Thank you for joining us for Navios Maritime Partners Third Quarter 2019 Earnings Conference Call.With us today from the Company are Chairman and CEO, Angeliki Frangou; Chief Financial Officer, Stratos Desypris; and Executive Vice President of Business Development, George Achniotis.As a reminder, this conference call is being webcast. To access the webcast, please go to the Investors section of Navios Partners’ website at www.navios-mlp.com. You’ll see the webcasting link in the middle of the page, and a copy of the presentation referenced in today’s earnings conference call can also be found there.Now, I’ll review the Safe Harbor statement. This conference call could contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios Partners. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Navios Partners’ management and subject to numerous material risks and uncertainties, which could cause actual results to differ from the forward-looking statements. Such risks are more fully discussed in Navios Partners’ filings with the Securities and Exchange Commission. The information discussed on this call should be understood in light of such risks. Navios Partners does not assume any obligation to update the information contained in this conference call.The agenda for today’s call is as follows, we’ll begin this morning’s call with formal marks from the management team, and after, we’ll open the call to take questions.Now, I turn the call over to Navios Partners’ Chairman and CEO, Angeliki Frangou.

Thank you, Laura. And good morning to all of you joining us on today’s call.I am pleased with the results for the third quarter of 2019 for which Navios Partners reported strong financial results. We had $41.3 million in EBITDA, $16.9 million in net income and $1.67 in earnings per unit. Charter rates in the drybulk sector are healthy with a Capesize 5TC rate around $25,000 per day. This is more than 4 times the average for the month of February, March and April. Navios Partners had a TCE rate of $18,778 per day for the third quarter and declared a quarterly distribution of $0.30 per unit, representing a current yield of approximately 6%. With only one vessel being retrofit for scrubber, our vessels are in the water, generating revenue.As you can see from slide five, NMM owns 37 vessels. In addition, NMM owns 33.5% of NMCI, and we also have an investment in each of the two Navios Europe entities that together own 24 vessels.Slide six sets forth the reasons we believe that Navios Partners is a premier drybulk shipping platform. We have over $500 million in remaining contracted revenue. For 2019, Navios Partners should generate about $60 million of cash flow, based on the current rate. We rewarded unitholders with $1.20 per unit in distribution annually, representing a 6% return and have a unit repurchase program under which we have used $4.5 million, representing repurchases of approximately 3% of our units outstanding.Slide seven details the recent developments. NMM has a strong balance sheet and competitive positioning in the recovering drybulk and container market. Our Q3 EBITDA increased by 85% over Q2. We used our cash flow to refinance our Term Loan B and deleveraged our balance sheet. The new debt bracket is expected to save us about $11.5…

Thank you, Angeliki, and good morning all.I will briefly review our unaudited financial results for the third quarter and nine months ended September 30, 2019. The financial information is included in the press release and is summarized in the slide presentation on the Company’s website. Please note, for simplicity, the discussion of the financial results below exclude the effect of one-off items listed in slide 13.As Angeliki mentioned earlier, throughout 2019, we have been focusing on the refinancing of our Term Loan B. Our efforts were completed in October where we fully repaid the outstanding amount one year before its maturity. Pro forma for the Term Loan B, we have reduced our debt by over $80 million.Moving to the financial results. As shown on slide 13, our revenue for the third quarter of 2019 increased by $0.9 million to $63.5 million compared to $62.6 million for Q3 of 2018. The increase was mainly due to the 6.7% increase in the time charter equivalent rate achieved in the third quarter of 2019 and was mitigated by the 5.5% decrease in our available days. Adjusted EBITDA for the third quarter of 2019 was $41.3 million. Compared to the second quarter of 2019, adjusted EBITDA increased by 85%, reflecting the significantly improved market. Adjusted net income for the quarter amounted to $18.3 million. Operating surplus for the third quarter of 2019 amounted to $25.7 million. The replacement and maintenance CapEx reserve was $7.2 million. Fleet utilization for the third quarter of 2019 was almost 99%.Moving to the nine-month operations. Time charter revenue for the nine months decreased by 9% to $158.1 million compared to $173.8 million in 2018. The decrease was mainly due to the 8.2% decrease in the time charter equivalent rate achieved in the nine months of 2019 as well as…

Thank you, Stratos.Please turn to slide 20. The IMF forecast world GDP growth at 3% for 2019 and 3.4% in 2020. The emerging and developing Asian markets, which drive drybulk demand, are expected to grow at a healthy 5.9% in ‘19 and 6% in 2020. The drybulk market experienced a volatile 2019 with earnings falling to near historical lows in Q1, mostly due to disruptions in the supply of iron ore in both Brazil and Australia. Volatility continued in the third quarter as the BDI reached a nine-year high of 2,518 in early September due to strong demand across all bulk commodities, along with the reduction in fleet capacity due to scrubber retrofitting.Turning to slide 21. For the second half of 2019, drybulk demand for the three major cargoes of iron ore, coal and grain is forecast to outpace in the first half by almost 7% or about 110 million tons. This increase is led by iron ore, which is expected to grow by 11% or 77 million tons, much of which will come from Brazil and Canada, adding to ton miles. At the same time, the supply of vessels is expected to reduce as vessels are retrofitted with scrubbers. About 4.3% of the Capesize fleet is expected to be out of service in Q4 and the first quarter of 2020. Given current supply and demand forecast, the fundamentals going forward remain positive.Turning to slide 22. Chinese steel production growth is an impressive 8% through September. Chinese steel exports continue to be strong due to large infrastructure projects outside China. The Belt and Road Initiative remains the cornerstone of Chinese economic plans for the next few years, supporting steel and power demand domestically and abroad. The Chinese government continues to stimulate their economy with large infrastructure projects, resulting in a…

[Operator Instructions] Your first question is from the line of Chris Wetherbee with Citi.

Hey. Thanks for taking my call. I wanted to ask on free cash flow. And so, obviously, where rates are and all the charter structures that you have, they have potentially generated a decent amount of free cash when you think about the next 12 months or certainly in 2020. Can we talk about sort of priorities with the free cash flow? Is aggressive debt pay down sort of the right way to be thinking about that use of cash? Are there other things that you might want to do? I don’t know if there’s opportunities out there. I just want to get a sense on how you’re thinking about that free cash flow.

Good morning, Chris. You can see what we did this year. I mean, if you take for example this year, we have -- we always have the balancing act. We’re doing dividends, buyback and deleveraging. I mean, of course, this year, we paid $13.5 million in dividends. We did a buyback of almost $5 million. So almost $20 million of return to our shareholders, where at the same time, we repaid our term loan, reduced our debt by 20%, almost $83 million, saved about $11.5 million from interest, and extended our maturities to 2030.So, as we look on 2020, the reality is that we have more choices because of taking a maturity away from in front of us. So, we are able to use -- we have a pipeline that is already -- is within our balance sheet. With the Navios Europe opportunity, don’t forget we have a receivable of $50 million, that’s not even in fitted in our balance sheet and can be about -- when you translate it into assets, it’s about $4.5 NAV; and also the Kamsarmax, the deal that we always add to our balance sheet.So, as we look 2020, we have a lot of positive deals win and at the same time, we start with a healthy dividend, and we will see also how the free cash flow generation is coming.Let’s not forget, we saw the tale of two different situations this year where a random event, a tragedy in the Vale dam really created a very difficult market in the first half. We have seen that this year the second half is better, and we foresee that even Q1 is a seasonally low margin. Because of the coverage of it and the restriction of the supply, it can be a positive market. So, we have taken the maturities away, yes, and we have a balancing act between dividend, buyback and deleveraging, of course, mindful of the market.

Okay. Would buybacks be part of that you thinking 2020? I’m just trying to maybe get a sense of how you kind of prioritize. It sounds like obviously everything is on the table. But, I just wanted to get a sense if there is something you feel strongly about prioritizing at this point?

I think, our dividend, I mean, is a healthy dividend. Yes, buyback, we have a program. So, it can be part of that. I think, the important thing is really how you materialize the opportunities. Like, the receivable from Navios Europe 1 is a big opportunity for moving forward and creating more value.

And then, can you comment on your thoughts around equity? Do you have any needs from an equity perspective? How do you see -- obviously, we had a rebound in the market here. Just kind of curious what your thoughts are around equity, if you foresee having a need for equity?

I think, the kind of a creative pipeline we have, we don’t see any equity requirement. I mean, we have a good cash flow. I mean, we did it quite significant, and I will repeat, a 20% reduction of our debt is over $83 million within the year. In a year that it started, really, I mean, it started very difficult in the beginning for random events. So, on where we are sitting today with the portfolio we have, with the requirements which are basically the normal CapEx of a vessel that comes from drybulk, and we don’t see anything that will require this kind of a major equity infusion. I mean, even the pipeline we have is really with minimal amount.

Okay. That’s helpful. I wanted to make sure. I had a couple of market-related questions I just wanted to run through quickly, if I could. First, on IMO 2020, clearly, there is going to be, I think, an overweight focus on scrubbers with the largest Capesize vessels on the dry side. Do you have a sense of how much of the drybulk market fuel consumption might be tied up in the Capesize vessels that will be having scrubbers installed? I guess, really, what I’m trying to understand is what the demand for compliant fuel is relative to heavy bunkers in the new world. It seems like there’s a significant amount of scrubber installation activity on the Capesizes, which burn the most fuel. I just want to get a sense of what your thoughts are around that.

If you see, we have at page 21, about the 4.5% of the fleet is of Capesizes that have been out of service for a retrofit of scrubber. I mean, this is for the end of the quarter. But in reality, I think the majority of the vessels are not with scrubber. Scrubber is -- I mean, you really are looking on the scrubber as a play on the spread basically. And whether you will make -- what kind of a margin -- I mean, you can see that this scrubber as a scrubber margin can collapse if prices of fuel go -- goes up. So, this is a kind of a situation that Navios as a group, we have not taken a position. I mean, we have in NMM one vessel that we did install scrubber at a cost plus profit, and we have a time charter for five years at a very, very attractive rate. So, on a percentage overall on the Capes, it may -- it’s not the majority. I think 4.5% in the quarter, we say that over 80%, they do not have scrubbers. There was a lot of the VLOCs with their Vale trade to Brazil has taken this kind of a trade. This has to be seen in the future. For sure, scrubber is not the long-term solution.

Okay, yes. No. That would certainly make sense. Okay. Last question on the containership side, if I could. When you think about what we’ve seen in the market with meaningful rate increases that we’ve seen on the container side. I guess, it strikes me to a degree that we haven’t seen as much activity on the asset price side. So, asset prices are somewhat stagnant. And I think, if you look at some of the spot data we’ve seen on the box level, we’ve seen kind of weakness in rate. I just wanted to get a sense of maybe what your thoughts are around the containership market as we kind of get past the peak season, we have an earlier than average Chinese New Year. What’s the outlook for the next few months on the container side, and sort of how do you think about asset values?

Actually, we had also -- on NMM, we are all fit. But, if you take overall the position on the containers, we have seen a much healthier quarter than the beginning of the year. So, basically -- and that has been very much assisted also because of the scrubbers of retrofit and they had created a huge backlog on the containers, on the ones that have fitting scrubbers. And also, there is -- we have seen on the smaller vessels, a healthy market, and our charter-in market. I mean, basically if you compare the beginning of the year to where we are today, we have seen a 7% recovery. And that’s an important part. I think overall, the container market is a market that -- it seems to have been balanced and is in a nice balance. We will see how to after the Chinese New Year. And you’re right. The Chinese New Year is early this year, which is good. So, in February we’ll have a full activity on the market.

Your next question is from Randy Giveans with Jefferies.

Congrats on the term loan refinancing and the new management agreement. So, with that, what is your expected, I guess, interest expense in 2020? And what about your expected management fees or vessel OpEx as well as G&A expense in 2020, in millions of dollars for those?

Yes. I mean, we have stated that there is a saving in interest expense, there is saving of around $11.5 million from the whole refinancing activity that we did within this year. So on an average, you can see what was this year and deduct $11.5 million. On the management fees, I mean we have recently announced the renewal of the management agreement for all our vessels. This was, if you remember, at a 3% average increase for the full-year period. So, the rates are fixed, the rates are set. So, it’s very easy. We have -- if you see the presentation, we have details on a per vessel basis on how the OpEx are calculated. On the G&As, I wouldn’t expect any major difference compared to what we have this year.

Perfect. And then, turning to your fleet. What are your plans for those kind of five large containerships? Are those sales candidates, are you planning on keeping them for a few years? And then, for the vessels, especially drybulk ones with charters expiring in the coming months, what’s your strategy for spot versus time charters in the quarters ahead?

Listen, I mean, on the vessels -- the container vessels provide a huge cash flow, and don’t forget that those vessels that charter until 2028. So this is a quite significant cash flow for the Company. So, this is a position we like. We like the cash flow we generate from them. Now, on the vessels that we see open, I mean, as you see the strategy of Navios is we don’t see really previous charter rates at attractive levels. We have concentrated more creating optionality and upside with the index, usually above -- a description of our vessels that are usually above index. So, we can fix at 108%, 120%, 125%, depending on the vessels, and with the optionality to convert to fix whenever we like. So, this provides us ability to have vessels at all-time fixed with longer durations, but on the same time, we are able to convert whenever we have a view on the market and gives us the visibility. So, there is no really -- you’re not going to see a big -- we don’t see that the period market really makes a lot of sense today because it’s at-- we have not seen that period market picking up. The same way, we have not seen vessel values picking up comparing to where we are sitting today on a $25,000 environment on Capes and a very healthy rate environment.

Okay. And then, for your index rate charters, for example, 107% of BCI or 108% of BCI. Is that calculated on a quarterly basis and then paid at the end of the quarter, or is it per voyage? Like, how is that determined, the average kind of BCI and the premium…

No, no. Every 15 days is quite have risen. You mimic the market.

In numbers?

Purely every 15 days, you have -- so you automatically get the upside.

Got it. Every 15 days. All right. Just curious how that was calculated. All right. Well, hey, thank you so much.

I would now like to turn the call back over to Angeliki for closing remarks.

Thank you. This completes our Q3 results.

Thank you. This concludes today’s conference call. You may now disconnect.