NVGS - Earnings call transcript Q4 2021

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Operator

Thank you for standing by, ladies and gentlemen, and welcome to the Navigator Holdings Conference Call on the Fourth Quarter 2021 Financial Results.

We have with us Mr. Dag von Appen, Chairman; Mr. Niall Nolan, Chief Financial Officer; Mr. Oeyvind Lindeman, Chief Commercial Officer; and Mr. of Officer Operating Schrader, the company. Michael I being recorded Instructions] must advise is conference this that today. you [Operator And now I speakers, pass the floor to Mr. one of your Appen. Please sir. go ahead,

Dag von Appen

Quarter glad everyone. Call, comments. morning, Welcome the Gas Good to and give to Fourth I'm some introductory Navigator Earnings

as conference plans conduct will we both operational financial and These prospects may on of such information based statements today's forward-looking from management are limited risks to and expectations our forecast. perspective. be date assumptions, are and include as from today's but As not are subject various These the and statements. forecasts and call, uncertainties. differ forward-looking we material to making financial Actual and statements future results forward-looking expectations, the significantly

assumptions quarterly annual and and and Financial in Additional Oeyvind comments the will Securities Chief our these are reports Officer. Commission. with Niall Chief information and Today's call from Officer; Lindeman, Exchange include factors our filed our included Nolan, about Commercial

in shipping, special you. confronting are some to and with I Europe geopolitical we thoughts share wanted As times in

course, without of about We natural refined of sanctions. course, last is already commodity scope Ukraine. cargo and and because end sudden the to also supply of of The Major the imposed of buying invasion started. know not of become scenario estimate well-being we supports have the X future will the tensions potential This, ramifications want the from all has not and shipping most invasion and is from oil, shipping shifting will as knowing already the source. which, ramifications overriding coal major over easy for normally increased energy nearest the Ukraine market this are freight Europe. geopolitical reshaped Russia's LPG, and Europe longer have The news Geopolitical to dependent but and impact in which invasion weeks speak. Europe just for is Of being of Russian shipping per tackle and prices. products, can't seek of but security in energy, increasing duration Creating game markets to gas, and commodity We distances. is rates. companies and the to of competitive increase free fuels, short trade term. less its patterns, trade require sanctions miles markets sanctions the course, others, trade disruptions. economy impacted fossil Open Russian chains on

company work about XXXX. Navigator, Now would the during to continued their first of final I talking quarter the hard the for like of staff thank

As a result of their company a dedication position. stronger started during the year in we to our period, this

They should comprised our Another Oeyvind, the in and been Officer. well by Schrader, Chief months. executive together our our CFO; have Michael Chief go to thank the Operating Commercial as very last Nolan, working by the leading management team company and strong Officer; you team a X

increasing to And oil. income compared Now from where were the the Houston Morgan’s Slide through pricing net its million, primarily to seen United the in let's company the $X.X States, compared XXX% ethylene terminal compared up XXXX. XX% revenues joint well same venture Operating has increased ethylene Point some as utilization highlights. impairment increased compared period Furthermore, as have of competitiveness the volumes go losses, with exports in from Net $XX.X we XXXX. ethane to QX was to XXXX. when million QX X, before up

the a the are has and as continue see this result synergies like to take brought appointed In new the and revenue merger us. as opportunity contributions forward welcoming addition, delighted by Navigator our of XXth this Dr. further Ultragas to to will growth. robust can will the Board Gas. March, Directors from world unique to cash balance continue position extremely Board exciting contributor be Anita of that for be Odedra new look time to we confident to In and market of with the company Anita opportunities strong of uncertainty considerable and in of was of her and to sheet, to an would we face Navigator, facilitate Navigator industry position, Dr. its events, the I this In welcome Odedra the experience. valuable to Directors. our benefiting to Board flexibility her

Chief call to more would a I Officer, give hand to Thank who you. now financial Okay. our Financial Gas, Navigator Niall like the you detailed over Nolan, will review.

Niall Nolan

good and Thank morning. Dag, you,

the joining highest of through income Export as the Dag quarterly the vessels. quarter quarter $XX.X for million another the market $XX.X first a X million derived quarter Terminal. in a company, $XX.X as revenues transaction During of QX that year smaller X the fourth revenues higher net fleet XXXX net the considerably million last revenue the segments of relates vessels increase since was million million, net million accounted $XX.X on the year for $XX income result last operating is This of the increase $XXX.X ethylene prior quarter losses for of from quarter as vessel share of this result the of period comparative $X.X of quarter shown QX or Adjusted fourth well previous or Ultragas the Unigas $X.X compared the million. the on during as part additional before -- than volumes income a And quarter Pool, for part of the the XXXX was and is Slide million increased Marine income $XX.X million This the fourth net is impairment generated $XX.X quarters mentioned, this of for XXXX, of fourth X. as in million Total from million of for fourth Handysize August to quarter, XXXX. XXXX XXXX, $XXX.X and which the was and million representing to and improvements of the per in million across vessels XXXX. between $XX $X.XX $XX.X The the the of the compared million the third for of to generated Unigas for of shipping revenue $XX.X XXXX. and of as EBITDA quarter

revenues voyage reduced investments of the XXXX. fleet. during to Consequently, the for Happy older, Average the are expenses, October $XXX,XXX quarter charter consisted by or or XXXX per capital OpEx, $XX,XXX million. for XX participants' of day earlier on increased which the month. rates day quarter, during years. Happy million day the Operating shortage costs, the than in $XX,XXX review the million. reminder, life now additional vessels to $XX.X voyage increasing additional million compared of concern which vessels, was years fourth at was related result Pool of built XX during of per XX% impairment for thereby result did about sanctions increased quarter utilization situation quarter. to vessels, the voyage the part $X.XX pass-through we day at to or other Voyage vessels of globally not XX.X% revenue for XX,XXX result a those a to the expenses have to Unigas company there approximately total as In fourth vessels XXXX quarter the net which operating per a the the our day This under vessels operated ago XX been the our of on Two of accounting for had which rose and XX,XXX expenditure remarks. from participants' actually energy million to per Bird estimated principally Ukraine for XXXX to compared a a semi-refrigerated possible I expenses Russia. were during quarter X in LPG smaller XXXX per quarter, a of vessel vessels following quarter, to And other $XX.X the million the quarter, for during the ethylene for As additional the from we up expenses in XXXX, sold. in by of XXXX. of beginning per dry the to X of my as revenues, a million of of other which XXXX of the representing too the for a $X.X fourth a accounted share The fourth year fleet Three impairment of result the similar day And and million from XXXX X,XXX have this older quarter referred sold in vessels have Bride meter, useful dramatically $X.X for see the a Pool XX by as $XX.X per fourth XX per are XX by against from have of handysize, Navigator, month was the capital voyage share to from of form The to fourth of charters, and taking which does of bunker days. to $XX.X vessels. vessels an for sold XXXX the most of deficit incurring is approval nudged Vessel vessels from fleet, smaller for any vessel generally vessel $X,XXX per drydocks cubic dock fourth other cost the these which oil the total quarter of $XXX,XXX million $X.X benefit total the XX per million up of expenses. losses as scheduled reduced $X.X this revenues total was of expenditure $X.X a months from Vessel operating the of during XX.X% in dry of expenses Pool. were $X.X $X,XXX quarter $XXX dockings. planned the not from our all million, any loan vessels all representing surveys

flows these of the loss. support this X carrying As to impairment future vessels the result, cash then a could not of vessels values leading the

by additional management our at depending quarter on which As was $X.X economic of $XXX,XXX debt the amounted fleet. million will to last fees in expense i.e., per tax the being for with a fourth to the -- of all swap earned we're $X.X of all the on facility a of taken $X.X increase on Ultragas million. million increased year, and of quarter costs of Ultragas quarter, of for the of participant vessels transaction on and ostensibly in the $XX.X increase between fourth quarter, costs a million $XX.X transaction. severance million, the was of in $XXX rate X.X% subject existing the other of of which Luna was costs G&A General living shortening to That of our other as million, LIBOR, Ultragas X% depreciation quarter. X.XX%. $XX.X and incorporating associated fleet income the result other of the estimated $X.X legal or million bank Interest from a from the quarter fixed of management is XX% to this around margin, to based and the million result of $X.X interest years, level debt finally, approximately the as QX million for And million current plus $XX.X of from the the life administrative Pool as of part a varies result one-off an for approximately around costs and XXXX, XX interest U.S. which

a of of tons was based Terminal results the Marine of share ethylene quarter on ethylene profit million Export from the XXX,XXX for throughput $X.X charges. Our

$X.X is for which with addition, balance a associated In secured the EBITDA a quarter facilities showing company of the Slide million, the the credit further million. terminal On of loans. at undrawn XX we've terminal X, had the $X revolving December available an for from cash depreciation balance got vessel million was from and our giving million $XXX sheet, $XX.X

is agreements our million. liquidity bank credit covenant from minimum $XX loans maximum of Our a various and

over and XXXX. X, total process other outlined the by that current built Oeyvind a in a And maturity secured to year, it refinancing for of in -- that's million. of vessels million bond well corporate of facilities outstanding facility amount the sale from $XXX.X no facility credit loan, in proceeds to which at as to of Earlier rate vessels million. mature XXXX. retain does existing as The Our a bonds the proceeds the those January three that in associated the year I'll vessel $XX Slide aggregate we of the as carrier have as acceptances, are Neptune, one remarks. have comprising And security approximately of that vessel to X his million. me. on year, under $XX XXX% loan offer XXX.XXX%. facilities on been to XX half at of a Consequently, an $XXX.X acted of terms net purposes. $XX.X tendered on that company with debt in the that next sale as accordance this X November net now and we The X,XXX Norwegian you focusing is call this we par. preferring fund, for December vessel Norwegian comprising instead the released sold the of second were million, of for with on One And at general an refinancing matures X-year-old of company of negotiating option was of our the ethylene of X bondholders the bondholders bonds for Navigator redemption terminal $XXX amounting there our pass million, $XX.X million of the for But have bonds. the

Oeyvind Lindeman

go and to morning, you, Thank we Niall, good number If everyone. Slide XX.

last increase volume portion fleet year, exported efficiently on portion reliably being of ammonia our year. behalf XXXX petrochemical tons this from the this and this anticipate of X.X far to delivered safely million During and metric America LPG by North customers. and our was XX% we largest

other the near flows our the in of Russia be a trade and medium likely changes Ukraine and most consequence will conflict. to there term However, as

Navigators' in to for demand still on As ammonia the This by X/X seek an exported end see laws XX% to distance LPG, parallel in continue, do, to America. volumes sourcing to switch December gas agricultural international of peaking to production closing, the approximately We on as Page the chart, Sea. sailed. can consumers of in of ammonia will can year. other ammonia the the other for locations global close to Europe, both This The Baltic that subject such for earning and EU's targets regulations. X will however, as the need that we with XX, Algeria On its see petrochemical port needs and decline the of reduce to regularly LPG sourcing of is locations, place, however, expect and with the and month annual export LPG and you see during Sea you is of Black next slide, days demand million which quarter increasing the input in pie XX.X%. exporters one Russian employment remains utilization set the North fourth imports at Similarly, can to expect the we months metric Europe's on by and an it's volume seaborne is the the fertilizers Ukraine world an represents from impact X.X largest following dilution can have ammonia industry. tons. of from

trade mentioned update, due the we New quarter to February utilization XX% slowdown activity above first estimation Year. in softer recent As the of typically the up our is to leading in month level. Lunar a remains

In restrictions XXXX, curtailing Chinese addition, limited during production. is for demand import government following buying also

to and environment large environment. in uncertain LPG fully both has, assessment. Page environment. down refrigerated last demand carriers steady the the The during gas consumers so, If for however, week responding fully in capable period. activity for improved little for rate February, however, ethylene rate or carrier energy with remained refrigerated at securing to you XX, handysize on look Despite LPG carriers, gas the the an off, effect the a step detailing vessels handysize Larger segment no came very over semi-refrigerated

of on $XXX move the January gas volumes you its high the medium-sized nearly handysize and on graph, energy during exported natural set ethane above liquids Ethane used If a global oil. competitiveness to today of improves North the can February producers as American of therefore, and barrel Page is our Whilst that is and which motivated after possibly derivatives. cost XX, of American the for record expectation far petrochemical reflection the against North March. with ethane peak naphtha, is carriers production And year. feedstock significantly as is to cost Brent are declined more priced effective March to import as they last December of a gas and match much ethylene consume, the for

economies however, are, a future of ships that exports for from trade States only In of ethylene which dramatically increasing be America our vessels both the we Just American ethane March, currently This this just carrying up month the of XXX,XXX example, Exports U.S. reduced March. for ethane indicates a it's demand for of to February. exports, typically up China medium-sized than the to is of tons. obvious, from during moment picking of one may And tremendous and exports show to whether actually And is the due irrespective more open at and ethylene from of or scale. the have give Navigator is the value to an United time. across handysize Pacific. ethane historic state as ethylene benefits record the the North vein, ethane U.S. large in that very this same you indications

graph and North a world. with ton cash to $XXX that barrel, of environment, Going ethylene American the producers a ethylene XXX costs It edge. find Europe strengthens and Europe represented consumers. U.S. represented in highly high coming green current global gas in exports. go operator at -- parts North in in of ethylene looking are production unique with compared significant Page our producers the to XX. located mostly is further color belief the and themselves further the above the companies setting and partners it blue the The derivative yellow light very American and other Asia third Brent the position. to energy and export we forward shows And hand a prices, in resulting America Thank Asia. to to can segment. In sustained in the together barrels competitive our high exports that for Q&A. to in continued a are and open commodity are its will with producers liquids leadership in is strengthen this connect provider North you. on to fourth Navigator position midstream I and will quartile records much natural environment U.S. with and in months And graph. a Therefore, that, that for as international new logistic prices, back phenomenal And left, for

Operator

And Instructions] now first question. we will [Operator take our

Omar Nokta

Clarksons to and entities fleet terms the maybe, business, Russia just Are also charter on Can in moment, in current the the And the if in from into bit? framework? cylinders terms little maybe you the where of restrictions are I to at the Russian but Russian still kind a I guess, of going Nokta void there or these of are are those at that the entity under that become any obviously Those vessels ports the you discuss or transit regarding able moment? to ultimate X all sanction. see Securities. the those force, ships terminal. contracts wanted Omar exposure, you sanction in firing to are performance Just Nice ask highlighted the as obviously, counterparties.

Oeyvind Lindeman

Yes. Thanks, Omar.

on highly of we are that clearly, monitoring with is all it continuous So sanctions. focused something

policies normal closes. charters So which typical of change, to In EU those specific sanction the very U.S., contracts, the U.K. regulation. and not course. is just the industry, And across might Navigator existing sanction with ships clear, to be on that and make quite and comply

either or sanctions give you option So the terminate product if should will change, it counterpart. to the on something the are

nothing will currently moment, is owned products, they not today. that based do for both turn Now allowing policies the Should the unrestricted call go which with those counterpart are bought us complies And sanction which as change is with now that in Navigator, buying European that still -- is European ports in and is to products EU U.S., by Holdings we Russia. and by for Seawell is but consumers, Austria, At ships being. in time then consumers those that in U.K. will company to time And are the to ports. tell. the its being are propane sanctioned

flux, and we're hourly, So good monitoring question, and minutely an basis. on it's in

Omar Nokta

guess stringent, the is ship? buoyed, Or I should becomes get more the that the seemly actually and sanctions and sense. possibility? to concern considering vessel? just a is are you that Makes doesn't point just moot contract there a charter back that the any operating get Is

Oeyvind Lindeman

was the sorry? maybe. question, what Sorry, Niall,

Niall Nolan

chance, I are in they by our There not staying within this privatized is and particular any Russia. for Omar. the mean are meaning trade, no ships crewed used case, crew country,

-- So went might go we where where where go would is international then suggestion are the there some they happen they clearly, to waters, that, to international that wanted into direct and to we go. ship to

So essence. no in

Omar Nokta

good. Very Okay.

You I'll more queue hop in I've a questions, other know what analysts ask. back and but the got let few

Operator

will next now question. We our take

Sean Morgan

Evercore. Morgan Sean is from calling This

production, terminal volatility great for of volume base from trying basis. setting rest the quarter-to-quarter so there's just the So to of But on year. this the been of a much mean, I obviously, quarter. terms production in rates ethylene understand

variability be fully operational kind have be we constant ramped a there high the and going of all of with should out that steady planning fair to utilization So terminal for construction. of seasonality utilization stream? these of planning be we is there? Or start different sort in is going Or amount chillers past we we Will for a get issues should that into to -- forward? once there

Oeyvind Lindeman

answer to I'll that one. try

from a operational ago the So in [indiscernible]. year XXXX are February issues there

operational the So itself total working. is --

be right. that production that [Technical Indication week. dynamics have earlier looking now shows [indiscernible] partners XX we the Page enterprise in speaking then attractiveness on and XXX,XXX to regarding international Difficulty] tons, question And than fundamental our sequentially to illustrated market. its -- So the terminal, our this more

about offers of cheap and it we using Europe -- That's [Technical access ethylene. exactly to environment of and Page addition, ethylene And we're Why the looking sense America, Difficulty] with world, of the is the XX, our United current makes can of April very States at a and So ethane, from of that on is get unique the have talked of position ethane just the you produce what absolute exports [indiscernible] commentary will cheap in the strong. the rest you America. Asia out in. and compared

we from seeing you'll for strong America. believe numbers So the be North terminal

Sean Morgan

the that Okay. sort into things of if And I maybe from But that's peak from the of has guess, though, now? utilization in sort demand normalized, kind of infer like market. given steady settled can crude of that, current so we -- prices state now, X kind a years are could of we're from dip more seeing more kind than

Oeyvind Lindeman

terminal annum. our XXX%, itself this contracted. which show per to to when friends nameplate is fully of crank at almost up our discussion which shown peak the you is definitely And million But than talked of doing capability XX%, then they we is -- and have XX% more tons demand. for The This enterprise have exports about almost capacity. see base, the And their capability its XX% that needed. increase have

Sean Morgan

Okay. out the XX ships facility, then The I just rate in you related squeeze could model it's X%. question. at the And one All swapped I right. new on said Ultragas think for if

like so all-in an Or fixed like LIBOR X% above really doesn't sort that is low. So is rate apply, but some I that it's seems at fixed, X% of X%? effective know --

what rate understand for that? to the is appropriate trying So

Niall Nolan

Yes.

and On top that, [indiscernible] Sean, $X.XX. you of X%. fixed, is at LIBOR between So have $X.X

Sean Morgan

Got it.

Okay.

So all right. yes,

and clear So base fixing the that then you're spread the That supplies, up. helps okay. rate

Operator

We will now take next question. our

BenNolan

products. This Is with or just of respect out what of clarify had to there's that capacity view is and ammonia about of probably world, about whether excess the It's elsewhere less seaborne, want Russia, contracts of your coming it's cargoes you're to or I won't Russia. the the that how be it when go Ben capacity necessarily you're will did longer little follow-ons. elsewhere a LPG out a Ukraine other with bit talking it? of a Nolan at there be I over such your coming just in thinking at necessarily couple distance. looking those fewer you're not but the produced that It's Stifel.

Oeyvind Lindeman

question, Interesting Ben.

try X.X from go the rest let's LPG sea to of on was that million by of rail. to basics. tons Europe last was tons imported Russia year. So XXX,XXX and

supply Now of rail. there LPG from of Europe is so the Russia to largest portion

be a it. will restricted, And that And amount for mentioned XXXX. trade should Therefore, of you're will XXXX sure, then the the tons, of assume shortfall I have somewhere from same if portion which the of X.X Europe million looking the at am stop, is of Some you proximity seaborne largest briefly, that I come in. else. to in law also kick close will

largest one, then you're you can Europe that have but So Mediterranean. America is capacity, as where that then is that or it is States the and and know, transatlantic million the is X.X source tons United whatever living shortfall of that And in They coming trade. from.

X% that longer a I case, European will comes the ton vessels So out that this Navigator's at what the huge be our LPG from that point Dag shortfall shipped ship America continent. And then to than opportunity mile. last North of supply that be came increases was -- that? opening less what remarks, doing I then the mentioned question think that And for will Russia. if what the mix. year, is for it's which any from tried was, cargo Well, What for to conflict

business. of only Even it's Tobago away bigger was small for the Trinidad part a go small, that should a Navigator. So

that's different So anyway, a topic.

BenNolan

helpful. No, I that's appreciate Okay. that.

Just switching gears for a moment.

ethylene of thinking what the ethylene the it carrier through the behind a XX-year-old lot asset is that's in an a You guys tightness sold there's -- of a on a were, handysize the ship, sale? portion Can fleet. market specifically bit you side, that maybe talk which carrier Neptune, but was little in clearly, that the was

Niall Nolan

to we've XX I that also is, twofold, vessel, I mentioned, our timeline. years. was Ben, commercially albeit there XX-year-old as think accounting one and therefore, a a and estimated life revised probably is say, And it economic financially. It you

it's So life. years got X of

you shipping it's ship, any that's analysts, million. of we're valuing nobody at are If look the and who valued approaching that $XX the analysts the

side it a at understand going we But going be to believe Chinese the we it's do tend thirdly, not, So or was China a in own competing who to least I trades at is on that price. that guess, good around counterpart that we to the And is the purposes purchaser with and world. but us the very ship it operate is business of for on. or their not use

Operator

our will [Operator next take Instructions] And we question. now

Climent Molins

Investors Edge. from Molins Climent

on the you facility to North American at prices if would competitiveness increase for oil terminal, and you And timing so, also Following are terminal. looking currently your of very throughput capacity? was to I what underline the ethylene be kind at looking wondering, benefiting expect And of strong, throughput increasing we be the high up come March how you online?

Oeyvind Lindeman

very question, or puts businesses in derivatives. the commodity is produce environment, ethylene a ethylene price high to exports their oil interesting U.S. to an polyethylene which people price, this definitely high relevant It's internationally in for boardrooms

last few as definitely really back has on X last ethylene states minds. the depressed agenda. and featured people's in security from So the then hasn't the COVID weeks, world markets, the years arguably, the of that changed of But over now is

partners to So be our expansion, extremely working hard we absolutely. and interest up internationally possible with diligent will for drum

Climent Molins

a after be priorities you on also All been the allocation capital divesting comfortable portion going and your what right. the position. in with of merger you're sitting will you've helpful. financial the That's commentary provide oldest fleet Ultragas And some now forward? very Could

Oeyvind Lindeman

too. question, That's a good

And other think that would considering introducing policy. part first of reduction. But obviously the options, in would -- investments. then certainly, a matter debt got be yet to That's the be buyback I or dividend the which that maturity term, We looking a not for year. a share subject also would at of mentioned, a But Board, be of unreasonable. we've consider number coming have for that. next short up I facilities alternative

initial would of we reducing look at phase. in our So debt some the

Operator

will now our we take And next question.

BenNolan

want sorry. time. overstay muted, the I welcome I Sorry, was first to didn't my

about also, it months X I and maybe little little or having that There know, of kind thing that else, and a the been So spoke backseat some if possibly it bit has movement I into guys another on right then of frame partnership sort X over happened? more carbon a that maybe taken everything little you COX. and -- me. that's the prices taking that given and of you that for capture a that question could being moving appreciate of I'm energy a the noise the security And and last, introduce you going moving is market transportation everything bit. has had COX was curious, a don't to in of Russia in bit or in

Oeyvind Lindeman

an expansive question. Yes,

So it's twofold.

correct. you're So

So Dan-Unity, for and which Gas is services Navigator the joint venture that. which develop COX transportation between now Evergas, is to Ultragas is

economics what to in are logistics, a about There's called type this as well project containment system part in COX projects, a they've trade. with needed far of. of prior COX so in a couple discussions -- and across fully Europe specifically particular and chain. going lot is the is venture done that There ship is the So our a possibility, joint design green of COX of fledged transport which projects supply sand and that Denmark, a public practicality Atlantic on to

direction. in at is Baby be it it moving steps definitely right something could the bigger. the much So moment,

back second this part at question of your is, The the is a seat moment.

quite opposite. the I think

Europe, read is region, to energy dependency reduce of environment then you any news in the if trying other sourcing coming big alternative and So time.

therefore, don't will -- in that contrary. quite interest Europeans stopping carbon scope, of And COX think in reduction have to any or a Europe I transportation -- that others. I address issue in the among So think has, there's

Operator

further this at Back you. are gentlemen. There time, questions to no

Dag von Appen

our Okay. you and speak attending Thank will XXXX. the we at bye. all earnings of for quarter first quarter call, you to would fourth again and all you I much, thank very good

Operator

Thank Ladies today. Thank for gentlemen, may does now participating, disconnect. you. conclude your and conference for and you you call that

Navigator (NVGS) 11 Mar 222021 Q4 Earnings call transcript