Business context and reporting period
Navios Maritime Partners L.P. filed an audited Form 20-F for the fiscal year ended December 31, 2021—not a standalone Q4 report. The Marshall Islands partnership owns and operates drybulk, containership and tanker vessels, generally chartered under time charters. Results include Navios Containers from April 1, 2021 and Navios Acquisition from August 26, 2021, following the mergers and acquisition of control.
At April 1, 2022, the reported fleet comprised 26 Panamax, 24 Capesize, four Ultra-Handymax, 47 containerships and 45 tankers, including vessels under construction or charter-in and two containerships agreed to be sold.
Financial results and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Time charter and voyage revenue | $713.2 million | $226.8 million |
| Net income (loss) attributable to unitholders | $516.2 million | $(68.5) million |
| Adjusted EBITDA (non-GAAP) | $426.5 million | $99.8 million |
| Operating surplus (non-GAAP) | $293.7 million | $39.9 million |
| Net cash from operating activities | $277.2 million | $94.1 million |
| Net cash used in investing activities | $(106.3) million | $(83.9) million |
| Net cash used in financing activities | $(32.2) million | $(9.9) million |
| Net borrowings, after deferred financing costs | $1,361.7 million | $486.9 million |
- Fleet utilization was 99.2% versus 98.9%; daily time-charter equivalent (TCE) rose to $21,709 from $12,497. Available days increased to 31,884 from 17,430, largely reflecting the mergers.
- Cash and cash equivalents were $159.5 million and restricted cash was $10.0 million at year-end. Current assets of $226.3 million were below current liabilities of $395.5 million, a negative working capital position of $169.2 million.
- Current borrowings, net, were $255.1 million. The company reported compliance with its debt covenants at December 31, 2021. Borrowings generally carry floating rates; the reported weighted-average rate was 4.1% in 2021.
- Margins are not separately presented as a headline metric in the supplied filing text. The reported earnings include significant merger-related and vessel-sale items, so net income is not a straightforward measure of recurring profitability.
Material changes versus the prior comparable period
- Revenue rose 214.5%, reflecting both the larger fleet and higher TCE. Operating and financing costs also rose with the fleet expansion.
- Net income swung from a loss to a profit, but 2021 included an $80.8 million gain associated with remeasuring the previously held Navios Containers interest, $48.0 million of bargain-purchase gains, and $33.6 million in net vessel-sale gains. It also included $10.4 million in merger transaction costs. These items materially affect reported results.
- There was no vessel impairment charge in 2021, compared with $71.6 million in 2020. The filing attributes the 2021 conclusion partly to improved markets.
- Net debt increased substantially following the mergers, additional vessel financing and fleet growth. Common units outstanding increased from 11.3 million at year-end 2020 to 30.2 million at year-end 2021, reflecting merger consideration and equity offerings.
Outlook, management commentary and risks
- Management reported $2.873 billion of contracted revenue as of April 1, 2022 and stated its cash forecast indicated sufficient resources for debt service and normal working capital needs for at least 12 months from issuance of the financial statements. This assessment incorporates contracted revenue and expected vessel-sale proceeds.
- As of April 1, 2022, charter coverage was 60.1% of available days for 2022. Management said nearly all available containership days were fixed for 2022, while 65% of drybulk days and 45.1% of tanker days remained exposed to market rates.
- The partnership declared a $0.05-per-unit distribution for Q4 2021, paid February 11, 2022. The filing emphasizes that future distributions remain discretionary and subject to cash needs, debt covenants and board decisions.
- Expansion plans include newbuild containerships and drybulk vessels, with deliveries extending through 2024. The filing also reports the February 2022 agreement to sell two 8,204-TEU containerships for $220 million, with an estimated gain of about $144.3 million, subject to completion.
- Key risks include shipping-rate and vessel-value volatility, charter renewals and customer concentration, high leverage and floating interest rates, refinancing and covenant exposure, negative working capital, COVID-related disruption, and the Russia-Ukraine conflict and related sanctions. The filing also highlights environmental and decarbonization rules, fuel costs, off-hire exposure and the transition away from LIBOR.
- Singapore Marine accounted for 14.5% of 2021 revenue. Management and administrative services are provided by affiliated managers; related-party vessel operating and administrative costs increased with the expanded fleet.
Most important facts for investors to verify
- Reconcile reported net income with recurring performance, particularly merger remeasurement and bargain gains, vessel-sale gains, and merger costs; review the non-GAAP reconciliations and definitions.
- Review debt maturities, secured vessels, sale-and-leaseback obligations, covenant headroom and interest-rate sensitivity. The filing reports $1.374 billion of total borrowings before deferred finance costs and substantial scheduled principal payments in 2022–2025.
- Assess the negative working capital position and validate the assumptions behind management’s 12-month liquidity forecast, including the timing and proceeds of vessel sales.
- Check charter coverage, expiring charters and renewal rates by vessel sector, plus customer credit quality and the concentration represented by Singapore Marine.
- Confirm delivery, financing and charter assumptions for newbuild commitments, and completion of the planned sale of the two containerships.
- Consider dilution from 2021 equity issuance and merger consideration, and the board’s discretion over future distributions.
The 2021 financial statements received an unqualified audit opinion, and the auditor also issued an unqualified opinion on internal control over financial reporting. The independent auditor identified valuation of acquired charter-related intangible assets and unfavorable lease terms as a critical audit matter.