Navigator .(US:NVGS)2020-05-29 19:48Financial Data and Key Metrics Changes - The company reported a headline loss of $8.5 million for Q1 2020, which includes $3.7 million in foreign exchange losses due to COVID-19 impacts [27][36] - Operating revenue for vessels increased to $81.3 million, up from $76.1 million in Q1 2019, attributed to improved vessel utilization from 84.8% to 89% [29][36] - Average charter rates decreased to $20,855 per day, down from $21,782 per day in Q1 2019, but increased by 3.2% from the previous quarter [30] Business Line Data and Key Metrics Changes - The ethylene terminal generated a loss of $3 million during the quarter, primarily due to initial start-up operations, but throughput is expected to ramp up in Q2 [35][36] - Vessel operating expenses decreased by 7% to $27.4 million, or $7,925 per vessel per day, compared to $29.5 million in Q1 2019 [32] Market Data and Key Metrics Changes - Utilization rates dropped to mid-80% levels in February, March, and April, but improved to around 90% in May, indicating a recovery in global economic activity [21][22] - The price arbitrage for ethylene has more than doubled from an all-time low of $300 per ton in April to $700 per ton, encouraging exports [50] Company Strategy and Development Direction - The company is focused on improving operational efficiency and is optimistic about the completion of infrastructure projects that will enhance export volumes [6][18] - Plans for a phased return of onshore personnel are in place, respecting social distancing guidelines [13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the gradual lifting of lockdowns and its potential positive impact on global economic activity [11][12] - The company is actively working to increase liquidity and is considering refinancing options to bolster cash flow [38][39] Other Important Information - Cash stood at $51 million as of March 31, 2020, exceeding the required liquidity covenant of $43.7 million [37] - The company has not made any capital contributions to the export terminal joint venture during Q1 2020 but contributed $7.5 million post-quarter [39] Q&A Session Summary Question: Insights on customer conversations regarding ethylene terminal contracts - Management noted a strong demand for ethylene due to price differentials, with customers actively seeking terminal space for exports [58][60] Question: Update on storage tank operational timeline - The storage tanks are expected to be operational by late November or early December 2020, unaffected by COVID-19 [70] Question: Expectations for joint venture performance and cargo exports - The terminal is expected to export around 110,000 tons in the first half of 2020, with Navigator ships handling about 52% of that volume [84] Question: Utilization and TCE rates trends - Utilization is expected to reach 90% in May, with TCE rates showing resilience despite market fluctuations [80][81] Question: Potential for joint venture financing expansion - Management indicated that while expanding financing is possible, it is constrained by the joint venture structure, which does not allow for debt within the entity [122]