Highlights
- On November 13, 2023, the Board
declared a cash dividend of $0.05 per share of the common stock of
Navigator Holdings Ltd. (the "Company", “Navigator”, "we", "our"
and "us") (NYSE: NVGS), for the quarter ended September 30,
2023 (the “Dividend”). The Dividend will be payable on
December 21, 2023, to all shareholders of record as of the
close of business New York time on December 7, 2023 which
would have equated to a quarterly dividend payment of $3.7
million.
- As part of the Capital Return Policy
for the quarter ended September 30, 2023, Navigator expects to
repurchase approximately $1.1 million of the Company’s common stock
(the “Share Repurchases”) between November 16, 2023 and December
31, 2023, subject to operating needs, market conditions and other
circumstances, such that the Dividend and Share Repurchases
together equal 25% of net income for the quarter ended
September 30, 2023.
- The company reported operating revenue
of $137.8 million for the three months ended September 30,
2023, compared to $106.8 million for the three months ended
September 30, 2022.
- Net Income attributable to
stockholders' of Navigator Holdings Ltd. was $19.1 million for the
three months ended September 30, 2023, compared to $2.4
million for the three months ended September 30, 2022.
- Earnings per share was $0.26 for the
three months ended September 30, 2023, compared to $0.03 per
share for the three months ended September 30, 2022.
- Adjusted Earnings per share, to exclude
unrealized gains or losses on non-designated derivative instruments
was $0.27 for the three months ended September 30, 2023,
compared to a loss of $0.07 for the three months ended
September 30, 2022.
- Adjusted EBITDA(1) was a record since
the Company's IPO of $72.2 million for the three months ended
September 30, 2023, compared to $41.5 million for the three
months ended September 30, 2022.
- Fleet utilization increased to 93.4%
for the three months ended September 30, 2023, compared to
84.9% for the three months ended September 30, 2022.
- Average daily time charter equivalent
("TCE") was $26,278 for the three months ended September 30,
2023, compared to $22,022 for the three months ended
September 30, 2022.
- The Ethylene Export Terminal had a
throughput during the third quarter of 2023 totaling 249,857 metric
tons, compared to 189,140 metric tons during the third quarter of
2022.
- In September 2023, we purchased an
aggregate of $9.0 million of the 2020 Bonds in the open market
using cash on hand. These purchased 2020 Bonds have not been
canceled or redeemed and the Company intends to hold the bonds to
maturity.
- On October 25, 2023 the Company
announced a new investment alongside Yara Growth Ventures to
acquire a 14.5% interest in Azane Fuel Solutions for 2.7 million
EUR (approximately $3 million). The first green ammonia bunkering
units are scheduled to be delivered in 2025 enabling low carbon
fuel offering to shipowners.
Ethylene Export Terminal
The Ethylene Export Terminal had a throughput during the third
quarter of 2023 totaling 249,857 metric tons, compared to 189,140
metric tons during the third quarter of 2022.
We, together with Enterprise Products Partners L.P, our joint
venture partner, have agreed to the Terminal Expansion Project,
which is expected to increase the export capacity from
approximately one million tons per year to at least 1.55 million
tons. Long lead items have already been ordered and construction,
which is expected to be completed in the fourth quarter of 2024,
has commenced. The total capital contributions required from us to
the Export Terminal Joint Venture for the Terminal Expansion
Project are expected to be approximately $125 million which the
Company expects to finance using existing cash resources,
distributions from the Export Terminal Joint Venture during the
course of the expansion and additional debt. The Company has made a
total of $27 million in capital contributions for the Terminal
Expansion Project.
Azane Fuel Solutions Ammonia Bunkering
On October 25, 2023 the Company , together with Yara Growth
Ventures, announced that each of them had successfully acquired a
14.5% interest in the Norwegian startup Azane Fuel Solutions AS
(“Azane”) for 2.7 million EUR (approximately $3 million). Azane, a
joint venture between ECONNECT Energy AS and Amon Maritime AS was
founded in Norway in 2020 to develops proprietary technology and
services for ammonia fuel handling, to facilitate the transition to
green fuels for shipping.
Subject to customary conditions, Azane intends to build the
world’s first ammonia bunkering network, with Yara Clean Ammonia
already pre-ordering 15 units from Azane. The investment made by
Yara and Navigator is expected to enable Azane to begin
construction of its first bunkering unit for ammonia supply in
Norway, aiming to kickstart the transition to zero-carbon fuels for
maritime transportation. Future value creation for Azane is
expected to come through international expansion with its bunkering
solutions and broadening of its offerings in ammonia fuel handling
technology.
Purchase of 2020 Unsecured Bonds
On September 10, 2020, we issued senior unsecured bonds in an
aggregate principal amount of $100.0 million with Nordic Trustee AS
as the bond trustee (the “2020 Bonds”). The 2020 Bonds are governed
by Norwegian law and listed on the Nordic ABM which is operated and
organized by Oslo Børs ASA.
In September 2023, we purchased an aggregate of $9.0 million of
the 2020 Bonds in the open market using cash on hand. These
purchased 2020 Bonds have not been canceled or redeemed and the
Company intends to hold the bonds to maturity.
Shipping Trends
Utilization across the fleet increased from 89.0% in the second
quarter of 2023 to 93.4% in the third quarter of 2023. Utilization
during third quarter of 2022 was 84.9%. The increase in utilization
of 8.8% is primarily driven by improvement in the market conditions
for the ethylene capable vessels in our fleet.
During the third quarter of 2023, the handysize 12-month market
assessment for semi-refrigerated and fully refrigerated vessels
increased by $12,000 and $20,000 per calendar month (“pcm”), to
$800,000 pcm and $772,000 pcm, respectively. The handysize ethylene
market assessment increased by $40,000 pcm to $1,000,000 pcm.
During the third quarter of 2023 we experienced downward
pressure on the ethylene arbitrage to Asia, this was balanced by
increased activity on ethane movements, both transatlantic and to
Asia, the latter being relatively long voyages and increasing the
ton/mile. Guiding spot rates on the ethylene segment remained flat
during the third quarter of 2023, however utilization and time
charter assessments have improved.
We have 32 vessels engaged under time charters ("TC") and 15
vessels on spot and contracts of affreightment ("CoA"). Our midsize
and fully refrigerated vessels are fully employed on time charters,
our semi-refrigerated vessels are employed under time charters and
voyage charters, and most of the Ethylene capable vessels are
employed on the spot market. From October 31, 2023 to October 31,
2024, we currently expect to have 38% of our ship days covered
under time charter.
The fourth quarter of 2023 and the first quarter of 2024 are
typically busier seasons for our fleet. We expect to see an
increase in spot activity and an increase in time charter
assessment as well as a continuation of the positive market
developments we have recently seen.
Reconciliation of Non-GAAP Financial
Measures
The following table sets forth a reconciliation of net income to
EBITDA and Adjusted EBITDA for the three months ended
September 30, 2023 and 2022:
|
Three months ended |
Nine
months ended |
|
September 30,
2022 |
September
30, 2023 |
September 30,
2022 |
September
30, 2023 |
|
(in thousands) |
(in thousands) |
Net income |
$ |
2,859 |
$ |
21,383 |
|
$ |
44,623 |
$ |
67,728 |
|
Net interest expense |
$ |
12,996 |
$ |
16,421 |
|
$ |
36,488 |
$ |
44,896 |
|
Income taxes |
$ |
426 |
$ |
1,120 |
|
$ |
1,490 |
$ |
4,269 |
|
Depreciation and
amortization |
$ |
32,842 |
$ |
32,353 |
|
$ |
95,661 |
$ |
96,374 |
|
EBITDA(1) |
$ |
49,123 |
$ |
71,277 |
|
$ |
178,262 |
$ |
213,267 |
|
Profit from sale of
vessel |
|
— |
$ |
— |
|
|
|
4,941 |
|
Unrealized gain / (loss) on
non-designated derivative instruments |
$ |
2,541 |
$ |
(972 |
) |
$ |
12,437 |
$ |
(2,028 |
) |
Foreign currency exchange
loss/(gain) on senior secured bonds |
$ |
8,218 |
|
— |
|
$ |
12,558 |
$ |
— |
|
Adjusted
EBITDA(1) |
$ |
41,465 |
$ |
72,249 |
|
$ |
153,267 |
$ |
210,354 |
|
|
1EBITDA and Adjusted EBITDA are not measurements prepared in
accordance with U.S. GAAP (non-GAAP financial measures). EBITDA
represents net income before net interest expense, income taxes,
depreciation and amortization. We define Adjusted EBITDA as EBITDA
before profit on sale of vessel, unrealized gain or loss on
non-designated derivative instruments and foreign currency exchange
gain or loss on senior secured bonds.
Management believes that EBITDA and Adjusted EBITDA are useful
to investors in evaluating the operating performance of the
Company. EBITDA and Adjusted EBITDA do not represent and should not
be considered alternatives to consolidated net income, cash
generated from operations or any measure prepared in accordance
with U.S. GAAP, and our calculation of EBITDA and Adjusted EBITDA
may not be comparable to that reported by other companies.
Navigator Holdings Ltd. Announces Date for the Release
of Third Quarter 2023 Results and Zoom
Tomorrow, Tuesday, November 14, 2023 at 10:00 A.M. E.S.T., the
Company’s management team will host a Zoom conference call and
slide presentation to discuss the financial results.
Zoom Conference Call DetailsParticipants should register for the
conference call and slide presentation through the following
link:
https://us06web.zoom.us/webinar/register/WN_5Ka5sWGlTnSGNOlXRPq1Rg
Or join by
phone: United
States: +1 929 205 6099United Kingdom: +44 330 088 5830
For a full list of US and international numbers available,
please click on the link below:
International Dial-in numbers
Webinar ID: 854 2757 9980Passcode: 280346
The conference call and slide presentation will be available for
replay on Navigator’s website www.navigatorgas.com under Key Dates
and All Reports in the Investors Centre section.
Audio Webcast:There will also be a live, and
then archived, webcast of the conference call, available through
the Company’s website (www.navigatorgas.com). To listen to the live
and archived audio file, visit our website www.navigatorgas.com and
click on Key Dates under our Investors Centre page. Participants to
the live webcast should register on the website approximately 10
minutes prior to the start of the webcast.
About Navigator Gas
Navigator Holdings Ltd., which we sometimes refer to as
“Navigator Gas”(NYSE: NVGS), is the owner and operator of the
world’s largest fleet of handysize liquefied gas carriers and a
global leader in the seaborne transportation services of
petrochemical gases, such as ethylene and ethane, liquefied
petroleum gas (“LPG”) and ammonia and owns a 50% share, through a
joint venture, in an ethylene export marine terminal at Morgan’s
Point, Texas on the Houston Ship Channel, USA. Navigator Gas’ fleet
consists of 56 semi- or fully-refrigerated liquefied gas carriers,
25 of which are ethylene and ethane capable. Navigator Gas plays a
vital role in the liquefied gas supply chain for energy companies,
industrial consumers and commodity traders, with its sophisticated
vessels providing an efficient and reliable ‘floating pipeline’
between the parties, connecting the world today, creating a
sustainable tomorrow.
Navigator Gas Attention:Investor Relations
investorrelations@navigatorgas.com and
randy.giveans@navigatorgas.comAddress: 333 Clay Street, Suite 2480,
Houston, Texas, U.S.A. 77002Tel: +1 713 373 6197 and +44 (0)20 7340
4850London: 10 Bressenden Place, London, SW1E 5DH. Tel: +44 (0)20
7340 4850
Investor Relations / Media AdvisorsNicolas Bornozis / Paul
LampoutisCapital Link – New YorkTel:
+1-212-661-7566Email: navigatorgas@capitallink.com
Unaudited Results of Operations for the
Three months ended September 30, 2023
Compared to the Three months ended
September 30, 2022
The following table compares our operating results for the three
months ended September 30, 2022 and 2023:
|
Three
months ended September 30, 2022 |
Three
months ended September 30, 2023 |
PercentageChange |
|
(in thousands, except Percentage Change) |
Operating revenues |
$ |
93,960 |
|
$ |
125,541 |
|
33.6% |
Operating revenues – Unigas
Pool |
|
9,615 |
|
|
12,227 |
|
27.2% |
Operating revenues – Luna Pool
collaborative arrangements |
|
3,238 |
|
|
— |
|
(100.0)% |
Total operating revenue |
|
106,813 |
|
|
137,768 |
|
29.0% |
Expenses, net: |
|
|
|
Brokerage commission |
|
1,430 |
|
|
1,788 |
|
25.0% |
Voyage expenses |
|
20,208 |
|
|
20,561 |
|
1.7% |
Voyage expenses – Luna Pool collaborative arrangements |
|
3,643 |
|
|
19 |
|
(99.5)% |
Vessel operating expenses |
|
38,663 |
|
|
39,565 |
|
2.3% |
Depreciation and amortization |
|
32,842 |
|
|
32,353 |
|
(1.5)% |
General and administrative costs |
|
6,137 |
|
|
7,357 |
|
19.9% |
Profit from sale of vessel |
|
— |
|
|
— |
|
- |
Other income |
|
(60 |
) |
|
— |
|
100.0% |
Total operating expenses |
|
102,863 |
|
|
101,643 |
|
(1.2)% |
Operating Income |
|
3,950 |
|
|
36,125 |
|
814.6% |
Other income/(expense) |
|
|
|
Foreign currency exchange gain on senior secured bond |
|
5,117 |
|
|
— |
|
(100.0)% |
Unrealized gain / (loss) on non-designated derivative
instruments |
|
2,541 |
|
|
(972 |
) |
(138.3)% |
Interest expense |
|
(13,166 |
) |
|
(18,189 |
) |
38.3% |
Interest income |
|
170 |
|
|
1,768 |
|
940.0% |
(Loss) / Income before taxes and share of result of equity method
investments |
|
(1,388 |
) |
|
18,732 |
|
(1449.6)% |
Income taxes |
|
(426 |
) |
|
(1,120 |
) |
162.9% |
Share of result of equity method
investments |
|
4,673 |
|
|
3,771 |
|
(19.3)% |
Net Income |
|
2,859 |
|
|
21,383 |
|
647.9% |
Net income attributable to
non-controlling interest |
|
(414 |
) |
|
(2,270 |
) |
448.3% |
Net Income attributable to
stockholders' of Navigator Holdings Ltd. |
$ |
2,445 |
|
$ |
19,113 |
|
681.7% |
Operating Revenues. Operating revenues,
net of address commissions, was $125.5 million for the three months
ended September 30, 2023, an increase of $31.6 million or 33.6%
compared to $94.0 million for the three months ended September 30,
2022. This increase was primarily due to:
• an increase in operating revenues of
approximately $15.5 million attributable to an increase in
average monthly time charter equivalent rates, which increased to
an average of approximately $26,278 per vessel per day ($799,279
per vessel per calendar month) for the three months ended September
30, 2023, compared to an average of approximately $22,022 per
vessel per day ($669,890 per vessel per calendar month) for the
three months ended September 30, 2022;
• an increase in operating revenues of
approximately $9.5 million attributable to an increase in
fleet utilization, which rose to 93.4% for the three months ended
September 30, 2023, compared to 84.9% for the three months ended
September 30, 2022;
• an increase in operating revenues of
approximately $6.2 million or 8.45%, attributable to a 333 day
increase in vessel available days for the three months ended
September 30, 2023, compared to the three months ended September
30, 2022. This increase was in part as a result of five handysize
vessels acquired by the Navigator Greater Bay Joint Venture being
fully operational during the three months ended September 30, 2023,
and not included in the revenue for the three months ended
September 30, 2022, and in part as a result of fewer vessels in
drydock for the three months ended September 30, 2023,
compared to the three months ended September 30, 2022;
• a increase in operating revenues of
approximately $0.4 million primarily attributable to a
increase in pass through voyage costs for the three months ended
September 30, 2023, compared to the three months ended September
30, 2022.
The following table presents selected operating data for the
three months ended September 30, 2023, and 2022, which we believe
are useful in understanding the basis for movement in our operating
revenues.
|
Three months ended September 30, 2022 |
Three months endedSeptember 30, 2023 |
* Fleet Data: |
|
|
Weighted average number of vessels |
|
44.0 |
|
|
47.0 |
|
Ownership days |
|
4,048 |
|
|
4,324 |
|
Available days |
|
3,943 |
|
|
4,276 |
|
Earning days |
|
3,349 |
|
|
3,995 |
|
Fleet utilization |
|
84.94% |
|
|
93.43% |
|
** Average daily time charter equivalent rate |
$ |
22,022 |
|
$ |
26,278 |
|
|
|
|
|
|
|
|
* Fleet Data - Our nine owned smaller vessels
in the independent commercially managed Unigas Pool and the vessels
owned by Pacific Gas in our Luna Pool prior to their acquisition by
the Navigator Greater Bay Joint Venture are not included in this
data.
** Non-GAAP Financial Measure—Time charter
equivalent: Time charter equivalent (“TCE”) is a measure
of the average daily revenue performance of a vessel. TCE is not
calculated in accordance with U.S. GAAP. For all charters, we
calculate TCE by dividing total operating revenues (excluding
collaborative arrangements and revenues from the Unigas Pool), less
any voyage expenses (excluding collaborative arrangements), by the
number of earning days for the relevant period. TCE exclude the
effects of the collaborative arrangements, as earning days and
fleet utilization, on which TCE are based, are calculated for our
owned vessels, and not the average of all pool vessels. Under a
time charter, the charterer pays substantially all of the vessel
voyage related expenses, whereas for voyage charters, also known as
spot market charters, we pay all voyage expenses. TCE is a shipping
industry performance measure used primarily to compare
period-to-period changes in a company’s performance despite changes
in the mix of charter types (i.e., voyage charters, time charters
and contracts of affreightment) under which the vessels may be
employed between the periods. We include average daily TCE, as we
believe it provides additional meaningful information in
conjunction with net operating revenues because it assists our
management in making decisions regarding the deployment and use of
our vessels and in evaluating their financial performance. Our
calculation of TCE may not be comparable to that reported by other
companies.
Reconciliation of Operating Revenues to TCE
rate
The following table represents a reconciliation of operating
revenues to TCE rate. Operating revenues are the most directly
comparable financial measure calculated in accordance with U.S.
GAAP for the periods presented.
|
Three months ended September 30, 2022 |
Three months ended September 30, 2023 |
|
(in thousands, except earning days and
average daily time charter equivalent rate) |
Fleet Data: |
|
|
*** Operating revenue |
$ |
93,960 |
$ |
125,541 |
*** Voyage expenses |
|
20,208 |
|
20,561 |
Operating revenue less voyage expenses |
|
73,752 |
|
104,980 |
Earning days |
|
3,349 |
|
3,995 |
Average daily time charter equivalent rate |
$ |
22,022 |
$ |
26,278 |
|
|
|
|
|
***Operating revenues and voyage expenses excluding
collaborative arrangements and Unigas pool.
Operating Revenues – Unigas
Pool. Operating revenues – Unigas Pool was $12.2
million for the three months ended September 30, 2023 compared to
$9.6 million for the three months ended September 30, 2022 and
represents our share of the revenues earned from our nine vessels
operating within the Unigas Pool, based on agreed pool points.
Operating Revenues – Luna Pool Collaborative
Arrangements. Pool earnings are aggregated and then
allocated (after deducting pool overheads and managers' fees) to
the Pool Participants in accordance with the Pooling Agreement.
Operating revenues - Luna Pool collaborative arrangements was $nil
for the three months ended September 30, 2023, compared to $3.2
million for the three months ended September 30, 2022 and
represents our share of pool net revenues generated by the other
participant’s vessels in the pool, prior to the acquisition of the
vessels by Navigator Greater Bay Joint Venture. This decrease was
primarily as a result of the arrangement ending following the
acquisition of the final vessel Navigator Vega on April 13,
2023.
Brokerage Commissions. Brokerage
commissions, which typically vary between 1.25% and 2.5% of
operating revenues, increased by $0.4 million or 25.0% to $1.8
million for the three months ended September 30, 2023, from
$1.4 million for the three months ended September 30, 2022,
primarily due to an increase in operating revenues on which
brokerage commissions are based.
Voyage Expenses. Voyage expenses increased
by $0.4 million or 1.7% to $20.6 millionfor the three months ended
September 30, 2023, from $20.2 million for the three months ended
September 30, 2022. These voyage expenses are pass through costs,
corresponding to an increase in operating revenues of the same
amount.
Voyage Expenses – Luna Pool Collaborative
Arrangements. Voyage expenses – Luna Pool
collaborative arrangements were $nil$— million for the three months
ended September 30, 2023, compared to $3.6 million for the three
months ended September 30, 2022. These voyage expenses – Luna Pool
collaborative arrangements represent the other participant’s share
of pool net revenues generated by both our vessels and those of the
Navigator Greater Bay Joint Venture in the pool This decrease was
primarily as a result of the arrangement ending following the
acquisition of the final vessel Navigator Vega on April 13,
2023.
Vessel Operating Expenses. Vessel
operating expenses increased by $0.9 million or 2.3% to $39.6
million for the three months ended September 30, 2023, from
$38.7 million for the three months ended September 30, 2022.
Average daily vessel operating expenses decreased by $250 per
vessel per day, or 3.2%, to $7,680 vessel per day for the three
months ended September 30, 2023, compared to $7,930 per vessel
per day for the three months ended September 30, 2022.
Depreciation and
Amortization. Depreciation and amortization decreased
by $0.5 million . Depreciation and amortization included
amortization of capitalized drydocking costs of $4.4 million
and $5.5 million for the three months ended September 30, 2023 and
2022, respectively.
General and Administrative Costs. General
and administrative costs increased by $1.2 million or 19.9% to
$7.4 million for the three months ended September 30, 2023, from
$6.1 million for the three months ended September 30,
2022.
Non-operating Results
Foreign Currency Exchange Gain on Senior Secured
Bonds. In December 2022, we redeemed all of the 600
million Norwegian Kroner then outstanding principal amount of our
senior secured bonds (the “2018 Bonds”) and no exchange gains and
losses were recorded for the three months ended September 30, 2023.
A foreign currency exchange gain of $5.1 million was recorded for
the three months ended September 30, 2022, as a result of the
Norwegian Kroner weakening against the U.S. Dollar.
Foreign Currency Exchange Gain on Senior Secured
Bonds. In December 2022, we redeemed all of the 600
million Norwegian Kroner then outstanding principal amount of our
senior secured bonds (the “2018 Bonds”) and no exchange gains and
losses were recorded for the three months ended September 30, 2023.
A foreign currency exchange gain of $5.1 million was recorded for
the three months ended September 30, 2022, as a result of the
Norwegian Kroner weakening against the U.S. Dollar.
Unrealized Gains / (Losses) on Non-designated Derivative
Instruments. The unrealized loss of $1.0
million on non-designated derivative instruments for the three
months ended September 30, 2023, relates to a fair value loss on
interest rate swaps across a number of our secured term loan and
revolving credit facilities, as a result of a decrease in forward
U.S. Libor and Secured Overnight Financing Rate (“SOFR”) interest
rates relative to the fixed rates applicable on these secured term
loan and revolving credit facilities. The unrealized gains on
non-designated derivative instruments of $2.5 million for the three
months ended September 30, 2022, primarily related to fair value
gains of $7.6 million on our interest rate swaps across a number of
our secured term loan and revolving credit facilities, as a result
of continued increases in forward U.S. Libor interest rates
relative to the fixed rates applicable on these secured term loan
and revolving credit facilities, off-set by a loss on our
cross-currency interest rate swap of $5.1 million which was due to
further strengthening of the U.S. Dollar against the Norwegian
Kroner.
Interest Expense. Interest expense
increased by $5.0 million, or 38.3%, to $18.2 million for the
three months ended September 30, 2023, from $13.2
million for the three months ended September 30, 2022. This is
primarily as a result of increases in U.S. Libor and SOFR rates and
the draw down of facilities that provided financing for the
acquisition of five ethylene carriers by the Navigator Greater Bay
Joint Venture.
Income Taxes. Income taxes relate to taxes
on our subsidiaries incorporated in the United States of America,
as well as other countries around the world where we have
subsidiaries. Income taxes increased to $1.1 million for the three
months ended September 30, 2023, compared to $0.4 million for the
three months ended September 30, 2022, primarily as a result of
current and deferred taxes on our portion of the profits from the
Ethylene Export Terminal.
Share of Result of Equity Method
Investments. The share of the result of the Company’s
50% ownership in the Export Terminal Joint Venture was an income of
$3.8 million for the three months ended September 30, 2023,
compared to an income of $4.7 million for the three months ended
September 30, 2022. This decrease is a result of higher gas prices
resulting in reduced throughput rates, offset by increased volumes
exported through the Ethylene Export Terminal, of 249,857 tons for
the three months ended September 30, 2023, compared to 189,140 tons
for the three months ended September 30, 2022,
Non-Controlling Interest. We entered into a
sale and leaseback arrangement in November 2019 with a wholly-owned
special purpose vehicle of a financial institution (“Lessor SPV”).
Although we do not hold any equity investments in this Lessor SPV,
we have determined that we are the primary beneficiary of this
entity and accordingly, we are required to consolidate this
Variable Interest Entity ("VIE") into our financial results. The
net income attributable to the Lessor SPV was $0.4 million and this
is presented as a non-controlling interest for each period for both
the three months ended September 30, 2023, and three months ended
September 30, 2022.
In September 2022, the Company entered into the Navigator
Greater Bay Joint Venture to acquire five ethylene vessels,
Navigator Luna, Navigator Solar, Navigator Castor, Navigator
Equator and Navigator Vega. The joint venture is owned 60% by the
Company and 40% by Greater Bay Gas. The Navigator Greater Bay Joint
Venture is accounted for as a consolidated subsidiary in our
consolidated financial statements, with the 40% owned by Greater
Bay Gas accounted for as a non-controlling interest. A gain
attributable to Greater Bay Gas of $1.9 million is presented as the
non-controlling interest in our financial results for the three
months ended September 30, 2023.
Our Fleet
The following table sets forth our vessels as of November 13,
2023:
Operating Vessel |
YearBuilt |
Vessel Size(cbm) |
EmploymentStatus |
Current Cargo |
Time CharterExpiration Date |
Ethylene/ethane capable semi-refrigerated
midsize |
|
|
|
|
|
Navigator Aurora |
2016 |
37,300 |
Time Charter |
Ethane |
December 2026 |
Navigator Eclipse |
2016 |
37,300 |
Time Charter |
Ethane |
March 2026 |
Navigator Nova |
2017 |
37,300 |
Time Charter |
Ethane |
September 2026 |
Navigator Prominence |
2017 |
37,300 |
Time Charter |
Ethane |
March 2025 |
|
|
|
|
|
|
Ethylene/ethane capable semi-refrigerated
handysize |
|
|
|
|
|
Navigator Pluto* |
2000 |
22,085 |
Drydock |
— |
— |
Navigator Saturn* |
2000 |
22,085 |
Time Charter |
Ethylene |
April 2024 |
Navigator Venus* |
2000 |
22,085 |
Spot Market |
Ethylene |
— |
Navigator Atlas* |
2014 |
21,000 |
Spot Market |
Ethylene |
— |
Navigator Europa* |
2014 |
21,000 |
Time Charter |
Ethane |
December 2023 |
Navigator Oberon* |
2014 |
21,000 |
Spot Market |
Ethylene |
— |
Navigator Triton* |
2015 |
21,000 |
Spot Market |
Ethylene |
— |
Navigator Umbrio* |
2015 |
21,000 |
Time Charter |
Ethane |
December 2023 |
Navigator Luna* |
2018 |
17,000 |
Spot Market |
Ethylene |
— |
Navigator Solar* |
2018 |
17,000 |
Spot Market |
Ethylene |
— |
Navigator Castor* |
2019 |
22,000 |
Spot Market |
Ethylene |
— |
Navigator Equator* |
2019 |
22,000 |
Spot Market |
Ethylene |
— |
Navigator Vega* |
2019 |
22,000 |
Spot Market |
Ethylene |
— |
|
|
|
|
|
|
Ethylene/ethane capable semi-refrigerated smaller
size |
|
|
|
|
|
Happy Condor** |
2008 |
9,000 |
Unigas Pool |
— |
— |
Happy Pelican** |
2012 |
6,800 |
Unigas Pool |
— |
— |
Happy Penguin** |
2013 |
6,800 |
Unigas Pool |
— |
— |
Happy Kestrel** |
2013 |
12,000 |
Unigas Pool |
— |
— |
Happy Osprey** |
2013 |
12,000 |
Unigas Pool |
— |
— |
Happy Peregrine** |
2014 |
12,000 |
Unigas Pool |
— |
— |
Happy Albatross** |
2015 |
12,000 |
Unigas Pool |
— |
— |
Happy Avocet** |
2017 |
12,000 |
Unigas Pool |
— |
— |
|
|
|
|
|
|
Semi-refrigerated handysize |
|
|
|
|
|
Navigator Aries |
2008 |
20,750 |
Time Charter |
LPG |
January 2024 |
Navigator Capricorn |
2008 |
20,750 |
Time Charter |
Butane |
October 2024 |
Navigator Gemini |
2009 |
20,750 |
Spot Market |
Butadiene |
— |
Navigator Pegasus |
2009 |
22,200 |
Time Charter |
Propylene |
March 2024 |
Navigator Phoenix |
2009 |
22,200 |
Time Charter |
Ammonia |
September 2024 |
Navigator Scorpio |
2009 |
20,750 |
Time Charter |
LPG |
January 2024 |
Navigator Taurus |
2009 |
20,750 |
Time Charter |
Ammonia |
January 2024 |
Navigator Virgo |
2009 |
20,750 |
Time Charter |
Butane |
April 2024 |
Navigator Leo |
2011 |
20,600 |
Time Charter |
LPG |
December 2023 |
Navigator Libra |
2012 |
20,600 |
Time Charter |
LPG |
December 2023 |
Atlantic Gas |
2014 |
22,000 |
Time Charter |
LPG |
February 2024 |
Adriatic Gas |
2015 |
22,000 |
Time Charter |
LPG |
November 2024 |
Balearic Gas |
2015 |
22,000 |
Time Charter |
LPG |
December 2023 |
Celtic Gas |
2015 |
22,000 |
Spot Market |
Butadiene |
— |
Navigator Centauri |
2015 |
21,000 |
Time Charter |
LPG |
May 2024 |
Navigator Ceres |
2015 |
21,000 |
Time Charter |
LPG |
June 2024 |
Navigator Ceto |
2016 |
21,000 |
Time Charter |
LPG |
May 2024 |
Navigator Copernico |
2016 |
21,000 |
Time Charter |
LPG |
May 2024 |
Bering Gas |
2016 |
22,000 |
Spot Market |
Butadiene |
— |
Navigator Luga |
2017 |
22,000 |
Time Charter |
LPG |
July 2024 |
Navigator Yauza |
2017 |
22,000 |
Time Charter |
LPG |
July 2024 |
Arctic Gas |
2017 |
22,000 |
Spot Market |
Butadiene |
— |
Pacific Gas |
2017 |
22,000 |
Time Charter |
LPG |
May 2024 |
|
|
|
|
|
|
Semi-refrigerated smaller size |
|
|
|
|
|
Happy Falcon** |
2002 |
3,770 |
Unigas Pool |
— |
|
|
|
|
|
|
|
Fully-refrigerated |
|
|
|
|
|
Navigator Glory |
2010 |
22,500 |
Time Charter |
Ammonia |
June 2025 |
Navigator Grace |
2010 |
22,500 |
Time Charter |
Ammonia |
January 2025 |
Navigator Galaxy |
2011 |
22,500 |
Time Charter |
Ammonia |
December 2024 |
Navigator Genesis |
2011 |
22,500 |
Time Charter |
Ammonia |
January 2025 |
Navigator Global |
2011 |
22,500 |
Spot Market |
— |
— |
Navigator Gusto |
2011 |
22,500 |
Time Charter |
Ammonia |
March 2024 |
Navigator Jorf |
2017 |
38,000 |
Time Charter |
Ammonia |
August 2027 |
|
|
|
|
|
|
* denotes our owned vessels that operate within the Luna Pool**
denotes our owned vessels that operate within the independently
managed Unigas Pool
Condensed Consolidated Balance
Sheets(Unaudited)
|
December 31, 2022 |
September 30, 2023 |
|
(in thousands, except share data) |
Assets |
|
|
Current Assets |
|
|
Cash, cash equivalents and restricted cash |
$ |
153,194 |
|
$ |
178,666 |
|
Accounts receivable, net of allowance for credit losses |
$ |
18,245 |
|
$ |
17,079 |
|
Accrued income |
$ |
9,367 |
|
$ |
12,029 |
|
Prepaid expenses and other current assets |
$ |
21,152 |
|
$ |
24,721 |
|
Bunkers and lubricant oils |
$ |
8,548 |
|
$ |
12,473 |
|
Insurance receivable |
$ |
1,452 |
|
$ |
1,833 |
|
Amounts due from related parties |
$ |
16,363 |
|
$ |
30,905 |
|
Total current assets |
$ |
228,321 |
|
$ |
277,706 |
|
Non-current Assets |
|
|
Vessels, net |
$ |
1,692,494 |
|
$ |
1,782,245 |
|
Property, plant and equipment, net |
$ |
198 |
|
$ |
56 |
|
Intangible assets, net of accumulated amortization |
$ |
239 |
|
$ |
240 |
|
Equity method investments |
$ |
148,534 |
|
$ |
156,818 |
|
Derivative assets |
$ |
21,955 |
|
$ |
19,928 |
|
Right-of-use asset for operating leases |
$ |
3,625 |
|
$ |
3,009 |
|
Prepaid expenses and other non-current assets |
$ |
1,372 |
|
$ |
— |
|
Total non-current assets |
$ |
1,868,417 |
|
$ |
1,962,296 |
|
Total Assets |
$ |
2,096,738 |
|
$ |
2,240,002 |
|
Liabilities and Stockholders’ Equity |
|
|
Current Liabilities |
|
|
Current portion of secured term loan facilities, net of deferred
financing costs |
$ |
99,009 |
|
$ |
120,006 |
|
Current portion of operating lease liabilities |
$ |
219 |
|
$ |
278 |
|
Accounts payable |
$ |
7,773 |
|
$ |
9,527 |
|
Accrued expenses and other liabilities |
$ |
24,708 |
|
$ |
18,396 |
|
Accrued interest |
$ |
4,211 |
|
$ |
2,575 |
|
Deferred income |
$ |
23,108 |
|
$ |
25,745 |
|
Amounts due to related parties |
$ |
595 |
|
$ |
591 |
|
Total current liabilities |
$ |
159,623 |
|
$ |
177,118 |
|
Non-current Liabilities |
|
|
Secured term loan facilities and revolving credit facilities, net
of current portion and deferred financing costs |
$ |
608,338 |
|
$ |
700,318 |
|
Senior unsecured bond, net of deferred financing costs |
$ |
98,943 |
|
$ |
90,238 |
|
Operating lease liabilities, net of current portion |
$ |
4,032 |
|
$ |
3,994 |
|
Deferred tax liabilities |
$ |
4,250 |
|
$ |
6,970 |
|
Amounts due to related parties |
$ |
48,140 |
|
$ |
42,985 |
|
Total non-current liabilities |
$ |
763,703 |
|
$ |
844,505 |
|
Total Liabilities |
$ |
923,326 |
|
$ |
1,021,623 |
|
Commitments and Contingencies |
|
|
Stockholders’ Equity |
|
|
Common stock—$0.01 par value per share; 400,000,000 shares
authorized; 73,285,088 shares issued and outstanding, (December 31,
2022: 76,804,474) |
|
769 |
|
|
734 |
|
Additional paid-in capital |
|
798,188 |
|
|
799,100 |
|
Accumulated other comprehensive loss |
|
(463 |
) |
|
(103 |
) |
Retained earnings |
|
364,000 |
|
|
377,237 |
|
Total Navigator Holdings Ltd. Stockholders’
Equity |
|
1,162,494 |
|
|
1,176,968 |
|
Non-controlling interest |
|
10,918 |
|
|
41,411 |
|
Total equity |
|
1,173,412 |
|
|
1,218,379 |
|
Total Liabilities and Stockholders’ Equity |
$ |
2,096,738 |
|
$ |
2,240,002 |
|
Condensed Consolidated Statements of
Operations(Unaudited)
|
Three months ended September 30,(in thousands except share and per
share data) |
|
|
2022 |
|
|
2023 |
|
Revenues |
|
|
Operating revenues |
$ |
93,960 |
|
$ |
125,541 |
|
Operating revenues – Unigas
Pool |
|
9,615 |
|
|
12,227 |
|
Operating revenues – Luna Pool
collaborative arrangements |
|
3,238 |
|
|
— |
|
Total operating revenue |
|
106,813 |
|
|
137,768 |
|
Expenses |
|
|
Brokerage commission |
|
1,430 |
|
|
1,788 |
|
Voyage expenses |
|
20,208 |
|
|
20,561 |
|
Voyage expenses – Luna Pool
collaborative arrangements |
|
3,643 |
|
|
19 |
|
Vessel operating expenses |
|
38,663 |
|
|
39,565 |
|
Depreciation and
amortization |
|
32,842 |
|
|
32,353 |
|
General and administrative
costs |
|
6,137 |
|
|
7,357 |
|
Profit from sale of vessel |
|
— |
|
|
— |
|
Other income |
|
(60 |
) |
|
— |
|
Total operating
expenses |
$ |
102,863 |
|
$ |
101,643 |
|
Operating
Income |
$ |
3,950 |
|
$ |
36,125 |
|
Other
income/(expense) |
|
|
Foreign currency exchange gain on
senior secured bond |
|
5,117 |
|
|
— |
|
Unrealized gain / (loss) on
non-designated derivative instruments |
|
2,541 |
|
|
(972 |
) |
Write off of deferred financing
costs |
|
— |
|
|
— |
|
Interest expense |
|
(13,166 |
) |
|
(18,189 |
) |
Interest income |
|
170 |
|
|
1,768 |
|
(Loss) / Income before
taxes and share of result of equity method
investments |
$ |
(1,388 |
) |
$ |
18,732 |
|
Income taxes |
|
(426 |
) |
|
(1,120 |
) |
Share of result of equity method
investments |
|
4,673 |
|
|
3,771 |
|
Net Income |
$ |
2,859 |
|
$ |
21,383 |
|
Net income attributable to
non-controlling interest |
|
(414 |
) |
|
(2,270 |
) |
Net Income attributable
to stockholders' of Navigator Holdings Ltd. |
$ |
2,445 |
|
$ |
19,113 |
|
Earnings per share attributable to stockholders of Navigator
Holdings Ltd.: |
|
|
Dividend Paid |
$ |
— |
|
$ |
0.05 |
|
Basic: |
$ |
0.03 |
|
$ |
0.26 |
|
Diluted: |
$ |
0.03 |
|
$ |
0.26 |
|
Weighted average number of shares outstanding: |
|
|
Basic: |
|
77,264,139 |
|
|
73,449,619 |
|
Diluted: |
|
77,574,995 |
|
|
74,032,887 |
|
Condensed Consolidated Statements of Cash
Flows(Unaudited)
|
Nine months ended September 30, 2022 |
Nine months ended September 30, 2023 |
|
(in thousands) |
Cash flows from operating activities |
|
|
Net income |
$ |
44,623 |
|
$ |
67,728 |
|
Adjustments to reconcile net income to net cash provided by
operating activities |
|
|
Unrealized (gains)/losses on non-designated derivative
instruments |
|
(12,437 |
) |
|
2,028 |
|
Depreciation and amortization |
|
95,661 |
|
|
96,374 |
|
Payment of drydocking costs |
|
(11,466 |
) |
|
(9,842 |
) |
Amortization of share-based compensation |
|
670 |
|
|
912 |
|
Amortization of deferred financing costs |
|
2,992 |
|
|
3,074 |
|
Share of result of equity method investments |
|
(17,933 |
) |
|
(15,067 |
) |
Profit from sale of vessel |
|
(358 |
) |
|
(4,941 |
) |
Unrealized foreign exchange gain on senior secured bonds |
|
(12,558 |
) |
|
— |
|
Other unrealized foreign exchange (loss) |
|
(2,450 |
) |
|
(232 |
) |
Changes in operating assets and liabilities |
|
|
Accounts receivable |
|
9,788 |
|
|
1,166 |
|
Insurance claim receivable |
|
(2,229 |
) |
|
(2,212 |
) |
Bunkers and lubricant oils |
|
322 |
|
|
(3,925 |
) |
Accrued income and prepaid expenses and other current assets |
|
(7,283 |
) |
|
(4,245 |
) |
Accounts payable, accrued interest, accrued expenses and other
liabilities |
|
(979 |
) |
|
(744 |
) |
Amounts due to related parties |
|
5,157 |
|
|
(14,542 |
) |
Net cash provided by operating activities |
|
91,520 |
|
|
115,532 |
|
Cash flows from investing activities |
|
|
Additions to vessels and equipment |
|
(2,793 |
) |
|
(191,727 |
) |
Contributions to equity method investments |
|
— |
|
|
(18,036 |
) |
Distributions from equity method investments |
|
20,562 |
|
|
24,819 |
|
Purchase of other property, plant and equipment |
|
(36 |
) |
|
(185 |
) |
Net proceeds from sale of vessels |
|
26,449 |
|
|
20,720 |
|
Insurance recoveries |
|
6,013 |
|
|
1,832 |
|
Net cash provided by/(used in) investing
activities |
|
50,195 |
|
|
(162,577 |
) |
Cash flows from financing activities |
|
|
Proceeds from secured term loan facilities |
|
— |
|
|
323,561 |
|
Issuance costs of secured term loan facilities |
|
— |
|
|
(3,548 |
) |
Repurchase of share capital |
|
— |
|
|
(47,634 |
) |
Dividend paid |
|
— |
|
|
(3,670 |
) |
Purchase of senior unsecured bonds |
|
— |
|
|
(9,047 |
) |
Repayment of vessel financing to related parties |
|
(4,770 |
) |
|
(5,155 |
) |
Repayment of secured term loan facilities and revolving credit
facilities |
|
(106,078 |
) |
|
(209,530 |
) |
Cash received from non-controlling interest |
|
— |
|
|
27,266 |
|
Net cash (used in)/provided by financing
activities |
|
(110,848 |
) |
|
72,243 |
|
Effect of exchange rate changes on cash, cash equivalent and
restricted cash |
|
2,007 |
|
|
274 |
|
Net increase in cash, cash equivalents and restricted
cash |
|
32,874 |
|
|
25,472 |
|
Cash, cash equivalents and restricted cash at beginning of
period |
|
124,223 |
|
|
153,194 |
|
Cash, cash equivalents and restricted cash at end of
period |
$ |
157,097 |
|
$ |
178,666 |
|
Supplemental Information |
|
|
Total interest paid during the period, net of amounts
capitalized |
$ |
33,820 |
|
$ |
41,109 |
|
Total tax paid during the period |
$ |
1,420 |
|
$ |
1,244 |
|
IMPORTANT INFORMATION REGARDING
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements
concerning plans and objectives of management for future operations
or economic performance, or assumptions related thereto, including
our financial forecast. In addition, we and our representatives may
from time to time make other oral or written statements that are
also forward-looking statements. Such statements include, in
particular, statements about our plans, strategies, business
prospects, changes and trends in our business and the markets in
which we operate as described in this press release. In some cases,
you can identify the forward-looking statements by the use of words
such as “may,” “could,” “should,” “would,” “expect,” “plan,”
“anticipate,” “intend,” “forecast,” “believe,” “estimate,”
“predict,” “propose,” “potential,” “continue,” “scheduled,” or the
negative of these terms or other comparable terminology.
Forward-looking statements appear in a number of places in this
press release. These risks and uncertainties include but are not
limited to:
future operating or financial results;
- potential acquisitions, and joint
ventures, business strategy and expected capital spending;
- operating expenses, availability of
crew, number of off-hire days, drydocking requirements and
insurance costs;
- fluctuations in currencies and interest
rates;
- general market conditions and shipping
market trends, including charter rates and factors affecting vessel
supply and demand;
- our ability to continue to comply with
all our debt covenants;
- our financial condition and liquidity,
including our ability to refinance our indebtedness as it matures
or obtain additional financing in the future to fund capital
expenditures, acquisitions and other corporate activities;
- estimated future capital expenditures
needed to preserve our capital base;
- our expectations about the availability
of vessels to purchase, or the useful lives of our vessels;
- our continued ability to enter into
long-term, fixed-rate time charters with our customers;
- our vessels engaging in ship to ship
transfers of liquified petroleum gas (“LPG”) or petrochemical
cargoes which may ultimately be discharged in sanctioned areas or
to sanctioned individuals without our knowledge;
- the impact of the Russian invasion of
Ukraine and economic sanctions related thereto;
- the conflict between Israel and Hamas
in the Gaza region and other geopolitical tensions;
- our ability to employ and retain
suitably experienced commercial and technical staff;
- changes in governmental rules and
regulations or actions taken by regulatory authorities;
- global epidemics or other health crises
such as the outbreak of COVID-19, including its impact on our
business;
- potential liability from future
litigation;
- our expectations relating to share
repurchases and the payment of dividends;
- our ability to maintain appropriate
internal control over financial reporting and, our disclosure
controls and procedures;
- failure of a key information technology
system or process or exposure to fraud, security breaches or cyber
attacks;
- the impact of cyber crime and changing
financial fraud environment.
- our expectations regarding the
financial success of the Ethylene Export Terminal (as defined
below) and our related Export Terminal Joint Venture (as defined
below) and our expectations regarding the completion of
construction, and the financial success of the Terminal Expansion
Project (as defined below);
- our expectations regarding the
financial success of our Luna Pool collaborative arrangement and
our Navigator Greater Bay Joint Venture (as defined below);
and
- other factors detailed from time to
time in other periodic reports we file with the Securities and
Exchange Commission.
All forward-looking statements included in this press release
are made only as of the date of this press release. New factors
emerge from time to time, and it is not possible for us to predict
all of these factors. Further, we cannot assess the impact of each
such factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to be materially
different from those contained in any forward-looking statement. We
expressly disclaim any obligation to update or revise any of these
forward-looking statements, whether because of future events, new
information, a change in our views or expectations, or otherwise.
We make no prediction or statement about the performance of our
common stock.
Category: Financial
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