Frangou optimistic

Angeliki Frangou has broken ranks with many other dry-bulk players by declaring cause for “measured optimism” for the industry.

The Navios Maritime chairman and chief executive pointed to some rays of light for the beleaguered sector as Navios Maritime Holdings spin-off Navios Maritime Partners reported an almost 50% hike in annual profit.

Angeliki Frangou.

In a busy day of reporting, Navios Maritime Partners also flagged a shelf registration which allows it to raise up to $500m while it has also rearranged its revolving credit facility which will see it pay up a large lump sum this quarter.

Frangou said in Thursday’s announcement: “There is some data that allows measured optimism for our industry. It appears that urbanization and the associated demand for dry bulk cargo continues.”

There have been reports in the past month or two of negotiations on getting large-scale construction contracts back on track, particularly in China and the US. Recent upturns in both spot and time charter rates in the capesize and panamax sectors lend credence to the optimism.

“The [Baltic Dry index] has progressed well off its December lows and various governmental stimulus packages are targeted towards infrastructure development,” Frangou continued.

Regardless of any possible recovery in the dry-bulk market, Navios Maritime Partners on Thursday filed a shelf registration “under which it may sell any combination of securities (debt or equity) for up to a total of $500m”.

Like competitor Genco did earlier this week, Navios also announced it has amended its revolving credit facility. It will now pay off $40m of the loan in the first quarter which will result in a $1.5m interest expense saving, it said.

“The interest rate on the remaining facility of $195m would have a spread of 225 [basis points],” it continued.

Unlike many dry-bulk competitors, however, Navios has decided to cash dividend for the fourth quarter.

“The results of the fourth quarter of 2008 were in line with our expectations, and we have declared a $0.40 per unit cash distribution for the fourth quarter of 2008,” Frangou said on Thursday.

“This distribution represents a 4% increase over the prior quarter. We are comfortable with this dividend policy in the current environment as Navios Partners is well positioned given the long-term employment of its fleet.”

The declaration came on the back of a 45% rise in net profit from $19.51m to $28.76m as revenues rose 49% to $75.08m.

Expenses were, however, also significantly up with management fees increasing tenfold to $9.28m, general and administrative costs up two-and-a-half times and financial expenses up 67% at $9.22m.

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