Navigator Posts $18.8MM Quarterly Profit Supported by USA Gas Exports

Navigator Holdings Ltd. reported Monday $18.8 million in net income for the first quarter supported by sustained momentum in ethylene and liquefied petroleum gas (LPG) shipments from the USA.

With earnings per share of $0.25, the London-headquartered gas carrier’s net profit was up from $0.13 in the prior three-month period but down from $0.35 in the corresponding quarter of 2022.

Navigator collected $136 million in operating revenue, up both from October-December 2022 and January-March 2022.

“Charter rates for the handysize LPG vessel segment continued an upward trajectory through the first quarter of 2023”, it said in a press release. “Both the handysize 12-month market assessment for semi-refrigerated and fully-refrigerated vessels increased by $10,000 per calendar month (‘pcm’) to $760,000 pcm, and $740,000 pcm respectively, and the handysize ethylene assessment increased $85,000 pcm to $975,000 pcm during the first quarter”.

Navigator attributed the higher rates to a shift in shipping pattern for ammonia induced by “the geopolitical conflict around Ukraine”, as well as a surge in LPG exports and sustained ethylene coming from the USA.

“The Ukrainian port of Yuzhnyy, which historically exported approximately 10% of the world’s seaborne ammonia, remains out of operation. In addition, ammonia originating from the Russian Baltic Sea area continues to experience delays and therefore European ammonia consumers were sourced [sic] the commodity from further distances, increasing ton mile and thus increasing the demand for handysize shipping”, the New York-listed company said.

Though normalizing natural gas prices weighed down European demand for ammonia, ship demand for the gas has been sustained in the handysize segment, it noted.

“Secondly, the U.S. continues to export record volumes of LPG, increasing week on week, compared to the same time period last year”, Navigator said. “The U.S. exported a record 5.5 million tons of LPG during March 2023, providing improved employment opportunities across all the gas carrier segments.

“Finally, North American ethane remains competitively priced enabling a sustainable floor for cheap domestic production of ethylene. The arbitrage for U.S. produced ethylene compared to international markets continues to be open, both to Europe and to Asia-Pacific consumers, which has given rise to continued throughput from our Ethylene Export Terminal, as well as demand for our ethylene capable vessels”.

Navigator closed higher at $13.14 on the New York Stock Exchange Monday compared to $13.04 in last week’s closing session, starting the week with a two-week high of 185,766 volumes traded.

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