US-listed Navigator Gas has seen earnings boosted by a jump in rates across the midsized LPG carrier fleet in the fourth quarter.
The owner of 56 ships said net profit in the last three months of 2023 rose to $19.1m, compared with $10.3m a year ago.
Revenue was $141.6m, up from $123.3m.
The dividend will be $0.05 per share, and Navigator also expects to buy back $0.8m of shares before the end of the month as part of its capital return policy.
Fearnley Securities said earnings were in line with expectations, with Ebitda of $66m the second highest on record.
Time charter equivalent earnings across the fleet increased to $28,428 per day, versus $23,622 a year ago.
Utilisation was down at 93.4% from 91.3% year on year, however.
During the quarter, the market assessment for semi-refrigerated handysize vessels increased by $60,000 per month to $885,000.
For fully refrigerated ships, this improvement was $115,000 per month to $910,000.
The handysize ethylene rate rose $400,000 to $1.4m.
Arbitrage under pressure
The company said it has experienced downward pressure on the ethylene arbitrage to Asia.
This was compensated by additional activity in the ethane spot and time charter market, however.
“Low rainfall in Panama, and a subsequent reduction in available daily transits, meant that ethane transport between US Gulf and China had to sail a longer distance via Cape of Good Hope,” Navigator added.
This resulted in longer tonne-miles and more demand for shipping, which supported the handysize ethylene market assessment, the owner added.
Navigator had about 30 carriers under time charters in the period.
Others were trading spot or on contracts of affreightment, while nine vessels were operated in the independently managed Unigas Pool.
For 2024, the company has 48% of ship days covered under time charter.
The midsize and fully refrigerated vessels are largely employed on these deals, while the semi-refrigerated units operate under a mix of time and spot charters.
The majority of the ethylene fleet is trading in the spot market.
The company repaid $23.8m of the $111.8m term loan and revolving credit facility held with Credit Agricole at the end of the year. Navigator now has $233m of liquidity.
Fearnley Securities tips it to reduce debt substantially in the coming quarters.
