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: June 2, 2023

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  ☐

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-month periods ended March 31, 2023 and 2022. 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’ 2022 annual report on Form 20-F filed with the Securities and Exchange Commission on March 27, 2023 (the “2022 Form 20-F”) and the unaudited 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. Factors that could cause actual results to differ include, but are not limited to, risks relating to: global and regional economic and political conditions; changes in demand for the transportation or storage of grain and mineral commodities and petroleum products; the planned development of Navios Logistics’ Port Murtinho Terminal and Nueva Palmira Free Zone port terminal facilities; changing vessel crews and availability of financing; potential disruption of shipping routes due to accidents, wars, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of global pandemics; the aging of our fleets and resultant increases in operating costs; loss of any customer or charter or vessel; the financial condition of our customers; changes in the availability and costs of funding due to conditions in the bank market, capital markets and other factors; increases in costs and expenses related to the operation of vessels (including but not limited to costs associated with crew wages, insurance, provisions, port expenses, lube oil, bunkers, repairs, maintenance, and general and administrative expenses); the expected cost of, and the ability to comply with, governmental regulations and maritime self-regulatory organization standards, as well as standard regulations imposed by charterers; competitive factors in the markets in which Navios Logistics operates; risks associated with operations outside the United States; and other factors listed from time to time in the filings Navios Logistics makes with the SEC, including its Forms 20-F and Forms 6-K, including the section entitled “Item 3. Key Information—D. Risk Factors” in the 2022 Form 20-F. Navios Logistics expressly disclaims any obligation or undertaking to release publicly any update or revision to any forward-looking statements contained herein to reflect any change in our expectations with respect to any such statement, or any change in events, conditions or circumstances on which any such statement is based.

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 infrastructure and logistics companies in the Hidrovia river system, the main navigable river system in the region, and on the cabotage trades along the southeastern coast of South America. We have three reportable segments: the Port Terminal Business, the Cabotage Business and the Barge Business. The Port Terminal Business includes dry port terminal operations and liquid port terminal operations. A general description of each segment follows:

Port Terminal Business

We own three port storage and transfer facilities: a grain port terminal (the “ Grain Port Terminal”), which supports agricultural and forest-related exports; an iron ore port terminal (the “ Iron Ore Port Terminal”), which supports mineral-related exports; and a liquid port terminal (the “ Liquid Port Terminal”), which provides tank storage for refined petroleum products. The Grain Port Terminal and the Iron Port Terminal are located in Nueva Palmira, Uruguay, and the Liquid Port Terminal is located in San Antonio, Paraguay. In October 2022, we commenced providing bunkering services using floating storage capacity in the port of Nueva Palmira. Our port facilities in Nueva Palmira have a total static grain-storage capacity of 460,000 metric tons, and a mineral-ore-stockpile capacity of 1,246,000 tons following the completion of a new stockpile area in the second quarter of 2023. The Liquid Port Terminal has a total static storage capacity of 65,660 cubic meters. The Grain Port Terminal, together with the Iron Ore Terminal, may be collectively referred to in this report as our “Dry Port Terminals.”

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The Cabotage Business

We own and operate ocean-going vessels to support the transportation needs of our customers in the South American coastal-trade business. Our fleet consists of five ocean-going product tanker vessels, a river and estuary tanker vessel and a bunker vessel. We contract our vessels either on a time charter basis or on a contract of affreightment (“CoA”) basis.

The Barge Business

We service the Argentine, Bolivian, Brazilian, Paraguayan and Uruguayan river transportation markets through our fleet of 301 vessels, including 271 barges and 30 pushboats. We operate different types of pushboats and wet and dry barges for delivering a wide range of dry and liquid products between ports in the Parana, Paraguay and Uruguay River systems in South America (the Hidrovia or the “waterway”). Navios Logistics contracts its vessels either on a time charter basis or on a CoA basis. We provide transportation for dry cargo (cereals, cotton pellets, soy bean, wheat, limestone (clinker), mineral iron and rolling stones), liquid cargo (hydrocarbons such as crude oil, gas oil, naphtha, fuel oil and vegetable oils) and liquefied cargo (liquefied petroleum gas (“LPG”)).

Fleet

Our current core fleet consists of a total of 308 owned vessels, barges and pushboats.

The following is the current core fleet as of June 2, 2023:

Navios Logistics Fleet Summary (owned)

Chartering Arrangements

We continually monitor developments in the shipping industry and make operational decisions based on an individual vessel and segment basis, and 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 CoAs (some of which have minimum guaranteed volumes), and spot contracts. In the Cabotage Business, we typically operate under time charters with terms in excess of one year. Some of our charters provide fixed pricing, minimum-volume requirements, and adjustment formulas for labor cost and fuel price.

Factors Affecting Navios Logistics’ Results of Operations

For further discussion on factors affecting our results of operations, see “Item 3. Key Information — D. Risk Factors” included in the 2022 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 the Countries in which we Operate” in the 2022 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 employ our fleet and ports upon the expiration or termination of current contracts. This ability depends mainly upon economic conditions in the economic 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 transshipment and storage of commodities.

Weather Conditions

In our Barge Business, we transport cargo along the Paraguay and Parana Rivers from Puerto Caceres (Brazil) to Nueva Palmira (Uruguay)(the “Hidrovia Waterway”). Thus, weather-related changes adversely affecting the region, such as low water levels, could reduce or limit our ability to transport cargo effectively along the Hidrovia Waterway. 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, stores, and transships, which could result in a reduction in demand for our port and transportation 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 peso, Argentine peso, Brazilian real and Paraguayan guarani. 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 recorded 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 profit/(loss).

Inflation and Fuel Price Increases

The impact of inflation on prices in the South American countries in which we operate and the effects of the current war in Ukraine 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 Barge and Cabotage Businesses, we negotiated, and will continue to negotiate, fuel price adjustment clauses; however, in some cases, prices that we pay for fuel 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. The high season for the Dry Port Terminals’ Uruguayan operations occurs from April to September and is linked to the South American harvest and the arrival of barges down the river. The high season for the Barge Business is between February and July as a result of the South American harvest and higher river levels. During the South American late spring and summer, mainly from November to January, the low water level in the northern Hidrovia waterway could adversely affect operations of the Barge Business and the volumes it transports. To the extent water levels are insufficient to accommodate the draft of a heavily laden vessel, a vessel may be only partially loaded, generating lower revenue under agreements where revenue is based on volume of cargo loaded. If water levels on a waterway are too low, vessels could be prevented entirely from loading and navigating. In addition, low water levels create difficult navigation conditions, causing voyages to last longer and to incur increased voyage expenses. Such circumstances reduce the effective available carrying capacity of the vessel for the year. Our Liquid Port Terminal and our Cabotage Business are not significantly affected by seasonality as their operations are primarily linked to refined petroleum products, and thus not significantly affected by water levels.

Statement of Operations Breakdown by Segments

We report our operations based on three reportable segments: Port Terminal Business, Cabotage Business and Barge Business. The Port Terminal Business segment includes the operating results of our Dry Port Terminals and the Liquid Port Terminal operations.

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Our Dry Port Terminals comprise our Grain Port Terminal and our Iron Ore Port Terminal, each of which is 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, located in San Antonio, Paraguay, approximately 17 miles by river from the capital, Asuncion. In October 2022, we commenced providing bunkering services using floating storage capacity in the port of Nueva Palmira.

Period over Period Comparisons

The following table presents consolidated revenue and expense information for the three-month periods ended March 31, 2023 and 2022. 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 March 31, 2023 compared to the three month period ended March 31, 2022

Revenue

The following table presents our revenues for the three-month periods ended March 31, 2023 and 2022:

Time Charter, Voyage and Port Terminal Revenues: For the three-month period ended March 31, 2023, Navios Logistics’ time charter, voyage and port terminal revenues increased by $5.0 million, or 8.8%, to $62.0 million, as compared to $57.0 million for the same period in 2022. Revenue from the Barge Business increased by $3.0 million, or 15.6%, to $22.6 million for the three-month period ended March 31, 2023, as compared to $19.5 million for the same period in 2022. The increase was mainly attributable to time charter-out contracts for iron ore transportation during the three months ended March 31, 2023. Revenue from the Port Terminal Business increased by $1.8 million, or 6.8%, to $27.8 million for the three-month period ended March 31, 2023, as compared to $26.1 million for the same period in 2022. The increase was mainly attributable to higher tariffs and volumes transshipped at the Iron Ore Port Terminal, partially offset by a decrease in revenues from the Grain Port Terminal due to lower grain throughput related to a decline in Uruguayan exports. Revenue from the Cabotage Business increased by $0.2 million, or 2.0%, to $11.6 million for the three- month period ended March 31, 2023, as compared to $11.4 million for the same period in 2022.

Sales of Products- Liquid Port Terminal: For the three-month period ended March 31, 2023, Navios Logistics’ sales of products increased by $1.2 million, or 63.0%, to $3.1 million, as compared to $1.9 million for the same period in 2022. This increase was attributable to the sale of fuel products in connection with our recently commenced bunkering services in the port of Nueva Palmira.

Cost of Sales

The following table presents our cost of sales for the three-month periods ended March 31, 2023 and 2022:

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Time Charter, Voyage and Port Terminal Expenses: For the three-month period ended March 31, 2023, time charter, voyage and port terminal expenses increased overall by $0.4 million, or 2.9%, to $13.0 million as compared to $12.6 million for the same period in 2022. Port terminal expenses increased by $1.4 million, or 32.0%, to $5.8 million for the three-month period ended March 31, 2023, as compared to $4.4 million for the same period in 2022, mainly due to higher volumes transshipped in the Iron Ore Port Terminal. The overall increase was offset by a $0.8 million, or 10.3%, decrease in time charter and voyage expenses of the Barge Business for the three-month period ended March 31, 2023 to $6.7 million, as compared to $7.5 million for the same period in 2022, mainly due to decreased bunker consumption and other voyage expenses resulting from time charter-out contracts in place for iron ore transportation during the current period. Time charter and voyage expenses of the Cabotage Business decreased by $0.3 million, or 41.6%, to $0.4 million for three-month period ended March 31, 2023, as compared to $0.7 million for the same period during 2022.

Direct Vessel Expenses: Overall, direct vessel expenses increased by $0.2 million, or 1.0%, to $16.1 million for the three-month period ended March 31, 2023, as compared to $15.9 million for the same period in 2022. Direct vessel expenses of the Barge Business increased by $0.5 million, or 6.4%, to $8.5 million for the three-month period ended March 31, 2023, as compared to $7.9 million for the same period in 2022, mainly due to increased payroll and related costs and repairs and maintenance. The Cabotage Business recognized a decrease in direct vessel expenses of $0.4 million, or 4.4%, to $7.6 million for the three-month period ended March 31, 2023, down from $8.0 million for the same period in 2022. Direct vessel expenses include crew costs, victualling costs, dockage expenses, lubricants, stores, insurance, maintenance and repairs.

Cost of Products Sold - Liquid Port Terminal: For the three-month period ended March 31, 2023, Navios Logistics’ cost of products sold increased by $1.1 million, or 62.6%, to $2.8 million, as compared to $1.7 million for the same period in 2022. This increase was mainly attributable to an increase in fuel products sold in connection with our recently commenced bunkering services in the port of Nueva Palmira.

Depreciation and Amortization: Depreciation and amortization expense increased overall by $0.5 million, or 5.8%, to $9.4 million for the three-month period ended March 31, 2023, from $8.9 million for the same period in 2022. Depreciation and amortization in the Port Terminal Business increased by $0.4 million, or 19.6%, to $2.6 million for the three-month period ended March 31, 2023, as compared to $2.2 million for the same period in 2022. Depreciation and amortization in the Cabotage Business increased by $0.4 million, or 34.1%, to $1.7 million for the three-month period ended March 31, 2023, as compared to $1.3 million for the same period in 2022. Depreciation and amortization in the Barge Business decreased by $0.3 million, or 6.1%, to $5.1 million for the three- month period ended March 31, 2023, as compared to $5.5 million for the same period in 2022.

Administrative Expenses

Administrative expenses increased by $1.1 million, or 31.8%, to $4.7 million for the three-month period ended March 31, 2023, as compared to $3.6 million for the same period in 2022. This increase was due mainly to an increase in payroll, travel expenses and other general and administrative expenses. Certain of our administrative expenses are directly charged to their respective segments, while others are allocated proportionally across segments based on headcount.

Other Operating Income

Other operating income remained stable at $0.2 million for each of the three-month periods ended March 31, 2023 and 2022.

Other Operating Expenses

Other operating expenses increased overall by $0.1 million, or 12.7%, to $1.3 million for the three-month period ended March 31, 2023, up from $1.2 million for the same period in 2022. Other operating expenses in the Barge Business increased by $0.1 million, or 13.8%, to $0.8 million for the three-month period ended March 31, 2023, as compared to $0.7 million for the same period in 2022. Other operating expenses in the Cabotage Business increased by $0.1 million, or 13.5%, to $0.5 million for the three- month period ended March 31, 2023, as compared to $0.4 million for the same period in 2022. Other operating expenses in the Port Terminal Business were less than $0.1 million for each of the three-month periods ended March 31, 2023 and 2022.

Allowance for Expected Credit Losses on Financial Assets

Overall, allowance for expected credit losses on financial assets increased by $0.3 million to $0.4 million for the three-month period ended March 31, 2023, from $0.1 million for the same period in 2022.

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Operating Profit/(Loss)

Total operating profit increased by $2.7 million, or 17.7%, to $17.7 million for the three-month period ended March 31, 2023, as compared to $15.0 million for the same period in 2022.

Operating loss in the Barge Business decreased by $3.0 million to $1.2 million for the three-month period ended March 31, 2023, as compared to $4.3 million for the same period in 2022. The decrease in operating loss was mainly attributable to: (i) an increase in revenue; (ii) a decrease in time-charter and voyage expenses; (iii) a decrease in depreciation and amortization; and (iv) a decrease in allowance for expected credit losses on financial assets. The overall decrease in operating loss in the Barge Business was partially offset by (i) an increase in administrative expenses; (ii) an increase in direct vessel expenses; and (iii) an increase in other operating expenses.

Operating profit in the Cabotage Business increased by $0.2 million, or 37.2%, to $0.7 million for the three-month period ended March 31, 2023, as compared to $0.5 million for the same period in 2022. The increase was mainly attributable to: (i) an increase in revenue; (ii) a decrease in time charter and voyage expenses; and (iii) a decrease in direct vessel expenses. The increase in operating profit was partially offset by (i) an increase in depreciation and amortization; (ii) an increase in administrative expenses and (iii) an increase in other operating expenses.

Operating profit in the Port Terminal Business decreased by $0.6 million, or 3.0%, to $18.2 million for the three-month period ended March 31, 2023, as compared to $18.8 million for the same period in 2022. Though the Port Terminal Business realized increased revenue for the period, this increase was partially offset by (i) an increase in port terminal expenses; (ii) an increase in depreciation and amortization; (iii) an increase in allowance for expected credit losses on financial assets; and (iv) higher administrative expenses.

Finance Income

Finance income increased by $0.3 million to $0.4 million for the three-month period ended March 31, 2023, as compared to less than $0.1 million for the same period in 2022. Finance income is allocated to the business segments pro rata to the book value of our tangible assets.

Finance Costs

Overall, finance costs increased by $0.5 million, or 3.2%, to $16.0 million for the three-month period ended March 31, 2023, as compared to $15.5 million for the same period in 2022. This increase was attributable primarily to the higher weighted average interest rate for the three-month period ended March 31, 2023. The annualized weighted average interest rates of the Company’s total borrowings were 10.26% and 10.17% for the three-month periods ended March 31, 2023 and 2022, respectively. The finance cost of the 2025 Notes is allocated to the business segments pro rata to the book value of our tangible assets.

Foreign Exchange Differences, Net and Other Financial Results

Overall, loss from foreign exchange differences and other financial results increased by $0.7 million to $0.7 million for the three-month period ended March 31, 2023, as compared to a less than $0.1 million gain for the same period in 2022.

In the Cabotage Business, loss from foreign exchange differences and other financial results increased by $0.5 million to $0.4 million for the three-month period ended March 31, 2023, compared to a $0.1 million gain for the same period in 2022. In the Barge Business, loss from foreign exchange differences and other financial results increased by $0.4 million to $0.3 million for the three-month period ended March 31, 2023, compared to a $0.1 million gain for the same period in 2022. The Company’s overall loss was partially mitigated by a $0.2 million increase in gain from foreign exchange differences and other financial results in the Port Terminal Business to less than $0.1 million for the three-month period ended March 31, 2023, compared to a $0.2 million loss for the same period in 2022. These variations were mainly attributable to the unfavorable 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 benefit increased by $0.2 million to $0.2 million for the three-month period ended March 31, 2023, as compared to $0.1 million for the same period in 2022. Income tax benefit from the Cabotage Business increased by $0.3 million to $0.3 million for the three-month period ended March 31, 2023, as compared to less than $0.1 million income tax expense for the same period in 2022. Income tax expense from the Barge Business increased by $0.2 million to less than $0.1 million for the three-month period ended March 31, 2023, compared to a $0.1 million income tax benefit for the same period in 2022.

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Profit/(Loss) for the Period

In the aggregate, profit for the period increased by $2.0 million to $1.6 million for the three-month period ended March 31, 2023, compared to a $0.4 million loss for the same period in 2022.

Loss for the period in the Barge Business decreased by $2.8 million, or 24.9%, to $8.3 million for the three-month period ended March 31, 2023, as compared to a loss of $11.1 million for the same period in 2022. The decrease was mainly attributable to: (i) a decrease in operating loss; (ii) an increase in finance income; and (iii) a decrease in finance costs. The decrease in loss for the period was partially offset by (i) an increase in loss from foreign exchange differences, net and other financial results; and (ii) an increase in income tax expense.

Loss for the period in the Cabotage Business decreased by less than $0.1 million, or 0.6%, to $1.9 million for the three-month period ended March 31, 2023, as compared to $2.0 million for the same period in 2022. The decrease was mainly attributable to: (i) an increase in income tax benefit; (ii) an increase in operating profit and (iii) an increase in finance income, partially offset by an increase in loss from foreign exchange differences, net; and other financial results.

Profit for the period in the Port Terminal Business decreased by $0.8 million, or 6.4%, to $11.9 million for the three-month period ended March 31, 2023, as compared to $12.7 million for the same period in 2022. The decrease was mainly attributable to: (i) a decrease in operating profit; and (ii) an increase in finance costs, partially mitigated by (i) a decrease in loss from foreign exchange differences, net and other financial results; and (ii) an increase in finance income.

EBITDA Reconciliation to Profit/(Loss)

EBITDA represents profit/(loss) before finance income, finance costs, depreciation and amortization, and income taxes. EBITDA is presented because it is used by certain investors to measure a company’s operating performance. Adjusted EBITDA represents EBITDA before impairment losses and loss on debt extinguishment. EBITDA and Adjusted EBITDA are “non-IFRS financial measures” 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 and Adjusted EBITDA are frequently used as a measure of operating performance, the definitions of EBITDA and Adjusted EBITDA used here may not be comparable to that used by other companies due to differences in methods of calculation. EBITDA and Adjusted EBITDA have limitations as analytical tools, and therefore, neither should be considered in isolation or as a substitute for the analysis of results as reported under IFRS. Some of these limitations are: (i) EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, working capital needs; (ii) EBITDA and Adjusted EBITDA do 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 and Adjusted EBITDA do not reflect any cash requirements for such capital expenditures. Because of these limitations, among others, EBITDA and Adjusted EBITDA should not be considered as a principal indicator of our performance. During the three-month periods ended March 31, 2023 and 2022 there were no differences between EBITDA and Adjusted EBITDA and thus no Adjusted EBITDA is presented.

Three Month Period Ended March 31, 2023

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Three Month Period Ended March 31, 2022

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 issuances of debt securities. 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 options for refinancing our existing indebtedness and 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 Position”, “— Capital Expenditures” and “—Interest-bearing Loans and Borrowings” included elsewhere in this report 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 month periods ended March 31, 2023 and 2022.

Cash provided by operating activities for the three-month period ended March 31, 2023 as compared to cash used in operating activities for the three-month period ended March 31, 2022:

Net cash provided by operating activities increased by $10.9 million to $6.8 million for the three-month period ended March 31, 2023, as compared to $4.1 million net cash used in operating activities for the same period in 2022.

In determining net cash provided by operating activities, profit/(loss) is adjusted for the effect of certain non-cash items, including depreciation and amortization, which items are analyzed in detail in our unaudited condensed Consolidated Statement of Cash Flows for the Three Month Periods Ended March 31, 2023 and 2022, included elsewhere in this report.

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Profit/(loss) is adjusted for changes in working capital in order to determine net cash provided by(used in) operating activities.

The positive change in working capital of $7.8 million for the three-month period ended March 31, 2023 resulted from a $11.7 million decrease in trade receivables and contract assets and a $0.5 million increase in trade and other payables and contract liabilities. These positive changes were partially offset by a $2.4 million increase in prepayments and other assets and a $2.0 million increase in inventories.

The negative change in working capital of $0.1 million for the three-month period ended March 31, 2022 resulted from a $0.8 million increase in trade receivables and contract assets and a $0.5 million increase in prepayments and other assets, partially offset by a $0.8 million decrease in inventories and a $0.5 million increase in trade and other payables and contract liabilities.

Cash used in investing activities for the three-month period ended March 31, 2023 as compared to the three-month period ended March 31, 2022:

Net cash used in investing activities increased by $3.6 million to $5.8 million for the three-month period ended March 31, 2023, compared to $2.3 million for the same period in 2022.

Cash used in investing activities for the three-month period ended March 31, 2023 comprised mainly: (i) $3.5 million in payments for the purchase of tangible assets, including payments for drydock and special surveys; (ii) $2.3 million in payments for expansion works in the Iron Ore Port Terminal; and (iii) less than $0.1 million in payments for the development of our port operations in Port Murtinho, Brazil.

Cash used in investing activities for the three-month period ended March 31, 2022 was mainly attributable to: (i) $2.2 million in payments for the purchase of tangible assets, including payments for drydock and special surveys; and (ii) less than $0.1 million in payments for the construction of our two new tanks.

Cash used in financing activities for the three-month period ended March 31, 2023 as compared to cash provided by financing activities for the three-month period ended March 31, 2022:

Net cash used in financing activities increased by $21.7 million to $14.5 million for the three-month period ended March 31, 2023, as compared to $7.2 million cash provided by financing activities for the same period of 2022.

The increase in cash used in financing activities for the three-month period ended March 31, 2023 was primarily due to payments of: (i) $10.0 million in relation to the promissory note to Grimaud (the “Promissory Note”); (ii) $3.2 million in connection with the Company’s outstanding indebtedness; (iii) $0.9 million for the repayment of the Notes Payable (as defined herein); and (iv) $0.3 million for the principal portion of our lease liabilities.

Cash provided by financing activities for the three-month period ended March 31, 2022 was the result of receipt of $22.0 million in proceeds from long term debt, partially offset by payments of: (i) $13.9 million in connection with the Company’s existing outstanding indebtedness; (ii) $0.8 million for the repayment of the Notes Payable (as defined herein); and (iii) $0.1 million for the principal portion of our lease liabilities.

Interest-Bearing Loans and Borrowings

Navios Logistics’ interest-bearing loans and borrowings are presented under the captions “Interest-bearing loans and borrowings” under current and non-current liabilities in the unaudited condensed consolidated statement of financial position, included elsewhere in this report. As of March 31, 2023 and December 31, 2022, total interest-bearing loans and borrowings amounted to $544.2 million and $547.3 million, respectively. The current portion of interest-bearing loans and borrowings amounted to $29.0 million at March 31, 2023 and $23.6 million at December 31, 2022. Please refer to our 2022 Form 20-F for a full description of Interest-bearing loans and borrowings.

Working Capital Position

On March 31, 2023, Navios Logistics’ current assets totaled $94.4 million, while current liabilities totaled $84.7 million, resulting in a positive working capital position of $9.8 million. Management anticipates that the Company’s primary sources of funds will be available cash, cash from operations and borrowings under existing and new loan agreements. Management believes that these sources of funds will be sufficient for the Company to meet its liquidity needs and comply with its banking covenants for at least twelve months from the end of the reporting period and therefore it is appropriate to prepare the financial statements on a going-concern basis.

10

Capital Expenditures

Please read Note 5 to our unaudited condensed consolidated financial statements included elsewhere in this report for a full description of our capital expenditures.

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.

No dividends were declared during the three-month periods ended March 31, 2023 and 2022. In the three-month period ended March 31, 2023, the Company paid $10.0 million, representing the remaining balance due under the Promissory Note, (nil for the three-month period ended March 31, 2022).

Concentration of Credit Risk

Accounts Receivable and Contract Assets

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 three-month period ended March 31, 2023, our largest customers, Vale International S.A. (“Vale”) and Y.P.F S.A. (“YPF”), accounted for 22.5% and 12.9%, respectively, of our revenues, and five customers accounted for approximately 51.9% of our revenues, with no single customer (other than Vale and YPF) accounting for more than 10% of our total revenues. For the three- month period ended March 31, 2022, Vale and Vitol S.A. (“Vitol”) accounted for 23.2% and 10.8%, respectively, of our revenues, and five customers accounted for approximately 58.4% of our revenues, with no single customer (other than Vale and Vitol) accounting for more than 10% of our total revenues. In addition, some of our customers, including many of our most significant customers, operate their own vessels and/or barges as well as their own 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 and adversely affect our business, financial condition and results of operations. See “Item 3. Key Information—D. Risk Factors—We derive a significant part of our revenues from a small number of customers, and the loss of one or more of these customers could materially and adversely affect our revenues.” in the 2022 Form 20-F.

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

11

In July 2022, Vale S.A. announced the closing of the sale of its iron ore, manganese ore and logistics assets in the midwestern system to J&F Mineracao Ltda., an entity controlled by J&F Investimentos S.A. The Vale port contract entered into between Corporacion Navios S.A., a company controlled by Navios Logistics, and Vale, dated September 27, 2013, remains in full force and effect.

Cash Deposits with Financial Institutions

We are exposed to potential loss related to cash deposits in excess of amounts covered by government-provided insurance in the event of non-performance 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.

Legal Proceedings and Commitments and Contingencies

We are 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 unaudited condensed consolidated financial position, results of operations or cash flows.

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 28, 2024.

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, in the amounts of $0.8 million and $0.5 million, respectively.

In September 2020, the Company agreed to a settlement regarding a storage and transshipment contract in the Grain Port Terminal for a total amount to be paid to the Company as a result of the settlement of $4.1 million, to be collected in three equal installments of $1.4 million within each of June 2021, 2022 and 2023. In June 2021 and 2022, the Company collected the first and second installments.

On April 28, 2022, the Company entered into a five-year finance leasing contract for eight liquid barges to be delivered from the fourth quarter of 2022 through the second quarter of 2023. The finance lease contract is payable by 60 consecutive monthly payments of $26 thousand each, commencing with the delivery date of the applicable barge. At expiration, the Company will have the ability to exercise the purchase option for these barges or extend the term of the finance leasing contract. Please refer to Note 9 to our unaudited condensed consolidated financial statements, included elsewhere in this report.

Related Party Transactions

Please read Note 10 to our unaudited condensed consolidated financial statements included elsewhere in this report for a full description of related party transactions.

Quantitative and Qualitative Disclosures about Market Risks

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

Interest Rate Risk:

Debt Instruments. As of March 31, 2023 and December 31, 2022, the Company’s long-term indebtedness totaled $555.2 million and $559.4 million, respectively. The debt is dollar-denominated and bears interest at a fixed rate, except for the Notes Payable and the 2022 Term Bank loan that bear interest at a floating rate.

Interest rates on the 2025 Notes, the 2022 BBVA Facility, the Santander Facility, the seller’s credit for the construction of six liquid barges and the seller’s credit agreement for the acquisition of the 2020 Fleet are fixed and, therefore, changes in interest rates affect the fair value of each, which, as of March 31, 2023 was $490.2 million, $20.6 million, $3.8 million, $8.1 million and $10.0 million, respectively, but do not affect the related finance costs. Interest rates on the Notes Payable and the 2022 Term

12

Bank loan is at a floating rate and, therefore, changes in interest rates affect the interest rate and related finance costs for each. As of March 31, 2023, the amount outstanding under the Company’s floating rate loan facilities was $12.7 million. A change of 100 basis points in the SOFR or LIBOR rate would have increased finance costs for the three-month period ended March 31, 2023 by $0.1 million.

For a detailed discussion of Navios Logistics’ debt instruments refer to Note 8 to our unaudited condensed consolidated financial statements included elsewhere in this report.

Foreign Currency Transactions:

We are exposed to foreign currency exchange transaction risk related to funding our operations. For the three-month period ended March 31, 2023 and 2022 approximately 56.6%, and 56.5%, respectively, of our expenses were incurred in currencies other than U.S. dollars. Further, for the three-month period ended March 31, 2023, approximately 30%, 14% and 13% of the Company’s $36.5 million of combined costs for: (a) time charter, voyage and port terminal expenses; (b) direct vessels expenses; (c) cost of products; and (d) administrative expenses, net of depreciation (together, the “Combined Cost”), was denominated in Argentinean pesos, Paraguayan guaranies and Uruguayan pesos, respectively. Comparatively, the same foreign currencies accounted for approximately 28%, 18% and 10%, respectively, of our $33.8 million of Combined Cost for the three-month period ended March 31, 2022. For the three-month periods ended March 31, 2023 and 2022, Brazilian reais accounted for less than 1% of our Combined Cost.

For the three-month period ended March 31, 2023, 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 $0.1 million, less than $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 March 31, 2022 by $0.1 million, $0.1 million and less than $0.1 million, respectively.

Inflation and Fuel Price Increases

See “Factors Affecting Navios Logistics’ Results of Operations” included elsewhere in this report.

Critical Accounting Policies

The Navios Logistics’ unaudited 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 2022 Form 20-F. There have been no significant changes to accounting policies and estimates during the three-month period ended March 31, 2023.

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.

13

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

F-1

NAVIOS SOUTH AMERICAN LOGISTICS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(Expressed in thousands of U.S. dollars)

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

F-2

NAVIOS SOUTH AMERICAN LOGISTICS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT/(LOSS)

(Expressed in thousands of U.S. dollars)

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

F-3

NAVIOS SOUTH AMERICAN LOGISTICS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Expressed in thousands of U.S. dollars)

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

F-4

NAVIOS SOUTH AMERICAN LOGISTICS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Expressed in thousands of U.S. dollars)

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

F-5

NAVIOS SOUTH AMERICAN LOGISTICS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars)

NOTE 1. CORPORATE INFORMATION

Navios South American Logistics Inc. (“Navios Logistics” or the “Company”) was incorporated under the laws of the Republic of the Marshall Islands on December 17, 2007. Navios Logistics believes it is one of the largest infrastructure and logistics companies in the Hidrovia region of South America, focusing on the Hidrovia river system, the main navigable river system in the region, and on the cabotage trades along the southeastern coast of South America. Navios Logistics is focused on providing its customers integrated transportation, storage and related services through its port facilities, its large, versatile fleet of dry and liquid cargo barges and its product tankers. Navios Logistics serves the needs of a number of growing South American industries, including mineral and grain commodity providers as well as users of refined petroleum products. As of March 31, 2023, Navios Maritime Holdings Inc. (“Navios Holdings”) owned 63.8% of Navios Logistics’ stock.

NOTE 2: BASIS OF PREPARATION, ACCOUNTING POLICIES AND SIGNIFICANT FACTORS AFFECTING UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a) Basis of Preparation

The unaudited condensed consolidated financial statements of Navios Logistics have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”), and present the financial position, results of operations and cash flows of the Company on a going concern basis.

These unaudited condensed consolidated financial statements do not include all information and disclosures required for the annual consolidated financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes as of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021 and 2020.

The unaudited condensed consolidated financial statements have been prepared on a historical cost basis, except where fair value accounting is specifically required by IFRS, as explained in the accounting policies below. The unaudited condensed consolidated financial statements are presented in U.S. dollars which is also the currency of the Company’s primary economic environment and the functional currency of the major and majority of the Company’s subsidiaries. All values are rounded to the nearest thousand (U.S.D. 000), except when otherwise indicated.

On May 16, 2023, the unaudited condensed consolidated financial statements as of and for the three-month period ended March 31, 2023 have been authorized for issuance by the Board of Directors.

(b) Going concern

In considering whether it is appropriate to prepare the financial statements on a going concern basis, management has reviewed the Company’s future cash requirements, covenant compliance and earnings projections. As of March 31, 2023, the Company’s current assets totaled $94,435, while current liabilities totaled $84,671, resulting in a positive working capital position of $9,764.

Management anticipates that the Company’s primary sources of funds will be available cash, cash from operations and borrowings under existing and new loan agreements. Management believes that these sources of funds will be sufficient for the Company to meet its liquidity needs and comply with its banking covenants for at least twelve months from the end of the reporting period and therefore it is appropriate to prepare the financial statements on a going concern basis.

F-6

NAVIOS SOUTH AMERICAN LOGISTICS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars)

(c) Basis of Consolidation

The unaudited condensed consolidated financial statements comprise the financial statements of Navios Logistics and its subsidiaries. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The accounting policies and methods of computation used in the preparation of the unaudited condensed consolidated financial statements are consistent with those applied in the preparation of the consolidated financial statements for the year ended December 31, 2022 and have been consistently applied in all periods presented in this report except for the following IFRSs which have been adopted by the Company as of January 1, 2023. Amendments and interpretations that apply for the first time in 2023 do not have a significant impact on the unaudited condensed consolidated financial statements of the Company for the three-month period ended March 31, 2023. These are also disclosed below.

The IASB issued IFRS 17 in May 2017 as the replacement for IFRS 4 Insurance Contracts. It requires a current measurement model where estimates are remeasured in each reporting period. Contracts are measured using the building blocks of: (i) discounted probability-weighted cash flows; (ii) an explicit risk adjustment, and (iii) a contractual service margin (CSM) representing the unearned profit of the contract which is recognized as revenue over the coverage period. The standard allows a choice between recognizing changes in discount rates either in the statement of profit or loss or directly in other comprehensive income The amendments deferred the application date of IFRS 17 to January 1, 2023.

The IASB amended IAS 1 to require entities to disclose their material rather than their significant accounting policies. The amendments define what is ‘material accounting policy information’ and explain how to identify when accounting policy information is material. They further clarify that immaterial accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure material accounting information. To support this amendment, the IASB also amended IFRS Practice Statement 2 Making Materiality Judgements to provide guidance on how to apply the concept of materiality to accounting policy disclosures.

The amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors clarifies how companies should distinguish changes in accounting policies from changes in accounting estimates. The distinction is important, because changes in accounting estimates are applied prospectively to future transactions and other future events, whereas changes in accounting policies are generally applied retrospectively to past transactions and other past events as well as the current period.

The amendments to IAS 12 Income Taxes require companies to recognize deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such as leases of lessees and decommissioning obligations, and will require the recognition of additional deferred tax assets and liabilities. The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative period presented. In addition, entities should recognize deferred tax assets (to the extent that it is probable that they can be utilized) and deferred tax liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with: (i) right-of-use assets and lease liabilities; and (ii) decommissioning, restoration and similar liabilities, and the corresponding amounts recognized as part of the cost of the related assets. The cumulative effect of recognizing these adjustments is recognized in retained earnings, or another component of equity, as appropriate. IAS 12 did not previously address how to account for the tax effects of on balance sheet leases and similar transactions and various approaches were considered acceptable. Some entities may have already accounted for such transactions consistent with the new requirements. These entities will not be affected by the amendments.

F-7

NAVIOS SOUTH AMERICAN LOGISTICS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars)

(e) Impact of Standards issued but not yet effective and not early adopted by the Company

The Company has not early adopted any of the following standards, interpretations or amendments that have been issued but are not yet effective. In addition, the Company assessed all standards, interpretations and amendments issued but not yet effective, and concluded that they will not have any significant impact on the unaudited condensed consolidated financial statements.

Amendments made to IAS 1 Presentation of Financial Statements in 2020 clarified that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the entity’s expectations or events after the reporting date (e.g. the receipt of a waiver or a breach of covenant). The amendments also clarified what IAS 1 means when it refers to the ‘settlement’ of a liability. The amendments were due to be applied from January 1, 2022. However, the effective date was subsequently deferred to January 1, 2023 and then further to January 1, 2024. In October 2022, the IASB made further amendments to IAS 1 in response to concerns raised about these changes to the classification of liabilities as current or non-current. The new amendments clarify that covenants of loan arrangements will not affect classification of a liability as current or non-current at the reporting date if the entity must only comply with the covenants after the reporting date. However, if the entity must comply with a covenant either before or at the reporting date, this will affect the classification as current or non-current, even if the covenant is only tested for compliance after the reporting date. The amendments require disclosures if an entity classifies a liability as noncurrent and that liability is subject to covenants that the entity must comply with within 12 months of the reporting date. The disclosures include: (i) the carrying amount of the liability, (ii) information about the covenants, and (iii) facts and circumstances, if any, that indicate that the entity may have difficulty complying with the covenants. The amendments must be applied retrospectively in accordance with the normal requirements in IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Special transitional rules apply if an entity had early adopted the 2020 amendments regarding the classification of liabilities as current or noncurrent. The Company estimates that its application will not have a significant impact on the Company’s consolidated financial statements.

In September 2022, the IASB finalized narrow-scope amendments to the requirements for sale and leaseback transactions in IFRS 16 Leases which explain how an entity accounts for a sale and leaseback after the date of the transaction. The amendments specify that, in measuring the lease liability subsequent to the sale and leaseback, the seller-lessee determines ‘lease payments’ and ‘revised lease payments’ in a way that does not result in the seller-lessee recognizing any amount of the gain or loss that relates to the right of use that it retains. This could particularly impact sale and leaseback transactions where the lease payments include variable payments that do not depend on an index or a rate.. The amendments are effective for annual reporting periods beginning on or after January 1, 2024, but they could be early adopted. The Company estimates that its application will not have a significant impact on the Company’s consolidated financial statements.

(f) Accounting policies and the use of estimates

The preparation of the unaudited condensed consolidated financial statements, in accordance with IFRS, requires the use of certain critical accounting estimates and assumptions. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the unaudited condensed consolidated financial statements are disclosed where considered necessary. Estimates and judgements are discussed in detail in Note 2(z) in the annual consolidated financial statements for the year ended December 31, 2022. Such estimates and judgments are continuously evaluated and are based on historical experience and other factors, including expectations of future events as assessed to be reasonable under the present circumstances.

F-8

NAVIOS SOUTH AMERICAN LOGISTICS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars)

(g) Seasonality

Certain of the Navios Logistics’ businesses have seasonality aspects, and seasonality affects the results of Navios Logistics’ operations and revenues, particularly in the first and last quarters of each year. The high season for the Dry Port Terminals’ Uruguayan operations occurs from April to September and is linked to the South American harvest and the arrival of barges down the river. The high season for the Barge Business is between February and July as a result of the South American harvest and higher river levels. During the South American late spring and summer, mainly from November to January, the low water level in the northern Hidrovia Waterway could adversely affect operations of the Barge Business and the volumes it transports. To the extent water levels are insufficient to accommodate the draft of a heavily laden vessel, a vessel may be only partially loaded, generating lower revenue under agreements where revenue is based on volume of cargo loaded. If water levels on a waterway are too low, vessels could be prevented entirely from loading and navigating. In addition, low water levels create difficult navigation conditions, causing voyages to last longer and to incur increased voyage expenses. Such circumstances reduce the effective available carrying capacity of the vessel for the year.

Navios Logistics’ Liquid Port Terminal and its Cabotage Business are not significantly affected by seasonality, as their operations are primarily linked to refined petroleum products, and thus not significantly affected by water levels.

NOTE 3: SEGMENT INFORMATION

Current accounting guidance establishes standards for reporting information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial reports issued to shareholders. Operating segments are components of a company of which separate financial information is available that is regularly evaluated by the chief operating decision makers in deciding how to allocate resources and assess performance. Chief operating decision makers use profit to evaluate operating performance of each segment. The guidance also establishes standards for related disclosures about a company’s products and services, geographical areas and major customers. The Company has determined that its reportable segments are those that are based on the Company’s method of internal reporting.

Navios Logistics has three reportable segments: Port Terminal Business, Cabotage Business and Barge Business. The Port Terminal Business includes the dry port terminal operations and the liquid port terminal operations. A general description of each segment follows:

The Port Terminal Business segment

This segment includes the operating results of Navios Logistics’ dry port terminal and liquid port terminal operations.

(i) Dry port terminal operations

Navios Logistics owns and operates the largest independent bulk transfer and storage port terminal facilities in Uruguay based on throughputs. Its dry port terminal operations are comprised of two port terminals, one for agricultural and forest-related exports (the “Grain Port Terminal”) and one for mineral-related exports (the “Iron Ore Port Terminal”), which are both located in an international tax-free trade zone in the port of Nueva Palmira, Uruguay, at the convergence of the Parana and Uruguay rivers. The Grain Port Terminal, together with the Iron Ore Port Terminal, may be collectively referred to in this report as the “Dry Port Terminals.”

(ii) Liquid port terminal operations

Navios Logistics owns and operates an up-river port terminal with tank storage for refined petroleum products, oil, and gas (the “Liquid Port Terminal”) in San Antonio, Paraguay, approximately 17 miles by river from the capital of Asuncion. The Liquid Port Terminal is one of the largest independent storage facilities for crude and petroleum products in Paraguay based on storage capacity. In addition, in October 2022, Navios Logistics began providing bunkering services using floating storage capacity in the port of Nueva Palmira.

The Cabotage Business segment

Navios Logistics owns and operates ocean-going vessels to support the transportation needs of its customers in the South American coastal trade business. Its fleet consists of five ocean-going product tanker vessels, a river and estuary tanker vessel and a bunker vessel. Navios Logistics contracts its vessels either on a time charter basis or on a contract of affreightment (“CoA”) basis.

F-9

NAVIOS SOUTH AMERICAN LOGISTICS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars)

The Barge Business segment

Navios Logistics services the Argentine, Bolivian, Brazilian, Paraguayan and Uruguayan river transportation markets through its fleet. Navios Logistics operates different types of pushboats and wet and dry barges for delivering a wide range of dry and liquid products between ports in the Parana, Paraguay and Uruguay River systems in South America (the Hidrovia or the “waterway”). Navios Logistics contracts its vessels either on a time charter basis or on a CoA basis.

Inter-segment transactions, if any, are accounted for at current market prices.

The following table describes the results of operations of the three segments, the Port Terminal Business segment, the Cabotage Business segment and the Barge Business segment for the three-month periods ended March 31, 2023 and 2022:

F-10

NAVIOS SOUTH AMERICAN LOGISTICS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars)

For the Barge Business segment and for the Cabotage Business segment, the Company’s vessels operate on a regional basis and are not restricted to specific locations. Accordingly, it is not practicable to allocate the assets of these operations to specific locations. The total net book value of long-lived assets for vessels, including constructions in progress, amounted to $313,414 and $315,667, as of March 31, 2023 and December 31, 2022, respectively.

All the assets related to the Port Terminal Business segment are located in Uruguay and in Paraguay. The total net book value of tangible assets for the Port Terminal Business segment amounted to $197,591 and $196,587 as of March 31, 2023 and December 31, 2022, respectively.

In addition, the net book value of intangible assets other than goodwill allocated to the Barge Business segment and to the Cabotage Business segment, collectively, amounted to $8,429 and $8,873 as of March 31, 2023 and December 31, 2022, respectively, while the net book value of intangible assets allocated to the Port Terminal segment amounted to $37,071 and $37,320 as of March 31, 2023 and December 31, 2022, respectively.

Goodwill totaling to $22,142, $40,868 and $41,086 has been allocated to the three segments, the Port Terminal Business, the Cabotage Business and the Barge Business, respectively, for all periods presented.

NOTE 4: REVENUE, COST OF SALES AND ADMINISTRATIVE EXPENSES

4.1 Disaggregated revenue information

An analysis of the Company’s revenues from contracts with customers by stream of revenue is presented below:

4.2 Contract balances

F-11

NAVIOS SOUTH AMERICAN LOGISTICS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars)

Trade receivables from contracts with customers represent net amounts receivable from customers in respect of voyage charters, port terminals and in respect of time charters for the non-lease (service component) of the receivable. Trade receivables consisted of the following:

Movement in the allowance for expected credit losses of trade receivables is analyzed as follows:

Contract assets represent amounts from contracts with customers that reflect services transferred to customers before payment or consideration is due. Specifically, contract assets represent the freight, demurrage, deviation and other amounts receivable from charterers for the completed voyage performance as at the period end. The balances of contract assets vary and depend on ongoing voyage charters at period end.

Contract liabilities represent the performance due to a customer for the remaining voyage as at the period end. This may happen in the case where the customer has made an advance payment before the completion of the voyage as of the period end date. The balances of contract liabilities vary and depend on advance payments received at period end.

4.3 Cost of Sales

Cost of sales for the three-month periods ended March 31, 2023 and 2022 were as follows:

4.4 Administrative expenses

General and administrative expenses for the three-month periods ended March 31, 2023 and 2022 were as follows:

F-12

NAVIOS SOUTH AMERICAN LOGISTICS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in thousands of U.S. dollars)