Thank you for joining us for Navios Maritime Partners First Quarter 2023 Earnings Conference Call. With us today from the company are Chairwoman and CEO Ms. Angeliki Frangou; Chief Operating Officer, Mr. Efstratios Desypris; Chief Financial Officer, Ms. Erifili Tsironi; and Vice Chairman, Mr. Ted Petrone. 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 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 1985 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 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 segment data. Next, Ms. Tsironi will give an overview of Navios Partners financial results. 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.

Good morning to all of you joining us on today's call. I am pleased with our results for the first quarter of 2023, in which we reported revenue and net income of $309.5 million and $99.2 million, respectively. We're also pleased to report net earnings per common unit of $3.22 for the quarter. Navios Partners is a leading publicly listed shipping company diversified in 15 asset classes in three sectors with an average vessel age of about 9.6 years. We have 173 vessels split roughly equally in three sectors based on a charter adjusted values. In addition to diversification, we have been actively managing our portfolio to maintain a younger, more technologically advanced fleet as we believe the newer technologies are a competitive advantage both in terms of operating efficiencies and also for fuel emissions. We have rationalized our fleet by selling old vessels and acquiring new vessels. As I said last quarter, we're also focused on reducing leverage rate. Most recently, we reduced our net LTV to about 42% in the first quarter of 2023 from about 45% in the fourth quarter of 2022 measured for vessels in the water. Our stated goal is to continue to reduce leverage, so that that net LTV falls within a range of 20% to 25%. Please turn to slide 7. We continue to finance our newbuilding program on attractive terms. Since our last earnings, we secured $438.6 million of new financing at an average margin of 1.8%, $343.6 million of which financed six newbuilding vessels. We have also refinanced $95 million for eight tanker vessels at the same average margin. We have also taken advantage of market conditions to secure $161 million of long-term contracted revenue and to sell vessels generating $242.2 million in gross sales proceeds. As to contracted revenue, we…

Thank you, Angeliki. And good morning all. Please turn to slide 9 with details on strong operating free cash flow potential for 2023. We fixed 63% of available days at an average rate of $27,688 net per day. Our contracted revenue exceed the expected total cash expense for the remaining nine months of 2023 by over $70 million. We have 15,469 open and index linked days that will provide additional profitability once fixed. Slide 10 demonstrates the basic principles of our diversified platform in action. We aim to benefit from countercyclicality which creates the opportunity to redeploy cash flows from well-performing segments into assets in underperforming segments. We believe a diversified asset base smooths volatility on our financial statements. You can see this dynamic playing itself out in our asset base. As of Q1 2023, container values dropped by 4%, while drybulk and tanker vessel values increased by 9% and 2%, respectively. In sum, the net change for fleet value is an increase of approximately 3%. Multiple segments also allows us to optimize chartering. In segments with attractive returns, we can enter into period charters. In other segments, we can be patient. As you can see from the chart on the bottom of the slide, we have fixed 86% of our 13,602 total available days for the second quarter of 2023 at a net average rate of $25,654 per day. Our containerships are 100% fixed at $38,615 net per day. Our tankers 90%, up $28,033 net per day. And our drybulk fleet is 79% fixed at $17,458 per day. In slide 11, you can see our fleet renewal activities. We are always adding new in the fleet, so that we maintain the [indiscernible] profile, benefiting from new technologies and more carbon efficient vessels. We have $1.4 billion remaining investment in…

Thank you, Stratos. And good morning all. I will briefly review our unaudited financial results for the first quarter of 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 in slide 13. Total revenue for the first quarter of 2023 increased by 31% to $309.5 million compared to $236.6 million for the same period in 2022. Time charter revenue for the period is understated by $13 million because US GAAP rules require the recognition of revenue for our charters with deescalating rates on a straightline basis. Available days increased by 24% to 15,908 compared to 11,228 for the same quarter last year. Our average time charter equivalent rate increased by 2% to $20,811 per day compared to $20,386 per day for the same period in 2022. In terms of sector performance, both tankers and containers enjoyed improved rates compared to the same period last year. TCE rates for our tankers increased by 86% to $28,477 and for our containers by 29% to $34,987. In contrast, our dry fleet TCE rate was 45% lower compared to the same period last year at $10,998. EBITDA for Q1 2023 increased by 50% to $188.8 million compared to $126.1 million for the same period last year. Time charter and voyage expenses increased by $22.7 million as a result of high banker expenses, as a number of our vessels were employed on freight volumes and [indiscernible] expenses following recent vessel acquisitions. Operating expenses and general administrative expenses increased mainly due to the expansion of our fleet. Net income for Q1 2023 increased by 16% to $99.2 million compared to $85.7 million in Q1 2022. Earnings per unit worth $3.22. Net income was negatively affected by $22.3 million…

Thank you, Eri. Please turn to slide 20 for the review of the tanker industry. Real GDP is expected to grow at 2.8% in 2023 based on the IMS April forecast and is forecast to be 3% in 2024. There was an 85% correlation of world oil demand to global GDP growth. In spite of economic uncertainties and the Ukraine crisis, the IEA projects a 2.2 million barrels per day or 2.2% increase in world demand for 2023 to 102 million barrels per day, exceeding 2019 pre-pandemic levels. China, in particular, accounts for 60% of global oil demand growth in 2023, rising 1.3 million barrels per day or 8.8% over 2022 to average an all-time high of 16 million barrels per day. After a strong Q4 across all asset classes, firm tanker rates continued in 2023 on the back of strong supply and demand fundamentals, minimum fleet growth and shifting trading patterns resulting in longer haul trade routes, especially for Suez and Aframax. Recent declines in US crude exports and OPEC cuts, although less than the headline numbers, have put downward pressure on VLCC rates, particularly out of [indiscernible]. Turning to slide 21. Tanker rates across the board remained strong due to previously mentioned supply and demand fundamentals combined with the invasion of Ukraine, which has shifted Russian crude and product exports to longer haul routes out to India and China. Additionally, European refineries are replacing Russian crude with supply from the US, Brazil and the Middle East, further increasing ton miles and trade inefficiencies. Product tankers should also be aided by discounted Russian crude exported to the Indian Ocean and the Far East returning to the Atlantic as clean product. This could add upward pressure on already strong rates. 2023 crude and product ton mile growth is expected to…

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

[Operator Instructions]. Our first question comes from Omar Nokta with Jefferies.

First, just wanted to maybe ask strategically about the business. And, obviously, the balance sheet, you've gotten the net LTV down to 42% from 45% last quarter. Your aim or target is to get it to 20%, 25% threshold. It looks like you're on pace to get there perhaps over the next couple of years. I wanted to ask, is there something you're looking to do strategically when you get to that point versus not being able to do that now? Or is it just simply you're looking to delever to have that added flexibility down the line?

I think that you got it well. We are well positioned. We are generating the cash. Our diversified model is performing well. $4.5 billion assets in the first quarter generated cash above the net LTV from 45% in Q4 to 42%. And basically, you have now three sectors. The containers that were cautious, we saw that they are performing better than we thought. We did over $100 million of contracted revenue from five vessels over the two years. And this is actually performing much better than we thought. On the tanker, the other sector we're in, we see structural changes, strong ton mile demand on crude, strong ton mile demand on product, restricted supply and good cash flows. And on the drybulk, second half of the year can be, because of China, much healthier than the first half. So, with that background, and knowing that we cover all our expenses and we have $40 million above our expenses for the remaining nine months, you know that we have 16,000 days, so do your own calculation of what their age will be, that every 10,000, we provide $160 million of free cash. And this is about, at the end of the story, about total turns. We bring in our net LTV down to 2025 and it's about total returns. We should be able to measure on this total return. And we have – I think we have done well. And I've put a side on that if you look since 2020 when we started this strategy, this diversified strategy, and we hope that we'll do well in the future. It's a patient, but also a very steady strategy we have articulated over the last quarter.

In general, in terms of how you are, clearly, you have the portfolio approach. You're diversified across three segments. And each market is moving in its own direction presenting its own opportunities and risks perhaps. But I kind of think about where you're positioned now, you've sold some older ships, you've brought in some of that cash, your newbuildings, you've mostly locked away on longer term charters. So you've derisked those. In terms of kind of how we think about Navios strategically with its, say – whether it's use of cash or just how it looks at fleet or manages it, should we think Navios in the current environment is perhaps, one, a seller of older ships and then also a harvester of cash flows, and then, three, not going to be as acquisitive on the acquisition front as it has been? Is that fair to say? You're basically selling older ships, harvesting cash and not being acquisitive?

Yes. And we're modernizing our fleet. That is a clear path. Getting more efficient vessels, it makes sense. And your investment, your return on your investment is quite significant. We are actually seeing that – we are there to do an acquisitions are depending on the opportunity. I think what we like about the diversified platform is that we can be able to capture every opportunity that comes to us without being restricted one way or the other. You remember when we were doing drybulk in 2021, when we did our containers early on, then we enter a new sector in the tankers, we expanded again on the tankers, we will seek the best, more attractive opportunity. Modernizing the fleet is something that will be always ongoing. I think that creates, on every aspect, being more efficient, fuel efficient is a driver in the market.

And maybe just one final one for me, just about the containers. Clearly, that's been a nice source of visibility, and you've paid off a lot of shifts significantly. So it's really the free cash is fairly significant from that stream of the business. But just wanted to ask about what we're seeing in the market today. Clearly, we went from a very quiet time charter market at the beginning of the year to one that's become much more active, and you've been able to put away some ships that are on the water today on medium term charters. Just wanted to ask, you do have a few vessels that roll off contract in the next several quarters, not a tremendous amount, but you do have some that roll off. What do those contracts discussions look like? Maybe are you able to give us a sense of how far in advance when those shifts would be scheduled to roll off would you be able to secure them on new contracts today?

We're cautious about the sector, but we saw very healthy levels. We have basically fixed everything and Stratos will take you through. But basically, we've fixed everything at a very good and attractive rate. And what we see from the market is – you can actually secure cash flows and visibility from that.

Omar, on all the fixing front, the latest transactions that we did was generated over $100 million of contracted revenue for the next 2.7 years. And if you see, also you can see it in our presentation, we have nothing left opening in 2023. So, okay, we have a vessel where the delivery period is between, let's say, the end of the year and beginning of next year, but effectively there's nothing open. So we have fully covered our position on this sector.

I guess, to say, for a vessel that's opening up in six or seven months, is now the time that you're having dialogues, or is it become much more of like an August, September time period?

We have fixed the container sector basically. We don't have anything open.

Yeah, the ones that are coming next year, today, it's too early to start thinking about that. I think this is a question that we will have towards – going to the end of the next quarter. At the later part of Q3, this is when we start discussing on the market and seeing what's the availability.

Our next question comes from Chris Wetherbee with Citigroup.

This is Rob on for Chris. I guess just to piggyback on that last question with regard to the containership market, could you give us a sense of what your expectations are for the back half of the year with regard to volume kind of across the broader industry? It sounds like we're starting to see a little bit of seasonality return to the containership trade and how that kind of fits in to your time charter approach? It'd be great to get a little bit of color there.

I think the good thing is that we are totally fixed for the container. We have only one vessel at the end of the year, but that will give you the container sector idea.

I used the SCFI as a proxy, right? It's a box rate, but used as a proxy for the industry and it's kind of bounced off the bottom. So, maybe we've found the bottom here. You see the chart we have on one of the slides there, the US consumer continues to buy goods at a healthy level. There'll be some pressure on the rates, but the good thing, obviously, we've already mentioned in the other question was we were fixed out for the year. But for us, I think the market – the second half could some pressure on the bigger rates. Remember, most of our ships are below 13,000 TEU. And if you take the order book for the entire fleet, it's probably close to 30%. But for under 13%, it's probably around 13%, 14%. So that holds up well for our sector. And I think that's why you've seen us be able to put out ships forward for period at some higher rates.

That certainly has cut across and you've been able to secure the vessels over the past several quarters at very good rates that are adding to your contracted revenue, as well as generating some nice free cash. I guess, as you look forward with regard to the vessels, kind of looking out a year as some of those container ships come off charter, how do you think about kind of the redeployment? Would you prefer to have those under long term charters as well? Or if we're in a kind of a stronger demand environment, would you consider using some of those the way you're using your tanker fleet kind of more on shorter term charters?

The model we have is to put out vessels on a medium to longer term charter according to where we are in the cycle. When we get to the end of the year, if the cycle is different than we think, we may be putting out the ships on longer term. But let's see then where the cycle is for each sector, especially the containers. Maybe it surprises us like it did in Q1.

No, it makes sense. And you guys have taken advantage of that with regard to some vessel sales. As if to kind of tie a bow on the leverage question, how should we be thinking about kind of the deleveraging? Are there more? Are you hoping to kind of do additional vessel sales over the duration of 2023? Or should we think about this as more using the free cash flow that you're generating from your fleet to delever and get closer to your target leverage ratio?

I think we have done a fair sale of the vessels that we had on – it's about 13 vessels that we already sold this year. And we're going to be – it's already delivered in the Q1 and Q2. There maybe a couple, but I think the majority of this has been completed. I think where we see the cash generation is in a very simple thing. We have contracted revenues that exceed our total expense by $70 million for the remaining nine months. And we have about almost 16,000 open and index days. If you see on page 9, you have the actual type of vessels and the open days. You calculate on that whatever you assume rates, this is your strong cash flow generation. Every $10,000 is over $150 million. So that's basically how you can delever quite significantly with the cash flows of the company.

Thank you. That concludes our question-and-answer session. I'll now turn the call back over to Angeliki for any additional or closing remarks.

Thank you. This completes our Q1 results. Thank you.

This concludes today's call. Thank you for your participation. You may disconnect at any time.