Navios Maritime Partners Q3 2023 Earnings Call Transcript

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Provided by Quartr
November 2, 2023

There are 8 speakers on the call.

Operator

Thank you for joining us for Navios Maritime Partners Third Quarter 2023 Earnings Conference Call. With us today from the company are Chairwoman and CEO, Ms. Angeliki Frangou Chief Operating Officer, Mr. Stratos Desipres Chief Financial Officer, Mr. Eri Tironi and Vice Chairman, Mr.

Operator

Ted Petrone. As a reminder, this conference call is being 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 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 the litigation Reform Act of 1995 about Navios Partners.

Operator

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 St. Navios Partners' filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks.

Operator

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: 1st, Ms. Faimo will offer opening remarks next Mr. Desipres, who will give an overview of Navios Partners segment data next, Ms. Sironi will give an overview of Navios Partners' financial results.

Operator

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.

Operator

Angeliki?

Speaker 1

Good morning, and thank you all for joining us on today's call. I am pleased with the results of the 3rd quarter of 2023, in which we reported revenue of $323,000,000 and net income of about $90,000,000 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.

Speaker 1

Economy is generally healthy, but there are clouds on the horizon. The U. S. Has high government debt levels the highest peacetime fiscal deficits. The Fed is engaged in the quantitative tightening, And there is a risk of interest rates rising further from their current relatively elevated levels.

Speaker 1

China, the world's largest consumer of commodities, is not firing on all cylinders. These factors, along with the wars in Ukraine and Israel, Have contributed to making this one of the most dangerous times in memory. Despite these clouds, the shipping market is robust and healthy. Arch. Arch company is doing well and positioned for all weather.

Speaker 1

We 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 deal we entered into with various or remainders. Navios Partners is a leading publicly listed shipping Company diversified in 15 asset classes in 3 sectors with an average vessel age of about 9.6 years. We have 180 vessels split roughly equally into 3 sectors based on a charter adjusted value. Please turn to Slide 7. We have about $270,000,000 of cash on our balance sheet.

Speaker 1

In the Q3, we had about 5.3% on an annualized basis on our cash balances. In addition, we are positioned well for the Q4 as we have $52,000,000 of contracted revenue in excess of cash expenses and 2,304 open index days. In the Q3, we entered into the transshipment business. We modified the Navios Vega Ultra Handymax vessels to have the equipment necessary to provide transshipment operations Enel into a 5 year charter with Navios South America Logistics. The vessel is expected to commence this operation in the Q4 and generate about $30,000,000 of EBITDA over the course of its charter.

Speaker 1

The vessel itself in this trade should have an extended useful life of about 30 years. Please turn to Slide 8. We provide an S and P update year to date. 2023 will generate $255,200,000 gross profit from the sale of 14 vessels. In the 1st 9 months of the year, we received $242,000,000 and we received $13,000,000 balance in the Q4 of 2023.

Speaker 1

In terms of acquisition, we spent $421,600,000 for 4 newbuildings, scrubber fitted Aframax LR2 vessels and 4 Japanese New Buildings MR2 vessels. We also spent $28,000,000 to acquire A 2019 built Camshamax vessel that we previously chartered in. We continue to work on obtaining long term contracted expected revenue. In the Q3, we created $257,900,000 of contracted revenue. Of this amount, we expect to receive $171,900,000 from 5 tankers with an average charter period of 3.8 years.

Speaker 1

In addition, we expect to receive $47,100,000 from the vessel we placed into the transshipment business. Finally, we expect to generate $38,900,000 from 34,250 TEU container ships. Average about 18,300 net per day for 1.9 years. This year, we were approached by certain counterparties to enter into amendments that would relieve them of certain liabilities. We facilitated this transaction at an estimated $10,200,000 net present value benefit Tunavios.

Speaker 1

$3,500,000 of this value is attributable to a $52,500,000 prepayment of charter hire for 2 container ships and $6,700,000 of this value is was attributable 2 charter amendments and extension for 2 container ships. Please turn to Slide 9. Since our transformation in 2020, our financial performance has been strong. Our 9 month 2023 adjusted EBITDA is 11.4% higher than 9 months 2022. Looking backwards, 2022 was 57% higher than 2021 and almost 5 70% higher than 2020.

Speaker 1

We believe that our diversified business model can continue to perform in difficult markets. I now turn the presentation over Mr. Stratos Desycles, Navios Partners' Chief Operating Officer. Stratos?

Speaker 2

Thank you, Angeliki, and good morning, all. Please turn to Slide 10, which details our strong operating free cash flow and potential for the Q4 of 2023. We fixed 83 percent of our available days at an average rate of $23,610 net per day. Our contracted revenue exceeds expected total cash expense for Q4 'twenty three by about 52,000,000 We have 2,304 opening index linked days that will provide additional profitability. Please turn to Slide 11.

Speaker 2

Arch. 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 $1,700,000,000 remaining investment In 28 newbuilding vessels, delivering to our fleet through 2027, for which most of the financing has already been in place. In Container 6, we acquired 12 vessels for a total of about $860,000,000 which we hedged by entering to long term creditworthy charges, Generating about $1,100,000,000 in contracted revenue for about 6.5 years average duration of the related charges.

Speaker 2

In the tanker space, we acquired 16 vessels for a total price of approximately $885,000,000 We have already chartered out 10 of these vessels For another period of 5 years, generating revenues of about $500,000,000 The drybulk newbuilding program of 8 vessels was completed in June 2023 with the delivery of the last Capesize vessel. We have also been actively opportunistically selling on their vessels based on segment fundamentals. Year to date, we have sold 14 vessels with an average age of approximately 15 years for 265,200,000 We sold 7 tanker vessels for about $160,000,000 take advantage of a strong tanker market. Also, we sold 7 Sybulk vessels for a total price of $95,400,000 Our last sale was a 19.3 years old Capesize vessel, which we sold within Q4 for 13,000,000 Moving to Slide 12. We continue to secure long term employment for our fleet.

Speaker 2

As Angeliki mentioned earlier, In Q3, we have created about $260,000,000 additional contracted revenue. Approximately $172,000,000 comes from our tanker fleet And about $40,000,000 comes from our containerships. Additionally, we agreed a 5 year contract with Navios Logistics for Navios Vega, 1 Ultra Handymax vessel that was modified to perform Transigen operations, which is expected to provide about $50,000,000 in revenue. The vessel is expected to be delivered within the Q4. Additionally, we amended charters for 4 of our containerships.

Speaker 2

For 2 of the vessels, we agreed a prepayment of higher of $52,500,000 and the assumption of the sub charters that the vessels are currently on. This prepayment was received in October and resulted in a net present value benefit of approximately 3,500,000 Arch. For the remaining two vessels, we have agreed to amend the current charter rate and extended duration of the charters for an additional 2.4 years At an implied rate of $18,000 net per day, creating $31,700,000 additional revenue and resulting in a net present value benefit of approximately 6,700,000 In Slide 15, you can see our total contracted revenue, which amounts to $4,300,000,000 relates to our tanker fleet $400,000,000 relates to our drybulk fleet and $1,900,000,000 relates to our containers. Charters are extending through 2,037 with a diverse group of quality counterparties. About 50% of our contracted revenue will be earned in the next 2 years.

Speaker 2

I now pass the call to Erichironi, our CFO, who will take you through the financial highlights. Erich?

Speaker 3

Thank you, Stratus, and good morning all. I will briefly review our unaudited financial results for the Q3 9 months ended September 30, 2023. The financial information is included in the press release and is summarized in the slide presentation available on the company's website. Moving to the earnings highlights on Slide 14. Total revenue for the Q3 of 2020 H3 slightly increased to $323,200,000 compared to $322,400,000 for the same period in 2022.

Speaker 3

Time charter revenue for the period is understated by $9,700,000 because U. S. GAAP rules require the recognition of revenue for our charters with de escalating rates on a straight line basis. Available days increased by 6.7 hedged to 13,759 compared to 12,897 for the same quarter last year. Our average combined time charter equivalent rate for the Q3 of 2023 was $22,052 per day, 7.3% lower than Q3 2022 levels.

Speaker 3

In terms of sector performance, both tankers and containers enjoyed improved rates compared to the same period last year. TCE rates for the Q3 of 2023 for our tankers increased by 20 6.8 percent to $27,688 per day and for our containers by 5.4 10% to 34,350 per day. In contrast, our dry fleet TCE rate was 29.5% lower compared to the same period last year at $14,139

Speaker 4

per day.

Speaker 3

EBITDA, net income and EPU were adjusted due to the following gains from sale of vessels: For Q3 2023, dollars 7,200,000 for the 1st 9 months of 2023, dollars 50,800,000 and for Q3 1st 9 months 2022, €143,800,000 Excluding these items, adjusted EBITDA for Q3 'twenty decreased by 2.3 percent to $173,700,000 compared to $177,700,000 for the same the period last year. Adjusted net income for Q3 2023 decreased by 27% to 82,600,000 compared to $113,400,000 in Q3 2022, mainly due to the negative effect of the $21,300,000 reduction in the positive income of the amortization of our favorable leases And the $6,300,000 increase in our interest expense, net of interest income, due to the increase in our debt levels and interest rate costs. Adjusted earnings per common unit for Q3 2023 were $2.68 Total revenue for the 1st 9 months of 2023 increased by 16.7% to $979,600,000 compared to $839,700,000 for the same period in 2022. Time charter revenue for the period is understated by $30,200,000 because U. S.

Speaker 3

GAAP rules require the recognition of revenue for our charters with de escalating rates on a straight line basis. The increase in revenue was mainly a result of a 16 point 5% increase in our available days to 41,239 compared to 35,000 394 for the same period in 2022. Our combined time charter rate for the 1st 9 months of 2023 slightly lower at $22,242 per date compared to the same period last year. In terms of sector performance, both tankers and containers enjoyed improved rates compared to the same period last year. Time charter equivalent rate for the 1st 9 months of 2023 for our tankers increased by 62.7 $29,014 per day and for our containers by 14.6 percent 34,930 per day.

Speaker 3

In contrast, our dry fleet TCE rate was 36 0.3% lower compared to the same period last year at $13,613 per day. Excluding the items mentioned earlier, adjusted EBITDA for the 1st 9 months of 2023 increased by 11.4 percent to 500 and $12,500,000 compared to $467,300,000 for the same period in 2022. Adjusted net income for the 1st 9 months of 2023 decreased by 21% to 250 point $5,000,000 compared to $317,200,000 for the same period last year. Our net income was negatively affected By a $47,800,000 reduction in the positive impact of the amortization of our favorable leases and a $43,400,000 increase in our interest H. E.

Speaker 3

S. Net of interest income due to the increase in our debt levels and interest rate costs. Adjusted earnings per common unit for the 1st 9 months of 2023, were $18.13 Turning to Slide 15. I will briefly discuss some key balance sheet data. As of September 30, 2023, cash and cash equivalents were $269,200,000 In the 1st 9 months of 2023, we paid $225,900,000 of predelivery installments and other highlights expenses under our newbuilding program and $83,900,000 for vessel acquisitions and improvements.

Speaker 3

We sold 13 vessels for $237,400,000 net adding $153,000,000 cash after the repayment of the respective debt. Long term borrowings, including the current portion, net of deferred fees, slightly reduced to 1,930,000,000 net debt to book capitalization decreased to 36.4%. Slide 16 highlights our debt profile. We continue to diversify our funding resources between bank debt and leasing structures, while 36% of our debt has fixed interest at an average rate of 5.6%. We also tried to mitigate part of the increased interest rate cost, Having reduced the average margin for our floating debt by approximately 40 basis points to 2.3% from 2.7% at 2022 year end.

Speaker 3

Our maturity profile is staggered with no significant volumes due in any single year. In terms of our newbuilding program, 82% of our newbuilding financing is already concluded or in documentation phase at an average margin of 1.8%. During the quarter, we arranged a total of $92,300,000 to refinance existing leasing JPS, where we manage to decrease respective margins and extend maturities. Turning to Slide 17. You can see our ESG initiatives.

Speaker 3

We continue to invest in new energy efficient vessels and reduce emissions through energy saving devices and efficient vessel operations. Navios is a socially conscious group whose core values include diversity, inclusion and safety. We have strong corporate governance and clear code of ethics, while our Board is composed by majority independent directors. I'll now pass the call to Ted Petrone to take you through the industry section. Ted?

Speaker 5

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, IEA projects a 2,300,000 barrels per day increase in world oil demand for 2023 to 101,900,000 barrels per day And a 900,000 barrels per day increase in 2024.

Speaker 5

Chinese crude imports continue to rise, averaging 11,400,000 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 crude and product rates remain strong across the board due to healthy supply and demand fundamentals, Minimal fleet growth and shifting trading patterns.

Speaker 5

Product tankers are also aided by 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 'twenty three And a further 4.9% in 2024. Similarly, product ton miles anticipated increases stand at 11.3% 6.1% for 2023 2024, respectively. Turning to Slide 22. VLCC net fleet growth is projected at 2.3% for 2023 and a negative fleet growth of 0.9% for 2024.

Speaker 5

This decline can be partially attributed to owners' hesitance to order expensive long lived assets in light of macroeconomic uncertainty An engine technology concern due to CO2 restrictions in force since the beginning of this year. The current low order book is only 2.7% of the fleet Only 24 vessels, the lowest in 30 years. Vessels over 20 years of age are 14.1% of the total fleet or 129 vessels, which is over 5 times the order book. Turning to Slide 23. Product tanker net fleet growth is projected at 0.1% for 2023 and only 1.1% for 2024.

Speaker 5

The current product tanker order book is 10.2% of the fleet, 1 of the lowest on record and is approximately equal to the 9.8% of the fleet, which is 20 years of age or older. In concluding the tanker sector review, tanker rates across the board at strong levels, the combination of below average global inventories, growth in global oil demand, new longer trade routes for both crude and products, well as the lowest order book in 3 decades and the IMO 2023 regulations should provide for healthy tanker earnings going forward. Please turn to Slide 25 for the review of the drybulk industry. For the majority of Q3, normal seasonality played out, assisted By unwinding congestion and soft demand outside China, however, Chinese raw material demand continued to increase on the back of sustained economic stimulus and pre winter stockpiling, especially for coal and iron. This led the BDI to more than double from 962 On July 25, 2,105, on October 18, after a recent retracement, the BDI currently stands at about 1400.

Speaker 5

With regard to iron ore and coal, Chinese continuing stimulus measures and free winter stocking should assist imports through the year end. The global grain trade is impacted by the war in Ukraine, shifting trading patterns toward longer haul routes. Seaborne grain trade volume is expected by 2.7% in 2024, added by ton mile growth of 3.6%. Going forward, supply and demand fundamentals remain intact. A normal seasonally stronger Q4, historically low order book, declining net fleet growth and tightening GHG emissions, regulations remain positive factors, Which are reflected in the time charter and S and P markets.

Speaker 5

Please turn to Slide 26. The current order book stands at 8% of the fleet, 1 of the lowest since the early 1980s. Net fleet growth of 23% is expected at 2.9% and only 2.2% in 2024, as owners remove tonnage that has been uneconomic due to IMO 23 CO2 in force since the beginning of the year and the emissions trading system starting in Europe at the beginning of next year. Vessels over 20 years of age or about 8.3% of the total fleet, Which compares favorably with the historically low order book. In concluding our dry bulk sector review, continuing demand for natural resources congestion at the Panama Canal, War and sanction related longer haul routes combined with a slowing pace of new deliveries all support freight rates going forward.

Speaker 5

Arch. Please turn to Slide 28. Container rates, although still above pre pandemic levels, continue to soften on the back of elevated deliveries And lower imports by Western consumers partially attributed to the end of stimulus fuel spending and other macroeconomic issues, including inflation. Below trade is expected to grow by 3.8% in 2024. Newbuilding deliveries in 2024 and 2025 will be equivalent Approximately 20% of the fleet after a record net fleet growth of 7.7% this year.

Speaker 5

This has continued to pressure rates for some time. The Shanghai Container Freight Index or SEFI currently at 10.13, which is 5% lower than opening the year at 10.61. As you'll note in the graph in the lower right, the U. S. Retail inventory to sales ratio was off the recent low, but still well below the long term average.

Speaker 5

The graph on the lower left, a recent slowdown of U. S. Consumer purchases of goods, although still above pre pandemic levels. Lower imports have eased port takeaway bottlenecks and port congestion. Turning to Slide 29.

Speaker 5

Net fleet growth is expected at 7.7 percent for 2023 and 6.8% for 2024. Current order book stands at 26.7% Against 10.7% of the fleet 20 years of age or older, about 72% of the order book is for 10,000 TEU vessels or larger. In concluding the container sector review, supply and demand fundamentals remain challenged due to economic and geopolitical uncertainties and an elevated order book The prospect of Chinese stimulus and world GDP growth of 3% for 'twenty three and 2.9% in 'twenty four provide a counterpoint for a challenging 'twenty three. This concludes our presentation. I would now like to turn the call over to Angeliki for her final comments.

Speaker 5

Angeliki?

Speaker 1

Thank you, Ted. We open the call. This concludes our formal presentation. We open the call

Speaker 6

And we will take our first question from Omar McCorda with Jefferies. Your line is now open.

Speaker 7

Thank you. Hey, guys. Good morning and good afternoon. Thanks for the update as always. Obviously, Navios has been focused on keeping a pretty nice and sizable contract backlog at $3,300,000,000 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.

Speaker 7

And you highlighted that they are NPV positive. 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 also with respect to Navios. And then do you think that there is potential that's happening with the new buildings 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.

Speaker 1

Good morning, Omar. Actually, your observation is correct. It contains a weak in a weak moment. So these kinds of transactions I happen, I mean, counterparties will ask for amendments. And of course, We only do things that make sense for Navios.

Speaker 1

So we are very careful about that. We Basically got about over $10,000,000 of positive MTB. We do not see this happening on Ader. And these are actually 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 area to the sector.

Speaker 7

Thank you. Yes, no, that's helpful Angeliki. Thank you. And then wanted to follow-up and ask about the transshipment business, which is clearly looks interesting. You took the Vega, if I recall, that's an Older Supermax and you fixed it for 5 years of that $30,000,000 of cash flow.

Speaker 7

Obviously, that jumps out just given especially where dry book rates have been, just wanted to ask, 1, what does the cost look like to modify the ship For that trend shipment business and then also are there opportunities to do more here on that front?

Speaker 1

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 And yes, this business can Start with 1 vessel and grow to more. And there was an additional tremendous benefit is that you And it's basically proprietary because of the transurban vessels, then you can see more opportunities on employment of our Oceango investment, South America to China, South America to Europe. So this can be 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 asset because this asset unlike the rest can be 30 years plus.

Speaker 1

So basically, we are amortizing 100%. We have we get all our profit and CapEx on the 5 years, but we see that this can actually have additional life.

Speaker 7

Arch. Okay. Wow. Thank you. That sounds interesting and compelling.

Speaker 7

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, it's still Perhaps maybe the main priority is to delever and bring the net LTV down to that 20% to 25% range?

Speaker 1

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 Chennai with energy efficient vessels. And basically, the very important part of that was that we actually expanded and built more our relationship with all majors and that is something that we focus On Bennington.

Speaker 7

Yes. Great. Well, thanks Angeliki. I'll turn it over.

Speaker 1

Thank you very much. Thank

Speaker 6

you. And we will take our next question from Chris Wetherbee with Citigroup. Your line is now open.

Speaker 4

Arch. Hey, thanks guys. Appreciate the time today. I wanted to ask, Angeliki, maybe as you think about this Entities. So you have obviously exposure to multiple end markets here.

Speaker 4

And I guess each 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 it? I understand the new build opportunities you have both on the container and the tanker. But as we're thinking about Where you're putting where you think about putting new capital work, where you'd want some emphasis to be placed, where would it be?

Speaker 1

Good morning, Chris. The reality is a lot of calculations, a lot of work trying to see what is the best opportunity. I mean, you show where we allocated a good amount of money this quarter, building entering we have entered a new asset class, the Aframax LR2s, and we believe it on that because we see A fishing vessel that have the specifications that we have actually the 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 short haul has higher emissions, but if you have Energy efficient vessel that can really mitigate the situation. So we look at the opportunity and build on that.

Speaker 1

On containers, obviously, I mean, this was previous transaction 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 in between Providers an attractive return. So big picture is a very simple thing, attractive return over 10% and have low residual value risk and so that you have because the asset has a longer duration.

Speaker 4

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. Can Arch.

Speaker 4

Can you talk a little bit about how you think about opportunities to maybe monetize some of the fleet and maybe where you want to deemphasize or where you see relative value between Asset values and charter rates today.

Speaker 1

Basically, There is a graph that we have usually recoveries that we see values on The tanker has strong values, of course, strong returns. I mean, you optimize I mean, we optimize that fleet. And then on the drybulk, you have more or less values and long term earnings of the vessels, approximately about 80%, 90%. So what we are doing is basically we see a vessel, what is Maintenance CapEx, what is the age of the vessel, knowing the regulatory environment for the next couple of years, meaning that there will be You will have carbon tax. There will be in Europe, there will be requirement.

Speaker 1

So you target a vessel that makes sense at the value to sales and we have done that. You will 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 8. So yes, we had more vessels in the beginning. This will in 2024 drop to about on the average about Envessel. This is not mathematical, it from the market, but this is approximately the kind of a renewal you will need.

Speaker 4

Okay. So that's the way we should be thinking about it. And obviously, I guess, market fluctuations will determine kind of how aggressive you are, I guess. And then Maybe just one, I guess one more on the tanker cycle as you guys think about it. Obviously, some macroeconomic concerns flowing through here, I guess.

Speaker 4

You always do a really nice job outlining your thoughts on what the market looks like. I guess as you're thinking about Yes, 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?

Speaker 1

Today, U. S. Economy is still healthy. There is clouds. I mean, there is definitely clouds both On the interest rate and but we don't see any recession today.

Speaker 1

But you also have a big effect from the wars in Ukraine in 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 long term 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 war in Israel.

Speaker 1

And that can have quite significant. Don't forget the area has a lot of the oil, a lot of the gas. It can be significant in case of

Speaker 4

Okay. Very helpful. Appreciate the time this morning. Thank you very much. Archibald.

Speaker 6

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

Speaker 1

Thank you. This concludes our results for the quarter.

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Earnings Conference Call
Navios Maritime Partners Q3 2023
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