Navigator .(US:NVGS)2019-08-09 18:26Financial Data and Key Metrics Changes - Revenue for Q2 2019 was $73.6 million, slightly up from $73.2 million in Q2 2018, but down from $76.1 million in Q1 2019 [11] - Net loss for Q2 2019 was $7.7 million, compared to a net loss of $3.2 million in Q2 2018 [18] - EBITDA for Q2 2019 was $23.2 million, down from $27.2 million in Q2 2018 [18] - Cash as of June 30 was $47.3 million, with an additional $35 million available for drawdown from a revolving credit facility [19] Business Line Data and Key Metrics Changes - Charter rates improved to $19,940 per day in Q2 2019, compared to $19,334 per day in Q2 2018, but utilization fell from 90.3% to 85.2% [12] - Time charters accounted for 59% of operating days, while spot charters accounted for 41% [13] - LPG was transported for 72% of time charter days, while petrochemical gases accounted for 79% of spot charter days [13] Market Data and Key Metrics Changes - The company faced headwinds from U.S. sanctions on Venezuela, which affected the availability of vessels in the spot market [23] - New build handysize vessels added capacity to the spot market, contributing to challenges in maintaining charter rates [24] - Reduced petrochemical ton mile demand due to a European chemical turnaround impacted the market [25] Company Strategy and Development Direction - The company is focused on completing infrastructure projects that will drive future growth, particularly in the handysize segment [30] - There is an emphasis on expanding transport networks through partnerships with midstream and petrochemical companies [7] - The company aims to transition from a domestic focus to international markets, leveraging its expertise and infrastructure [106] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the global economic environment and its impact on oil prices, which could affect export arbitrage opportunities [97][98] - There is optimism about future profitability as infrastructure projects come online, potentially leading to record earnings [48] - The company is not counting on a quick resolution to trade tensions, but believes alternative trade routes will emerge [51] Other Important Information - The company undertook four drydockings in the first half of 2019, with plans for additional drydockings in the second half [14] - Total debt as of June 30 was $863.4 million, including various bank loans and bonds [21] Q&A Session Summary Question: Utilization expectations and recent performance - Management noted that utilization has not dropped significantly and expects improvements in line with upcoming projects [56][58] Question: Ethylene export terminal earnings expectations - Current arbitrage opportunities suggest higher earnings potential for ethylene capable vessels, with expectations of increased rates [60][64] Question: Capacity expansion viability - Management indicated that while technical capability exists for expansion, it would require sufficient contractual commitments from customers [72][76] Question: Impact of Venezuela sanctions - Management stated that there has been no communication from OFAC regarding sanctions and does not expect a quick resolution [82][84] Question: Contract structures with off-takers - Management described a mixed approach to contracts, with some time charters and contracts of affreightment being utilized depending on the market [90]