Navios Maritime Midstream Partners L.P. Reports Net Income of $4.5 million During First Quarter

TIN news:  Navios Maritime Midstream Partners L.P., an owner and operator of tanker vessels, reported its financial results today for the first quarter of 2017.

Angeliki Frangou, Chairman and Chief Executive Officer of Navios Midstream stated, “We are pleased with our results for the first quarter of 2017. We reported $14.7 million of EBITDA and $4.5 million of net income. We recently announced a distribution of $0.4225 per unit, providing an annual yield of about 14%. Our total unit coverage ratio for the distribution was a healthy 1.1x for the quarter.”

Angeliki Frangou continued, “Investor sentiment in the MLP sector has materially improved since early 2016. However, we have been experiencing uncertainty regarding the potential oversupply of VLCCs. We are being patient and cautiously reviewing market opportunities. We believe that our patience and prudence will be rewarded. ”

The Board of Directors of Navios Midstream declared a cash distribution for the first quarter of 2017 of $0.4225 per unit. The cash distribution is payable on May 11, 2017 to unitholders of record as of May 5, 2017.

Long – Term Cash Flow

Navios Midstream has entered into long-term charter-out agreements for its vessels, with a remaining average term of 4.1 years, which are expected to provide a stable base of revenue and distributable cash flow. Navios Midstream has currently contracted out 100% of its available days for 2017 and 2018 expecting to generate revenues, including the backstop commitment provided by Navios Maritime Acquisition Corporation (“Navios Acquisition”), of approximately $86.7 million and $86.6 million for 2017 and 2018, respectively. The average expected daily charter-out rate for the fleet is $39,580 and $39,559 for 2017 and 2018, respectively.

Continuous Offering Program

Pursuant to the Continuous Offering Program in place, Navios Midstream issued 315,846 common units in 2017 and received net proceeds of $3.8 million. In connection with the issuance of the common units, Navios Midstream issued 6,446 general partnership units to its general partner in order for it to maintain its 2.0% general partner interest. The net proceeds from the issuance of the general partnership units were $0.1 million.

Three month periods ended March 31, 2017 and 2016

Revenue for the three month period ended March 31, 2017 decreased by $3.0 million to $21.1 million, as compared to $24.1 million for the same period in 2016. Time Charter Equivalent (“TCE”) was $38,547 for the three month period ended March 31, 2017 and $43,476 for the three month period ended March 31, 2016. The decrease in the TCE was mainly attributable to the decrease in the market rates during the first quarter ended March 31, 2017, as compared to the same period in 2016.

EBITDA decreased by approximately $3.0 million to $14.7 million for the three month period ended March 31, 2017, as compared to $17.7 million for the same period in 2016. The decrease in EBITDA was due to a: (a) $3.0 million decrease in revenue; and (b) $0.2 million increase in other expense; partially mitigated by a: (i) $0.1 million decrease in time charter expenses; (ii) $0.1 million decrease in management fees; and (iii) $0.1 million decrease in general and administrative expenses.

The reserve for estimated maintenance and replacement capital expenditures for the three month period ended March 31, 2017 was $2.5 million (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Navios Midstream generated an Operating Surplus for the three month period ended March 31, 2017 of $9.5 million. Operating Surplus is a non-GAAP financial measure used by certain investors to assist in evaluating a partnership’s ability to make quarterly cash distributions (please see Reconciliation of Non-GAAP Financial Measures in Exhibit 3).

Net income for the three month period ended March 31, 2017 was $4.5 million compared to $7.5 million for the three month period ended March 31, 2016. The decrease in net income of $3.0 million was due to a: (a) $3.0 million decrease in EBITDA; and (b) $0.1 million increase in direct vessel expenses; partially mitigated by a $0.1 million increase in depreciation and amortization.