Navios South American Logistics (NSAL) 6-KCurrent report (foreign)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

Dated: September 10, 2021

Commission File No. 333-179250

NAVIOS SOUTH AMERICAN LOGISTICS INC.

Aguada Park Free Zone

Paraguay 2141, Of. 1603

Montevideo, Uruguay

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F:

Form 20-F  ☒                Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐                No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐                No  ☒

Operating and Financial Review and Prospects

The following is a discussion of the financial condition and results of operations of Navios South American Logistics Inc. (“Navios Logistics” or the “Company”) for each of the three and six month periods ended June 30, 2021 and 2020. All of these financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”). You should read this section together with the consolidated financial statements and the accompanying notes included in Navios Logistics’ 2020 annual report filed on Form 20-F with the Securities and Exchange Commission on April 15, 2021 (the “2020 Form 20-F”) and the condensed consolidated financial statements and the accompanying notes included in this Form 6-K.

This report contains forward-looking statements within the meaning of the Private Securities Reform Act of 1995. All statements herein other than statements of historical fact, including statements regarding business and industry prospects or future results of operations or financial position, and future dividends or distributions, should be considered forward-looking. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. These forward looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by, Navios Logistics at the time this filing was made. Although Navios Logistics believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Navios Logistics. Actual results may differ materially from those expressed or implied by such forward-looking statements. Included among the factors that, in management’s view, could cause actual results to differ materially from the forward-looking statements contained in this report are changes in any of the following: (i) demand and/or charter and contract rates for our vessels and port facilities; (ii) production or demand for the types of dry and liquid products that are transported by our vessels or stored in our ports; (iii) operating costs including, but not limited to, changes in crew salaries, insurance, provisions, repairs, maintenance and overhead expenses; (iv) changes in interest rates; and (v) other factors listed from time to time in Navios Logistics’ filings with the Securities and Exchange Commission, including its Forms 20-F and Forms 6-K, including the section entitled “Item 3. Key Information — D. Risk Factors” in the 2020 Form 20-F. Navios Logistics expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Navios Logistics’ expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Recent Developments

On July 30, 2021, Navios Logistics declared and paid a pro rata dividend to its shareholders in shares of Grimaud (as defined herein), representing 100% of Navios Logistics’ equity interest in Grimaud.

Overview

General

Navios Logistics was incorporated under the laws of the Republic of the Marshall Islands on December 17, 2007. We believe we are one of the largest logistics companies in the Hidrovia region river system, the main navigable river system in the region, and in the cabotage trades along the south-eastern coast of South America. We serve our customers in the Hidrovia region through our three existing port storage and transfer facilities (the “Port Terminal Business”), our Grain Terminal, which supports agricultural and forest-related exports located in Uruguay, our Iron Ore Terminal, which supports mineral-related exports both located in Uruguay and our Liquid Port Terminal, with tank storage for refined petroleum products in San Antonio, Paraguay. We complement our three port terminals with a diverse fleet of 329 barges and 30 pushboats that operate in our barge business (the “Barge Business”) and eight vessels, including six tankers, one bunker vessel and one river and estuary product tanker, which operate in our cabotage business (the “Cabotage Business”). We provide transportation for dry cargo (cereals, cotton pellets, soybeans, wheat, limestone (clinker), mineral iron, and rolling stones) and liquid cargo (hydrocarbons such as crude oil, gas oil, naphtha, fuel oil and vegetable oils) and liquefied cargo (liquefied petroleum gas or “LPG”).

Ports

We own three port storage and transfer facilities, one grain terminal, which supports agricultural and forest-related exports (the “Grain Terminal”), one iron ore terminal, which supports mineral-related exports both located in Nueva Palmira Free Zone, Uruguay (the “Iron Ore Terminal” and together with the Grain Terminal, the “Dry Port Terminals”) and one liquid port terminal, with tank storage for refined petroleum products in San Antonio, Paraguay (the “Liquid Port Terminal”). Our port facilities in Nueva Palmira have a total static storage capacity for grains of 460,000 metric tons, and a stockpile capacity of 700,000 tons for mineral ores. Our port facility in San Antonio has a total static storage capacity of 65,660 cubic meters.

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Fleet

Our current core fleet consists of a total of 367 owned vessels, barges and pushboats.

The following is the current core fleet as of September 10, 2021:

Navios Logistics Fleet Summary (owned)

Chartering Arrangements

We continually monitor developments in the shipping industry and make decisions based on an individual vessel and segment basis, as well as on our view of overall market conditions, in order to implement our overall business strategy. In the Barge Business, we typically operate under a mix of time charters and contracts of affreightment (“CoAs”) with durations of one to five years (some of which have minimum guaranteed volumes) and spot contracts. In the Cabotage Business, we typically operate under time charters with durations in excess of one year. Some of our charters provide fixed pricing, minimum volume requirements and labor cost and fuel price adjustment formulas.

Factors Affecting Navios Logistics’ Results of Operations

For further discussion on factors affecting our results of operations, see also “Item 3. Key Information — D. Risk Factors” included in the 2020 Form 20-F. For information regarding governmental, economic, fiscal, monetary or political policies that could materially affect our operations, see “Item 3. Key Information — D. Risk Factors — Risks Relating to Argentina”, “Item 3. Key Information — D. Risk Factors — Risks Relating to Uruguayan Free Zone Regulation” and “Item 3. Key Information — D. Risk Factors — Other Risks Relating to the Countries in which We Operate” in the 2020 Form 20-F.

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Contract Rates

The shipping and logistics industry has been highly volatile in the recent past. In order to maximize the utilization of our fleet and storage capacity, we must be able to renew the contracts that utilize our fleet and ports upon the expiration or termination of current contracts. This ability mainly depends upon economic conditions in the sectors in which the vessels, barges and pushboats operate, changes in the supply and demand for vessels, barges and pushboats and changes in the supply and demand for the transportation and storage of commodities.

Weather Conditions

As we specialize in the transportation and storage of liquid cargoes and dry bulk cargoes along the Hidrovia, any changes adversely affecting the region, such as low water levels, could reduce or limit our ability to effectively transport cargo. In 2020 and 2021, navigation conditions in the Hidrovia have been difficult due to low water levels, adversely affecting our performance as barges have limited capacity in reduced drafts and trips are taking longer to be completed, increasing voyage expenses. Droughts and other adverse weather conditions, including any possible effects of climate change, could result in a decline in production of the agricultural products Navios Logistics transports and stores, and this could result in a reduction in demand for its services.

Foreign Currency Transactions

Our operating results, which are reported in U.S. dollars, may be affected by fluctuations in the exchange rate between the U.S. dollar and the Uruguayan pesos, Argentine pesos, Brazilian reais and Paraguayan guaranies. We use the U.S. dollar as our functional and reporting currency. Therefore, revenue and expense accounts are translated into U.S. dollars at the exchange rate in effect at the date of each transaction. The balance sheets of our foreign operations are translated using the exchange rate at the balance sheet date except for property and equipment and equity, which are translated at historical rates.

Our subsidiaries in Uruguay, Argentina, Brazil and Paraguay transact their operations in either U.S. dollars or Uruguayan pesos, Argentine pesos, Brazilian reais and Paraguayan guaranies, respectively; however, the subsidiaries’ primary cash flows are in U.S. dollars. Transactions in currencies other than the functional currency are translated at the exchange rate in effect at the date of each transaction. Differences in exchange rates during the period between the date a transaction denominated in a foreign currency is consummated and the date on which it is either settled or translated are recognized in the statement of income.

Inflation and Fuel Price Increases

The impact of inflation and the resulting pressure on prices in the South American countries in which we operate may not be fully neutralized by equivalent adjustments in the rate of exchange between the local currencies and the U.S. dollar. Specifically, for our vessel, barge and pushboat business, we have negotiated, and will continue to negotiate, crew cost adjustment and fuel price adjustment clauses; however, in some cases, the prices that we pay for fuel and crew costs are temporarily not aligned with the adjustments that we obtain under our freight contracts.

Seasonality

Certain of our businesses have seasonality aspects, and seasonality affects the results of our operations and revenues, particularly in the first and last quarters of each year. Generally, the high season for the Barge Business is the period between February and July as a result of the South American harvest and higher river levels. Any growth in production and transportation of commodities may offset part of this seasonality. During the South American late spring and summer, mainly from November to January, the low level of water in the northern Hidrovia could adversely affect our operations because the water level is not high enough to accommodate the draft of a heavily laden vessel. Such low levels also adversely impact our ability to employ convoys as the water level towards the banks of the river may be too low to permit vessel traffic even if the middle of the river is deep enough to permit passage. With respect to dry port terminal operations in Uruguay, the high season is mainly from April to September, linked with the arrival of the first barges down the river and with the oceangoing vessels’ logistics operations. Our Liquid Port Terminal operations in Paraguay and our Cabotage Business are not significantly affected by seasonality as the operations of the Liquid Port Terminal and Cabotage Business are primarily linked to refined petroleum products.

Statement of Operations Breakdown by Segments

We report our operations based on three reportable segments: Port Terminal Business, Barge Business and Cabotage Business. The Port Terminal Business segment includes the operating results of our Dry Port Terminals and Liquid Port Terminal operations. Our Dry Port Terminals are comprised of our Grain Terminal and our Iron Ore Terminal, each of which are located in an international tax-free trade zone in the port of Nueva Palmira, Uruguay, at the convergence of the Parana and Uruguay rivers. Our Liquid Port Terminal is an up-river port terminal with tank storage for refined petroleum products and oil and gas in San Antonio, Paraguay, approximately 17 miles by river from the capital, Asunción.

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Period over Period Comparisons

The following table presents consolidated revenue and expense information for the three and six month periods ended June 30, 2021 and 2020. This information was derived from Navios Logistics’ unaudited condensed consolidated financial statements for the respective periods.

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For the three month period ended June 30, 2021 compared to the three month period ended June 30, 2020

Revenue

The following table presents our revenues for the three month periods ended June 30, 2021 and 2020:

Time Charter, Voyage and Port Terminal Revenues: For the three month period ended June 30, 2021, Navios Logistics’ time charter, voyage and port terminal revenues increased by $1.8 million or 3.3% to $57.0 million, as compared to $55.2 million for the same period during 2020. Revenue from the Barge Business increased by $6.7 million or 36.7% to $24.7 million for the three month period ended June 30, 2021, as compared to $18.0 million for the same period during 2020. For the three month period ended June 30, 2021, CoA/voyage revenues increased by $7.8 million to $21.8 million, as compared to $14.0 million for the same period in 2020, related to higher liquid cargo moved, partially mitigated by a $1.1 million or 26.7% decreased in time charter revenues to $3.0 million, as compared to $4.1 million for the same period in 2020, mainly due to a decrease in time charter rates. Revenue from the Port Terminal Business decreased by $0.3 million or 1.6% to $24.3 million for the three month period ended June 30, 2021, as compared to $24.6 million for the same period during 2020. The decrease was mainly attributable to lower volumes transshipped in the grain port terminal. Revenue from the Cabotage Business decreased by $4.4 million or 35.2% to $8.1 million for the three month period ended June 30, 2021, as compared to $12.5 million for the same period during 2020. The decrease was mainly attributable to fewer operating days.

Sales of Products- Liquid Port Terminal: For the three month period ended June 30, 2021, Navios Logistics’ sales of products decreased by $3.1 million or 90.8% to $0.3 million, as compared to $3.4 million for the same period during 2020. This decrease was mainly attributable to the decrease in the Paraguayan liquid port’s volume of products sold.

Cost of Sales

The following table presents our cost of sales for the three month periods ended June 30, 2021 and 2020:

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Time Charter, Voyage and Port Terminal Expenses: Time charter, voyage and port terminal expenses increased by $3.0 million or 24.3% to $15.5 million for the three month period ended June 30, 2021, as compared to $12.5 million for the same period during 2020. Time charter and voyage expenses of the Barge Business increased by $2.8 million or 38.9% to $10.1 million for the three month period ended June 30, 2021, as compared to $7.3 million for the same period during 2020, mainly due to more spot voyages performed. Time charter and voyage expenses of the Cabotage Business increased by $0.1 million or 31.3% to $0.5 million for the three month period ended June 30, 2021, as compared to $0.4 million for the same period during 2020. Port terminal expenses increased by $0.1 million or 1.5% to $4.9 million for the three month period ended June 30, 2021, as compared to $4.8 million for the same period during 2020.

Direct Vessel Expenses: Direct vessel expenses increased by $4.6 million or 38.5% to $16.6 million for the three month period ended June 30, 2021, as compared to $12.0 million for the same period during 2020. Direct vessel expenses of the Barge Business increased by $3.5 million or 58.5% to $9.6 million for the three month period ended June 30, 2021, as compared to $6.1 million for the same period during 2020. The increase was mainly attributable to the increased utilization of our convoys to service the demand of the COA/voyage market. Direct vessel expenses of the Cabotage Business increased by $1.1 million or 18.0% to $7.0 million for the three month period ended June 30, 2021, as compared to $5.9 million for the same period during 2020, mainly due to increased crew costs. Direct vessel expenses include crew costs, victual costs, dockage expenses, lubricants, spares, insurance, maintenance and repairs.

Cost of Products Sold- Liquid Port Terminal: For the three month period ended June 30, 2021, Navios Logistics’ cost of products sold decreased by $2.9 million or 90.4% to $0.3 million, as compared to $3.2 million for the same period during 2020. This decrease was mainly attributable to the decrease in the Paraguayan liquid port terminal’s volumes of products sold.

Depreciation and Amortization: For the three month period ended June 30, 2021, Navios Logistics’ depreciation and amortization increased by $0.4 million or 4.9% to $8.5 million, as compared to $8.1 million for the same period during 2020. Depreciation and amortization in the Barge Business increased by $0.4 million or 10.1% to $5.0 million for the three month period ended June 30, 2021, as compared to $4.6 million for the same period in 2020, mainly due to the delivery of each of the six liquid barges completed in the first quarter of 2021 and the three pushboats and 18 tank barges acquired in the first quarter of 2021 (the “2020 Fleet”). Depreciation and amortization in the Cabotage Business decreased by $0.1 million or 6.9% to $1.3 million for the three month period ended June 30, 2021, as compared to $1.4 million for the same period during 2020, mainly due to reduced amortization of dry dock expenses. Depreciation and amortization in the Port Terminal Business remained stable at $2.1 million for both of the three month periods ended June 30, 2021 and 2020.

Administrative Expenses

Administrative expenses increased by $0.3 million or 6.3% to $3.7 million for the three month period ended June 30, 2021, as compared to $3.4 million for the same period during 2020. Administrative expenses in the Cabotage Business increased by $0.1 million or 8.3% to $0.6 million for the three month period ended June 30, 2021, as compared to $0.5 million for the same period during 2020. Administrative expenses in the Barge Business increased by $0.1 million or 4.8% to $2.3 million for the three month period ended June 30, 2021, as compared to $2.2 million for the same period during 2020. Administrative expenses in the Port Terminal Business remained stable at $0.8 million for both of the three month periods ended June 30, 2021 and 2020. Certain of our administrative expenses are directly charged to their respective segments, while others are allocated proportionally based on headcount.

Other Operating Income

Other operating income increased by $0.2 million or 160.6% to $0.4 million for the three month period ended June 30, 2021, as compared to $0.2 million for the same period in 2020. Other operating income in the Barge Business increased by $0.3 million to $0.4 million for the three month period ended June 30, 2021, as compared to $0.1 million for the same period of 2020. Other operating income in the Port Terminal Business decreased by $0.1 million or 76.5% to nil for the three month period ended June 30, 2021, as compared to $0.1 for the same period of 2020. Other operating income in the Cabotage Business was nil for both the three month periods ended June 30, 2021 and June 30, 2020.

Other Operating Expenses

Other operating expenses increased by $0.6 million or 174.5% to $1.0 million for the three month period ended June 30, 2021, as compared to $0.4 million for the same period in 2020. Other operating expenses in the Barge Business increased by $0.9 million to $0.8 million for three month period ended June 30, 2021, as compared to $0.1 million income for the same period of 2020. This increase was mainly due to the increased taxes other than income taxes derived from an increase in CoA/Voyage revenues in the Barge Business during the same period. Other operating expenses in the Cabotage Business decreased by $0.3 million or 57.5% to $0.2 million for the three month period ended June 30, 2021, as compared to $0.5 million for the same period during 2020. This decrease was mainly due to the decreased taxes other than income taxes, derived from a decrease in revenues in the Cabotage Business during the same period. Other operating expenses in the Port Terminal Business was nil for both the three month period ended June 30, 2021 and June 30, 2020.

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Allowance for Expected Credit Losses on Financial Assets

Allowance for expected credit losses on financial assets decreased by $0.2 million to nil for the three month period ended June 30, 2021, as compared to $0.2 million for the same period in 2020. Allowance for expected credit losses on financial assets in the Barge Business decreased by $0.1 million to nil for the three month period ended June 30, 2021, as compared to $0.1 million for the same period in 2020. Allowance for expected credit losses on financial assets in the Port Terminal Business decreased by $0.1 million to nil for the three month period ended June 30, 2021, as compared to $0.1 million for the same period in 2020. Allowance for expected credit losses on financial assets in the Cabotage Business was nil for both the three month periods ended June 30, 2021.

Operating Profit/(Loss)

Operating profit decreased by $6.9 million or 35.9% to $12.2 million for the three month period ended June 30, 2021, as compared to $19.1 million for the same period in 2020. Operating loss in the Cabotage Business increased by $5.2 million or 137.5% to $1.4 million for the three month period ended June 30, 2021, as compared to $3.8 million operating profit for the same period in 2020. The increase was mainly attributable to (a) lower revenue, (b) higher direct vessel expenses, (c) higher time charter, voyage and port terminal expenses and (d) higher administrative expenses, partially offset by (a) lower other operating expenses and (b) lower depreciation and amortization. Operating loss in the Barge Business increased by $0.9 million or 48.1% to $2.7 million for the three month period ended June 30, 2021 as compared to $1.8 million for the same period in 2020. The increase was mainly attributable to (a) higher direct vessel expenses, (b) higher time charter, voyage and port terminal expenses, (c) higher other operating expenses, (d) higher depreciation and amortization and (c) higher administrative expenses, partially offset by (a) higher revenues, (b) higher other operating income and (c) lower allowance for expected credit losses on financial assets. Operating profit in the Port Terminal Business decreased by $0.8 million or 4.4% to $16.4 million for the three month period ended June 30, 2021, as compared to $17.2 million for the same period in 2020. The decrease was mainly attributable to (a) lower revenue, (b) higher port terminal expenses, and (c) lower other operating income, partially mitigated by lower allowance for expected credit losses on financial assets.

Finance Income

Finance income decreased by $0.3 million or 12.8% to $2.2 million for the three month period ended June 30, 2021, as compared to $2.5 million for the same period in 2020. Finance income in the Port Terminal Business decreased by $0.3 million or 22.7% to $0.8 million for the three month period ended June 30, 2021, as compared to $1.1 million for the same period in 2021. Finance income in the Barge Business decreased by $0.2 million or 22.4% to $1.0 million for the three month period ended June 30, 2021, as compared to $1.2 million for the same period in 2020. These decreases were partially offset by a $0.2 million increase in Finance income in the Cabotage Business, to $0.4 million or 78.4% for the three month period ended June 30, 2021, as compared to $0.2 million for the same period in 2020. The overall decrease was mainly due to the lower finance income rate from the Navios Holdings Loan Agreement during the three month period ended June 30, 2021 as compared to the same period in 2020. Following the amendment of the Navios Holdings Loan Agreement during December 2019, and as a result of the redemption of the 2022 Notes and Term Loan B Facility in July 2020 and the issuance of 2025 Notes (as defined below), the interest rate on the secured credit facility decreased to 10.0% from 12.75%. Effective as of May 2021, and upon the release of certain collateral, the facility bears interest of 13.0% per annum. For the three month period ended June 30, 2021, finance income is allocated into our segments pro rata to the book value of our tangible assets. For the three month period ended June 30, 2020, finance income was allocated into our segments pro rata to the book value of our interest-bearing loans and borrowings.

Finance Costs

Finance costs increased by $5.9 million or 61.8% to $15.4 million for the three month period ended June 30, 2021, as compared to $9.5 million for the same period in 2020. Finance costs in the Barge Business increased by $2.3 million or 49.7% to $6.8 million for the three month period ended June 30, 2021, as compared to $4.5 million for the same period in 2021. Finance costs in the Cabotage Business increased by $1.9 million or 178.3% to $2.9 million for the three month period ended June 30, 2021, as compared to $1.0 million for the same period in 2020. Finance costs in the Port Terminal Business increased by $1.8 million or 45.1% to $5.7 million for the three month period ended June 30, 2021, as compared to $3.9 million for the same period in 2020. These increases were mainly attributable to the higher weighted average interest rate for the three month period ended June 30, 2021, due to the issuance of the 2025 Notes (as defined below). The annualized weighted average interest rates of the Company’s total borrowings were 9.96% and 6.83% for the three month periods ended June 30, 2021 and 2020, respectively. Finance costs for the 2025 Notes are allocated into our segments pro rata to the book value of our tangible assets.

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Foreign Exchange Differences, Net

Gain from foreign exchange differences increased by $0.9 million to $0.6 million for the three month period ended June 30, 2021, as compared to $0.3 million loss for the same period in 2020. Gain from foreign exchange differences in the Barge Business increased by $1.3 million to $1.3 million for the three month period ended June 30, 2021, as compared to less than $0.1 million for the same period in 2020. Loss from foreign exchange differences in the Cabotage Business increased by $0.3 million to $0.4 million for the three month period ended June 30, 2021, as compared to $0.1 million for the same period in 2020. Loss from foreign exchange differences in the Port Terminal Business increased by $0.1 million to $0.3 million for the three month period ended June 30, 2021, as compared to a $0.2 million loss for the same period in 2020. The overall gain was mainly attributable to the favorable impact of the fluctuation of the U.S. dollar exchange rate against the local currencies in the different countries where we conduct our operations.

Income Tax Benefit/(Expense)

Income tax expense increased by $0.7 million to $0.6 million for the three month period ended June 30, 2021, as compared to $0.1 million income tax benefit for the same period during 2020. Income tax expense of the Barge Business increased by $0.9 million to $0.4 million for the three month period ended June 30, 2021, as compared to $0.5 million income tax benefit for the same period during 2020, mainly due to the impact of local foreign exchange differences for the three month period ended June 30, 2021. Income tax expense of the Cabotage Business decreased by $0.3 million to $0.2 million for the three month period ended June 30, 2021, as compared to $0.5 million for the same period during 2020.

Profit/(Loss) for the Period

Loss for the period increased by $12.7 million or 107.1% to $0.8 million for the three month period ended June 30, 2021, as compared to $11.9 million profit for the same period in 2020. Loss for the period in the Cabotage Business increased by $6.8 million to $4.4 million for the three month period ended June 30, 2021, as compared to a $2.4 million profit for the same period in 2020. The increase was mainly attributable to (a) lower operating profit, (b) higher finance costs and (c) higher loss from foreign exchange differences, partially offset by (a) lower income tax expense and (b) higher finance income. Loss for the period in the Barge Business increased by $3.0 million or 67.2% to $7.6 million for the three month period ended June 30, 2021, as compared to $4.6 million for the same period in 2020. The increase was mainly attributable to (a) higher finance costs, (b) lower operating profit, (c) higher income tax expense and (d) lower finance income, partially offset by higher gain from foreign exchange differences. Profit for the period in the Port Terminal Business decreased by $2.9 million or 20.3% to $11.2 million for the three month period ended June 30, 2021, as compared to $14.1 million for the same period in 2020. The increase was mainly attributable to (a) higher finance costs, (b) lower operating profit, (c) lower finance income and (d) higher loss from foreign exchange differences.

For the six month period ended June 30, 2021 compared to the six month period ended June 30, 2020

Revenue

The following table presents our revenues for the six month periods ended June 30, 2021 and 2020:

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Time Charter, Voyage and Port Terminal Revenues: For the six month period ended June 30, 2021, Navios Logistics’ time charter, voyage and port terminal revenues increased by $3.0 million or 2.9% to $106.9 million, as compared to $103.9 million for the same period during 2020. Revenue from the Barge Business increased by $6.6 million or 17.8% to $43.5 million for the six month period ended June 30, 2021, as compared to $36.9 million for the same period during 2020. For the six month period ended June 30, 2021, CoA/voyage revenues increased by $13.8 million or 55.8% to $38.5 million, as compared to $24.7 million for the same period in 2020, related to higher CoA/voyage revenues of convoys previously under time charter contracts, partially mitigated by a $7.2 million or 58.6% decrease in time charter revenues to $5.0 million, as compared to $12.2 million for the same period in 2020, mainly due to the expiration of certain legacy time charter contracts. Revenue from the Port Terminal Business increased by $2.7 million or 6.3% to $45.8 million for the six month period ended June 30, 2021, as compared to $43.1 million for the same period during 2020. The increase was mainly attributable to higher volumes transshipped in the grain port terminal. Revenue from the Cabotage Business decreased by $6.3 million or 26.4% to $17.6 million for the six month period ended June 30, 2021, as compared to $23.9 million for the same period during 2020, mainly due to lower time charter rates affected by market conditions and fewer operating days.

Sales of Products- Liquid Port Terminal: For the six month period ended June 30, 2021, Navios Logistics’ sales of products decreased by $7.8 million or 69.0% to $3.5 million, as compared to $11.3 million for the same period during 2020. This decrease was mainly attributable to the decrease in the Paraguayan liquid port terminal’s volumes of products sold.

Cost of Sales

The following table presents our costs of sales for the six month periods ended June 30, 2021 and 2020:

Time Charter, Voyage and Port Terminal Expenses: Time charter, voyage and port terminal expenses increased by $3.5 million or 15.0% to $26.8 million for the six month period ended June 30, 2021, as compared to $23.3 million for the same period during 2020. Time charter and voyage expenses of the Barge Business increased by $2.6 million or 19.1% to $16.2 million for the six month period ended June 30, 2021, as compared to $13.6 million for the same period during 2020, due to higher voyage expenses, mainly fuel, related to more spot voyages performed. Time charter and voyage expenses of the Cabotage Business increased by $0.7 million or 75.5% to $1.7 million for the six month period ended June 30, 2021, as compared to $1.0 million for the same period during 2020, mainly due to higher voyage expenses, mainly fuel, related to more spot voyages performed. Port terminal expenses increased by $0.1 million or 1.9% to $8.9 million for the six month period ended June 30, 2021, as compared to $8.8 million for the same period during 2020, mainly due to higher volumes transshipped in the Grain Port terminal.

Direct Vessel Expenses: Direct vessel expenses increased by $6.1 million or 26.4% to $29.3 million for the six month period ended June 30, 2021, as compared to $23.2 million for the same period during 2020. Direct vessel expenses of the Barge Business increased by $5.1 million or 43.2% to $16.8 million for the six month period ended June 30, 2021, as compared to $11.7 million for the same period during 2020. The increase was mainly attributable to the increased utilization of our convoys to service the demand of the COA/voyage market. Direct vessel expenses of the Cabotage Business increased by $1.1 million or 9.2% to $12.5 million for the six month period ended June 30, 2021, as compared to $11.4 million for the same period during 2020, mainly due to increased crew costs. Direct vessel expenses include crew costs, victual costs, dockage expenses, lubricants, spares, insurance, maintenance and repairs.

Cost of Products Sold- Liquid Port Terminal: For the six month period ended June 30, 2021, Navios Logistics’ cost of products sold decreased by $7.6 million or 69.4%, to $3.3 million, as compared to $10.9 million for the same period during 2020. This decrease was mainly attributable to the decrease in the Paraguayan liquid port terminal’s volumes of products sold.

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Depreciation and Amortization: For the six month period ended June 30, 2021, Navios Logistics’ depreciation and amortization increased by $0.5 million or 3.0% to $16.8 million, as compared to $16.3 million for the same period during 2020. Depreciation and amortization in the Barge Business increased by $0.5 million or 6.1% to $9.7 million for the six month period ended June 30, 2021, as compared to $9.2 million for the same period during 2020, mainly due to the delivery of each of the six liquid barges completed in the first quarter of 2021 and the 2020 Fleet acquired in the first quarter of 2021. Depreciation and amortization in the Port Terminal Business increased by $0.2 million or 4.4% to $4.4 million for the six month period ended June 30, 2021, as compared to $4.2 million for the same period during 2020, mainly due to increased depreciation expense of tangible assets. Depreciation and amortization in the Cabotage Business decreased by $0.2 million or 8.5% to $2.7 million for the six month period ended June 30, 2021, as compared to $2.9 million for the same period during 2020, mainly due to reduced amortization of dry dock expenses.

Administrative Expenses

Administrative expenses increased by $0.2 million or 3.2% to $7.0 million for the six month period ended June 30, 2021, as compared to $6.8 million for the same period during 2020. Administrative expenses in the Barge Business increased by $0.1 million or 1.9% to $4.3 million for the six month period ended June 30, 2021, as compared to $4.2 million for the same period during 2020. Administrative expenses in the Cabotage Business increased by $0.1 million or 4.9% to $1.1 million for the six month period ended June 30, 2021, as compared to $1.0 million for the same period during 2020. Administrative expenses in the Port Terminal Business remained stable at $1.6 million for both of the six month periods ended June 30, 2021 and 2020. Certain of our administrative expenses are directly charged to their respective segments, while others are allocated proportionally based on headcount.

Other Operating Income

Other operating income increased by $0.7 million or 154.9% to $1.1 million for the six month period ended June 30, 2021, as compared to $0.4 million for the same period in 2020. Other operating income, in the Port Terminal Business increased by $0.6 million to $0.7 million for the six month period ended June 30, 2021, as compared to $0.1 million for the same period of 2020, mainly due to an insurance claim settlement. Other operating income, in the Barge Business increased by $0.1 million or 25.9% to $0.5 million for the six month period ended June 30, 2021, as compared to $0.4 million for the same period of 2020. Other operating income in the Cabotage Business was nil for both of the six month periods ended June 30, 2021 and June 30, 2020.

Other Operating Expenses

Other operating expenses increased by $0.4 million or 24.9% to $1.9 million for the six month period ended June 30, 2021, as compared to $1.5 million for the same period in 2020. Other operating expenses in the Barge Business increased by $0.8 million or 173.2% to $1.3 million for six month period ended June 30, 2021, as compared to $0.5 million for the same period of 2020. This increase was mainly due to the increased taxes other than income taxes, derived from an increase in CoA/Voyage revenues in the Barge Business during the same period. Other operating expenses in the Cabotage Business decreased by $0.5 million or 39.3% to $0.6 million for the six month period ended June 30, 2021, as compared to $1.1 million the same period during 2020. This decrease was mainly due to the decreased taxes other than income taxes, derived from a decrease in revenues in the Cabotage Business during the same period. Other operating expenses in the Port Terminal Business was nil for both of the six month period ended June 30, 2021 and June 30, 2020.

Allowance for Expected Credit Losses on Financial Assets

Allowance for expected credit losses on financial assets decreased by $0.5 million or 74.3% to $0.1 million for the six month period ended June 30, 2021, as compared to $0.6 million for the same period in 2020. Allowance for expected credit losses on financial assets in the Cabotage Business decreased by $0.2 million to nil for the six month period ended June 30, 2021 as compared to $0.2 million for the same period in 2020. Allowance for expected credit losses on financial assets in the Barge Business decreased by $0.2 million or 75.6% to $0.1 million for the six month period ended June 30, 2021, as compared to $0.3 million for the same period in 2020. Allowance for expected credit losses on financial assets in the Port Terminal Business remained stable at $0.1 million for both of the six month period ended June 30, 2021 and 2020.

Operating Profit/(Loss)

Operating profit decreased by $6.8 million or 20.6% to $26.2 million for the six month period ended June 30, 2021, as compared to $33.0 million for the same period in 2021. Operating loss in the Cabotage Business increased by $7.3 million or 115.8% to $1.0 million for the six month period ended June 30, 2021, as compared to $6.3 million profit for the same period in 2020. The decrease was mainly attributable to (a) lower revenue, (b) higher direct vessel expenses, (c) higher time charter, voyage and port terminal expenses and (d) higher administrative expenses, partially offset by (a) lower other operating expenses, (b) lower depreciation and amortization and (c) lower allowance for expected credit losses on financial assets. Operating loss in the Barge Business increased by $2.2 million or 98.7% million to $4.4 million for the six month period ended June 30, 2021 as compared to $2.2 million for the same period in 2020. The increase was mainly attributable to (a) higher direct vessel expenses, (b) lower time charter, voyage

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and port terminal expenses, (c) higher other operating expenses, (d) higher depreciation and amortization and (e) higher administrative expense, partially offset by (a) higher revenue, (b) lower allowance for expected credit losses on financial assets and (c) higher other operating income. Operating profit in the Port Terminal Business increased by $2.7 million or 9.3% to $31.6 million for the six month period ended June 30, 2021, as compared to $28.9 million for the same period in 2020. The increase was mainly attributable to (a) higher revenue and (b) higher other operating income, partially mitigated by (a) higher time charter, voyage and port terminal expenses and (b) higher depreciation and amortization.

Finance Income

Finance income decreased by $0.9 million or 17.3% to $4.0 million for the six month period ended June 30, 2021, as compared to $4.9 million for the same period in 2020. Finance income in the Barge Business decreased by $0.6 million or 25.6% to $1.8 million for the six month period ended June 30, 2021, as compared to $2.4 million for the same period in 2020. Finance income in the Port Terminal Business decreased by $0.5 million or 27.5% to $1.5 million for the six month period ended June 30, 2021, as compared to $2.0 million for the same period in 2020. These decreases were partially offset by a $0.3 million or 69.2% increase in Finance income in the Cabotage Business, to $0.8 million for the six month period ended June 30, 2021, as compared to $0.5 million for the same period in 2020. The overall decrease was mainly due to the lower finance income rate from the Navios Holdings Loan Agreement during the six month period ended June, 2021 as compared to the same period in 2020. Following the amendment of the Navios Holdings Loan Agreement during December 2019, and as a result of the redemption of the 2022 Notes and Term Loan B Facility in July 2020 and the issuance of 2025 Notes (as defined below), the interest rate on the secured credit facility decreased to 10.0% from 12.75%. Effective as of May 2021, and upon the release of certain collateral, the facility bears interest of 13.0% per annum. For the six month period ended June, 2021, finance income is allocated into our segments pro rata to the book value of our tangible assets. For the six month period ended June 30, 2020, finance income was allocated into our segments pro rata to the book value of our interest-bearing loans and borrowings.

Finance Costs

Finance costs increased by $11.0 million or 58.0% to $29.9 million for the six month period ended June 30, 2021, as compared to $18.9 million for the same period in 2020. Finance costs in the Barge Business increased by $4.0 million or 44.2% to $12.9 million for the six month period ended June 30, 2021, as compared to $8.9 million for the same period in 2020. Finance costs in the Cabotage Business increased by $3.6 million or 176.5% to $5.7 million for the six month period ended June 30, 2021, as compared to $2.1 million for the same period in 2020. Finance costs in the Port Terminal Business increased by $3.4 million or 42.4% to $11.3 million for the six month period ended June 30, 2021, as compared to $7.9 million for the same period in 2020. These increases were mainly attributable to the higher weighted average interest rate for the six month period ended June 30, 2021, due to the issuance of the 2025 Notes (as defined below). The annualized weighted average interest rates of the Company’s total borrowings were 10.00% and 6.85% for the six month periods ended June, 2021 and 2020, respectively. Finance costs for the 2025 Notes are allocated into our segments pro rata to the book value of our tangible assets.

Foreign Exchange Differences, Net

Gain from foreign exchange differences increased by $2.0 million to $1.7 million for the six month period ended June 30, 2021, as compared to $0.3 million loss for the same period in 2020. Gain from foreign exchange differences in the Barge Business increased by $2.0 million to $2.1 million for the six month period ended June 30, 2021, as compared to $0.1 million for the same period in 2020. Gain from foreign exchange differences in the Port Terminal Business increased by $0.4 million to less than $0.1 million for the six month period ended June 30, 2021, as compared to a $0.3 million loss for the same period in 2020. Loss from foreign exchange differences in the Cabotage Business increased by $0.3 million to $0.4 million for the six month period ended June 30, 2021, as compared to $0.1 million for the same period in 2020. The overall gain was mainly attributable to the favorable impact of the fluctuation of the U.S. dollar exchange rate against the local currencies in the different countries where we conduct our operations.

Income Tax Benefit/ (Expense):

Income tax expense increased by $0.5 million to $0.3 million for the six month period ended June 30, 2021, as compared to $0.2 million income tax benefit for the same period in 2020. Income tax expense from the Cabotage Business increased by $0.4 million to $1.2 million for the six month period ended June 30, 2021, as compared to $0.8 million for the same period in 2020, mainly due to the reversal of the deferred tax asset recorded for the year ended December 31, 2019, related to impairment losses of the Cabotage Business. Income tax benefit from the Barge Business decreased by $0.1 million to $0.9 million for the six month period ended June 30, 2021, as compared to $1.0 million for the same period in 2020, mainly due to the impact of local foreign exchange differences for the six month period ended June 30, 2021.

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Profit/(Loss) for the Period

Profit for the period decreased by $17.1 million or 91.2% to $1.7 million for the six month period ended June 30, 2021, as compared to $18.8 million for the same period in 2020. Loss for the period in the Cabotage Business increased by $11.3 million to $7.6 million for the six month period ended June 30, 2021, as compared to a $3.7 million profit for the same period in 2020. The increase was mainly attributable to (a) lower operating profit, (b) higher finance costs, (c) higher income tax benefit and (d) higher loss from foreign exchange differences, partially offset by higher finance income. Loss for the period in the Barge Business increased by $5.0 million or 65.4% to $12.6 million for the six month period ended June 30, 2021, as compared to $7.6 million for the same period in 2020. The increase was mainly attributable to (a) higher finance costs, (b) higher operating loss, (c) lower finance income and (d) lower income tax benefit, partially offset by higher gain from foreign exchange differences. Profit for the period in the Port Terminal Business decreased by $0.9 million or 3.9% to $21.9 million for the six month period ended June 30, 2021, as compared to $22.8 million for the same period in 2020. The increase was mainly attributable to (a) higher finance costs and (b) lower finance income, partially offset by (a) higher operating profit and (b) higher gain from foreign exchange differences.

EBITDA Reconciliation to Profit/(Loss)

EBITDA represents profit/(loss) before finance costs, net, depreciation and amortization and income taxes. EBITDA is presented because it is used by certain investors to measure a company’s operating performance. EBITDA is a “non-IFRS financial measure” and should not be considered a substitute for profit, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with IFRS or as a measure of profitability or liquidity. While EBITDA is frequently used as a measure of operating performance, the definition of EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation. Some of these limitations are: (i) EBITDA does not reflect changes in, or cash requirements for, working capital needs; (ii) EBITDA does not reflect the amounts necessary to service interest on our debt and other financing arrangements; and (iii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future. EBITDA does not reflect any cash requirements for such capital expenditures. Because of these limitations, among others, EBITDA should not be considered as a principal indicator of our performance.

Three Month Period Ended June 30, 2021

Three Month Period Ended June 30, 2020

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For the six month period ended June 30, 2021

For the six month period ended June 30, 2020

Liquidity and Capital Resources

We have historically financed our capital requirements with cash flows from operations, equity contributions from stockholders, borrowings under our credit facilities and issuance of other debt. Our main uses of funds have been capital expenditures for the acquisition of new vessels, new construction and upgrades at the port terminals, expenditures incurred in connection with ensuring that our owned vessels comply with international and regulatory standards, repayments of debt and payments of dividends. We may also use funds to repurchase our outstanding indebtedness from time to time. Repurchases may be made in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms we deem appropriate and subject to our cash requirements for other purposes, compliance with the covenants under our debt agreements, and other factors management deems relevant. In addition, we regularly review opportunities for acquisitions of businesses and additional vessels, development of new facilities and infrastructure, joint ventures and other corporate transactions that may be material to us. In connection with any such transactions, we may need to raise significant amounts of capital, including debt. We do not have any material contractual arrangements for such transactions at this time. See “— Working Capital”, “— Capital Expenditures” and “— Interest-bearing loans and borrowings” for further discussion of our working capital position.

The following table presents cash flow information derived from the unaudited condensed consolidated statements of cash flows of Navios Logistics for the six month periods ended June 30, 2021 and 2020.

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Cash provided by operating activities for the six month period ended June 30, 2021 as compared to cash provided by operating activities for the six month period ended June 30, 2020:

Net cash provided by operating activities decreased by $20.0 million to $8.0 million for the six month period ended June 30, 2021, as compared to $28.0 million for the same period during 2020.

In determining net cash from operating activities, profit is adjusted for the effect of certain non-cash items including depreciation and amortization which are analyzed in detail in our Consolidated Statement of Cash Flows for the Six Month Period Ended June 30, 2021 and 2020, included elsewhere in this report.

Profit is adjusted for changes in working capital in order to determine net cash provided by operating activities.

The negative change in working capital of $12.9 million for the six month period ended June 30, 2021 resulted from a $14.3 million increase in trade receivables and contract assets, a $2.7 million increase in prepayments and other assets, a $2.4 million increase in inventories, partially offset by a $6.4 million increase in trade and other payables and contract liabilities.

Interest paid increased by $13.6 million to $31.6 million for the six month period ended June 30, 2021, as compared to $18.0 million for the same period in 2020. The increase was mainly attributable to the interest payment of the 2025 Notes. The 2025 Notes have interest payments due in the first and third quarters of each year, compared to the 2022 Notes that had interest payments due in the second and fourth quarters of each year.

The negative change in working capital of $3.4 million for the six month period ended June 30, 2020 resulted from a $3.0 million increase in trade receivables and contract assets, a $2.8 million increase in inventories, a $1.6 million increase in prepayments and other assets, partially offset by a $4.1 million increase in trade and other payables and contract liabilities.

Cash used in investing activities for the six month period ended June 30, 2021 as compared to the six month period ended June 30, 2020:

Net cash used in investing activities increased by $18.6 million to $24.6 million for the six month period ended June 30, 2021, from $5.9 million for the same period during 2020.

Cash used in investing activities for the six month period ended June 30, 2021 was mainly the result of (a) $15.4 million in payments for the acquisition of three pushboats and 18 liquid barges, (b) $4.6 million in payments for the purchase of tangible assets, (c) $3.1 million for the construction of a crane, (d) $1.2 million in payments for the construction of our six new liquid barges, (e) $0.2 million in payments for the construction of our two new tanks and (f) $0.1 million in payments for the development of our port operations in Port Murtinho region of Brazil.

Cash used in investing activities for the six month period ended June 30, 2020 was mainly the result of (a) $4.4 million in payments for the purchase of fixed assets, (b) $0.7 million in investment providing a secured credit facility to our parent, (c) $0.5 million in payments for the construction of our two new tanks and (d) $0.4 million in payments for the construction of the Company’s six new liquid barges, partially mitigated by $0.1 million in collections from net investment in the lease.

Cash used in financing activities for the six month period ended June 30, 2021 as compared to cash used in financing activities for the six month period ended June 30, 2020:

Net cash used in financing activities decreased by $23.4 million to $10.8 million for the six month period ended June 30, 2021, as compared to $34.2 million cash used in financing activities for the same period during 2020.

Cash used in financing activities for the six month period ended June 30, 2021 was due to (a) $8.2 million in payments made in connection with the Company’s outstanding indebtedness, (b) $2.3 million in payments for the repayment of the Notes Payable (as defined below) and (c) $0.3 million in payment for the principal portion of our lease liabilities.

Cash used in financing activities for the six month period ended June 30, 2020 was due to (a) $27.5 million dividend paid to common shareholders, (b) $4.1 million in payments made in connection with the Company’s outstanding indebtedness, (c) $2.2 million in payments for the repayment of the Notes Payable (as defined below) and (d) $0.4 million in payment of principal portion of lease liabilities.

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Interest-Bearing Loans and Borrowings

Senior Notes

2025 Notes

On July 8, 2020, Navios Logistics and its wholly-owned subsidiary Navios Logistics Finance (US) Inc. (“Logistics Finance” and, together with Navios Logistics, the “Co-Issuers”) issued $500.0 million in aggregate principal amount of senior secured notes due 2025 (“the 2025 Notes”), at a fixed rate of 10.75%. The net proceeds from the offering of the 2025 Notes were used to satisfy and discharge the indenture governing the 2022 Notes, to repay all amounts outstanding under the Term Loan B Facility and to pay certain fees and expenses related to the offering, with the balance to be used for general corporate purposes.

On or after August 1, 2022, the Co-Issuers may redeem some or all of the 2025 Notes at the redemption prices set forth in the indenture governing the 2025 Notes. In addition, before August 1, 2022, the Co-Issuers may redeem up to 35% of the aggregate principal amount of the 2025 Notes at a price equal to 110.750% of the principal amount of the 2025 Notes to be redeemed plus accrued and unpaid interest, if any, to the redemption date with an amount equal to the net cash proceeds of one or more equity offerings so long as at least 50% of the originally issued aggregate principal amount of the 2025 Notes remains outstanding. Prior to August 1, 2022, the Co-Issuers may also redeem all or a part of the 2025 Notes at a redemption price equal to the sum of: (a) 100% of the principal amount of the 2025 Notes to be redeemed; plus (b) the applicable “make-whole” premium described in the indenture governing the 2025 Notes, plus (c) accrued and unpaid interest, if any, on the 2025 Notes to be redeemed, to (but excluding) the applicable redemption date, subject to the right of holders of notes on the relevant record date to receive interest due on all the relevant interest payment dates. The Co-Issuers may also redeem all, but not less than all, of the 2025 Notes at a price equal to 100% of the principal amount plus accrued and unpaid interest, if any, upon certain changes in law that would trigger the payment of withholding taxes. Furthermore, upon the occurrence of certain change of control events, the Co-Issuers may be required to offer to purchase 2025 Notes from holders at a price equal to 100% of the principal amount plus accrued and unpaid interest, if any.

The 2025 Notes are senior secured obligations of the Co-Issuers and rank equal in right of payment to all of their existing and future senior indebtedness and senior in right of payment to all of their future subordinated indebtedness. The 2025 Notes are fully and unconditionally guaranteed, jointly and severally, by all of the Company’s direct and indirect subsidiaries, other than Logistics Finance and Grimaud Ventures S.A. (“Grimaud”). The 2025 Notes are secured by (i) first priority ship mortgages on four tanker vessels servicing the Company’s Cabotage Business (the (1) Elena H, (2) Makenita H, (3) Sara H and (4) He Man H) owned by certain subsidiary guarantors (such guarantors, the “Mortgaged Vessel Guarantors”) and related assignments of earnings and insurance together with a first priority lien on the capital stock of each Mortgaged Vessel Guarantor and (ii) an assignment by way of security of the Vale Port Contract (collectively, the “Collateral”). The 2025 Notes will be effectively senior to all existing and future obligations of the subsidiary guarantors that own Collateral to the extent of the value of the Collateral but effectively junior to any existing and future secured obligations of the Co-Issuers and the subsidiary guarantors that are secured by assets other than the Collateral to the extent of the value of any assets securing such other obligations.

The indenture governing the 2025 Notes contains restrictive covenants that limit, among other things, the ability of the Co-Issuers and their subsidiaries to incur additional indebtedness, pay dividends and make distributions on common and preferred stock, make other restricted payments, make investments, incur liens, consolidate, merge, sell or otherwise dispose of all or substantially all of their assets and enter into certain transactions with affiliates, in each case, subject to exclusions, and other customary covenants. The indenture governing the 2025 Notes also contains customary events of default.

As of June 30, 2021 and December 31, 2020, deferred finance costs associated with the 2025 Notes amounted to $17.7 million and $19.4 million, respectively. Finance costs associated with the 2025 Notes amounted to $13.4 million and $26.7 million for the three and six month periods ended June 30, 2021, respectively (nil for each of the three and six month periods ended June 30, 2020).

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2022 Notes

On April 22, 2014, the Co-Issuers issued $375.0 million in aggregate principal amount of Senior Notes due May 1, 2022 (the “2022 Notes”), at a fixed rate of 7.25%. The 2022 Notes were redeemed in full on July 16, 2020 at 100% of their face amount, plus accrued and unpaid interest to the redemption date with the proceeds of the Co-Issuers’ 2025 Notes.

Finance costs associated with the 2022 Notes amounted to nil for each of the three and six month periods ended June 30, 2021 ($6.8 million and $13.6 million for the three and six month periods ended June 30, 2020, respectively).

Term Loan B Facility

On November 3, 2017, Navios Logistics and Logistics Finance, as co-borrowers, completed the issuance of a $100.0 million Term Loan B Facility (the “Term Loan B Facility”). The Term Loan B Facility bore an interest rate of LIBOR plus 475 basis points and had a four-year term with 1.0% amortization per annum. The Term Loan B Facility was repaid in full on July 8, 2020 at par plus accrued and unpaid interest to the repayment date with the proceeds of the Co-Issuers’ 2025 Notes.

Finance costs associated with the Term Loan B Facility amounted to nil for each of the three and six month periods ended June 30, 2021 ($1.5 million and $3.1 million, respectively, for the three and six month periods ended June 30, 2020).

Notes Payable

In connection with the purchase of mechanical equipment for the expansion of its dry port terminal, the Company entered into an unsecured export financing line of credit for a total amount of $42.0 million, including all related fixed finance costs of $5.9 million, available in multiple drawings upon the completion of certain milestones (“Drawdown Events”). The Company incurs the obligation for the respective amount drawn by signing promissory notes (“Notes Payable”). Each drawdown is repayable in 16 consecutive semi-annual installments, starting six months after the completion of each Drawdown Event. Together with each Note Payable, the Company shall pay interest equal to six-month LIBOR. The unsecured export financing line is fully and unconditionally guaranteed by Ponte Rio S.A.. As of June 30, 2021, the Company had drawn the total available amount and the outstanding balance of Notes Payable was $15.5 million.

Finance costs associated with the Notes Payable amounted to $0.2 million and $0.3 million for the three and six month periods ended June 30, 2021, respectively ($0.3 million and $0.6 million, respectively, for the three and six month periods ended June 30, 2020).

Other Indebtedness

On December 15, 2016, the Company entered into a $25.0 million facility with Banco Bilbao Vizcaya Argentaria Uruguay S.A. (“BBVA”), for general corporate purposes. On July 8, 2020, this loan was repaid in full in connection with drawing the New BBVA Facility.

On February 28, 2020, the Company entered into a $25.0 million loan facility (the “New BBVA Facility”) with BBVA, which was drawn on July 8, 2020. The New BBVA Facility was used to repay the existing loan facility with BBVA, and for general corporate purposes. The New BBVA Facility bears interest at a rate of LIBOR (180 days) plus 325 basis points, is repayable in quarterly installments with final maturity on March 31, 2022 and is secured by assignments of certain receivables. As at June 30, 2021, the outstanding balance was $15.5 million.

On May 18, 2017, the Company entered into a $14.0 million term loan facility (the “Term Bank Loan”) in order to finance the acquisition of two product tankers. The Term Bank Loan bears interest at a rate of LIBOR (90 days) plus 315 basis points and is repayable in twenty quarterly installments with a final balloon payment of $7.0 million on the last repayment date. As of June 30, 2021, the outstanding amount of the Term Bank Loan was $8.4 million. As of June 30, 2021 and December 31, 2020, unamortized deferred financing costs associated with the Term Bank Loan amounted to less than $0.1 million and less than $0.1 million, respectively.

In December 2020, the Company entered into a $13.5 million seller’s credit agreement for the construction of six liquid barges to be made available by way of credit in six equal tranches. Each drawdown is repayable in 20 quarterly installments starting from the delivery of each barge. The seller’s credit for the construction of the six liquid barges bears interest at a fixed rate of 8.5%. As of June 30, 2021, the Company had drawn

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the total available amount and the outstanding balance was $12.4 million. Finance costs associated with the seller’s credit agreement for the construction of six liquid barges amounted to $0.3 million and $0.6 million for the three and six month periods ended June 30, 2021 (nil for each of the three and six month periods ended June 30, 2020).

In the fourth quarter of 2020, Navios Logistics entered into a purchase agreement with an unrelated third party for the acquisition of three pushboats and 18 liquid barges (the “2020 Fleet”). The acquisition was completed on March 22, 2021, and the Company entered into a $15.0 million seller’s credit agreement for the acquisition of the 2020 Fleet. The seller’s credit agreement bears interest at a fixed rate of 5.0% per annum and is payable in three equal annual installments of $5.0 million. Finance costs associated with the seller’s credit agreement for the acquisition of the 2020 Fleet amounted to $0.2 million and $0.2 million for the three and six month periods ended June 30, 2021 (nil for each of the three and six month periods ended June 30, 2020).

In connection with the acquisition of Hidronave S.A. on October 29, 2009, the Company assumed a $0.8 million loan facility that was entered into by Hidronave S.A. in 2001, in order to finance the construction of the pushboat Nazira. As of June 30, 2021, the outstanding balance of the loan facility of Hidronave S.A. was less than $0.1 million. The loan facility bears interest at a fixed rate of 600 basis points. The loan is repayable in monthly installments and the final repayment must occur prior to August 10, 2021.

In connection with the loan and other long term liabilities, the Company is subject to certain covenants, commitments, limitations and restrictions.

The Company was in compliance with all such covenants as of June 30, 2021.

The annualized weighted average interest rates of the Company’s total interest-bearing loans and borrowings were 9.96% and 10.00% for the three and six month periods ended June 30, 2021, respectively (6.83% and 6.85% for the three and six month periods ended June 30, 2020, respectively).

As of June 30, 2021, an amount of $22.9 million ($26.3 million as of December 31, 2020) was included under “Trade and other payables” in the Company’s statement of financial position related to accrued interest from our interest-bearing loans and borrowings.

The maturity table below reflects future payments of the long-term interest-bearing loans and borrowings and interest outstanding as of June 30, 2021, for the next five years and thereafter.

Contractual Obligations

The following table summarizes our contractual obligations as of June 30, 2021:

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Working Capital Position

On June 30, 2021, Navios Logistics’ current assets totaled $189.9 million, while current liabilities totaled $102.4 million, resulting in a positive working capital position of $87.5 million. Navios Logistics’ cash forecast indicates that Navios Logistics will generate sufficient cash for at least the next 12 months to make the required principal and interest payments on Navios Logistics’ indebtedness, provide for the normal working capital requirements of the business and remain in a positive cash position.

Capital Expenditures

During the first quarter of 2021, Navios Logistics completed the construction of six liquid barges and a total of $19.5 million was included under “Tangible assets” in our consolidated statement of financial position.

During the first quarter of 2021, Navios Logistics completed the construction of two new tanks in its liquid port terminal and a total of $1.8 million was transferred to “Tangible assets” in our consolidated statement of financial position.

Since 2018, we acquired approximately 6.6 hectares of undeveloped land located in the Port Murtinho region of Brazil and on March 24, 2021, we acquired 2.3 additional hectares. We plan to develop this land for our port operations. As of June 30, 2021, we had paid $2.3 million for the land acquisition and capitalized expenses for the development of our port operations.

In the fourth quarter of 2020, Navios Logistics entered into a purchase agreement with an unrelated third party for the acquisition of the 2020 Fleet, for a purchase price of $30.0 million. The acquisition was completed on March 22, 2021. As of June 30, 2021, a total of $32.0 million was transferred to “Tangible assets” in our consolidated statement of financial position.

During the second quarter of 2021, Navios Logistics completed the construction of a crane in its grain port terminal and a total of $3.8 million was transferred to “Tangible assets” in our consolidated statement of financial position.

Dividend Policy

The payment of dividends is at the discretion of Navios Logistics’ board of directors. Any determination as to dividend policy will be made by Navios Logistics’ board of directors and will depend on a number of factors, including the requirements of Marshall Islands law, Navios Logistics’ future earnings, capital requirements, financial condition and future prospects and such other factors as Navios Logistics’ board of directors may deem relevant. Marshall Islands law generally prohibits the payment of dividends other than from surplus, when a company is insolvent or if the payment of the dividend would render the company insolvent. Navios Logistics’ ability to pay dividends is also restricted by the terms of the indenture governing its 2025 Notes.

Because Navios Logistics is a holding company with no material assets other than the stock of its subsidiaries, its ability to pay dividends is dependent upon the earnings and cash flow of its subsidiaries and their ability to pay dividends to Navios Logistics. If there is a substantial decline in any of the markets in which Navios Logistics participates, its earnings will be negatively affected, thereby limiting its ability to pay dividends.

On February 21, 2020, the Company declared and paid a pro rata dividend to its shareholders in the aggregate amount of $27.5 million.

On July 10, 2020, the Company declared and paid a pro rata dividend to its shareholders in cash or shares of Navios Holdings in the aggregate amount of $6.4 million.

On July 30, 2021, the Company declared and paid a pro rata dividend to its shareholders in shares of Grimaud, representing 100% of Navios Logistics’ equity interest in Grimaud.

Concentration of Credit Risk

Accounts Receivable

Concentration of credit risk with respect to accounts receivables is limited due to our large number of customers, who are established international operators and have an appropriate credit history. Due to these factors, management believes that no additional credit risk, beyond amounts provided for collection losses, is inherent in our trade receivables. See “Item 3. Key Information — D. Risk Factors — We depend on a few significant customers for a large part of our revenues, and the loss of one or more of these customers could materially and adversely affect our revenues.” in the 2020 Form 20-F.

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In each of our businesses, we derive a significant part of our revenues from a small number of customers. We expect that a small number of customers will continue to generate a substantial portion of our revenues for the foreseeable future. For the six month period ended June 30, 2021, our two largest customers, Vale International S.A. (“Vale”) and YPF S.A. (“YPF”), accounted for 23.5% and 10.3% of our revenues, respectively, and our five largest customers accounted for approximately 52.0% of our revenues, with no such customer (other than Vale and YPF) accounting for more than 10% of our revenues. For the six month period ended June 30, 2020, our largest customer, Vale, accounted for 34.4% of our revenues, and our five largest customers accounted for approximately 62.5% of our revenues, with no customer (other than Vale) accounting for more than 10% of our revenues. In addition, some of our customers, including many of our most significant customers, operate their own vessels and/or barges as well as port terminals. These customers may decide to cease or reduce the use of our services for various reasons, including employment of their own vessels or port terminals as applicable. The loss of any of our significant customers, including our large take-or-pay customers or the change of the contractual terms of any one of our most significant take-or-pay contracts or any significant dispute with one of these customers could materially adversely affect our financial condition and our results of operations.

If one or more of our customers does not perform under one or more contracts with us and we are not able to find a replacement contract, or if a customer exercises certain rights to terminate the contract, we could suffer a loss of revenues that could materially adversely affect our business, financial condition and results of operations.

We could lose a customer or the benefits of a contract if, among other things:

Cash Deposits with Financial Institutions

Cash deposits in excess of amounts covered by government-provided insurance are exposed to loss in the event of nonperformance by financial institutions. Although we maintain cash deposits in excess of government-provided insurance limits we minimize our exposure to credit risk by dealing with a diversified group of major financial institutions.

Off-Balance Sheet Arrangements

On July 22, 2016, the Company guaranteed the compliance of certain obligations related to Edolmix S.A. and Enresur (entities wholly owned by the Company) under their respective direct user agreements with the Free Zone of Nueva Palmira, for the amounts of $0.8 million and $0.5 million, respectively.

The Company issued a guarantee and indemnity letter that guarantees the performance by Petrolera San Antonio S.A. (a consolidated subsidiary) of all its obligations to Vitol up to $12.0 million. This guarantee expires on March 1, 2022.

Legal Proceedings and Commitments and Contingencies

The Company is subject to legal proceedings, claims and contingencies arising in the ordinary course of business. When such amounts can be estimated and the contingency is probable, management accrues the corresponding liability. While the ultimate outcome of lawsuits or other proceedings against us cannot be predicted with certainty, management does not believe the costs, individually or in aggregate, of such actions will have a material effect on our consolidated financial position, results of operations or cash flows.

In September 2020, the Company agreed to a settlement regarding a storage and transshipment contract in the grain port terminal for a total amount of $4.1 million, which will be collected in three equal installments of $1.4 million on June 1, 2021, 2022 and 2023. In June 2021, the Company collected the first installment.

On July 30, 2021, Navios Logistics issued a $20.0 million promissory note to Grimaud. The promissory note is payable in four semiannual equal installments commencing on August 15, 2021.

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Related Party Transactions

As of June 30, 2021 and December 31, 2020, amounts due from affiliate companies were as follows:

Amounts due from affiliate companies do not accrue interest and do not have a specific due date for their settlement apart from the Navios Holdings Loan Agreement (as defined below).

The Navios Holdings Loan Agreement: On April 25, 2019, Navios Logistics agreed to lend Navios Holdings up to $50.0 million on a secured basis (the “Navios Holdings Loan Agreement”) to be used for general corporate purposes, including the repurchase of Navios Holdings’ 7.375% First Priority Ship Mortgage Notes due 2022 (the “Navios Holdings 2022 Notes”). The secured credit facility is secured by Navios Holdings 2022 Notes purchased with secured credit facility funds. The secured credit facility included an arrangement fee of $0.5 million and bears fixed interest of 12.75% for the first year and 14.75% for the second year. The secured credit facility also includes negative covenants substantially similar to the 2022 Notes and customary events of default. On December 2, 2019, Navios Logistics agreed to increase the secured credit facility by $20.0 million. Following this amendment, as a result of the redemption of the 2022 Notes and Term Loan B Facility in July 2020 and the issuance of 2025 Notes, (a) the interest rate on the secured credit facility decreased to 10.0%, and (b) the maturity of the secured credit facility was extended to December 2024, and is repayable in four equal annual installments. Effective as of May 2021, and upon the release of certain collateral, the facility bears interest of 13.0% per annum. As of June 30, 2021, the full amount was drawn under the secured credit facility. The arrangement fee is amortized in income following the effective interest rate method over the life of the credit facility, resulting in $0.1 million deferred income as of June 30, 2021. For the three and six month period ended June 30, 2021, interest income related to Navios Holdings Loan Agreement amounted to $2.2 million and $3.9 million, respectively ($2.4 million and $4.6 million, respectively, for the three and six month periods ended June 30, 2020). As of June 30, 2021, an amount of $1.5 million ($5.2 million as of December 31, 2020) was included under “Financial assets at amortized cost (related party)” in our consolidated statement of financial position related to accrued interest to be collected from Navios Holdings.

On June 24, 2020, we entered into a deed of assignment and assumption with our wholly-owned subsidiary, Grimaud and Anemos Maritime Holdings Inc. in respect of the Navios Holdings Loan, in which we assigned its legal and beneficial right, title and interest in the Navios Holdings Loan to Grimaud. On June 25, 2020, Grimaud agreed to amend the Navios Holdings Loan Agreement to amend the interest payment date in respect of the Navios Holdings Loan and to allow a portion of the total interest payable in respect of the Navios Holdings Loan to be effected in common shares of Navios Holdings. On July 10, 2020, Navios Holdings issued 2,414,263 shares of common stock to Grimaud and paid Grimaud $6.4 million in satisfaction of the interest payable in respect of the Navios Holdings Loan.

On June 30, 2021, Grimaud entered into a supplemental agreement (the “Supplemental Navios Holdings Loan Agreement”) to the loan agreement dated as of April 25, 2019 with Navios Holdings (as amended, the “Navios Holdings Loan Agreement”), whereby Grimaud and Navios Holdings agreed to amend the Navios Holdings Loan Agreement so that the Navios Holdings Loan Agreement may be repaid or prepaid in full through the issuance of shares of common stock of Navios Holdings (the “Shares”) to Grimaud. The effectiveness of the Supplemental Navios Holdings Loan Agreement was subject to, and contingent upon, a prepayment by Navios Holdings of the Navios Holdings Loan Agreement in the amount of $7.5 million in cash and the effectiveness of a registration statement of Navios Holdings registering the resale of 9,301,542 Shares, among other conditions. Consequently, as of June 30, 2021, an amount of $69.9 million was included under “Intercompany receivable loan from parent (related party), current portion” in our consolidated statement of financial position. On July 13, 2021 following the completion of all conditions precedent, the Shares were transferred to Grimaud and the Navios Holdings Loan Agreement was repaid in full. Subsequently, Grimaud entered into a 10b-5 sales agreement for the sale of the Shares.

Administrative expenses: On August 29, 2019 Navios Logistics entered into an assignment agreement with Navios Corporation (“NC”) and Navios Shipmanagement Inc. (“NSM”), whereby the administrative services agreement originally entered into between Navios Logistics and Navios Holdings on April 12, 2011, first assigned to NC on May 28, 2014 and subsequently amended on April 6, 2016 (extending the duration of the agreement until December 2021), was assigned from NC to NSM. Thereafter NSM will continue to provide certain administrative management services to Navios Logistics. NSM will be reimbursed for reasonable costs and expenses incurred in connection with the provision of these services. Total administrative expenses charged for the three and six month periods ended June 30, 2021 amounted to $0.3 million and $0.6 million, respectively $0.3 million and $0.6 million for the three and six month periods ended June 30, 2020, respectively).

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Lodging and travel services: Navios Logistics obtains lodging and travel services from Empresa Hotelera Argentina S.A./(NH Lancaster), Divijet S.A., Trace Capital and Pit Jet S.A., all owned by members of the Lopez family, including Claudio Pablo Lopez, Navios Logistics’ Chief Executive Officer and Vice Chairman and Carlos Augusto Lopez, Navios Logistics’ Chief Commercial Officer—Shipping Division, each of whom has no controlling interest in those companies. Total charges were nil for each of the three and six month periods ended June 30, 2021 (less than $0.1 million for the three and six month periods ended June 30, 2020, respectively), and amounts payable amounted to less than $0.1 million as of June 30, 2021 and December 31, 2020.

Quantitative and Qualitative Disclosures about Market Risks

We are exposed to certain risks related to interest rate, foreign currency, fuel price inflation and time charter hire rate fluctuation. Risk management is carried out under policies approved by executive management.

Interest Rate Risk:

Debt Instruments—As of June 30, 2021 and December 31, 2020, Navios Logistics had a total of $566.8 million and $560.0 million, respectively, in long-term indebtedness. The debt is dollar denominated.

Interest rates on the Nazira Loan, the seller’s credit for the construction of six liquid barges, the 2025 Notes and the credit agreement for the acquisition of the 2020 Fleet are fixed and, therefore, changes in interest rates affect their fair value, which as of June 30, 2021 was less than $0.1 million, $12.4 million, $554.4 million and $15.0 million, respectively, but do not affect the related finance cost. The interest on the Notes Payable, the New BBVA Facility and the Term Bank loan is at a floating rate and, therefore, changes in interest rates would affect their interest rate and related finance cost. As of June 30, 2021, the amount outstanding under the Company’s floating rate loan facilities was $39.4 million. A change in the LIBOR rate of 100 basis points would increase finance costs for the six month period ended June 30, 2021 by $0.4 million.

For a detailed discussion of Navios Logistics’ debt instruments refer to section “Interest-Bearing Loans and Borrowings” included elsewhere in this document.

Foreign Currency Transactions:

We are exposed to foreign currency exchange transaction risk related to funding our operations. For the six month periods ended June 30, 2021 and 2020 approximately 53.7%, and 46.1%, respectively, of our expenses were incurred in currencies other than U.S. dollars. Further, for the six month period ended June, 2021, approximately 25%, 18% and 10% of the Company’s $66.5 million of combined cost of (a) time charter, voyage and port terminal expenses, (b) direct vessels expenses, (c) cost of products and (d) administrative expenses, net of depreciation (“Combined Cost”), were denominated in Argentinean pesos, Paraguayan guaranies and Uruguayan pesos, respectively. Comparatively, the same foreign currencies accounted for approximately 20%, 16% and 11%, respectively, of our $64.2 million of Combined Cost for the six month period ended June 30, 2020. For the six month periods ended June 30, 2021 and 2020, Brazilian reais accounted for less than 1% of our Combined Cost.

For the six month period ended June 30, 2021, a 1.00% change in the exchange rates between the U.S. dollar and Argentinean pesos, Paraguayan guaranies and Uruguayan pesos would change our profit for the year by $0.2 million, $0.1 million and less than $0.1 million, respectively. Comparatively, a 1.00% change in the same exchange rates would change our profit for the period ended June 30, 2020 by $0.1 million, less than $0.1 million and less than $0.1 million, respectively.

Inflation and Fuel Price Increases

See “Factors Affecting Navios Logistics’ Results of Operations.”

Critical Accounting Policies

The Navios Logistics’ interim condensed consolidated financial statements have been prepared in accordance with IFRS. The preparation of these financial statements requires Navios Logistics to make estimates in the application of its accounting policies based on the best assumptions, judgments and opinions of management.

The Company’s most critical accounting policies and estimates are those that involve subjective decisions or assessments and are included in the Company’s 2020 Form 20-F.

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Recent Accounting Pronouncements

The Company’s recent accounting pronouncements are included in the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this report.

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INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

F-1

NAVIOS SOUTH AMERICAN LOGISTICS INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(Expressed in thousands of U.S. dollars)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-2

NAVIOS SOUTH AMERICAN LOGISTICS INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Expressed in thousands of U.S. dollars)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-3

NAVIOS SOUTH AMERICAN LOGISTICS INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Expressed in thousands of U.S. dollars)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-4

NAVIOS SOUTH AMERICAN LOGISTICS INC.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

(Expressed in thousands of U.S. dollars)