Navigator Holdings Ltd. Preliminary Fourth Quarter and Financial Year 2022 Results (Unaudited)
Navigator Holdings Ltd. (NYSE: NVGS) reported operating revenue of $123.3 million for Q4 2022, a decline from $132.3 million in Q4 2021. For the full year, revenue rose to $473.8 million from $406.5 million in 2021. Net income shifted to $10.3 million (EPS: $0.13) compared to a net loss of $40.2 million (loss per share: $0.53) in the prior year. Fleet utilization increased to 94.1%, while adjusted EBITDA remained consistent at $59.4 million. The company has initiated a share repurchase program, acquiring 2 million shares for $25.4 million. Furthermore, an expansion project at their Ethylene Export Terminal is expected to increase throughput capacity significantly by 2024.
- Net income of $10.3 million for Q4 2022, a significant improvement compared to a net loss of $40.2 million in Q4 2021.
- Operating revenue increased for the full year 2022 to $473.8 million, up 16.6% from $406.5 million in 2021.
- Adjusted EBITDA of $59.4 million in Q4 2022, showing stability compared to $59.7 million in Q4 2021.
- Fleet utilization improved to 94.1% in Q4 2022 from 91.4% in Q4 2021.
- Share repurchase program initiated with $25.4 million spent on buying back 2 million shares.
- Operating revenue for Q4 2022 decreased to $123.3 million from $132.3 million in Q4 2021, a drop of 6.8%.
- Increase in vessel operating expenses by 8.7% to $43.9 million in Q4 2022.
- Depreciation and amortization expenses rose by 19% to $30.6 million in Q4 2022.
Highlights
- Navigator Holdings Ltd. (the “Company”, “we”, “our” and “us”) (NYSE: NVGS) reported operating revenue of
$123.3 million for the three months ended December 31, 2022, compared to$132.3 million for the three months ended December 31, 2021. Operating revenue for the year ended December 31, 2022, amounted to$473.8 million , compared to$406.5 million for the year ended December 31, 2021. - Net Income was
$10.3 million (earnings per share of$0.13) for the three months ended December 31, 2022, compared to a net loss of$40.2 million (loss per share of$0.53) for the three months ended December 31, 2021. - Adjusted EBITDA(1) was
$59.4 million for the three months ended December 31, 2022, compared to$59.7 million for the three months ended December 31, 2021. Adjusted EBITDA for the year ended December 31, 2022, amounted to$212.7 million , compared to$160.3 million for the year ended December 31, 2021. - Fleet utilization was
94.1% for the three months ended December 31, 2022, compared to91.4% for the three months ended December 31, 2021. - The ethylene export marine terminal at Morgan’s Point, Texas on the Houston Ship Channel (the “Ethylene Export Terminal”) had throughput volumes of approximately 262,835 tons for the three months ended December 31, 2022, compared to 234,024 tons for the three months ended December 31, 2021. The total ethylene throughput volumes for the year ended December 31, 2022, were 987,529 tons.
- On November 23, 2022, the Company sold its oldest vessel, Navigator Magellan, a 1998 built 22,000 cbm LPG carrier to a third party for
$12.7 million . - On December 20, 2022, the Company’s joint venture (the “Navigator Greater Bay Joint Venture”) with Greater Bay Gas Co. Ltd. (“Greater Bay”) acquired a 17,000 cbm, 2018-built ethylene capable liquefied gas carrier, Navigator Luna, for
$42.25 million . The vessel was financed by borrowing$27.5 million , or65% , under a term loan facility, and the Company financed its share of the balance from cash on hand. - On March 9, 2023, the Company agreed, together with our joint venture partner, to a capital project to expand the Ethylene Export Terminal (the “Expansion Project”) increasing the export capacity to at least 1.5 million tons and up to three million tons per year. The total capital contributions required from us to the joint venture that owns the Ethylene Export Terminal (the “Export Terminal Joint Venture”) for the Expansion Project are expected to be approximately
$120 -130 million. - The Company initiated a share repurchase program in December 2022. As of March 10, 2023, the Company had purchased and cancelled two million common shares for a total amount of
$25.4 million (an average price of$12.57 per share). - On March 20, 2023, the Company entered into a new
$200.0 million senior secured term loan facility to refinance two existing loan facilities that were due to mature during 2023. The new loan will mature in 2029, and will enable the Company to borrow an additional approx.$65.0 million for general corporate purposes.
NEW YORK and LONDON, March 20, 2023 (GLOBE NEWSWIRE) -- The Company’s financial information for the quarter and year ended December 31, 2022, 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, 2022, is finalized.
Share Repurchase Program
On October 18, 2022, the Company announced the Board’s authorization for a share repurchase program of up to
Russian Invasion of Ukraine
In February 2022, the Russian attack on Ukraine started. The ongoing conflict may lead to further regional and international conflicts or armed action. The conflict could disrupt supply chains, as we have seen particularly in the availability of ammonia, which has resulted in ammonia being sourced further away from its consumers, thus increasing the demand for our vessels carrying ammonia on longer voyages relative to prior to the invasion. The conflict could cause instability in the global economy and could result in the imposition of further economic sanctions by the United States and the European Union against Russia, which could spread to other nations, including potentially China. While much uncertainty remains regarding the future global impact of the invasion, the tensions could adversely affect our business, financial condition, results of operations and cash flows.
We currently have two charter parties with a Russian counterparty that were entered into in 2012 and which expire in December 2023. These charter parties cannot be prematurely terminated without the consent of both parties unless a counterparty was to become a sanctioned entity or our dealings with that counterparty were to be otherwise prohibited by sanctions, which would render the charters void. As of the date hereunder, the counterparty remains unsanctioned.
We employ many Russian and Ukrainian officers on board our vessels, albeit at a reduced number compared to prior to the Ukrainian conflict, and many of such officers are employed aboard the same vessels. Although we have only experienced solidarity among our officers on board our vessels and we have not experienced any operational issues with such officers, we continue to monitor this situation closely, and there may be governmental restrictions, logistical challenges or an inability to employ either or both nationalities in the future.
Ethylene Export Terminal
The Ethylene Export Terminal commenced full operations in January 2021 with an export capacity of one million tons of ethylene throughput through the terminal annually. For the year ended December 31, 2022, the Ethylene Export Terminal had a throughput of 987,529 metric tons of ethylene, compared to 628,257 tons during 2021. We expect that throughput levels achieved in 2022 would continue into the future. We, together with our joint venture partner have agreed to a capital project to expand the Ethylene Export Terminal (the “Expansion Project”), increasing the export capacity from approximately one million tons per year to at least 1.5 million tons and up to three million tons per year. . Long lead items have already been ordered and construction is expected to be completed in the second half of 2024. The total capital contributions required from us to the joint venture that owns the Ethylene Export Terminal (the “Export Terminal Joint Venture”) for the Expansion Project are expected to be approximately
Shipping Trends
The Company’s vessel utilization through 2022 was in line with expectations, with higher seasonal demand from the LPG segment at the beginning of 2022, combined with long haul, intercontinental ethylene voyages to Asia from the U.S, keeping utilization relatively high during the first quarter of 2022, before the summer months during which less demand is anticipated. Vessel utilization increased again in the fourth quarter of 2022 to approximately
According to broker reports, the handysized semi-refrigerated 12 month market assessment rose in 2022 by
Throughput in the Ethylene Export Terminal achieved the approximate nameplate capacity at 987,500 metric tons during 2022, averaging approximately 83,000 metric tons of ethylene throughput per month. The primary destination of the U.S. cargo was to Europe from February 2022 to September 2022, resulting in shorter voyages and less ton mile for much of the 2022 year, which had the effect of reduced demand for ethylene capable vessels, softening the market, particularly through the summer months of 2022, lower utilization and lower rates. However, the ethylene price arbitrage between the U.S. and Asia opened later in 2022 year, resulting in the majority of terminal output being transported on longer voyages to Asia. A roundtrip voyage between Houston and Asia is typically approximately 75 to 80 days, compared to approximately 35 days for a roundtrip between Houston and Europe.
Vessel utilization also increased during 2022 as result of the geopolitical conflict around Ukraine. The Port of Yuzhne (Yuzhnyy) in Ukraine is the provider of approximately
At December 31, 2022 the newbuild orderbook for handysize vessels stood at two vessels, which constitutes approximately
You should consider the following factors when evaluating our historical financial performance and assessing our future prospects:
- We have been significantly increasing the size of our fleet. In August 2021, the Company entered into a transaction (the “Ultragas Transaction”) with Naviera Ultranav Limitada (“Ultranav”) to combine the fleet and business activities of Ultragas ApS (“Ultragas”) with Navigator, by acquiring two entities, Othello Shipping Company S.A. with its then 18 wholly-owned vessel owning entities and Ultragas, (renamed Navigator Gas Denmark Aps,), the vessels’ operator and with its subsidiary Ultraship, (renamed Navigator Shipmanagement Denmark ApS,), the in-house technical manager and associated entities UltraShip Crewing and Unigas Intl B.V. and the Unigas pool. The acquired fleet comprised:
- seven modern 22,000cbm handysize semi-refrigerated vessels;
- five smaller 12,000cbm ethylene vessels and six gas carriers in the 3,770-9,000 cbm range, two of which were subsequently sold, and eight of which are ethylene capable. The existing nine vessels are commercially managed by the Unigas Pool.
- seven modern 22,000cbm handysize semi-refrigerated vessels;
- We will have different financing arrangements. Our current financing arrangements may not be representative of our historical arrangements or the arrangements we will enter into in the future. We may amend our existing credit facilities or enter into other financing arrangements.
- In August 2021, as part of the Ultragas Transaction, the Company assumed the loan facilities relating to the vessels acquired, consisting of five bank loans, secured on a total of 13 of the 18 vessels acquired.
- In December 2022, the Company entered into a new
$151.3 million term credit facility to part finance the vessels acquired or expected to be acquired by the Navigator Greater Bay Joint Venture. As of December 31, 2022, we had drawn down$27.5 million , with a further$27.8 million drawn in the first quarter of 2023, coinciding with the joint venture’s acquisition of a second Greater Bay vessel. - In December 2022, the Company repaid in full the NOK 600 million senior secured bonds (with an early redemption premium of
1.79% ). The bonds incurred interest at NIBOR plus6% .
- In August 2021, as part of the Ultragas Transaction, the Company assumed the loan facilities relating to the vessels acquired, consisting of five bank loans, secured on a total of 13 of the 18 vessels acquired.
- Our results are affected by fluctuations in the fair value of our derivative instruments. The change in the fair value of our derivative instruments is included in our net income, which has fluctuated significantly in 2022 as forward interest rates have increased significantly.
Results of Operations for the Three Months Ended December 31, 2022, Compared to the Three Months Ended December 31, 2021 (Unaudited)
The following table compares our operating results for the three months ended December 31, 2022, and 2021:
| Three Months Ended December 31, 2021 | Three Months Ended December 31, 2022 | Percentage Change | |||||
| (in thousands, except percentages) | |||||||
| Operating revenues | $ | 105,176 | $ | 105,115 | ( | ||
| Operating revenues – Unigas Pool | 18,849 | 11,837 | ( | ||||
| Operating revenues – Luna Pool collaborative arrangements | 8,265 | 6,333 | ( | ||||
| Total operating revenues | $ | 132,290 | $ | 123,285 | ( | ||
| Operating expenses: | |||||||
| Brokerage commissions | 1,472 | 1,494 | |||||
| Voyage expenses | 21,873 | 16,865 | ( | ||||
| Voyage expenses – Luna Pool collaborative arrangements | 6,346 | 5,533 | ( | ||||
| Vessel operating expenses | 40,417 | 43,924 | |||||
| Depreciation and amortization | 25,686 | 30,559 | |||||
| Impairment losses on vessels | 63,581 | — | — | ||||
| Profit from sale of vessels | — | (4,363) | — | ||||
| General and administrative costs | 9,055 | 8,389 | ( | ||||
| Other income | (109) | (105) | ( | ||||
| Total operating expenses | $ | 168,321 | $ | 102,296 | ( | ||
| Operating income / (loss) | $ | (36,031) | $ | 20,989 | — | ||
| Other income/(expense) | |||||||
| Foreign currency exchange gain/(loss) on senior secured bonds | 436 | (5,969) | — | ||||
| Realized gain on cross currency interest rate swap | — | 6,888 | — | ||||
| Unrealized gain/(loss) on non-designated derivative instruments | 740 | (471) | — | ||||
| Interest expense | (10,701) | (13,983) | |||||
| Loss on repayment of senior bonds | — | (1,102) | — | ||||
| Write off of deferred financing costs | — | (212) | — | ||||
| Interest income | 138 | 713 | |||||
| Income/(loss) before income taxes and share of result of equity method investments | $ | (45,418) | $ | 6,853 | — | ||
| Income taxes | (1,188) | (4,459) | |||||
| Share of result of equity method investments | 6,449 | 7,861 | |||||
| Net income /(loss) | $ | (40,157) | $ | 10,255 | — | ||
| Net income attributable to non-controlling interests | (576) | (287) | ( | ||||
| Net income/(loss) attributable to stockholders of Navigator Holdings Ltd. | $ | (40,733) | $ | 9,968 | — | ||
Operating Revenues. Operating revenues, net of address commissions, was
- a decrease in operating revenues of approximately
$5.0 million , primarily as a result of a decrease in pass through voyage costs for the three months ended December 31, 2022, compared to the three months ended December 31, 2021. This decrease is due to a greater percentage of our vessels being on time charters, relative to voyage charters, during the three months ended December 31, 2022, compared to the three months ended December 31, 2021; - a decrease in operating revenues of approximately
$1.7 million attributable to a decrease in vessel available days of 84 days, or2.1% for the three months ended December 31, 2022, compared to the three months ended December 31, 2021; - an increase in operating revenues of approximately
$4.0 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of approximately$718,469 per vessel per calendar month ($23,621 per day) for the three months ended December 31, 2022, compared to an average of approximately$684,278 per vessel per calendar month ($22,497 per day) for the three months ended December 31, 2021; and - an increase in operating revenues of approximately
$2.6 million attributable to an increase in fleet utilization which rose to94.1% for the three months ended December 31, 2022, compared to91.4% for the three months ended December 31, 2021.
The following table presents selected operating data for the three months ended December 31, 2021, and 2022, which we believe are useful in understanding the basis for movement in our operating revenues. It does not include our nine owned smaller vessels in the independent commercially managed Unigas Pool or the four vessels in the Luna Pool owned by Pacific Gas as of December 31, 2022.
| Three Months Ended December 31, 2021 | Three Months Ended December 31, 2022 | ||||
| Fleet Data: | |||||
| Weighted average number of vessels | 45.0 | 43.7 | |||
| Ownership days | 4,140 | 4,021 | |||
| Available days | 4,052 | 3,968 | |||
| Earning days | 3,703 | 3,736 | |||
| Fleet utilization | |||||
| Average daily time charter equivalent rate (*) | $ | 22,497 | $ | 23,621 | |
| * | 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 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 rates exclude the effects of the collaborative arrangements, as earning days and fleet utilization, on which TCE rates are based, are 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 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 the 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 presents 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, 2021 | Three Months Ended December 31, 2022 | ||||
| (in thousands, except earning days and average daily time charter equivalent rate) | |||||
| Fleet Data: | |||||
| Operating revenues (excluding collaborative arrangements) | $ | 105,176 | $ | 105,115 | |
| Voyage expenses (excluding collaborative arrangements) | 21,873 | 16,865 | |||
| Operating revenues less Voyage expenses | 83,303 | 88,250 | |||
| Earning days | 3,703 | 3,736 | |||
| Average daily time charter equivalent rate | $ | 22,497 | $ | 23,621 | |
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 were
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
Vessel Operating Expenses. Vessel operating expenses increased by
Depreciation and Amortization. Depreciation and amortization increased by
Impairment Losses on Vessels. No impairment was incurred for the three months December 31, 2022 compared to impairment losses on vessels of
General and Administrative Costs. General and administrative costs decreased by
Other Income. Other income was
Non-operating Results
Foreign Currency Exchange Gain/(Loss) on Senior Secured Bonds. Exchange gains and losses relate to movements on our 2018 Bonds which are denominated in Norwegian Kroner. The foreign currency exchange loss on translation of
Realized Gain on Cross Currency Interest Rate Swap. The realized gain of
Unrealized Gains/(losses) on Non-designated Derivative Instruments. The unrealized loss on non-designated derivative instruments of
Interest Expense. Interest expense increased by
Loss on repayment of senior bonds. In connection with the redemption of the 2018 NOK Bonds, pursuant to which we redeemed all of the outstanding principal amount on December 23, 2022, there was
Write off of Deferred Financing Costs. The write off of deferred financing costs of
Income Taxes. Income taxes relate to taxes on our subsidiaries incorporated in the United States of America, for the earnings from the Ethylene Export Terminal; in the United Kingdom and Poland for management and other fees from affiliates; in Denmark, for Danish tonnage tax, in Singapore for interest earned from loans to our variable interest entity in Indonesia; and our consolidated variable interest entity (“VIE”), incorporated in Malta. For the three months ended December 31, 2022, 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. The net income attributable to the financial institution of
Results of Operations for the Year Ended December 31, 2021 Compared to the Year Ended December 31, 2022 (Unaudited)
The following table compares our operating results for the years ended December 31, 2021 and 2022:
| Year Ended December 31, 2021 | Year Ended December 31, 2022 | Percentage Change | |||||
| (in thousands, except percentages) | |||||||
| Operating revenues | $ | 352,922 | $ | 405,346 | |||
| Operating revenues – Unigas Pool | 27,004 | 46,345 | |||||
| Operating revenues – Luna Pool collaborative arrangements | 26,555 | 22,101 | ( | ||||
| Total operating revenues | $ | 406,481 | $ | 473,792 | |||
| Operating expenses: | |||||||
| Brokerage commissions | 4,802 | 5,900 | |||||
| Voyage expenses | 71,953 | 78,674 | |||||
| Voyage expenses – Luna Pool collaborative arrangements | 20,913 | 20,716 | ( | ||||
| Vessel operating expenses | 131,183 | 159,266 | |||||
| Depreciation and amortization | 88,486 | 126,220 | |||||
| Impairment losses on vessels | 63,581 | — | — | ||||
| Profit from sale of vessels | — | (4,721) | — | ||||
| General and administrative costs | 28,881 | 27,439 | ( | ||||
| Other income | (367) | (364) | ( | ||||
| Total operating expenses | $ | 409,432 | $ | 413,130 | |||
| Operating income / (loss) | $ | (2,951) | $ | 60,662 | — | ||
| Other income/(expense) | |||||||
| Foreign currency exchange gain on senior secured bonds | 2,146 | 6,589 | |||||
| Realized loss on cross currency interest rate swap | — | (6,270) | — | ||||
| Unrealized gain on non-designated derivative instruments | 791 | 25,124 | |||||
| Interest expense | (38,682) | (50,840) | |||||
| Loss on repayment of senior bonds | — | (1,102) | — | ||||
| Write off of deferred financing costs | — | (212) | — | ||||
| Interest income | 302 | 1,082 | |||||
| Income/(loss) before income taxes and share of result of equity method investments | $ | (38,394) | $ | 35,033 | — | ||
| Income taxes | (1,969) | (5,949) | |||||
| Share of results of equity method investments | 11,147 | 25,794 | |||||
| Net income /(loss) | $ | (29,216) | $ | 54,878 | — | ||
| Net income attributable to non-controlling interests | (1,748) | (1,405) | ( | ||||
| Net income/(loss) attributable to stockholders of Navigator Holdings Ltd. | $ | (30,964) | $ | 53,473 | — | ||
Operating Revenues. Operating revenues, net of address commissions, increased by
- an increase in operating revenues of approximately
$23.5 million attributable to an increase in vessel available days of 1,216 days, or8.4% for the year ended December 31, 2022, compared to the year ended December 31, 2021. This increase in available days is primarily as a result of seven additional acquired handysize vessels as part of the Ultragas Transaction being part of the fleet for the twelve months ended December 31, 2022, compared to five months for the year ended December 31, 2021;
- an increase in operating revenues of approximately
$16.1 million attributable to an increase in average monthly time charter equivalent rates, which increased to an average of$23,317 per vessel per day ($709,236 per vessel per calendar month) for the year ended December 31, 2022, compared 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;
- an increase in operating revenues of approximately
$6.1 million attributable to an increase in fleet utilization which rose to89.0% for the year ended December 31, 2022, compared to87.4% for the year ended December 31, 2021; and
- an increase in operating revenues of approximately
$6.7 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, 2022, compared to the year ended December 31, 2021.
The following table presents selected operating data for the years ended December 31, 2021 and 2022, which we believe are useful in understanding the basis for movements in operating revenues. It does not include our nine owned smaller vessels in the independent commercially managed Unigas Pool or the four Pacific Gas owned vessels in our Luna Pool as of December 31, 2022:
| Fleet Data: | Year Ended December 31, 2021 | Year Ended December 31, 2022 | |||
| Weighted average number of vessels | 40.9 | 43.9 | |||
| Ownership days | 14,941 | 16,047 | |||
| Available days | 14,525 | 15,741 | |||
| Earning days | 12,688 | 14,010 | |||
| Fleet utilization | |||||
| Average daily time charter equivalent rate (*) | $ | 22,145 | $ | 23,317 | |
| * | 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 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 rates exclude the effects of the collaborative arrangements, as earning days and fleet utilization, on which TCE rates are based, are 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 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 the 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 presents 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, 2021 | Year Ended December 31, 2022 | |||
| Operating revenues (excluding collaborative arrangements) (in thousands) | $ | 352,922 | $ | 405,346 | |
| Voyage expenses (excluding collaborative arrangements) (in thousands) | 71,953 | 78,674 | |||
| Operating revenues less Voyage expenses (in thousands) | $ | 280,969 | $ | 326,672 | |
| Earning days | 12,688 | 14,010 | |||
| Average daily time charter equivalent rate | $ | 22,145 | $ | 23,317 | |
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. There were no impairment losses on vessels for the year ended December 31, 2022, compared to
General and Administrative Costs. General and administrative costs decreased by
Other Income. Other income was
Non-operating Results
Foreign Currency Exchange Gain on Senior Secured Bonds. Exchange gains relate to movements on our 2018 Bonds which are denominated in Norwegian Kroner. The foreign currency exchange gain on translation of
Realized Loss on Cross Currency Interest Rate Swap. The realized loss of
Unrealized Gain on Non-designated Derivative Instruments. The unrealized gain of
Interest Expense. Interest expense increased by
Loss on repayment of senior bonds. In connection with the redemption of our 2018 Bonds, pursuant to which we redeemed all of the outstanding principal amount on December 23, 2022, there was
Write off of Deferred Financing Costs. The write off of deferred financing costs of
Income Taxes. For the year ended December 31, 2022, we incurred taxes of
Share of Result of Equity Method Investments. The share of result of the Company’s
Non-Controlling Interest. We have entered into a sale and leaseback arrangement in November 2019 with the 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 VIE into our financial results. The net income attributable to the financial institution of
We own a
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, 2021 and 2022:
| Three months ended | Year ended | ||||||||||
| December 31, 2021 | December 31, 2022 | December 31, 2021 | December 31, 2022 | ||||||||
| (in thousands) | (in thousands) | ||||||||||
| Net income/(loss) | $ | (40,157) | $ | 10,255 | $ | (29,216) | $ | 54,878 | |||
| Net interest expense | 10,563 | 13,270 | 38,380 | 49,758 | |||||||
| Income taxes | 1,188 | 4,459 | 1,969 | 5,949 | |||||||
| Depreciation and amortization | 25,686 | 30,559 | 88,486 | 126,220 | |||||||
| EBITDA (1) | $ | (2,720) | $ | 58,543 | $ | 99,620 | $ | 236,805 | |||
| Foreign currency exchange (gain)/loss on senior secured bonds | (436) | 5,969 | (2,146) | (6,589) | |||||||
| Realized (gain)/loss on the cross currency interest rate swap | — | (6,888) | — | 6,270 | |||||||
| Unrealized loss/(gain) on non-designated derivative instruments | (740) | 471 | (791) | (25,124) | |||||||
| Loss on repayment of bonds | — | 1,102 | — | 1,102 | |||||||
| Write off of deferred financing costs | — | 212 | — | 212 | |||||||
| Impairment losses on vessels | 63,581 | — | 63,581 | — | |||||||
| Adjusted EBITDA(1) | $ | 59,685 | $ | 59,409 | $ | 160,264 | $ | 212,676 | |||
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, depreciation and amortization. We define Adjusted EBITDA as EBITDA before foreign currency exchange gain or loss on senior secured bonds, realized gain or loss on cross currency interest rate swap, unrealized gain or loss on non-designated derivative instruments, loss on repayment of bonds, write off of deferred financing costs and vessel impairment losses. 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.
Our Fleet
The following table sets forth our vessels as of March 17, 2023:
| 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 Orion* | 2000 | 22,085 | Spot Market | — | — | |||||
| Navigator Pluto* | 2000 | 22,085 | Spot Market | Ethylene | — | |||||
| Navigator Saturn* | 2000 | 22,085 | Time Charter | LPG | March 2023 | |||||
| Navigator Venus* | 2000 | 22,085 | Spot Market | Ethylene | — | |||||
| Navigator Atlas* | 2014 | 21,000 | Spot Market | Ethylene | — | |||||
| Navigator Europa* | 2014 | 21,000 | Spot Market | Ethylene | — | |||||
| Navigator Oberon* | 2014 | 21,000 | Spot Market | Ethylene | — | |||||
| Navigator Triton* | 2015 | 21,000 | Spot Market | Ethylene | — | |||||
| Navigator Umbrio* | 2015 | 21,000 | Spot Market | Ethylene | — | |||||
| Navigator Luna* | 2018 | 17,000 | — | — | — | |||||
| Navigator Solar* | 2018 | 17,000 | 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 | January 2024 | |||||
| Navigator Capricorn | 2008 | 20,750 | Time Charter | LPG | April 2023 | |||||
| Navigator Gemini | 2009 | 20,750 | Time Charter | LPG | March 2023 | |||||
| Navigator Pegasus | 2009 | 22,200 | Time Charter | Propylene | June 2023 | |||||
| Navigator Phoenix | 2009 | 22,200 | Time Charter | Ammonia | August 2023 | |||||
| Navigator Scorpio | 2009 | 20,750 | Time Charter | LPG | January 2024 | |||||
| Navigator Taurus | 2009 | 20,750 | Time Charter | Ammonia | July 2023 | |||||
| Navigator Virgo | 2009 | 20,750 | Time Charter | LPG | April 2023 | |||||
| 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 | Time Charter | LPG | November 2023 | |||||
| Balearic Gas | 2015 | 22,000 | Spot Market | — | — | |||||
| Celtic Gas | 2015 | 22,000 | Time Charter | LPG | April 2023 | |||||
| Navigator Centauri | 2015 | 21,000 | Time Charter | LPG | May 2023 | |||||
| Navigator Ceres | 2015 | 21,000 | Time Charter | LPG | June 2023 | |||||
| Navigator Ceto | 2016 | 21,000 | Time Charter | LPG | May 2023 | |||||
| Navigator Copernico | 2016 | 21,000 | Time Charter | LPG | June 2023 | |||||
| Bering Gas | 2016 | 22,000 | Spot Market | Butadiene | — | |||||
| Navigator Luga | 2017 | 22,000 | Time Charter | LPG | July 2023 | |||||
| Navigator Yauza | 2017 | 22,000 | Time Charter | LPG | July 2023 | |||||
| Arctic Gas | 2017 | 22,000 | Time Charter | LPG | April 2023 | |||||
| Pacific Gas | 2017 | 22,000 | Time Charter | LPG | November 2023 | |||||
| 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 2024 | |||||
| Navigator Galaxy | 2011 | 22,500 | Time Charter | Ammonia | December 2023 | |||||
| Navigator Genesis | 2011 | 22,500 | Time Charter | Ammonia | January 2024 | |||||
| Navigator Global | 2011 | 22,500 | Time Charter | LPG | April 2023 | |||||
| Navigator Gusto | 2011 | 22,500 | Time Charter | Ammonia | April 2023 | |||||
| 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, Tuesday, March 21, 2023, at 10:00 A.M. E.D.T., the Company’s management team will host a Zoom conference call and slide presentation to discuss the preliminary financial results.
Zoom Conference Call Details
Participants should register for the conference call and slide presentation through the following link:
https://us06web.zoom.us/webinar/register/WN_Nr0RrRCYQg67exxUeqy5cw
Or join by phone:
| United States: | +1 929 205 6099 |
| United Kingdom: | +44 330 088 5830 |
| For a full list of US and international numbers available, please click on the link below: International numbers | |
Webinar ID: 885 2239 5790
Passcode: 474409
The conference call and slide presentation will be available for replay on Navigator’s website (www.navigatorgas.com) under Key Dates and All Reports in the Investors Centre section.
Navigator Gas:
Investor Relations investorrelations@navigatorgas.com or randy.giveans@navigatorgas.com
Houston: 1201 Fannin St, Suite 262, Houston, Texas USA 77002. Tel: +1 713 373 6197.
London: 10 Bressenden Place, London, SW1E 5DH. Tel +44 (0)20 7340 4850
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, 2021 | December 31, 2022 | ||||
| (in thousands, except share data) | |||||
| Assets | |||||
| Current assets | |||||
| Cash, cash equivalents and restricted cash | $ | 124,223 | $ | 153,194 | |
| Accounts receivable, net of allowance for credit losses | 31,906 | 14,319 | |||
| Accrued income | 6,150 | 13,294 | |||
| Prepaid expenses and other current assets | 16,293 | 21,151 | |||
| Bunkers and lubricant oils | 13,171 | 8,548 | |||
| Insurance receivable | 6,857 | 1,452 | |||
| Amounts due from related parties | 16,736 | 16,363 | |||
| Total current assets | 215,336 | 228,321 | |||
| Non-current assets | |||||
| Vessels, net | 1,763,252 | 1,692,494 | |||
| Assets held for sale | 25,944 | — | |||
| Property, plant and equipment, net | 330 | 198 | |||
| Intangible assets, net of accumulated amortization of | 400 | 239 | |||
| Equity method investments | 150,209 | 148,534 | |||
| Derivative assets | 579 | 21,955 | |||
| Right-of-use asset for operating leases | 923 | 3,625 | |||
| Prepaid expenses and other non- current assets | 452 | 1,372 | |||
| Total non-current assets | 1,942,089 | 1,868,417 | |||
| Total assets | $ | 2,157,425 | $ | 2,096,738 | |
| Liabilities and stockholders’ equity | |||||
| Current liabilities | |||||
| Current portion of secured term loan facilities, net of deferred financing costs | $ | 148,570 | $ | 209,833 | |
| Current portion of operating lease liabilities | 381 | 219 | |||
| Accounts payable | 11,600 | 7,773 | |||
| Accrued expenses and other liabilities | 20,247 | 24,866 | |||
| Accrued interest | 5,211 | 4,211 | |||
| Deferred income | 18,510 | 23,108 | |||
| Amounts due to related parties | 224 | 595 | |||
| Total current liabilities | 204,743 | 270,605 | |||
| Non-current liabilities | |||||
| Secured term loan facilities and revolving credit facilities, net of current portion and deferred financing costs | 604,790 | 497,514 | |||
| Senior secured bond, net of deferred financing costs | 67,688 | — | |||
| Senior unsecured bond, net of deferred financing costs | 98,551 | 98,943 | |||
| Derivative liabilities | 8,800 | — | |||
| Operating lease liabilities, net of current portion | 522 | 4,032 | |||
| Deferred tax liabilities | — | 4,092 | |||
| Amounts due to related parties | 54,877 | 48,140 | |||
| Total non-current liabilities | 835,228 | 652,721 | |||
| Total Liabilities | 1,039,971 | 923,326 | |||
| Commitments and contingencies | |||||
| Stockholders’ equity | |||||
| Common stock— | 772 | 769 | |||
| Additional paid-in capital | 797,324 | 798,188 | |||
| Accumulated other comprehensive loss | (253) | (463) | |||
| Retained earnings | 316,008 | 364,000 | |||
| Total Navigator Holdings Ltd. stockholders’ equity | 1,113,851 | 1,162,494 | |||
| Non-controlling interest | 3,603 | 10,918 | |||
| Total equity | 1,117,454 | 1,173,412 | |||
| Total liabilities and equity | $ | 2,157,425 | $ | 2,096,738 | |
Navigator Holdings Ltd.
Consolidated Statements of Operations
(Unaudited)
| Three months ended December 31, 2021 | Three months ended December 31, 2022 | Year ended December 31, 2021 | Year ended December 31, 2022 | ||||||||
| (in thousands, except per share data) | |||||||||||
| Revenues | |||||||||||
| Operating revenues | $ | 105,176 | $ | 105,115 | $ | 352,922 | $ | 405,346 | |||
| Operating revenues—Unigas Pool | 18,849 | 11,837 | 27,004 | 46,345 | |||||||
| Operating revenues—Luna Pool collaborative arrangements | 8,265 | 6,333 | 26,555 | 22,101 | |||||||
| Total operating revenues | $ | 132,290 | $ | 123,285 | 406,481 | 473,792 | |||||
| Expenses | |||||||||||
| Brokerage commissions | 1,472 | 1,494 | 4,802 | 5,900 | |||||||
| Voyage expenses | 21,873 | 16,865 | 71,953 | 78,674 | |||||||
| Voyage expenses—Luna Pool collaborative arrangements | 6,346 | 5,533 | 20,913 | 20,716 | |||||||
| Vessel operating expenses | 40,417 | 43,924 | 131,183 | 159,266 | |||||||
| Depreciation and amortization | 25,686 | 30,559 | 88,486 | 126,220 | |||||||
| Impairment losses on vessels | 63,581 | — | 63,581 | — | |||||||
| Profit from sale of vessels | — | (4,363) | — | (4,721) | |||||||
| General and administrative costs | 9,055 | 8,389 | 28,881 | 27,439 | |||||||
| Other income | (109) | (105 ) | (367) | (364) | |||||||
| Total operating expenses | $ | 168,321 | $ | 102,296 | 409,432 | 413,130 | |||||
| Operating income/(loss) | $ | (36,031) | $ | 20,989 | (2,951) | 60,662 | |||||
| Other income/(expense) | |||||||||||
| Foreign currency exchange gain/(loss) on senior secured bonds | 436 | (5,969) | 2,146 | 6,589 | |||||||
| Realized gain/(loss) on cross currency interest rate swap | — | 6,888 | — | (6,270) | |||||||
| Unrealized gain on non-designated derivative instruments | 740 | (471) | 791 | 25,124 | |||||||
| Interest expense | (10,701) | (13,983) | (38,682) | (50,840) | |||||||
| Loss on repayment of senior bonds | — | (1,102) | — | (1,102) | |||||||
| Write off of deferred financing costs | — | (212) | — | (212) | |||||||
| Interest income | 138 | 713 | 302 | 1,082 | |||||||
| Income/(loss) before income taxes and share of result of equity method investments | $ | (45,418) | $ | 6,853 | (38,394) | 35,033 | |||||
| Income taxes | (1,188) | (4,459 ) | (1,969) | (5,949) | |||||||
| Share of results of equity method investments | 6,449 | 7,861 | 11,147 | 25,794 | |||||||
| Net income/(loss) | $ | (40,157) | $ | 10,255 | (29,216) | 54,878 | |||||
| Net income attributable to non-controlling interests | (576) | (287) | (1,748) | (1,405) | |||||||
| Net income/(loss) attributable to stockholders of Navigator Holdings Ltd. | $ | (40,733) | $ | 9,968 | (30,964) | 53,473 | |||||
| Earnings/(loss) per share attributable to stockholders of Navigator Holdings Ltd.: | |||||||||||
| Basic and diluted: | $ | (0.53) | $ | 0.13 | $ | (0.48) | $ | 0.69 | |||
| Weighted average number of shares outstanding: | |||||||||||
| Basic: | 77,183,379 | 77,216,530 | 64,669,567 | 77,234,830 | |||||||
| Diluted: | 77,183,379 | 77,537,386 | 64,669,567 | 77,558,494 | |||||||
IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This press release on Form 6-K 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 end close procedures and further financial review with respect to the Company’s financial statements for the year ended December 31, 2022, and other developments that may arise between now and the disclosure of the Company’s final results.
- 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;
- our vessels engaging in ship to ship transfers of liquefied petroleum gas (“LPG”) or petrochemical cargoes which may ultimately be discharged in sanctioned areas or to sanctioned individuals without our knowledge;
- the impact of the Russian invasion of Ukraine;
- changes in governmental rules and regulations or actions taken by regulatory authorities;
- global epidemics or other health crises such as the outbreak of COVID-19, including its impact on our business;
- potential liability from future litigation;
- our expectations relating to the payment of dividends;
- our ability to maintain appropriate internal controls over financial reporting and our disclosure controls and procedures;
- our expectations regarding the financial success of the Ethylene Export Terminal and our related Export Terminal Joint Venture and our expectations regarding the completion of construction and financing, and the financial success, of the Expansion Project;
- our expectations regarding the financial success of our Luna Pool collaborative arrangement and our Navigator Greater Bay Joint Venture; the timing and costs of the anticipated vessel acquisitions by our Navigator Greater Bay Joint Venture;
- our expectations regarding the integration, profitability and success of the vessels and businesses acquired in the Ultragas Transaction and the operational and financial benefits from the combined businesses and fleet; and
All forward-looking statements included in the 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 are the Q4 2022 earnings for Navigator Holdings Ltd. (NVGS)?
How did the revenue of Navigator Holdings Ltd. (NVGS) change in 2022?
What was the fleet utilization for Navigator Holdings Ltd. (NVGS) in Q4 2022?
How much has Navigator Holdings Ltd. (NVGS) spent on share repurchases?
What is the expected expansion for Navigator's Ethylene Export Terminal?
