Market Overview

Navigator Holdings Ltd. Preliminary Results for the Three Months Ended March 31, 2019


LONDON, May 13, 2019 /PRNewswire/ --


  • Navigator Holdings Ltd. (NYSE: NVGS) (the "Company", "we", "us" and "our") reported operating revenue of $76.1 million for the three months ended March 31, 2019, a decrease from $77.8 million for the three months ended March 31, 2018.
  • Net loss was $3.3 million (resulting in a loss per share of $0.06) for the three months ended March 31, 2019, a decrease from a net income of $0.7 million for the three months ended March 31, 2018.
  • Adjusted EBITDA1 was $27.1 million for the three months ended March 31, 2019, a decrease from $30.5 million for the three months ended March 31, 2018.
  • During the three months ended March 31, 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.
  • During the first quarter, the Company successfully executed a credit agreement for a maximum principle amount of $75.0 million to be solely used for the payment of construction costs relating to the ethylene export marine terminal at Morgan's Point, Texas (the "Marine Export Terminal"), resulting in the Company's portion of the capital cost of construction of the Marine Export Terminal being fully financed
  • Entered into a comprehensive, multi-year contract of affreightment utilizing up to four ethylene vessels until December 2025.
  • An additional long term throughput agreement signed for the Marine Export Terminal.

The first quarter of 2019 enjoyed a positive start as the strong finish to 2018 carried over into January, with strong returns on both LPG and petrochemical fixtures. However, the initial fortitude of 2019 failed to gather further momentum due to a number of far-reaching incidents, including disruptions relating to sanctions imposed in Venezuela as mentioned below.

In January 2019, the Government of the United States imposed sanctions on Venezuela's state-owned oil company, Petróleos de Venezuela S.A., or "PDVSA", giving ship owners until the end of February 2019 to cease trading with all related entities. At the end of 2018, PDVSA had six handy-size vessels on time charter, two of which were our vessels. By the end the first quarter of 2019, PDVSA had only one handy-size vessel on time charter. The five vessels that left Venezuela softened the shipping market in the short term, but most have since found alternative employment. The outcome of the political and economic uncertainty in Venezuela is unknown. The country's extreme situation can only be burdened further without the LPG cabotage trade these vessels performed, which supplied fuel for cooking and heating.

These circumstances led to the Company concluding alternate short-term time charters in the U.S. Gulf – Caribbean market with various major commodity traders in the first quarter of 2019. Elsewhere, the North Sea and Baltic LPG markets have remained consistent and a good employer of handy-size vessels.

The larger fully refrigerated liquefied gas carrier market also suffered during the first quarter of 2019, with the very large gas carrier ("VLGC") market struggling with earnings per vessel below $200,000 per calendar month ("pcm") at times as the number of available vessels greatly outweighed the number of cargoes and demand for product. The Mariner East network on the East Coast of the US again suffered with several pipeline issues that led to unreliable exports of both LPG and ethane. This long shipping market at times also led to VLGC owners opportunistically taking cargoes from the midsize gas carrier ("MGC") and handy-size market. Nonetheless, by the end of the first quarter of 2019 the VLGC market had turned full circle with earnings approaching $1.0 million pcm as more cargo availability and demand swung the market balance towards the ship owners. This trend, at least in the short term, should have a positive effect on both the MGC and handy-size market.

The strong performance of the ethylene sector slowed dramatically following a serious fire at Versalis' steam cracker at Priolo, Italy in early January 2019. The halt in output meant that the traders that hold all the equity in Priolo were left with no employment for their considerable time charter fleets. These traders thus absorbed all spot tons to keep their vessels moving from January well into March, which would normally have been shipped by the wider spot fleet. This impacted both ethylene utilization and earnings. Priolo has since come back online, with the market settling back into its previous balance. Exports from Targa Terminal in the U.S. remained steady and are already booked at full capacity for the second quarter, with all cargoes to be loaded on our vessels.

The long-haul butadiene arbitrage from Europe to Asia was closed for most of the first quarter of 2019, with the Far East over-supplied locally. There have been regular movements on butadiene, butene-1 and crude C4 from Europe to the US, however. This, accompanied by the long-awaited U.S. Propylene export trade finally coming to life, has created new opportunities for triangulation in the Atlantic basin across the petrochemical streams. This is expected to continue for the remainder of 2019.

We have also seen increased exports from the Middle EastSaudi Arabia and Abu Dhabi in particular – on both propylene and ethylene, following years of unreliable production.

Petrochemical sector voyages achieved charter rates of up to approximately $24,000 per day during the first quarter of 2019, whereas rates for standard LPG transportation remained at approximately $14,500 per day. Moreover, we concluded charters with five new charterers during the first quarter of 2019. This shows the continued adaptability of our fleet to accommodate difficult market situations and develop new opportunities.

Reconciliation of Non-GAAP Financial Measures

The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended March 31, 2018 and 2019:


(in thousands)

March 31,

March 31,

Net income / (loss)              

$                 696

$           (3,257)

Net interest expense           



Income taxes



Depreciation and amortization






Foreign currency exchange loss on senior secured bonds           



Unrealized gain on non-designated derivative instruments



Adjusted EBITDA(1)          

$            30,531

$            27,122


  1. EBITDA and Adjusted EBITDA are non-GAAP financial measures. EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA before any foreign currency exchange gain or loss on senior secured bonds and unrealized gain or loss on non-designated derivative instruments. 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 alternatives 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.

Conference Call Details:

On Tuesday, May 14, 2019, at 9:00 A.M. ET, the Company's management team will host a conference call to discuss the financial results.

Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll Free Dial In) or +44 (0) 2071 928 592 (Standard International Dial In). Please quote "Navigator" to the operator. There will also be a live, and then archived, webcast of the conference call, available through the Company's website ( Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

A telephonic replay of the conference call will be available until Tuesday, May 21, 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 services of liquefied petroleum gas ("LPG"), petrochemical gases, such as ethylene and ethane, 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.


This press release 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. In addition, we and our representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate as described in this press release. In some cases, you can identify the forward-looking statements by the use of words such as "may," "could," "should," "would," "expect," "plan," "anticipate," "intend," "forecast," "believe," "estimate," "predict," "propose," "potential," "continue," "scheduled," or the negative of these terms or other comparable terminology. Forward-looking statements appear in a number of places in this press release. 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;
  • our vessels engaging in ship to ship transfers of LPG or petrochemical cargoes which may ultimately be discharged in sanctioned areas or to sanctioned individuals without our knowledge. Three of our vessels were named in a recent US Department of Treasury's Office of Foreign Assets Control ("OFAC") Advisory to the Maritime Petroleum Shipping Community as ships that had engaged in such ship to ship transfers of cargoes that may have ultimately been destined for Syria.
  • 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 with Enterprise Products Partners L.P.; and
  • other factors detailed from time to time in other periodic reports we file with the Securities and Exchange Commission.

All forward-looking statements included in this press release are made only as of the date of this press release. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of our common stock.



Navigator Holdings Ltd.

Condensed Consolidated Balance Sheets


December 31, 2018

March 31, 2019

(in thousands, except share data)


Current assets

Cash and cash equivalents

$                 71,515

$                 53,895

Accounts receivable, net



Accrued income

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