Navios NMM Earnings Call Transcript

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Date

Tuesday, Nov. 18, 2025 at 8:30 a.m. ET

Call participants

• Chairwoman & Chief Executive Officer — Angeliki Frangou
• Chief Operating Officer — Efstratios Desypris
• Chief Financial Officer — Erifili Tsironi
• Chief Trading Officer — Vincent Vandewalle

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Takeaways

• Net Income -- $56.3 million with quarterly earnings per common unit of $1.90 directly reported.
• Fleet Modernization -- Average fleet age is 9.7 years, nearly 30% lower than the industry average, and almost 50% lower in the tanker segment.
• Gross and Net Vessel Values -- $6.3 billion in gross vessel value and $3.8 billion in net equity.
• Net Loan-To-Value (LTV) -- 34.5% with a target net LTV range of 20%-25% stated by management.
• Available Liquidity -- $412 million reported as of quarter-end.
• Contracted Revenue Backlog -- $3.7 billion at quarter-end; $745 million in new contracted revenue added during the period.
• Fixed Period Charter Coverage -- 58% of 2026 available days fixed at a net average rate of $27,088 per day, covering most projected cash operating costs.
• Breakeven on Open Days -- Cash breakeven of $894 per day on 23,387 open and index-based days in 2026.
• Interest Rate Management -- $300 million senior unsecured bond issued at 7.75% five-year fixed coupon; 41% of debt now fixed at a 6.2% average rate.
• Return of Capital -- $42.2 million returned via dividends and unit repurchases; almost 5% of units repurchased since program inception; $37.3 million in purchase power remains.
• Newbuilding Activity -- Four new 8,850 TEU containerships acquired at $460 million, each chartered for over five years at $44,145 per day, generating $336 million in revenue.
• Sales of Older Vessels -- Sold six dry bulk, three tanker, and three containership vessels (average age over 18 years) in 2025 for $235 million.
• Total Revenue -- Total revenue for 2025 increased by 1.8% to $347 million, with combined time charter equivalent (TCE) rate for 2025 up 2.4% to $24,167 per day.
• Adjusted Net Income -- $84 million, down from $97 million YOY, primarily due to higher depreciation, amortization, and financing costs.
• Combined OpEx Rate -- $6,798 per day, up slightly by $10 YOY; for the first nine months, combined OpEx rate increased by 2.4% to $6,961 per day.
• Long-Term Debt Structure -- $2.2 billion in long-term borrowings; net debt to book capitalization improved to 33.8% as of quarter-end.

Summary

Navios Maritime Partners (NYSE:NMM) presented a quarter defined by active fleet renewal and significant contract coverage for 2026, with 58% of next year's available days already fixed at profitable rates. Management detailed a $300 million senior unsecured bond issuance that increases funding diversification and fixes 41% of debt at a 6.2% average interest rate, mitigating exposure to rising rates while preserving collateral and optionality. Continued disciplined capital allocation was evidenced by unit repurchases approaching 5% of outstanding units and a remaining $37.3 million repurchase authorization. The company issued new long-term charters for four modern containerships, navigated sector volatility with a robust backlog, and executed opportunistic sales of older assets to optimize fleet composition.

• Angeliki Frangou said, "virtually all of the fleet is covered for 2025," signaling high revenue visibility for the near term.
• Efstratios Desypris reported, "Contracted revenue exceeds estimated total cash operating cost by about $86 million" for Q4 2025, highlighting strong near-term cash flow generation.
• Management attributed the decline in adjusted EBITDA to "a $4.5 million decrease in other income net mainly due to the decrease in foreign exchange gains and a $3.2 million increase in vessel operating expenses."
• Fleet expansion continues, with 25 newbuild vessels due by 2028 and $1.9 billion in related investment, increasing long-term revenue potential.
• No significant debt maturities arise until 2030, reducing near-term refinancing risk, as noted by Erifili Tsironi.

Industry glossary

• Net LTV (Loan-To-Value): Ratio of net debt to vessel market value, used to assess leverage.
• TCE (Time Charter Equivalent): Standardized daily revenue metric for vessel performance, net of voyage expenses.
• TEU (Twenty-Foot Equivalent Unit): Shipping industry measure for the capacity of container vessels.
• OpEx: Operational expenses, primarily vessel operating costs per day.

Full Conference Call Transcript

Angeliki Frangou: And net income of $56.3 million and $168 million, respectively. Earnings per common unit were $1.90 for the quarter and $5.62 for the nine-month period. For the past five years, it seems that we have been addressing constant change in our operating environment driven by geopolitical and other events. Yet, we have remained laser-focused on our business, modernizing our fleet. As you can see on Slide three, our fleet has an average age of 9.7 years compared to an industry average of 13.5 years for our three segments. Our reinvestment program puts us in a fortunate position of having a fleet that is almost 30% younger than the average and almost half when you look at our tanker fleet.

Please turn to Slide four. Navios Maritime Partners L.P. is a leading maritime transportation company owning, operating, and chartering a modern fleet of 171 vessels across three segments and 15 asset classes. Our fleet is split about one-third in its category by vessel number and vessel type. Vessel values are $6.3 billion in gross value and $3.8 billion net equity. We also enjoy a low net LTV of 34.5% and have $412 million available liquidity and strong credit ratings of Ba3 by Moody's and BB by S&P. Please turn to Slide five. We believe that diversification is strength. When embedded in a culture of risk management, we have a business providing significant optionality in our decision-making process.

For example, when chartering, if we are unable to secure long-term charters that provide a reasonable return on our investment, we will limit our exposure to short-term waiting for sector opportunity to return. We approached the allocation of capital similarly, patiently observing the market for either opportunistic purchases or acquisitions that can be had by long-term charters with a credit quality counterparty. These activities are accompanied by deleveraging goals. We maintain a strong balance sheet and a target net LTV of 20% to 25%. I would offer that all this works because of our strong risk management culture. We are continuously monitoring and assessing risk.

We evaluate and structure our transactions with risk management professionals who are equal partners in all our activities. We also obtained robust insurance coverage for liability and losses. We have implemented many tools to manage operational risk in crew training. Please turn to Slide six. Our fleet gross LTV was 40.6% at the end of the third quarter. Net LTV was 34.5%, and we aim to continue to drive net LTV lower. We added $745 million of long-term contracted revenue during the quarter. And revenue backlog is $3.7 billion. Currently, virtually all of the fleet is covered for 2025. Please turn to Slide seven. I would like to focus on the prospects for 2026, which are shaping up nicely.

We are covered 58% of our days and reduced the cash breakeven to $894 per day for the remaining 23,387 open and index base. You can see the breakdown of each segment on the right part of the slide. 92% of our container base and 73% of our tanker base are fixed with drybulk days representing most of our market exposure by number of days. Please turn to Slide eight. A few weeks ago, we took the opportunity to offer a $300 million senior unsecured bond in the Norwegian market. We priced the bond at par at a coupon of 7.75% with a five-year term.

The proceeds are used to repay $292.3 million of floating rate debt and the balance for issuance fees and for general corporate purposes. These transactions have no impact on our leverage rate because the proceeds are used to refinance existing debt, but we believe opportunistic financing reduces interest rate risk by placing floating rate debt with a fixed interest rate. It also releases collateral, and we have around $1.2 billion of debt-free vessels. Pro forma for this transaction, we have 41% of our debt fixed at an average interest rate of 6.2%. The bond also introduces us to the Norwegian market, providing an alternative source of financing. Please turn to Slide nine, where we outline a return of capital program.

As you can see here to date, we have returned $42.2 million under the dividend and unit repurchase programs. Today, we purchased almost 5% of the number of units out determined as of the date we launched the program. We have $37.3 million purchase power remaining. These purchases have resulted in a $4.6 per unit value accretion assuming the analyst estimate of NAV of around $138 per unit. Please turn to Slide 10. Navios Maritime Partners L.P. is a proven platform that has been executing its strategy in a challenging environment. I referenced the many uncertainties when I started this discussion.

Certainly, the geopolitical risk, regional conflict, change in global tariff regime, and evolving trade patterns are unprecedented in recent history. We have remained focused, and over the past four years, we have built a platform with an EBITDA run rate of about €750 million while increasing our book of contracted revenue to $3.7 billion and our vessel value to $6.3 billion. At the same time, we have decreased our net NPV by 23% to 34.5%. We have more to do, but we believe that this proven platform containing a diverse fleet with a risk management culture is the way to do it. And I now turn the presentation over to Mr. Efstratios Desypris, Navios Partners, Chief Operating Officer. Stratos?

Efstratios Desypris: Thank you, Angeliki, and good morning all. Please turn to Slide 11, which details our operating free cash flow potential for 2025 and 2026. Q4 2025, we fixed 88% of our available days at a net average rate of $24,871 per day. Contracted revenue exceeds estimated total cash operating cost by about $86 million. We have 1,594 remaining open or index-linked days that should provide additional cash flow. In 2026, we have fixed about 58% of our available days at a net average rate of $27,088 per day, generating about $860 million in revenue. This almost covers our total estimated cash operating cost for the year, resulting in a breakeven of $894 per day on our 23,387 open index days.

Turn to Slide 12. We are constantly renewing our fleet in order to maintain a young profile. We reduced our carbon footprint by modernizing our fleet, benefiting from newer technologies and advanced environmentally friendly features. During Q3, we acquired four new buildings, 8,850 TEU containerships for a total price of $460 million. Vessels have already been chartered out for a fair period of over five years at a net rate of $44,145 per day, generating revenues of $336 million. We have 25 newbuilding vessels delivering to the fleet by 2028, representing $1.9 billion of investment. Based on our financing, both are the retail in process have about $230 million of equity remaining to be paid.

In containerships, we have eight vessels to be delivered, with a total acquisition price of about $900 million. We have mitigated the residual value risk with long-term creditworthy charters expected to generate about $600 million in revenue over a five-year average charter duration. In tankers, we have 17 vessels to be delivered, for a total price of approximately $1 billion. We charter out 11 of these vessels for an average period of five years, expected to generate aggregate contracted revenue of about $600 million. We also continue to opportunistically sell older vessels.

In 2025, we sold credit vessels, six dry bulk, three tankers, and three container ships, with an average age of over 18 years, for a total of about $235 million. Moving to Slide 13. We continue to maintain a strong backlog of contracted revenue that creates visibility in an uncertain environment. During the quarter, we added $745 million of contracted revenue. $595 million from container ships, including the $336 million of the 40,000,000 vessels, $138 million on tankers, and $12 million on drybulk vessels. Total contracted revenue amounts to $3.7 billion. $1.3 billion relates to our tanker fleet, $200 million relates to our drybulk fleet, and $2.2 billion relates to our containerships.

Charters are extending through 2057 with a diverse group of quality counterparties. I now pass the call to Erifili Tsironi, our CFO, who will take you through the financial highlights. Eri?

Erifili Tsironi: Thank you, Stratos, and good morning all. I will briefly review our unaudited financial results for the third quarter and the nine months ended 09/30/2025. The financial information is included in the press release and is summarized in the slide presentation available on the company's website. Moving to the earnings highlights on Slide 14. Total revenue for 2025 increased by 1.8% to $347 million compared to $341 million for the same period in 2024, due to higher fleet combined time charter equivalent rate despite lower available days. Our combined TCE rate for 2025 increased by 2.4% to $24,167 per day while our available days decreased by 0.8% to 13,443 days compared to Q3 2024.

In terms of sector performance, the TCLA for our combined container and tanker fleet increased by 3.71.7% to 31,832 and 26,238 per day, respectively. In contrast, our TCE rate for our drybulk fleet was 3.5% lower at $17,976 per day. EBITDA for the third quarter and first nine months of '25 was adjusted as explained in the slide footnote. Adjusted EBITDA for Q3 2025 decreased by $1.4 million to $194 million compared to Q3 2024.

The decrease was primarily driven by a $4.5 million decrease in other income net mainly due to the decrease in foreign exchange gains and a $3.2 million increase in vessel operating expenses, mainly due to a $3.4 million increase in OpEx sales and a $2 million increase in general and administrative expenses in accordance with our administrative services agreement. The above decrease was partially mitigated by a $6.1 million increase in time charter and voyage revenues and a $2.2 million decrease in time charter and voyage expenses, mainly due to the decrease in bunker expenses as a result of lower freight voyage days in 2025. Our average combined OpEx rate was $6,798 per day, only $10 more than Q3 2024.

Adjusted net income for Q3 2025 was $84 million compared to $97 million in Q3 2024. The decrease is mainly due to a $9 million increase in depreciation and amortization and a $2 million increase in interest expense and finance cost net. Adjusted earnings and earnings per common for 2025 were $2.8 and $1.9, respectively. For the first nine months of 2025, revenue decreased by $23 million to $979 million. Adjusted EBITDA decreased by $29 million to $520 million, and adjusted net income decreased by $67 million to $196 million compared to the same period in 2024. Our combined TCE rate for the first nine months of 2025 was $22,125 per day.

In terms of sector performance, the TCE rate for our containers increased by 3.1% to $31,213 per day compared to the same period in 2024. In contrast, our drybulk and tanker TCE rates were approximately 9.23.5% lower, respectively. TCE rates for our drybulk vessels stood at $15,369 per day, and for our tankers at $26,290 per day for the first nine months of 2025. Our average combined OpEx rate was 2.4% higher compared to the first nine months of 2024 at $6,961 per day, also as a result of the change in the composition of our fleet. Adjusted NEMEX and NEMEX per common unit for the first nine months of '25 were $6.6 and $5.6, respectively.

Turning to Slide 15, I will briefly discuss some key balance sheet data. As of 09/30/2025, cash and cash equivalents, including restricted cash and time deposits in excess of 3 months, were $382 million. During the first nine months of 2025, we paid $178 million under our homebuilding program net of debt. We concluded the sale of six vessels for $75 million, adding about $49 million cash after debt repayment. Long-term borrowings, including the current portion net of the deferred fees, were $2.2 billion following the delivery of six vessels during the first nine months of the year. Net debt to book capitalization improved to 33.8%. Slide 16 highlights our debt profile.

With our recent $300 million senior unsecured bond, we further diversified our funding resources in addition to bank debt and leasing structures. The bond has a fixed interest rate of 7.75%, and pro forma for the bond, 41% of our debt is fixed at an average rate of 6.2%. We also have mitigated part of the increased interest rate cost by reducing the average for our floating rate debt and bareboat liabilities for the in the water to 1.8%. I would like to note that the average margins for the committed undrawn floating rate debt of our newbuilding program is 1.5%.

Our maturity profile is staggered with no significant balloons due in any single year until 2030 when the bond matures. In Q3 2025, Navios Maritime Partners L.P. completed three facilities for a total amount of $246 million. One additional facility of $68 million was signed in October. I now pass the call to Vincent Vandewalle, Navios Partners Chief Trading Officer, to take you through the industry section. Vincent?

Vincent Vandewalle: Thank you, Eri. Please turn to Slide 18. Geopolitical developments continue to shift worldwide trading routes caused by the tariff war, restricted Suez Canal passages, Ukraine war, and port fee impositions by the U.S. and China. Announced tariffs and the causes in effect are not expected to have a significant effect on tankers and dry bulk trade apart from steel. Tariff impacts on grain and container ships are expected to reduce following the recent trade deal between the U.S. and China. Red Sea entrance leading to the Suez Canal continues to operate at restricted transit level, increasing ton miles for most vessel types. Since the Gaza ceasefire, Huttig announced that they have ceased the tax on shipping.

There were several piracy incidents off Somalia in November. The Ukraine war is shifting trading patterns, limiting grain export out of the Black Sea and benefiting exports out of Brazil and the U.S. Russian crude and product exports are adjusting to tighter sanctions on Russian oil producers Rosneft and Lukoyle, elevating rates for non-sanctioned vessels. USDR port fees on Chinese vessels and similar Chinese port fees on U.S. vessels have been put on hold for the year while the two countries negotiate a more permanent solution. Please turn to Slide 20 for the review of the drybulk industry. Demand growth for drybulk has been relatively stable over the last five years at about 4% average annual ton mile growth.

The current order book stands at about 11% of the total fleet and will remain low due to high newbuilding prices, uncertainty about new fuel regulations and availability, and general market outlook. The fleet is aging quickly with 39% of the vessels fifteen years old. With the older vessels far exceeding those on order, supply should be constrained over the medium term. Please turn to Slide 21. The main driver of drybulk demand will be strong Atlantic Basin iron ore growth over the next several years with new projects in Guinea and Brazil. The biggest new project is Simandou in Guinea, starting now, which will ramp up to $120 million by '27.

Also, Vale in Brazil has three new projects totaling 50 million tons expected to start exporting by 2026. A total of 170 million tonnes are all long haul ton mile trades creating demand for an additional 234 Capes. With the current order book of only 173 Capes, the further tightening of supply and demand is expected over the next few years, benefiting rates. Overall, the drybulk market looks positive based on bulk steady long-term demand growth and a constrained supply of vessels. Please turn to Slide 23 for the review of the tanker industry. Reviewing the supply side, as in dry, we see a relatively low tanker order book of 16%.

With 51% of the fleet already over fifteen years old, rising quickly in the next few years. With older vessels exceeding the order book and yards offering first deliveries in late 2028, supply is set to be tight for several years. Please turn to Slide 24. The U.S. Office of Foreign Asset Control, OFAC, the EU, and the UK continue to sanction Russian, Venezuelan, and Iranian oil revenue, and the ships delivering their crude and products. These types of sanctions have two main effects. Sanctioned oil volumes from these three countries have more difficulty finding willing buyers, raising demand for compliant barrels and non-sanctioned vessels to carry that oil.

Secondly, with 785 tankers now sanctioned, the fleet has already seen a significant reduction of about 14% of total capacity. The tanker market also looks positive over the medium term based on a low order book, an aging fleet, and a reduced fleet due to sanctions. Please turn now to Slide 26 for a review of the container industry. After the COVID pandemic, containerships are already focusing mainly on the biggest units with fleet expansion in large vessels set to continue from high levels this year into next. Currently, 80% of the order book is for bigger ships with 9,000 TEU capacity or greater.

And only 70% of the order book is for 2,000 to 9,000 TEU capacity where Navios Maritime Partners L.P. is most active. Smaller segments of the fleets are well positioned to take advantage of shifting trading patterns. As shown on the right-hand graph, growth in non-mainland trades far exceeds the traditional Mainland trade to the U.S. and Europe, due to tariffs and higher growth in developing economies. Trades involving the Southern Hemisphere, mostly served by smaller-sized vessels, are expected to see continued health growth as this trade shift continues. Overall, Navios Maritime Partners L.P. is well positioned within the container market and continues to benefit from long-term employment with our high-quality charters. This concludes our presentation.

I now like to turn the call over to Angeliki Frangou for her final comments. Angeliki?

Angeliki Frangou: Thank you, Vincent. This completes our formal presentation, and we open the call to questions. And at this time, we will take our first question from Omar Nokta with Jefferies. Please go ahead. Your line is open.

Omar Nokta: Thank you.

Angeliki Frangou: Hi, good morning or good afternoon Angeliki and team. Thanks for the update. Slide 11 has a really nice summary.

Omar Nokta: Hi, Angeliki. Yeah. Slide 11 has a really nice summary that shows 2026 how you have 42% of your available days open to say the spot market or index rates. Yet given how much charter coverage you have, you only need $894 to breakeven on those shifts. Clearly a great place to be, gives you plenty of flexibility. You know, with that, how does that shape your interest in fixing your vessels kind of going forward from here? At least into '26? Do you keep what's available now to the spot market to keep those free and open given you've got that flexibility? Or do you want to continue to put these ships on contract and fix your coverage out?

Angeliki Frangou: I am going to take you through, and I think Stratos would like to add a couple of things. One of the things we are doing is we use maximum flexibility. So you will see that the vessels that are open for 2026, 60% of the majority is drybulk. And basically, those vessels are on a lot of them are index-based with the premiums. So that those we are actually very comfortable with how we are facing fleet and quarter forward. Depending on what we assume on the market. This is a very nice position we are in. The majority of our container vessels have been fixed. And basically, that is the area where we see a lot of upside.

We also are seeing for the first time after quite some period that we see also fixed period for dry bulk that we have not seen for some time. And with that, I would like Stratos to give you a little bit of feedback.

Efstratios Desypris: Just to add to what Angeliki was saying, is that in 2026, as we said, the business value of the contingency is covered. So there is no exposure on that sector, which people are discussing a lot of things that certainly the majority, I would say, more than 50% of the bank is covered. So the majority of the exposure is indeed on the drybulk. You see that with the contracted revenue, we only have $20 million to cover for the year, and we have 23,400 days approximately. Which basically is on the dry bulk sector, and we have seen a very easy strength on the dry bulk sector recently.

With rates across all the sectors of drybulk being very healthy. And we have seen also the forward care to be very healthy. So the exposure that we have today provides a very good opportunity for us. And it shows how much of the upside you can have on this portfolio today.

Omar Nokta: Got it. Thank you, Stratos and Angeliki. And just a follow-up, you know, clearly, we are seeing a pretty healthy containership chartering market, and you have been able to take advantage of really good strong, we would say, line of interest to build ships against contracts. And you have been fairly active in recent years in that 5,000 to maybe, say, 9,000 TEU range. There has been some focus recently, or at least it feels like there has been a shift. Liners are starting to look more at the feeder size kind of in that sub 2,000 TEU size range. You do not have a big focus on that in today's with your fleet today.

Is that something you see an opportunity in? Are there opportunities to build these smaller ships against contracts? Or is that more just talk at this point?

Angeliki Frangou: There are always projects. I will tell you that we see a lot of activity in every site. What you have to be very careful is counterparty and duration. Because building prices remain at the levels we have seen. So it is very important the signature, duration, residual value of the risk. But we see increased activity. I mean, it is quite interesting that there is a focus. We see a lot of inefficiencies in the market and the trading patterns.

Efstratios Desypris: And it seems that the smaller vessels give more flexibility to the liners in order to achieve their ever-changing trading pattern, I would say. It is almost on a yearly basis you will have new, I mean, we showed China, United States having a new one-year agreement. So basically, we see that it will happen in a lot of other areas. So you need to be alert, and smaller vessels give that flexibility.

Omar Nokta: That makes sense. Thank you. Okay. And then maybe just finally, you had the successful $300 million bond issue last month, unsecured, good rate. How are you thinking about those proceeds in terms of how you plan to deploy them?

Angeliki Frangou: As you said, I mean, accessing the market, the unsecured market is quite important. It has not been open for quite some time, I think almost ten years, for the maritime section. So what we achieved with that is we fixed our interest rate at 4% to 1% at 6.2%. We have got the diversification sources, but also very importantly, we have got €1.2 billion of debt-free vessels. Basically, our net debt is the same before and after. And that gives us about €1 billion of debt-free vessels. That gives us the most important thing that we get: optionality.

And this is a nice part where we will see how to you have 1.2 of your vessels of 6.6 basically that are mortgage-free. Yes, certainly.

Omar Nokta: Thanks, Angeliki. Very good. I will turn it over. Thank you. Thank you.

Operator: Thank you. And now I will turn the call back to Angeliki for final comments.

Angeliki Frangou: Thank you. This completes our Q3 results.

Operator: Thank you, ladies and gentlemen. This does conclude today's program. Thank you for your participation. You may disconnect at any time.

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