Kristoffer Skeie

Kristoffer Skeie with Arctic Securities inquired about potential changes to Navios Maritime Partners' depreciation accounting, noting a significant drop versus Q3, the timeline for reaching the net Loan-to-Value (LTV) target and its implications for future buybacks and dividends, and whether the company is exploring investment opportunities in new shipping segments beyond dry bulk, tankers, and containers.

Answer

Chief Trading Officer Vincent Vandewalle clarified that the Q3 depreciation drop was a one-off accounting adjustment related to variable charter terminations, with Chairwoman and CEO Angeliki Frangou adding that the vessels were re-entered into a healthy market. Ms. Frangou also explained that the company's financial flexibility, including $170 million in contracted revenue above cash operating costs for 2026 and 16,000 open days, supports LTV reduction, liquidity, and opportunistic investments, while confirming continued buybacks and a dividend increase driven by unit repurchases. Regarding new segments, Ms. Frangou stated they continuously seek opportunities but are well-positioned with current fixed container exposure and open days primarily in dry bulk and VLCC.

Kristoffer Skeie inquired whether Navios Maritime Partners is exploring investment opportunities in new shipping segments beyond its current focus on dry bulk, tankers, and containers.

Answer

Angeliki Frangou, Chairwoman and CEO, stated that Navios Maritime Partners continuously evaluates new opportunities but emphasized the company's strong current market position, particularly with its container fleet fully fixed and strategic open days in dry bulk and VLCC segments.

Kristoffer Skeie asked about the Q1 LR2 fleet trading strategy (dirty vs. clean) and open bookings, considering the spread between LR2s and Aframaxes. He also inquired about term rates for LR2s, comparing them to VLCC rates and potential upside.

Answer

Chief Commercial Officer Lars Dencker Nielsen reiterated an opportunistic but disciplined approach to dirtying ships, noting that the perceived large spread is a short-term spike, with a more normalized quarterly difference. CEO Emanuele Lauro clarified that LR2/Aframax term rates have not remained flat, with one-year deals in the high $40s and longer-term deals comfortably in the $30s, and Mr. Nielsen added that LR2/Aframax had relatively outperformed VLCCs.

Kristoffer Skeie asked for more details on Scorpio Tankers' Q1 LR2 fleet bookings, specifically the dirty versus clean trading split and how the company views the spread between LR2 and Aframax rates. He also inquired about the potential upside for LR2 term rates, given strong VLCC term rates.

Answer

Lars Dencker Nielsen, Chief Commercial Officer, reiterated an opportunistic approach to LR2 trading, emphasizing that the reported $40,000 difference in rates was a short-term spike, with a more normalized quarterly spread closer to $10,000, which doesn't justify large-scale switching. Emanuele Lauro, CEO, clarified that LR2/Aframax term rates have not been flat, citing high $40s for 1-year deals and comfortably $30s for 5-year deals, with strong demand. Robert Bugbee, President, added that product tanker stocks show strong return on equity compared to VLCCs.

Kristoffer Barth Skeie, from Arctic Securities, inquired about the lapsing dates and delivery timelines for CSOV options, and the conditions required to declare them, specifically if a long-term contract is a prerequisite. He also asked about the time charter levels needed for the tanker division to de-risk estimates and the refinancing strategy for the bond maturing next year.

Answer

CEO Alexander Saverys stated that CMB.TECH has close to a year to declare CSOV options, with deliveries expected in 2028-2029, and a long-term contract is not a must-have. He indicated that current long-term time charter rates for modern tankers are not high enough to tempt them to de-risk. CFO Ludovic Saverys explained that the bond process was stopped due to cheaper alternatives, and they plan to pay back the bond with internal cash flow and asset sales, not foreseeing equity issuances.

Kristoffer Barth Skeie asked about the lapsing period and delivery schedule for CSOV options, the conditions required to declare these options, the time charter levels needed in the tanker division to de-risk estimates, and the company's plan for refinancing the bond maturing next year, specifically regarding its equity covenant.

Answer

CEO Alexander Saverys stated that they have close to a year to declare CSOV options, with deliveries expected in 2028-2029, and that a contract is not a must-have to lift the option. He indicated that current long-term time charter rates for modern VLCCs are not high enough to tempt them to de-risk. CFO Ludovic Saverys explained that the bond process was stopped due to cheaper alternatives, and they anticipate paying back the bond with own free cash flow, asset sales, and liquidity, not foreseeing equity issuances or debt capital markets in the coming quarters.

Kristoffer Skeie from Arctic Securities inquired about the anticipated market impact from the recent OPEC+ decision to increase output on product tanker loadings and also asked for the current earnings levels for Handy-size tankers.

Answer

Søren Winther, VP of Commercial, stated that the OPEC+ production increase is fundamentally positive. He explained it supports crude tanker rates, reducing their cannibalization of the product tanker fleet, and also leads to higher refinery activity and trade volumes. He noted this strengthens the structural outlook for the remainder of the year. He also specified that Handy-size vessels are currently earning in the low $20,000s per day, similar to MRs.

Kristoffer Skeie inquired about the new dividend policy, asking for color on the balance between dividends and share buybacks given the stock's discount to intrinsic value. He also asked for the company's short-term rate expectations and long-term view on the Simandou iron ore project's impact on ton-mile demand.

Answer

Executive Stamatios Tsantanis explained that dividends are the preferred method for capital return due to daily trading volume limits on buybacks, stating the Q2 dividend is a good guide for the future. He expressed conservative optimism for the market, citing strong fundamentals like miner export guidance and low inventories, and noted that the underlying market dynamics have not changed despite negative sentiment.

Kristoffer Barth Skeie questioned the company's capital distribution policy, asking how it weighs dividends against share buybacks given the stock's discount to NAV. He also asked about the cash impact of recent refinancing and the key market drivers expected for Q3 and Q4.

Answer

Executive Stamatios Tsantanis stated that as the company gains more certainty on its cash flow, its appetite to increase shareholder dividends grows. CFO Stavros Gyftakis added that recent refinancing activities will nullify the equity needed for one vessel acquisition and minimize it for another, preserving cash. For the market outlook, Tsantanis pointed to favorable demand-supply fundamentals and geopolitical factors like the Red Sea closure as key drivers, though he cautioned that aberrations in supply could still cause volatility.

Inquired about current charter discussions for open vessels, interest from liners in forward fixing, potential for further vessel divestments, and the typical useful life of their vessels.

Answer

The company has few vessels opening up soon. The charter market is firming up, with rates for a 2,800 TEU ship increasing from $20,000/day to $25,000/day in about a month. Liners are interested in fixing ships for the near term but not for openings six months out. The company is considering options for its older vessels (selling or rechartering) as their current charters expire. Technically, vessels can operate until their 25th year, making the decision to keep or sell a commercial one based on market rates.

Kristoffer Skeie from Arctic Securities asked for an update on chartering discussions for open vessel days, including liner interest in forward fixing and recent changes in charter durations. He also inquired about the company's strategy for its older vessels, including potential divestments and their expected useful life.

Answer

Executive Aristides Pittas noted that the charter market is firming up, with rates for similar vessels increasing recently and available charter periods lengthening. He explained that liners are focused on near-term openings rather than those six months out. Regarding older vessels, Mr. Pittas stated that management is considering all options, including reselling or rechartering, as it's a commercial decision, not a technical one, given the ships can operate until their 25th year.