Navigator Gas First Quarter 2024 Results
Navigator Gas reported its financial results for Q1 2024 on May 15, 2024. The company declared a $0.05 per share dividend, payable on June 25, 2024, as part of its Return of Capital policy, and plans to repurchase $2 million of common stock. Operating revenue for the quarter was $134.2 million, a slight decrease from $136 million in Q1 2023. Net income attributable to shareholders was $22.6 million, up from $18.8 million in the same period last year, and basic earnings per share were $0.31 compared to $0.25.
EBITDA grew to $73.7 million from $64.6 million, while adjusted EBITDA increased to $74.1 million from $69 million. The company reduced its debt by $31.1 million to $862.1 million, maintaining cash reserves of $172.2 million. The average daily time charter equivalent (TCE) rose to $28,339 from $25,620, though fleet utilization dropped to 89.3% from 96.3%.
Navigator Gas also announced plans for a $130 million expansion of its ethylene export terminal in Texas and a $2.5 million investment in an early-stage clean ammonia export project.
- Net income increased by 20.2% to $22.6 million.
- EBITDA grew from $64.6 million to $73.7 million.
- Adjusted EBITDA rose from $69 million to $74.1 million.
- Basic earnings per share improved from $0.25 to $0.31.
- Debt reduced by $31.1 million, now at $862.1 million.
- Cash reserves at $172.2 million.
- Average daily time charter equivalent increased to $28,339.
- Plans for a $130 million expansion of ethylene export terminal.
- Investment in an early-stage clean ammonia export project.
- Operating revenue decreased by 1.4% to $134.2 million.
- Fleet utilization dropped from 96.3% to 89.3%.
- Ethylene export terminal throughput decreased by 12%.
- Share of equity method investments income fell by 17.2% to $4.4 million.
- Interest expense increased by 18% to $15.7 million.
- Unrealized loss on non-designated derivative instruments was $0.4 million.
Insights
The first quarter 2024 results of Navigator Holdings Ltd. show a steady financial performance compared to the previous year. The company posted an increase in net income to
One point worth highlighting is the cash dividend of
On the flip side, the company's operating revenue decreased slightly to
Overall, the financial metrics indicate a strong footing with stable revenue streams, enhanced by strategic capital returns and debt reduction. Investors should weigh the consistent dividend policy and share repurchase against the slight revenue decline.
Navigating the segmented shipping market, Navigator Holdings faced mixed operational results. The TCE rate increased notably to
The company's diversified fleet operations across different types of charters (time charters, spot voyage charters and CoA) offer flexibility to adapt to market conditions. Nonetheless, the decrease in utilization could be a concern if it persists, as it impacts revenue generation.
Investment in the ethylene export terminal and a clean ammonia export project suggest a forward-looking approach, diversifying and potentially stabilizing future revenue streams. The expansion of the ethylene terminal is particularly noteworthy, as it is expected to significantly increase export capacity, positioning the company well in the ethylene shipping market amid rising demand.
For retail investors, the mixed utilization rates might be a red flag, but the higher TCE rates and strategic investments could present long-term growth potential.
Navigator Holdings Ltd.'s market positioning appears robust, evidenced by their strategic fleet management and investments in terminal expansions. The increased TCE rates across all vessel segments highlight a favorable market for their shipping services. Market assessments indicate significant rate increases for semi-refrigerated, fully-refrigerated and ethylene-capable vessels, by
The company's focus on the U.S. Gulf to China ethane shipping routes, leveraging the Panama Canal constraints, showcases strategic route optimization. Additionally, the ethylene arbitrage improvement between the U.S. Gulf and the Far East could translate into better utilization rates if market conditions stabilize.
The varied fleet employment and the ongoing expansion projects like the ethylene terminal and clean ammonia project denote a commitment to capturing emerging market opportunities. These moves could potentially mitigate the impact of short-term drops in utilization rates.
Retail investors should watch how these strategic investments play out, as they are likely to influence the company's long-term market positioning and financial performance positively.
LONDON, May 15, 2024 (GLOBE NEWSWIRE) --
Financial Highlights
- On May 14, 2024, the Board of Navigator Holdings Ltd. (NYSE: NVGS) declared a cash dividend of
$0.05 per share for the quarter ended March 31, 2024, (the “Dividend”) under the Company's Return of Capital policy. The Dividend will be payable on June 25, 2024, to all shareholders of record as of the close of business U.S. E.D.T. on June 4, 2024. - Also as part of the Company's Return of Capital policy for the quarter ended March 31, 2024, the Company expects to repurchase approximately
$2.0 million of common stock between May 16, 2024, and June 30, 2024, subject to operating needs, market conditions, and other circumstances, such that the Dividend and share repurchases together equal25% of net income for the quarter ended March 31, 2024. - The Company repurchased 52,630 shares of common stock during the quarter ended March 31, 2024, at an average price of
$15.20 per share. - The Company reported total operating revenue of
$134.2 million for the three months ended March 31, 2024, compared to$136.0 million for the three months ended March 31, 2023. - Net Income attributable to stockholders' of the Company was
$22.6 million for the three months ended March 31, 2024, compared to$18.8 million for the three months ended March 31, 2023. - Basic earnings per share was
$0.31 for the three months ended March 31, 2024, compared to$0.25 per share for the three months ended March 31, 2023. Basic earnings per share adjusted to exclude realized and unrealized gains or losses on non-designated derivative instruments of$0.4 million and$4.3 million for the quarters ended March 31, 2024 and 2023 respectively, was$0.31 per share for the three months ended March 31, 2024, compared to$0.30 per share for the three months ended March 31, 2023. - EBITDA1 was
$73.7 million for the three months ended March 31, 2024, compared to$64.6 million for the three months ended March 31, 2023. Adjusted EBITDA1 was$74.1 million for the three months ended March 31, 2024, compared to$69.0 million for the three months ended March 31, 2023. - Debt reduced by
$31.1 million to$862.1 million during the three months ended March 31, 2024, with cash, cash equivalents and restricted cash standing at$172.2 million as of March 31, 2024.
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1 EBITDA and Adjusted EBITDA are not measurements prepared in accordance with U.S. GAAP. EBITDA represents net income before net interest expense, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA before profit/loss on sale of vessel, unrealized gain/loss on non-designated derivative instruments and foreign currency exchange gain or loss on senior secured bonds. 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 alternatives to consolidated net income, cash generated from operations or any measure. Reconciliations of GAAP to non-GAAP financial measures are in the below section "Reconciliation of Non-GAAP Financial Measures".
Other Highlights and Developments
Operational Update
Total operating revenue was
Average daily time charter equivalent2 ("TCE") across the fleet increased to
Utilization across the fleet decreased from
During the first quarter of 2024 we experienced continued robust demand for ethane shipping from the U.S. Gulf area to China. The demand was primarily driven by a continued reduction in available Panama Canal transits and ethane carriers opting to proceed via the Cape of Good Hope between the U.S. Gulf and China. Furthermore, ethylene arbitrage between the U.S. Gulf and the Far East improved, meaning increased demand from ethylene traders.
In the first quarter of 2024 we had approximately 31 vessels engaged under time charters, 16 vessels on spot voyage charters and contracts of affreightment ("CoA") and nine vessels were operated in the independently managed Unigas Pool. From April 1, 2024, and 12 months out, we have approximately
Ethylene Export Terminal
We own a
We, together with Enterprise Products Partners L.P, our joint venture partner, have agreed to invest in the extension of the Ethylene Export Terminal (the “Terminal Expansion Project”), which is expected to increase the export capacity from approximately one million tons per year to at least 1.55 million tons. All major project equipment has been purchased (much of which has already been delivered), support infrastructure and new pipes are being assembled, and construction is expected to occur throughout 2024 with completion scheduled in the fourth quarter of 2024. The first new multi-year offtake contract has been signed and another offtake customer has agreed to commercial terms. We continue to expect that additional capacity will be contracted during the remainder of the construction phase.
The total capital contributions required from us to the Export Terminal Joint Venture for the Terminal Expansion Project are expected to be approximately
Investment in an Early-Stage Clean Ammonia Export Project
On May 14, 2024, the Company’s Board of Directors approved a
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2 TCE is not calculated in accordance with U.S. GAAP. For a reconciliation of TCE to operating revenue, the most directly comparable financial measure calculated in accordance with U.S. GAAP, please see below under “Reconciliation of Operating Revenues to TCE”.
Return of Capital Policy
The Company’s current Return of Capital policy, which is subject to operating needs and other circumstances, is based on paying out quarterly cash dividends of
As part of the Return of Capital policy, we expect to repurchase the Company’s common stock (the “Share Repurchases”) and any such Share Repurchases will be made via open market transactions, privately negotiated transactions or any other method permitted under U.S. securities laws and the rules of the U.S. Securities and Exchange Commission.
Declarations of any dividends in the future, and the amount of any such dividends, are subject to the discretion of the Company’s Board. The Return of Capital policy does not oblige the Company to pay any dividends or repurchase any of its shares in the future and it may be suspended, discontinued or modified by the Company at any time, for any reason. Further, the timing of any Share Repurchases under the Return of Capital policy will be determined by the Company’s management and will depend on market conditions, legal requirements, stock price, and other factors.
Unaudited Results of Operations for the Three months ended March 31, 2024 compared to the Three months ended March 31, 2023
| ` | Three months ended March 31, 2023 | Three months ended March 31, 2024 | Percentage change | ||||||
| (in thousands, except Percentage change) | |||||||||
| Operating revenues | $ | 116,610 | $ | 121,020 | 3.8 | % | |||
| Operating revenues – Unigas Pool | 12,192 | 13,135 | 7.7 | % | |||||
| Operating revenues – Luna Pool collaborative arrangements | 7,200 | — | (100.0 | )% | |||||
| Total operating revenue | 136,002 | 134,155 | (1.4 | )% | |||||
| Brokerage commission | 1,694 | 1,626 | (4.0 | )% | |||||
| Voyage expenses | 17,229 | 14,183 | (17.7 | )% | |||||
| Voyage expenses – Luna Pool collaborative arrangements | 5,028 | — | (100.0 | )% | |||||
| Vessel operating expenses | 41,672 | 42,118 | 1.1 | % | |||||
| Depreciation and amortization | 31,831 | 33,441 | 5.1 | % | |||||
| General and administrative costs | 6,755 | 6,480 | (4.1 | )% | |||||
| Other income | (96 | ) | — | 100.0 | % | ||||
| Total operating expenses | 104,113 | 97,848 | (6.0 | )% | |||||
| Operating Income | 31,889 | 36,307 | 13.9 | % | |||||
| Unrealized loss on non-designated derivative instruments | (4,251 | ) | (447 | ) | (89.5 | )% | |||
| Write off of deferred financing costs | (171 | ) | — | (100.0 | )% | ||||
| Interest expense | (13,338 | ) | (15,737 | ) | 18.0 | % | |||
| Interest income | 583 | 1,612 | 176.5 | % | |||||
| Income before taxes and share of result of equity method investments | 14,712 | 21,735 | 47.7 | % | |||||
| Income taxes | (1,164 | ) | (1,206 | ) | 3.6 | % | |||
| Share of result of equity method investments | 5,302 | 4,390 | (17.2 | )% | |||||
| Net Income | 18,850 | 24,919 | 32.2 | % | |||||
| Net income attributable to non-controlling interest | (64 | ) | (2,346 | ) | 3565.6 | % | |||
| Net Income attributable to stockholders of Navigator Holdings Ltd. | $ | 18,786 | $ | 22,573 | 20.2 | % | |||
Operating Revenues. Operating revenues, net of address commissions, was
- an increase of approximately
$11.0 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately$28,339 per vessel per day ($861,990 per vessel per calendar month) for the three months ended March 31, 2024, compared to an average of approximately$25,620 per vessel per day ($779,283 per vessel per calendar month) for the three months ended March 31, 2023; - a decrease of approximately
$8.3 million attributable to a decrease in fleet utilization, which declined to89.3% for the three months ended March 31, 2024, compared to96.3% for the three months ended March 31, 2023; - an increase of approximately
$4.7 million or4.7% , attributable to a 190 day increase in vessel available days for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. This increase was in part a result of five handysize vessels acquired by the Navigator Greater Bay Joint Venture being fully operational during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, in which three vessels were acquired. - a decrease of approximately
$3.0 million primarily attributable to a decrease in pass through voyage costs for the three months ended March 31, 2024, compared to the three months ended March 31, 2023.
The following table presents selected operating data for the three months ended March 31, 2024, and 2023, which we believe is useful in understanding the basis of movements in our operating revenues.
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| * Fleet Data: | ||||||
| Weighted average number of vessels | 45.0 | 47.0 | ||||
| Ownership days | 4,048 | 4,277 | ||||
| Available days | 4,030 | 4,220 | ||||
| Earning days | 3,879 | 3,770 | ||||
| Fleet utilization | 96.3 | % | 89.3 | % | ||
| ** Average daily Time Charter Equivalent | $ | 25,620 | $ | 28,339 | ||
* Fleet Data - Our nine owned smaller vessels in the independently managed Unigas Pool and the vessels owned by Pacific Gas in our Luna Pool prior to their acquisition by the Navigator Greater Bay Joint Venture are not included in this data.
** Non-GAAP Financial Measure—Time charter equivalent: Time charter equivalent (“TCE”) is a measure of the average daily revenue performance of a vessel. TCE is not calculated in accordance with U.S. GAAP. For all charters, we calculate TCE by dividing total operating revenues (excluding collaborative arrangements and revenues from the Unigas Pool), less any voyage expenses (excluding collaborative arrangements), by the number of earning days for the relevant period. TCE excludes the effects of the collaborative arrangements, as earning days and fleet utilization, on which TCE is based, is calculated for our owned vessels, and not the average of all pool vessels. Under a time charter, the charterer pays substantially all of the vessel's voyage related expenses, whereas for voyage charters, also known as spot market charters, we pay all voyage expenses. TCE is a shipping industry performance measure used primarily to compare period-to-period changes in a company’s performance despite changes in the mix of charter types (i.e., voyage charters, time charters and contracts of affreightment) under which the vessels may be employed. We include average daily TCE, as we believe it provides additional meaningful information in conjunction with net operating revenues. Our calculation of TCE may not be comparable to that reported by other companies.
Reconciliation of Operating Revenues to TCE
The following table represents a reconciliation of operating revenues to TCE. Operating revenues are the most directly comparable financial measure calculated in accordance with U.S. GAAP for the periods presented.
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| (in thousands, except earning days and average daily time charter equivalent rate) | ||||||
| Fleet Data: | ||||||
| *** Operating revenue | $ | 116,610 | $ | 121,020 | ||
| *** Voyage expenses | 17,229 | 14,183 | ||||
| Operating revenue less voyage expenses | 99,381 | 106,837 | ||||
| Earning days | 3,879 | 3,770 | ||||
| Average daily time charter equivalent rate | $ | 25,620 | $ | 28,339 | ||
***Operating revenues and voyage expenses excluding collaborative arrangements and our nine owned vessels in the independently managed Unigas Pool.
Operating Revenues – Unigas Pool. Operating revenues – Unigas Pool was
Operating Revenues – Luna Pool Collaborative Arrangements. Luna Pool earnings were aggregated and then allocated (after deducting pool overheads and manager's fees) to the pool participants in accordance with the Pooling Agreement. Operating revenues - Luna Pool collaborative arrangements was $nil for the three months ended March 31, 2024, compared to
Brokerage Commissions. Brokerage commissions, which typically vary between
Voyage Expenses. Voyage expenses decreased by
Voyage Expenses – Luna Pool Collaborative Arrangements. Voyage expenses – Luna Pool collaborative arrangements were $nil for the three months ended March 31, 2024, compared to
Vessel Operating Expenses. Vessel operating expenses increased by
Depreciation and Amortization. Depreciation and amortization increased by
General and Administrative Costs. General and administrative costs decreased by
Non-Operating Results
Unrealized Gains / (Losses) on Non-Designated Derivative Instruments. The unrealized loss of
Interest Expense. Interest expense increased by
Income Taxes. Income taxes relate to taxes on our subsidiaries and businesses incorporated around the world including those incorporated in the United States of America. Income taxes were
Share of Result of Equity Method Investments. The share of the result of the Company’s
Non-Controlling Interest. The Company entered into a sale and leaseback arrangement in November 2019 with a wholly-owned special purpose vehicle of a financial institution (“Lessor SPV”). Although we do not hold any equity investments in this Lessor SPV, we have determined that we are the primary beneficiary of this entity and accordingly, we are required to consolidate this Variable Interest Entity ("VIE") into our financial results. The net income attributable to the Lessor SPV was
Navigator Greater Bay Joint Venture
In September 2022, the Company entered into the Navigator Greater Bay Joint Venture to acquire five ethylene vessels, Navigator Luna, Navigator Solar, Navigator Castor, Navigator Equator, and Navigator Vega. The joint venture is owned
Reconciliation of Non-GAAP Financial Measures
The following table shows a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months ended March 31, 2024 and 2023:
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| (in thousands) | ||||||
| Net income | $ | 18,850 | $ | 24,919 | ||
| Net interest expense | 12,755 | 14,125 | ||||
| Income taxes | 1,164 | 1,206 | ||||
| Depreciation and amortization | 31,831 | 33,441 | ||||
| EBITDA1 | $ | 64,600 | $ | 73,691 | ||
| Unrealized loss on non-designated derivative instruments | 4,251 | 447 | ||||
| Write off of deferred financing costs | 171 | — | ||||
| Adjusted EBITDA1 | $ | 69,022 | $ | 74,138 | ||
| 1 EBITDA and Adjusted EBITDA are not measurements prepared in accordance with U.S. GAAP. EBITDA represents net income before net interest expense, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA before profit/loss on sale of vessel, unrealized gain/loss on non-designated derivative instruments and foreign currency exchange gain or loss on senior secured bonds. 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 alternatives to consolidated net income, cash generated from operations or any measure. | ||||||
Liquidity and Capital Resources
Liquidity and Cash Needs
Our primary sources of funds are cash and cash equivalents, cash from operations, undrawn bank borrowings and proceeds from bond issuances. As of March 31, 2024, we had cash, cash equivalents and restricted cash of
The Company repaid
Our secured term loan facilities and revolving credit facilities require that the borrowers have liquidity of no less than (i)
Our primary uses of funds are drydocking and other vessel maintenance expenditures, voyage expenses, vessel operating expenses, general and administrative costs, insurance costs, expenditures incurred in connection with ensuring that our vessels comply with international and regulatory standards, financing expenses, quarterly repayment of bank loans and the Terminal Expansion Project. We also expect to use funds in connection with our Return of Capital policy. In addition, our medium-term and long-term liquidity needs relate to debt repayments, repayment of bonds, potential future vessel newbuildings, related investments, vessel acquisitions, and or related port or terminal projects.
As of March 31, 2024, we had
We believe, given our current cash balances, that our financial resources, including the cash expected to be generated within the year, will be sufficient to meet our liquidity and working capital needs for at least the next twelve months, taking into account our existing capital commitments and debt service requirements.
Capital Expenditures
Liquefied gas transportation by sea is a capital-intensive business, requiring significant investment to maintain an efficient fleet and to stay in regulatory compliance.
We currently have no newbuildings on order. However, we may place newbuilding orders or acquire additional vessels as part of our growth strategy. We may invest further in terminal infrastructure, such as the expansion of our existing Ethylene Export Terminal. The total capital contributions required from us to fund our share of the construction cost of the Terminal Expansion Project are expected to be approximately
Cash Flows
The following table summarizes our cash, cash equivalents and restricted cash provided by/(used in) operating, investing and financing activities for the three months ended March 31, 2024 and 2023:
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| (in thousands) | ||||||
| Net cash provided by operating activities | $ | 39,257 | $ | 49,122 | ||
| Net cash provided by/(used in) investing activities | (133,144 | ) | (620 | ) | ||
| Net cash (used in)/provided by financing activities | 130,908 | (33,624 | ) | |||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 648 | (880 | ) | |||
| Net increase in cash, cash equivalents and restricted cash | $ | 37,669 | $ | 13,998 | ||
Operating Cash Flows. Net cash provided by operating activities for the three months ended March 31, 2024, increased to
Net cash flow from operating activities principally depends upon charter rates attainable, fleet utilization, fluctuations in working capital balances, repairs and maintenance activity, amount and duration of drydocks and changes in foreign currency rates.
We are required to drydock each vessel once every five years until it reaches 15 years of age, after which we drydock vessels approximately every two and a half years. Drydocking each vessel, including travelling to and from the drydock, can take approximately 30 days in total being approximately 5-10 days of voyage time to and from the shipyard and approximately 15-20 days of actual drydocking time. Ten of our vessels completed their respective drydockings during the three months ended March 31, 2024,
We estimate the current cost of a five-year drydocking for one of our vessels is approximately
Investing Cash Flows. Net cash used in investing activities was
Net cash used in investing activities was
Financing Cash Flows. Net cash used in financing activities was
Net cash provided by financing activities was
Terminal Facility
General. In March 2019, Navigator Ethylene Terminals LLC (“Marine Terminal Borrower”), our wholly-owned subsidiary, entered into a Credit Agreement (the “Terminal Facility”) with ING Capital LLC and SG Americas Securities, LLC for a maximum principal amount of
Term and Facility Limits. The Terminal Facility is now converted into a term loan with a final maturity of December 31, 2025. Based on the committed throughput agreements for the Ethylene Export Terminal, a total of
Interest. The Terminal Facility is subject to quarterly repayments of principal and interest. Interest is payable at a rate of Compounded SOFR ("Comp SOFR") plus 275 to 300 basis points over the remaining term of the facility. We have entered into floating to fixed interest rate swap agreements for approximately
Financial Covenants. Under the Terminal Facility, the Marine Terminal Borrower must maintain a minimum debt service coverage ratio (as defined in the Terminal Facility) for the prior four calendar fiscal quarters (or shorter period of time if data for the prior four fiscal quarters is not available) of no less than 1.10 to 1.00.
Restrictive Covenants. The Marine Terminal Borrower can only pay dividends if the Marine Terminal Borrower satisfies certain customary conditions, including maintaining a debt service coverage ratio for the immediately preceding four consecutive fiscal quarters and the projected immediately succeeding four consecutive fiscal quarters of not less than 1.20 to 1.00 and where no default or event of default has occurred or is continuing. The Terminal Facility also limits the Marine Terminal Borrower from, among other things, incurring further indebtedness or entering into mergers and divestitures. The Terminal Facility also contains general covenants that require the Marine Terminal Borrower to vote its interest in the Export Terminal Joint Venture to cause the Export Terminal Joint Venture to maintain adequate insurance coverage and maintain its property (but only to the extent the Marine Terminal Borrower has the power under the organizational documents of the Export Terminal Joint Venture to cause such actions).
Secured Term Loan Facilities and Revolving Credit Facilities
General. Navigator Gas L.L.C., our wholly-owned subsidiary, and certain of our vessel-owning subsidiaries have entered into various secured term loan facilities and revolving credit facilities as summarized in the table below. For additional information regarding our secured term loan facilities and revolving credit facilities, please read “Item 5—Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Secured Term Loan Facilities and Revolving Credit Facilities” in the Company's 2023 Annual Report.
The table below summarizes our secured term loan and revolving credit facilities as of March 31, 2024:
| Facility agreement | Original facility amount | Principal amount outstanding | Interest rate | Facility maturity date | ||||
| (in millions) | ||||||||
| March 2019 | 107.0 | 61.3 | Term SOFR + 266 BPS | March 2025 | ||||
| September 2020 | 210.0 | 158.2 | Comp SOFR + 276 BPS | September 2025 | ||||
| October 20193 | 69.1 | 39.7 | Term SOFR + 201 BPS | October 2026 | ||||
| August 2021 Amendment and Restatement Agreement | 67.0 | 40.8 | Fixed 378 BPS | June 2026 | ||||
| DB Credit Facility A | 57.7 | 15.6 | Comp SOFR + 247 BPS | April 2027 | ||||
| Santander Credit Facility A | 81.0 | 22.4 | Comp SOFR + 247 BPS | May 2027 | ||||
| DB Credit Facility B | 60.9 | 24.1 | Comp SOFR + 247 BPS | December 2028 | ||||
| Santander Credit Facility B | 55.8 | 23.3 | Comp SOFR + 247 BPS | January 2029 | ||||
| December 2022 | 111.8 | 69.2 | Term SOFR + 209 BPS | September 2028 | ||||
| Greater Bay JV Secured Term Loan | 151.3 | 139.0 | Term SOFR + 220 BPS | December 2029 | ||||
| March 2023 Secured Term Loan | 200.0 | 166.7 | Comp SOFR + 210 BPS | March 2029 | ||||
| Total | $ | 1,171.6 | $ | 760.3 | ||||
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3 The October 2019 loan facility relates to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with a financial institution) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. Please read Note 14—Variable Interest Entities to the unaudited condensed consolidated financial statements for additional information.
March 2023 Secured Term Loan. On March 20, 2023, the Company entered into a senior secured term loan with Nordea Bank ABP, ABN AMRO Bank N.V., Skandinaviska Enskilda Banken AB (Publ), and BNP Paribas S.A. to refinance the June 2017 Secured Term Loan and Revolving Credit Facility and the October 2016 Secured Term Loan and Revolving Credit Facility that were due to mature in June and October 2023 respectively.
The March 2023 Secured Term Loan has a term of six years, maturing in March 2029 and is for a maximum principal amount of
This loan facility is secured by first priority mortgages on a total of ten of our owned vessels.
Financial Covenants. All of the secured term loan facilities and revolving credit facilities contain financial covenants requiring the borrowers, among other things, to ensure that:
- the borrowers have liquidity (including undrawn available lines of credit with a maturity exceeding 12 months) of no less than (i)
$35.0 million or$50.0 million , or (ii)5% of Net Debt or total debt, as applicable, whichever is greater; and - the borrower must maintain a minimum ratio of shareholder equity or value adjusted shareholder equity to total assets or value adjusted total assets of
30% .
Restrictive Covenants. The secured facilities provide that the borrowers may not declare or pay dividends to shareholders out of operating revenues generated by the vessels securing the indebtedness if an event of default has occurred and is continuing. The secured term loan facilities and revolving credit facilities also limit the borrowers from, among other things, incurring further indebtedness or entering into mergers and divestitures. The secured facilities also contain general covenants that require the borrowers to maintain adequate insurance coverage and to maintain their vessels. In addition, the secured term loan facilities include customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, representation and warranty, a cross-default to other indebtedness and non-compliance with security documents.
Other than as stated, our compliance with the financial covenants listed above is measured as of the end of each fiscal quarter. As of March 31, 2024, we were in compliance with all covenants under the secured term loan facilities and revolving credit facilities.
The borrowers are also required to deliver semi-annual compliance certificates, which include valuations of the vessels securing the applicable facility from an independent ship broker. Upon delivery of the valuation, if the market value of the collateral vessels is less than
2020 Senior Unsecured Bonds
General. On September 10, 2020, we issued senior unsecured bonds in an aggregate principal amount of
Interest. Interest on the 2020 Bonds is payable at a fixed rate of
Maturity. The 2020 Bonds mature in full on September 10, 2025 and become repayable on that date.
Optional Redemption. We may redeem the 2020 Bonds, in whole or in part at any time. Any 2020 Bonds redeemed; up until September 9, 2023 will be priced at the aggregate of the net present value (based on the Norwegian government bond rate plus 50 basis points) of
Additionally, upon the occurrence of a “Change of Control Event” (as defined in the bond agreement for the 2020 Bonds, (the “2020 Bond Agreement”)), the holders of 2020 Bonds have the option to require us to repay such holders’ outstanding principal amount of 2020 Bonds at
Financial Covenants. The 2020 Bond Agreement contains financial covenants requiring us, among other things, to ensure that:
- we and our subsidiaries maintain a minimum liquidity of no less than
$35.0 million ; and - we and our subsidiaries maintain an Equity Ratio (as defined in the 2020 Bond Agreement) of at least
30% .
Our compliance with the covenants listed above is measured as of the end of each fiscal quarter. As of March 31, 2024, we were in compliance with all covenants under the 2020 Bonds.
Restrictive Covenants. The 2020 Bonds provide that we may declare or pay dividends to shareholders provided the Company maintains a minimum liquidity of
In September 2023 we purchased
Lessor VIE Debt
In October 2019, we entered into a sale and leaseback transaction to refinance one of our vessels, Navigator Aurora¸ with a lessor, OCY Aurora Ltd, a special purpose vehicle (“SPV”) and wholly owned subsidiary of Ocean Yield Malta Limited. The SPV was determined to be a VIE. We are deemed under U.S. GAAP to be the primary beneficiary of the VIE, and as a result, we are required to consolidate the SPV into our results. The loan described below under “—Navigator Aurora Facility” relates to the VIE. Although we have no control over the funding arrangements of this entity, we are required to consolidate this loan facility into our financial results.
Upon the occurrence of a “Change of Control Event” (as defined in the sale and leaseback agreement), the lessor has the option to require us to repurchase Navigator Aurora at
Navigator Aurora Facility In October 2019, the SPV, which owns Navigator Aurora, entered into secured financing agreements for
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For a description of our material accounting policies, please read Note 2—Summary of Significant Accounting Policies to the Company's 2023 Annual Report.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates and foreign currency fluctuations, as well as inflation. We use interest rate swaps to manage some of our interest rate risks. We do not use interest rate swaps or any other financial instruments for trading or speculative purposes.
Interest Rate Risk
We are exposed to the impact of interest rate changes through borrowings that require us to make interest payments based on SOFR. Our wholly-owned subsidiaries and certain of our vessel-owning subsidiaries are party to secured term loan and revolving credit facilities that bear interest at rates of SOFR plus between 185 and 250 basis points. At March 31, 2024,
We use interest rate swaps to reduce our exposure to market risk from changes in interest rates. The principal objective of these contracts is to minimize the risks and costs associated with our floating-rate debt. The Company is exposed to the risk of credit loss in the event of non-performance by the counterparty to the interest rate swap agreements.
Foreign Currency Exchange Rate Risk
Our primary economic environment is the international shipping market. This market utilizes the U.S. Dollar as its functional currency. Consequently, most of our revenues are in U.S. Dollars although some charter hires are paid in Indonesian Rupiah. Our expenses however are in the currency invoiced by each supplier, and we remit funds in various currencies. We incur some vessel operating expenses and general and administrative costs in foreign currencies, primarily the Euro, Pound Sterling, Danish Kroner, and Polish Zloty, and therefore there is a transactional risk that currency fluctuations could have a negative effect on our cash flows and financial condition. We believe these adverse effects would not be material and we have not entered into any derivative contracts to mitigate our exposure to foreign currency exchange rate risk during the first quarter of 2024. However, we may enter into derivative or forward contracts to cover our foreign currency exposure in the future.
Inflation
We are exposed to increases in operating costs arising from various vessel operations, including crewing, vessel repair costs, drydocking costs, insurance and fuel prices as well as from general inflation and are subject to fluctuations as a result of market forces. Increases in bunker costs could have a material effect on our future operations if the number and duration of our voyage charters or Contract of Affreightment ("COA") increases. In the case of the 47 vessels owned and commercially managed by us as of March 31, 2024, 33 were employed on time charter and as such it is the charterers who pay for the fuel on those vessels. If our vessels are employed under voyage charters or COA, freight rates are generally sensitive to the price of fuel. However, a further sharp rise in bunker prices may have a temporary negative effect on our results since freight rates generally adjust only after bunker prices settle at a higher level.
Credit Risk
We may be exposed to credit risks in relation to vessel employment and at times we may have multiple vessels employed by one charterer. We consider and evaluate the concentration of credit risk continuously and perform ongoing evaluations of these charterers for credit risk. At March 31, 2024, no more than four of our vessels were employed by the same charterer. We invest our surplus funds with reputable financial institutions, and at March 31, 2024, all such deposits had maturities of no more than three months, in order to provide the Company with flexibility to meet all requirements for working capital and capital investments.
| NAVIGATOR HOLDINGS LTD. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Condensed Consolidated Statements of Operations (Unaudited) | ||||||
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| (in thousands except share and per share data) | ||||||
| Revenues | ||||||
| Operating revenues | $ | 116,610 | $ | 121,020 | ||
| Operating revenues – Unigas Pool | 12,192 | 13,135 | ||||
| Operating revenues – Luna Pool collaborative arrangements | 7,200 | — | ||||
| Total operating revenue | 136,002 | 134,155 | ||||
| Expenses | ||||||
| Brokerage commission | 1,694 | 1,626 | ||||
| Voyage expenses | 17,229 | 14,183 | ||||
| Voyage expenses – Luna Pool collaborative arrangements | 5,028 | — | ||||
| Vessel operating expenses | 41,672 | 42,118 | ||||
| Depreciation and amortization | 31,831 | 33,441 | ||||
| General and administrative costs | 6,755 | 6,480 | ||||
| Other income | (96 | ) | — | |||
| Total operating expenses | 104,113 | 97,848 | ||||
| Operating Income | 31,889 | 36,307 | ||||
| Unrealized loss on non-designated derivative instruments | (4,251 | ) | (447 | ) | ||
| Write off of deferred financing costs | (171 | ) | — | |||
| Interest expense | (13,338 | ) | (15,737 | ) | ||
| Interest income | 583 | 1,612 | ||||
| Income before taxes and share of result of equity method investments | 14,712 | 21,735 | ||||
| Income taxes | (1,164 | ) | (1,206 | ) | ||
| Share of result of equity method investments | 5,302 | 4,390 | ||||
| Net Income | 18,850 | 24,919 | ||||
| Net income attributable to non-controlling interest | (64 | ) | (2,346 | ) | ||
| Net Income attributable to stockholders of Navigator Holdings Ltd. | $ | 18,786 | $ | 22,573 | ||
| Earnings per share attributable to stockholders of Navigator Holdings Ltd.: | ||||||
| Basic: | $ | 0.25 | $ | 0.31 | ||
| Diluted: | $ | 0.25 | $ | 0.31 | ||
| Weighted average number of shares outstanding in the period: | ||||||
| Basic: | 75,955,162 | 73,209,771 | ||||
| Diluted: | 76,319,753 | 73,757,164 | ||||
| NAVIGATOR HOLDINGS LTD. Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||||||
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| (in thousands) | ||||||
| Net income | $ | 18,850 | $ | 24,919 | ||
| Other comprehensive income: | ||||||
| Foreign currency translation income | 165 | 34 | ||||
| Total comprehensive income | 19,015 | 24,953 | ||||
| Total comprehensive income attributable to: | ||||||
| Stockholders of Navigator Holdings Ltd. | 18,951 | 22,607 | ||||
| Non-controlling interest | 64 | 2,346 | ||||
| Total comprehensive income | $ | 19,015 | $ | 24,953 | ||
| NAVIGATOR HOLDINGS LTD. Condensed Consolidated Balance Sheet (Unaudited) | ||||||
| As at December 31, 2023 | As at March 31, 2024 | |||||
| (in thousands, except share data) | ||||||
| Assets | ||||||
| Current Assets | ||||||
| Cash, cash equivalents and restricted cash | $ | 158,242 | $ | 172,240 | ||
| Accounts receivable, net of allowance for credit losses | 34,653 | 41,024 | ||||
| Accrued income | 2,437 | 6,830 | ||||
| Prepaid expenses and other current assets | 17,068 | 20,855 | ||||
| Bunkers and lubricant oils | 9,044 | 10,574 | ||||
| Insurance receivable | 526 | 1,013 | ||||
| Amounts due from related parties | 33,402 | 20,311 | ||||
| Total current assets | 255,372 | 272,847 | ||||
| Non-current Assets | ||||||
| Vessels, net | 1,754,382 | 1,726,119 | ||||
| Property, plant and equipment, net | 142 | 156 | ||||
| Intangible assets, net of accumulated amortization | 332 | 299 | ||||
| Equity method investments | 174,910 | 180,932 | ||||
| Derivative assets | 14,674 | 14,227 | ||||
| Right-of-use asset for operating leases | 2,873 | 2,584 | ||||
| Total non-current assets | 1,947,313 | 1,924,317 | ||||
| Total Assets | $ | 2,202,685 | $ | 2,197,164 | ||
| Liabilities and Stockholders’ Equity | ||||||
| Current Liabilities | ||||||
| Current portion of secured term loan facilities, net of deferred financing costs | $ | 120,327 | $ | 171,315 | ||
| Current portion of operating lease liabilities | 914 | 1,151 | ||||
| Accounts payable | 11,643 | 10,556 | ||||
| Accrued expenses and other liabilities | 20,847 | 25,369 | ||||
| Accrued interest | 5,488 | 3,322 | ||||
| Deferred income | 25,617 | 25,979 | ||||
| Amounts due to related parties | 606 | 518 | ||||
| Total current liabilities | 185,442 | 238,210 | ||||
| Non-current Liabilities | ||||||
| Secured term loan facilities and revolving credit facilities, net of current portion and deferred financing costs | 641,975 | 560,638 | ||||
| Senior unsecured bond, net of deferred financing costs | 90,336 | 90,435 | ||||
| Operating lease liabilities, net of current portion | 3,500 | 3,160 | ||||
| Deferred tax liabilities | 7,016 | 7,707 | ||||
| Amounts due to related parties | 41,342 | 39,699 | ||||
| Total non-current liabilities | 784,169 | 701,639 | ||||
| Total Liabilities | 969,611 | 939,849 | ||||
| Commitments and Contingencies - Note 11 | ||||||
| Stockholders’ Equity | ||||||
| Common stock— | 733 | 733 | ||||
| Additional paid-in capital | 799,472 | 799,561 | ||||
| Accumulated other comprehensive loss | (152 | ) | (118 | ) | ||
| Retained earnings | 390,221 | 411,993 | ||||
| Total Navigator Holdings Ltd. Stockholders’ Equity | 1,190,274 | 1,212,169 | ||||
| Non-controlling interest | 42,800 | 45,146 | ||||
| Total equity | 1,233,074 | 1,257,315 | ||||
| Total Liabilities and Stockholders’ Equity | $ | 2,202,685 | $ | 2,197,164 | ||
| NAVIGATOR HOLDINGS LTD. Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) |
For the three months ended March 31, 2024:
| (in thousands, except share data) | ||||||||||||||||||
| Number of shares | Amount | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-Controlling Interest | Total | ||||||||||||
| January 1, 2024 | 73,208,586 | $ | 733 | $ | 799,472 | $ | (152 | ) | $ | 390,221 | $ | 42,800 | $ | 1,233,074 | ||||
| Restricted shares issued | 1,185 | — | — | — | — | — | — | |||||||||||
| Net income | — | — | — | — | 22,573 | 2,346 | 24,919 | |||||||||||
| Foreign currency translation | — | — | — | 34 | — | — | 34 | |||||||||||
| Dividend declared | — | — | — | — | — | — | — | |||||||||||
| Repurchase of common stock | (52,630 | ) | — | — | — | (801 | ) | — | (801 | ) | ||||||||
| Share-based compensation plan | — | — | 89 | — | — | — | 89 | |||||||||||
| March 31, 2024 | 73,157,141 | $ | 733 | $ | 799,561 | $ | (118 | ) | $ | 411,993 | $ | 45,146 | $ | 1,257,315 | ||||
For the three months ended March 31, 2023:
| (in thousands, except share data) | ||||||||||||||||||
| Number of shares | Amount | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-Controlling Interest | Total | ||||||||||||
| January 1, 2023 | 76,804,474 | $ | 769 | $ | 798,188 | $ | (463 | ) | $ | 364,000 | $ | 10,918 | $ | 1,173,412 | ||||
| Restricted shares issued March 15, 2023 | 47,829 | — | — | — | — | — | — | |||||||||||
| Net income | — | — | — | — | 18,786 | 64 | 18,850 | |||||||||||
| Foreign currency translation | — | — | — | 165 | — | — | 165 | |||||||||||
| Investment by non-controlling interest | — | — | — | — | 20,353 | 20,353 | ||||||||||||
| Repurchase of common stock | (2,162,484 | ) | (22 | ) | — | — | (28,086 | ) | — | (28,108 | ) | |||||||
| Share-based compensation plan | — | — | 180 | — | — | — | 180 | |||||||||||
| March 31, 2023 | 74,689,819 | $ | 747 | $ | 798,368 | $ | (298 | ) | $ | 354,700 | $ | 31,335 | $ | 1,184,852 | ||||
| NAVIGATOR HOLDINGS LTD. Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| Cash flows from operating activities | ||||||
| Net Income | $ | 18,850 | $ | 24,919 | ||
| Adjustments to reconcile net income/(loss) to net cash provided by operating activities | ||||||
| Unrealized loss on non-designated derivative instruments | 4,251 | 447 | ||||
| Depreciation and amortization | 31,831 | 33,440 | ||||
| Payment of drydocking costs | (2,908 | ) | (4,565 | ) | ||
| Share-based compensation expense | 180 | 89 | ||||
| Amortization of deferred financing costs | 922 | 841 | ||||
| Share of results of equity method investments | (5,302 | ) | (4,390 | ) | ||
| Deferred taxes | — | 692 | ||||
| Other unrealized foreign exchange loss/(gain) | (23 | ) | 306 | |||
| Changes in operating assets and liabilities | ||||||
| Accounts receivable | (3,667 | ) | (6,372 | ) | ||
| Insurance claims receivables | 322 | (1,499 | ) | |||
| Bunkers and lubricant oils | (1,915 | ) | (1,531 | ) | ||
| Accrued income and prepaid expenses and other current assets | 4,599 | (7,889 | ) | |||
| Accounts payable, accrued interest, accrued expenses and other liabilities | (3,913 | ) | 1,542 | |||
| Amounts due to/(from) related parties | (3,970 | ) | 13,092 | |||
| Net cash provided by operating activities | 39,257 | 49,122 | ||||
| Cash flows from investing activities | ||||||
| Additions to vessels and equipment | (142,883 | ) | — | |||
| Contributions to equity method investments | — | (8,000 | ) | |||
| Distributions from equity method investments | 8,446 | 6,368 | ||||
| Purchase of other property, plant and equipment and intangibles | 28 | — | ||||
| Insurance recoveries | 1,265 | 1,012 | ||||
| Net cash used in investing activities | (133,144 | ) | (620 | ) | ||
| Cash flows from financing activities | ||||||
| Proceeds from secured term loan facilities and revolving credit facilities | 291,813 | — | ||||
| Direct financing cost of secured term loan and revolving credit facilities | (3,151 | ) | — | |||
| Repurchase of share capital | (28,108 | ) | (801 | ) | ||
| Repayments under operating lease obligations | — | (103 | ) | |||
| Repayment of secured term loan facilities and revolving credit facilities | (148,335 | ) | (31,076 | ) | ||
| Repayment of refinancing of vessel to related parties | (1,664 | ) | (1,644 | ) | ||
| Cash received from non-controlling interest | 20,353 | — | ||||
| Net cash (used in)/provided by financing activities | 130,908 | (33,624 | ) | |||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 648 | (880 | ) | |||
| Net increase in cash, cash equivalents and restricted cash | 37,669 | 13,998 | ||||
| Cash, cash equivalents and restricted cash at beginning of year | 153,194 | 158,242 | ||||
| Cash, cash equivalents and restricted cash at end of year | $ | 190,863 | $ | 172,240 | ||
| Supplemental Information | ||||||
| Total interest paid during the period, net of amounts capitalized | $ | 14,178 | $ | 17,389 | ||
| Total tax paid during the period | $ | 169 | $ | 344 | ||
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
1. General Information and Basis of Presentation
General Information
Navigator Holdings Ltd. (the “Company”), the ultimate parent company of the Navigator Group of companies, is registered in the Republic of the Marshall Islands. The Company has a core business of owning and operating a fleet of liquefied gas carriers. As of March 31, 2024, the Company owned and operated 56 gas carriers (the “Vessels”) each having a cargo capacity of between 3,770 cbm and 38,000 cbm, of which 25 were ethylene and ethane-capable vessels.
The Company entered into a joint venture (the “Navigator Greater Bay Joint Venture”) with Greater Bay Gas Co. Ltd. (“Greater Bay Gas”) in September 2022, which has acquired two 17,000 cbm, 2018-built ethylene-capable liquefied gas carriers and three 22,000 cbm, 2019-built ethylene capable liquefied gas carriers. The vessels are currently commercially managed through the in-house Luna Pool and technically managed by a third party, PG Shipmanagement of Singapore.
The Company owns a
Unless the context otherwise requires, all references in the consolidated financial statements to “our”,” we” and “us” refer to the Company.
Basis of Presentation
These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and related Securities and Exchange Commission (“SEC”) rules for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In our opinion, all adjustments consisting of normal recurring items, necessary for a fair statement of financial position, operating results and cash flows have been included in the unaudited interim condensed consolidated financial statements and related notes. The unaudited interim condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2023 included in our Annual Report on Form 20-F filed with the SEC on March 27, 2024 (the “2023 Annual Report”). The year-end condensed balance sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results for the three months ended March 31, 2024, are not necessarily indicative of results for the year ending December 31, 2024, or any other future periods.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its subsidiaries and Variable Interest Entities (“VIE”) for which the Company is a primary beneficiary and are also consolidated (please read Note 14—Variable Interest Entities for additional information). All intercompany accounts and transactions have been eliminated on consolidation.
The results of operations are subject to seasonal and other fluctuations and are therefore not necessarily indicative of results that may otherwise be expected for the entire year.
Management has evaluated the Company’s ability to continue as a going concern and considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after these financial statements are issued. As part of the assessment, management has considered the following;
- the current financial condition and liquidity sources, including current funds available and forecasted future cash flows;
- any likely effects of global epidemics or other health crises,
- the effects of the conflicts in Ukraine and the Gaza region on the Company’s business, including potential escalations or wider implications on other countries as well as possible effects of trade disruptions.
- environmental regulations such as those affecting vessels' Energy Efficiency Existing Ship Index (“EEXI”); and
- the total capital contributions required for the Terminal Expansion Project (as defined below).
Management has determined that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.
A discussion of the Company’s significant accounting policies can be found in the Company’s consolidated financial statements included in the Company's 2023 Annual Report. There have been no material changes to these policies in the three months ended March 31, 2024.
Recent Accounting Pronouncements
New accounting standards issued as of March 31, 2024, may affect future reporting by Navigator Holdings Ltd. Refer to the Company's 2023 Annual Report for a comprehensive list of accounting pronouncements. There are no other new accounting pronouncements that are expected to have a material impact on the financial reporting by the Company for the three months ended March 31, 2024.
2. Operating revenues
The following table discloses operating revenues by contract type for the three months ended March 31, 2024 and 2023:
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| (in thousands) | ||||||
| Operating revenues: | ||||||
| Time charters | $ | 76,392 | $ | 89,089 | ||
| Voyage charters | 40,218 | 31,931 | ||||
| Voyage charters from Luna Pool collaborative arrangement | 7,200 | — | ||||
| Operating revenues from Unigas Pool | 12,192 | 13,135 | ||||
| Total operating revenues | $ | 136,002 | $ | 134,155 | ||
As of March 31, 2024, 36 of the Company’s 47 operated vessels (excluding the nine vessels operating within the independently managed Unigas Pool) were subject to time charters, 24 of which will expire within one year, nine of which will expire within three years, and three of which will expire between three to five years from the balance sheet date (December 31, 2023: 38 of the Company’s 47 operated vessels were subject to time charters, 27 of which will expire within one year, five of which will expire within three years and six of which will expire between three to five years). The estimated undiscounted cash flows for committed time charter revenues that are expected to be received on an annual basis for ongoing time charters, as of March 31, 2024, are as follows:
| (in thousands of U.S. dollars) | |
| Within 1 year | 242,222 |
| In the second year | 68,840 |
| In the third year | 23,746 |
| In the fourth year | 3,267 |
For time charter revenues accounted for under ASC 842, the amount of accrued income on the Company’s unaudited condensed consolidated balance sheet as of March 31, 2024, was
Voyage Charter revenues
Voyage charter revenues, which include revenues from contracts of affreightment, are shown net of address commissions.
As of March 31, 2024, for voyage charters and contracts of affreightment, services accounted for under ASC 606, the amount of contract assets reflected within accrued income on the Company’s unaudited condensed consolidated balance sheet was
The period opening and closing balance of receivables from voyage charters, including contracts of affreightment, was
The amount allocated to costs incurred to fulfill a contract with a charterer, which are costs incurred following the commencement of a contract or charter party but before the loading of the cargo commences, was
Voyage and Time charter revenues from Luna Pool collaborative arrangements
Revenues from the Luna Pool collaborative arrangements for the three months ended March 31, 2023 which was accounted for under ASC 808 – Collaborative Arrangements, represent our share of pool net revenues generated by the other Pool Participant’s vessels in the Luna Pool. These include revenues from voyage charters and contracts of affreightment, which are accounted for under ASC 606 in addition to time charter revenues, which are accounted for under ASC 842. Following the acquisition of the final of five vessels by Navigator Greater Bay Joint Venture on April 13, 2023, revenues from the Luna Pool vessels are no longer accounted for under ASC 808 – Collaborative Arrangements.
3. Vessels
| Vessels | Drydocking | Total | |||||||
| (in thousands) | |||||||||
| Cost | |||||||||
| January 1, 2024 | $ | 2,467,396 | $ | 69,938 | $ | 2,537,334 | |||
| Additions | — | 5,125 | 5,125 | ||||||
| Write-offs of fully amortized assets | — | (2,209 | ) | (2,209 | ) | ||||
| March 31, 2024 | 2,467,396 | 72,854 | 2,540,250 | ||||||
| Accumulated Depreciation | |||||||||
| January 1, 2024 | 743,334 | 39,618 | 782,952 | ||||||
| Charge for the period | 27,753 | 5,635 | 33,388 | ||||||
| Write-offs of fully amortized assets | — | (2,209 | ) | (2,209 | ) | ||||
| March 31, 2024 | 771,087 | 43,044 | 814,131 | ||||||
| Net Book Value | |||||||||
| December 31, 2023 | 1,724,062 | 30,320 | 1,754,382 | ||||||
| March 31, 2024 | $ | 1,696,309 | $ | 29,810 | $ | 1,726,119 | |||
The cost and net book value of the 36 vessels that were contracted under time charter arrangements (please read Note 2—Operating Revenue for additional information) was
The net book value of vessels that serve as collateral for the Company’s secured term loan and revolving credit facilities (please read Note 5—Secured Term Loan Facilities and Revolving Credit Facilities, for additional information) were
The cost and net book value of vessels that are included in the table above (please read Note 14—Variable Interest Entities for additional information) were
4. Equity Method Investments
Interests in investments are accounted for using the equity method and are recognized initially at cost and subsequently include the Company’s share of the profit or loss and other comprehensive income of equity-accounted investees.
As of December 31, 2023, and March 31, 2024, we had the following participation in investments that are accounted for using the equity method:
| December 31, 2023 | March 31, 2024 | |||||
| (in thousands) | ||||||
| Enterprise Navigator Ethylene Terminal L.L.C. (“Export Terminal Joint Venture”) | 50 | % | 50 | % | ||
| Unigas International B.V. (“Unigas”) | 33.3 | % | 33.3 | % | ||
| Dan Unity CO2 A/S | 50 | % | 50 | % | ||
| Luna Pool Agency Limited (“Pool Agency”) | 50 | % | 50 | % | ||
| Azane Fuel Solutions AS ("Azane") | 14.5 | % | 14.5 | % | ||
| Bluestreak CO2 Limited ("Bluestreak") | 50 | % | 50 | % | ||
Share of results from equity method investments, excluding amortized costs, recognized in the share of results of equity method investments for the three months ended March 31, 2024, was
Enterprise Navigator Ethylene Terminal L.L.C. (“Export Terminal Joint Venture”)
In January 2018, the Company entered into definitive agreements creating the Export Terminal Joint Venture. As of March 31, 2024, we had contributed
Cumulative interest and associated costs capitalized on the investment in the Export Terminal Joint Venture are being amortized over the estimated useful life of the Ethylene Export Terminal, which began commercial operations with the export of commissioning cargoes in December 2019. As of March 31, 2024 the unamortized difference between the carrying amount of the investment in the Export Terminal Joint Venture and the amount of the Company’s underlying equity in net assets of the Export Terminal Joint Venture was
Unigas International B.V. ("Unigas B.V.")
Unigas B.V. based in the Netherlands is an independent commercial and operational manager of seagoing vessels capable of carrying liquefied petrochemical and petroleum gases on a worldwide basis. Unigas B.V. is the operator of the Unigas pool. The Company owns a
Dan Unity CO2 A/S ("Dan Unity")
In June 2021, one of the Company’s subsidiaries entered into a shareholder agreement creating joint venture, Dan Unity CO2 A/S, a Danish entity, to undertake commercial and technical projects relating to seaborne transportation of CO2.
We account for our investment using the equity method and we exercise joint control over the operating and financial policies of Dan Unity CO2 A/S. As of March 31, 2024, we have recognized the Company’s initial investment at cost along with the Company’s share of the profit or loss and other comprehensive income of equity accounted investees. We disclose our proportionate share of profits and losses from equity method unconsolidated affiliates in the statement of operations and adjust the carrying amount of our equity method investments on the balance sheet accordingly.
Luna Pool Agency Limited ("Pool Agency")
In March 2020, the Company collaborated with Pacific Gas Pte. Ltd. and Greater Bay Gas Co. Ltd. ("Greater Bay Gas”) to form and manage the Luna Pool. As part of the formation, Luna Pool Agency Limited, (the “Pool Agency”), was incorporated in May 2020. The pool participants jointly own the Pool Agency on an equal basis, and both have equal board representation. As of March 31, 2024, we have recognized the Company’s initial investment of one British pound in the Pool Agency within equity method investments on our consolidated balance sheet. The Pool Agency has no activities other than as a legal custodian of the Luna Pool bank account and there will be no variability in its financial results as it has no income and its minimal operating expenses are reimbursed by the Pool Participants.
Azane Fuel Solutions AS ("Azane")
Azane, a joint venture between ECONNECT Energy AS and Amon Maritime AS, both of Norway, was founded in Norway in 2020 as a company that develops proprietary technology and services for ammonia fuel handling, to facilitate the transition to green fuels for shipping. The Company acquired a
Subject to customary conditions, Azane intends to build the world’s first ammonia bunkering network, with Yara Clean Ammonia ("Yara") already pre-ordering 15 units from Azane. The first green ammonia bunkering units are scheduled to be delivered in 2025 enabling a low-carbon fuel offering to shipowners. The investment made by Yara and Navigator is expected to enable Azane to begin construction of its first bunkering unit for ammonia supply in Norway, aiming to kickstart the transition to zero-carbon fuels for maritime transportation. Future value creation for Azane is expected to come through international expansion with its bunkering solutions and the broadening of its offerings in ammonia fuel handling technology.
Bluestreak CO2 Limited ("Bluestreak")
Bluestreak is a
The table below represents movement in the Company’s equity method investments, for the year ended December 31, 2023, and three months ended March 31, 2024:
| Year ended December 31, 2023 | Three months ended March 31, 2024 | |||||
| (in thousands) | ||||||
| Equity method investments at January 1, 2023 and 2024 | $ | 148,534 | $ | 174,910 | ||
| Share of results | 20,607 | 4,390 | ||||
| Distributions received from equity method investments | (30,790 | ) | (6,368 | ) | ||
| Equity contributions to joint venture entity | 35,000 | 8,000 | ||||
| Equity method investments – additions | 1,559 | — | ||||
| Total equity method investments at December 31, 2023 and March 31, 2024 | $ | 174,910 | $ | 180,932 | ||
5. Secured Term Loan Facilities and Revolving Credit Facilities
The following table shows the breakdown of all secured term loan facilities and total deferred financing costs split between current and non-current liabilities at December 31, 2023 and March 31, 2024:
| December 31, 2023 | March 31, 2024 | |||||
| (in thousands) | ||||||
| Current Liability | ||||||
| Current portion of secured term loan facilities | $ | 123,024 | $ | 173,900 | ||
| Less: current portion of deferred financing costs | (2,697 | ) | (2,585 | ) | ||
| Current portion of secured term loan facilities, net of deferred financing costs | $ | 120,327 | $ | 171,315 | ||
| Non-Current Liability | ||||||
| Secured term loan facilities and revolving credit facilities net of current portion, excluding amount due to related parties | $ | 646,131 | $ | 564,182 | ||
| Amount due to related parties* | 41,342 | 39,699 | ||||
| Less: non-current portion of deferred financing costs | (4,156 | ) | (3,544 | ) | ||
| Non-current secured term loan facilities and revolving credit facilities, net of current portion and non-current deferred financing costs | $ | 683,317 | $ | 600,337 | ||
*Amount due to related parties relates to the Navigator Aurora Facility held within a lessor entity (for which legal ownership resides with a financial institution) that we are required to consolidate as a variable interest entity under U.S. GAAP into our financial statements as a variable interest entity.
March 2023 Secured Term Loan
On March 20, 2023, the Company entered into a senior secured term loan with Nordea Bank ABP, ABN AMRO Bank N.V. Skandinaviska Enskilda Banken AB (Publ), and BNP Paribas S.A. to refinance the June 2017 Secured Term Loan and Revolving Credit Facility and the October 2016 Secured Term Loan and Revolving Credit Facility that were due to mature in June and October 2023 respectively.
The March 2023 Secured Term Loan has a term of six years, maturing in March 2029 and is for a maximum principal amount of
6. Senior Unsecured Bonds
In September 2020, the Company issued senior unsecured bonds in an aggregate principal amount of
The 2020 Bonds bear interest at a rate of
The following table shows the breakdown of our senior unsecured bonds and total deferred financing costs as of December 31, 2023 and March 31, 2024:
| December 31, 2023 | March 31, 2024 | |||||
| (in thousands) | ||||||
| Senior Unsecured Bonds | ||||||
| Total bonds cost | $ | 100,000 | $ | 100,000 | ||
| Less Treasury bonds | (9,000 | ) | (9,000 | ) | ||
| Less deferred financing costs | (664 | ) | (565 | ) | ||
| Total bonds, net of deferred financing costs | $ | 90,336 | $ | 90,435 | ||
In September 2023, we purchased
7. Derivative Instruments Accounted for at Fair Value
The following table includes the estimated fair value of those assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023 and March 31, 2024.
| December 31, 2023 | March 31, 2024 | ||||||
| (in thousands) | |||||||
| Fair Value Hierarchy Level | Fair Value Hierarchy Level | Fair Value Asset | Fair Value Asset | ||||
| Interest rate swap agreements | Level 2 | $ | 14,674 | $ | 14,227 | ||
The Company uses derivative instruments in accordance with its overall risk management policy to mitigate the risk of unfavorable fluctuations in foreign exchange and interest rate movements.
The Company held no derivatives designated as hedges as of December 31, 2023 or March 31, 2024
Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. The fair value accounting standard establishes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Include other inputs that are directly or indirectly observable in the marketplace.
Level 3—Unobservable inputs which are supported by little or no market activity.
Interest Rate risk
The Company also has a number of existing vessel loan facilities with associated fixed interest rate swaps. As of March 31, 2024, the interest rate swaps had a fair value of
These fixed interest rate swaps are entered into with the financial institutions which were lenders on the loan facilities. The interest rate payable by the Company under these interest rate swap agreements is between
All interest rate swaps above are remeasured to fair value at each reporting date and have been categorized as level two on the fair value measurement hierarchy. The remeasurement to fair value has no impact on the cash flows at the reporting date. There is no requirement for cash collateral to be placed with the swap providers under these swap agreements and there is no effect on restricted cash as of March 31, 2024.
Foreign Currency Exchange Rate risk
All foreign currency-denominated monetary assets and liabilities are revalued and are reported in the Company’s functional currency based on the prevailing exchange rate at the end of the period. These foreign currency transactions fluctuate based on the strength of the U.S. Dollar. The remeasurement of all foreign currency-denominated monetary assets and liabilities at each reporting date results in unrealized foreign currency exchange differences which do not impact our cash flows.
Credit risk
The Company is exposed to credit losses in the event of non-performance by the counterparties to its interest rate swap agreements. As of March 31, 2024, the Company is exposed to credit risk as the interest rate swaps were in an asset position from the perspective of the Company. In order to minimize counterparty risk, the Company only enters into derivative transactions with counterparties that are reputable financial institutions, highly rated by a recognized rating agency.
The fair value of our interest rate swap agreements is the estimated amount that we would pay / receive to sell or transfer the swap at the reporting date, taking into account current interest rates and the current credit worthiness of the swap counterparties. The estimated amount is the present value of future cash flows, adjusted for credit risk. The Company transacts all of these derivative instruments through investment-grade rated financial institutions at the time of the transaction. The amount recorded as a derivative asset or liability could vary by a material amount in the near term if credit markets are volatile or if credit risk were to change significantly.
The fair value of our interest rate swap agreements at the end of each period is most significantly affected by the interest rate implied by the benchmark interest yield curve, including its relative steepness. Interest rates and foreign exchange rates have experienced significant volatility in recent years in both the short and long term. While the fair value of our swap agreements is typically more sensitive to changes in short-term rates, significant changes in long-term benchmark interest, foreign exchange rates and the credit risk of the counterparties or the Company also materially impact the fair values of our swap agreements.
8. Fair Value of Financial Instruments Not Accounted for at Fair Value
The principal financial assets of the Company as of March 31, 2024, and December 31, 2023, consist of cash, cash equivalents, and restricted cash and accounts receivable. The principal financial liabilities of the Company as of March 31, 2024, and December 31, 2023, consist of accounts payable, accrued expenses and other liabilities, secured term loan facilities, revolving credit facilities and the 2020 Bonds and does not include deferred financing costs.
The carrying values of cash, cash equivalents and restricted cash, accounts receivable, accounts payable, accrued expenses and other liabilities are reasonable estimates of their fair value due to the short-term nature or liquidity of these financial instruments.
Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. The fair value accounting standard establishes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Include other inputs that are directly or indirectly observable in the marketplace.
Level 3—Unobservable inputs which are supported by little or no market activity.
The 2020 Bonds are classified as a level two liability and the fair values have been calculated based on the most recent trades of the bond on the Oslo Børs prior to March 31, 2024. These trades are infrequent and therefore not considered to be an active market.
The fair value of secured term loan facilities and revolving credit facilities is estimated to approximate the carrying value in the balance sheet since they bear a variable interest rate, which is reset quarterly. This has been categorized at level two on the fair value measurement hierarchy as of March 31, 2024.
The following table includes the estimated fair value and carrying value of those assets and liabilities where the fair value does not approximate to carrying value. The table excludes cash, cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and other liabilities because the fair value approximates carrying value and, for accounts receivable and payable, are due in one year or less.
| December 31, 2023 | March 31, 2024 | |||||||||||||||
| (in thousands) | ||||||||||||||||
| Financial Asset/Liability | Fair Value Hierarchy Level | Carrying Amount (Liability) | Fair Value (Liability) | Fair Value Hierarchy Level | Carrying Amount (Liability) | Fair Value (Liability) | ||||||||||
| 2020 Bonds (Note 6) | Level 2 | (91,000 | ) | (91,455 | ) | Level 2 | $ | (91,000 | ) | $ | (91,910 | ) | ||||
| Secured term loan facilities and revolving credit facilities (Note 5) | Level 2 | $ | 810,497 | $ | 810,497 | Level 2 | $ | (777,781 | ) | $ | (777,781 | ) | ||||
9. Earnings per share
Basic earnings per share is calculated by dividing the net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by adjusting the weighted average number of common shares used for calculating basic earnings per share for the effects of all potentially dilutive shares. The following table shows the calculation of both the basic and diluted number of weighted average outstanding shares for the three months ended March 31, 2024 and 2023:
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| Net Income attributable to stockholders of Navigator Holdings Ltd.(in thousands) | $ | 18,786 | $ | 22,573 | ||
| Basic weighted average number of shares: | 75,955,162 | 73,209,771 | ||||
| Effect of dilutive potential share options: | 364,591 | 547,393 | ||||
| Diluted weighted average number of shares | 76,319,753 | 73,757,164 | ||||
10. Share-Based Compensation
Share Awards
On March 17, 2024, 31,833 shares which were previously granted to non-employee directors under the 2013 Plan (as defined below) with a weighted average grant value of
On March 15, 2023, under the Navigator Holdings Ltd. 2013 Long-Term Incentive Plan (the “2013 Plan”) the Company granted a total of 47,829 restricted shares, 36,327 of which were granted to non-employee directors and 11,502 of which were granted to the officers and employees of the Company. The weighted average value of the shares granted was
On March 17, 2023, 45,864 shares which were previously granted to non-employee directors under the 2013 Plan with a weighted average grant value of
On June 30, 2023, 15,627 shares which were previously granted to an officer of the Company under the 2013 Plan with a weighted average grant value of
Restricted share grant activity for the year ended December 31, 2023, and the three months ended March 31, 2024, was as follows:
| Number of non-vested restricted shares | Weighted average grant date fair value | Weighted average remaining contractual term (years) | |||||||
| Balance as of January 1, 2023 | 115,693 | $ | 10.16 | 1.04 | |||||
| Granted | 47,829 | 12.45 | |||||||
| Vested | (78,144 | ) | 10.16 | ||||||
| Balance as of December 31, 2023 | 85,378 | $ | 11.44 | 0.81 | |||||
| Vested | (41,944 | ) | 11.92 | ||||||
| Balance as of March 31, 2024 | 43,434 | $ | 11.49 | 0.56 | |||||
We account for forfeitures as they occur. Using the graded straight-line method of expensing the restricted stock grants, the weighted average estimated value of the shares calculated at the date of grant is recognized as compensation cost in the unaudited condensed consolidated statement of operations over the period to the vesting date.
During the three months ended March 31, 2024, the Company recognized
Share options
Share options issued under the 2013 Plan are exercisable between the third and tenth anniversary of the grant date, after which they lapse. The fair value of any option issued is calculated on the date of the grant based on the Black-Scholes valuation model. Expected volatility is based on the historic volatility of the Company’s stock price and other factors. The expected term of the options granted is anticipated to occur in the range between 4 and 6.5 years. The risk-free rate is the rate adopted from the U.S. Government Zero Coupon Bond.
The movements in the outstanding share options during the year ended December 31, 2023, and the three months ended March 31, 2024, were as follows:
| Options | Number of options outstanding | Weighted average exercise price per share | Aggregate intrinsic value | ||||||
| Balance as of January 1, 2023 | 320,856 | 20.99 | $ | — | |||||
| Forfeited during the year | (35,875 | ) | 22.35 | — | |||||
| Issuance during the year | 262,412 | 15.45 | 1,180,854 | ||||||
| Balance as of December 31, 2023 | 547,393 | 21.08 | $ | — | |||||
| Issuance during the period | — | — | — | ||||||
| Balance as of March 31, 2024 | 547,393 | 18.25 | $ | 1,180,854 | |||||
The weighted-average remaining contractual term of options outstanding and exercisable at March 31, 2024 was 2.75 years (December 31, 2023: 2.99 years). During the three months ended March 31, 2024, the Company recognized
The Company has employee stock purchase plans in place which is a savings-related share scheme where certain employees have the option to buy common stock at a
11. Commitments and Contingencies
The contractual obligations schedule set forth below summarizes our contractual obligations as of March 31, 2024.
| 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | Total | |||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Secured term loan facilities and revolving credit facilities | $ | 96,695 | $ | 292,616 | $ | 107,216 | $ | 67,539 | $ | 89,186 | $ | 84,830 | $ | 738,082 | |||||||
| Ethylene Export Terminal capital contributions1 | 89,348 | — | — | — | — | — | 89,348 | ||||||||||||||
| 2020 Bonds | — | 100,000 | — | — | — | — | 100,000 | ||||||||||||||
| Office operating leases2 | 960 | 1,251 | 1,054 | 1,261 | — | — | 4,526 | ||||||||||||||
| Navigator Aurora Facility3 | — | — | — | 39,699 | — | — | 39,699 | ||||||||||||||
| Total contractual obligations | $ | 187,003 | $ | 393,867 | $ | 108,270 | $ | 108,499 | $ | 89,186 | $ | 84,830 | $ | 971,655 | |||||||
1 We have committed to invest further in terminal infrastructure, such as expanding our existing Ethylene Export Terminal. As at March 31, 2024 the remaining capital contributions required from us to the Export Terminal Joint Venture for the Terminal Expansion Project are expected to be approximately
2 The Company occupies office space in London with a lease that commenced in January 2022 for a period of 10 years with a mutual break option in January 2027, which is the fifth anniversary of the lease commencement date. The annual gross rent under this lease is approximately
The Company entered into a lease for office space in Houston that expires on March 31, 2025. The annual gross rent under this lease is approximately
The lease term for our representative office in Gdynia, Poland was revised during 2021 for an amended period to May 31, 2025. The gross rent per year is approximately
The Company occupies office space in Copenhagen, Denmark with a lease that commenced in September 2021 that expires in June 2025. The gross rent per year is approximately
The weighted average remaining contractual lease term for the above four office leases on March 31, 2024, was 1.94 years (December 31, 2023: 3.88 years).
3 The Navigator Aurora Facility is a loan facility held within a lessor entity (for which legal ownership resides with financial institutions) that we are required to consolidate under U.S. GAAP into our financial statements as a variable interest entity. Please read Note 14—Variable Interest Entities to our consolidated financial statements.
12. Operating Lease Liabilities
The Company’s unaudited condensed consolidated balance sheet includes a right-of-use (“ROU”) asset and a corresponding liability for operating lease contracts where the Company is a lessee. The discount rate used to measure the lease liability presented on the Company’s unaudited condensed consolidated balance sheet is the incremental cost of borrowing since the rate implicit in the lease cannot be determined.
The liabilities described below are for the Company’s offices in London, Gdynia, Copenhagen and Houston which are denominated in various currencies. At March 31, 2024, the weighted average discount rate across the four leases was
At March 31, 2024, based on the remaining lease liabilities, the weighted average remaining operating lease term was 1.94 years (December 31, 2023: 3.17 years ).
Under ASC 842, the ROU asset is a non-monetary asset and is remeasured into the Company’s reporting currency using the exchange rate for the applicable currency as at the adoption date of ASC 842. The operating lease liability is a monetary liability and is remeasured quarterly using current exchange rates, with changes recognized in a manner consistent with other foreign currency-denominated liabilities in general and administrative expenses in the unaudited condensed consolidated statements of comprehensive income.
A maturity analysis of the annual undiscounted cash flows of the Company’s operating lease liabilities as of December 31, 2023 and March 31, 2024, is presented in the following table:
| December 31, 2023 | March 31, 2024 | |||||
| (in thousands) | ||||||
| One year | $ | 1,027 | $ | 1,283 | ||
| Two years | 1,279 | 1,185 | ||||
| Three years | 1,066 | 2,058 | ||||
| Four years | 1,274 | — | ||||
| Total undiscounted operating lease commitments | $ | 4,646 | $ | 4,526 | ||
| Less: Discount adjustment | (232 | ) | (215 | ) | ||
| Total operating lease liabilities | 4,414 | 4,311 | ||||
| Less: current portion | (914 | ) | (1,151 | ) | ||
| Operating lease liabilities, non-current portion | $ | 3,500 | $ | 3,160 | ||
13. Cash, Cash Equivalents and Restricted Cash
The following table shows the breakdown of cash, cash equivalents and restricted cash as of December 31, 2023 and March 31, 2024:
| December 31, 2023 | March 31, 2024 | |||||
| (in thousands) | ||||||
| Cash, Cash Equivalents and Restricted Cash | ||||||
| Cash and cash equivalents | $ | 149,581 | $ | 163,113 | ||
| Cash and cash equivalents held by VIE | 23 | 380 | ||||
| Restricted cash | 8,638 | 8,747 | ||||
| Total cash, cash equivalents and restricted cash | $ | 158,242 | $ | 172,240 | ||
Amounts included in restricted cash represent cash in blocked deposit accounts that are required to be deposited in accordance with the terms of a number of secured term loans with banking institutions. These funds are not available for daily operational use.
14. Variable Interest Entities
As of December 31, 2023 and March 31, 2024, the Company has consolidated
In October 2019, the Company entered into a sale and leaseback to refinance one of its vessels, Navigator Aurora, with OCY Aurora Ltd., a Maltese limited liability company. OCY Aurora Ltd. is a wholly owned subsidiary of Ocean Yield Malta Limited, whose parent is Ocean Yield ASA, a listed company on the Oslo stock exchange. The Company does not hold any shares or voting rights in OCY Aurora Ltd. Under U.S. GAAP the entity, OCY Aurora Ltd, is considered to be a VIE.
As of December 31, 2023, and March 31, 2024, the Company has consolidated
The Company has performed an analysis and concluded that the Company exercises power through the exercise of the call options in the lease agreement. The call options, although not an activity of the SPV, if exercised would significantly impact the SPV’s economic performance as the SPV owns no other revenue generating assets. The options transfer to the Company the right to receive benefits as they are agreed at a predetermined price. The SPV is protected from decreases in the value of the vessel, as if the vessel’s market value were to decline, the call option provides the SPV protection up to the point where it would not be economically viable for the Company to exercise the option. In addition, the Company has the power to direct decisions over the activities and care of the vessel which directly impact its value such as for the day-to-day commercial, technical management and operation of the vessel.
We own a
The Company has determined that it has a variable interest in NCPI and NSSPI and is considered to be the primary beneficiary as a result of having a controlling financial interest in the entities and has the power to direct the activities that most significantly impact NCPI’s and NSSPI’s economic performance.
As of March 31, 2024, the VIE’s had total assets and liabilities of
15. Related Party Transactions
The following table summarizes our transactions with related parties for the three months ended March 31, 2024 and 2023:
| Three months ended March 31, 2023 | Three months ended March 31, 2024 | |||||
| (in thousands) | ||||||
| Net income / (expenses) | ||||||
| Luna Pool Agency Limited | $ | (17 | ) | $ | (8 | ) |
| Ocean Yield Malta Limited | (774 | ) | (763 | ) | ||
| Ultranav Business Support ApS | (32 | ) | (15 | ) | ||
| $ | (823 | ) | $ | (786 | ) | |
The following table sets out the balances due from related parties as of December 31, 2023 and March 31, 2024:
| December 31, 2023 | March 31, 2024 | |||||
| (in thousands) | ||||||
| Luna Pool Agency Limited | $ | 30,804 | $ | 16,189 | ||
| Unigas Pool | 2,598 | 4,122 | ||||
| $ | 33,402 | $ | 20,311 | |||
The following table sets out the balances due to related parties as of December 31, 2023 and March 31, 2024:
| December 31, 2023 | March 31, 2024 | |||||
| (in thousands) | ||||||
| Ocean Yield Malta Limited | $ | 41,912 | $ | 40,217 | ||
| Naviera Ultranav Dos Limitada | 36 | — | ||||
| $ | 41,948 | $ | 40,217 | |||
As of March 31, 2024, Ultranav International ApS held a
Ultranav Business Support ApS: On August 4, 2021, in connection with the Company’s acquisition of the fleet and businesses of Othello Shipping Company S.A. and Ultragas ApS from Naviera Ultranav Limitada, the Company entered into a Transitional Services Agreement (“TSA”) with Ultranav Business Support ApS (“UBS”) to provide back office services, such as accounting and payroll, IT, treasury, financial controlling, tax and compliance, communications and CSR, HR, administrative and branding. The Company pays UBS a monthly fee for services provided. The TSA agreement with UBS can be terminated by the Company by giving six-months' notice.
16. Subsequent Events
On May 14, 2024, the Company's Board of Directors declared a cash dividend of
Our Fleet
The following table provides details of our vessels as of May 15, 2024:
| Operating Vessel | Year Built | Vessel Size (cbm) | Employment Status | Current Cargo | Time Charter Expiration Date |
| Ethylene/ethane capable semi-refrigerated midsize | |||||
| Navigator Aurora | 2016 | 37,300 | Time Charter | Ethane | December 2026 |
| Navigator Eclipse | 2016 | 37,300 | Time Charter | Ethane | March 2026 |
| Navigator Nova | 2017 | 37,300 | Time Charter | Ethane | September 2026 |
| Navigator Prominence | 2017 | 37,300 | Time Charter | Ethane | March 2025 |
| Ethylene/ethane capable semi-refrigerated handysize | |||||
| Navigator Pluto* | 2000 | 22,085 | Time Charter | Ethane | July 2024 |
| Navigator Saturn | 2000 | 22,085 | Time Charter | Ethane | September 2024 |
| Navigator Venus* | 2000 | 22,085 | Spot Market | Ethane | — |
| Navigator Atlas* | 2014 | 21,000 | Spot Market | — | — |
| Navigator Europa* | 2014 | 21,000 | Time Charter | Ethane | December 2024 |
| Navigator Oberon* | 2014 | 21,000 | Spot Market | Ethylene | — |
| Navigator Triton* | 2015 | 21,000 | Spot Market | Ethane | — |
| Navigator Umbrio* | 2015 | 21,000 | Time Charter | Ethane | January 2025 |
| Navigator Luna* | 2018 | 17,000 | Spot Market | Ethylene | — |
| Navigator Solar* | 2018 | 17,000 | Time Charter | Ethylene | August 2024 |
| Navigator Castor* | 2019 | 22,000 | Spot Market | Ethylene | — |
| Navigator Equator* | 2019 | 22,000 | Time Charter | Ethane | June 2024 |
| Navigator Vega* | 2019 | 22,000 | Spot Market | Ethylene | — |
| Ethylene/ethane capable semi-refrigerated smaller size | |||||
| Happy Condor** | 2008 | 9,000 | Unigas Pool | — | — |
| Happy Pelican** | 2012 | 6,800 | Unigas Pool | — | — |
| Happy Penguin** | 2013 | 6,800 | Unigas Pool | — | — |
| Happy Kestrel** | 2013 | 12,000 | Unigas Pool | — | — |
| Happy Osprey** | 2013 | 12,000 | Unigas Pool | — | — |
| Happy Peregrine** | 2014 | 12,000 | Unigas Pool | — | — |
| Happy Albatross** | 2015 | 12,000 | Unigas Pool | — | — |
| Happy Avocet** | 2017 | 12,000 | Unigas Pool | — | — |
| Semi-refrigerated handysize | |||||
| Navigator Aries | 2008 | 20,750 | Time Charter | LPG | July 2024 |
| Navigator Capricorn | 2008 | 20,750 | Time Charter | LPG | October 2024 |
| Navigator Gemini | 2009 | 20,750 | Time Charter | LPG | June 2024 |
| Navigator Pegasus | 2009 | 22,200 | Spot Market | — | — |
| Navigator Phoenix | 2009 | 22,200 | Time Charter | Ammonia | September 2024 |
| Navigator Scorpio | 2009 | 20,750 | Time Charter | LPG | January 2026 |
| Navigator Taurus | 2009 | 20,750 | Time Charter | Ammonia | June 2024 |
| Navigator Virgo | 2009 | 20,750 | Time Charter | LPG | April 2025 |
| Navigator Leo | 2011 | 20,600 | Time Charter | LPG | December 2024 |
| Navigator Libra | 2012 | 20,600 | Time Charter | LPG | March 2025 |
| Atlantic Gas | 2014 | 22,000 | Time Charter | LPG | April 2025 |
| Adriatic Gas | 2015 | 22,000 | Time Charter | LPG | November 2024 |
| Balearic Gas | 2015 | 22,000 | Spot Market | LPG | — |
| Celtic Gas | 2015 | 22,000 | Spot Market | LPG | — |
| Navigator Centauri | 2015 | 21,000 | Time Charter | LPG | May 2025 |
| Navigator Ceres | 2015 | 21,000 | Time Charter | LPG | June 2025 |
| Navigator Ceto | 2016 | 21,000 | Time Charter | LPG | May 2025 |
| Navigator Copernico | 2016 | 21,000 | Time Charter | LPG | May 2025 |
| Bering Gas | 2016 | 22,000 | Spot Market | LPG | — |
| Navigator Luga | 2017 | 22,000 | Time Charter | LPG | July 2024 |
| Navigator Yauza | 2017 | 22,000 | Time Charter | LPG | July 2024 |
| Arctic Gas | 2017 | 22,000 | Spot Market | LPG | — |
| Pacific Gas | 2017 | 22,000 | Time Charter | LPG | November 2024 |
| Semi-refrigerated smaller size | |||||
| Happy Falcon** | 2002 | 3,770 | Unigas Pool | — | — |
| Fully-refrigerated | |||||
| Navigator Glory | 2010 | 22,500 | Time Charter | Ammonia | June 2025 |
| Navigator Grace | 2010 | 22,500 | Time Charter | Ammonia | January 2025 |
| Navigator Galaxy | 2011 | 22,500 | Time Charter | Ammonia | December 2024 |
| Navigator Genesis | 2011 | 22,500 | Time Charter | Ammonia | January 2025 |
| Navigator Global | 2011 | 22,500 | Time Charter | Ammonia | December 2024 |
| Navigator Gusto | 2011 | 22,500 | Time Charter | Ammonia | March 2025 |
| Navigator Jorf | 2017 | 38,000 | Time Charter | Ammonia | August 2027 |
* denotes our owned vessels that operate within the Luna Pool
** denotes our owned vessels that operate within the independently managed Unigas Pool
PART II. First Quarter 2024 Conference Call Details
Navigator Holdings Ltd. First Quarter 2024 Earnings Webcast and Presentation
On Thursday, May 16, 2024, at 10:00 A.M. E.D.T., the Company’s management team will host an online webcast to present and discuss the financial results for the first quarter of 2024.
Those wishing to participate should register for the webcast using the following details:
https://us06web.zoom.us/webinar/register/WN_GDgEYvKZQ--jx8wiPerasw
Webinar ID: 886 1481 2123
Passcode: 560302
Participants can also join by phone by dialing:
United States: +1 929 436 2866
United Kingdom:+44 330 088 5830
A full list of US and international numbers is available via the following link:
International Dial-in numbers
The webcast and slide presentation will be available for replay on the Company's website (www.navigatorgas.com) shortly after the end of the webcast. Participants wishing to join the live webcast are encouraged to do so approximately 5 minutes prior to the start.
About Navigator Gas
Navigator Holdings Ltd. (described herein as “Navigator Gas” or the “Company”) 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 petrochemical gases, such as ethylene and ethane, liquefied petroleum gas (“LPG”) and ammonia and owns a
For media inquiries or further information, please contact:
Alexander Walster
Head of ESG & Communications
Email: communications@navigatorgas.com
Verde, 10 Bressenden Place, London, SW1E 5DH, UK
Tel: +44 (0)7857 796 052, +44 (0)20 7045 4114
Navigator Gas Investor Relations
Email: investorrelations@navigatorgas.com, randy.giveans@navigatorgas.com
333 Clay Street, Suite 2400, Houston, Texas, U.S.A. 77002
Tel: +1 713 373 6197, +44 (0)20 7340 4850
Investor Relations / Media Advisors
Nicolas Bornozis / Paul Lampoutis
Capital Link – New York
Tel: +1-212-661-7566
Email: navigatorgas@capitallink.com
Category: Financial
FAQ
What was Navigator Gas' net income for Q1 2024?
How much is the dividend declared by Navigator Gas for Q1 2024?
What was Navigator Gas' total operating revenue in Q1 2024?
How did Navigator Gas' EBITDA change in Q1 2024?
What is the average daily time charter equivalent (TCE) for Navigator Gas in Q1 2024?
What is Navigator Gas' cash reserve as of Q1 2024?
How much did Navigator Gas reduce its debt by in Q1 2024?
What is Navigator Gas' plan for the ethylene export terminal?
What investment did Navigator Gas make in clean ammonia export?
What was the fleet utilization rate for Navigator Gas in Q1 2024?
