Interview With The Chairman And CEO: Navios Maritime Holdings Inc. (NM) - Angeliki Frangou
December 20, 2011 - The Wall Street Transcript has just published Transportation and Logistics Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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Angeliki Frangou is Chairman and Chief Executive Officer of Navios Maritime Holdings Inc., a global, vertically integrated seaborne dry bulk shipping and logistics company; Navios Maritime Partners L.P., a master limited partnership that owns and operates dry cargo vessels; and Navios Maritime Acquisition Corporation, an owner and operator of tanker vessels specializing in the transportation of petroleum products and bulk liquid chemicals. Ms. Frangou received a bachelor's degree in mechanical engineering from Fairleigh Dickinson University, summa cum laude, and a master's degree in mechanical engineering from Columbia University. In 2011, she was named to Fortune Magazine's Top 50 Most Powerful Women in Business Global List. Ms. Frangou was honored as the 2011-2012 Commodore of the Year by the Connecticut Maritime Association, the first woman to be named Commodore in its 22-year history.
TWST: Please start by giving us a history and an overview of Navios.
Ms. Frangou: Navios was incorporated in 1954 as a wholly owned subsidiary of United States Steel to transport iron ore from Venezuela and Canada to the United States, but had a storied history as a shipping company dating back to the early 1900s. In 2004, we raised more than 200 million to acquire Navios through a reverse merger with International Shipping Enterprises, and a short time later, became a public entity listed on the New York Stock Exchange. Subsequently, Navios has expanded into a group of four significant shipping companies, and is one of the leading global brands in seaborne shipping and logistics, specializing in the worldwide carriage, trading, storage and related logistics of international dry bulk, petroleum and chemical cargoes. We are the industry leader in almost every segment in which we operate, and I am proud to say that to date, we have created 3.5 billion in enterprise value at Navios.
TWST: Would you please describe your operations?
Ms. Frangou: The Navios group of companies is comprised of three publicly listed companies and one company focused on logistics within South America, including Navios Maritime Holdings Inc. (NM), the parent company, which owns and operates dry bulk vessels focused on the transport and trans-shipment of dry bulk commodities, including iron ore, coal and grain, among other products. Our long-term core fleet consists of 56 vessels totaling 5.8 million deadweight tons. We have 43 vessels in the water with an average age of five years. This is considerably younger than the industry average of about 13 years. Navios Maritime Partners L.P. (NMM) is a publicly traded master limited partnership, which owns and operates dry cargo vessels. As such, it distributes most of its earnings to its shareholders. We currently own 27.1% of Navios Partners, including a 2% GP interest. NMM operates a fleet of 18 vessels equaling 1.9 million dwt with an average age of 5.4 years. Navios Partners provides significant cash flow to Navios Holdings.
Through Q3 2011, we received more than 70 million in total distributions from partners since inception. This year, we will receive 25.6 million in distributions. This is more than 100% of Holding's expected annual dividend. Including NNA's dividend, NM receives over 130% of its expected to be paid annual dividend from its ownership in these two companies. The Navios Group has paid about 386.5 million in dividends to its shareholders since the first listing at Nasdaq of Navios Holdings to date. Navios Maritime Acquisition Corporation (NNA) owns and operates tanker vessels specializing in the transportation of petroleum products and bulk liquid chemicals. NMAC has a large, modern and diverse tanker fleet worth approximately 1.2 billion. We have long-term contracted revenue that is well above our company's low operating breakeven, and we have profit-sharing arrangements in many contracts.
These agreements limit our downside risk to the base rate and allow NNA to enjoy the upside volatility. The related cash flow also sustains us for a long period in distressed market conditions.Together, these companies control 100 vessels of approximately 11 million deadweight tons. Navios South American Logistics Inc. is one of the largest logistics companies in the Hidrovia region of South America. We serve storage and marine transportation needs through our port terminal, river barge and coastal cabotage operations to meet the requirements of many rapidly growing industries located in South America, including mineral and grain commodity providers, and users of refined petroleum products. We have a strong upside for our logistics business. Although the vast river system in the Hidrovia region is the size of Mississippi, the Mississippi system has been developed since 1930s and has over 20,000 barges. By contrast, in Hidrovia, there are only about 2,000 barges. So there is a lot of upside to growth there, since South America is a strong beneficiary of the ongoing globalization taking place in Asia, China and India.
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