Suspension of dividends by Navios Maritime Partners
Navios Maritime Partners (NMM) reported EPS (earnings per share) of $0.09 per share for 4Q15, which misses consensus estimates of $0.15 per share. Also, the top line came in at $52 million, which was below expectations of $59 million. More importantly, the company announced the suspension of dividends altogether. This follows a 52% dividend cut by the company in 3Q15.
Navios Maritime Partners’ stock whipsaws
NMM’s stock opened up to a thrashing. It was down ~39% in the pre-market trading. It closed the day at $1.55 per share, which was a loss of 28.6% from the previous close of $2.17 per share. The suspension of dividends came as a surprise to investors and other market participants, especially considering that dividends were cut by 52% last quarter. Management had stated that the reduced distribution was sustainable for at least five years.
Dry bulk operations have deteriorated since November 2015, when the company stated that, based on their charter contracts and assumed spot rates for open days, it would still able to cover the dividends. This raised many questions during the question-and-answer session of the company’s earnings call. The call was held pre-market on February 3, 2016.
Focus of this series
In this series, we’ll analyze Navios Maritime Partners’ 4Q15 earnings and conference call highlights in detail. We’ll also look at the reasons behind the management’s distribution suspension and what it means for the company’s future prospects. Investors can gain additional insight as we compare the company’s performance with that of others in the sector such as Diana Shipping (DSX), Navios Maritime Holdings (NM), Scorpio Bulkers (SALT), and Ship Finance International (SFL). Investors interested in broad exposure to industrials can invest in the SPDR Dow Jones Industrial Average ETF (DIA).