Navigator Holdings reported surging revenue that lifted its quarterly profit skyward as the New York-listed gas carrier owner benefited from Europe’s continued hunger for cargoes in the wake of Russia’s invasion of Ukraine.
The company, whose customer-facing name is Navigator Gas, reported a second-quarter net income of $14.4m, up from just $654,000 in the same period of 2021.
Operating revenue jumped 44.6% to nearly $124m.
Ebitda of $55m was below the average analyst expectation of $58m, according to data from Fearnley Securities.
The rising profits came as the LPG and ethylene carrier owner’s long-term charters were expected to prevent it from fully benefiting from market dislocations caused by the Ukraine conflict.
“Europe continues to import energy, feedstocks, petrochemicals and ammonia from wherever the region can source supply,” Navigator said.
The company pointed to Kpler data that showed that 80% of US ethylene exports were headed to Europe in the second quarter, which has the effect of cutting ethylene carrier demand compared to voyages to the Pacific.
“The arbitrage remains open to both continents however demand and consumption in China remain challenged following lingering Covid restrictions with the resultant effect on the country’s GDP. We expect an increasing percentage of the ethylene exports to be transported across the Pacific during the latter part of the year,” Navigator said.
However, ethane exports from the US reached record levels, as did LPG volumes from the country.
Navigator pointed to assessments of 12-month charter rates that jumped to $720,000 per month for handysize semi-refrigerated LPG carriers during the second quarter, up $35,000 compared to the first quarter of this year.
Full-refrigerated rates gained $15,000 to $650,000 per month, the shipowner said.
Looking forward, brokers are now assessing rates slightly lower for semi-refrigerated handysizes, at $700,000 per month in the current market.
But fully-refrigerated ships are looking better, at $655,000 per month.
The quarter’s profit surge added to a strong first half that saw the company log $41.1m in net income compared to just $3.1m in the first six months of last year.
The strong also quarter helped the London-headquartered company slash its debt by $45.9m during the second quarter, leaving cash and equivalents of $151m at the end of June.
