Navigator .(US:NVGS)2022-11-16 21:19Financial Data and Key Metrics Changes - Operating revenues for Q3 2022 increased by 7.9% year-over-year to $106.8 million from $102.7 million in Q3 2021 [7][11] - Adjusted EBITDA for Q3 2022 was $41.5 million, slightly up from $40.5 million in Q3 2021, but down from $55 million in the first two quarters of 2022 [10][30] - Net income for Q3 2022 was $2.4 million, a decrease from earlier quarters, with expectations for improvement in Q4 [23] Business Line Data and Key Metrics Changes - Vessel utilization improved to 85% in Q3 2022, consistent with the same period last year [8] - Average charter rates increased to over $22,000 per day in Q3 2022 from $21,900 per day in Q3 2021 [12] - Operating revenue from the Luna Pool was $3.2 million for the quarter, with voyage expenses of $3.6 million, indicating a net contribution of $400,000 to other pool participants [14] Market Data and Key Metrics Changes - Approximately 80% of U.S. ethylene exports were transported to Europe, highlighting the importance of energy security in the region [7] - Ethylene throughput at the terminal was 189,000 tons in Q3 2022, lower than previous quarters but higher than 128,000 tons in Q3 2021 [22] - The company noted a significant increase in handysize LPG export volumes in October 2022, up 40% compared to September [35] Company Strategy and Development Direction - The company announced two joint ventures to expand operational capabilities in the global liquefied gas supply chain, including a joint venture with Greater Bay Gas to acquire five ethylene-capable liquid carriers [5][47] - The company is focusing on increasing its footprint in infrastructure and supply chain connectivity, exploring synergies between shipping and terminal operations [67] - Plans for terminal expansion at Morgan's Point are underway, with construction expected to commence in Q1 2023 [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for Q4 2022, expecting utilization to exceed 90% due to higher volumes of ethylene exports and ammonia demand [55][45] - The company anticipates a return to or exceeding earlier EBITDA levels in Q4 2022, driven by improved utilization and demand [10][88] - Management highlighted the structural changes in ammonia demand due to supply constraints in Europe, indicating a long-term opportunity for the company [92] Other Important Information - The company had cash of $157.1 million and total debt of $881.4 million as of September 30, 2022, with a reduction in debt by $38.8 million during Q3 [24][25] - The company is exploring refinancing options for its vessel loan facility and converting existing facilities to lower-cost financing [26] Q&A Session Summary Question: Funding for terminal expansion - Management indicated that existing cash resources are sufficient for the terminal expansion, but they are exploring options for the lowest cost of capital [60] Question: Utilization rates and time charters - Management clarified that many vessels are on time charters, contributing to improved utilization rates, and they are working on optimizing vessel employment [62][65] Question: Potential for using older vessels for infrastructure - Management acknowledged opportunities to repurpose older vessels for infrastructure projects, leveraging their tanks for storage [69] Question: Share repurchase program status - Management confirmed that the share repurchase program has not yet been initiated due to blackout periods but is expected to commence soon [75] Question: Impact of terminal expansion on current operations - Management assured that current capacity would continue operating normally during the terminal expansion [101]