Navigator Holdings Ltd. Q3 FY2024 earnings call

• Revenue increased 3% driven by higher TCE rate. - Adjusted EBITDA for Q3 was $68 million, slightly lower than Q3 last year's $72 million. - Balance sheet is strong with robust cash position; repaid debt and deployed capital into Ethylene Terminal expansion. - Return of capital continued with $0.05 fixed dividend and share buyback up to 25% of net income. - Issued $100 million of new unsecured bonds at 7.25%, the tightest spread in Nordic market since 2008. - Commercially, pushed TCE rates to over $29,000, 11% higher than last year, utilization above 90%. - Ethylene Terminal throughput down due to Hurricane Beryl; expansion on track for Q4 2024 completion. - Progress made in CO2 transportation (MOU with Uniper) and clean ammonia (investment in Ten08). - Expect higher utilization in Q4 than Q3, renew expiring time charters at higher rates, more available vessel days as dry docking program ends, Ethylene Terminal export volumes to return to near nameplate capacity in Q4.

In Q3 2024, Navigator Holdings generated revenues up 3% compared to the same period. Adjusted EBITDA was $68 million, slightly below the $72 million in Q3 last year. The Ethylene Terminal had throughput of 122,000 tons, significantly down due to Hurricane Beryl. TCE rate was over $29,000, 11% higher than the same period last year. Utilization was above 90%. Revenue contribution from the Ethylene Terminal was $2.2 million from 121,634 tons throughput.

• Expect higher vessel utilization in Q4 compared to Q3. - Continue to renew expiring time charters at higher rates. - More available vessel days as 2024 dry docking program concludes. - Ethylene Terminal export volumes anticipated to return to near nameplate capacity in Q4. - Robust market conditions expected to continue due to solid demand for transportation, older vessels sold, and limited newbuilding supply in the segment.

• Soft transport demand temporarily impacted TCE rates. - Hurricane Beryl disrupted ethylene production and inventory levels, affecting terminal throughput. - Bond market conditions could change abruptly, impacting refinancing and debt costs.

Q: How was the impact of Hurricane Beryl on the Terminal's throughput and compensation?

A: Throughput was down due to Hurricane Beryl, but with take-or-pay contracts, compensation will be received. The terminal itself was not impacted.

Q: Can propane be exported from the Terminal?

A: The Terminal at Morgan's Point is for ethane and ethylene only; no appetite or opportunities for propane exports in the near-term.

Q: Details on newbuilding options and chartering plans?

A: Newbuilding options need to be declared by November 21; Board will discuss next week. Looking to mix short-term and long-term charters for the newbuildings.

Q: Delta in TCE rates between semi and fully refrigerated vessels?

A: Third quarter TCE average was over $29,000 vs $26,728 in Q3 last year, a 10% uplift.

Q: Update on Uniper MOU for CO2 transportation?

A: Pre-FEED study ongoing, FEED study expected next year; U.K. regulation needed, long-term process with potential revenue in the end of the decade.