New York-listed Navigator Holdings has returned to profit in the third quarter thanks to earnings from its new export terminal joint venture.
The company reported net profit of $1.5m, versus a loss of $2.9m in the same period of 2019. Revenue was up at $81.4m, compared to $75.6m.
Adjusted Ebitda was $31.9m, comprising $27.5m from the LPG carriers and $4.4m from the ethylene terminal at Morgan’s Point, Texas.
Ebidta last year was $29.5m.
Fleet utilisation decreased to 78.8% from 84.6% last year.
The ethylene terminal continues to be operational although throughput has been affected by hurricane Laura, which disrupted power supply to nearby ethylene crackers, reducing the availability of ethylene to export, Navigator said.
The new 30,000-tonne storage tank, which will increase the terminal’s throughput capacity, is currently being commissioned and is on schedule to be operational in December.
Committed off-take agreements over a minimum of five years are expected to result in 940,000 tonnes of annual throughput.
Net result meets expectations
To date the company has contributed $142.5m out of its expected share of $146.5m towards the capital cost.
Cash stands at $120m, with no further loan maturities until April 2022.
Fearnley Securities, which has a buy rating on the stock, said Ebitda was below expectations, but net earnings in line.
The investment bank said fleet utilisation continued to deteriorate and the market was overall softer than anticipated.
"With US ethylene prices declining and an open arbitrage, Navigator states it expects fleet utilisation to rise ahead. It has also extended one time charter with a European chemical player and entered a new contract with a Chinese chemical producer, both at unknown rates," analysts Espen Landmark Fjermestad, Peder Nicolai Jarlsby and Ulrik Mannhart said.
"While focus will be on completing the terminal in the short-term, we would not be surprised if focus shifts towards an early refinancing of the secured bond given the reduction in credit risk since issuance and limited size of the bond (NOK 600m or $65m)."
