Navios Maritime Partners LP (NMM) 2011 Q2 法說會逐字稿

Thank you for joining us for this morning's call. With us today from Navios Maritime Partners are Chairman and CEO, Miss Angeliki Frangou; SVP of Business Development, Mr. George Achniotis; and Chief Financial Officer, Mr. Efstratios Desypris. The conference call is also being webcast. To access the webcast please go to the Investor section of Navios Partners' website at www.Navios-MLP.com and you'll see the webcasting link.

I'd like to now read the Safe Harbor statement. This conference could contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Navios Partners. Forward-looking statements are statements that are not historical fact.

Such forward-looking statements are based upon the current beliefs and expectations of Navios Partners management and are subject to risk and uncertainties which could cause actual results to differ from forward-looking statements. Such risks are more fully discussed in Navios Partners' filings with the Securities and Exchange Commission.

The information set forth herein should be understood in light of such risks. Navios Partners does not assume any obligation to update the information contained in this conference call. Thank you.

At this time I'd like to review the agenda for today's call. First Miss Frangou will offer opening remarks, next Mr. Desypris will provide a review of Navios Partners' second-quarter 2011 financial results, then Mr. Achniotis will give an operational update and an overview of market fundamentals. Miss Frangou will then offer concluding remarks and we'll open the call to take your questions. I'd now like to turn the call over to Angeliki Frangou, Chairman and CEO of Navios Maritime Partners. Angeliki?

Thank you, Laura, and good morning to all of you joining us on today's call. I am pleased with the results for the quarter during which we increased adjusted net income by 72.6% and adjusted EBITDA by 41.5%. The strong results in our stable business model allowed us to increase our distribution by 2.3% to $0.44 for the quarter and $1.76 annually. This is the second time in the last three quarters that we have raised our dividend.

The shipping industry continues to suffer. Our industry is being (inaudible) by the absence of capital from the (inaudible) lenders and the capital markets. The European lending communities, the main lenders to the shipping industry, is distracted. The sovereignty credit crisis caused people to shine a flashlight on balance sheet and they attempted to assess the health of its bank.

As a result, the European lending institutions have generally turned inward to conserve capital while being absent in the new loan market. At the same time the capital markets have become extremely selective. In sum, capital is generally unavailable in our industry.

as I have observed in the past, it is fortunate that the shipping industry is going through this transition while there is a healthy demand for mineral and (inaudible) commodities and good (inaudible). We can see currency market and commodity prices and future demand from the urbanization of emerging markets.

We also see signs that the market is beginning to rationalize the supply of vessels. The [nonbelievers] continue. At 40% in the first half of 2011 and we are (inaudible) what we believe may exceed the previous record for scrapping this year, whether measured by number of vessels scrapped, deadweight or percentage of the fleet. To date 2.65% of the fleet was scrapped representing about 195 vessels and 14.2 million deadweight tons.

Moreover, we have already exceeded the previous record set in 1986 where the scrapping was 12.31 million deadweight tons annually. Despite the scrapping, about 20% of the dry bulk fleet is older than 20 years. The (inaudible) prices are at an all-time high. As a result it makes sense to scrap an old vessel and reinvest the profits into a younger vessel.

For example, if you scrap a 20-plus-year-old Capesize vessel you will receive about $11 million representing almost 30% of the cost of a five-year old Capesize.

Slide 2 reflects our current structure, Navios Holding owns about [37]% of Navios Partners and Navios Partners operates a fleet of 18 dry bulk vessels of an average age of about five-years-old. We have entered into long-term [charters] with very good (inaudible) with another remaining charter period of over four years, about four and a half years. These charters are covered by insurance (inaudible) from a AA class entity.

Let's now turn to slide 3 which sets forth the recent developments for our Company. During the most recent quarter we acquired the Navios Orbiter and Navios Luz. The Orbiter is a 2004 built Panamax, it is chartered out for $38,052 per day net until April 2014. The Navios Luz is a 2010 built Capesize, it is chartered out at $29,356 per day until November 2020 with a 50-50 profit sharing up over the threshold of $38,500.

The two vessels cost Navios Partners about $130 million. We financed them conservatively with about $85 million of cash from our balance sheet and $35 million of debt. We also issued about $10 million worth in value of common units to Navios Holdings. The vessels are anticipated to produce an annualized base EBITDA of $20.3 million and an aggregate base EBITDA during the lives of the charters of $122.5 million.

In March of 2011 the Navios Apollon suffered an engine breakdown on her way to Tonda, Japan for discharging operations. As a result of the injury to the vessel the charter was subsequently terminated. The vessel is currently undergoing (inaudible) in a Japanese shipyard and we estimate she will be operational in early September. The cost of repair is covered by insurance.

We estimate the financial impact of the terminated charter to be about $1.5 million in the third quarter until the vessel resumes operation and $3.9 million upon rechartering at current rates for the remaining period of the original charter which expired in October 2012.

Also recently a major counterparty failed to make payments in respect of three vessels. The sale aggregates about $5.1 million. It is still too early to determine with precision what is causing the nonpayment. However, we can confirm today that all of these charters are covered by a AA class European entity insurance. We are acting in concert with our insurer to protect our interest and we are reasonably comfortable that we can understand and (inaudible) manage the extent of our exposure.

At this point I would like to turn the call over to Mr. Efstratios Desypris, Navios Partners' CFO, who will take you through the results of the quarter. Efstratios?

Thank you, Angeliki, and good morning all. I will briefly review our (inaudible) financial results for the second quarter and six months ended June 30, 2011. The financial information was included in the press release and summarized in the slide presentation on the Company's website.

We continue to demonstrate significant increases in our operating metrics reflecting the accretive growth of our fleet. Our operating strength has enabled us to increase our quarterly distribution to $0.44 per common units, a 2.3% increase from our previous quarterly distribution.

As shown on slide 5, time charter revenue for the second quarter of 2011 increased by $12.4 million to $45.7 million. The 37.2% increase in revenue was mainly attributable to 394 more available days in the second quarter of 2011 compared to the same period of 2010 due to the acquisition of four vessels. We have seen this increased despite the $2.1 million effect of the off hire of the Navios Apollon.

EBITDA and net income have been adversely affected by the $4 million non-cash charge for writing off the intangible asset associated with the Navios Apollon (inaudible) contract. Excluding this one-off event, adjusted EBITDA increased by $10.2 million or 41.5% to $34.8 million for the second quarter of 2011 as compared to $24.6 million for the same period of 2010.

Adjusted net income for the second quarter of 2011 increased by $4.3 million or 32.6% to $17.5 million as compared to $13.2 million for the same period of 2010. The increase in adjusted net income is mostly attributable to the increase in the number of vessels and available days and was adversely affected by a $5.6 million increase in depreciation and amortization expense.

Of this amount $3.3 million relates to the amortization of favorable leases attached to the acquired vessels. This favorable component is amortized over the remaining duration of the charter contract as opposed to the remaining useful life of the vessel.

Operating surplus for the quarter ended June 30, 2011 was $28.7 million which is 43.5% higher than the corresponding quarter in 2010. Operating surplus is a non-GAAP financial measure used in evaluating a partnership's ability to make quarterly cash distributions. During the second quarter of 2011 Navios Partners operated 18 vessels, an increase of four vessels as compared to the same quarter last year.

Moving to the six-month operations, time charter revenue for the six months of operations increased by $25.8 million to $88.5 million. The increase in revenue by 41.1% was mainly due to the acquisition of four vessels. EBITDA and net income have been adversely affected by the same non-cash item that affected the second-quarter results. Excluding this one-off event adjusted EBITDA increased by $21.3 million or 46.4% to $67.2 million for the first half of 2011.

Adjusted net income for the first half of 2011 increased by $8.3 million or 32.2% to $34.1 million. The increase in adjusted net income is mostly attributable to the increase in the number of vessels and available days and was adversely affected by $12 million increase in depreciation and amortization expense. Operating surplus for the six months ended June 30, 2011 was $55.2 million which is almost 50% higher than the corresponding period in 2010.

Turning to slide 6, I will briefly discuss some key balance sheet data for June 30, 2011. Cash and cash equivalents, including fixed costs, was $56.5 million. Total assets grew to $944 million. Long-term debt, including our portion, increased by $20.4 million reflecting the additional facility of $35 million for the acquisition of the two vessels in the second quarter and the debt repayment of $14.6 million in the first half of the year.

The effective average interest rate for the first half of 2011 was 2.3%. With the growth in our fleet, net debt to asset value in its other adjusted basis decreased to 51.9% at the end of the period. As of June 30, 2011 Navios Partners was in compliance with the financial covenants of its credit facility.

As shown in slide 7, our Board of Directors approved an increase in the second-quarter's cash distribution to $0.44 per common unit. This represents a 2.3% increase over the prior quarter's distribution and a 26% increase over our minimum quarter distribution. The record date for the distribution is August 5 and the payment date is August 11, 2011.

Total distributions amount to $24.8 million of which $20.6 million is attributable to the comment units. We have comfortable distribution coverage, total unit coverage is 1.15 times. Our current (inaudible) distribution of $1.76 per common unit provides for a 10.4% effective yield based on yesterday's closing price. For US taxpayer costs, Navios Partners reported (inaudible) distribution to common unitholders on Form 1099.

On slide 8, the favorable quarterly pattern of EBITDA operating surplus and net income as shown for the quarter from Q1 2008 through Q2 2011. The consecutive increase primarily reflects increases in the number of operating vessels through accretive drop downs from our sponsor. Navios Partners has consistently paid quarterly distribution since its inception in November 2007 uninterrupted by market conditions.

Furthermore, we have increased our dividend distribution in eight out of the 14 quarters of operation. Our annual distribution has been growing at an average rate of almost 7% per year. This rate of increase exceeds the average US inflation rate by more than 5%.

Slide 9 demonstrates our strong relationship with key participants in our industry. We have quality charters with an average remaining period of 4.2 years. These charters are spread among a diverse group of counterparties. In addition, we have insured our chartered out contracts for (inaudible) with a AA+ rated European entity.

As shown on slide 10, our fleet consists of 18 vessels, six Capesize's, 11 Panamax's and one Ultra-Handymax vessel. Our fleet is young relative to the global (inaudible) fleet with an average age of 5.1 years compared to the industry average of approximately 15 years.

Following the termination of the charter of Navios Apollon we have contracted 98.1% of our available days on a charter out basis for 2011 and 91% for 2012. The expiration dates are staggered and the charter durations extend to September 2022.

It is our objective to continue to grow Navios Partners' 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 industry section. George?

Please turn to slide 11. Growth in developing economies contributed a higher percentage to total world growth than the developed economies and the IMF expects that trend to continue for the foreseeable future. The IMF June forecast shows that emerging economies will continue to grow at 6.6% 2011 and 6.4% 2012.

Despite fears of a Chinese slowdown China's economy grew at 9.5% in the second quarter. For 2011 the AMEX expects the Chinese economy to grow at 9.6%. India's economy growth is expected to reach 8.2% 2011. More importantly, global growth is projected at 4.3% this year and 4.5% next year.

Turning to slide 12, since China joined the WTO in 2001, trade in dry bulk commodities expanded by 5.5% per year through 2010. This trend is expected to continue through 2011 despite the production slowdowns caused by the weather and natural disasters in the first quarter. This increase does not take into account the increase in ton miles due to changing trading partners. The primary engine of trade growth continues to be China, India, Brazil, with other emerging countries adding strongly.

Moving to slide 13. The development and urbanization of the Western and Central parts of China will contribute significantly to steel consumption in 2011 and onwards. Growth in the infrastructure and housing construction also underpin development in 2011 and beyond.

Chinese crude steel production continues to expand. This compares with the expansion in steel use seen in the development of Korea and Japan as shown on the upper right-hand chart. That chart also shows that India and Brazil are just starting to increase the amount of steel used in their expanding economies. Gross steel production in China for the first half 2011 was 353 million tons, up 9% year on year.

Iron ore imports have increased by 8% year on year to 334 million tons for the first half and domestic iron ore production was up 17% to 565 million tons. The growth in Chinese iron ore imports will be constrained and (inaudible) iron ore mines and expansion projects become operational in 2012 and later in Brazil, Australia, and the rest of the world. These expansions will likely increase the tons carried in the ton miles.

Turning to slide 14. India has taken initial steps to industrialize and urbanize. As you can see on the lower right-hand chart, India is expected to increase its urban population to 590 million people by 2030. That means India will have to build about one and a half New York City's per year during that time.

To keep pace with expanding steel and electricity production, Indian coal imports shown on the left and chart have increased dramatically at a 25% compound annual growth rate since 2006. According to the Central Electricity Authority of India, substantial demand will continue as most planned new power generators will be coal-fired. India now imports more coal per year than the UK, Italy, France and Germany combined. Indian companies are buying coal assets globally to assure future supplies to meet projected growth.

Turning to slide 15, the confluence of low freight rates, expensive fuel and high ship scrap prices has led to a surge in scrapping of vessels. In the first half of 2011 more Capesize vessels have been scrapped than in the five-year period of 2006 to 2010. The high steel prices mean that a Capesize owner can earn $11 million to $12 million on scrapping the vessel or approximately 35% of the value of a five-year-old vessel.

Through July 22, 195 dry bulk vessels representing 14.2 million deadweight tons have been sold for demolition. This deadweight ton total already surpasses the record 12.3 million tons scrapped in all of 1986 and represents an annualized scrapping rate of about 26 million tons or almost 5% of the fleet.

The current environment should lead to high scrapping levels as about 13% of the fleet is older than 25 years of age and 20% of the fleet is over 20-years-old, providing about 114 million tons of scrapping potential. There is potential for yet higher demolition in 2012 as a major new Chinese recycling facility in Dalian is due to enter service.

Moving to slide 16. 2010 new building deliveries were 77.9 million deadweight tons against an expected 125.6 million tons with slippage of approximately 40%. The order book for 2011 ballooned from about 120 million deadweight tons to 137 million tons as statisticians reclassified many ships that were not delivered in 2010 to 2011 deliveries.

However, through Q2 2011 non-deliveries continued to run at about 40% as new building deliveries were 43.8 million tons against an expected 73.5 million deadweight tons. This demonstrates that non-deliveries continue to be a substantial part of the dry bulk order book.

Additions to the fleet this year are on pace to be similar to 2010, but net growth in deadweight tons should be lower after expected scrapping is taken into account. The order book declines in 2012 and again in 2013.

Please turn to slide 17. Levels of research show downward revisions to 2011 trade estimates. However, this is due to lower than anticipated shipments in the first half of 2011 and particularly Q1 where shipments were negatively affected by natural disasters particularly in Japan and Australia.

The strength of both iron ore and coal prices continue to suggest rising demand and increased trade as cargo availability continues to rise. However, we have seen no concrete evidence of this trend. Over the medium- to long-term, minus our investing heavily in additional production which ultimately should feed seaborne movements.

Navios Partners continues to operate its vessels on long-term time charters to ensure creditworthy counterparties and have little in charter areas until 2013. This concludes my presentation. I will now like to turn the call back to Angeliki for your final comments. Angeliki?

Thank you, George, and with that we'll open the call. We finished our formal presentation, we open the call to the questions.

Natasha Boyden, Cantor Fitzgerald.

I want to ask about just acquisitions in general. We've seen several public-to-public acquisitions over the last several months and most recently yesterday. Do you think this is a trend that will continue in the sector or do you think that public to private will win out?

That's about yesterday's event. I think you summarize very nicely on your timing of your (inaudible). So that will comment as (inaudible) M&A. And I feel that in general M&A should continue because the two things that we see very much as a sector.

Number one you have at this moment the European Bank that went through. (Inaudible) credit and Tier 1 analysis we have -- they have to delever under the rules, they will have also to take some losses under their government bond portfolios that will maybe have an immediate effect over a period and they have to have (inaudible) next year.

So the addition of the credit together with market the way it is it's going to have M&A activity. Now the particular (inaudible) discussing yesterday, this is my -- you are better than me on my guessing that.

Okay, great. Thank you. Just staying on the acquisition topic just for the moment. Can you talk a little bit about potential further acquisitions for NMM? I mean are there other specific vessels you're looking to drop down from NM considering that you do have a significant cash balance? And if so, how many more vessels to you think NM could drop down into NMM?

As you know, this is a very disciplined company. We'll use (inaudible) finance to do anything. I think NMM is very well positioned, it is a company that has a strong balance sheet. If you see our leveraged ratio, even in today's market we are almost 30% financed in an area that if you take any publicly listed company it's going to be over 100% financed in today's volumes. So you have a strong balance sheet, stronger (inaudible) today (inaudible) and you are able to really access the market on attractive deals. So I think we are in at the right moment. I cannot -- that we'll use economic rationale.

Okay. And then during your comments, Angeliki, you mentioned that you had three charters that were nonpayment. Can you give a little more, if you can, a little more specifics on that? For example, when the nonpayment occurred, when you think it potentially might come back in again at what will happen if it doesn't?

In essence we have about 45 days of nonpayment, this is a major counterparty that is connected with a governmental entity. We are in connection with our insurers so we are very -- we are working closely. We have a full -- we have obtained full collateral from high standard bank on this, so we are very safe on that exposure.

And we believe this is either some kind of renegotiating ploy or some kind of a cash flow problem of a division. But in any situation, we have protection insurance and we are protected on that. And our distributions are very -- are unaffected of this event.

Okay. That's helpful, thank you. And they just lastly on the Apollon. Obviously the vessel is out until at least September. Will the original charter pick up the vessel again once it comes back into service or will you have to look for a new contract for that?

No, we have already -- this kind of an accident was unique. We can say that in my 20 years of career I've never seen something like that. We had -- there is a cancellation of the charter, we have already taken (inaudible) the full effect, it is $1.5 million until the vessel comes on in service in September, (technical difficulty) about $0.9 million.

The rechartering the vessel until expiring of the charter, that was October 2012. So you have a full effect [if you] (inaudible) to our distribution. And it is really a mechanical failure that was impossible to be foreseeing or taking care of.

okay, great. Thank you very much for your time.

Thank you.

(Operator Instructions). Joshua Katzeff, Deutsche Bank.

Good afternoon. I just wanted to follow up on those charters. Can you walk us through how any sort of renegotiation would play out? Would your charterer negotiate with Navios or would they be negotiating with the insurance agency?

I didn't say that this was -- Navios is not renegotiating -- we'll never renegotiate because we have an insurance policy which will automatically we'll claim upon. And the counterparty is strong enough that I don't think that our insurance will ever allow not to go after that.

So this is not an issue that is under dispute. I'm saying that maybe if from the past maybe this is the way it is perceived from the counterparty. Navios has never renegotiated because it has no economic -- it will make no economical rationale.

Got it, thanks for the extra color. With regards to the Apollon, it's the only Supramax in your fleet and now that it doesn't have a charter -- is there any thought on maybe selling that vessel and using some of the proceeds as well as some of your cash on hand to maybe take on some more Navios Holding drop downs?

I think that is a decision to be made. The vessel will be in service, if we want to sell the vessel this is a different decision to be made at that point. We will use the best possibilities with them in having a better return for our shareholders.

Got it. And one more question on that -- on the divestiture. I guess topic, in the beginning of your comments you mentioned selling off older tonnage -- being attractive to sell off older tonnage and then purchase more modern tonnage. Going through your fleet list it looks like there's I guess one Panamax, Libra, that has a more short-term contract that's one of your older vessels. Is that a potential sale candidate?

Well, I was describing really scrapping. To be honest, the candidate for sale depends on the moment the vessels come out of hire and if that makes sense (inaudible).

What I was discussing on my speech, and I think this is a unique moment in the history of shipping which I've not seen it in data that we look over 30 years plus, is that today a 20-year-old vessel, Capesize vessel of 1000 lightweight at 550 registered days of life and of $1 million in value. You can use this money as a down equity payment for a Capesize can be about 30% of a five-year-old or if you buy a Panamax -- a five-year-old Panamax it can be even more than 40%.

So what I'm trying to describe is that older capes, older (inaudible) older tonnage, it makes far more sense to be scrapped in today's market as we see this acceleration because owners as well as the financial institutions that are financing the charter, we push the owners to substitute these vessels with younger because they will have an asset with a longer duration and (inaudible) above market.

That is a situation which is unique in history as a percentage is (inaudible) to the scrap price as a percentage of the five-year-old asset. Today the scrap price we are producing from a Capesize is the highest ever.

That's actually really interesting. All right, I think that's all I had, so I'll turn it back. Thanks.

Thank you.

Ken Hoexter, Bank of America-Merrill Lynch.

Hi, good morning, Angeliki. On the counterparties that have stopped paying, is that -- the three vessels -- do they have any other vessels chartered with you?

No, these three vessels.

Does the insurance kick in immediately as far as the payment? Is there any lost downtime from the -- are there any certain number of days that you're responsible for?

You know very well that our insurance we have already technically been (inaudible) we have technically now that -- he's asking me did we (inaudible) the proper documentation is provided which we are okay. I think this is not an issue, I think the most important that we advise is of course we believe that it may be a non-(inaudible) to enter the process. But it may become a major counterparty, maybe much more important to the (inaudible) industry.

I'm sorry, so I missed that. Does the insurance kick in immediately as far as your cash flow?

Yes, it kicks in on the usual way.

Okay. What's the usual way? Is that one day or is there a payment period from your perspective?

It is the same as Korea Line, it follows certain documentation, is up after 30 days and in the same fashion.

So there's no payment for 30 days then, and then you get the cash flow? I don't know what your terms are with Korea Lines, so I'm just asking is there -- so you're saying there's 30 days and then the cash kicks in?

You get the payment from day one. The issue is when you actually (inaudible) to get the first payment, you do not -- there is no down period, it acts day one, if you're asking.

Okay, that is what I'm asking. Thank you. Are you (multiple speakers)?

It doesn't increase a period of nonpayment that's what -- just to clarify because (inaudible) I didn't understand your question. There is no down period. You are paid from (technical difficulty). The issue is that you paid (inaudible) 35 days or 45 days or 60 days, it depends on organizing the proper documentation.

No, that makes sense, that makes sense. And the counterparty that stopped paying, are you willing to tell us who that is?

No, but I think I gave enough information.

Okay. Is this your first example of a charterer not paying?

No, we had in the holdings level -- first of all in Navios Partners we have the Korea Line and in the Holdings we already have a couple of other counterparties.

So does anything change accounting wise as far as what we will see? Do the revenues still appear as revenues or does it become kind of, I don't know, an insurance collectible that appears in some other fashion? I just want to understand from a perspective of -- accounting perspective.

From an accounting perspective nothing changes. Revenue is recognized as earnings. (Inaudible) the receivable comes from reinsurance (inaudible) happening. But the revenue is recognized (inaudible) way.

Okay. And then, Angeliki, maybe I just misheard the end of the answer. I mean Korea Lines was one that was bankrupt, so obviously they stopped paying. But did you mention that there were others -- other counterparties that had stopped paying?

Yes, in the time -- in the case of Navios Holdings we had other counterparties.

Oh, up at the parent. Okay. You mentioned on the Apollon that this was the -- I think you said something like in your 20-year career this was the oddest thing you've seen. Was this something that was caused by age? I made this is your third or fourth oldest vessel. When you look at this was it because you're running a different size ship than the rest of the Partners vessels, what would you attribute the engine breakdown to?

Sorry, Ken, but I can tell you that that vessel is not considered old in the industry when you have much older vessels. So it may be Partners or Holdings, but in my career I have operated much older vessels than that. That was a new building for me at the time. So it has nothing to do with age, it has nothing to do with size. This is a mechanical failure that has nothing to do with any of these things. That would have been very customary otherwise. This was a unique mechanical failure.

So just purely mechanical failure or operating failure? Was this liability on the staff operating the vessel or was it something to do with the manufacturing of the engine?

Mechanical failure.

Okay. So you wouldn't anticipate this -- I guess you're saying this is kind of a one-off from what you've seen. You wouldn't expect just because, again, as some of your vessels -- I mean your Gemini and Libra are I guess halfway through their lives. This is not something that you expect to become more common?

No, this has nothing to do with age, nothing to do with age or type of the vessel, the vessel is Japanese built on a high-quality yard, this is a mechanical failure of a unique nature. I'm 22 years in business, it has never happened to me. My family has been much longer, I can tell you this, we have not seen it before.

All right, great, I appreciate that rundown on those two issues. Let me just ask on the distribution. When I look at the growth of your fleet, the growth of revenues, the growth of your operating income, all the numbers that you put on the top of the release, which really highlighted the increase in the quarterly revenues, operating surplus, adjusted EBIT all in the 30% to 40% range. And then when you look at the headline you get kind of the small 2% increase in cash distribution.

Is there something that would get you to even this down vessel you mentioned has absolutely no bearing on your ability to pay that distribution. Anything that you think that gets you to maybe expedite that? Or is this just kind of going back to the original commentary that we had a few years ago, just slow and steady over the longtime?

I think what Navios Partners has demonstrated is that very much is a stock market event, irrelevant to (inaudible) default, irrelevant to (inaudible) in the financial markets, irrelevant to (inaudible) in the shipping freight market. We continue not only to grow but to grow our distribution, have a stable distribution and know that we will give return to our shareholders.

And you can see that we provide steady and we have increased the distribution two (inaudible) in three quarters and has been a very steady disciplined way. And I think what we like to provide shareholders is that the distribution is at no point at risk, that you have a strong balance sheet that cannot undermine in any way, shape or form the distribution and that that distribution will grow in a consistent way.

Great. Appreciate the time, Angeliki. Thanks.

Thank you.

And at this time I'm showing no further questions. I'll turn the conference back to you, Miss Frangou.

With that, thank you very much. This is completing our second-quarter results.

And ladies and gentlemen, that concludes our conference call for this morning. We appreciate your time. You may now disconnect.