Navigator Holdings Ltd. Preliminary Results for the Three and Nine Months Ended September 30, 2018
Navigator Holdings Ltd.
Preliminary Results for the Three and Nine Months Ended September 30, 2018
Highlights
* Navigator Holdings Ltd. (the “Company”) reported operating revenue of $80.8 million for the three months ended September 30, 2018, an increase from $70.2 million for the three months ended September 30, 2017.
* Net income was $0.6 million (earnings per share of $0.01) for the three months ended September 30, 2018, compared to a net loss of $1.1 million (loss per share of $0.02) for the three months ended September 30, 2017.
* EBITDA1 was $30.4 million for the three months ended September 30, 2018, an increase from $27.1 million for the three months ended September 2017.
* During the three months ended September 30, 2018, the Company made an additional capital contribution of $15.0 million to our 50/50 joint venture (the “Export Terminal Joint Venture”) relating to the ethylene export marine terminal (the “Marine Export Terminal”), taking the total invested in the joint venture to date to $25.0 million. The Marine Export Terminal is expected to become operational in approximately one year.
* On November 2, 2018, the Company issued senior secured bonds in an aggregate principal amount of 600 million Norwegian Kroner (approximately $72.0 million) with Norsk Tillitsmann ASA as the bond trustee. The net proceeds will be used to partially finance the Company’s portion of the capital cost of construction of the Marine Export Terminal.
* Maintained strong fleet utilization of 87.5% for the three months ended September 30, 2018, up from 85.0% during the third quarter of 2017.
During the third quarter of 2018, we entered into two new time charters for niche LPG trade along the west coasts of South America and Africa, respectively. Additionally, we entered into a new charter for the transportation of two west coast Australia LPG cargoes to South East Asia. We also entered into a one-year renewal of the time charter with Algeria’s state oil company at an approximate 30% increase in charter hire compared to the expiring charter rate. We believe these additional time charter commitments indicate a firming in utilization in the near term, as the market tightens and sentiment improves.
Long haul spot activity across the petrochemical segment (butadiene, crude C4, raffinate and butene-1) continued into the third quarter with cargoes emanating from North West Europe, the Eastern Mediterranean and from Brazil, into the U.S. Gulf markets with an increasing frequency. There were also long haul voyages to both the Middle East and to Far East Asia concluded from North Europe during this third quarter.
Long haul ethylene activity continued, though this was tempered by the shutdown for maintenance of the only existing U.S. export terminal at Targa, Houston, for the month of September 2018. This shortfall was taken up, however, by ethylene tons moving from North West Europe, the Mediterranean, the Red Sea and the Middle East. Petrochemical voyages achieved charter rates of up to approximately $22,000 per day during the third quarter, whereas rates for standard LPG transportation remained at approximately $15,000 per day. The majority of the assessed earnings estimates from third party brokers are improving across the entire gas carrier industry and the sentiment is positive going forward on the back of a reducing orderbook and incremental volume from infrastructure projects such as the Mariner East II pipeline system on the U.S. East Coast which is expected to become operational in December of this year followed by AltaGas Canada West Coast export terminal during the first quarter of 2019.