Navigator Holdings Ltd. (NYSE:NVGS) Q4 2019 Earnings Conference Call - Final Transcript

Apr 03, 2020 • 09:00 am ET

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Navigator Holdings Ltd. (NYSE:NVGS) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] First question comes from the line of Randy Giveans from Jefferies. Please ask your question.

Executive
David Butters

Good morning, Randy.

Analyst
Randy Giveans

Gentlemen, how are you-all?

Executive
David Butters

Good. Thank you. Hope you're well too.

Analyst
Randy Giveans

Thank you. Yes, all is okay. All right. So, starting on the shipping side; I know your press release stated the company has not experienced any significant decrease in charter earnings thus far, but utilization has fallen from 97% in January to the mid-80% range.

So, a couple of questions; what kind of charter rate levels are you seeing for the spot propane and/or ethylene ships? And then, what was the average utilization for 1Q20? Should we just maybe take the midpoint of the 97%, mid-80% to around 90%?

Executive
Oeyvind Lindeman

Hi, Randy. So, you have the utilization rate for the quarter in the press release there. But I think at backend of January, quoted time charter earnings from Clarksons were at its peak at $695,000 a month, so that was at end of January. End of last week, it was quoted at $665,000. So, down a tad bit, but we are not seeing a drop off the cliff, if that was the question.

So, I'd say it's a slight reduction from its peak at the end of January to what we're seeing today. It's smaller, so the rates are impacted less so. But its utilization, as you picked up on, which is somewhat lower than what we had in December and January, because of just dampening effect from -- on the demand side.

Analyst
Randy Giveans

Sure. All right. Well, thanks for that Oeyvind. And then a question for Niall. Looking at the sale-leaseback, that transaction freed up around $30 million in liquidity, net of the debt repayment. Any specific use for those proceeds, that percentage staying on the balance sheet? And then, two other questions. What is the effective interest rate on that transactions and/or additional sale leaseback kind of as an available option that market's still open to possibly repay that $100 million next February?

Executive
Niall Nolan

Yes. So, the existing sale leaseback transaction, first, this is with Ocean Yield and Norwegian outfit. The rate was 4.3% plus LIBOR.

And we have $25.25 million, as I mentioned, of surplus cash. That's really just strengthening the balance sheet, providing additional liquidity that we did in -- so, that transaction was closed in October last year, October 28 of last year.

With respect to any future sale leaseback that we're considering to pay off the $100 million bond in the event that the market stays closed or the capital markets stay closed, we're looking at alternatives. The market, certainly, the Japanese leasing market is very much open. It has remained open throughout, and the rates would probably be less than the 4.3% that I mentioned in the -- relating to the existing leaseback.

Analyst
Randy Giveans

Perfect. Niall, thanks for that. And then one more little topic to cover here. For the ethylene export terminal, I know there's still kind of commercial acceptance and those things are hopefully coming,