Thank you for joining us for Navios Maritime Partners Second Quarter 2018 Earnings Conference Call. With us today from the company are Chairman and CEO, Angeliki Frangou; Chief Financial Officer, Stratos Desypris; and Executive Vice President of Business Development, George 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 webcasting link in the middle of the page, and a copy of the presentation referenced in today's earnings conference call can also be found there. Now I'll 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 numerous material risks and uncertainties, which could cause actual results to differ from 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 the call. The agenda for today's call is as follows; first, Mr. 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 industry overview and wrapping, we'll open the call to questions. Now I turn the call over to Navios Partners Chairman and CEO, Angeliki Frangou. Angeliki?

Thank you, Laura, and good morning to all of you who joined us on today's call. I am pleased with the results for the second quarter of 2018, for which Navios Partners had $34.7 mill adjusted EBITDA and $9.2 mill of adjusted net income. We declared a quarterly distribution of $2 cent per unit for the second quarter, representing a current yield of approximately 4%. We used excess cash flow and new equity to renew and expend our dry bulk fleet. As you can see from slide 4, NMM owns 35 dry bulk vessels. We also leveraged historic weakness in the container sector by establishing Navios Containers, a growth vehicle with 26 containerships. Having taken advantage of this opportunity we restored distribution to unitholders in the 1st Quarter of this year, and I am pleased with this trajectory, although there is plenty of hard work ahead of us. Slide 5 provide some of Navios Partners highlights. NMM has no significant near-term debt maturities, and has significant expected free cash flow generation. Our credit ratios are strong with 30.9% in net debt to capitalization proforma for the recent sale of the two containerships. Slide 6 highlights NMM's long term strategy. NMM renewed and expanded its drybulk fleet. Since 2016, NMM has added on a net basis 11 dry bulk vessels increasing dry bulk fleet capacity by 52 % on a deadweight tons basis, and reducing the average vessel’s age by 15 %. We are also focused on deleveraging. We used sales proceeds of container ships to repay $20.2 million in bank debt. NMM’s net debt to book capitalization ratio is reduced by 25.4% since 4th Quarter of 2016. We will work to continue to bring this down. Today NMM owns 36% of Navios Containers, which filed an F1 with SEC to…

Thank you, Angeliki, and good morning, all. I will briefly review our unaudited financial results for the first quarter and first half of 2018 ended June 30, 2018. The financial information is included in the press release and is summarized in the slide presentation on the company's website. Moving to the financial results, as shown on Slide 13. During the second quarter and first half of 2018 our results were affected by the 115 days of operation of Navios Container which was consolidated in our accounts. During that period, Navios Container reported $3.1 million of revenue and $2.3 million of EBITDA. In order for the comparison to be more meaningful, the below discussion focus only on Navios Partners results. Revenue for the 2nd quarter 2018 increased by 24% to $58.2 million, compared to $46.9 million for the 2nd quarter 2017. The increase was mainly due to the 520 additional days of the enlarged dry bulk fleet. Adjusted EBITDA for the 2nd quarter 2018 increased to $34.7 million, compared to $30.3 million for the 2nd quarter of 2017, primarily due to the increase in revenues, and the 1.6 million increase in equities and net earnings of our affiliate companies. This increase was mitigated mainly by a $2.6 million in management fees, due to the increase in fleet. Adjusted net income for the 2nd Quarter of 2018 amounted to $9.2 million - $5.2 million higher than the corresponding quarter of last year. Operating surplus for the 2nd quarter of 2018 amounted to $19.8 million. Replacement and maintenance capital reserve was $6.4 million. And fleet utilization for the 2nd quarter of 2018 was almost 99%. Moving to the six months operation, the time charter revenue for the six months increased by 24.5% to $111.2 million, compared to $89.3 million in the first half…

Thank you, Stratos. Please turn to slide 22. The IMF forecast world economic growth at 3.9% for both 2018 and 2019. Emerging and developing Asian markets, which drive dry bulk demand, are expected to grow at 6.5% in 2018 and 2019. When the pipe of synchronized global economic growth, dry bulk trade grew by 4% in 2017, and is forecasted to rise by 2.7% in 2018, slightly higher than the expected 20.5% net fleet growth. The current trade tensions, particularly between the U.S.A. and China is not expected to have a significant effect on the dry bulk trade. On the contrary, this may initially have a positive impact on the tons miles, as commodities find new routes to the end users. We have already seen this in the shipments of grain from the U.S.A. to South America. The average Bulk Dry Index over the first half of 2018 recorded about 25% increase over first half of 2017. The dry bulk market still has substantial upside. Charter rates are still about 40% below the 20 years average. Turn to slide 23. World wide seaborne iron ore trade increased about 5% in the first half 2018. Chinese steel production rose by 6.6%. Chinese steel exports continue to decrease on the part of increased domestic demand, which has been stimulated by large infrastructure projects, and a recovery in the housing market. The [indiscernible] and road project is a corner stone of China’s economical plan for the next five years. It supports steel and power demand, inside and outside China. Substituting Chinese expensive low quality iron ore, with lower price and higher quality iron ore imports are continuing. Up to the end of May, domestic production was down by 36%, whilst import was up slightly by 0.6%. Our forecast rise by 2.8% in 2018.…

Thank you, George. And this opens the call to questions.

[Operator Instructions] Your first question comes from the line of Randy Givens from Jefferies

Hey, good morning, and a congratulation on a good quarter here. A few questions. 15 of your vessels have charter expirations in the back half of this year, what is your strategy for spot versus time charter to replace those in the quarters ahead?

That’s a good question, and something that we are looking at all the time. To be honest, you have seen that we have already have fixed about four of our vessels until 2020. We have managed to do index to go way beyond 2019, and in the late part of 2020. That gives us, and we managed to do that with the ability to close to low sulphur, so and we have done that on index. Now on the way we are looking on the vessels that are coming up, in case you can have for Capesize a period charter in the low $20,000 in an area we are working carefully. And we will do a combination of you know 18 months – 24 months fixed, and a part of our fleet will also be index, because we are very, and we look that the market it still has quite significant strength.

Okay. And then looking at the balance sheet, and kind of usage of cash, obviously with your low leverage, minimal debt in works, free cash going forward, and received the potential five container ship sales, I guess a $180 million, what is the expected use of cash in the coming quarters looking at possible purchases, increases of distribution, additional acquisitions, I know you just announced two here, so kind of going forward, what is your strategy?

You know, we care much about the leveraging. In that sense, with the potential sales of the vessels, we will be able to get chartered adjusted evaluations. As we don’t get any benefit in our [indiscernible] from the capital market. We take that cash up front and delever. And as you can see, we have quite a significant cash generation. We are generating the kind of $70 million of cash so that with a modest level gives us the ability to grow. So, two levels. We have one of the lowest leverage ratios at 30.9% debt to capitalization. And grow carefully on a low level. When we take away all the container ships, and looking only at dry bulk.

Right. Let me rephrase that. Is there a certain net debt to capitalization that you are looking for, to get down to, before possibly distribution increases?

You know the distribution we already have established, and you will see the dividend we started last quarter. I think that other events that we will be looking at if we manage to do some period charters fixed, so that we create this cash flow, so we are in an early part of a recovery, and there is two things we are looking. Period charter that we take care of our fleet, and also taking care of the maturity of the debt in 2020, so that that goes further out. With these two things, than we will look to return capital, either through distribution or buybacks.

Okay. That’s fair. Now, last question from me. What is your strategy for IMO 2020 compliance? Any thoughts on installing scrubbers on some of your Capesize vessels in the coming quarters?

This is one thing that, you know, we have seen. First of all, I would say that the current market is very strong, we are looking at spot rates of over $26,000. Stopping a vessel today, I think is a mistake, because you generate a very strong cash flow. And if you take the cost of fuel no matter what will increase in 2020 definitely we have accelerated cargo movements in 2019. So we look at presently keep our vessels trading, because it is a good environment, now if in 2020 we see that there is a material benefit to put scrubbers on bigger vessels, as you know the technology is improving, and you can always get scrubbers at usually declining prices. In shipping, the longer you wait, the lower price you usually get. One thing I would like to mention and can be seen in our fixtures, we have presently done with one major charters, the four vessels we have fixed will be on charter in 2020, without effecting the index fixtures that we have. I think it’s an interesting event that shows that charterers are willing to fix longer, and it does not really affect the performance of the vessel.

Sure, Alright. Thank you for the time.

[Operator Instructions] The next question comes from the line of Chris Wetherbee of Citi

Hi, this is [indiscernible] for Chris Wetherbee. Thank you for taking my question. I just want to ask a little bit about how trade tensions and discussions around tariffs have potentially led to any uncertainty as you engage in the discussion with your charterers for your dry bulk fleet and how those potential tariffs might impact Chinese seaborne iron ore import.

I think this is an interesting question, and we also look very carefully at what’s happening around the world, but the reality is in the physical market, and it has not really affected it. Capesizes is at a twelve months high market. You have sentiment affected, we saw a little bit of volatility but overall physical market has not been affected. Sentiment around the capital market is more affected, and this is something we have to watch how it develops. What form it will take. Generally, commodities have changed some directions. Soyabeans will be imported from other areas. Commodities that are needed, will be taken from different places. So it may become more inefficient trade. It may actually create a net benefit, because of the inefficiencies of trade. I mean, we have a recent example of, we seen that even grains from United States are being transported to Argentina. Over a million tons, so it will create different inefficiencies.

Got it. Thank you for the color there. I just want to follow up on that. There is kind of a thesis out there that the increase in commodity prices is due to customers placing higher orders, more of a typical seasonality for orders, ahead of the tariffs, is that likely, and how that may have impacted rates, and may impact rates going forward

I am not, I mean the realities of commodities. I think it is just inefficiencies in the market. If you take this in a very macro level, the world [indiscernible] the level of tariffs. We are not there. The physical market is good, and it is more about the inefficiencies of the commodities around the world.

Thank you for taking my questions.

[Operator Instructions] Your next question comes from the line of Hillary Kakanando of Wells Fargo

Thanks for taking my questions. You mentioned that taking care of the maturity of the 2020 debt as something you are looking into before perhaps increasing the distribution or buying back stocks. So, when will start to look at refinancing your debt, and also, eh what is the realistic time line? And also you mentioned that there were four drybulk vessels that were included in the collateral, could you discuss which one?

Let me go to the first question. From this quarter we can actually finance the term loan at part, so this is part of the strategy. So in the next three quarters, at the beginning of next year, this is going to be, we will take as much as possible of this out. Now, on the collateral Stratos will give you

As part of the sales of the container vessels, we prepaid $20 million of our bank facility. So we listed three of the vessels out of the debt facility. It was Navios Fantastiks, Navios Sagittarius and Navios Prosperity, and together with one unencumbered vessel that we have, which was Navios Appolon I they were all moved to the collateral package.

Okay. Great. Thank you, And then you also mentioned simplifying the corporate structure by NMM, you know purely focusing on dry bulk, and Navios Container focusing on containers, so down the road, do you perhaps see NMM being rolled up in to the parent company as well, to simplifying the structure even further?

I think this is very simple structure. The company has now – eh focus on dry bulk, with a separate container strategy. We don’t have, I mean maybe there will be dropdowns, as it is in a regular business, there is no other [indiscernible]

Okay. Alright. Thank you.

[Operator Instructions] Your next question comes from the line of Espen Landmark of Fearnley

Yeah, Hi Angeliki and Stratos, Following up on the last question. What kind of alternative would you consider you know for the NMM in terms of the listing, or taking part of the NMCI offering, or having some of the proceeds from the HMM vessels that are paid in in shares?

I mean Navios Container has an F1 public filing, I cannot comment on the whole process. There is a press release and there is an F1 and that is already public.

Okay, fair enough. And then you know the acquisition of the Kamsarmax and Cape from the parent, I guess relation wise, it looks fine, in line with last done levels, but I would still question why you decide to acquire vessels from the parent company instead of a third party. Can you explain the decision behind that? If you intend to acquire more of the NM vessels in the future?

It is just like a third party. The vessels we acquired, the Capesize is an Imabari Eco type vessel, a top of the line, I can say it has a premium to any other vessels, and they are known performers, very good vessels, a premium to major charterers. And the Kamsarmax is actually a bigger than a Kamsarmax, it’s an 84,000 tonner, quite a significant better vessel than can be found. It is very much treasured by the grain houses. So, no vessels, top performing Imabari vessels, I will not consider as a better acquisition in the market, even those that can be done are not as good. And if you see the actual returns, you are talking about 15% yield on today’s rates. So it’s a transaction.

Right, so you wouldn’t overrule acquiring more vessels from NM in the future?

When a dropdown can be done, if it is attractive, I will not exclude, but it is subject to economic rational and both of the Conflict Committees for approving the transaction.

Okay, and finally, I mean for ballast water treatment related costs for 46 vessels and 33 dry bulk, how much shall we factor in for 18 and 19 for capex?

As you know that we are for this year we have no vessels, our vessels are [indiscernible] until 2022, technological expenses are going down, as well as cost of installation are going down. Therefore, the installation of ballast water, is that to our benefit. We are working on the most appropriate one.

Okay, thank you very much.

[Operator Instructions] Your next question comes from the line of Amit Mehrotra of Deutsche Bank

Hey, good morning this is Chris Snyder in for Amit. So the first question is around potential cash flow from divesting from container ships fleet. So, first on the sales to Navios Container, you say that the sales are at the option of Navios Container, can you tell me about the potential timing of the sale, and the likelihood that NMCI will exercise these options?

I will refer you to the public disclosures. We have already given that, and the rest you can find in the public disclosures.

Okay. Are the sales contingent on the potential IPO going through, or could they go forward without that?

There is a lot of conditions, I would suggest you go through the public disclosures.

Okay. Fair enough. I guess this kind of thinking about the proceeds from the container ships in general –should we assume that any proceeds that you do receive, that you will continue to reinvest in younger dry bulk tonnage?

Yes, I mean, if you see what we have done over the last year and a half, we added thirteen vessels, sold two, and we have increased our deadweight capacity with larger vessels about over 50%, in pure only dry bulk, and decreasing the age of the fleet from the industry average, and this is something we will continue with in the remaining of the year, and next year.

Okay, I just want to follow up on the S&P market, it seems that its, there been a bit up in the prices for modern tonnage over the last couple of months, and given you guys, with the additional fire power, with the improving cash flows, debt maturities not until 2020, any potential proceeds from the container ship fleet, can you maybe talk about the depth and availability of modern tonnage in the S&P market?

There is availability. It depend on what is your target. We targeted larger vessels. And also what we target is vessels that are good performers with a concentration on Capesize and post Panamax.

Okay. That does it for me. Thank you for the time, guys.

There are no questions at this time. I will turn the call back to Ms. Frangou for any additional or closing remarks.

Thank you. This completes our Q2 results.

Thank you for participating in today's conference call. You may now disconnect your lines at this time.