Operator: Thank you for joining us for Navios Maritime Partners first quarter 2019 earnings conference call. With us today from the company are Chairman and CEO, Angeliki Frangou; Chief Financial Officer, Mr. Stratos Desypris; and Executive Vice President of Business Development, Mr. Georgios Achniotis. As a reminder, this conference call is being webcast.

To access the webcast, please go to the Investor 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 referencing today's earnings conference 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 belief and expectations of Navios Partners management and subject to numerous material 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, including the company's most recent 20-F. 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: first, Ms.

Frangou will offer opening remarks. Next, Mr. Desypris will give an overview of Navios Partners financial results. And then Mr. Achniotis will provide an operational update and an industry overview.

And lastly, we'll open the call for questions. Now I'll turn the call over to Navios Partners Chairman and CEO, Mrs. Angeliki Frangou. Angeliki?

Angeliki Frangou: Thank you, Dorothy, and good morning to all of you joining us on today's call. I'm pleased with the results of the first quarter of 2019, during which Navios Partners reported $46.8 million of revenue and $22.7 million of adjusted EBITDA.

These results were particularly strong given the weak rate market. Charter rate in the drybulk sector was devastated by the tragic dam collapse in Brazil which occurred in January. The closure of second Brazilian mine not only removed a significant amount of iron ore from the supply chain, but also did slow on the longest route to China, the biggest user of iron ore. Overall, there was a disproportionate negative impact on charter rate. Despite this challenging backdrop, NMM managed to earn a time charter rate of $13,209 per day for its fleet in the first quarter of 2019.

Moreover, we have seen material rate improvements since the first quarter. The current spot rate of $11,182 per day is up about 90% from the average spot rate for the month of February and March. For the quarter, we declared a quarterly distribution of $0.02 per unit, representing a current yield of approximately 8%. As you can see from Slide 5, NMM owns 37 vessels. Two years ago, we leveraged the weakness in the container sector by establishing Navios Maritime Containers L.P, which now has 30 vessels.

After having spun-off 2.5% of the outstanding ind equity of NMCI to our unitholders in 2018, NMM now owns 33.5% of NMCI. Today, Navios Containers trade on NASDAQ and has a strong balance sheet and competitive position in the recovering markets. Slide 6 sales for the region, we delivered Navios Partners in the Premiere Dry Bulk Shipping Platform. We have about $600 million remaining contracted revenue. Based on the current charter rate, Navios Partners is expected to generate about $51 million of free cash flow for 2019.

We have a modest net debt to book capitalization at the end of the first quarter of 2019 of 35.7%. Moreover, we have no debt maturities until the third quarter of 2020. As a result, the NMM platform has significant cash flow generation capability. We have rewarded our unitholders with $13.7 million in annual cash distribution equating to $0.08 per unit annually, and through our $50 million unit repurchase program active for the next two years, through which we have repurchased 4.7 million units through April of 2019, representing approximately 3% of our units outstanding. Slide 7 highlights our proactive approach towards upcoming debt maturities, including the Term Loan B.

We have arranged $220 million in financing at favorable terms, which includes approximately $170 million in agreed financing with four banks with an average interest rate of LIBOR plus 270 basis points and a term of up to six years. And approximately $50 million in sale and leaseback transactions with another fixed interest rate of 6.3%, term of up to 11 years, no LTV in either covenants. Post first quarter, we prepaid $73.5 million of Term Loan B, which brings the current Term Loan B balance to about $340 million, an approximately 18% decrease compared to the end of the first quarter of 2019, and approximately 19% decrease compared to the end of 2018. Slide 8 shows a significant cash flow potential for 2019 with 5,839 open day plus days on index charters. Our breakeven trade open days are $3,759.

Therefore, NMM fleet should generate significant free cash flow at current rate and vendor rates [ph] in calendar 20 years average. Slide 9 shows our liquidity. As of March 31, 2019, we have a total cash of $50.4 million and total borrowings of $500.7 million. Our net debt to book capitalization is a modest 35.7%. Moreover, our debt maturities are expected to significantly reduce pro forma for the prepayment of the Term Loan B using profits of the financing that has already been arranged.

We have no debt maturities until the third quarter of 2020. At this point, I would like to turn the call over to Mr. Stratos Desypris, Navios Partners' CFO, who will take you through the results of the first quarter of 2019. Stratos?

Efstratios Desypris: Thanks, Angeliki, and good morning all. I will briefly review our financial results for the first quarter ended March, 31, 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 discussions of the financial results exclude the effect of one-off items listed in Slide 10. Moving to the financial results as shown in Slide 10, our revenue from the first quarter 2019 decreased by 11.3% to $46.8 million compared to $53.1 million in Q1 2018. The decrease was mainly due to the 18% decrease in the time charter equivalent [indiscernible] in the first quarter of 2019, which was partially mitigated by a 2.9% increase in our available days due to the increased LIBOR. Adjusted EBITDA for the first quarter of 2019 decreased to $22.7 million compared to $31.5 million in Q1 2018, primarily due to the decrease in revenues.

Adjusted net loss for the quarter amounted to $2.2 million. Operating surplus for the first quarter 2019 amounted to $5.7 million. Replacement and maintenance CapEx reserve was $7.5 million. Fleet utilization for the first quarter of 2019 was 98%. Turning to Slide 11.

I will briefly discuss our key balance sheet data as of March 31, 2019. Cash and cash equivalents was $50.4 million. Long-term borrowings, including the current portion of the net of deferred fee and discount, amounted to almost $500 million. Net debt to book capitalization was 35.7% at the end of the quarter. As Angeliki mentioned earlier, after the end of the quarter, we prepaid $73.5 million for our Term Loan B.

The prepayment was made using the $16.4 million of cash on our balance sheet, $6 million from the sale - from our assets and $51.1 million drawn on [indiscernible]. Moving to Slide 12. We declared the cash distribution for the first quarter of 2019 of $0.02 per unit, equivalent to $0.08 per unit on an annual basis. Our current annual distribution provides for an effective yield of approximately 8% based on previous closure price. The record date is May 10, 2019, and the payment date is May 15, 2019.

Total cash distributions for the quarter amount to $3.4 million. Our common unit coverage for the quarter is 1.7x. On March 15, 2019, the company was notified by the by the New York Stock Exchange that it is no longer in compliance with its continued business standards because the average closing price of the company's common stock over a consecutive 30 trading day period was less than $1 per unit. In order to cope with this deficiency, our Board of Directors has approved a 1-for-15 reverse split of our common units. The reverse split will be effective before the market opens on May 21, 2019.

Common units will begin trading on May 21, 2019, on a split-adjusted basis on the New York Stock Exchange, under the name, ticker symbol NMM. Following the reverse split the company expects to have approximately 11.1 million common units issued and outstanding. Slide 15 shows the details of our fleet. We have a large modern, diverse fleet with a total capacity of 4.3 million deadweight tonnage and an average age of 10 years. Our fleet consists of 37 vessels, 14 Capesizes, 15 Panamaxs, 3 Handymax and 5 container ships.

In Slide 16, you can see the list of our fleet with contracted days and their respective expiration dates by vessel. Our charters have an average remaining contract duration of approximately 2.2 years. Currently, we have contracted 84.8% of our available days for 2019, including days contracted at index-linked charters. The expiration date extend to 2028. In Slide 17, you can see the details of Navios containments, [indiscernible] was listed in NASDAQ in December 2019 and control 30 containerships.

Currently, Navios Partners has effective 3.5% ownership interest in Navios Containers. I now pass it over it George Achniotis, our Executive Vice President of Business Development, to discuss the industry section. George?

Georgios Achniotis: Thank you, Stratos. Please turn to Slide 17. The IMF forecast world GDP growth of 3.3% for 2019 and 3.6% for 2020.

Emerging and developing Asian markets which drives dry bulk demand and expected to grow at a healthy 6.3% in '19 and 6.4% in 2020. Following an improving marketing during the second half 2018, 2019 Q1 was unexpectedly weak mainly due to the tragic dam burst at the Vale mine in Brazil and severe weather issues in Western Australia that have disrupted our annual shipments. Over the past few weeks, Capesize spot charter rates have been improving as shipments from Australia returned back to normal. There is still scope for substantial upside as shipments out of Brazil remain low, with [indiscernible] one of the lowest months and quarters in the past 10 years. Turning to Slide 18.

Chinese steel production rose by an impressive 7% in 2018 and a further 10% for March 2019. Chinese steel export increased so far in 2019 due to large infrastructure projects outside China. The Belt and Road initiative remain the cornerstone of Chinese economic plans for the next few years and supports steel and power demand domestically and abroad. Following the Vale accident and the subsequent closure of a number of mines for safety checks, it is estimated that Brazilian exports will be about 29 million tons lower during 2019 with some of the nearly losses being made up in the second half of the year. Australia lost about 15 million tons of exports in Q1 mainly due to Typhoon Veronica that affected loading ports.

In spite of this, it is forecasted that Australia's iron ore exports for 2019 will expand by 3 million tons compared to last year. During the iron ore supply disruptions, Chinese steel mills have been eating through their stockpiles which have reduced by 26 million tons since June 2018. Please turn to Slide 19. Asian seaborne coal imports increased by 7% in 2018 and are forecast to increase by a further 2% in 2019. India is expected to surpass China as the largest importer of coal in Asia in 2019.

Coal imports to India increased by 13% in 2018 and are - they are expected to grow by a further 5%, 2019. Other Asian economies continue to bring new coal-fired power plants online, requiring increased coal imports. As long as load factor remain high, we can expect this to continue. Turn to Slide 20. Worldwide grain trade has been going up by 5.2% CAGR since 2008 mainly driven by Asian demand.

The trade war between the USA and China affected the core grains in 2018 and the Chinese turned to South America for additional imports and reduced imports from the USA. As the USA and China trade negotiations continue, Chinese buyers are taking additional USA tradings. Projections for grain trade growth have been reduced to about 2% in 2019. Forecasts for large grain harvests will continue to keep grain stocks high and will lead to low prices that could affect the export sales going forward. Moving to Slide 21.

So far in 2019, the non-delivery remains at 32%. Based on a non-delivery days of 30% and annualized scrapping of about 12 million tons, net fleet growth is expected to be about 2%. The total current order book before non-deliveries is about 11% of the whole fleet, which is one of the lowest on record. Therefore, net fleet growth is expected to remain low over the next few years. Turn to Slide 22.

This looks over 20 years of age in our bodies basing off the total fleet which compares favorably with the 11% total order book before non-deliveries. Scrapping in 2019 is accelerated due to the lower rates in Q1. The added cost of complying with IMO regulations for ballast water treatment systems and fuel regulations are expected to result in enhanced scrapping going forward. We expect that the disruption caused by the IMO 2020 fuel regulations changes should provide support to the drybulk market through the balance of 2019 and beyond. Tonnage supply entitlement is about 400 vessels, from Panamax to VLOCs, are expected to go to dry dock for extended periods to add building scrubbers.

In addition, we expect the increase in fuel cost in 2020 provides an incentive to bring shipments forward into the second half of the year and slow steam vessels to reduce fuel consumption in 2020. This concludes my presentation. I would now like to turn the call over to Angeliki for the final comments. Angeliki?

Angeliki Frangou: Thank you, Georgios. We open the call to questions.

Operator: Your first question comes from the line of Noah Parquette of JPMorgan.

Noah Parquette: So I just want to ask, obviously done a lot on the Term Loan B. Do you see yourself being completely refinanced out of the Term Loan B this year? Is that part of your plans or do you still see kind of a place for that type of debt capital in your structure?

Angeliki Frangou: Reality is that we have seen that we have a nice fleet, a strong fleet of 27 vessels. We have a nice cash flows, low levered. And what we adopt with - what we saw that was important is to diversify our maturities.

So at this point, if you see in the presentation, we have brought it down with the financings that we have already signed. Basically, we have brought it down to below $170 million on 13 vessels, a very manageable number, which will - we are working on further financing. So - but it's a very manageable level with a very manageable LTV. And I think the important thing, if you see from as a company, you have a strong fleet, you have very low breakeven, $3,759, that gives you the ability to really generate nice cash flows even in a weak market. This is exactly the environment where this company can show how strong it is.

And if we're going to the - really, we have put it in the liquidity Page 9, doing a pro forma debt maturities where you extend the maturities to 2029, that gives you a more flexible balance sheet. So you have a strong balance sheet, good cash flows and basically you diversified your risk through the different point at smaller amounts. So this is a manageable amount. It's 13 - relying on 13 vessels and we will do it over the period of time. We have until end of Q3 of 2020, but most probably it will be well in advance of that.

Noah Parquette: Okay. That makes sense. And then you guys talked a little bit about it, but I'd love some more color. I mean, the Capesize market definitely bounced back the last couple of weeks, I mean, you've seen a couple of things but steel, no profitability in China. I guess a little more stable output from Brazil, saw a drawdown in port stockpiles.

Can you point to anything in particular? Or is there something that you're seeing that's kind of contributing to this firmness? And I would love some additional color.

Angeliki Frangou: The one thing we can say is that apart from the real accident which was the collapse of the dam in end of January, and at the end, the Australia cyclones that affected Q1, there is also the emotional part of it which creates a tremendous disruption. Today, I think there is - the mines has - you have much more clarity on the actual capacity that is back on the iron ore. You get away from the weak quarter on weather, usually see affected by weather. So the prospects, you have a lot of visibility right now.

The only thing, again, come in an emotional issue, is a new event that we saw over the weekend on - with President Trump and the trade wars. I think in essence that is - issues have no effect. But always, it as I say, a huge psychological effect. But from the point of Vale and iron ore, I think we have a lot of visibility right now, and quantities will be higher just to achieve the stated goals of the company.

Noah Parquette: Okay.

And then just one last one on the industry. Forgive me, but I don't know if it was - the announcement last week for, like, a speed limit basically industry-wide to the IMO. Was Navios a signatory to that letter? I know the Greek shipping industry is behind that. And if so, what are your thoughts on how something like that could affect the drybulk market or pay out over the coming years?

Angeliki Frangou: You are talking about the...

Noah Parquette: The proposal to IMO for, like, a speed - basically a speed limit for ships, I guess, is the way to...

Angeliki Frangou: Can I tell you something? There is no one solution. I will be very frank. There is no one solution. We have a - IMO is working which - we have a limitation of what will be 50% of our 2008 emission, it is I think, for 2040. The reality is there will not be one solution to the problem.

There will be efficiencies that have will have to be included. I mean, it will be most probably part of the solution because it cannot be taken out of context, this - it would be also speed, meaning that speed has a big effect on CO2 emissions the same way scrubbers have a negative effect on CO2 emissions. So it will be a lot of - we have - this will have not a single solution, but there will be a lot of solutions that will bring us to what we need to do. But this is now the equation, you always have - also speed.

Operator: Your next question comes from the line of Randy Giveans of Jefferies.

Randall Giveans: So quick question, just looking at these staggered Time Charter maturity, it seems like you have a handful here coming up in May, June, July. Is the plan just to continue to roll those on 6 to 12 month Time Charters? Are you open to the spot market later this year?

Angeliki Frangou: I think what you have seen us doing is that the majority of our charters, we have about eight vessels that are long-term charters that provide us a lot of the visibility of cash flows. The $600 million of contracted revenue comes from, if you see on the bottom of the page, by about eight vessels basically. And what we are doing on the rest of the vessels, we are trying to actually fix them index. And there, you can see from the Page 14, that we can have the description of our vessel as Japanese fleet and good quality of our vessel commanding much higher than the standard vessel.

And you can see from our 120%, 108%, 111%, different numbers on different vessels. With this fixing index, it provides us the ability to convert forward our vessels and have the ability to create visible cash flows whenever we like. So in a lot of our strategies, it is a part of our strategies also to have index with the ability to contract forward and create visibility of cash flows.

Randall Giveans: Sure. Okay.

And then a few - I guess a quarter or two ago, you were saying you wanted to see with the market looked like in the first half of '19 in terms of rates and also if there was of premium forming for scrubbers on Capesizes and other vessels. Any updated thoughts on those?

Angeliki Frangou: I mean, I think we are still in a - Navios Partners has one vessel that is committed, Fantastiks, which we have a five year charter for that at a very good rate. So basically - and we have also - we are receiving the full cost of the scrubber plus time and et cetera. So on this - at this point, we don't see any - we don't have any plans for an additional vessel on Navios Partners. The premium estimating has not really materialized.

But of course we will have to see later. I don't see - we don't see any big premiums right now that will confirm for us to do something like that. At any - the reality is that we are - as I always said, is we are agnostic. If the market demand in 2020 scrubbers is - and they pay for that, we will do it. It's just a matter of what makes economic sense.

Operator: Thank you. I will now return the call to Angeliki Frangou for any additional or closing comments.

Angeliki Frangou: Thank you. This completes our Q1 result. Thank you.

Operator: Thank you for participating in today's conference call. You may now disconnect.