Navios Maritime Partners LP (NMM) 2010 Q2 法說會逐字稿

Thank you for standing by, ladies and gentlemen, and welcome to the Navios Maritime Partners conference call on the second-quarter 2010 financial results. We have with us Ms. Angeliki Frangou, Chairman and CEO; Mr. Efstratios Desypris, Chief Financial Officer; and Mr. George Achniotis, Executive Vice President for Business Development of the Company.

At this time all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions). I must advise you that this conference is being recorded today, Monday, July 26, 2010. We now pass the floor to Mr. Nicolas Bornozis, President of Capital Link, Investor Relations Advisor for Navios Maritime Partners. Please go ahead, sir.

Thank you and good morning to all of our participants. This is Nicolas Bornozis of Capital Link, Investor Relations Advisor to Navios Maritime Partners L.P.

The Company release financial results for the second-quarter and six-month period ended June 30, 2010. The press release has been distributed publicly and is also available on the Company's website under the Investor Relations section at www.Navios-MLP.com.

On the website, in the same section and also under events, you can access and download the slides used in today's conference call and webcast, and you can also access the webcast itself. You are also welcome to call us at 212-661-7566 or email us at NaviosPartners@CapitalLink.com and we will send you the press release and the slides.

Today, in addition to the conference call, there is also a live audio and slides to the webcast which can be accessed, as I mentioned, through the Company's website at www.Navios-MLP.com. The webcast will also be available as an archive after the conference call. Please note that the slides are user controlled, so by clicking on the proper button you can move to the next or to the previous slide on your own.

Before we proceed with the presentation I have to take you through the forward-looking statement disclaimer as displayed on slide number 2 of the presentation. Please note that statements in this presentation and webcast, which are not statements of historical fact, are forward-looking statements. These forward-looking statements are based on information available to, and the expectations and assumptions being reasonable to the Company at the time this presentation was made.

Although the Company believes that the assumptions underlying such statements are reasonable, it can give no assurance that they will be attained. The Company undertakes no obligation to update any forward-looking statements whether as a result of new information or future events unless it is required to do so under the securities laws. The Company makes no prediction or statement about the performance of its common units.

A full description of the forward-looking statement disclaimer can be found in the press release and also on slide number 2 of the presentation. Please be kind enough to take a minute and read through it. And now I will turn over the floor to Ms. Angeliki Frangou, Chairman and Chief Executive Officer of Navios Maritime Partners. Please go ahead, Angeliki.

Thank you, Nicolas, and good morning to all of you joining us on today's call. I'm very pleased with our financial and operational results for the second quarter of 2010. As an MLP we have concentrated on growing our cash flow by acquiring quality vessels with a long duration of charters. Currently our fleet has an average age of 5.7 years and an average time charter duration of 4.4 years. All our charters, as you know, they are insured AA+.

Based on the strength of our cash flow we have been able again to announce an increase in distribution for this quarter. This distribution of $0.42 per common unit is payable on August 12 to record holders on August 9. So far for 2010 we have increased distribution by almost 2.5%.

As you can see on Slide 3, since we launched Navios Partners in late 2007 we have increased our distributions by more than 20% and our fleet by over 112%.

On slide 4 (inaudible) in equity and debt market. In May we raised $92.3 million in an overnight equity offering of about 5.2 million common units. We also raised 1.8 million for units issued to Navios Holding as a general partner. In addition, we increased the amount of our credit facility by almost $35 million to $271.7 million as of June 30, 2010.

This new tranche was used to finance the acquisition of the Navios Pollux which I will discuss in a moment. Our new margins range between 1.45% to 1.8%. Our effective interest rate for the second quarter of 2010 was 2.25% as compared to 3.66% for the second quarter of 2009, representing almost a 40% reduction. No principal repayment is required until 2010.

Let's now turn to slide 5 which shows what we did with the [process] of the equity offering and the new debt grant. We acquired the Navios Pollux for $110 million. The Pollux is a 2009 built Capesize of 180,000 deadweight tonnes. She started out at $42,250 per day through July 2009 since and should provide annual EBITDA approximately of $13.2 million.

We have also secured a new charter for our Navios Alegria, a 2004 built Panamax, 72,000 deadweight tonnes. The charter out rate is almost $17,000 for a three-year period ending in January of 2014. More significantly, we were able to agree to a profit-sharing whereby Navios Partners will receive 50% of the amount above the base rate based on the Baltic Panamax time charter average. This profit-sharing is calculated every 15 days.

The charter agreement is very favorable as the $17,000 per day, provides a protection against downside volatility and the profit-sharing allows the Company to share any upside volatility. At this point I would like to turn the call over to Mr. Efstratios Desypris, Navios Partner's CFO, who will take you through the results of the quarter. Efstratios.

Thank you, Angeliki and good morning, all. I will briefly review our unaudited financial results for the second quarter and six months ended June 30, 2010. In the second quarter and half year of 2010 our positive operating metrics continued to increase significantly reflecting the growth of our fleet through accretive vessel drop-down from Navios Holdings.

Our operating strength has enabled the increase in quarterly cash distributions to $0.42 per common unit, an increase of 20% over the last two and a half years. The financial information was included in the press release and is summarized in the slide presentation on the Company's website.

As shown on slide 6, time charter revenue for the three months operations ended June 30, 2010, increased by 50% to $33.3 million as compared to $22.2 million for the same period of 2009. The increase in revenue is attributable to the increase in total vessel operating days from 840 days in the second quarter of 2009 to 1,147 days for the same period of 2010 due to the addition of five vessels -- Navios Sagittarius which was delivered in June 2009 and was fully operational in the first half of 2010; Navios Apollon, Navios Hyperion, Navios Aurora II and Navios Pollux.

EBITDA increased by $9.4 million or 61.8% to $24.6 million for the second quarter of 2010 as compared to $15.2 million for the same period of 2009. The 2009 EBITDA excludes the non-cash compensation expense of $6.1 million incurred in the second quarter. This increase was primarily attributable to the $11.1 million increase in revenue as discussed above and the $0.4 million decrease in time charter and voyage expenses mainly as a result of the exercise of the purchase option of Navios Sagittarius. These increases were partially offset by a $2.1 million increase in management fees due to the increase in the number of the vessels.

Net income for the second quarter of 2010 increased by $9.6 million or 266.7% to $13.2 million as compared to $3.6 million for the same period in 2009. The increase in net income is mostly attributable to the increase in vessel operating days as well as a $6.1 million non-cash compensation expense incurred in the second quarter of 2009, a $0.5 million decrease in net interest expense and a $0.1 million decrease in direct vessel expenses.

This overall favorable variance of $16.1 million was overtly affected by a $6.5 million increase in depreciation and amortization expense. Please keep in mind that the favorable lease component of the acquired vessels is amortized over the remaining duration of the charter out contract which is generally significantly less than the remaining useful life of a vessel.

Operating surplus for the quarter ended June 30, 2010, was $34.4 million which is $23 million higher than the corresponding quarter in 2009. Operating surplus is a non-GAAP financial measure used to assist in evaluating a partnership's ability to make quarterly cash distributions.

Capital replacement reserve for the second quarter of 2010 amounted to $3.6 million compared to $2 million for the same quarter of last year. During the second quarter of 2010 Navios Partners operated 14 vessels, an increase of four vessels as compared to the same quarter last year.

Moving on to the six months of operations in slide 7, time charter and voyage revenues for the first half of 2010 were $62.7 million as compared to $43.3 million for the same period of 2009. The increase in revenue by almost 45% was mainly due to the increase in total vessel operating days from 1,650 days in the first half of 2009 to 2,228 days in 2010. The increased days resulted from the acquisition of Navios Hyperion, Navios Aurora II and Navios Pollux in 2010, as well as the acquisition of Navios Sagittarius and Navios Apollon in 2009, which were fully operational in the first half of 2010.

EBITDA increased by $16 million or 53.5% to $45.9 million for the first half of 2010 as compared to $29.9 million for the same period of 2009. 2009 EBITDA excludes the non-cash compensation expense of $6.1 million incurred in the second quarter. The increase is mainly attributable to the $19.3 million increase in revenue discussed above and a $0.5 million decrease in time charter and voyage expenses mainly as a result of the exercise of the purchase option of Navios Sagittarius. These increases were partially offset by a $3.6 million increase in management fees due to the increase in the number of vessels and a $0.2 million increase in general and administrative expenses.

Net income for the first half of 2010 was $25.8 million compared to $12.6 million for the same period of 2009. The increase in net income is mostly attributable to the increase in vessel operating days as well as a $6.1 million non-cash compensation expense during the first half of 2009, a $1.8 million decrease in net interest expense and a $0.2 million decrease in direct vessel expenses.

This overall favorable variance of $24.1 million was adversely affected by a $10.9 million increase in depreciation and amortization expense. Operating surplus for the first half of 2010 was $52.2 million representing a $30.2 million increase compared to 2009. Vessel utilization for the first half of 2010 was 99.6% compared to 100% for 2009.

Turning to slide 8, I will briefly discuss some key balance sheet data for June 30, 2010, as compared to December 31, 2009. Cash and cash equivalents, including restricted cash, amounted to $49.3 million on June 30, 2010 compared to $91.2 million at December 31, 2009. 2009 cash and cash equivalents include $56.8 million in net proceeds of the equity offering completed in November of 2009.

Total assets grew by [56.8]% to $685.3 million as of June 30, 2010 primarily due to the acquisition of Navios Hyperion, Navios Aurora II and Navios Pollux.

Long-term debt, including the [current portion] increased to $271.5 million at June 30, 2010, compared to $195 million at December 31, 2009. Navios Partners amended the existing credit facility by adding three new tranches and borrowed an additional $76.5 million net of a $12.5 million prepayment in January 2010 to finance the acquisition of the vessels.

The facilities subject to a margin ranging from 1.45% to 1.8%. No principal payments are required until the first quarter of 2012. Net debt to book capitalization on a [capital] adjusted basis remained at 34.1% as of June 30, 2010.

As of June 30, Navios Partners was in compliance with the financial covenants of its credit facility.

On slide 9 favorable quarterly pattern of EBITDA, operating surplus and net income are shown for the 10 quarters from Q1 2008 through Q2 of 2010. The consecutive [prior] results primarily reflect the significant profitable growth by the Company from increases in the number of operating vessels through accretive drop downs. This consistent growth is demonstrated in the increased dividend distribution to our unitholders.

Our Board of Directors approved an increase in the second-quarter cash distribution to $0.42 per common unit. This represents a 1.2% increase over the prior year quarterly distribution and a 20% increase over our minimum quarterly distribution. The record date for the second-quarter of 2010 distribution is August 9, and the payment date is August 12, 2010.

It must be noted that Navios Partners has consistently paid out quarterly dividend distributions since its inception in November of 2007. Furthermore, Navios Partners has increased its dividend distribution in six out of the 10 quarters of its operations.

The total distribution amounts to $18.3 million of which $14.6 million will be to the common units and $3.7 million to the GP and subordinated units. We are pleased with the distribution covenants, common unit coverage is 2.65 times, and total unit coverage is 2.11 times. Our current annual distribution of $1.68 per common unit provides for a 9.2% effective yield based on Friday's closing price. For US tax purpose Navios Partners reported a cumulative annual distribution to common unitholders on Form 1099.

Slide 10 demonstrates our strong relationship with key participants in our industry. We have built a portfolio of [bonded charter] counterparties which provide vessel employment with an average remaining contract life of 4.4 years with a diversified customer base. One of the attributes we seek in our charter counterparties is strong credit quality. In addition, we have insured our charter out contracts with AA plus insurance. Our objective is to grow a visible, secure and steady long-term base of revenues and distributable cash flows for our unitholders.

As shown in slide 11, our fleet consists of 14 vessels, three Capesizes, 10 Panamaxes and one Ultra-Handymax vessel. The fleet provides the carrying capacity of 1.3 million deadweight tonnes. Navios Partners' fleet is designed [relative] to the global drybulk fleet with an average age of 5.7 years as compared to the industry average of approximately 15.3 years.

Navios Partners has currently contracted 100% of its available days on a charter out basis for 2010, 92.9% for 2011 and 88.3% for 2012. By design the expiration dates are staggered and the charter durations extend to the end of 2010 the earliest and November 2019 in the latest. It is our objective to continue to grow Navios Partner's fleet on an accretive basis and increase cash available for distributions.

I now pass the call to George Achniotis, our Executive Vice President of Business Development, to discuss the end of the section. George?

Thank you, Efstratios, and good morning, all. Please turn to slide 12. The drybulk market performed well during the first part of Q2 with the BDI picking up 4,209 for May 26. Since then the BDI dropped for 35 consecutive days, the most since 2002. Cape time chartered rates dropped from about $59,000 a day on June 2 to about $12,000 on July 15. The market has moved up slightly since. This slight uptick combined with the recent rally in Chinese [fee] prices provides optimism that rates may have bottomed.

Please turn to slide 13. The extended decline in the BDI was a result of the [confluence] of normal seasonal easing of cargoes out of India and Latin America combined with a Chinese slowdown in construction which had a negative effect on both iron ore and coal imports. Demand side pressure on the drybulk fleet was compounded by a reduction in 14 days. For example, worldwide Cape congestion fell from 164 vessels in late April to 133 in mid July.

The decrease in Chinese [port/import] activity was prompted by a reduction in loan availability in China intended to reduce speculation in an overheated housing market which caused a decrease in car sales and consumer spending on a month-on-month basis in spite of strong year-on-year gains. We believe that this will set up the stage for improvement later this year and into next year driven by pent-up demand in China's price sensitive markets and sharp increases in seaborne iron ore availability going forward.

A policy shift in China favors the consolidation of the steel industry and increases in imported metallurgical coal as domestic supply is too expensive to develop. As a result new steel mills will be sited near the coast to facilitate the import of met coal and iron ore. The consolidation of steelmaking capacity is expected to be completed during 2011 in conjunction with the increase of seaborne [iron ore] (inaudible). At the same time note that since 2001 Chinese steel production has grown faster than GDP growth in every year except 2008.

Turning to slide 14, according to the July IMF projections world GDP in 2010 is expected to grow by 4.6%. Emerging economies will lead the way with growth of 6.8%, a 0.5% favorable change from their May forecast, thus increasing prospects for improved raw material demand globally. China's GDP grew by 11.9% in the first quarter, the fastest quarterly growth rate for three years.

Second-quarter growth was 10.3% and the IMF forecasts China's economy will grow by 10% in 2010 and overtake Japan as the world's second-largest economy. These latest economic statistics suggest a soft landing for the Chinese economy. The government remains committed to lower and middle class housing projects, major infrastructure projects and development of western China.

Turning to slide number 15. China turned recently into a net importer of coal. China has determined that its internal met coal is too expensive to develop and has thus decided it must increase imports inside steel mills closer to the coast. Analysts forecast very large increases in met coal imports from 34 million tonnes in 2009 to a range of 50 million tonnes to 60 million tonnes in 2012 with a large portion of this additional demand being met by coal from North America.

In addition, thermal coal will remain a large import with forecasts of yearly imports ranging from 100 million tonnes to 150 million tonnes with only minimal exports of about 15 million tonnes per year. China is expected to be a significant lead importer of thermal and metallurgical coal for years to come.

Turning to slide 16, [Crude] steel production in China through June was 323 million tonnes, up 21% year on year. Iron ore imports were up 4% while domestic iron ore production was up 29%. This reflected a return to production of domestic, [high-cost] capacity that had been idle in 2009 when import prices were low.

China imported 309 million tonnes of iron ore in the first half of 2010 to keep pace with high steel production and demand driven by housing, cars and durable goods. First-half 2010 iron ore imports began decelerating at the end of the second quarter due to high prices for imported ore in a price sensitive market. The new quarterly iron ore price mechanism resulted in a Q3 contract price reflecting the highest ore prices of the second quarter while the spot price has fallen dramatically since June. This has created an incentive to delay contract commitments.

Analysts estimated that Chinese domestic iron ore accounted for 33% of blast furnace feed stock this year compared with 27% in the second half of 2009 when import prices were lower. Analysts estimate that when prices for spot ore drop below $100 per ton, Chinese mills begin to import more reducing domestic ore usage.

Turning now to slide 17. Drybulk vessel demand is not only driven by demand for natural resources, but also by the distance that these cargoes are transported. Changing trading partners affects all sizes of vessels. As an example, Australia and India have been the main suppliers of Chinese iron ore imports until the last few years.

Since then India's steel production increased and its proportion of ore sent to China declined forcing China to import ore from outside the Pacific Rim. This has not only increased seaborne demand, but it also increased the ton miles covered to transport the ore and is a key driver to Capesize demand.

As an example, Vale Brazil sold a record 114 million tonnes of ore to China in 2009 compared to 91 million tonnes in 2008. Vale expects to produce about 300 million tonnes of ore in 2010 and about 450 million tonnes by 2014.

Indian coal imports, shown on the right-hand chart, have increased dramatically at a 21% compounded annual growth rate since 2006. According to the Central Electricity Authority of India, this demand will continue to substantially grow as the majority of planned new power generators will be coal-fired.

It's reported this month that 38% of all coal-fired power plants have critical stock levels below seven days of supply. Forecasts are for greater than 60% growth in Indian thermal coal imports. Indian met coal imports will add to this reaching 63 million tonnes in 2012 from 21 million tonnes in 2009.

Turning now to slide 18, the collapse in the trade market in the fourth quarter of 2008 resulted in a dramatic jump in scrapping levels last year when a record 10 million deadweight tonnes was recorded. With the subsequent and consistent market increase scrapping has been less than the average since 2002 and has raised only 2.3 million deadweight tonnes year to date. This is equivalent of about 5 million deadweight tonnes on an annualized basis. Still 16% of the fleet is older than 25 years of age and 25% of the fleet is over 20 years old providing over 120 million deadweight tonnes of scrapping potential.

Moving to slide 19, through June 2010 new building delivers were 37.1 million deadweight tonnes against an expected 64.2 million deadweight tonnes, a slippage of 42%. For 2010 deliveries are projected to be about 72 million deadweight tonnes, demonstrating that non-deliveries continue to substantiate that the drybulk order book is over marked.

Even though some yards may have increased capacity it should be noted that the 2010 deliveries reflect orders probably contracted at prices significantly above the current market, making them uneconomical to date. In addition, the lack of bank financing will continue to adversely impact the market, severely curtailing funding to private ship owners.

Despite high slippage in 2010, expected deliveries will likely establish a record year for new business. As a conclusion, the recent decline in drybulk rates reflects a slowdown in Chinese construction, higher iron ore prices and increasing vessel deliveries into a seasonally slow market. The futures market, however, is in contango with rates for Q4 2010 and calendar 2011 much higher than current spot rates. Cape rates for calendar 2011 were 98% higher than spot rates on July 23.

Usual increases in trade volumes in the fourth quarter depend on an active US grain export season, increased activity after the end of the Indian monsoon season, and for the remainder of 2010 a renewed emphasis on imports as iron ore prices decline and Chinese steel demand remains strong.

This concludes the presentation. I would now like to turn the call back to Angeliki for closing remarks. Angeliki.

Thank you, George. And we are opening now the call to questions.

(Operator Instructions). JPMorgan, Jon Chappell.

Thank you, good afternoon.

Good morning, Jonathan.

Two questions for you, Angeliki. First on the second half growth strategy. You had the Pollux for a full quarter in the third quarter, so there doesn't really need to be any more drop downs to have any sequential cash flow growth in the second half of the year. But as you look at the fact that rates have come down significantly yet asset prices have remained relatively steady, and then also given the volatility in the equity markets, how do you perceive Navios Partners' growth strategy for the next six months?

Our strategy is very consistent from the beginning. What we like is we are very opportunistic and very quick if we can find a good deal that is accretive and the markets allow us to make sure that we have vessels that can provide us accretive cash flow. And that's why we have been so consistent on growing our dividend.

You have to realize that Navios Partners is a unique company that has -- we have built the liquidity and the distribution during a very severe crisis. And we are able to have done that because we are very conservative and we do a step-by-step raising in acquisitions. So, we will be in the same way very opportunistic and ready to do accretive deals. We have to be consistent.

And most of your growth, or all of your growth so far, has been through direct Navios Holdings drop downs. You mentioned opportunistic. Has anyone come to you, Navios Partners, with any potential growth opportunities?

We constantly see this, constantly.

Okay. The second question I had is you've consistently had Samsun Logix in your list of counterparties and there are some rumored issues with them financially. Have they been consistent payers of the charters? Have you had to call on the insurance policy to make up for any lost income from them or any of your counterparties for that matter?

For Navios Partners there was not -- there is nothing of any issues with all the counterparties. If you are talking about Samsun Logix, this is a fully insured -- and also the counterparty has -- paying consistently, we know that. So there is not any problem on any of our counterparties.

Okay, great. Thanks a lot, Angeliki.

Thank you.

Merrill Lynch, Ken Hoexter.

Great. Hey, good morning, Angeliki. On the Alegria, great job re-chartering that one. It seemed a little bit light relative to our targets, but what -- can you tell us anything about who that was renewed with? Was it with the same party it's currently with or was it with a new charter?

I mean, if you see -- if you compare the two leases you can even see who it is. There is only a new name, that's the name that we fixed. We don't identify the counterparties, but it's very easy on this case because of the new name on the counterparty list on the pie chart. The reality, I think what we did very successfully, is we could have locked at a higher rate, but given all the up side away.

What we did is we fixed a 17,000 base rate for until 2014. And then we have a 50-50 profit-sharing which is calculated (inaudible) every 15 days. So you are almost having -- protecting your downside in an open half FFA for the upside. Which in my opinion is far better than average. Average can sometimes show much lower numbers than it should calculate every 15 days.

Okay. And then can you talk a bit about -- the Libra II comes up at the end of the year. Obviously just having done the Alegria it's the only one I think in 2011 -- 2010 and 2011. Can you talk a bit about have you started discussions on that?

Really at this market it would be a mistake. I mean, we did the Alegria at this point when we're far more optimistic the market, that's why we're able to fix also a very favorable profit-sharing. But if you take the one year or two years for Panamaxes today, there are around 22,000 in today's market. So you know that this is very much about the rate that we have the vessel. So we will wait until the expiration date now that we have taken away the incentive [with the one] vessel, we can go very spot on the Libra. We have no reason to do it earlier.

Okay. How many drop-down vessels do you have now left at Navios' parent that are on three-year charters that are Capes or Panamaxes? Do you have a subset of the 73 that already have charters for that length of period that may be debated with the partners?

I think you can see the fleet lease of Navios Holding, there are plenty of vessels.

I'm sorry, I didn't hear you there. Is there a number that already has three-year plus charters at the parent?

You can see the fleet lease of Navios Holding is public and you have plenty of vessels coming. We just have another eight Capesizes that we are taking this year and early next year. So there are plenty of vessels.

Okay. Thanks for the time.

Thank you.

Cantor Fitzgerald, Noah Parquette.

Thank you. Good afternoon. There was kind of a fall in the [BDI's] the last couple of months; you see some early indications that asset values are starting to fall. What are you seeing in the S&P market particularly for Capesizes?

The S&P market takes a little bit longer and need to see a consistent downward pressure to see the reacting to that. So in overage vessels you may see it reacting much faster, but in the younger fleet it will take time. Because it's not as fast as the acquisitions. But one thing that you have to see is that the FSA -- S&P and sales and (inaudible) of our vessels is really a sentiment. And to see something maintained you have to see the FSA forward curve reacting. If you see now, it's really in contango. And this is one issue that is still -- you see strong -- the market is still strong.

Okay. Thank you. And it looks like you paid on the cash flow statement -- $38 million was allocated towards the charter for the Pollux out of $110 million. Can you kind of just share -- I mean, since it's a 10-year charter it's very hard to value that. How did you arrive at that number and what kind of assumptions and did you use, any independent analysis?

I think I will let Efstratios speak to that. But this is mostly an accounting treatment that reflects the acquisition of the vessel initially and when we drop it we have to do certain accounting treatment. It not necessarily shows the analysis we do internally.

Everything is based on the discounted customers compared to a market comparative. The market comparative usually you get from a broker and you try to get as close to the actual market at that point at the date of the acquisitions as possible (multiple speakers).

Yes, I know, but for a 10-year forecast, I mean what -- how do you kind of get that number?

We always get third-party appraisal, so we always do a fairness opinion and we get a third-party valuation done for us in order to be independent and be sure that the numbers that we are using are correct.

So those are from independent brokers. And then what kind of a discount rate do you use, may I ask?

Usually it's a weighted average cost of capital, so difference depending on the way you calculate.

Okay, all right, that's really helpful. Thank you.

Thank you.

Deutsche Bank, Justin Yagerman.

Hi, it's [Josh Catsophon] for Justin. Good afternoon, everyone.

Good morning.

Just a couple of quick questions. I think you might have touched upon this, but off hire and dry docking this quarter, I think we had a few more available days. I think there was a Sagittarius dry docking; was there anything else this quarter?

Actually during this quarter we had four vessels being dry-docked, it was the Felicity, Hope, Fantastiks and the Libra. And this had an effect on approximately 70 days of less available days compared to the budgeted one.

Okay. And going forward this year?

Going forward we're expecting only one vessel to be dry docked in the second half of the year, and the rest of them are 2011 and forward.

Okay great, thanks. And then kind of touching up on further acquisitions. You guys have had success with Navios acquisitions and some recent acquisitions with long-term charters. Is there any thought on acquiring any tankers?

I think this is a totally different subject. Navios Partners is a company that is dedicated to long charters of drybulk vessels. So, we have a very distinct strategy.

So there's no thought of acquiring any tankers and Partners is --?

This is -- no, we cannot comment on this.

Okay. And can you go any further into why you guys think BDI has bottomed?

We have BDI dropping at 1,700. And to be honest, if you take the -- nobody can give you how the volatility will play. But one thing I can tell you is that we -- the 600 and 700 that we lease in Q4 of 2008 was really a letter of credit. The 1,700 is really the bottoming of -- is a reflection of the real market, the demand driven drybulk market. Absent a real financial shock we don't believe that this is -- we have seen that the long trend of the BDI has been around 2000 to 4000, either it's up or down. But very much in that circa that area.

And of course it's affected by seasonality, it's affected by the way the purchasing of the steel prices, the purchasing of iron ore by the Chinese. You may have the usual ingredients, but we don't foresee even a situation as it happened this time where the Chinese really pulled away from everything, you are not going to see going down to the level of Q4 2008.

Great, thank you for that. That's all I had.

Thank you.

Lazard Capital Markets, Urs Dur.

Hi, guys, everything has been asked for me. So, thanks for your time.

As there are no further questions, I'll now pass the floor back to Ms. Angeliki Frangou for closing remarks.

Thank you very much for attending our call for the second quarter 2010 results. Thank you.

That does conclude our conference for today. Thank you for participating. You may now all disconnect.