Operator: [Abrupt Start]Earnings Conference Call. With us today from the company are Chairman and CEO, Ms. Angeliki Frangou; Chief Financial Officer, Mr. Efstratios 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 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 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' financial results; then Mr.

Achniotis will provide an operational update and an industry overview; and lastly, we will open the call to take questions.Now I turn the call over to Navios Partners' Chairman and CEO, Mr. Angeliki Frangou.

Angeliki Frangou: Thank you, Doris, and good morning to all of you joining us on today's call. While the humanitarian crisis caused by the pandemic has been heartbreaking, we have also been strengthened by the courage and compassion of the first responders, particularly the many dedicated health care workers. At any given time, our vessels carry over 1,000 people.

Keeping these people safe and these vessels moving in and out of quarantined countries with ever-changing rules and challenges requires the immediate input of many disciplines. I am proud of the members of the Navios family as they have been showing agreeable resilience during this unprecedented time of uncertainty. And we have taken the necessary measures to ensure safety of our people while keeping our fleet functioning.I am pleased with the results of the first quarter of 2020. For the first quarter, Navios Partners reported $46.5 million of revenue and $19.1 million of adjusted EBITDA. We also declared a quarterly distribution of $0.30 per unit, representing a current yield of approximately 17%.

Several banks and governments have injected unprecedented amounts of liquidity into their economies to counter the slowdown in economic activity caused by the pandemic. To date, about $16.5 trillion of such stimulus have been announced.Despite this, the pandemic's negative effect on global economic activity can be seen in the duration of the downturn in charter rates. Year-to-date, 2020, the Capesize's 5TC rate is averaging around $5,300 per day. This is 70% less than the 2019 average of $18,000. We are, however, expecting a recovery in the second half of 2020 as the countries emerge from quarantine and return to normalized ways of doing business.

We expect this normalization should increase the need for drybulk cargoes.As you can see from Slide 5, NMM's fleet is now 48 vessels. In December 2019, we liquidated Navios Europe I. NMM's current maritime investments are at 33.5% interest in the Navios Maritime Containers and a 5% interest in Navios Europe II, which we expect to be liquidated in Q2.On Slide 6, you can see why we believe that Navios Partners is a premier drybulk shipping platform. We have a strong balance sheet and low leverage. We have reduced our gross debt by 3% compared to year-end 2019.

We also have no debt maturities until Q3 of 2021 and no significant committed growth CapEx requirements. We also have cash flow capabilities with about $498 million in remaining contracted revenue.For 2020, about 62% of our 16,836 available days are fixed at an average net rate of $13,878 per day. This has created a manageable breakeven of $8,710 per day -- per open day.Slide 7 details the pandemic impact on global trade. The IMF projects a 3% decrease in 2020 global GDP, mostly driven by a 6.1% decline in advanced economies. As a result of the disruption to the world economic activity, drybulk trade is expected to contract by 3.6% in 2020.

We may have felt much of this negative impact in Q1 and so far, in Q2 as countries observed extended lockdowns. Looking forward, economies are projected to recover in the second half of 2020 and drive by trade is projected to increase by 4.3% in 2021. Moreover, global GDP is expected to increase by 5.8% in 2021, which we would expect to be beneficial for drybulk market.Slide 8 details the dynamics of a rebounding commodity trade and shrinking supply of the Capesize fleet expected in the second half of 2020. Demand for the 3 major drybulk cargoes, iron ore, coal and grain, are forecasted to outpace demand in the first half of 2020 by about 142 million tons or 8.9%. This demand is led by iron ore, which is forecasted to grow by 14.1%.

This growth should be observed from the perspective of a shrinking global Capesize fleet. Net fleet growth 2020 year-to-date is negative 1%, caused by accelerating nondeliveries and scrapping of vessels alongside various announcement of phasing out of 25-year VLOC vessels.Slide 9 shows how NMM has weathered the storm during the ongoing market disruption. For the first quarter, we generated $19.1 million in adjusted EBITDA and a Time Charter Equivalent rate of $10,717 per day. The vessels fixed long-term, provide protection against the ongoing market downturn. We have 61.6% of our days fixed for 2020, and the remaining open days provide us with a breakeven of $8,710 per day.We continue to deleverage our balance sheet and reduce our gross debt by $13.5 million in the first quarter.

Our net debt to book capitalization stands at 37.4%, and we have no significant maturities until Q3 of 2021. We expect to liquidate Navios Europe II in the second quarter of 2020. We will receive $17.3 million in the form of steel value and cash.Slide 10 details our cost structure for the remaining 9 months of 2020. 61.6% over available days are fixed at an average rate of $13,878 per day and 6,466 open plus index-linked days not only provide us with a breakeven of $8,710 per open day, but also allow us to generate $7 million at current rate.Slide 11 shows our liquidity. As of March 31, 2020, we had total cash of $31.1 million and total borrowings of $476.1 million.

Our net debt to capitalization is 37.4%, and we have no debt maturities until Q3 of 2021 and no significant committed growth CapEx.At this point, I would like to turn the call to Stratos Desypris, Navios Partners CFO, who will take you through the results of the first quarter.

Efstratios Desypris: Thank you, Angeliki, and good morning all. I will briefly review our annual financial results for the first quarter ended March 31, 2020. The financial information is included in the press release and is summarized in the slide presentation available on the company's website. Before I start discussing our financial highlights, I would like to draw your attention to certain one-off items that are listed on Slide 12.

For simplicity, the discussion of the financial results below exclude the effect of the one-off items listed in this slide.Moving to the financial results, as shown on Slide 12. Revenue for the first quarter of 2020 was almost the same as last year and amounted to $46.5 million compared to $46.8 million for Q1 of 2019. Our revenue was affected by the 18.9% decrease in the Time Charter Equivalent rate achieved in the first quarter of 2020 versus the first quarter of 2019. The decrease was mitigated by the 25% increase in the available days of the fleet.Adjusted EBITDA for the first quarter of 2020 decreased to $19.1 million compared to $22.7 million for the first quarter of 2019. The main reason for the decrease was the $5.6 million increase in management fees, mainly due to our larger fleet.

This increase was mitigated by $1.7 million increase in equity in earnings of Navios Containers. Adjusted net loss for the quarter amounted to $3.8 million. Operating surplus for the quarter was $4.4 million. Fleet utilization for the first quarter of 2020 was almost 98%.Turning to Slide 13. I will briefly discuss our key balance sheet data as of March 31, 2020.

Cash and cash equivalents was $31.1 million. Long-term debt, including the current portion, was $476.1 million. Net debt to book capitalization was 37.4% at the end of the quarter.Moving to Slide 14. We declared a cash distribution for the first quarter of 2020 or $0.30 per unit. Our current distribution provides for an effective yield of approximately 17.5% based on yesterday's closing price.

The record date was May 11, 2020, and the payment date is May 14, 2020. Total cash distributions for the quarter amount to $3.4 million. Our common unit coverage for the quarter is 1.3x.Slide 15 shows the details of our fleet. We have a large, modern divest fleet with a total capacity of 4.9 million deadweight tons and an average age of 10.9 years. Our fleet consists of 48 vessels, 14 Capesizes, 20 Panamaxes, 4 Ultra-Handymax and 10 containerships.In Slide 16, you can see the list of our fleet with the contracted rates and the respective expiration dates per vessel.

Our charters have an average remaining contract duration of approximately 2 years. Currently, we have contracted 84.6% of our available days for 2020, including days contracted at index-linked charters. The expiration dates extend to 2028.In Slide 17, you can see the details of Navios Containers. This entity was listed in NASDAQ in December 2018. Currently, it controls 29 containerships.

Navios Partners has a 33.5% ownership interest in Navios Containers.I now pass the call to George Achniotis, Executive Vice President of Business Development, to discuss the industry section.

Georgios Achniotis: Thank you, Stratos. Please turn to Slide 19. With the entire globe affected by the pandemic, oil economies were severely constrained as governments put confinement guidelines in place. In April, the IMF projected global GDP contraction of 3% for 2020 led by 6.1% contraction in advanced economies.

Governments have put in place unprecedented emergency monetary and fiscal plans to support the economies. Central banks have embarked on huge monetized stimulus programs. In light of this, the IMF projects 5.8% global GDP growth in 2021. Q2 is expected to be the lowest point in the contraction. We should begin to see the results of the measures taken from Q3 onwards.

As a result of the above, seaborne drybulk trade is projected to contract by 3.6% in 2020 and grow by 4.3% in 2021.For the second half of 2020, drybulk demand for the 3 major cargoes of iron ore, coal and grain is forecast to outpace the first half by about 9%. This increase is led by iron ore, which is expected to grow by about 14% or 100 million tons, much of which will come from Brazil, adding to ton miles.Turning to Slide 20. Chinese iron ore imports fell slightly last year by 1%, but are expected to increase by 2% in 2020 to 1,068 million tons. Despite the lockdown in China in Q1, iron ore imports increased by about 1% compared to Q1 '19. Chinese steel mills have reduced their iron ore stockpiles by about 49 million tons between June 2018 and April 2020.

With additional availability of iron ore in the second half of 2020, shipments from Brazil and Australia to China are expected to increase by about 45 million tons per quarter as steel mills replenish stockpiles, driving demand for Capesize vessels. The Chinese fiscal stimulus should support steel production and in turn, drybulk trade going forward.Moving to Slide 21. The combination of the worldwide lockdowns due to the pandemic and the significant drop in the price of oil has resulted in reduced coal trade. Asian coal imports, which account for over 80% of the world's seaborne trade, are expected to decrease in 2020 by 3.1% but increase by 2.6% in '21. This reduction has added pressure on the smaller-sized vessel, which has been partially offset by increased demand for grains discussed on the following slide.Turning to Slide 22.

Worldwide grain trade has been growing by approximately 5% CAGR since 2008, mainly driven by Asian demand. An ever-increasing world population as well as increasing product demand worldwide continues to support the global grain trade. With the pandemic disruptions causing minimal grain trade disruptions, the International Grains Council projects record shipments of wheat, corn and soybean for the 2020 crop year.Please turn to Slide 23. The current order book is just over 8% of the fleet, which is historically low. New building contracting has collapsed and year-to-date is down by about 80% compared to 2019.

In the aftermath of the pandemic outbreak, the pace of nondeliveries has increased dramatically. After near-normal deliveries in January, the average of non-deliveries from February through April was about 26%. This has resulted in year-to-date non deliveries of 18%.Accordingly, net fleet growth is expected to remain low at about 2% for 2020. We also note that following Vale's announcement for the phaseout of 25 VLOCs, the Capesize net fleet is expected to be minimal at below 1%.Turning to Slide 24. Vessels over 20 years of age are about 7% of the total fleet, which compares favorably with the previously mentioned record low order book.

Scrapping year-to-date, is 7 million tonnes or 86% of the total for the whole of 2019. Currently, due to the pandemic lockdown in Southeast Asia, there is a temporary halt on scrapping. Once the current restrictions are lifted, scrapping is expected to restart at increased pace.In conclusion, positive demand fundamentals, along with reduced fleet availability caused by IMO 2020 and the valid phase out of its VLOC fleet, should provide support to the drybulk market in the second half of 2020, in its efforts to navigate through the pandemic storm.And this concludes my presentation. I would now like to turn the call over to Angeliki for her final comments.

Angeliki Frangou: Thank you, George.

This completes our formal presentation, and we open the call to questions.

Operator: [Operator Instructions]. Your first question comes from the line of Randy Giveans with Jefferies.

Randall Giveans: All right. So you have, obviously, significant coverage, which is certainly good in this current, weakened environment.

But looking at your spot vessels, and I guess those with upcoming charter maturities here in the next few months, is the plan to book those for maybe 6- to 12-month charters? Or just operate those in the spot market? And what kind of rates are you seeing for 1-year charters for Capsizes and Panamaxes as well as the 3,000 TEU containerships?

Angeliki Frangou: You can hear a little bit of the -- I mean, today, the spot market, as you very well know, is one maybe of the lowest, around 2,000. But period is -- and you can see it also from the indication of the FSA, is in a better rate of around 11,000 and 12,000 for the second half. So -- for capes. So what we are looking, usually, we are not going on a spot market exposure. I mean, it's obvious that, that is -- but we are looking more for whatever it is a best, short period 3 to 5 months or long at 9 to 11, 12 months.One of the things that I'd like to bring you is, if you can really see, and we have a little bit put that on Page 8.

There is -- the spot market gives all the fear and it is really the situation that we feel because of the pandemic and the lockdowns that we have seen around the world. But if you see in pay date which we put a little bit of what we know of the cargoes that we get, iron ore, grains, you see that the second half is much stronger than the first half. Let's not forget that shipping is actually serving essential businesses. That is a food industry, food staff, you have construction. So these are things that are needed and they're essential for the world.And also another thing that we see that is positive is that we have a shrinking Capesize fleet.

So basically, you're seeing well under control supply with the possibility that as economies open up and as the market comes to normalization, a better second half. So with that in mind, let's not forget that the periods where there's a lot of crisis and inefficiencies, that provides a lot of opportunities.

Randall Giveans: An expectation for a stronger back half of the year, you said you were not going to operate in the spot market. Are the time charter rates that you're looking at booking going to reflect that pretty strong improvement that you expect in the back half of the year?

Angeliki Frangou: Yes. I mean, all the vessels are not opening on the same time, as you see, there is a different point.

And as the vessels open, you'll fix them in a portfolio approach with different durations and maturities.

Randall Giveans: All right. About rates on the 3,000 TEU containerships. I know that market is a little strained as well. How are you seeing those vessels in terms of rechartering opportunities in the next month or two?

Angeliki Frangou: That is a very small percentage.

And I mean, on that, we will do -- usually, we do smaller durations and a repositioning of those vessels. The majority of your vessels are in the drybulk and the open base is really drybulk.

Randall Giveans: Okay. And just last question for me. Your balance sheet, as you show, sort of pretty good shape.

You do have that -- kind of this maturity next year, manageable debt earmarks, lots of contracted revenue. And you point to your distribution coverage, still pretty firm here. So with the expectation for a pretty nice cash infusion from the Navios Europe II, I guess, this quarter and next quarter, how do you view the current distribution? Should we expect any changes this year? And what about unit repurchases?

Angeliki Frangou: As you know, we just announced our quarterly dividend of $0.30 for the Q1. As in every quarter, the Board makes this decision, and we also -- there's an evaluation of the capital allocation. I think we all know that the spot market is a difficult market, but we see a second half of the year with a better outlook than the first.

Randall Giveans: Sure. And in our view, it looks like your units are feeding at 40-plus percent discount to NAV. So it does seem like a pretty accretive use of cash.

Angeliki Frangou: I think this is a decision that will -- it will be on the Board as every quarter.

Operator: Your next question is from the line of Chris Wetherbee with Citi.

Christian Wetherbee: I guess I wanted to ask about Europe. Angeliki, can you just be specific about what we should be expecting flow through to NMM from Navios Europe? And is it in the second quarter? So will the timing be 2Q? And what is the amount specifically?

Angeliki Frangou: I think the amount is a percentage that -- I will let Stratos give you that. But in reality, this will be done by the conflict committee. It's the percent that each company has, and there will be an allocation of cash and cash and assets depending on the percentage and on the different companies.

Efstratios Desypris: I mean, Chris, as Angeliki said, I mean, it's a pretty straightforward allocation.

So you have the receivables that all the Navios entity have and you take the pro rata allocation on these receivables. So this -- you can see in our presentation, we expect to have approximately $17.5 million of value that is going to come to NMM. And this is going to be in the form of either cash and steel value, in proportion of the 2.

Christian Wetherbee: Okay. Okay.

And so that ships, you're saying cash in ships?

Efstratios Desypris: Yes, correct, correct.

Christian Wetherbee: Okay. I just want to make sure I'm clear on how this is going to kind of flow through. And is the timing 2Q?

Angeliki Frangou: The estimation is for Q2.

Christian Wetherbee: Okay.

Okay. That's helpful. I appreciate that. And then how do we think about leverage? Obviously, there is some cash here in cash generation. So if I were to look out through 2020, maybe putting what EBITDA does aside, how do you think about sort of net debt and the ability to pay that down or sort of work down leverage over the course of the year? Any sort of goals or expectations around how that might play out?

Angeliki Frangou: This is not a sprint, it's a marathon.

And as you know, that we have worked them for a very long time on the leverage. We have come significantly -- we have reduced our leverage over the years from the last downturn in 2016, we reduced quite significantly the leverage. And now we are sitting in a good position, but this is something that is an ongoing. And as our debt has now changed from term loans to conventional financing from banks. Amortization further reduces our -- the amortization of the loans further reduces our leverage.

And this is something that we will see happening over the year.

Operator: Thank you. I'll now turn it back over to Angeliki Frangou.

Angeliki Frangou: Thank you. This completes our first quarter results.

Operator: Thank you. This concludes today's conference call. You may now disconnect.