NYSE-listed Navios Maritime Holdings says it will commence a share repurchase programme and will suspend its dividend payment in order to weather the depressed dry bulk shipping market.
“We have experienced an extended period of weakness that is virtually unprecedented in our history, with the BDI average this year lower than at any time since 1986,” Angeliki Frangou, chairman and CEO of Navios Maritime, stated today in the company’s financial results for the third quarter 2015.
“As a result, we have adjusted our return of capital to our shareholders by initiating a share repurchase program and suspending our dividend payment.”
Navios plans to spend up to $25m in the share repurchase programme, which is effective until December 31, 2017.
Shares will be bought back from time to time in the open market at prevailing market prices or in privately negotiated transactions, the company said.
“The decision to suspend dividends was a difficult one, as we have paid a dividend for 39 consecutive quarters,” Frangou continued.
“Senior management owns about 30% of the company, so we are intimately aware of the consequences of our action, but feel that reducing our capital commitment and opportunistically redeploying cash toward our share repurchase program will be in our best long-term interests.”
Navios Maritime Holdings today reported revenue of $131m and adjusted EBITDA of $39.5m in its unaudited results for the third quarter. As of September 30, 2015, the company’s net debt to total book capitalisation stood at 53.5%.
In early December 2014, affiliate company Navios Maritime Acquisition (NNA) announced it would spend up to $50m on repurchasing its shares over a two-year period.