• Revenue: $141.8 million in Q3 2024.
• Adjusted EBITDA: $67.7 million in Q3 2024.
• Net Income: $18.2 million attributable to stockholders.
• Earnings Per Share (EPS): Basic EPS of 26; Adjusted EPS of 29.
• Time Charter Equivalent (TCE) Rates: Average of $29,079 per day in Q3 2024.
• Utilization Rate: 90.9% in Q3 2024.
• Vessel Operating Expenses: $43.5 million in Q3 2024.
• General and Administrative Costs: $9.4 million in Q3 2024.
• Cash and Cash Equivalents: Over $127 million as of September 30, 2024.
• Debt Repayment and Share Buybacks: $24.1 million paid in Q3 2024.
• New Unsecured Bonds: $100 million issued at 7.25% in October 2024.
• Leverage Ratio: Net debt to adjusted EBITDA at 2.3 times.
• Ethylene Terminal Throughput: 121,634 tons in Q3 2024.
• Dividend and Share Buyback: 5 per share dividend and $1.1 million in share buybacks planned.

• Warning! GuruFocus has detected 3 Warning Sign with NVGS.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Navigator Holdings Ltd (NYSE:NVGS) reported a 3% increase in revenues for Q3 2024, driven by higher time charter (TC) rates.
• The company maintains a strong balance sheet with a robust cash position, even after debt repayments and capital deployment into the Ethylene terminal expansion.
• Navigator Holdings Ltd (NYSE:NVGS) achieved a high vessel utilization rate of over 90%, aligning with their guidance.
• The company issued $100 million of new unsecured bonds at a 7.25% interest rate, marking the tightest spread for any dollar-denominated shipping bond in the Nordic market since 2008.
• Navigator Holdings Ltd (NYSE:NVGS) continues to explore new markets, having entered into a memorandum of understanding (MOU) with Uniper for CO2 transportation and committed to an investment in clean ammonia.

Negative Points

• Adjusted EBITDA for Q3 2024 was $68 million, slightly below the $72 million from the same period last year.
• Ethylene export terminal throughput was significantly down due to disruptions caused by Hurricane Beryl.
• General and administrative costs were slightly elevated due to nonrecurring legal costs related to a secondary public offering.
• The company reported a non-cash unrealized loss of $5.2 million on derivative instruments in Q3 2024.
• There are upcoming cash calls totaling around $63 million for the terminal expansion project, which will be paid from cash on hand until new financing arrangements are completed.

Q & A Highlights

Q: Can you confirm if the take-or-pay contracts at the terminal will compensate for lost volumes due to Hurricane Beryl disruptions? A: Yes, the take-or-pay contracts ensure compensation. If the commodity is not taken, there is a period to make up for it or pay deficiencies. We expect to receive the cash flows not received in Q3 during Q4 2024 and early 2025. The terminal itself was unaffected by the hurricane; the impact was on ethylene production facilities.

Q: Are there any plans to export propane from the terminal, given the current infrastructure limitations? A: Currently, the infrastructure at Morgan's Point is designed for ethane and ethylene only. There are no immediate plans or opportunities to export propane. Any changes would require significant time and infrastructure adjustments.

Q: What are your plans regarding the options for the two new building orders, and when do they expire? A: The options for the new buildings need to be declared by November 21st. We will discuss this in our upcoming board meeting in Houston. We are maximizing our optionality and will decide soon.

Q: Can you provide insights on the expected duration and rates for the new time charter contracts for the new builds? A: We are considering a mix of short and long-term contracts. While we are confident in the market tightening, we prefer a balance between spot exposure and long-term contracts. Discussions are ongoing, and we aim for a mix across the vessels.

Q: What is the current strategy for time charter contracts for the existing fleet? A: With a strengthening market, we are leaning towards more spot exposure and shorter time charters, typically 6 to 12 months. This strategy allows us to capitalize on strong market fundamentals while maintaining some time charter cover.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.