Thank you for joining us for Navios Maritime Partners Third Quarter 2020 Earnings Conference Call. With us today from the Company are Chairwoman and CEO, Ms. Angeliki Frangou; Chief Operating Officer, Mr. Efstratios Desypris; Chief Financial Officer, Ms. Erifili Tsironi; and Vice Chairman, Mr. Ted Petrone. 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 webcast link in the middle of the page, and a copy of the presentation referenced in today's earnings conference call will also be found there. Now, I will 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 are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements. Such risks are more fully discussed in Navios Partners filings with the Securities and Exchange Commission. The information set forth herein 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: first, Ms. Frangou will offer opening remarks. Next, Mr. Desypris will give an overview of Navios Partners segment data. Next, Ms. Tsironi will give an overview of Navios Partners financial results. Then Mr. Petrone will provide an industry overview. And lastly, we'll open the call to take questions. Now, I turn the call over to Navios Partners Chairwoman and CEO, Ms. Angeliki Frangou. Angeliki?

Good morning and thank you all for joining us on today's call. I am pleased with the results of the third quarter of 2023, in which we reported revenue of $323 million and net income of about $90 million. We are also pleased to report net earnings per common unit of $2.92 for the quarter. Before I provide some comments on the Company, I would like to share my views regarding economic sentiment. The U.S. economy is generally healthy, but there are clouds on the horizon. The U.S. has high government debt levels and the highest pastime fiscal deficit. The Fed is engaged in the computative tightening, and there is a risk of interest rates rising further from their current relatively elevated levels. China, the world's largest consumer of commodities, is not firing on all cylinders. These factors, along the wars in Ukraine and Israel, are contributing to making this one of the most dangerous times in memory. Despite these clouds, the TCE market is robust and healthy. Our company is doing well and positioned for all weather. We'll continue to focus on things that we can control, such as reducing levels, being eco-friendly by keeping a modern energy-efficient fleet and expanding into areas which we will promote our long-term prospects, such as the recent tanker build we entered into with various or majors. Navios Partners is a leading publicly listed shipment company, diversified in site asset classes in three sectors with an average vessel age of about 9.6 years. We have 180 vessels split roughly equally into three sectors based on a charter-adjusted value. Please turn to Slide 7. We have about $270 million of cash on our balance sheet. In the third quarter, we had about 5.3% on an annualized basis on our cash balances. In addition, we…

Thank you, Angeliki, and good morning all. Please turn to Slide 10, which details our strong operating free cash flow potential for the fourth quarter of 2023. We fixed 83% of our available days at an average rate of $23,610 net per day. Our contracted revenue exceeds expected total cash expense for Q4 '23 by about $52 million. We have 2,304 opening index-linked days that will provide additional profitability. Please turn to Slide 11. We are always renewing the fleet so that we maintain a young profile. It is part of our strategy to reduce our carbon footprint by modernizing our fleet, benefiting from new technologies and eco vessels with greener characteristics. We have $1.7 billion remaining investment in 28 building vessels delivering partly through 2027, for which most of the financing has already been in place. In containerships, we acquired 12 vessels for a total of about $860 million, which we hedged by entering to long-term credit bore charges, generating about $1 billion in contracted revenue for about 6.5 years average duration of the related charters. In the tanker space, we acquired 16 vessels for a total price of approximately $885 million. We have already chartered out 10 of these vessels for another period of five years, generating revenues of about $0.5 billion. The dry bulk program of eight vessels were completed in June 2023 with the delivery of the last Capesize vessel. We have also been active in opportunistically selling other vessels based on segment fundamentals. Year-to-date, we have sold 14 vessels with an average age of approximately 15 years for $255.2 million. We sold seven tanker vessels for about $160 million to take advantage of the strong tanker market. Also, we sold seven dry bulk vessels for a total price of $95.4 million. Our last sale was…

Thank you, Efstratos, and good morning all. I will briefly review our unaudited financial results for the third quarter and nine months ended September 30, 2023. The financial information is included in the press release and summarized in the slide presentation available on the Company's website. Moving to the end highlights on Slide 14. Total revenue for the third quarter of 2023 slightly increased to $323.2 million compared to $322.4 million for the same period in 2022. Time charter revenue for the period is understated by $9.7 million because U.S. GAAP rules require the recognition of revenue for our charters with the escalating rates on a straight-line basis. Available days increased by 6.7% to 13,759 compared to 12,897 for the same quarter last year. Our average combined time charter equivalent rate for the third quarter of 2023 was 22,052 per day, 7.3% lower than Q3 2022 levels. In terms of sector performance, both tankers and containers enjoyed improved rates compared to the same period last year. TCE rates for the third quarter of 2023 for own tankers increased by 26.8% to $27,688 per day and for our containers by 5.4% to $34,350 per day. In contrast, our dry TCE rate was 29.5% lower compared to the same period last year at $14,139 per day. EBITDA, net income and EPU were adjusted due to the following gains from sale of vessels. For Q3 2023, €7.2 million; for the first nine months of 2023, $50.8 million; and for Q3 and first nine months 2022, $143.8 million. Excluding these items, adjusted EBITDA for Q3 '23 decreased by 2.3% to $173.7 million compared to $177.7 million for the same period last year. Adjusted net income for Q3 2023 decreased by 27% to $82.6 million compared to $113.4 million in Q3 2022 mainly due to…

Thank you, Eri. Please turn to Slide 20 for the review of the tanker industry. World GDP is expected to grow at 3% in 2023 and 2.9% in 2024 based on the IMF's October forecast. There's an 85% correlation of world oil demand to global GDP growth. In spite of economic and geopolitical uncertainties, the IEA projects a 2.3 million barrels per day increase in world oil demand for 2023 to 101.9 million barrels per day and a 0.9 million barrels for the increase in 2024. Chinese crude imports continue to rise, averaging 11.4 million barrels per day through September, a 14.6% increase over the same period last year. Following a very strong first half, tanker rates softened slightly as Q3 seasonality played out, accentuated by reduced exports, refinery maintenance and inventory drawdowns. Recently, rates have risen on the back of rising demand and increased refinery throughput as the auto maintenance season finishes. The recent Saudi and Russian crude export cuts have been somewhat mitigated by increased Atlantic exports, which have elevated volatility for the larger vessels. Turning to Slide 21. As previously mentioned, both food and product rates remain strong across the board due to healthy supply and demand fundamentals, minimal fleet growth and shifting trading patterns. Product tankers are also aided by a healthy refinery margins and discounted Russian crude exported to the Indian Ocean and the Far East returning to the Atlantic as clean product. Crude ton mile growth is expected to increase by 6.2% in '23 and a further 4.9% in 2024. Similarly, product ton miles anticipated increases stand at 11.3% and 6.1% for 2023 and 2024, respectively. Turning to Slide 22. The OCC net fleet growth is projected at 2.3% for 2023 and a negative fleet growth of 0.9% for 2024. This decline can be…

Thank you, Ted. This is a conclusion of formal presentation. We'll open the call to questions.

[Operator Instructions] We will take our first question from Omar Nokta with Jefferies.

Obviously, Navios has been focused on keeping a pretty nice and sizable contract backlog at $3.3 billion, which is basically flat with last quarter. You've highlighted the amend and extend on the containership charters, which makes sense given the pullback obviously in that market. And you highlighted that they are NPV-positive. I wanted to ask in general, can we expect more of these in the near term? Is this something that we will continue to see in the container market and then also with respect to Navios? And then do you think that there is potential that's happening with the newbuildings as well? Or is this more of a dynamic that's affecting some of the existing tonnage that was fixed at the height of the market?

Omar, actually, your observation is correct. Containers are in a weak moment. So these kinds of transactions happened. I mean counterparties will ask for amendments. And of course, we only do things that make sense for Navios. So we are very careful about that. We basically got about over $10 million of positive NPV. We do not see this happening on other. And it was a counterparty that's uniquely less the sector came in when there was a very robust situation and logistics had to be resolved. And this kind of counterparties really were not strategic to the sector.

Yes. No, that's helpful, Angeliki. And then I wanted to follow up and ask about the transshipment business, which clearly looks interesting. You took the vague, if I recall, it's an older Supramax and you fixed it for five years of that $30 million of cash flow. Obviously, that jumps out just given especially where dry bulk rates have been. Just wanted to ask, one, what does the cost look like to modify the ship for that transshipment business? And then also, are there opportunities to do more here on that front?

Actually, to be honest, the CapEx was very modest, considering the opportunity. We are entering a unique area. We have that ability because we have the transparent into the region because of Navios South American Logistics. And yes, this business can start with one vessel and grow to more. And there was an additional tremendous benefit and is basically proprietary because of the transshipment vessel, then you can see more opportunities on employment or action going vessel South America to China, South America to Europe. So this can create the ability of a whole sector. And that we see as a very good entry point, modest CapEx and the ability really to extend the life of the assets. Because these assets, unlike the rest, can be essentially a year-plus. So basically, we're amortizing 100%. We get all our profit and CapEx on the five years that we see that this can actually have additional life.

Okay. Wow. That sounds interesting and compelling. So we'll stay tuned for more to come and maybe just one final one. You've obviously addressed this on the call but also in the past. In terms of strategic priorities, clearly, fleet renewal, continuing to build backlog is key. In terms of the balance sheet, perhaps maybe the main priority is to delever and bring the net LTV down to that 20% to 25% range?

Yes. I mean deleveraging. Sometimes you have to judge between a new opportunity and new sectors and deleveraging. But deleveraging is a target, energy-efficient vessel and creating the new sectors and new opportunities. I mean you saw that we did modernize. We found some unique opportunities to modernize with energy-efficient vessels. And basically, the very important part of that was that we actually expanded and built more our relationship to oil majors. And that is something that we focus on building.

And we will take our next question from Chris Wetherbee with Citigroup.

I wanted to ask, Angeliki, maybe as you think about this entity, so you have, obviously, exposure to multiple end markets here. And I guess, each one of them is in a little bit of a different part of the cycle. So as you're thinking about incremental capital and where you want to put that to work, how are you approaching that? I understand the newbuild opportunities you have both on the container and the tanker. But as we're thinking about where you think about putting new capital work, where you'd want some emphasis to be placed, where would it be?

Chris, the reality is a lot of calculations, a lot of work trying to see what is the best opportunity. I mean you saw where we allocated a good amount of money this quarter. We have entered a new asset class, the Aframax MR2s. And we build it on that because we see efficient vessel that have the specifications that we have additional specifications. We see a lot of opportunities with the oil majors on trades that are actually expanding. Same with MR2s, we see certain counterparties that they need specific need with shortfall has higher emissions, but if we have energy-efficient value, that can really mitigate the situation. So we look at the opportunity and build on that. On containers, I mean this was a previous transaction and fixed at a good time. But we always review and we see what makes the long-term returns, what will give us the best residual value and provide us an attractive return. So this picture is a very simple thing: attractive return over 10% and have low residual value risk because the asset has a longer duration.

Okay. That's helpful. I appreciate that. And that makes sense. And I guess maybe on the other side of that coin, so I think there was 14 vessels that were sold year-to-date. Could you talk a little bit about how you think about opportunities to maybe monetize some of the fleet and maybe where you want to emphasize or where you see relative value between asset values and charter rates today?

Basically, there is a graph that we have unit recovery that we see tankers strong values, of course, strong returns. I mean we optimize that fleet. And then on the dry bulk, you have more or less volumes and long-term net of the vessels, approximately about 80%, 90%. So what we are doing is basically, we see exactly what is maintenance CapEx, what is the age of the vessel, knowing the regulatory environment for the next couple of years, meaning that you will have carbon tax. In Europe, there will be requirements. So you target a vessel that makes sense, add value to sales. And we have done that. You think that about for the fleet we have, on an average year, we should have about at least 10 vessels renewal basically, just to renew and keep the age. So yes, we had more vessels in the beginning. This will in 2024 drop to about on the average about vessels. This is not mathematical. It depends on the market, but this is approximately the kind of a renewal you will need.

Okay. That's the way should be thinking about it and obviously, I guess, market determine market fluctuations will determine kind of how aggressive you are, I guess. And then maybe just one more on the tanker cycle as you guys think about it. Obviously, some macroeconomic concerns flowing through here, I guess. You had said you always do a really nice job outlining your thoughts on what the market looks like. I guess, as you're thinking about the potential for either a recession or slowdown materially in U.S. economic activity and demand pull kind of in developed markets, how do you think about that kind of plays out in 2024 and influences your view on oil demand?

Today, the U.S. economy is pretty healthy. There is cloud. I mean there is definitely clouds both on the interest rate, but we don't see a recession today. But you also have a big effect from the wars in Ukraine and Israel. Basically, the Ukrainian war added to the ton miles. This is something that doesn't change. It will continue in our system. There is longtail miles on crude and product. And this is without taking any consideration of any potential. And I don't know how that will be potential disruption because of the world. And that can have quite an effect. Don't forget the area has a lot of the oil, a lot of the gas, it can be significant in case of a disruption there.

And we have reached our allotted time for questions. I will now turn the call back over to Ms. Angeliki Frangou for any additional or closing remarks.

Thank you. This concludes our results for the quarter.

Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time.