Angeliki Frangou, Chairman and Chief Executive Officer of Navios Acquisition, stated, “I am pleased with the results of the second quarter, for which we reported revenue of $41.5 million and Adjusted EBITDA of $11.0 million.”
Angeliki Frangou continued, “The oil transportation market continues to be under pressure. We are maintaining cost control, as operating costs are about 17% lower than our listed peers, based on 2017 data. We are also taking advantage of this market by returning capital to stockholders through dividend and stock repurchase programs. We declared a dividend of $0.02 for the second quarter and have repurchased approximately 7.6 million shares (about 5.0% of the shares outstanding) YTD 2018."
HIGHLIGHTS — RECENT DEVELOPMENTS
Bareboat structure on newbuild VLCCs
In August 2018, Navios Acquisition agreed to the main terms of a 12-year bareboat charter-in agreement with de-escalating purchase options for two newbuild Japanese VLCCs delivering in the third and fourth quarter of 2020, respectively. The bareboat charter-in agreement reflects an implied price of approximately $84.5 million per vessel and an annual effective interest of approximately 6% fixed for the duration of the agreement. Concurrently, Navios Acquisition agreed to the main terms of bareboat charter-out agreements with a duration of 10 years for each vessel plus a five-year optional period granted to the charterer. The bareboat charter-out rate is $27,816 net per day, $29,751 net per day for the optional period, and the charterer is granted de-escalating purchase options. The above structure is expected to provide an annual free cash flow of approximately $5.0 million on average for the duration of the bareboat charter-in agreement. The above structure is subject to definitive documentation and there can be no assurances that it will be completed in full or that, if agreed upon, will be pursuant to the terms described in this press release.
Dividend of $0.02 per share of common stock
On July 31, 2018, the Board of Directors of Navios Acquisition declared a quarterly cash dividend for the second quarter of 2018 of $0.02 per share of common stock. The dividend is payable on September 27, 2018 to stockholders of record as of September 20, 2018. The declaration and payment of any further dividends remain subject to the discretion of the Board of Directors and will depend on, among other things, Navios Acquisition’s cash requirements as measured by market opportunities and restrictions under its credit agreements and other debt obligations and such other factors as the Board of Directors may deem advisable.
Navios Midstream acquisition proposal
On June 28, 2018, Navios Acquisition announced that it has submitted a proposal to the Board of Directors of Navios Maritime Midstream Partners L.P. (“Navios Midstream”) (NYSE:NAP) to acquire the publicly held units of Navios Midstream not already owned by Navios Acquisition in a stock for units exchange.
Subject to negotiation and execution of a definitive agreement, Navios Acquisition is proposing consideration of 6.292 Navios Acquisition shares for each outstanding publicly held common unit of Navios Midstream as part of a transaction that would be structured as a merger of Navios Midstream with and into Navios Acquisition.
The proposed transaction is subject to the negotiation and execution of a definitive agreement, approval of the Board of Directors of Navios Acquisition and the necessary approvals of the conflicts committee of Navios Midstream under Navios Midstream’s limited partnership agreement. The consummation of the proposed transaction would be subject to customary closing conditions. There can be no assurance that any such approvals will be forthcoming, that a definitive agreement will be executed, or that any transaction will be consummated.
Stock repurchase program
As of August 21, 2018, Navios Acquisition has repurchased 7,626,619 shares for approximately $6.0 million, under the $25.0 million stock repurchase program, providing an additional return of 5.0% to our stockholders.
Time charter coverage
Navios Acquisition currently owns 35 vessels, of which seven are VLCCs, 26 are product tankers and two are chemical tankers.
Currently, Navios Acquisition has contracted 93.8% of its available days on a charter-out basis for 2018, which is expected to generate revenues of approximately $148.3 million for 2018. The average contractual net daily charter-out rate for the 83.7% of the available days that are contracted on base rate and/or on base rate with profit sharing arrangements is expected to be $13,987 for 2018.
Navios Maritime Acquisition Corporation press release