Navigator Holdings Ltd. Preliminary Fourth Quarter and Financial Year 2018 Results

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LONDON, April 1, 2019 /PRNewswire/ --

Highlights

  • Navigator Holdings Ltd. (the "Company") NVGS reported operating revenue of $78.2 million for the three months ended December 31, 2018, an increase from $76.7 million for the three months ended December 31, 2017. Operating revenue for the year ended December 31, 2018, amounted to $310.0 million.

  • A net loss of $3.9 million (or a loss per share of $0.07) for the three months ended December 31, 2018. This includes non-cash movements of our cross-currency interest rate swap and foreign exchange translation, both relating to our NOK denominated bond, without which the loss for the three months ended December 31, 2018 would have been $1.1 million (or a loss per share of $0.02). A net loss of $5.7 million (or a loss per share of $0.10) for the year ended December 31, 2018, which includes a loss of $2.8 million for non-cash movements of our cross-currency interest rate swap and foreign exchange translation.

  • Adjusted EBITDA(1) was $117.6 million for the year ended December 31, 2018, compared to $120.8 million for the year ended December 31, 2017.

  • Maintained a fleet utilization of 86.3% for the three months ended December 31, 2018, resulting in a strong utilization of 89.0% for the year ended December 31, 2018.

  • In November 2018, the Company successfully issued senior secured bonds in an aggregate principal amount of NOK 600 million (approximately $71.7 million) with Nordic Trustee AS. 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 ethylene export marine terminal at Morgan's Point, Texas (the "Marine Export Terminal") related to the Company's 50/50 joint venture (the "Marine Terminal Joint Venture").

  • Since the end of the year, in March 2019, the Company successfully re-financed four of its ethylene capable vessels from the 2015 Secured Term Loan Facility for an aggregate amount of $107.0 million. The repayment of the loan on the four vessels was $75.6 million, leaving net proceeds of $31.4 million for fees and for general corporate purposes.

  • In March 2019, the Company also successfully executed a credit agreement (the "Terminal Facility") for a maximum principle amount of $75.0 million to be solely used for the payment of construction costs relating to the Marine Export Terminal.

  • Upon completion of the above financings, the company has fully financed its portion of the capital cost of construction of the Marine Export Terminal.

Fourth Quarter 2018 Financial Results Overview

Operating revenue for the three months ended December 31, 2018, was $78.2 million, an increase of $1.5 million, or 2.0%, compared to the $76.7 million of operating revenue for the three months ended December 31, 2017.

For the fourth quarter of 2018, the average time charter equivalent rate ("TCE")(2) across the fleet was $636,333 per calendar month ($20,920 per day), compared to $626,161 per calendar month ($20,586 per day) for the comparable period in 2017.

Fleet utilization across the 38 vessels was 86.3% for the fourth quarter of 2018, a reduction from 87.2% in the fourth quarter of 2017.

Operating revenue less voyage expenses amounted to $62.8 million for the three months ended December 31, 2018, compared to $61.9 million in the same three month period of 2017. This increase during the three months ended December 31, 2018, compared to the three months ended December 31, 2017, was as a result of a combination of increases in TCE rates giving rise to additional revenue of $1.0 million, a further $0.5 million increase due to the additional vessels in our fleet, partially off-set by a reduction in utilization rates of $0.6 million.  

Net loss was $3.9 million for the three months ended December 31, 2018, or a loss per share of $0.07 per share. This includes non-cash movements of our cross-currency interest rate swap and foreign exchange translation, both relating to our NOK denominated bond, without which the loss for the three months ended December 31, 2018 would have been $1.1 million.

Reconciliation of Non-GAAP Financial Measure

The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the three and twelve months ended December 31, 2017 and 2018:


(in thousands)


(in thousands)


Three months ended


Year ended


December 31,
2017 

December 31,
2018


December 31,
2017 

December 31,
2018

Net income / (loss)

$              1,411

$           (3,899)


$              5,310

$           (5,739)

Net interest expense           

9,324

11,724


41,475

44,054

Income taxes      

6

(33)


397

333

Depreciation and amortization        

18,863

18,884


73,588

76,140







EBITDA(1)            

$            29,604

$            26,676


$         120,770

$         114,788

Foreign currency exchange gain on senior 
     secured bonds

(2,360)


(2,360)

Unrealized loss on non-designated derivative 
     instruments  

5,154


5,154







Adjusted EBITDA(1)

$            29,604

$            29,470


$         120,770

$         117,582







  1. EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. Adjusted EBITDA represents net income before net interest expense, income taxes, depreciation and amortization and non-cash movements of our cross-currency interest rate swap and foreign exchange translation . 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 as an alternative to any financial 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. See the table above for a reconciliation of EBITDA and Adjusted EBITDA to net income/(loss), our most directly comparable financial measure calculated accordance with U.S. GAAP.

  2. TCE rate is a non-GAAP financial measure. TCE rate is a measure of the average daily revenue performance of a vessel. TCE rate is a shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., time charters, voyage charters and contracts of affreightment, or "COAs") under which the vessels may be employed between the periods. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters we pay all voyage expenses. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with operating revenues less voyage expenses, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our method of calculating TCE rate is to divide operating revenue (net of voyage expenses) by operating days for the relevant time period. See the table below for a reconciliation to the most directly comparable GAAP financial measure.

 

The following table represents a reconciliation of TCE rate to operating revenue, the most directly comparable financial measure calculated in accordance with GAAP, for the periods presented:


Three Months
Ended
December 31, 2017
 

Three Months
Ended
December 31, 2018
 

Fleet Data:



Operating revenue.................................................................................

76,684

78,233

Voyage expenses.................................................................................

14,781

15,476




Operating revenue less Voyage expenses..........................................

61,903

62,757

Operating days......................................................................................

3,007

3,000

Average daily time charter equivalent rate (2).......................................

$                      20,586

$                      20,920

 

The Terminal Facility

On March 29, 2019, Navigator Ethylene Terminals LLC, a wholly-owned subsidiary of the Company (the "Marine Terminal Borrower"), entered into a Credit Agreement with ING Capital LLC and SG Americas Securities, LLC for a maximum principal amount of $75.0 million, to be used solely for the payment of project costs relating to our Marine Export Terminal.

The Terminal Facility is comprised of an initial construction loan, followed by a term loan with a final maturity occurring on the earlier of (i) five years from completion of the Marine Export Terminal and (ii) December 31, 2025. Initial borrowing under the Terminal Facility may only occur after the Marine Terminal Borrower has made equity contributions required under the terminal facility to the Export Terminal Joint Venture, which together with available borrowings under the Terminal Facility, will fund its entire portion of the capital cost for the construction of the Marine Export Terminal. In addition, the ability of the Marine Terminal Borrower to borrow under the Terminal Facility is subject to the satisfaction of certain conditions, including the delivery to the lenders thereunder of legal opinions with respect to certain regulatory and environmental matters relating to the Marine Export Terminal. There can be no assurance that all conditions to borrowing will be satisfied.

Conference Call Details:

On Monday, April 1, 2019, at 8:00 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 (www.navigatorgas.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

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A telephonic replay of the conference call will be available until April 8, 2019, 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.

 

 

Navigator Holdings Ltd.

Unaudited Condensed Consolidated Balance Sheets

(Unaudited)








December 31, 2017

December 31, 2018


(in thousands, except share data)

Assets



Current assets



Cash and cash equivalents..................................................................................................................

$                 62,109

$                 71,515

Accounts receivable, net.....................................................................................................................

14,889

17,033

Accrued income...................................................................................................................................

15,791

4,731

Prepaid expenses and other current assets........................................................................................

11,340

16,057

Bunkers and lubricant oils.....................................................................................................................

8,008

8,789

Total current assets..............................................................................................................................

112,137

118,125

Non-current assets



Vessels in operation, net......................................................................................................................

1,740,139

1,670,865

Property, plant and equipment, net.......................................................................................................

1,611

1,299

Investment in equity accounted joint venture.......................................................................................

42,462

Total non-current assets......................................................................................................................

1,741,750

1,714,626

Total assets.......................................................................................................................................

$           1,853,887

$           1,832,751




Liabilities and stockholders' equity



Current liabilities



Current portion of secured term loan facilities, net of deferred financing costs..................................

$                 81,559

$                 68,857

Accounts payable.................................................................................................................................

8,071

10,784

Accrued expenses and other liabilities.................................................................................................

12,478

12,798

Accrued interest....................................................................................................................................

3,500

4,613

Deferred income....................................................................................................................................

4,824

8,342

Total current liabilities...........................................................................................................................

110,432

105,394




Non-current Liabilities



Secured term loan facilities and revolving credit facilities, net of current portion and deferred 
     financing costs................................................................................................................................

681,658

599,676

Senior secured bond, net of deferred financing costs........................................................................

68,378

Senior unsecured bond, net of deferred financing costs....................................................................

98,584

99,039

Derivative liabilities................................................................................................................................

5,154

Total non-current liabilities....................................................................................................................

780,242

772,247

Total Liabilities...................................................................................................................................

890,674

877,641

Commitments and contingencies (see note 15)



Stockholders' equity



Common stock—$.01 par value per share; 400,000,000 shares authorized; 55,657,631 shares 
     issued and outstanding, (2017: 55,529,762)...................................................................................

555

557

Additional paid-in capital.......................................................................................................................

589,436

590,508

Accumulated other comprehensive loss..............................................................................................

(277 )

(363 )

Retained earnings.................................................................................................................................

373,499

364,408

Total stockholders' equity.....................................................................................................................

963,213

955,110

Total liabilities and stockholders' equity.....................................................................................

$           1,853,887

$           1,832,751




 

 

 

Navigator Holdings Ltd.

Unaudited Condensed Consolidated Statements of Income

  (Unaudited)








Three months ended

December 31,

(in thousands except share data)

Year ended

December 31,

(in thousands except share data)


2017

2018

2017

2018

Revenues





Operating revenue.........................................................................................

$            76,684

$            78,233

$         298,595

$         310,046






Expenses





Brokerage commissions..................................................................................

1,263

1,349

5,368

5,142

Voyage expenses...........................................................................................

14,781

15,476

55,542

61,634

Vessel operating expenses............................................................................

26,956

27,095

100,968

106,719

Depreciation and amortization.........................................................................

18,863

18,884

73,588

76,140

General and administrative costs...................................................................

3,554

4,121

13,816

16,346

Other corporate expenses.............................................................................

526

684

2,131

2,585

Total operating expenses.........................................................................

65,943

67,609

251,413

268,566

Operating income.......................................................................................

10,741

10,624

47,182

41,480

Other income/(expense)





Share of result of equity accounted joint venture...........................................

(38)

(38)

Foreign currency exchange gain on senior secured bonds...........................

2,360

2,360

Unrealized loss on non-designated derivative instruments............................

(5,154)


(5,154)

Interest expense.............................................................................................

(9,967)

(12,017)

(37,691 )

(44,908 )

Write off of deferred financing costs.............................................................

495

(786 )

Write off of call premium and redemption charges on 9% 
     unsecured bond.........................................................................................

(3,517 )

Interest income................................................................................................

148

293

519

854

Income/(loss) before income taxes........................................................

1,417

(3,932)

5,707

(5,406)

Income taxes...................................................................................................

(6 )

33

(397 )

(333 )

Net income/(loss)........................................................................................

$              1,411

$           (3,899)

5,310

(5,739)






Earnings/loss per share:





Basic:..............................................................................................................

$                0.03

$              (0.07)

$                0.10

$              (0.10)

Diluted:............................................................................................................

$                0.03

$              (0.07)

$                0.10

$              (0.10)






Weighted average number of shares outstanding:





Basic:..............................................................................................................

55,529,762

55,655,357

55,508,974

55,629,023

Diluted:.............................................................................................................

55,898,502

55,999,293

55,881,454

55,629,023






 

                        

Navigator Holdings Ltd.

Consolidated Statements of Comprehensive Income

  (Unaudited)





















Three months ended


Year ended



December 31,


December 31,



(in thousands)


(in thousands)



2017


2018


2017


2018










Net income / (loss)

$

1,411

$

(3,899)

$

5,310

$

(5,739)

Other comprehensive income/(loss):









Foreign currency translation
gain/(loss)


(242)


(77)


10


(86)










Total comprehensive income/(loss)


7,760


(3,976)


44,816


(5,825)


























 

 

Navigator Holdings Ltd.

Unaudited Condensed Consolidated Statements of Stockholders' Equity

(Unaudited)

(in thousands, except share data)














Common stock






Number of
shares

Amount 0.01
par value

Additional
Paid-in Capital

Accumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings

Total

January 1, 2016....................................

55,363,467

$              554

$        586,451

$                (465 )

$    323,551

$    910,091

Restricted shares issued March 29, 
     2016..................................................

72,620

Net income.............................................

44,638

44,638

Foreign currency translation.................

178

178

Share-based compensation plan...........

1,573

1,573

December 31, 2016.............................

55,436,087

$              554

$        588,024

$                (287 )

$    368,189

$    956,480

Restricted shares issued March 23, 
     2017..................................................

93,675

1

1

Net income.............................................

5,310

5,310

Foreign currency translation..................

10

10

Share-based compensation plan...........

1,412

1,412

December 31, 2017..............................

55,529,762

$              555

$        589,436

$                (277 )

$    373,499

$    963,213

Adjustment to equity for the adoption of 
     the new revenue standard ...............

(3,352)

(3,352)

Forfeited shares - 2013 long-term equity
incentive plan ........................................

(3,673)

Restricted shares issued March 20, 2018

131,542

2

2

Net income..............................................

(5,739)

(5,739)

Foreign currency translation...................

(86)

(86)

Share-based compensation plan............

1,072

1,072

December 31, 2018..............................

55,657,631

$              557

$        590,508

$                (363 )

$    364,408

$    955,110








 

 

 

Navigator Holdings Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(Unaudited)










Year ended
December 31,
2016
(in thousands)

Year ended
December 31,
2017
(in thousands)

Year ended
December 31,
2018
(in thousands)

Cash flows from operating activities




Net income/(loss)........................................................................................................................

$         44,638

$            5,310

$         (5,739)

Adjustments to reconcile net income to net cash provided by operating activities




Unrealized loss on non-designated derivative instruments........................................................

5,154

Depreciation and amortization.....................................................................................................

62,280

73,588

76,140

Payment of drydocking costs......................................................................................................

(9,902 )

(268 )

(5,796)

Amortization of share-based compensation...............................................................................

1,573

1,412

1,074

Amortization of deferred financing costs...................................................................................

3,091

3,217

2,292

Share of result of equity accounted affiliates............................................................................

38

Call option premium on redemption of 9.00% unsecured bond..................................................

2,500

Prior year expenses recovered from insurance claim...............................................................

(504 )

Insurance claim debtor...............................................................................................................

60

(7 )

(642 )

Unrealized foreign exchange gain on senior secured bonds....................................................

(2,360 )

Other unrealized foreign exchange gain/(loss).........................................................................

208

3

(12)

Changes in operating assets and liabilities




Accounts receivable..................................................................................................................

1,991

(7,831 )

(2,144 )

Bunkers and lubricant oils..........................................................................................................

(3,457 )

(1,074 )

(781 )

Prepaid expenses and other current assets.............................................................................

(7,694 )

(5,079 )

2,629

Accounts payable, accrued interest and accrued expenses and other liabilities.....................

(6,040 )

4,654

7,664





Net cash provided by operating activities.........................................................................

86,748

75,921

77,517





Cash flows from investing activities




Payment to acquire vessels.......................................................................................................

(1,733 )

(1,940 )

(648)

Investment in equity accounted joint venture.............................................................................

(42,500)

Payment for vessels under construction...................................................................................

(239,179 )

(180,629 )

Purchase of other property, plant and equipment......................................................................

(75 )

(1,726 )

(182 )

Receipt of shipyard penalty payments.......................................................................................

1,901

280

Placement of short term investment...........................................................................................

(25,000 )

Release of short term investment..............................................................................................

25,000

Insurance recoveries.................................................................................................................

9,374

990

1,003

Capitalized costs for the repair of Navigator Aries...................................................................

(8,441 )





Net cash used in investing activities..................................................................................

(238,153 )

(183,025 )

(42,327)





Cash flows from financing activities




Proceeds from secured term loan facilities and revolving credit facilities.................................

327,670

395,170

21,900

Issuance of senior secured bonds............................................................................................

71,697

Issuance of 7.75% senior unsecured bonds.............................................................................

100,000

Repayment of 9.00% senior unsecured bonds..........................................................................

(127,500 )

Issuance cost of senior secured bonds.....................................................................................

(991 )

Issuance cost of 7.75% senior unsecured bonds......................................................................

(1,819 )

Direct financing cost of secured term loan and revolving credit facilities...................................

(2,680 )

(2,058 )

(38 )

Repayment of secured term loan and revolving credit facilities..................................................

(204,092 )

(251,852 )

(118,352 )





Net cash provided by/(used in) financing activities..........................................................

120,898

111,941

(25,784)





Net (decrease)/increase in cash, cash equivalents and restricted cash.....................

(30,507 )

4,837

9,406

Cash, cash equivalents and restricted cash at beginning of year................................

87,779

57,272

62,109





Cash, cash equivalents and restricted cash at end of year...........................................

$         57,272

$         62,109

$         71,515





Supplemental Information




Total interest paid during the year, net of amounts capitalized...................................................

$         29,815

$         35,890

$         41,465





Total tax paid during the year......................................................................................................

$               601

$               515

$               176





 

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This Report on Form 6-K for the quarter ended December 31, 2018 contains certain forward-looking statements 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 report. 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. Forward-looking statements appear in a number of places in this report. 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 expectations regarding the construction and financing of the Marine Export Terminal, the financing of our investment in the Marine Export Terminal and the financial success of the Marine Export Terminal and our related 50/50 joint venture (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 Report on Form 6-K are made only as of the date of this Report on Form 6-K. 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 Gas

Attention: Investor Relations Department

New York:      650 Madison Ave, New York, NY 10022. Tel: +1-212-355-5893
London:          10 Bressenden Place, London, SW1E 5DH. Tel: +44 (0)20-7340-4850

 

 

SOURCE Navigator Gas

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