Navios Maritime Holdings Inc. Jefferies Shipping Conference September 15, 2005

Transcription

1 Navios Maritime Holdings Inc. Jefferies Shipping Conference September 15, 2005

2 Safe Harbor Statement This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios Maritime Holdings Inc. (Navios). Forward looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of Navios s management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. The information set forth herein should be viewed in light of such risks. Navios does not assume any obligation to update the information contained in this presentation. 2

3 Agenda Navios Overview Navios Vessel Operations Navios Risk Management Operations Navios Uruguay Port Operations Dry Bulk Shipping Market Overview Navios Historical Financial Performance 3

4 Navios Overview

5 Management Team The senior management team of Navios is very experienced in the maritime business and operates conservatively Angeliki Frangou Chairman & CEO Robert G. Shaw President Vasiliki Papaefthymiou EVP Legal Bruce C. Hoag CFO 15 years experience in the shipping industry CEO of Maritime Enterprises since founding in years as CEO of Franser Shipping Joined Navios in 2001 after representing management in 1999 MBO Responsible for Operations Group and Pireaus Technical Ship Management Arm 21 years experience in maritime law in New York with Healy & Baillie 14 years experience in maritime law General Counsel for Maritime Enterprises since years as General Counsel to Franser Shipping 13 years professional experience with USS 23 years experience with Navios He played a key part in the MBO of 1999 and the financial business combination of Navios and Anemos in 2002 Ted C. Petrone SVP Trading Michael E. McClure SVP Research & RM Shunji Sasada SVP Fleet Development Eugene Cornelius VP Finance Pablo Soler GM Uruguay Joined Navios in 1980 Serves as Vice President and is responsible for the commercial Panamax activities and the trading desk 27 years experience with Navios In 1995 he organized the risk management department of Navios Today he is responsible for freight derivative trading and market research 10 years experience with Mitsui O.S.K. Lines Ltd. 6 years experience with Trinity Bulk carriers a subsidiary of Mitsui O.S.K in Norway Joined Navios in 1997 Qualified as a Chartered Accountant in 1991 Professional experience as an accountant with Deloitte & Touche Joined Navios in 2001 Joined Navios Uruguay in 1984 as operations manager Promoted to General Manager in 1989 Member of Corporacion Navios Board since

6 Our History Navios incorporated as a subsidiary of United States Steel Corporation Sold to Fednav Limited February 10, 2005: ISE announces that it has entered into an exclusive negotiating agreement relating to the possible acquisition of Navios Merger of Navios Corporation and Anemos Maritime Holdings September 8, 2004: Navios engages Lazard to consider strategic alternatives including a potential sale March 1, 2005: ISE and Navios announce that they have entered into a stock purchase agreement 1954 Mid-1970s Mid-1980s Transformed itself from captive ore carrier for US Steel to a third party cargo carrier Series of MBOs, Citicorp Venture Capital ownership, and Restructurings September 17, 2004: ISE formed as a blank check company for the purposes of acquiring an operating business in the shipping industry August 25, 2005: ISE/Navios merger effective 6

7 Navios Dry Bulk Panamax and Handymax Platform 28 vessels (13 Ultra Handymax and 15 Panamax) Own 6 modern Ultra Handymax vessels Long-Term Chartered Fleet of 22 vessels Deep in-the-money purchase options on 13 vessels 5 options to be exercised in options to be exercised in 2006 Average Vessel Age years Experienced risk management FFA, COA, short-term chartering Port Terminal - substantial competitive advantage and stable earnings Strong and growing cash flow with healthy balance sheet 7

8 Corporate Structure NAVIOS MARITIME HOLDINGS INC Owning Companies Trading Companies ANEMOS MARITIME HOLDINGS INC NAVIOS CORPORATION Management Company Brokerage Company NAVIOS IONIAN IONIAN SHIPPING CORPORATION NAVIOS SHIP MANAGEMENT INC. NAVIMAX CORPORATION ACROPOLIS SHIPPING & TRADING INC. NAVIOS APOLLON APOLLON SHIPPING CORPORATION NAVIOS HANDYBULK INC. NAVIOS HERAKLES HERAKLES SHIPPING CORPORATION NAVIOS INTERNATIONAL INC. NAVIOS ACHILLES ACHILLES SHIPPING CORPORATION CORPORACION NAVIOS SOCIEDAD ANONIMA NAVIOS KYPROS KYPROS SHIPPING CORPORATION NAVIOS HIOS HIOS SHIPPING CORPORATION 1. Unless otherwise noted above, all companies are incorporated in the Marshall Islands. 2. All vessels are on the Greek flag (they were previously on the Marshall Islands flag). 3. Unless otherwise noted above, all companies are wholly-owned subsidiaries. 8

9 A Unique Corporate Strategy Capitalize on vertically integrated, global shipping company Economies of scale Differentiated information flow Build core fleet of owned vessels through excess cash flow Appropriate revenue mix stable cash flow from long-term charters (70%) and exposure to upside from spot charters (30%) Leverage brand name continue to acquire long-term charters-in, controlling significant additional assets without capital outlay Professional management enhance processes, systems and controls necessary to operate in a regulated environment Build technical management reduce operating costs by adopting best practices Adopt a FFA strategy that focuses on hedging risks of operations 9

10 Key Differentiators Platform for consolidation of the dry bulk industry Strong industrial brand privileged relationships with leading trading houses in Japan Capitalizing on industry dynamics in FFA market Scalability and institutionalization potential Strong industry fundamentals Seasoned management team State-of-the-art systems and IT infrastructure 10

11 Navios Vessel Operations

12 Business Segments Navios Maritime Holdings Inc. Panamax Long Term Fleet: 15 Short Term Chartering, COAs & Risk Management Handymax Owned Fleet: 6 Long Term Fleet: 7 Short Term Chartering, COAs & Risk Management Uruguay Port Terminal Provides diversified and stable earnings Strategic Information from port is a competitive advantage 12

13 Ultra-Handymax Owned Fleet Navios owns 6 latest generation Ultra-Handymax vessels which are all high-specification sister ships built at Sanoyas Shipyard, Japan Vessel Name Built DWT Navios Achilles ,063 Navios Apollon ,073 Navios Herakles ,061 Navios Hios ,180 Navios Ionian ,068 Navios Kypros ,180 13

14 Navios Risk Management

15 Risk Management Tools and implementation Short term (<12 months) chartering in and out of vessels Navios typically controls 20 to 40 vessels through ST Charters Short Term Charters FFAs Forward Freight Agreements over the counter swap contracts principal to principal or exchange cleared tied to the Baltic Exchange Indices approximately 7,000 trades in the market in 2004 COAs Contracts of Affreightment contracts to carry freight on specific route and at specific time (as opposed to chartering a vessel) customers typically industrial end-users and international agri-businesses Risk Management Trading Strategies Increasing Freight Rates Expected -> Long Position Decreasing Freight Rates Expected -> Short Position Buy vessels (long-term) Charter in new vessels (long-term) Charter in new vessels (short-term) Sell / Close (ie re-let ) existing COAs, locking in a spread Open Long FFAs / Close Short FFAs Sell vessels (long-term) Charter out new vessels (long-term) Charter out new vessels (short-term) Enter new COAs Open Short FFAs / Close Long FFAs 15

16 Risk Management Forward Freight Agreements Internal Risk Policies Industry Participants Financial Institution Participants Limiting counterparty / credit risk trades with only five approved outside brokerage firms which signed acknowledgements of Navios trading authority instructions about 35 approved counterparties with solid track record in the market daily review of mark-to-market exposure on individual counterparties Internal trading guidelines and practices traders must check with senior management on acceptance of counterparties not previously approved continuous monitoring by senior management on exposure to all counterparties CFO continuously obtains updated credit report on counterparties Limiting market risk through internal monitoring and reporting system daily trading meeting attended by senior management and traders daily report of mark-to-market VaR: estimates the gain / loss in case the market turns severely against a position stress analysis tests settlement values interim and financial trading results Cargill Morgan Stanley Louis Dreyfus Goldman Sachs Glencore Deutsche Bank Bunge ABN Amro Koch Carbon RBS BHP Billiton Coeclerici (# of FFA Trades) Global Trade in Forward Freight Agreements 12,000 10,000 8,000 6,000 4,000 2, Dry Wet Source: Freight Investor Services 16

17 Navios Uruguay Port Operations

18 Terminal Operations Ideally situated at the confluence of the Parana and Uruguay rivers and near the mouth of the River Plate estuary 18

19 Terminal Operations Terminal Nueva Palmira, Uruguay Navios Uruguay Annual Throughput Volumes Navios owns and operates a modern port terminal in Nueva Palmira, Uruguay largest bulk transfer and storage facility in Uruguay operates 24 hours a day, 365 days a year additional 11 acres of riverfront land available for future extensions 2.2 million tons of expected throughput in 2005 lease expires in 2025 with an option to extend for an additional 20 years Non-unionized Located in a tax-free zone well placed for export of commodities from Argentina, Bolivia, Brazil, Paraguay and Uruguay Navios has signed important long-term contracts with Archer Daniels Midland, Cargill and Louis Dreyfus Uruguay Grain Exports Storage capacities consist of seven silos with a total storage capacity of 280,000 tons of clean and secure grain seventh silo of 75,000 tons capacity is under construction Separate docks for unloading barges and loading Handymax and Panamax vessels Source: Uruguayan Farm Cooperative 19

20 20 Terminal Layout

21 Dry Bulk Shipping Markets

22 World Dry Cargo Trade 4,500 Average 7.20% growth from '00-'04 4,000 Average ( 80 04) = 3.9% Trade (Million tons) 3,500 3,000 2,500 2,000 Average 2.45% growth from '80-'90 Average 3.89% growth From '82-'92 1,500 1, Source: Drewry Shipping Consultants Ltd General Cargo Bulk Cargo 22

23 Promising Chinese Long Term Growth Prospects 1,200 Industrial Production 1,000 Index, Base Year = Years From Base Korea Base 1980 Japan Base 1959 China Base 1995 Source: Japanese METI 23

24 Dry Bulk Shipping Supply Known Through 2008 Orderbook includes 69.7 mdwt 1 (21% of fleet) of scheduled deliveries through 2008 global fleet projected to grow at 4.7% 2 CAGR during this period New vessels ordered today will not be delivered before 2008 Aging fleet 36% of Dry Bulk Fleet is more than 20 years old 27% of Handymax fleet > 20 years old 20% of Panamax fleet > 20 years old Given strong market conditions, older vessels are not currently being scrapped Dry Bulk Age Profile 1 Number of Vessels 18% 22% 10% 14% 20% 13% 3% Deliveries and Scrappings as a % of Fleet (% ) ,400 1,200 1, Over Age Fleet E 2006E 2007E 2008E 2009E Deliveries Scrappings Notes: 1 Drewry 2 Drewry except for projected growth which is per Clarkson with scrapping assumptions from Howe Robinson & Co. Ltd.; assumes 2006 & 2007 scrapping rates remain constant with estimated 2005 scrapping as a % of the fleet 3 Clarkson Research Studies 24

25 Demand will exceed supply through 2008 Increased global demand for seaborne coal / iron ore Coal is still growing as a primary fuel source for many parts of the world As global trade increases, port congestion will continue to affect seaborne commerce Brazil, Russia, India and China all rapidly emerging markets China grain imports also expected to rise as consumption increases 25

26 Navios Historical Financial Performance

27 Historical Financial Summary Data Revenues ($mm) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Reported EBITDA ($mm) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q

28 Summary Scalable platform for consolidation of the industry Strong industrial brand Pioneer and innovator in FFA trading Port Terminal - substantial competitive advantage and stable earnings Seasoned management team Strong and growing cash flow generator Strong dry bulk industry fundamentals Demand growing at over 4% annually led by BRIC Restricted supply combined with aging fleet 28