Navigator Holdings Ltd. Preliminary Fourth Quarter and Financial Year 2021 Results (Unaudited)
Navigator Holdings Ltd. (NYSE: NVGS) reported operating revenue of $129.4 million for Q4 2021, up from $87.4 million in Q4 2020. For the year, revenue was $403.6 million, compared to $332.5 million in 2020. However, the company faced a net loss of $47.0 million in Q4 2021, contrasting with a net income of $3.4 million in Q4 2020. Excluding impairment losses of $63.7 million, adjusted net income would be $16.7 million. Adjusted EBITDA for Q4 stood at $55.2 million, up from $32.0 million in Q4 2020, and fleet utilization increased to 91.4%.
- Operating revenue for Q4 2021 increased by 48% year-over-year.
- Adjusted EBITDA rose by 72% in Q4 2021 compared to the same period in 2020.
- Fleet utilization improved to 91.4% in Q4 2021 from 91.0% in Q4 2020.
- The ethylene export terminal throughput reached 241,500 tons in Q4 2021, up from 125,300 tons in Q4 2020.
- Net loss of $47.0 million in Q4 2021 compared to net income of $3.4 million in Q4 2020.
- Impairment losses on vessels were $63.7 million in Q4 2021, significantly impacting net income.
- Operating expenses rose 121.8% in Q4 2021, primarily due to increased vessel operating expenses and general administrative costs.
Highlights
- Navigator Holdings Ltd. (the “Company”, “we”, “our” and “us”) (NYSE: NVGS) reported operating revenue of
$129.4 million for the three months ended December 31, 2021, compared to$87.4 million for the three months ended December 31, 2020. Operating revenue for the year ended December 31, 2021, amounted to$403.6 million , compared to$332.5 million for the year ended December 31, 2020.
- Net loss was
$47.0 million for the three months ended December 31, 2021, compared to a net income of$3.4 million for the three months ended December 31, 2020. Excluding impairment losses on vessels of$63.7 million , net income would have been$16.7 million for the three months ended December 31, 2021. - Adjusted EBITDA(1) was
$55.2 million for the three months ended December 31, 2021, compared to$32.0 million for the three months ended December 31, 2020. Adjusted EBITDA for the year ended December 31, 2021, amounted to$155.8 million , compared to$124.2 million for the year ended December 31, 2020. - Fleet utilization was
91.4% for the three months ended December 31, 2021, compared to91.0% for the three months ended December 31, 2020. - The ethylene export marine terminal at Morgan’s Point, Texas on the Houston Ship Channel (the “Marine Export Terminal”) had throughput volumes of approximately 241,500 tons for the three months ended December 31, 2021, compared to 125,300 tons for the three months ended December 31, 2020. The total throughput volumes for the year ended December 31, 2021 were 628,257 tons.
- In November 2021, the Company secured multi-year time charters for its remaining three midsize ethane carriers, with expiry of these time charters in 2026.
- On January 14, 2022, the Company sold Navigator Neptune, a 2000 built 22,000 cbm ethylene carrier for
$21.0 million . - On March 7, 2022, the Company sold the Happy Bird, a 1999 built 8,600 cbm LPG carrier for
$6.1 million . - Debt reduced by
$24.2 million during the three months ended December 31, 2021, with cash and cash equivalents standing at$124.0 million as of December 31, 2021.
LONDON and NEW YORK, March 10, 2022 (GLOBE NEWSWIRE) -- The Company’s financial information for the quarter and year ended December 31, 2021 included in this press release is preliminary and unaudited and is subject to change in connection with the completion of the Company’s year-end close procedures and further financial review, including the audit currently underway by the Company’s independent registered public accounting firm. Actual audited results may differ as a result of the completion of the Company's year-end closing procedures, review adjustments and other developments that may arise between now and the time such financial information for the year ended December 31, 2021 is finalized.
Effect of Russian Invasion of Ukraine
We currently have four charterparties with a Russian counterparty that were entered into in 2012 and 2017, two of which expire in June 2022 and two expire in December 2023. These charterparties cannot be terminated without the consent of both parties, unless the counterparty was to become a sanctioned entity, which would render the charters void. Under the current circumstances, it would be our intention not to renew these charterparties when they expire.
We employ an aggregate of approximately 120 Russian and Ukrainian officers on board our vessels, many of whom are on the same vessels. We are monitoring this situation closely and we are mindful that there may be restrictions, logistical challenges or a complete inability to employ both nationalities in the near future. We understand there are approximately 70,000 Russian officers and approximately 50,000 Ukrainian Officers on the global fleet, which if unavailable in the future, would provide cost pressures from other nationalities or unavailability of suitably trained officers for our vessels.
Marine Export Terminal
The Marine Export Terminal exported approximately 241,500 metric tons of ethylene during the fourth quarter of 2021. The month of December showed a record for 2021 of nearly 100,000 metric tons passing through the terminal for exports. A wide ethylene arbitrage between the U.S. and international markets continued into January 2022, leading the terminal to reach a new monthly high of 106,000 metric tons of exports, before a reduction in activity prior to the Lunar New Year and the Winter Olympics in February 2022. However, higher global oil and energy prices from the second half of February 2022 and into March 2022 have resulted in increased ethylene demand from international buyers with total volume expected to be approximately 250,000 metric tons for the first quarter 2022.
Shipping Trends
The Company’s vessel utilization rose from a 2021 low point of
The key drivers for these rises over the last three months of 2021 are two-fold. First, increased throughput activity at the Marine Export Terminal which had a positive impact on vessel demand. The total U.S. ethylene exports in August 2021 were just 30,000 metric tons, which increased month by month to approximately 120,000 metric tons during December 2021. In addition, U.S. exports of ethane on handysize and medium-size ethane gas carriers increased from 225,000 metric tons in October 2021 to an all-time high of 300,000 metric tons in December 2021. The combined impact of both C2 molecules, ethylene and ethane, lifted the shipping segment as a whole, leaving the specialized ethylene vessels carrying thee products, thereby reducing inter-segment competition for other less complex petrochemical and LPG cargoes. Our petrochemical earnings days increased
Historically, a high oil and energy price environment tends to increase demand for LPG and petrochemical gases, and we have seen recent signs of this dynamic. North American competitiveness, particularly the production of ethylene from domestically produced ethane, and its pricing relative to the rest of the world, has increased. In comparison, ethylene producers in Europe and Asia who are using naphtha as feedstock are facing negative margins, making ethylene from the U.S more attractive. The petrochemical producers who have flexible refining capabilities are changing feedstock from oil to gas. Consequently U.S. ethane is once again in high demand, with Asian buyers seeking handysize ethane cargo sizes.
This U.S. to Asia trade has usually only been commercially viable with larger ethane vessels, such as our medium-sized ethane carriers, but the demand of handysize cargos illustrates the importance and attractiveness of North American produced natural gas liquids for export, as well as their derivatives, such as ethylene. Increased demand of LPG as a substitute from naphtha, along with longer ton mile are both positive factors for our handysize vessel segment.
Factors Affecting Comparability
You should consider the following factors when evaluating our historical financial performance and assessing our future prospects:
- Our fleet size has changed. On August 4, 2021, we acquired an additional 18 LPG Carriers as part of the acquisition of Ultragas and Othello Shipping Company S.A. These vessels comprised:
— seven modern 22,000cbm handysize semi-refrigerated vessels;
— five 12,000cbm ethylene vessels; and
— six gas carriers in the 3,770-9,000cbm range, three of which are ethylene capable.
On September 28, 2021, the Company agreed to sell one of the older acquired vessels, the Happy Bride, a 1999 built 6,400 cbm LPG carrier to a third-party for$4.75 million . The sale was completed on October 12, 2021.
Given the increase in the number of vessels operating in our fleet, our historical financial statements reflect, and in the future will reflect, significantly different levels of ownership and operating days as well as different levels of voyage expenses, vessel operating expenses, interest expense and other related costs.
- We have additional financing arrangements. We have assumed five bank loan facilities through the acquisition of Ultragas and Othello Shipping Company S.A. The loans are secured on a total of 13 of the 18 vessels acquired, the other five vessels are unencumbered. The bank loans, which in aggregate have half yearly repayments of approximately
$13.6 million , mature from June 2026 and accrues interest at U.S. LIBOR plus a margin of between1.9% and2.65% . In each case interest is fixed by an interest rate swap of approximately2.0% . The financial covenants on these five bank loans were modified to align with those of Navigator bank covenants.
Results of Operations for the Three Months Ended December 31, 2021 Compared to the Three Months Ended December 31, 2020
The following table compares our operating results for the three months ended December 31, 2021 and 2020:
| Three Months Ended December 31, 2020 | Three Months Ended December 31, 2021 | Percentage Change | ||||||||
| (in thousands, except percentages) | ||||||||||
| Operating revenues | $ | 82,926 | $ | 105,176 | 26.8 | % | ||||
| Operating revenues – Unigas Pool | — | 15,949 | — | |||||||
| Operating revenues – Luna Pool collaborative arrangements | 4,496 | 8,265 | 83.8 | % | ||||||
| Total operating revenues | $ | 87,422 | $ | 129,390 | 48.0 | % | ||||
| Expenses: | ||||||||||
| Brokerage commissions | 1,315 | 1,472 | 11.9 | % | ||||||
| Voyage expenses | 16,516 | 21,873 | 32.4 | % | ||||||
| Voyage expenses – Luna Pool collaborative arrangements | 5,055 | 6,346 | 25.5 | % | ||||||
| Vessel operating expenses | 28,383 | 40,817 | 43.8 | % | ||||||
| Depreciation and amortization | 19,140 | 25,686 | 34.2 | % | ||||||
| Impairment losses on vessels | — | 63,653 | — | |||||||
| General and administrative costs | 6,329 | 10,264 | 62.2 | % | ||||||
| Other income | (75 | ) | (109 | ) | 45.3 | % | ||||
| Total operating expenses | $ | 76,663 | $ | 170,002 | 121.8 | % | ||||
| Operating income/(loss) | $ | 10,759 | $ | (40,612 | ) | — | ||||
| Other income/(expense) | ||||||||||
| Foreign currency exchange (loss)/gain on senior secured bonds | (6,884 | ) | 436 | — | ||||||
| Unrealized gain/(loss) on non-designated derivative instruments | 8,378 | (1,384 | ) | — | ||||||
| Interest expense | (9,071 | ) | (10,701 | ) | 18.0 | % | ||||
| Interest income | 41 | 138 | 236.6 | % | ||||||
| Income/(loss)before taxes and share of result of equity accounted joint ventures | $ | 3,223 | $ | (52,123 | ) | — | ||||
| Income taxes | (161 | ) | (909 | ) | 464.6 | % | ||||
| Share of result of equity accounted joint ventures | 709 | 6,449 | 809.6 | % | ||||||
| Net income/(loss) | $ | 3,771 | $ | (46,583 | ) | — | ||||
| Net income attributable to non-controlling interest | (405 | ) | (378 | ) | (6.7 | %) | ||||
| Net income/(loss) attributable to stockholders of Navigator Holdings Ltd. | $ | 3,366 | $ | (46,961 | ) | — | ||||
Operating Revenues. Operating revenues, net of address commissions, was
- an increase in operating revenues of approximately
$11.5 million attributable to an increase in vessel available days of 598 days, or17.3% for the three months ended December 31, 2021 compared to the three months to December 31, 2020, primarily as a result of seven additional handysize vessels joining the fleet as part of the Ultragas transaction; - an increase in operating revenues of approximately
$5.1 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately$684,278 per vessel per calendar month ($22,497 per day) for the three months ended December 31, 2021, compared to an average of approximately$642,533 per vessel per calendar month ($21,123 per day) for the three months ended December 31, 2020; - an increase in operating revenues of approximately
$0.3 million attributable to a small increase in fleet utilization which rose to91.4% for the three months ended December 31, 2021, compared to91.0% for the three months ended December 31, 2020; and - an increase in operating revenues of approximately
$5.4 million primarily attributable to an increase in pass through voyage costs, associated with the additional vessels joining the fleet for the three months ended December 31, 2021 compared to the three months ended December 31, 2020.
The following table presents selected operating data for the three months ended December 31, 2020 and 2021, which we believe are useful in understanding the basis for movement in our operating revenues. It does not include our 10 owned smaller vessels in the independent commercially managed Unigas Pool or the five Pacific Gas owned vessels in our Luna Pool.
| Three Months Ended December 31, 2020 | Three Months Ended December 31, 2021 | ||||||
| Fleet Data: | |||||||
| Weighted average number of vessels | 38.0 | 45.0 | |||||
| Ownership days | 3,496 | 4,140 | |||||
| Available days | 3,454 | 4,052 | |||||
| Operating days | 3,144 | 3,703 | |||||
| Fleet utilization | 91.0 | % | 91.4 | % | |||
| Average daily time charter equivalent rate (*) | $ | 21,123 | $ | 22,497 | |||
* Non-GAAP Financial Measure—Time charter equivalent: Time charter equivalent (“TCE”) rate 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 operating revenues, less any voyage expenses, by the number of operating days for the relevant period. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters, also known as spot market charters, we pay all voyage expenses. TCE rate 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., spot charters, time charters and contracts of affreightment) under which the vessels may be employed between the periods. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with net operating revenues, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies.
Reconciliation of Operating Revenues to TCE rate
The following table represents a reconciliation of operating revenues to TCE rate. Operating revenues are the most directly comparable financial measure calculated in accordance with U.S. GAAP for the periods presented.
| Three Months Ended December 31, 2020 | Three Months Ended December 31, 2021 | ||||||
| (in thousands, except operating days and average daily time charter equivalent rate) | |||||||
| Fleet Data: | |||||||
| Operating revenues (excluding collaborative arrangements) | $ | 82,926 | $ | 105,176 | |||
| Voyage expenses (excluding collaborative arrangements) | 16,516 | 21,873 | |||||
| Operating revenues less Voyage expenses | 66,410 | 83,303 | |||||
| Operating days | 3,144 | 3,703 | |||||
| Average daily time charter equivalent rate | $ | 21,123 | $ | 22,497 | |||
Operating Revenues – Unigas Pool. Operating revenues – Unigas Pool was
Operating Revenues – Luna Pool Collaborative Arrangements. Pool earnings are aggregated and then allocated (after deducting pool overheads and managers fees) to the Pool Participants in accordance with the Pooling Agreement. Operating revenues - Luna Pool collaborative arrangements was
Brokerage Commissions. Brokerage commissions, which typically vary between
Voyage Expenses. Voyage expenses increased by
Voyage Expenses – Luna Pool Collaborative Arrangements. Voyage expenses – Luna Pool collaborative arrangements were
Vessel Operating Expenses. Vessel operating expenses increased by
Depreciation and Amortization. Depreciation and amortization increased by
Impairment Losses on Vessels. Impairment losses on vessels were
General and Administrative Costs. General and administrative costs increased by
Other Income. Other income was
Non-operating Results
Foreign Currency Exchange Gain/(Loss) on Senior Secured Bonds. Exchange gains and losses relate to non-cash movements on our 600 million Norwegian Kroner 2018 Bonds which are translated to U.S. Dollar at the prevailing exchange rate as of December 31, 2021. The foreign currency exchange gain of
Unrealized Losses on Non-designated Derivative Instruments. The unrealized losses on non-designated derivative instruments of
Interest Expense. Interest expense increased by
Income Taxes. Income taxes related to taxes on our subsidiaries incorporated in the United States of America, United Kingdom, Poland and Singapore and our consolidated variable interest entity (“VIE”), incorporated in Malta. For the three months ended December 31, 2021, we had a tax charge of
Share of Result of Equity Accounted Joint Ventures. The share of result of the Company’s
Non-Controlling Interest. We have entered into a sale and leaseback arrangement in November 2019 with a wholly-owned special purpose vehicle (“lessor SPV”) of a financial institution. 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 VIE into our financial results. Thus, the income attributable to the financial institution of
Results of Operations for the Year Ended December 31, 2020 Compared to Year Ended December 31, 2021
The following table compares our operating results for the years ended December 31, 2020 and 2021:
| Year Ended December 31, 2020 | Year Ended December 31, 2021 | Percentage Change | ||||||||
| (in thousands, except percentages) | ||||||||||
| Operating revenues | $ | 319,665 | $ | 352,922 | 10.4 | % | ||||
| Operating revenues – Unigas Pool | — | 24,104 | — | |||||||
| Operating revenues – Luna Pool collaborative arrangements | 12,830 | 26,555 | 107.0 | % | ||||||
| Total operating revenues | $ | 332,495 | $ | 403,581 | 21.4 | % | ||||
| Operating expenses: | ||||||||||
| Brokerage commissions | 5,095 | 4,802 | (5.8 | %) | ||||||
| Voyage expenses | 63,372 | 71,953 | 13.5 | % | ||||||
| Voyage expenses – Luna Pool collaborative arrangements | 12,418 | 20,913 | 68.4 | % | ||||||
| Vessel operating expenses | 109,503 | 131,583 | 20.2 | % | ||||||
| Depreciation and amortization | 76,681 | 88,486 | 15.4 | % | ||||||
| Impairment losses on vessels | — | 63,653 | — | |||||||
| General and administrative costs | 23,871 | 30,089 | 26.0 | % | ||||||
| Other income | (199 | ) | (367 | ) | 84.4 | % | ||||
| Total operating expenses | $ | 290,741 | $ | 411,112 | 41.4 | % | ||||
| Operating income / (loss) | $ | 41,754 | $ | (7,531 | ) | — | ||||
| Other income/(expense) | ||||||||||
| Foreign currency exchange (loss)/ gain on senior secured bonds | (1,931 | ) | 2,146 | — | ||||||
| Unrealized gain/(loss) on non-designated derivative instruments | 2,762 | (1,333 | ) | — | ||||||
| Interest expense | (41,080 | ) | (38,682 | ) | (5.8 | %) | ||||
| Loss on repayment of | (479 | ) | — | — | ||||||
| Write off of deferred financing costs | (155 | ) | — | — | ||||||
| Interest income | 408 | 302 | (26.0 | %) | ||||||
| Income/(loss) before income taxes and share of result of equity accounted joint ventures | $ | 1,279 | $ | (45,098 | ) | — | ||||
| Income taxes | (617 | ) | (1,690 | ) | 173.9 | % | ||||
| Share of result of equity accounted joint ventures | 651 | 11,147 | 1612.3 | % | ||||||
| Net income /(loss) | $ | 1,313 | $ | (35,641 | ) | — | ||||
| Net income attributable to non-controlling interest | (1,756 | ) | (1,550 | ) | (11.7 | %) | ||||
| Net loss attributable to stockholders of Navigator Holdings Ltd. | $ | (443 | ) | $ | (37,191 | ) | — | |||
Operating Revenues. Operating revenues, net of address commissions, increased by
- an increase in operating revenues of approximately
$15.8 million attributable to an increase in vessel available days of 841 days, or6.1% for the year ended December 31, 2021, compared to the year ended December 31, 2020. This increase in available days is primarily as a result of seven additional handysize vessels joining the fleet as part of the Ultragas transaction, less an additional 192 more drydocking days during the year ended December 31, 2021, compared to the year ended December 31, 2020. - an increase in operating revenues of approximately
$7.2 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately$22,145 per vessel per day ($673,575 per vessel per calendar month) for the year ended December 31, 2021, compared to an average of approximately$21,573 per vessel per day ($665,174 per vessel per calendar month) for the year ended December 31, 2020; - an increase in operating revenues of approximately
$1.7 million attributable to an increase in fleet utilization which rose to87.4% for the year ended December 31, 2021 compared to86.8% for the year ended December 31, 2020; and - an increase in operating revenues of approximately
$8.6 million primarily attributable to an increase in pass through voyage costs, associated with the additional vessels joining the fleet during the year ended December 31, 2021, compared to the year ended December 31, 2020;
The following table presents selected operating data for the years ended December 31, 2020 and 2021, which we believe are useful in understanding the basis for movements in operating revenues. It does not include our 10 owned smaller vessels in the independent commercially managed Unigas Pool or the five Pacific Gas owned vessels in our Luna Pool:
| Fleet Data: | Year Ended December 31, 2020 | Year Ended December 31, 2021 | |||||
| Weighted average number of vessels | 38.0 | 40.9 | |||||
| Ownership days | 13,908 | 14,941 | |||||
| Available days | 13,684 | 14,525 | |||||
| Operating days | 11,880 | 12,688 | |||||
| Fleet utilization | 86.8 | % | 87.4 | % | |||
| Average daily time charter equivalent rate (*) | $ | 21,573 | $ | 22,145 | |||
* Non-GAAP Financial Measure -Time charter equivalent: Time charter equivalent (“TCE”) rate 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 operating revenues, less any voyage expenses, by the number of operating days for the relevant period. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses, whereas for voyage charters, also known as spot market charters, we pay all voyage expenses. TCE rate 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., spot charters, time charters and contracts of affreightment) under which the vessels may be employed between the periods. We include average daily TCE rate, as we believe it provides additional meaningful information in conjunction with net operating revenues, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies.
Reconciliation of Operating Revenues to TCE rate
The following table represents a reconciliation of operating revenues to TCE rate. Operating revenues are the most directly comparable financial measure calculated in accordance with U.S. GAAP for the periods presented.
| Fleet Data: | Year Ended December 31, 2020 | Year Ended December 31, 2021 | |||||
| Operating revenues (excluding collaborative arrangements) | $ | 319,665 | $ | 352,922 | |||
| Voyage expenses (excluding collaborative arrangements) | 63,372 | 71,953 | |||||
| Operating revenues less Voyage expenses | $ | 256,293 | $ | 280,969 | |||
| Operating days | 11,880 | 12,688 | |||||
| Average daily time charter equivalent rate | $ | 21,573 | $ | 22,145 | |||
Operating Revenues – Unigas Pool. Operating revenues – Unigas Pool was
Operating Revenues – Luna Pool Collaborative Arrangements. Operating revenues – Luna Pool collaborative arrangements was
Brokerage Commissions. Brokerage commissions, which typically vary between
Voyage Expenses. Voyage expenses increased by
Voyage Expenses – Luna Pool Collaborative Arrangements. Voyage expenses – Luna Pool collaborative arrangements were
Vessel Operating Expenses. Vessel operating expenses increased by
Depreciation and Amortization. Depreciation and amortization increased by
Impairment Losses on Vessels. Impairment losses on vessels were
General and Administrative Costs. General and administrative costs increased by
Other Income. Other income was
Non-operating Results
Foreign Currency Exchange Gain/(Loss) on Senior Secured Bonds. Exchange gains and losses relate to non-cash movements on our 2018 Bonds which are denominated in Norwegian Kroner and translated to U.S. Dollar at the prevailing exchange rate as of December 31, 2021. The foreign currency exchange gain on translation of
Unrealized (Loss)/Gain on Non-designated Derivative Instruments. The unrealized loss of
Interest Expense. Interest expense decreased by
Loss on Repayment of
Write off of Deferred Financing Costs. The write off of deferred financing costs of
Income Taxes. Income tax relates to taxes on our subsidiaries incorporated in the United States of America, United Kingdom, Poland and Singapore and our consolidated VIE, incorporated in Malta. Our U.S. subsidiary is liable for taxes on the earnings from the Marine Export Terminal, two of our United Kingdom subsidiaries earn management and other fees from affiliates, and our Singaporean subsidiary earns interest from loans to our variable interest entity in Indonesia. The main corporate tax rates are
Share of Result of Equity Accounted Joint Ventures. The share of result of the Company’s
Non-Controlling Interest. We have entered into a sale and leaseback arrangement in November 2019 with a wholly-owned special purpose vehicle (“lessor SPV”) of a financial institution. While 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 VIE into our financial results. Thus, the income attributable to the financial institution of
Reconciliation of Non-GAAP Financial Measures
The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the three months and year ended December 31, 2020 and 2021:
| Three months ended | Year ended | ||||||||||||||
| December 31, 2020 | December 31, 2021 | December 31, 2020 | December 31, 2021 | ||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||
| Net (loss) / income | $ | 3,771 | $ | (46,583 | ) | $ | 1,313 | $ | (35,641 | ) | |||||
| Net interest expense | 9,030 | 10,563 | 41,306 | 38,380 | |||||||||||
| Income taxes | 161 | 909 | 617 | 1,690 | |||||||||||
| Depreciation and amortization | 19,140 | 25,686 | 76,681 | 88,486 | |||||||||||
| Impairment losses on vessels | — | 63,653 | — | 63,653 | |||||||||||
| EBITDA(1) | $ | 33,482 | $ | 54,228 | $ | 125,068 | $ | 156,568 | |||||||
| Foreign currency exchange (gain) / loss on senior secured bonds | 6,884 | (436 | ) | 1,931 | (2,146 | ) | |||||||||
| Unrealized loss / (gain) on non-designated derivative instruments | (8,378 | ) | 1,384 | (2,762 | ) | 1,333 | |||||||||
| Adjusted EBITDA(1) | $ | 31,988 | $ | 55,176 | $ | 124,237 | $ | 155,755 | |||||||
1 EBITDA and Adjusted EBITDA are not measurements prepared in accordance with U.S. GAAP (non-GAAP financial measures). EBITDA represents net income before net interest expense, income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA before foreign currency exchange gain or loss on senior secured bonds and unrealized gain or loss on non-designated derivative instruments. Management believes that EBITDA and Adjusted EBITDA are useful to investors in evaluating the operating performance of the Company. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to consolidated net income, cash generated from operations or any measure prepared in accordance with U.S. GAAP, and our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies. See the table above for a reconciliation of EBITDA and Adjusted EBITDA to net income / (loss), our most directly comparable U.S. GAAP financial measure.
Our Fleet
The following table sets forth our vessels as of March 10, 2022:
| Operating Vessel | Year Built | Vessel Size (cbm) | Employment Status | Current Cargo | 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 | January 2026 | |||||
| Ethylene/ethane capable semi-refrigerated handysize | ||||||||||
| Navigator Orion* | 2000 | 22,085 | Time Charter | Ethane | September 2022 | |||||
| Navigator Pluto* | 2000 | 22,085 | Spot Market | Ethane | — | |||||
| Navigator Saturn* | 2000 | 22,085 | Time Charter | Ethane | May 2022 | |||||
| Navigator Venus* | 2000 | 22,085 | Time Charter | LPG | April 2022 | |||||
| Navigator Atlas* | 2014 | 21,000 | Time Charter | LPG | March 2022 | |||||
| Navigator Europa* | 2014 | 21,000 | Spot Market | Ethane | — | |||||
| Navigator Oberon* | 2014 | 21,000 | Spot Market | Ethane | — | |||||
| Navigator Triton* | 2015 | 21,000 | Spot Market | Ethane | — | |||||
| Navigator Umbrio* | 2015 | 21,000 | Spot Market | Ethane | — | |||||
| Ethylene/ethane capable semi-refrigerated smaller size | ||||||||||
| 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 Magellan | 1998 | 20,700 | Spot Market | LPG | — | |||||
| Navigator Aries | 2008 | 20,750 | Time charter | LPG | January 2023 | |||||
| Navigator Capricorn | 2008 | 20,750 | Time charter | LPG | June 2022 | |||||
| Navigator Gemini | 2009 | 20,750 | Spot Market | Butadiene | — | |||||
| Navigator Pegasus | 2009 | 22,200 | Time charter | Propylene | August 2022 | |||||
| Navigator Phoenix | 2009 | 22,200 | Time charter | LPG | May 2022 | |||||
| Navigator Scorpio | 2009 | 20,750 | Spot market | LPG | — | |||||
| Navigator Taurus | 2009 | 20,750 | Spot market | — | — | |||||
| Navigator Virgo | 2009 | 20,750 | Time charter | LPG | April 2022 | |||||
| Navigator Leo | 2011 | 20,600 | Time charter | LPG | December 2023 | |||||
| Navigator Libra | 2012 | 20,600 | Time charter | LPG | December 2023 | |||||
| Atlantic Gas | 2014 | 22,000 | Spot market | — | — | |||||
| Adriatic Gas | 2015 | 22,000 | Spot market | Butadiene | — | |||||
| Balearic Gas | 2015 | 22,000 | Time charter | LPG | April 2022 | |||||
| Celtic Gas | 2015 | 22,000 | Spot market | LPG | — | |||||
| Navigator Centauri | 2015 | 21,000 | Time charter | LPG | May 2022 | |||||
| Navigator Ceres | 2015 | 21,000 | Time charter | LPG | June 2022 | |||||
| Navigator Ceto | 2016 | 21,000 | Time charter | LPG | June 2022 | |||||
| Navigator Copernico | 2016 | 21,000 | Time charter | LPG | June 2022 | |||||
| Bering Gas | 2016 | 22,000 | Spot market | Propylene | — | |||||
| Navigator Luga | 2017 | 22,000 | Time charter | LPG | June 2022 | |||||
| Navigator Yauza | 2017 | 22,000 | Time charter | LPG | June 2022 | |||||
| Arctic Gas | 2017 | 22,000 | Spot market | — | — | |||||
| Pacific Gas | 2017 | 22,000 | Spot market | Butadiene | — | |||||
| Semi-refrigerated smaller size | ||||||||||
| Happy Bird** | 1999 | 8,600 | Unigas Pool | — | — | |||||
| Happy Falcon** | 2002 | 3,770 | Unigas Pool | — | — | |||||
| Happy Condor** | 2008 | 9,000 | Unigas Pool | — | — | |||||
| Happy Pelican** | 2012 | 6,800 | Unigas Pool | — | — | |||||
| Happy Penguin** | 2013 | 6,800 | Unigas Pool | — | — | |||||
| Fully-refrigerated | ||||||||||
| Navigator Glory | 2010 | 22,500 | Time charter | Ammonia | May 2022 | |||||
| Navigator Grace | 2010 | 22,500 | Time charter | Ammonia | April 2022 | |||||
| Navigator Galaxy | 2011 | 22,500 | Time charter | Ammonia | December 2022 | |||||
| Navigator Genesis | 2011 | 22,500 | Time charter | Ammonia | April 2022 | |||||
| Navigator Global | 2011 | 22,500 | Time charter | LPG | April 2022 | |||||
| Navigator Gusto | 2011 | 22,500 | Spot market | — | — | |||||
| 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
Conference Call Details:
Tomorrow, Friday, March 11, 2022 at 9:00 A.M. ET, the Company’s management team will host a conference call to discuss the preliminary financial results.
Conference Call Details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (877) 553-9962 (US Toll Free Dial In), 0 (808) 238-0669 (UK Toll Free Dial In) or +44 (0) 2071 928592 (Standard International Dial In). Please quote “Navigator” to the operator.
Audio Webcast:
There will also be a live, and then archived, webcast of the conference call, available through the Company’s website (www.navigatorgas.com). To listen to the live and archived audio file, visit our website www.navigatorgas.com and click on Key Dates under our Investors Centre page. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Navigator Gas
Attention: Investor Relations Department - investorrelations@navigatorgas.com
London: 10 Bressenden Place, London, SW1E 5DH. Tel: +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
About Us
Navigator Holdings Ltd. is the owner and operator of the world’s largest fleet of handysize liquefied gas carriers and a global leader in the seaborne transportation of petrochemical gases, such as ethylene and ethane, liquefied petroleum gas (“LPG”) and ammonia and owns a
| Navigator Holdings Ltd. Consolidated Balance Sheets (Unaudited) | |||||||
| December 31, 2020 | December 31, 2021 | ||||||
| (in thousands, except share data) | |||||||
| Assets | |||||||
| Current assets | |||||||
| Cash, cash equivalents and restricted cash | $ | 59,271 | $ | 124,010 | |||
| Accounts receivable, net of allowance for credit losses of | 14,451 | 36,206 | |||||
| Accrued income | 20,073 | 3,344 | |||||
| Prepaid expenses and other current assets | 22,015 | 15,835 | |||||
| Bunkers and lubricant oils | 8,428 | 13,171 | |||||
| Insurance receivable | 447 | 7,265 | |||||
| Amounts due from related parties | 11,853 | 13,836 | |||||
| Total current assets | 136,538 | 213,667 | |||||
| Non-current assets | |||||||
| Vessels, net | 1,545,688 | 1,764,127 | |||||
| Asset held for sale | - | 26,033 | |||||
| Property, plant and equipment, net | 502 | 430 | |||||
| Intangible assets, net of accumulated amortization of | 277 | 400 | |||||
| Investment in equity accounted joint ventures | 148,665 | 147,963 | |||||
| Investment in associate companies | - | 1,152 | |||||
| Derivative assets | - | 579 | |||||
| Right-of-use asset for operating leases | 5,701 | 923 | |||||
| Prepaid expenses and other non-current assets | 2,037 | 452 | |||||
| Total non-current assets | 1,702,870 | 1,942,059 | |||||
| Total assets | $ | 1,839,408 | $ | 2,155,726 | |||
| Liabilities and stockholders’ equity | |||||||
| Current liabilities | |||||||
| Current portion of secured term loan facilities, net of deferred financing costs | $ | 65,663 | $ | 148,570 | |||
| Current portion of operating lease liabilities | 1,276 | 381 | |||||
| Accounts payable | 8,565 | 13,197 | |||||
| Accrued expenses and other liabilities | 16,488 | 21,255 | |||||
| Accrued interest | 3,398 | 5,211 | |||||
| Deferred income | 11,604 | 18,504 | |||||
| Amounts due to related parties | 229 | 224 | |||||
| Total current liabilities | 107,223 | 207,342 | |||||
| Non-current liabilities | |||||||
| Secured term loan and revolving credit facilities, net of current portion and deferred financing costs | 552,594 | 604,790 | |||||
| Senior secured bond, net of deferred financing costs | 69,580 | 67,688 | |||||
| Senior unsecured bond, net of deferred financing costs | 98,158 | 98,551 | |||||
| Derivative liabilities | 3,007 | 8,800 | |||||
| Operating lease liabilities, net of current portion | 5,232 | 522 | |||||
| Amounts due to related parties | 61,219 | 54,877 | |||||
| Total non-current liabilities | 789,790 | 835,228 | |||||
| Total Liabilities | 897,013 | 1,042,570 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity | |||||||
| Common stock—$.01 par value per share; 400,000,000 shares authorized; 77,180,429 shares issued and outstanding, (December 31, 2020: 55,893,618) | 559 | 772 | |||||
| Additional paid-in capital | 593,254 | 797,324 | |||||
| Accumulated other comprehensive loss | (245 | ) | (250 | ) | |||
| Retained earnings | 346,972 | 309,781 | |||||
| Equity hedging reserve | - | 2,124 | |||||
| Total Navigator Holdings Ltd. stockholders’ equity | 940,540 | 1,109,751 | |||||
| Non-controlling interest | 1,855 | 3,405 | |||||
| Total equity | 942,395 | 1,113,156 | |||||
| Total liabilities and equity | $ | 1,839,408 | $ | 2,155,726 | |||
| Navigator Holdings Ltd. Consolidated Statements of Operations (Unaudited) | |||||||||||||||
| Three months ended December 31, (in thousands except share data) | Year ended December 31, (in thousands except share data) | ||||||||||||||
| 2020 | 2021 | 2020 | 2021 | ||||||||||||
| Revenues | |||||||||||||||
| Operating revenues | $ | 82,926 | $ | 105,176 | $ | 319,665 | $ | 352,922 | |||||||
| Operating revenues – Unigas Pool | - | 15,949 | - | 24,104 | |||||||||||
| Operating revenues - Luna Pool collaborative arrangements | 4,496 | 8,265 | 12,830 | 26,555 | |||||||||||
| Total operating revenues | $ | 87,422 | $ | 129,390 | $ | 332,495 | $ | 403,581 | |||||||
| Expenses | |||||||||||||||
| Brokerage commissions | 1,315 | 1,472 | 5,095 | 4,802 | |||||||||||
| Voyage expenses | 16,516 | 21,873 | 63,372 | 71,953 | |||||||||||
| Voyage expenses - Luna Pool collaborative arrangements | 5,055 | 6,346 | 12,418 | 20,913 | |||||||||||
| Vessel operating expenses | 28,383 | 40,817 | 109,503 | 131,583 | |||||||||||
| Depreciation and amortization | 19,140 | 25,686 | 76,681 | 88,486 | |||||||||||
| Impairment losses on vessels | — | 63,653 | — | 63,653 | |||||||||||
| General and administrative costs | 6,329 | 10,264 | 23,871 | 30,089 | |||||||||||
| Other Income | (75 | ) | (109 | ) | (199 | ) | (367 | ) | |||||||
| Total operating expenses | 76,663 | 170,002 | 290,741 | 411,112 | |||||||||||
| Operating income/(loss) | 10,759 | (40,612 | ) | 41,754 | (7,531 | ) | |||||||||
| Other income/(expense) | |||||||||||||||
| Foreign currency exchange (loss)/gain on senior secured bonds | (6,884 | ) | 436 | (1,931 | ) | 2,146 | |||||||||
| Unrealized gain/(loss) on non-designated derivative instruments | 8,378 | (1,384 | ) | 2,762 | (1,333 | ) | |||||||||
| Interest expense | (9,071 | ) | (10,701 | ) | (41,080 | ) | (38,682 | ) | |||||||
| Loss on repayment of | — | — | (479 | ) | — | ||||||||||
| Write off of deferred financing costs | — | — | (155 | ) | — | ||||||||||
| Interest income | 41 | 138 | 408 | 302 | |||||||||||
| Income/(loss) before income taxes and share of result of equity accounted joint ventures | 3,223 | (52,123 | ) | 1,279 | (45,098 | ) | |||||||||
| Income taxes | (161 | ) | (909 | ) | (617 | ) | (1,690 | ) | |||||||
| Share of result of equity accounted joint ventures | 709 | 6,449 | 651 | 11,147 | |||||||||||
| Net income/(loss) | 3,771 | (46,583 | ) | 1,313 | (35,641 | ) | |||||||||
| Net income attributable to non-controlling interest | (405 | ) | (378 | ) | (1,756 | ) | (1,550 | ) | |||||||
| Net income/(loss) attributable to stockholders of Navigator Holdings Ltd. | $ | 3,366 | $ | (46,961 | ) | $ | (443 | ) | $ | (37,191 | ) | ||||
| Earnings/(loss) per share attributable to stockholders of Navigator Holdings Ltd.: | |||||||||||||||
| Basic and diluted: | $ | 0.06 | $ | (0.61 | ) | $ | (0.01 | ) | $ | (0.58 | ) | ||||
| Weighted average number of shares outstanding: | |||||||||||||||
| Basic: | 55,895,585 | 77,183,379 | 55,885,376 | 64,669,567 | |||||||||||
| Diluted: | 56,235,521 | 77,183,379 | 55,885,376 | 64,669,567 | |||||||||||
| Navigator Holdings Ltd. Consolidated Statements of Cash Flows (Unaudited) | |||||||
| Year ended December 31, 2020 (in thousands) | Year ended December 31, 2021 (in thousands) | ||||||
| Cash flows from operating activities | |||||||
| Net (loss)/income | $ | 1,313 | $ | (35,641 | ) | ||
| Adjustments to reconcile net (loss)/income to net cash provided by operating activities | |||||||
| Unrealized (gain)/loss on non-designated derivative instruments | (2,762 | ) | 1,327 | ||||
| Depreciation and amortization | 76,681 | 88,486 | |||||
| Payment of drydocking costs | (10,192 | ) | (19,944 | ) | |||
| Amortization of share-based compensation | 1,245 | 1,372 | |||||
| Amortization of deferred financing costs | 4,654 | 3,671 | |||||
| Share of result of equity accounted joint ventures | (651 | ) | (11,147 | ) | |||
| Call option premium on redemption of | 236 | — | |||||
| Insurance claim receivable | (975 | ) | (3,602 | ) | |||
| Unrealized foreign exchange losses/(gain) on senior secured bonds | 1,931 | (2,146 | ) | ||||
| Other unrealized foreign exchange gains | 80 | (635 | ) | ||||
| Impairment losses on vessels | — | 63,653 | |||||
| Changes in operating assets and liabilities | — | — | |||||
| Accounts receivable | 8,860 | (12,175 | ) | ||||
| Bunkers and lubricant oils | 1,218 | (2,703 | ) | ||||
| Accrued income, prepaid expenses and other current assets | (20,772 | ) | 39,541 | ||||
| Accounts payable, accrued interest, accrued expenses and other liabilities | (4,118 | ) | 6,043 | ||||
| Amounts from related parties | (12,075 | ) | (13,512 | ) | |||
| Net cash provided by operating activities | 44,673 | 102,588 | |||||
| Cash flows from investing activities | |||||||
| Additions to vessels and equipment | (2,233 | ) | (3,150 | ) | |||
| Investment in equity accounted joint ventures | (17,354 | ) | (4,000 | ) | |||
| Distributions from equity accounted joint ventures | — | 16,184 | |||||
| Purchase of other property, plant and equipment and intangibles | (31 | ) | (390 | ) | |||
| Cash acquired from investment in Ultragas | 17,477 | ||||||
| Net proceeds from sale of vessel | — | 4,530 | |||||
| Insurance recoveries | 3,467 | (2,406 | ) | ||||
| Net cash used in investing activities | (16,151 | ) | 28,245 | ||||
| Cash flows from financing activities | |||||||
| Proceeds from secured term loan facilities and revolving credit facilities | 51,000 | 18,000 | |||||
| Proceeds from revolving loan facility | 185,000 | — | |||||
| Issuance of | 100,000 | — | |||||
| Issuance cost of senior secured bonds | (141 | ) | — | ||||
| Issuance cost of | (1,963 | ) | — | ||||
| Issuance cost of refinancing of vessel | (18 | ) | — | ||||
| Direct financing cost of secured term loan and revolving credit facilities | — | (26 | ) | ||||
| Direct financing cost of terminal credit facility | (72 | ) | — | ||||
| Direct financing cost of revolving credit facility | (1,939 | ) | — | ||||
| Repayment of | (100,236 | ) | — | ||||
| Repayment of secured term loan facilities and revolving credit facilities | (260,167 | ) | (77,726 | ) | |||
| Repayment of refinancing of vessel to related parties | (6,845 | ) | (6,342 | ) | |||
| Net cash provided by/(used in) financing activities | (35,381 | ) | (66,094 | ) | |||
| Net (decrease)/increase in cash, cash equivalents and restricted cash | (6,859 | ) | 64,739 | ||||
| Cash, cash equivalents and restricted cash at beginning of year | 66,130 | 59,271 | |||||
| Cash, cash equivalents and restricted cash at end of year | $ | 59,271 | $ | 124,010 | |||
| Supplemental Information | |||||||
| Total interest paid during the year, net of amounts capitalized | $ | 37,619 | $ | 34,588 | |||
| Total tax paid during the year | $ | 330 | $ | 637 | |||
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto, including our financial forecast. In addition, we and our representatives may from time to time make other oral or written statements that are also forward-looking statements. Such statements include, in particular, statements about our plans, strategies, business prospects, changes and trends in our business and the markets in which we operate as described in this press release. In some cases, you can identify the forward-looking statements by the use of words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,” “believe,” “estimate,” “predict,” “propose,” “potential,” “continue,” “scheduled,” or the negative of these terms or other comparable terminology. Forward-looking statements appear in a number of places in this press release. These risks and uncertainties include but are not limited to:
- the completion of the Company’s year close procedures and further financial review with respect to the Company’s financial statements for the year ended December 30, 2021, and other developments that may arise between now and the disclosure of the Company’s final results for the year;
- global epidemics or other health crises such as the outbreak of COVID-19, including its impact on our business;
- future operating or financial results;
- pending acquisitions, business strategy and expected capital spending;
- operating expenses, availability of crew, number of off-hire days, drydocking requirements and insurance costs;
- fluctuations in currencies and interest rates;
- general market conditions and shipping market trends, including charter rates and factors affecting supply and demand;
- our ability to continue to comply with all our debt covenants;
- our financial condition and liquidity, including our ability to refinance our indebtedness as it matures or obtain additional financing in the future to fund capital expenditures, acquisitions and other corporate activities;
- estimated future capital expenditures needed to preserve our capital base;
- our expectations about the availability of vessels to purchase or the useful lives of our vessels;
- our continued ability to enter into long-term, fixed-rate time charters with our customers;
- the availability and cost of low sulfur fuel oil compliant with the International Maritime Organization sulfur emission limit reductions, generally referred to as “IMO 2020,” which took effect January 1, 2020;
- our vessels engaging in ship to ship transfers of LPG or petrochemical cargoes which may ultimately be discharged in sanctioned areas or to sanctioned individuals without our knowledge;
- the impact of the recent Russian invasion of Ukraine
- changes in governmental rules and regulations or actions taken by regulatory authorities;
- potential liability from future litigation;
- our expectations relating to the payment of dividends;
- our ability to successfully remediate material weaknesses in our internal control over financial reporting and our disclosure controls and procedures;
- our expectation regarding providing in-house technical management for certain vessels in our fleet and our success in providing such in-house technical management;
- our expectations regarding the financial success of the Marine Export Terminal and our related Export Terminal Joint Venture;
- our expectations regarding the integration, profitability and success of the vessels and businesses acquired in the Ultragas transaction; and
- other factors detailed from time to time in other periodic reports we file with the Securities and Exchange Commission.
All forward-looking statements included in this press release are made only as of the date of this press release. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of our common stock.
FAQ
What was the revenue of NVGS for Q4 2021?
How did Navigator Holdings Ltd.'s net income change in Q4 2021?
What was the adjusted EBITDA for NVGS in Q4 2021?
How much did the fleet utilization improve in Q4 2021 for NVGS?
What are the implications of the impairment losses reported by NVGS?
