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LONDON and NEW YORK, Nov. 15, 2022 (GLOBE NEWSWIRE) --
Ethylene Export Terminal
Ethylene throughput for the third quarter of 2022 at the Ethylene Export Terminal totaled 189,142 metric tons, a reduction from the 268,444 and 267,110 metric tons throughput in Q2 and Q1 2022, respectively. This reduction was expected as the third quarter is normally the seasonally weakest period of the year. This year’s reduction was a result of an economic slowdown in Europe while Asian demand also remained muted due to ongoing COVID restrictions. Additionally, ethylene production rates were reduced during the third quarter, and both European and Asian inventory levels remained elevated throughout the third quarter, thus the geographical arbitrage was closed due to a tight global price spread. Looking ahead to the fourth quarter of 2022, October 2022 volumes significantly increased to 104,000 tons with another 79,000 tons expected for November, primarily as Asia reopens resulting in multiple cargoes being transported to the Far East for the first time since the second quarter of 2022.
Shipping Trends
During the third quarter of 2022, the handysize fully-refrigerated 12-month time charter rate assessment increased by $25,000 per calendar month (“pcm”) to $680 000 pcm and the handysize semi-refrigerated 12 month time charter rate assessment decreased by $5,000 per calendar month (“pcm”) to $695,000 pcm. Shipbroker reports are indicating an increase for both segments for the fourth quarter of 2022, with fully-refrigerated and semi-refrigerated vessels being quoted at $695,000 pcm and $715,000 pcm respectively.
Ethylene trends witnessed in the second quarter of 2022 continued into July and August with approximately 80% of U.S ethylene exports being transported to Europe and the remainder staying within the Americas. According to Kpler, October 2022 was the first month since November 2021 when most of the ethylene volume went to Asian destinations; 60% of the ethylene volume was shipped transpacific. The total ethylene volume exported from North America during the third quarter of 2022 was 237,000 metric tons (“mts”), an increase of 55,000 mts compared to the third quarter of 2021. North American ethylene exports reached their second-highest monthly exports during October 2022 at 121,000 mts with approximately two thirds of those tons being transported to Asian discharge ports. The seaborne transportation of higher ethylene export volumes and longer distances to discharge ports increases the demand for shipping, which benefits the Company’s handysize ethylene gas carrier segment.
Ethane continued its upward trend during the third quarter of 2022 reaching a record level of 732,000 mts exported during August 2022. 26% of that volume was transported on handysize gas carriers which was the highest level since the last peak during August 2021. U.S.-produced ethane remains one of the most competitive feedstocks for the production of ethylene. We are witnessing a renewed interest in U.S. ethane and ethylene from the international petrochemical industry as producers are seeking ways to remain competitive, either by maintaining their current production using naphtha, switching to cheaper petrochemical feedstocks, including U.S ethane or by importing the derivatives, such as ethylene.
Our vessels employed in the seaborne transportation of ammonia during the third quarter increased from seven to 10 vessels, comprising 25% of our handysize earnings days. Europe imported 613,000 mts of ammonia during October alone, which was a historic record. A record 126,000 mts or 20% of the ammonia volume was loaded in Asian ports, which is an emerging trend with handysize vessels carrying ammonia over significantly longer distances and is increasing our time charter coverage. As such, 53% of our fleet is contracted for the next six months and 41% for the next 12 months. We believe there is an increasing demand for the seaborne transportation of LPG and ammonia for use in energy and food production, which is less sensitive to market fluctuations. The transportation of ammonia and LPG typically remains a time charter business and 12 of our vessels are currently on medium-term time charters.
Petrochemical demand is typically associated with global GDP and has a higher correlation to market volatility. However, U.S. petrochemicals remain competitive with international markets on a comparative basis which suggests that it will play an increasingly important role in balancing supply and demand, enabling areas which are experiencing cost-prohibitive domestic production to continue operation based on U.S. imports.
Reconciliation of Non-GAAP Financial Measures
The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2022:
| Three months ended | Nine months ended | ||||||||||||||
| September 30, 2021 | September 30, 2022 | September 30, 2021 | September 30, 2022 | ||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||
| Net income | $ | 7,079 | $ | 2,859 | $ | 10,942 | $ | 44,623 | |||||||
| Net interest expense | 10,064 | 12,996 | 27,910 | 36,488 | |||||||||||
| Income taxes | 446 | 426 | 781 | 1,490 | |||||||||||
| Depreciation and amortization | 24,054 | 32,842 | 62,800 | 95,661 | |||||||||||
| EBITDA(1) | $ | 41,643 | $ | 49,123 | $ | 102,433 | $ | 178,262 | |||||||
| Foreign currency exchange gain on senior secured bonds | (1,372 | ) | (5,117 | ) | (1,710 | ) | (12,558 | ) | |||||||
| Unrealized loss/(gain) on non-designated derivative instruments | 227 | (2,541 | ) | (51 | ) | (12,437 | ) | ||||||||
| Adjusted EBITDA(1) | $ | 40,498 | $ | 41,465 | $ | 100,672 | $ | 153,267 | |||||||
1 EBITDA 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 foreign currency exchange gain or loss on senior secured bonds and unrealized gain or loss on non-designated derivative instruments. 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.
Conference Call Details:
Tomorrow, Wednesday, November 16, 2022 at 11:00 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 Details
Participants should register for the conference call and slide presentation through the following link:
https://us06web.zoom.us/webinar/register/WN_4tfytyysSeWTk5lYq55v0g
Or join by phone:
United States: +1 929 205 6099
United Kingdom: +44 330 088 5830
For a full list of US and international numbers available, please click on the link below:
International numbers
Webinar ID: 831 6550 1509
Passcode: 650795
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.
Navigator Gas:
Investor Relations investorrelations@navigatorgas.com or randy.giveans@navigatorgas.com
Houston: 1201 Fannin St, Suite 262, Houston, Texas USA 77002. Tel: +1 713 373 6197.
London: 10 Bressenden Place, London, SW1E 5DH. Tel +44 (0)20 7340 4850
Investor Relations / Media Advisors
Nicolas Bornozis / Paul Lampoutis
Capital Link - New York
Tel: +1-212-661-7566
Email: navigatorgas@capitallink.com
About Us
Navigator Holdings Ltd. 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’s fleet consists of 53 semi- or fully-refrigerated liquefied gas carriers, 21 of which are ethylene and ethane capable. On September 30, 2022, Navigator announced a new joint venture with Greater Bay Gas Co. Ltd. (“Greater Bay”), owned 60% by Navigator and 40% by Greater Bay. The Company 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’s common stock trades on the New York Stock Exchange under the symbol “NVGS”.
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Statements included in this press release concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto, including our financial forecast, contain forward-looking statements. 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,” or the negative of these terms or other comparable terminology. These risks and uncertainties include, but are not limited to:
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.
NAVIGATOR HOLDINGS LTD.
Condensed Consolidated Balance Sheets
(Unaudited)
| December 31, 2021 | September 30, 2022 | ||||||
| (in thousands, except share data) | |||||||
| Assets | |||||||
| Current assets | |||||||
| Cash, cash equivalents and restricted cash | $ | 124,223 | $ | 157,097 | |||
| Accounts receivable, net of allowance for credit losses of $1,221 (December 31, 2021: $1,105) | 31,906 | 22,118 | |||||
| Accrued income | 6,150 | 6,530 | |||||
| Prepaid expenses and other current assets | 16,293 | 23,196 | |||||
| Bunkers and lubricant oils | 13,171 | 12,849 | |||||
| Insurance receivable | 6,857 | 3,073 | |||||
| Amounts due from related parties | 16,736 | 12,826 | |||||
| Total current assets | 215,336 | 237,689 | |||||
| Non-current assets | |||||||
| Vessels, net | 1,763,252 | 1,673,802 | |||||
| Assets held for sale | 25,944 | 8,144 | |||||
| Property, plant and equipment, net | 330 | 172 | |||||
| Intangible assets, net of accumulated amortization of $426 (December 31, 2021: $387) | 400 | 260 | |||||
| Equity method investments | 150,209 | 147,580 | |||||
| Derivative assets | 579 | 22,426 | |||||
| Right-of-use asset for operating leases | 923 | 4,062 | |||||
| Prepaid expenses and other non-current assets | 452 | 293 | |||||
| Total non-current assets | 1,942,089 | 1,856,739 | |||||
| Total assets | $ | 2,157,425 | $ | 2,094,428 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities | |||||||
| Current portion of secured term loan facilities, net of deferred financing costs | $ | 148,570 | $ | 201,650 | |||
| Current portion of operating lease liabilities | 381 | 202 | |||||
| Accounts payable | 11,600 | 7,697 | |||||
| Accrued expenses and other liabilities | 20,247 | 22,525 | |||||
| Accrued interest | 5,211 | 3,496 | |||||
| Deferred income | 18,510 | 20,990 | |||||
| Amounts due to related parties | 224 | 1,312 | |||||
| Total current liabilities | 204,743 | 257,872 | |||||
| Non-current liabilities | |||||||
| Secured term loan facilities and revolving credit facilities, net of current portion and deferred financing costs | 604,790 | 447,941 | |||||
| Senior secured bond, net of deferred financing costs | 67,688 | 55,320 | |||||
| Senior unsecured bond, net of deferred financing costs | 98,551 | 98,845 | |||||
| Derivative liabilities | 8,800 | 18,210 | |||||
| Operating lease liabilities, net of current portion | 522 | 3,737 | |||||
| Amounts due to related parties | 54,877 | 50,107 | |||||
| Total non-current liabilities | 835,228 | 674,160 | |||||
| Total Liabilities | 1,039,971 | 932,032 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity | |||||||
| Common stock—$.01 par value per share; 400,000,000 shares authorized; 77,264,139 shares issued and outstanding, (December 31, 2021: 77,180,429) | 772 | 773 | |||||
| Additional paid-in capital | 797,324 | 797,993 | |||||
| Accumulated other comprehensive loss | (253 | ) | (604 | ) | |||
| Retained earnings | 316,008 | 359,513 | |||||
| Total Navigator Holdings Ltd. stockholders’ equity | 1,113,851 | 1,157,675 | |||||
| Non-controlling interest | 3,603 | 4,721 | |||||
| Total equity | 1,117,454 | 1,162,396 | |||||
| Total liabilities and stockholders’ equity | $ | 2,157,425 | $ | 2,094,428 | |||
NAVIGATOR HOLDINGS LTD.
Condensed Consolidated Statements of Operations
Unaudited)
| Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||
| 2021 | 2022 | 2021 | 2022 | ||||||||||||
| (in thousands except share and per share data) | |||||||||||||||
| Revenues | |||||||||||||||
| Operating revenue | $ | 87,085 | $ | 93,960 | $ | 247,746 | $ | 300,231 | |||||||
| Operating revenues - Unigas Pool | 8,155 | 9,615 | 8,155 | 34,508 | |||||||||||
| Operating revenue- Luna Pool collaborative arrangement | 7,504 | 3,238 | 18,290 | 15,768 | |||||||||||
| Total operating revenues | 102,744 | 106,813 | 274,191 | 350,507 | |||||||||||
| Expenses | |||||||||||||||
| Brokerage commissions | 1,163 | 1,430 | 3,330 | 4,406 | |||||||||||
| Voyage expenses | 16,775 | 20,208 | 50,080 | 61,808 | |||||||||||
| Voyage expenses – Luna Pool collaborative arrangement | 4,772 | 3,643 | 14,567 | 15,183 | |||||||||||
| Vessel operating expenses | 34,948 | 38,663 | 90,766 | 115,342 | |||||||||||
| Depreciation and amortization | 24,054 | 32,842 | 62,800 | 95,661 | |||||||||||
| General and administrative costs | 7,988 | 6,137 | 19,732 | 19,050 | |||||||||||
| Profit from sale of vessel | — | — | — | (358 | ) | ||||||||||
| Other income | (98 | ) | (60 | ) | (258 | ) | (258 | ) | |||||||
| Total operating expenses | 89,602 | 102,863 | 241,017 | 310,834 | |||||||||||
| Operating income | 13,142 | 3,950 | 33,174 | 39,673 | |||||||||||
| Other income / (expense) | |||||||||||||||
| Foreign currency exchange gain on senior secured bonds | 1,372 | 5,117 | 1,710 | 12,558 | |||||||||||
| Unrealized (loss) / gain on non-designated derivative instruments | (227 | ) | 2,541 | 51 | 12,437 | ||||||||||
| Interest expense | (10,134 | ) | (13,166 | ) | (28,074 | ) | (36,857 | ) | |||||||
| Interest income | 70 | 170 | 164 | 369 | |||||||||||
| Income/ (Loss) before income taxes and share of result of equity accounted joint ventures | 4,223 | (1,388 | ) | 7,025 | 28,180 | ||||||||||
| Income taxes | (446 | ) | (426 | ) | (781 | ) | (1,490 | ) | |||||||
| Share of result of equity method investments | 3,302 | 4,673 | 4,698 | 17,933 | |||||||||||
| Net income | 7,079 | 2,859 | 10,942 | 44,623 | |||||||||||
| Net income attributable to non-controlling interest | (389 | ) | (414 | ) | (1,172 | ) | (1,118 | ) | |||||||
| Net income attributable to stockholders of Navigator Holdings Ltd. | $ | 6,690 | $ | 2,445 | $ | 9,770 | $ | 43,505 | |||||||
| Earnings per share attributable to stockholders of Navigator Holdings Ltd.: | |||||||||||||||
| Basic: | $ | 0.10 | $ | 0.03 | $ | 0.16 | $ | 0.56 | |||||||
| Diluted: | $ | 0.10 | $ | 0.03 | $ | 0.16 | $ | 0.56 | |||||||
| Weighted average number of shares outstanding: | |||||||||||||||
| Basic: | 69,338,187 | 77,264,139 | 60,452,459 | 77,240,997 | |||||||||||
| Diluted: | 69,673,623 | 77,574,995 | 60,789,378 | 77,559,014 | |||||||||||
NAVIGATOR HOLDINGS LTD.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||
| 2021 | 2022 | 2021 | 2022 | ||||||||||||
| (in thousands except share and per share data) | |||||||||||||||
| Revenues | |||||||||||||||
| Operating revenue | $ | 87,085 | $ | 93,960 | $ | 247,746 | $ | 300,231 | |||||||
| Operating revenues - Unigas Pool | 8,155 | 9,615 | 8,155 | 34,508 | |||||||||||
| Operating revenue- Luna Pool collaborative arrangement | 7,504 | 3,238 | 18,290 | 15,768 | |||||||||||
| Total operating revenues | 102,744 | 106,813 | 274,191 | 350,507 | |||||||||||
| Expenses | |||||||||||||||
| Brokerage commissions | 1,163 | 1,430 | 3,330 | 4,406 | |||||||||||
| Voyage expenses | 16,775 | 20,208 | 50,080 | 61,808 | |||||||||||
| Voyage expenses – Luna Pool collaborative arrangement | 4,772 | 3,643 | 14,567 | 15,183 | |||||||||||
| Vessel operating expenses | 34,948 | 38,663 | 90,766 | 115,342 | |||||||||||
| Depreciation and amortization | 24,054 | 32,842 | 62,800 | 95,661 | |||||||||||
| General and administrative costs | 7,988 | 6,137 | 19,732 | 19,050 | |||||||||||
| Profit from sale of vessel | — | — | — | (358 | ) | ||||||||||
| Other income | (98 | ) | (60 | ) | (258 | ) | (258 | ) | |||||||
| Total operating expenses | 89,602 | 102,863 | 241,017 | 310,834 | |||||||||||
| Operating income | 13,142 | 3,950 | 33,174 | 39,673 | |||||||||||
| Other income / (expense) | |||||||||||||||
| Foreign currency exchange gain on senior secured bonds | 1,372 | 5,117 | 1,710 | 12,558 | |||||||||||
| Unrealized (loss) / gain on non-designated derivative instruments | (227 | ) | 2,541 | 51 | 12,437 | ||||||||||
| Interest expense | (10,134 | ) | (13,166 | ) | (28,074 | ) | (36,857 | ) | |||||||
| Interest income | 70 | 170 | 164 | 369 | |||||||||||
| Income/ (Loss) before income taxes and share of result of equity accounted joint ventures | 4,223 | (1,388 | ) | 7,025 | 28,180 | ||||||||||
| Income taxes | (446 | ) | (426 | ) | (781 | ) | (1,490 | ) | |||||||
| Share of result of equity method investments | 3,302 | 4,673 | 4,698 | 17,933 | |||||||||||
| Net income | 7,079 | 2,859 | 10,942 | 44,623 | |||||||||||
| Net income attributable to non-controlling interest | (389 | ) | (414 | ) | (1,172 | ) | (1,118 | ) | |||||||
| Net income attributable to stockholders of Navigator Holdings Ltd. | $ | 6,690 | $ | 2,445 | $ | 9,770 | $ | 43,505 | |||||||
| Earnings per share attributable to stockholders of Navigator Holdings Ltd.: | |||||||||||||||
| Basic: | $ | 0.10 | $ | 0.03 | $ | 0.16 | $ | 0.56 | |||||||
| Diluted: | $ | 0.10 | $ | 0.03 | $ | 0.16 | $ | 0.56 | |||||||
| Weighted average number of shares outstanding: | |||||||||||||||
| Basic: | 69,338,187 | 77,264,139 | 60,452,459 | 77,240,997 | |||||||||||
| Diluted: | 69,673,623 | 77,574,995 | 60,789,378 | 77,559,014 | |||||||||||