There will be plenty of opportunities for strong dry bulk companies to repeat the success of a widely hailed deal for four capesizes that her principal listed company.
Navios boss Angeliki Frangou has said there will be plenty of opportunities for strong dry bulk companies to repeat the success of a widely hailed deal for four capesizes that her principal listed company, Navios Maritime Holdings, unveiled last month.
?There is half a trillion dollars worth of newbuildings coming up and I can guarantee you there will be more [deals] coming,? Ms Frangou said during a conference call to discuss second quarter financial results at Navios-backed spin-off Navios Partners.
?We are working on this. Navios is well-positioned as one of the few companies without covenant restrictions or other difficulties, so we are among the strong partners for financiers.?
In last month"s $325m deal, three of the four vessels ordered at Sungdong in South Korea were acquired from Commerzbank, and one from the yard, with payment in the form of cash and convertible stock.
Ms Frangou said that interest currently centred on distressed assets and led to newbuildings in which the equity had been wiped out, rather than secondhand deals.
Navios Partners, which is almost 47% owned by Navios Holdings, could also do such deals, she said.
Navios Partners had just posted increased operating surpluses, saying it foresaw steadier dry bulk demand ahead.
"The world"s economies are stabilising, and economic growth is projected to be positive in the second half of 2009,? Ms Frangou said.
?Emerging markets are continuing to outperform developed countries, and Navios Partners should be able to benefit from steadier global demand for dry bulk products while also participating in the rebalancing of the global fleet.?
At the same time, not all companies would be able to avail themselves of growth opportunities, she said.
?The credit crunch is very real,? Ms Frangou said. ?Even though we have better demand, availability of credit is worsening for shipping finance.?
Piraeus-based Navios Partners almost doubled second quarter operating profits in comparison with the same period last year, reaching $11.4m.
Net income, however, was battered by the second quarter issue of 1m subordinated units to Navios Holdings to be relieved of its $130m obligation to purchase the newly built capesize Navios Bonavis.
Under US GAAP accounting this had to be recognised as a $6.1m non-cash expense bringing net earnings down to $3.6m, a 50% drop from the second quarter of 2008.
Adjusted net income for the quarter was $9.7m and net income for the first half was $12.6m compared with $11m in the first six months of 2008.
Revenues rose 24% in the quarter and 34% in the first half, mainly due to last year"s acquisition of the 2005 built panamax Navios Hope, which boosted first quarter earnings this year with a lump sum charter settlement of nearly $30m, and the recent acquisition of rights to the chartered in panamax Navios Sagittarius.
The additions have brought the fleet to 10 owned and long-term chartered ships, comprising nine panamaxes and one capesize, which are chartered out with an average remaining term of 4.4 years across the fleet.
Navios Partners has declared a distribution to shareholders of $0.40 per unit for the second quarter.