NVGS - Earnings call transcript Q4 2023

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Mads Zacho

Thank you for standing by, ladies and gentleman, and welcome to the Navigator Holdings' conference call for the Fourth Quarter 2023 Financial Results. On today's call we have Gary Chapman, Chief Financial Officer; Oeyvind Lindeman, Chief Commercial Officer; and myself, Mads Peter Zacho, CEO. I must advise you that this conference is being recorded today.

As we conduct today's presentation, we'll be making various forward-looking statements. These statements include, but are not limited to, the future expectations, plans and prospects from both a financial and operational perspective and are based on management's assumptions, forecasts and expectations as of today's date and are such subject to material risks and uncertainties.

significantly forward-looking differ forecast. and may results from information our financial Actual

and that, information assumptions #X, reports and Securities and these and filed Commission. included the Additional on factors annual we'll are get about the to go please ahead in going our with Exchange Page With presentation. quarterly

of earnings I'll highlights and with an begin a thanks everybody, taking for morning, about for I'll fourth lot for the then part the we of call. the XXXX in little bit Good year a this talk just the quarter Navigator and Gas outlook overview started. that

significant always, compared color up charter in on to and set same $XX doubled both in that for As growth income, than and This solid a more We will compared there rates. business. $XX with of with Adjusted which a year. QX mainly time period adjusted equal to generated 'XX minutes and higher a million Gary XXXX. over driven by record EBITDA our top to period Oeyvind was last in revenues couple more was operating follow reflected QX, line The of in the progress improvement QX last we net was same was million. year's

own cash remained the Our similar dividend our revolver to and of ethylene repaid per even invested shares robust cash paying on $X.XX position and into we previous QX, terminal we when our repurchased we continued credit quarters. expansion. share, In

net fourth equivalent to dividends You'll in be This some of buybacks. see further our additional will, declare a $X.XX per this as and income share quarter in also continue we our now total, results. following XX% share

for slightly vessels than for higher above XXXX. million Fleet Equivalent compares be the was Time was of terminal QX day rate down shy or than on annum. utilization earned utilization allows completion million $XX,XXX for X ethylene TCE and payments we of venture contributed in was up at October $XX,XXX a by nevertheless terminal in X our QX TCE $XX of of tonnes 'XX, terminal payments track at export continues XXXX. XXX,XXX Utilization or but reached million, in to of each tonnes expansion total per our that XXXX. per achieved we 'XX quarter, of QX, brought above August, December. stayed Throughput QX capacity in same the less of $X XX% to and period around joint that average XX% This April, in The Charter progress it more in at the the and QX to for of typically just and rates. The made

outlook for our robust. business The remains

remain rates. NGL XX%, time and transportation limited from and demand We continue. new supply buildings solid expect handysize for on near utilization thereby we With at to our our renew expect to this charters carriers, segment, higher we expiring to continue gas production with in combined

cubic Canal meter We work also restored us. patterns be that more lead expect near and in future, Panama Suez may miles the the We through Asia do from customers work. not trade the in to backhaul which will of that transport is of a idling or example The our joint efficiency recent improve examples voyages. with intensively work ballast to propylene and great most for avoid

our of over Gary. hand it I'll that, to for financial ahead, results. just Go Gary With more detail

Gary Chapman

again momentum morning to results. much, everybody. latest and afternoon, very we've continued I'm some results, report good our quarter good with XXXX Mads, or positive very in which our Thank fourth you pleased

million day per to out, pointed charter quarter to XXXX. Slide XX.X% the much stronger quarter average $XX due X, of compared of in of XX,XXX the in to equivalent fourth that our quarter rates, as we has increase Mads were or On compared time fourth XX,XXX this in over XXXX on with of $XXX.X quarter total operating million fourth see revenue the up XXXX, to the

the further this vessels days also ownership result of positive in Bay were XXXX. the operating quarter effects and shown There as a our fourth was figures X Navigator reflected of in our And as on days, operational right-hand fully side. having available days Greater

later. this, Against has XXXX is the little utilization a quarter as Mads very will XX.X%, down quarter in compared already it fourth and the XXXX Oeyvind fourth still of at healthy, was to confirm of said, but

Our capacity XXXX. were X ethylene in tonnes closely near XXX,XXX terminal capacity to in million remain of line with and currently expect XXXX throughput nameplate tonnes, in volumes we

in expense was operating last XXXX of quarter other than per XXXX the the vessel and X,XXX quarter of a fourth at no line different. daily with is year quarter fourth that in higher day. little the essentially of the typically the Our was and quarters, XXXX the fourth Noting

on providing guidance X interested expense are We full XXXX some in that Slide year for this. those are

earned rate in XXXX, Greater quarter. as acquired quarter the our of due Navigator expenses the after a loss cash cushioned $X.X our mainly softening X of of Depreciation was and addition The vessels on the in XXXX. of various a our result the million were from forward and interest interest interest swaps in movements balances over in period fourth by valuations interest noncash that rates Bay the income was to the times up December slightly mark-to-market were at same

at of current profits tax up results Our Overall, our adjusted million XXXX and quarter share period mentioned, quarter of record tax fourth Mads per with our compared to the fourth and for the a for equaling was terminal $X.XX EPS $XX $X.XX provide for quarter same export EBITDA. the as reflects earnings from deferred XXXX line the in taxes, mainly on Morgan's XXXX, share Point. at $X.XX ethylene adjusted income our

Navigator's and XX. on The bank reporting to agreements all cash remains that loan million. This across balance buybacks, the the which shown This repaying $XXX recorded December after in credit at redrawn be Then and sheet terms the and loans million had around a of of adjusted with in to balance our remain revolving minimum liquidity highest covenant paid the we our term X of history under agreement. after at credit $XX taken cash XXXX facility liquidity full over of of $XX.X basically This end $XXX compares on dividends million EBITDA of million of million million. a means of around is XXXX. funds the year, facility all recent $XXX the balance Slide we're strong available annual total our $XXX of

We just being ethylene needed later as debt for that December finance and X.Xx other investments that project for export debt net until our for was net under Our shareholder we XX% well for adjusted capitalization the see EBITDA expansion cash of the our enhance year to as was months XX, to projects XX. returns. and to December in as fix XX

we're As projects looking you would at. number a expect, that actively of there are

later, we're can our we'll that continue always our our mention how look add X looking under at reduce addition, pillars debt, renew fleet. distributions and In potentially we buybacks capital to will to to share and and

Of maturities course, have of all no finance on X, is very XXXX. shown important loan as Slide this. until to we And

likely refinanced X million refinance depending bank senior maturities XXXX will might be a unsecured the investment in million positive we which that on cash And opportunities. facilities The include totaling transaction. $XXX bond, for $XXX

these progress already. our maturing group, the lending these discussions We'll very positive XXXX updates feedback coming on further On discussions and we we've commenced as quarters. provide facilities, with already received over have

compared On year Slide heavier XXXX, day, to scheduling is per coming figure we dock this XXXX debt our repayments which cash our outline XXXX. for includes X, estimated dry $XX,XXX in breakeven scheduled which and

our recalling was Even the generate low charter considering fourth TCE over breakeven of the enables this, this with relative rates, quarter average It Navigator relatively to shipping to for $XX,XXX. EBITDA throughout side. level positive XXXX

slide right different segments, vessel our complex vessels. our XXXX expectations OpEx is more size smaller daily vessels the to for across ethylene on larger, this ranging to from Then our

range XXXX a and expected OpEx, with expenses, for line the and figures. all are costs, We which vessel admin also broadly general annual in interest for spends net depreciation of provide

historic all million. adjusted the our $XXX and results nicely XX, the trend EBITDA of able a EBITDA, been XXXX, are of whole positive Slide the demonstrating quarters continuing on highest culminating adjusted step-up very quarterly report our this we On across a quarter, past to record over X outline we've showing in

the provide result. healthy a also quarter expect to first of XXXX We

the show adjusted side we adjusted historic an And this XXXX. based EBITDA essentially Slide bar months of quarter's our On annualized on XX, XX bar, right our EBITDA last results.

of right based average In adjusted the addition, the effects day charter increases per bars to in show $X,XXX of to EBITDA further give perspective. in the rates on increase an incremental some EBITDA

important scheduled our Slide of we topic on Then cover drydocks. XX, the vessels

fully budgeted. CapEx vessels with which total and have drydocking $XX.X days million of is of We off hire XXX with scheduled expected XX XXXX all drydocking during anticipated of an total for

noting Some expected has and drydocks shown more is that detail vessel year. in on of this docking already completed the its successfully costs one January timing these of below,

have take very we those energy-saving before, short announced period. as many will install having of as opportunities million, of technologies a those payback technologies around cost at vessels Also, $X.X a on to these we with drydocks

end XXXX Finally, Thank for give commercial a quarter scheduled at drydocks on XXXX very over foundation strong and you a we year XXXX, a at of update I'll with some stop an provide interested. those I'll are that position. good here set of the up to to and great Oeyvind there, hand our also you. that, And on and and end guidance the for with

Oeyvind Lindeman

Thank good all. morning, and Gary, you,

Let's fundamentals. look increase on barrels U.S. This remaining liquids. move at to which XX% of Slide a and natural million meaningful LPG The call. liquids earnings gas XX% but one million of ethane, XX XX of up gas reported last important? gas is production closer of the at barrel consists liquids why developments it take natural is gas to remember, natural a barrels XXX American of the recent since of is average Well, year-end,

export flat. additional consumption any ethane relatively solely And aimed LPG is is U.S. therefore, domestic less for of or markets. more and production

plants, American ethylene ethane gas good great In and consequence, and for is fractionators investing are the processing is expansions midstream This production. our gas in general, in allow terminal to a business. and Navigator companies it for increase transportation. for As additional growing

in Handysize demand ammonia middle the includes volume LPG, volume cargoes. graph petrochemical measured transported. and global in shows The The

Longer the XXXX. total reduce volume. reduced As loading disruptions rerouted. to Suez months last This the of you voyages operations petrochemical of frequency is at Many voyages Canals. can during mostly due which see, carried Panama and the were turn in dropped the of handysize tonnes

of volumes is we tracking historical the first as total for can the less seasonality. or X However, see, months more XXXX,

buyers. at look to that If previous despite international we cargoes development. ethylene years. the U.S. the see you seasonal exports highly counter these ethane compared attractive of We remains from handysize ethylene The positive development. longer exports us ethane and a specifically, voyages, tells see positive more graph shows right-hand It and a U.S. to

line between is arbitrage ethylene ethylene U.S. is lower pressure left graph the Growing and Asian on X price, U.S. domestic XX. continues the landed by by the on and updated Asia the line prices represented production gray Europe on The European Slide ethane. the price is and of NGL slide which the lines. price puts left-hand and top shown to on graph, Ethane shown

the needed due to cover As positive, call. we arbitrage the voyages. is see, last longer It has between of additional since freight earnings the This also continents course. to can widened is

of declined Canal. However, September as counterintuitive. the carrier gas the ethylene export is canal the Panama went middle rapidly at of The on restricted somewhat. onwards. through with transits number explanation last you lies graph, This see transits is downhill the from year The volume

can vessels, Good take-or-pay stretch of duration volumes, export terminal. of which a Point of chains. their created comment ethane is larger for We of fill vessels. XX%. in trips supply a demand a bound via and handysize is a interesting turn service vessels, ours, Asia. supply Asia What thing, though. which the vessel availability Houston that cracks not majority see handysize from the The you on graph. that to is From to exports, This vast on ethane that to increase in the is And round in were ethane open The contracts, right-hand Morgan's at by rerouting shipping [indiscernible] nice our this of including Cape bad perspective, Hope increased rerouted

Our petrochemical factor the earnings XX% flexibility December. reflects days our from the taking leaving mix nonutilization XX% only fleet. into XX from XX% LPG in ammonia, when on are from derived for earnings cargoes, account Slide days

and downtime in Canal is disruptions also unforeseen dynamic fleet. fluctuation a metric. do utilization. cause knock-on logistics includes And issues the and to It utilization technical effects across

this represents you Mads, level, freight market. healthy. in we XX. Slide too, mention have a and freight We mentioned it take shown he These again environment are on good Around very rates the I are XX% that healthy an mentioned mark the and past, heard above where opportunity will are utilization when around it relatively rates to in

upswing was assessment are can Canal is issues, we a time robust semi-refrigerated settled assessment charters the fully-refrigerated market at What in in many being seen a we the ethylene part shipping Panama quite green the oversupply index. The typically have say at of is knee-jerk particularly There immediately for third-party the after reality than levels. coming now renewed What for more off higher ruins and rates vessels. years. vessels has

into We it and next we segment visibility clear over have in supply today, previous the calls, the few said remains coming valid it have years. of

in comfortable the segment things -- the same good thing. at year At XX core low XX. shown is and Therefore, are a side vessels age. quite It supply over XX% time, the the our of of that's X% existing on years segment, Slide with has of we

take first, to exciting I'll So it to topics. I'm him above go few happy the over But Randy? Navigator. all for over developments to a on questions hand Randy on

Randall Giveans

you, Thank Oeyvind.

up So made several those following months, announcements. want we these few yes, some on additional on a to details announcements regarding of in developments provide recent we

Slide XX. So turning to

and are will for Board The million. shareholders be and XX% with a record line declared of of policy net return cash million in $X.XX We the payable totaling quarter, to shareholders the of or to as this April our our return income dividend of $X.X recently returning on fourth XX, quarterly announce dividend all share that payment $X.X We're quarter. pleased will announced April of table capital below. that of to X, a per be capital

of repurchase our shares. policy share, Additionally, well below trading portion with this $XX we'll our least at shares NAV of the to a use variable

share between As Board new price X.X we've $XX the an of reminder, far. which per May total of at used million. for million repurchase $X.X subsequently, of million December authorized $XX.XX shares a a XX average of XXXX, $XX and million And we thus program, a repurchased

quarter Now we shares looking least shareholders income. $XXX the the purchases of common such to the together between expect XX% of a that end, Return purchase core will equals us. to net NVGS of at ahead, capital and focus and remain million dividend share now for

complete. slide, of to the next Engineering our ethylene up previous regarding of our project components the progressing nicely. terminal, items been delivered. ordered, is On key long-lead export frankly, now expansion on announcement become the the fully following started is, many the All have have and

If yourself, want see down in to you come and Houston for just let know. me

quarter. occur from completed to fourth and during total new and be XXXX expected this to are made are paid totaling required than date, cash million, is To throughout this Construction be less $XX completed from to million. be financing for agreements $XXX remaining contributions we've hand the project progress payments the X is expected those expected us capital The expansion until on likely CapEx year. later

January with back customers spreads to and due of for with another capacity vessel strong expect Discussions in new the is throughput construction you and now December throughout availability, the As during be are to coming despite see tight contracted capacity looking current March offtake vast the to ongoing the nameplate contracts, to limited multiyear left chart, be and on month. the softness additional and phase majority bottom the some can months. we commodity

is money important. obviously shipping, making Slide on XX. In Finishing consistently

And so is spending this money wisely.

continue just at also to capital consistent we wanted deployment. dividends on steeply discounted key our We repurchase the expansion committed and the paying oldest with them by through our highlight quarterly business, debt for modern bunkering. fleet infrastructure energy cash debt, in remain levels. replacing vessels terminal to shares, to vessels, We for we highlighted grow these X our such, Fuel export focused we'll As selling recently Azane Solutions primarily secondhand most continue remain ethylene amortization. and We've especially renewed by to reducing our pillars recently ammonia investment and out

the now for capital. being I'll in over stewards Mads will turn good remarks. that, to his it closing forward, diligent remain management of back Going With

Mads Zacho

here, quick the And with parameters. and finished right on exciting Navigator improvements much all is with page, can years XXXX. positioned pretty we'll the for as over previous we future. an strong XXXX, see progress this year take And Entering Good. you on at heading direction look and just a is in into well back earnings the

sheet gives an best now customer Our shareholders flexibility it foundation position, you, it and relationships, our fleet shape a strong I'll same Randy. our hand with that, leading back growth. the leaves capital team efficient ever, The time. carriers best is experienced is return come. to its at and gas just us business handysize market to balance engaged grow with The us strong for yet and of And the in to really and to

Randall Giveans

much, some now Thanks line First Instructions] Mads. lines should your be [Operator question, Q&A. open. for the so Operator, we'll open

Omar Nokta

Am I through okay? coming

Randall Giveans

you do clear. How more loud and

Omar Nokta

you, update. Thank the for Randy. right. All Yes. Well, thanks

get of ships couple wanted couple your the first for a thus Just of has I say, questions a months. me. progressed of market for how far the sense to

started of saw you, just year they on that a a into we starting good wanted to and Handy very the again. get rebound to I saw in cliff rates larger same off You segment? type a the they've mentioned, from sense say, translated that of obviously, obviously -- in terms in the the still I strong, a and which kind to XX% is get showed one just wanted rates volatility your -- I closer think, early being to of, mentioned so being far volatility then Mads, amount has that slightly firm. the in strongly, dynamic with you slides utilization fell maybe And we VLGCs, of the of down then XQ, sense

Mads Zacho

a one? don't words you that few to why give Oeyvind,

Oeyvind Lindeman

not increased we it it Contrary, that in dropped cliff Omar, course, but segment. with the very Handysize carriers earlier show year. That through rates gas both able to ethane off were a we the of spot of the some renew the filtered to call, ethylene did fixtures. the the that every in broker or assessments happen Yes, earnings large at

it So the positive. and we remains VLGCs the where as not same for positive us experience did was

Omar Nokta

contracts that Okay. with envision of you chunk there everyone, Do think about nameplate or to million existing And for the tonnes. But there's what that Or million expansion, that we of as is be that more also develop then just it coming? through entered do the is I of the the are just Randy, about maybe X we -- see X XXX,XXX contracts big tonnes think spot? the how extra terminal could maybe contract, potential for Do Has terms you of, year? perhaps this can the X.X starting is become contracted just capacity thinking a in guess those 'XX. part, of for expansion And million? into, you, coming also, move obviously a -- contracts for have we upwards you that a on. then that where say,

Randall Giveans

Yes, that. start Omar, I'll on

contracting, So coming the have in on XX% the but the clearly, terms million the existing over unwind years. scale X contracted, we those of of

there. some happen, then we So we that extensions for And year. expect to additional new expect this frankly, contracting,

starting as goal about call look So XXXX, it let's that X.XX can is probably sell sell forward million plan, a tonnes forward. The that have when to the of January it. at XX% we you we'll X, portfolio,

for asset. and this model that's think the I enterprise Navigator

first of months have few happening new we'd tonnes roughly, weeks, contracts, So that in the be think we in latest. be these the on coming sold should million the want the upsized here both customers, X.X at right? advance, that to And would extension,

of your kind part. first So that's

terms In tonnage. additional contracting of

that tonnes we we from that to train the up XXX,XXX For are in million addition the already X.X new guaranteed tonnes to million Flex have. the can the do now, train,

contracting cannot forward we Now in of are because we not contract capacity. terms that, guaranteed that that

in maybe cargoes se. million on forward sold will future could incremental capacity be for Now additional the X.XX then tonnes a would guaranteed we we most is years, contracting then But start buying basis. spot per and purposes, sell

Omar Nokta

that's me, have recently an one you That but quarters for a you I'll over. you active And seeing ammonia amount something area clear. and trade mentioned several of a there. guys highlighted good topic, growth, Final the already. is Okay. for is very guys as It very separate very, and cargoes and of are now, in pass that

a And perhaps of then that Navigator over guess, midsize We have explore the after on shipping going you of or I to on that the interest you long go trade term? capitalize and forward VLACs the currently the owners easily smaller -- shipped kind or to way that shipping this segment ships seen has carriers? something or do one, is kind -- operate? is in the in that to as an more larger ammonia think realistically ammonia side

Mads Zacho

suitable it. well off think that future VLGC transporting colleagues ammonia order I just add for kick you us on for to to want the and on of can to going very ammonia transported majority make new-built today in then flexible, the they Maybe trade. they're my I'll very is midsize. say, We a on if then It's of be and a ammonia. capable this cost They're that invite VLGC small to very expensive it could and to not owners add, to

not build ammonia owners orders on that they say you will you transporting be that those in. that So assume these it's I VLGC new they necessarily don't think expect should -- necessarily put could

view comes vessels over of that When a expect our that will midsized customers around we being talking carrying it, to vessels that we'll are to Handysize time, or on number this, and do ammonia. it be we building be

also by first we an now, vessels would you the For comes of that say, least have, covered if particularly do ammonia. propelled to years could we it that looking so it couple to against probably are building contract be at offtake

to So this in part we market. do take expect

the in enterprise it, production would if upstream example can for And something we of to good marine ethylene, or we doing wider so. be with quite we on replicating is Point interested Azane supply expect setup part in also chain. logistics similar around Solutions a also of take think ammonia that. Fuel have the do on We today a like Morgan's

Omar Nokta

very color. helpful Very, Okay.

Randall Giveans

Omar. Thanks,

question a Okay.[Operator had around in Instructions] Azane. We come

joint seems like So is dual ammonia Oeyvind, turn infrastructure community, use I'll for It to will Azane as there you meet Azane over the how of lack this for to need? venture. this the a shipping a

Oeyvind Lindeman

to the to In simple. very problem. fuel, available. construct, use it's Azane that needs ammonia's first the Solutions, to to the that fuel particular ship-owning which So is encourage infrastructure is of order challenge, be constructing confident be Therefore covering in industry Fuel companies that unlock there vessels one

the et short since ordering investment which So a fuel Azane cetera, and so ammonia is confidently trades. will forth, be their with few available people that have knowing ammonia vessels sea come fuel in

majors, oil offshore exactly ammonia one then using Norway, in fuel. particularly a since Also, for have launched tender vessels

and instance So the exponentially. first start of forefront and our belief you in the start it part change pushing button the will is then see and happen can to the Azane and is the is transition. grow slowly That that

Randall Giveans

or equipment, anticipating here Operator, drydocking. longer? in delay it might Are hands How we schedule one are in any I dry any question you docking materials, other the that questions provide? you delays have last raised? Now with on make which the their confident

Mads Zacho

of in that off to us we also cost will of these, in they any expect duration and schedule and the terms we also there for delays underway will well in of stick on don't be that that that laid planned we terms out. can were expect drydockings are executing say I per and the and XXXX and se that kick in here planning terms we

us. think now, So world for we pressure we abating yes, in and the planned around somewhat inflationary It's this. there is well

that there So will be delays. we overruns don't cost or expect

Randall Giveans

XQ you if 'XX the us for that you joining May know to have first your earnings find Sounds other to results. we available? analyst for our looking thank to relations forward call. we'll know speaking question. Feel any offline. where us, to Have look great Is at a good. I navigatorgas.com, right. we so line in day. ask with quarter e-mail for Well, take follow-ups, you investor one our XXXX free But have you again All and

Mads Zacho

Thank you.

Navigator (NVGS) 14 Mar 242023 Q4 Earnings call transcript