA of Navios Holdings for the six month period ended June 30, 2016 increased by $17.6 million to $76.5 million as compared to $58.9 million for the same period of 2015. The $17.6 million increase in EBITDA was primarily due to (i) a $45.3 million decrease in time charter, voyage and logistics business expenses; (ii) a $2.5 million decrease in direct vessel expenses (excluding the amortization of deferred drydock and special survey costs); (iii) a $2.9 million decrease in general and administrative expenses (excluding share-based compensation expenses); and (iv) a $14.3 million increase in other income, net. This overall increase of $65.0 million was partially mitigated by (i) a $30.9 million decrease in revenue; (ii) a $15.5 million decrease in equity in net earnings from affiliated companies; and (iii) a $1.0 million increase in net income attributable to the noncontrolling interest.

EBITDA of Navios Logistics was $41.8 million for the six month period ended June 30, 2016 as compared to $38.3 million for the same period in 2015.

Net Loss of Navios Holdings for the six months ended June 30, 2016 was $33.9 million as compared to $51.5 million for the same period of 2015. The $17.6 million decrease in Net Loss was mainly due to (i) an increase in EBITDA of $17.6 million; (ii) a decrease in interest expense and finance cost, net of $1.5 million; and (iii) a decrease in depreciation and amortization of $1.7 million. This decrease in Net Loss was partially mitigated by (i) an increase in income tax expense of $2.3 million; (ii) an increase of $0.7 million in amortization for deferred drydock and special survey costs; and (iii) an increase of $0.2 million in share-based compensation expense.

Fleet Summary Data:

The following table reflects certain key indicators indicative of the performance of the Navios Holdings' dry bulk operations (excluding the Navios Logistics fleet) and its fleet performance for the three and six month periods ended June 30, 2016 and 2015, respectively.

    Three Month   Three Month   Six Month   Six Month
    Period Ended   Period Ended   Period Ended   Period Ended
    June 30,   June 30,   June 30,   June 30,
    2016   2015   2016   2015
    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Available Days (1)     5,198       5,846       11,158       11,184  
Operating Days (2)     5,181       5,793       11,037       11,077  
Fleet Utilization (3)     99.7 %     99.1 %     98.9 %     99.0 %
Equivalent Vessels (4)     57       64       61       62  
TCE (5)   $ 8,445     $ 7,457     $ 7,678     $ 7,332  
                                 

(1) Available days for the fleet are total calendar days the vessels were in Navios Holdings' possession for the relevant period after subtracting off-hire days associated with major repairs, drydocking or special surveys. The shipping industry uses available days to measure the number of days in a relevant period during which vessels should be capable of generating revenues.

(2) Operating days are the number of available days in the relevant period less the aggregate number of days that the vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a relevant period during which vessels actually generate revenues.

(3) Fleet utilization is the percentage of time that Navios Holdings' vessels were available for generating revenue, and is determined by dividing the number of operating days during a relevant period by the number of available days during that period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels.

(4) Equivalent Vessels is defined as the total available days during a relevant period divided by the number of days of this period.

(5) Time charter equivalent rate (“TCE”) is defined as voyage and time charter revenues less voyage expenses during a relevant period divided by the number of available days during the period.

About Navios Maritime Holdings Inc.

Navios Maritime Holdings Inc. (NYSE:NM) is a global, vertically integrated seaborne shipping and logistics company focused on the transport and transshipment of dry bulk commodities including iron ore, coal and grain. 

About Navios South American Logistics Inc.

Navios South American Logistics Inc. is one of the largest logistics companies in the Hidrovia region of South America, focusing on the Hidrovia region river system, the main navigable river system in the region, and on cabotage trades along the eastern coast of South America. Navios Logistics serves the storage and marine transportation needs of its petroleum, agricultural and mining customers through its port terminals, river barge and coastal cabotage operations.

 

EXHIBIT I
NAVIOS MARITIME HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of U.S. dollars — except share and per share data)
                         
      Three Month
 Period Ended
 June 30, 2016
     Three Month
 Period Ended
 June 30, 2015		     Six Month
 Period Ended
 June 30, 2016		     Six Month
 Period Ended
 June 30, 2015
      (unaudited)     (unaudited)     (unaudited)     (unaudited)
Revenue       $ 105,733     $ 119,839     $ 207,220     $ 238,119  
Administrative fee revenue from affiliates         5,463       3,882       10,945       7,804  
Time charter, voyage and logistics business expenses         (36,095 )     (57,856 )     (82,476 )     (127,790 )
Direct vessel expenses(1)         (34,685 )     (35,748 )     (64,759 )     (66,565 )
General and administrative expenses incurred on behalf of affiliates         (5,463 )     (3,882 )     (10,945 )     (7,804 )
General and administrative expenses(2)         (6,392 )     (8,668 )     (12,830 )     (15,479 )
Depreciation and amortization         (27,132 )     (27,479 )     (46,959 )     (48,684 )
Interest expense and finance cost, net         (26,698 )     (27,838 )     (54,448 )     (55,876 )
Other (expense)/income, net         (2,530 )     (3,321 )     9,134       (5,235 )
Loss before equity in net earnings of affiliated companies         (27,799 )     (41,071 )     (45,118 )     (81,510 )
Equity in net earnings of affiliated companies         3,424       17,968       16,376       31,880  
Loss before taxes       $ (24,375 )   $ (23,103 )   $ (28,742 )   $ (49,630 )
Income tax benefit/(expense)         621       1,695       (424 )     1,843  
Net loss         (23,754 )     (21,408 )     (29,166 )     (47,787 )
Less: Net income attributable to the noncontrolling interest         (2,662 )     (3,405 )     (4,715 )     (3,704 )
Net loss attributable to Navios Holdings common stockholders       $ (26,416 )   $ (24,813 )   $ (33,881 )   $ (51,491 )
Loss attributable to Navios Holdings common stockholders, basic and diluted       $ (30,387 )   $ (28,906 )   $ (41,822 )   $ (59,657 )
Basic and diluted net losses per share attributable to Navios Holdings common stockholders       $ (0.29 )   $ (0.27 )   $ (0.39 )   $ (0.57 )
Weighted average number of shares, basic and diluted         106,009,049       105,401,820       106,022,826       105,251,590  
                                     

(1) Includes expenses of Navios Logistics of $21.4 million and $22.9 million for the three months ended June 30, 2016 and 2015, respectively and $38.1 million and $41.0 million for the six months ended June 30, 2016 and 2015, respectively.

(2) Includes expenses of Navios Logistics of $3.5 million and $3.9 million for the three months ended June 30, 2016 and 2015, respectively and $6.8 million and $7.5 million for the six months ended June 30, 2016 and 2015, respectively.                                               

NAVIOS MARITIME HOLDINGS INC.
Other Financial Data
                   
      June 30,
2016
     December 31,
2015
  
      (unaudited)     (unaudited)  
ASSETS                   
Cash and cash equivalents, including restricted cash     $ 143,200     $ 176,892  
Other current assets       143,766       126,067  
Deposits for vessels, port terminals and other fixed assets       91,669       73,949  
Vessels, port terminal and other fixed assets, net       1,868,668       1,823,961  
Other noncurrent assets       449,578       447,151  
Goodwill and other intangibles       304,814       310,793  
Total assets     $ 3,001,695     $ 2,958,813  
                   
       
LIABILITIES AND EQUITY                  
Current liabilities, including current portion of long-term debt, net       245,040       226,856  
Senior and ship mortgage notes, net       1,352,860       1,350,941  
Long-term debt, net of current portion       252,520       213,423  
Other noncurrent liabilities       69,184       57,041  
Total stockholders’ equity       1,082,091       1,110,552  
Total liabilities and stockholders’ equity     $ 3,001,695     $ 2,958,813  
                   
        Six Month
Period Ended
June 30, 2016		       Six Month
Period Ended
June 30, 2015		  
        (unaudited)       (unaudited)  
Net cash provided by operating activities     $ 40,137     $ 1,739  
Net cash used in investing activities     $ (112,319 )   $ (18,176 )
Net cash provided by/(used in) financing activities     $ 49,299     $ (50,753 )
                   

Disclosure of Non-GAAP Financial Measures

EBITDA is a non-U.S. GAAP financial measure and should not be used in isolation or as substitution for Navios Holdings' results calculated in accordance with U.S. GAAP.

EBITDA represents net (loss)/income attributable to Navios Holdings' common stockholders before interest and finance costs, before depreciation and amortization, before income taxes and before stock-based compensation. We use EBITDA as a liquidity measure and reconcile EBITDA to net cash provided by operating activities, the most comparable U.S. GAAP liquidity measure. EBITDA is calculated as follows: net cash provided by operating activities adding back, when applicable and as the case may be, the effect of (i) net increase/(decrease) in operating assets, (ii) net (increase)/decrease in operating liabilities, (iii) net interest cost, (iv) deferred finance charges and other related expenses, (v) provision for losses on accounts receivable, (vi) equity in affiliates, net of dividends received, (vii) payments for drydock and special survey costs, (viii) noncontrolling interest, and (ix) reclassification to earnings of available–for-sale securities and impairment charges. Navios Holdings believes that EBITDA is a basis upon which liquidity can be assessed and represents useful information to investors regarding Navios Holdings’ ability to service and/or incur indebtedness, pay capital expenditures, meet working capital requirements and pay dividends. Navios Holdings also believes that EBITDA is used (i) by prospective and current lessors as well as potential lenders to evaluate potential transactions; (ii) to evaluate and price potential acquisition candidates; and (iii) by securities analysts, investors and other interested parties in the evaluation of companies in our industry.

EBITDA has limitations as an analytical tool, and therefore, should not be considered in isolation or as a substitute for the analysis of Navios Holdings’ results as reported under U.S. GAAP. Some of these limitations are: (i) EBITDA does not reflect changes in, or cash requirements for, working capital needs; (ii) EBITDA does not reflect the amounts necessary to service interest or principal payments on our debt and other financing arrangements; and (iii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA does not reflect any cash requirements for such capital expenditures. Because of these limitations, among others, EBITDA should not be considered as a principal indicator of Navios Holdings’ performance. Furthermore, our calculation of EBITDA may not be comparable to that reported by other companies due to differences in methods of calculation.

 Navios Logistics’ EBITDA is used to measure its operating performance.

The following tables provide a reconciliation of EBITDA of Navios Holdings (including Navios Logistics) and EBITDA of Navios Logistics on a stand-alone basis:

Navios Holdings Reconciliation of EBITDA to Cash from Operations

    June 30,     June 30,
Three Months Ended   2016     2015
(in thousands of U.S. dollars)   (unaudited)     (unaudited)
               
Net cash provided by operating activities   $ 11,197       $ 2,095  
Net increase/(decrease) in operating assets     447         (27,570 )
Net (increase)/decrease in operating liabilities     (3,753 )       18,343  
Net interest cost     26,698         27,838  
Deferred finance charges     (1,411 )       (1,046 )
Provision for losses on accounts receivable     (43 )       56  
Equity in affiliates, net of dividends received     (783 )       9,109  
Payments for drydock and special survey     1,709         7,285  
Noncontrolling interest     (2,662 )       (3,405 )
Loss on available-for-sale securities     (345 )       —  
EBITDA   $ 31,054       $ 32,705  
                   

Navios Logistics EBITDA Reconciliation to Net Income

    June 30,     June 30,
Three Months Ended   2016     2015
(in thousands of U.S. dollars)   (unaudited)     (unaudited)
               
Net income   $ 7,362       $ 9,412  
Depreciation and amortization     6,387         6,591  
Amortization of deferred drydock and special survey costs     1,787         1,752  
Interest expense and finance cost, net     5,829         6,735  
Income tax benefit     (694 )       (1,767 )
EBITDA   $   20,671       $   22,723  
                   

Navios Holdings Reconciliation of EBITDA to Cash from Operations

    June 30,     June 30,
Six Months Ended   2016     2015
(in thousands of U.S. dollars)   (unaudited)     (unaudited)
               
Net cash provided by operating activities   $ 40,137       $ 1,739  
Net increase/(decrease) in operating assets     11,776         (59,508 )
Net (increase)/decrease in operating liabilities     (33,156 )       36,630  
Net interest cost     54,448         55,876  
Deferred finance charges     (2,695 )       (2,155 )
Provision for losses on accounts receivable     (149 )       (10 )
Equity in affiliates, net of dividends received     8,105         14,162  
Payments for drydock and special survey     3,072         15,916  
Noncontrolling interest     (4,715 )       (3,704 )
Loss on available-for-sale securities     (345 )       —  
EBITDA   $ 76,478       $ 58,946  
                   

Navios Logistics EBITDA Reconciliation to Net Income

           
    June 30,     June 30,
Six Months Ended   2016     2015
(in thousands of U.S. dollars)   (unaudited)     (unaudited)
               
Net income   $   13,036     $     10,238  
Depreciation and amortization       13,061           13,058  
Amortization of deferred drydock and special survey costs       3,385           3,463  
Interest expense and finance cost, net       12,033           13,548  
Income tax expense/(benefit)        282           (1,985 )
EBITDA   $ 41,797     $   38,322  
                   
EXHIBIT II
             
Owned Vessels    
Vessel Name   Vessel Type   Year Built   Deadweight
(in metric tons)
Navios Serenity   Handysize   2011   34,690
Navios Ionian   Ultra Handymax   2000   52,067
Navios Horizon   Ultra Handymax   2001   50,346
Navios Herakles   Ultra Handymax   2001   52,061
Navios Achilles   Ultra Handymax   2001   52,063
Navios Vector   Ultra Handymax   2002   50,296
Navios Meridian   Ultra Handymax   2002   50,316
Navios Mercator   Ultra Handymax   2002   53,553
Navios Arc   Ultra Handymax   2003   53,514
Navios Hios   Ultra Handymax   2003   55,180
Navios Kypros   Ultra Handymax   2003   55,222
Navios Astra   Ultra Handymax   2006   53,468
Navios Ulysses   Ultra Handymax   2007   55,728
Navios Celestial   Ultra Handymax   2009   58,063
Navios Vega   Ultra Handymax   2009   58,792
Navios Magellan   Panamax   2000   74,333
Navios Star   Panamax   2002   76,662
Navios Northern Star   Panamax   2005   75,395
Navios Amitie   Panamax   2005   75,395
Navios Taurus   Panamax   2005   76,596
Navios Asteriks   Panamax   2005   76,801
Navios Galileo   Panamax   2006   76,596
N Amalthia   Panamax   2006   75,318
N Bonanza   Panamax   2006   76,596
Navios Avior   Panamax   2012   81,355
Navios Centaurus   Panamax   2012   81,472
Navios Sphera   Panamax   2016   84,872
Navios Stellar   Capesize   2009   169,001
Navios Bonavis   Capesize   2009   180,022
Navios Happiness   Capesize   2009   180,022
Navios Phoenix   Capesize   2009   180,242
Navios Lumen   Capesize   2009   180,661
Navios Antares   Capesize   2010   169,059
Navios Etoile   Capesize   2010   179,234
Navios Bonheur   Capesize   2010   179,259
Navios Altamira   Capesize   2011   179,165
Navios Azimuth   Capesize   2011   179,169
Navios Ray   Capesize   2012   179,515
Navios Gem   Capesize   2014   181,336
Navios Mars   Capesize   2016   181,259
             
Long term Chartered-in Fleet in Operation
 
Vessel Name   Vessel Type   Year
Built		   Deadweight
(in metric tons)		   Purchase
Option(1)
Navios Lyra   Handysize   2012   34,718   Yes (2)
Navios Primavera   Ultra Handymax   2007   53,464   Yes
Navios Oriana   Ultra Handymax   2012   61,442   Yes
Navios Mercury   Ultra Handymax   2013   61,393   Yes
Navios Venus   Ultra Handymax   2015   61,339   Yes
Navios Aldebaran   Panamax   2008   76,500   Yes
Navios Marco Polo   Panamax   2011   80,647   Yes
Navios Southern Star   Panamax   2013   82,224   Yes
Sea Victory   Panamax   2014   77,095   Yes
Navios Sky   Panamax   2015   82,056   Yes
Navios Amber   Panamax   2015   80,994   Yes
Beaufiks   Capesize   2004   180,310   Yes
King Ore   Capesize   2010   176,800   Yes
Navios Koyo   Capesize   2011   181,415   Yes
Navios Obeliks   Capesize   2012   181,415   Yes
Dream Canary   Capesize   2015   180,528   Yes
Dream Coral   Capesize   2015   181,249   Yes
                 
Long-term Chartered-in Fleet to be Delivered
            
                 
    Vessel   Delivery     Deadweight Purchase
Vessels   Type   Date     (in metric tons) Option
Navios Felix   Capesize   Q4 2016     180,000 Yes
Navios Coral   Panamax   Q4 2016     84,000 Yes
Navios Citrine   Panamax   Q1 2017     81,000 Yes
Navios Dolphin   Panamax   Q1 2017     81,000 Yes

(1) Generally, Navios Holdings may exercise its purchase option after three to five years of service.

(2) Navios Holdings holds the initial 50% purchase option on the vessel.