navios south american logistics inc. · – barges have already been delivered in china and...
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Company Presentation
November 2014
Navios South American Logistics Inc.
2
This presentation contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Navios South American Logistics, Inc.’s (“Navios Logistics”, “NSAL”, or the “Company”) growth strategy and measures to implement such strategy; including expected vessel acquisitions and entering into further time charters. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements include comments regarding expected revenues and time charters. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to changes in the demand for barge, pushboat and product tanker vessels; competitive factors in the market in which the Company operates; weather-related risks; risks associated with operations outside the United States; and other factors listed from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. For the selected financial data presented herein, Navios Logistics compiled consolidated statements of operation and selected balance sheets for the relevant periods.
Adjusted EBITDA represents Net Income/(Loss) attributable to Navios Logistics’ stockholders before interest, taxes, depreciation and amortization and excludes certain items as described under “Earnings Highlights”. Adjusted EBITDA is presented because it is used by certain investors to measure a company's operating performance. Adjusted EBITDA is a “non-GAAP financial measure” and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. While Adjusted EBITDA is frequently used as a measure of operating performance, the definition of Adjusted EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation.
Forward Looking Statements
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Navios Logistics Overview
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Navios Maritime Holdings Inc . (NYSE: NM)
• Controls 64-vessel dry bulk fleet; 40 owned and 24 long term chartered-in vessels.
• Global brand; Flexible business model
• Stable cash flow from charter out contracts and distributions (including IDRs) from subsidiaries
• FY 2013 EBITDA: $159.8 million; 9M 2014: $153.6 million
• Share price: $5.78
• Annual Dividend: $0.24; 4.2% yield
Navios Maritime Acquisition Corp. (NYSE: NNA)
• Fleet: 41 vessels: 29 product tankers, 8 VLCC,
4 chemical tankers
• Acquired crude and product tankers for
historically low values
• Developing leading company in tanker sector
• EBITDA: FY 2013: $122.6 million; 9M 2014:
$110.5 million
• Market value of NM ownership: $218.2 million
• Annual dividend: $0.20; 6.7% yield
Navios South American
Logistics • Logistics operator in Hidrovia
Region
• Core operations: Port Terminal
facilities (dry & wet), barging (dry
& wet), cabotage business
• EBITDA: FY 2013: $56.8 million;
9M 2014: $53.5 million
20-year contract with Vale for port
services – expected $35 million
annual minimum EBITDA
Navios Maritime Partners L.P. (NYSE: NMM)
• Fleet: 32 vessels: 8 Capesize, 14
Panamax, 3 Ultra Handymax Dry Bulk
Carriers and 7 Container vessels
• MLP with high dividend payout model
• FY 2013 EBITDA:$153.4 million; 9M
2014: $160.7 million
• Market value of NM ownership:
$217.0 million
• Annual dividend: $1.77; 12.9% yield
$2.05/share $2.06/share
All stock prices and yields as of November 12, 2014.
Navios Maritime Midstream Partners L.P (NYSE: NAP)
• Fleet: 4 VLCCs
• Focused on long-term charter business in the
tanker midstream sector
• Options on 7 VLCC dropdowns provide built-in
fleet & distribution growth
• NTM EBITDA: $47million
20% 46.4% 63.8%
57.5%
Creating Shareholder Value
5
(1) Including three new building push boats to be delivered in Q3 2015
Navios Maritime Holdings Inc.
NYSE: NM
Navios Logistics Ownership Structure
63.8% Ownership 36.2% Ownership
Port Terminals
Storage and Transshipment
• Bulk Terminal – Nueva
Palmira, Uruguay (tax free
zone) with 460,000 mt storage
capacity
• Fuel Terminal – San Antonio,
Paraguay with 45,660 m3
storage capacity
20-year contract with Vale for port
services – expected $35 million annual
minimum EBITDA
Barge Business
• 361(1) barges and pushboats
transporting dry and liquid
cargoes across the river system
– Push boats
– Dry barges
– Oil barges
– LPG barges
• 1 floating dry dock
Cabotage Business
• Refined product transportation
along the Argentinean coast
• Six ocean going product
tankers, two self-propelled
barges and one bunker vessel
• Strategy to secure cash flows
with long term contracts
• Awarded Brazilian Cabotage
contracts for six new building
vessels
Navios South American Logistics Inc.
(Marshall Islands)
Peers Business Inc.
Navios Logistics Highlights
6
Leading Logistics
Provider in the Hidrovia
Region of South
America
Largest independent dry terminal in Hidrovia
One of the largest independent liquid terminals in Paraguay
One of the largest, most versatile river barge fleets serving a diverse set of industries
Largest Argentinean product cabotage fleet with an average age of 5 years
Multiple Avenues of
Growth
Opportunities to invest in new port infrastructure
– 20-year contract with Vale for storage and transshipment of mineral commodities
Increasing minerals and grain production and fuel demand create need for new convoys
Opportunity to expand in Brazilian cabotage
Favorable Market
Fundamental
Robust growth in exports of grain and mineral commodities
Hidrovia system and coastal cabotage are critical infrastructure for region
Scale and Strong Asset
Base Provide Operating
Efficiency
Economies of scale provide low costs per ton transported
Integrated terminal, barge and cabotage network offers substantial operating leverage
Strong
Counterparties
Diverse group of large, high-quality counterparties
ADM, Bunge, Cargill, Dreyfus, Petrobras, Petropar, Vale, Vitol among others
Focus on Contracted
Cash Flow
Strategic positioning with fixed rate contracts and CoAs with minimum volume guarantees
Long-term relationships with high contract renewal rates
Seasoned Management
Team with Strong Track
Record and Established
Brand
Strategic relationships
Experienced management team
Long operating history in region
Integrated Transportation and Storage Services
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Port Terminals Barge Business Cabotage Business
Asset Base
Bulk transfer and storage port
terminal in Nueva Palmira,
Uruguay
Liquid port in San Antonio,
Paraguay
295 dry barges
34 tank barges
27 pushboats1
2 small inland oil tankers
3 LPG barges
1 floating dry dock
6 Product tankers
(8,974 – 17,508 dwt)
2 self-propelled barges
1 Bunker Vessel (1,693 dwt)
Commodities Transported
or Stored
Dry cargo (cereals, soybeans,
iron ore, etc)
Liquid cargo (primarily diesel
fuel and naphtha)
Dry cargo
Liquid cargo
Liquefied Petroleum Gas (LPG)
Refined oil products
Typical Customer Contracts
Long-term storage and
transshipment contracts
New 20-year storage and
transshipment contract with
Vale for mineral commodities
Time charters and CoAs (1-6
years)
Spot market contracts
Time charters
(1-3 years average duration)
Spot market contracts
Geographic
Region
Strategic locations along the
Hidrovia river system
Hidrovia river system
Argentinean coastal trade
Opportunity to expand into
Brazilian cabotage market
1. Including three new building push boats to be delivered in Q3 2015
Barge Business Ports Cabotage
# Barges &
Pushboats
Largest Independent Dry Port
in the Hidrovia
One of the Largest
Independent Liquid Ports in
Paraguay
Key Benefits of
Large Scale
• Lower operating costs
• Greater market presence
• Higher quality charterers
• Strong strategic relationships (shipyards, commercial banks, etc.)
DWT
(‘000) Top 5 Players Top 5 Argentinean Coastal Cabotage
Players by Tonnage1
Largest Independent Logistics Provider in Hidrovia
8 1. Includes vessels 5,000 – 29,000 DWT
2. Including three new building push boats to be delivered in Q3 2015
Sources: Drewry
712
361
247 243
118
0
100
200
300
400
500
600
700
800
Ultrapetrol NSAL Fluvialba ADM Interbarge
2
81
72
63
46 45
0
10
20
30
40
50
60
70
80
90
NSAL NationalShipping
Antares Petrotank Maruba
Navios Logistics Presence Throughout Supply Chain
9
Argentina
Paraguay
Brazil
Bolivia
Iron ore
Grains
Liquid cargo
Dry Port
Liquid Port
Paraguay Fuel Port Terminal • Loading / Unloading
• 45,660 m3 storage capacity
Uruguay Bulk Port Terminal • Loading / Unloading
• 460,000 mt storage capacity
• Drying & conditioning facility
Uruguay
Cabotage Transportation • 6 ocean going tankers
• 2 self-propelled barges
• 1 bunker vessel
• Distribution of oil products
Barge Transportation • 3611 barges and push boats
• Dry and liquid cargos
Exports
1. Including three new building push boats to be delivered in Q3 2015
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Navios Logistics Recent Developments
Iron ore port development for 20-year storage and transshipment contract with Vale
• Developing the engineering design and advancing on equipment selection and procurement
• Advancing on remaining regulatory processes
Acquisition update of six convoys
• Three convoys:
– Three convoys have been delivered and started performing six-year TC contracts at $14,500
per day per convoy within Q2; expected annualized EBITDA of $10 million or $3.3 million per
convoy(1)
• Three additional convoys:
– Barges have already been delivered in China and transported to South America, three new
building push boats are expected to be delivered in Q3 2015
Acquisition of 1,693 dwt, 2012 built, bunkering vessel
• $4.9 million estimated total acquisition cost including repositioning cost to Argentina
• Three year time charter at $16,525 net per day adjusted for crew cost and FX differences
• Estimated annualized EBITDA of $2.0 million(1)
(1) EBITDA estimates assume expenses approximating current operating costs for similar vessels and 360 revenue days per year
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Market Overview
• Runs over 4,500 kilometers across the agricultural heartland of South America
– Comparable in length to the Mississippi system
Hidrovia Region Mississippi Region South America
Number of barges: ~ 2,100 Number of barges: ~ 29,000
Significant Capacity for Growth
Hidrovia: Agricultural Heartland of South America
12 Source: Drewry
13
Favorable Market Fundamentals of Hidrovia
VENEZUELA
BOLIVIA
ARGENTINA
BRAZIL
FRENCH GUIANA
SURINAMEGUYANA
COLOMBIA
ECUADOR
PERU
PARAGUAY
URUGUAY
CHILE
VENEZUELA
BOLIVIA
ARGENTINA
BRAZIL
FRENCH GUIANA
SURINAMEGUYANA
COLOMBIA
ECUADOR
PERU
PARAGUAY
URUGUAY
CHILE
• Growing exports of grain and mineral commodities
- Region accounts for ~52% of global soybean
production
- Significant expansion in iron ore production
- Significant exporter to emerging market
economies, such as China
• Stable growth in oil demand
- 69% of Argentina’s refining capacity is located
near the Hidrovia and in the River Plate
- Paraguay does not produce any crude oil and
relies on imports from larger refineries in Argentina
• Reliance on waterborne transportation
- Shortage of highway or rail infrastructure
alternatives
- River system provides access to Atlantic Ocean
and global export markets
- River barges and coastal tankers are the most
cost-efficient method of transportation
Coastal
Cabotage
Trade
Navios
Oil
Products
Terminal
Navios
Dry Port
Terminal
Hidrovia
River
System
Source: Drewry, USDA November 2014
New Jumbo Barges: Even More Efficient Design
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One Jumbo Barge:
2,875 Tons
One Mississippi Barge:
1,500 Tons
~2x
Jumbo Hopper Car:
112 Tons
~26x
Large Semi:
26 Tons
~111x
One 16-Mississippi Barge
Convoy = 24,000 dwt
~2.1x 100-Car unit Train ~920x Large Semis (Trucks)
Source: IOWA Department of Transportation
One 20-Mississippi Barge
Convoy = 30,000 dwt
~2.7x 100-Car unit Train ~1,150x Large Semis (Trucks)
One 12-Jumbo Barge
Convoy = 34,500 dwt
~3.1x 100-Car unit Train ~1,330x Large Semis (Trucks)
=
=
=
=
=
=
Strategically Positioned to Serve the Soybean
Production…
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Hidrovia accounts for ~52% of
world soybean production
Mill
ion M
etr
ic T
ons
Note: Crop years for Soybean Production according to USDA definition, P = Preliminary, E = Estimate
Source: Drewry, USDA November 2014
Regio
n %
of W
orld
Hidrovia Region Soybean Production Uruguay Soybean Production
40%
45%
50%
55%
60%
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
00
/01
01
/02
02
/03
03
/04
04
/05
05
/06
06
/07
07
/08
08
/09
09
/10
10
/11
11
/12
12
/13
13
/14
P
14
/15
E
Soybean Production Region % of World
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Uruguay Soybean Production
Mill
ion M
etr
ic T
ons
Uruguay is the fastest growing soybean
producer in the region
…and the Corumba Region Iron-Ore Production
16 Source: Drewry
1.1 1.6 1.8 1.9 2.3
4.2 4.4 4.6 3.5
6.0 7.1
7.8 7.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Million Metric Tons Corumba Iron Ore Production
Source: Web site of the UNESCO/IHP Regional Office of Latin America and the Caribbean
Water requirement equivalent of main
food products
Global Virtual Water Imbalances Will Continue to be a Driver of Agricultural Trade
This table gives examples of water required per unit of
major food products, including livestock, which consume the
most water per unit. Cereals, oil crops, and pulses, roots
and tubers consume far less water.
Source: SIWI and IWMI, 2004
Product Unit Equivalent water
in m3 per unit
Fresh beef kg 15
Fresh lamb kg 10
Fresh poultry kg 6
Cereals kg 1.5
Citrus fruits kg 1
Palm oil kg 2
Puls, roots and tubers kg 1
North &
Central America
Africa
Asia
South
America
Europe
15% 8%
26%
6%
11% 13%
8% 13%
36%
60%
5% <1%
Australia
& Oceania
% of Global Water Supply % of Global Population
Fresh Water Availability vs. Population:
Grain Exports = Virtual Water Trade
17
18
Q3 2014 Earnings Highlights
Track Record of Strong EBITDA Growth
19
136.8 165.6 178.6 190.7
144.2 158.9
51.2
69.1 68.4 46.4
42.4 35.8
2010 2011 2012 2013 9M2013
9M2014
Sales of Product
Time charter, voyage and port terminals revenue
32.5
39.0
48.1
56.8
42.5
53.5
2010 2011 2012 2013 9M2013
9M2014
Revenue ($ million) Adjusted EBITDA ($ million)
8.0%
CAGR
20.5%
CAGR
188.0
234.7 247.0
237.1
186.6 194.7
• $10 million(2) expected annualized EBITDA from
three new convoys (started operation in Q2 2014)
• Further EBITDA expected from three additional
convoys to be delivered and port terminal expansion
(2) EBITDA estimates assume expenses approximating current operating costs; 360 revenue days per year per convoy
(1) Adjusted EBITDA for the nine months ended September 30, 2014 has been adjusted to exclude $27.3 million loss on bond extinguishment
(1) 25.8%
Navios Logistics Q3 & Nine Months 2014
Earnings Highlights
20
(in $ ‘000)
Three months
ended
September 30,
2014
Three months
ended
September 30,
2013
Y-O-Y
Variance
Nine months
ended
September 30,
2014
Nine months
ended
September
30, 2013
Y-O-Y
Variance
Navios
Logistics
Revenue 79,136 49,819 59% 194,702 186,516 4%
Adjusted EBITDA 18,127 10,824 67% 53,5161 42,530 26%
Net income/(loss) 3,072 (956) n/a (18,540) 9,401 n/a
Adjusted net
income/(loss) 3,072 (956) n/a 8,7411 9,401 (7%)
Port
Terminals
Revenue 32,451 12,316 163% 66,574 71,734 (7%)
Adjusted EBITDA 8,773 8,270 6% 22,566 22,527 -
Barge
Business
Revenue 29,312 22,886 28% 80,290 71,955 12%
Adjusted EBITDA 5,674 1,270 347% 14,4691 8,655 67%
Cabotage
Business
Revenue 17,373 14,617 19% 47,838 42,827 12%
Adjusted EBITDA 3,680 1,284 187% 16,4811 11,348 45%
1. Adjusted EBITDA and Adjusted Net Income for the nine months ended September 30, 2014 have been adjusted to exclude $27.3 million loss on bond extinguishment
Navios Logistics Balance Sheet
21
Selected Balance Sheet Data (in $'000)
September 30, 2014 December 31, 2013
Cash & cash equivalents 101,956 86,569
Accounts Receivable 23,841 21,503
Vessels port terminal and other fixed assets, net 462,884 395,879
Total Assets 805,352 712,060
Senior notes 375,000 293,156
Current portion of long term debt 69 69
Long term debt, net of current portion 407 459
Current portion of capital lease obligations 1,436 1,400
Capital lease obligations, net of current portion 21,282 22,359
Stockholders Equity 311,939 330,479
Book Capitalization 710,133 647,922
Net Debt / Book Capitalization 42% 36%
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