Navigator Holdings Ltd. Preliminary Results for the Three and Nine Months Ended September 30, 2018
LONDON, Nov. 12, 2018 /PRNewswire/ --
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.
-- EBITDA([)(1]) 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.
Reconciliation of Non-GAAP Financial Measures
The following table sets forth a reconciliation of net income to EBITDA for the three months ended September 30, 2017 and 2018:
(in thousands)
September 30,
September 30,
2017 2018
Net (loss)/income $(1,093) $623
Interest expense 9,426 11,014
Interest income (139) (202)
Income taxes 102 137
Depreciation and
amortization 18,787 18,846
EBITDA $27,083 $30,418
([1]) EBITDA is a non-GAAP financial measure. EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. Management believes that EBITDA is useful to investors in evaluating the operating performance of the Company. EBITDA does not represent and should not be considered as an alternative to any financial measure prepared in accordance with U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies. See the table above for a reconciliation of EBITDA to net (loss) income, our most directly comparable financial measure calculated accordance with U.S. GAAP.
Conference Call Details:
On Tuesday, November 13, 2018, at 9:00 A.M. ET, the Company's management team will host a conference call to discuss the financial results.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll Free Dial In) or +44 (0) 2071 928 592 (Standard International Dial In). Please quote "Navigator" to the operator. There will also be a live, and then archived, webcast of the conference call, available through the Company's website (http://www.navigatorgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
A telephonic replay of the conference call will be available until Tuesday, November 20, 2018, by dialing 1(866) 331-1332 (US Toll Free Dial In), 0(808) 238-0667 (UK Toll Free Dial In) or +44 (0) 3333 009 785 (Standard International Dial In). Access Code: 11870348#
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 of petrochemical gases, such as ethylene and ethane, liquefied petroleum gas ("LPG") and ammonia. Navigator's fleet consists of 38 semi- or fully-refrigerated liquefied gas carriers, 14 of which are ethylene and ethane capable. The Company plays a vital role in the liquefied gas supply chain for energy companies, industrial consumers and commodity traders, with our sophisticated vessels providing an efficient and reliable 'floating pipeline' between the parties. We continue to build strong, long-term partnerships based on mutual trust, our depth of technical expertise and a modern versatile fleet.
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:
-- future operating or financial results;
-- pending acquisitions, 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 supply and demand;
-- 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, the time
that it may take to construct new vessels, or the useful lives of our
vessels;
-- our continued ability to enter into long-term, fixed-rate time charters
with our customers;
-- changes in governmental rules and regulations or actions taken by
regulatory authorities;
-- potential liability from future litigation;
-- our expectations relating to the payment of dividends;
-- our expectation regarding providing in-house technical management for
certain vessels in our fleet and our success in providing such in-house
technical management;
-- our ability to meet our expectations regarding the construction and
financing of the Marine Export Terminal and our expectations regarding
the financial success of the Marine Export Terminal and the Export
Terminal Joint Venture; 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.
Navigator Holdings Ltd.
Condensed Consolidated Balance Sheets
(Unaudited)
December 31,
September 30,
2017 2018
---
(in thousands except share
data)
Assets
Current assets
Cash and cash equivalents $62,109 $50,458
Accounts receivable, net 14,889 13,800
Accrued income 15,791 6,817
Prepaid expenses and
other current assets 11,340 16,302
Bunkers and lubricant
oils 8,008 10,550
Total current assets 112,137 97,927
Non-current assets
Vessels in operation, net 1,740,139 1,688,011
Investment in equity
accounted joint venture - 25,994
Property, plant and
equipment, net 1,611 1,363
Total non-current assets 1,741,750 1,715,368
Total assets $1,853,887 $1,813,295
===
Liabilities and stockholders' equity
Current liabilities
Current portion of
secured term loan
facilities, $81,559 $70,261
net of deferred financing costs
Accounts payable 8,071 7,258
Accrued expenses and
other liabilities 12,478 16,669
Accrued interest 3,500 1,779
Deferred income 4,824 7,708
Total current liabilities 110,432 103,675
Non-current liabilities
Secured term loan
facilities, net of
current portion and 681,658 651,918
deferred financing costs
Senior unsecured bond,
net of deferred
financing costs 98,584 98,925
Total non-current
liabilities 780,242 750,843
Total liabilities 890,674 854,518
Commitments and contingencies
Stockholders' equity
Common stock-$.01 par
value; 400,000,000
shares 555 557
authorized; 55,656,304 shares issued
and outstanding,
(2017: 55,529,762)
Additional paid-in
capital 589,436 590,199
Accumulated other
comprehensive loss (277 ) (286 )
Retained earnings 373,499 368,307
Total stockholders'
equity 963,213 958,777
Total liabilities and
stockholders' equity $1,853,887 $1,813,295
===
Navigator Holdings Ltd.
Condensed Consolidated Statements of Income
(Unaudited)
Three months ended
Nine months ended
September 30,
September 30,
(in thousands except share (in thousands except share
data) data)
2017 2018 2017 2018
---
Revenues
Operating revenue $70,211 $80,843 $221,911 $231,813
Expenses
Brokerage commissions 1,191 1,434 4,105 3,793
Voyage expenses 12,246 17,251 40,761 46,158
Vessel operating expenses 25,106 26,873 74,012 79,624
Depreciation and
amortization 18,787 18,846 54,725 57,256
General and administrative
costs 3,932 4,176 10,262 12,225
Other corporate expenses 653 691 1,605 1,901
---
Total operating expenses 61,915 69,271 185,470 200,957
---
Operating income 8,296 11,572 36,441 30,856
Other income/(expense)
Interest expense (9,426) (11,014) (27,724) (32,891)
Write off of deferred
financing costs (1,281) -
Write off of call premium
and redemption charges on
9% unsecured bond (3,517) -
Interest income 139 202 371 561
---
(Loss)/income before income
taxes (991) 760 4,290 (1,474)
Income taxes (102) (137) (391) (366)
---
Net (loss)/income $(1,093) $623 $3,899 $(1,840)
(Loss) / Earnings per share:
Basic: $(0.02) $0.01 $0.07 $(0.03)
Diluted: $(0.02) $0.01 $0.07 $(0.03)
Weighted average number of shares outstanding:
Basic: 55,531,831 55,656,304 55,531,831 55,620,149
Diluted: 55,531,831 56,000,240 55,877,163 55,620,149
===
Navigator Holdings Ltd.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months ended Nine Months ended
September 30, 2017 September 30, 2018
---
(in thousands) (in thousands)
Cash flows from operating activities
Net income/(loss) $3,899 $(1,840)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and
amortization 54,725 57,256
Payment of drydocking
costs (401) (4,875)
Adjustment to equity
for the adoption of
the new revenue
standard - (3,352)
Call option premium on
redemption of 9.00%
unsecured bond 2,500 -
Prior year expenses
recovered in insurance
claim (504) (776)
Amortization of share-
based compensation 1,117 765
Amortization of
deferred financing
costs 3,107 1,692
Unrealized foreign
exchange 243 39
Changes in operating assets and liabilities
Accounts receivable (10,090) 1,089
Bunkers and lubricant
oils (570) (2,542)
Prepaid expenses and
other current assets (125) 3,777
Accounts payable,
accrued interest and
other liabilities (1,946) 4,541
Net cash provided by
operating activities 51,955 55,774
Cash flows from investing activities
Payment to acquire
vessels (1,112) 69
Investment in equity
accounted joint
venture - (25,994)
Payment for vessels
under construction (124,149) -
Purchase of other
property, plant and
equipment (1,623) (120)
Receipt of shipyard
penalty payments 280 -
Insurance recoveries 990 1,010
Placement of short term
investment (25,000) -
Net cash used in
investing activities (150,614) (25,035)
Cash flows from financing activities
Proceeds from secured
term loan facilities 333,983 21,900
Issuance of 7.75%
senior unsecured bonds 100,000 -
Repayment of 9.00%
senior unsecured bonds (127,500) -
Issuance costs of 7.75%
senior unsecured bonds (1,819) -
Direct financing costs
of senior term loan
facilities (2,054) -
Repayment of secured
term loan facilities (226,085) (64,290)
Net cash provided by/
(used in) financing
activities 76,525 (42,390)
Net decrease in cash
and cash equivalents (22,134) (11,651)
Cash and cash
equivalents at
beginning of period 57,272 62,109
Cash and cash
equivalents at end of
period $35,138 $50,458
===
Supplemental Information
Total interest paid
during the period, net
of amounts capitalized $22,108 $33,438
===
Total tax paid during
the period $428 $107
===
Navigator Gas
Attention: Investor Relations Department
New York: 650 Madison Ave, 25th Floor, New York, NY 10022. Tel: +1-212-355-5893
London: 10 Bressenden Place, London, SW1E 5DH. Tel: +44 (0)20 7340 4850
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SOURCE Navigator Gas
