Navig8 Chemical Tankers Inc. Reports Results for the Three and Six Months Ended June 30, 2017
NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND THE DISTRICT OF COLUMBIA) OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL
LONDON, Aug. 14, 2017 /PRNewswire/ -- Navig8 Chemical Tankers Inc. (the "Company") (N-OTC: CHEMS), an international shipping company focused on the transportation of chemicals, today announced its unaudited financial and operating results for the three and six months ended June 30, 2017.
Highlights
- Generated revenue of $38.4 million and net loss of $3.6 million, or $0.09 per share, for the three months ended June 30, 2017.
- Continued growth of the Company's operating fleet with the delivery of two 25,000 DWT stainless steel chemical tankers, Navig8 Spica and Navig8 Sceptrum.
- Entered into sale and leaseback agreements for four 25,000 DWT stainless steel chemical tankers for net proceeds of approximately $141 million.
- Increased vessel operating days by 41.5% to 2,689 for the three months ended June 30, 2017 compared to the same period in the prior year
"The chemical tanker market has stabilized since the start of the year, albeit at relatively low levels, after weakening throughout 2016," said Nicolas Busch, Chief Executive Officer of Navig8 Chemical Tankers, Inc. "Global fleet growth has outpaced demand growth, although this is expected to change as supply growth for large chemical tankers is forecast to slow significantly over the next 12 months. The demand environment is also positive as forecasted growth is dominated by longer haul trades with strong growth in methanol imports into China."
Fleet Update
The Company has entered into contracts to acquire 32 modern, fuel-efficient newbuilding chemical tankers. As of the date of this press release, 31 of these vessels have been delivered and are in operation. The remaining vessel is scheduled to be delivered in the third quarter of 2017. Upon their respective deliveries, the Company's vessels have and will be deployed in commercial pools managed by the Navig8 Group, including the Chronos8, Delta8 and Stainless8 pools. The Company's newbuilding fleet is composed of:
Eighteen IMO2 37,000 DWT Interline-coated tankers built at Hyundai Mipo, Korea ("A-Class vessels"), all of which have been delivered and have been deployed in the Delta8 pool.
Four IMO2 49,000 DWT Interline-coated medium range tankers ("T-Class vessels") built at STX Offshore & Shipbuilding Co., Ltd. ("STX"), all of which have been delivered and have been deployed in the Chronos8 pool.
Two IMO2 49,000 DWT Epoxy-coated medium range tankers built at Hyundai, Vinashin ("V-Class vessels"). Both V-Class vessels were delivered to the Company on bareboat charters in the first quarter of 2015; the Company purchased one of these vessels in December 2015 and the other in March 2016 pursuant to purchase obligations. The V-Class vessels are currently deployed in the Chronos8 pool.
Six IMO2 25,000 DWT stainless steel tankers built at Kitanihon Shipbuilding Co. Ltd ("Kitanihon") and two IMO2 25,000 DWT stainless steel tankers built at Fukuoka (Japan) (together, "S-Class vessels"). The S-Class vessels will be deployed in the Stainless8 pool. The Company took delivery of its final S-Class vessel built at Kitanihon, Navig8 Sceptrum, in May 2017. The Company took delivery of its first S-Class vessel built at Fukuoka, Navig8 Spica, in May 2017 and expects the final S-Class vessel to be delivered in August 2017. The Navig8 Spica is the first of two vessels to be delivered under the sale and leaseback arrangements entered into with subsidiaries of SBI Holdings, Inc ("SBI") announced on May 19, 2017.
Financing Update
On May 19, 2017, the Company announced that it had entered into a second sale and leaseback transaction with SBI for two 25,000 DWT stainless steel chemical tankers (the "SBI Vessels") being built by Fukuoka. BNP Paribas and Crédit Agricole are providing debt financing to SBI in connection with the transaction.
Under the agreements, the SBI Vessels will be purchased by SBI from the Company on their respective deliveries from Fukuoka. The Company has entered into eleven and half year bareboat charters for the SBI Vessels, commencing at the time of their deliveries. The Company has purchase options to re-acquire the SBI Vessels during the charter period, with the first such option exercisable on or around the fifth anniversary of each vessel delivery. The net proceeds (after sellers credit) from the transaction to the Company will be USD 74 million.
On May 31, 2017, the Company announced that it had entered into sale and leaseback agreements with CMB Financial Leasing Co. Ltd. ("CMB") for two of the Company's 25,000 DWT Stainless Steel Chemical Tankers, Navig8 Saiph and Navig8 Sceptrum (the "CMB Vessels"). The net proceeds (after sellers credit) from the transaction was approximately $65.2 million. A portion of the proceeds was utilized to repay existing loans used to finance the CMB Vessels' newbuilding contracts under the bank loan facility announced by the Company on November 3, 2016.
The Company has entered into 7-year bareboat charters with CMB for the Vessels. The Company has purchase options to re-acquire the CMB Vessels during the charter period, with the first such option exercisable on the third anniversary of the date of delivery of each vessel to CMB, and obligations to repurchase the CMB Vessels at the end of the bareboat period.
Results for the three months ended June 30, 2017
For the three months ended June 30, 2017, the Company reported net loss of $3.6 million, or $0.09 per share, compared to the net income of $9.6 million for the three months ended June 30, 2016. The decrease in net income is mainly attributable to lower gross average daily time charter equivalent ("TCE")1 rates achieved in the three months ended June 30, 2017 compared to the same period in prior year.
Revenue for the three months ended June 30, 2017 was $38.4 million, compared to revenue of $39.9 million for the three months ended June 30, 2016. The total number of vessel operating days for the three months ended June 30, 2017 increased by 789 to 2,689 compared to the same period in the prior year.
The TCE rates earned by the A-Class, V-Class, T-Class and S-Class vessels for the three months ended June 30, 2017, were $14,135, $14,016, $15,406 and $16,608 per day, respectively. The A-Class, V-Class, T-Class and S-Class vessels earned $21,822, $19,979, $21,194 and $18,194 per day, respectively, during the same period in the prior year. The Company had 31 vessels operating during the three months ended June 30, 2017, all of which operate in pools from which they derive TCE revenue.
Vessel operating expenses were $17.1 million for the three months ended June 30, 2017, an increase of $5.7 million from the three months ended June 30, 2016, when the Company had only taken delivery of 22 vessels compared to 31 vessels at June 30, 2017. Average fleet operating costs per day, including technical management fees, were approximately $5,900 per day for the three months ended June 30, 2017, which is approximately $380 per day higher than the average fleet operating costs per day during the three months ended June 30, 2016.
Depreciation expense for the three months ended June 30, 2017 was $11.5 million, an increase of $3.8 million compared to the three months ended June 30, 2016. The Company begins to depreciate vessels in its newbuilding fleet as they are delivered.
General and administrative expenses for the three months ended June 30, 2017, were $1.6 million, materially unchanged from the three months ended June 30, 2016.
Interest expense for the three months ended June 30, 2017 was $11.8 million, an increase of $2.2 million from $9.6 million for the three months ended June 30, 2016 when the Company had only taken delivery of 22 of the vessels in its newbuilding program.
1 Time charter equivalent, a non-US GAAP measure, is vessel revenues less voyage expenses (including bunkers and port charges but excluding pool commission).
Conference Call
On Tuesday, August 15, 2017 at 2:00PM GMT, the Company's management team will host a conference call to discuss its results for the three and six months ended June 30, 2017.
Participant should dial into the call 10 minutes before the scheduled time using the following number: 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075 441 375 (Standard International Dial In). Please inform the operator you wish to listen to the Navig8 Chemical Tankers Inc. conference call.
A telephonic replay of the conference call will be available until August 22, 2017 by dialing +1 412 317 0088 (Standard International Dial In) and using access code 10110994.
Slides and Webcast
There will also be a live webcast of the conference call and slide presentation, available through the Company's website (www.navig8chemicaltankers.com). Participants on the live webcast should register on the website approximately 10 minutes before the start of the webcast.
About Navig8 Chemical Tankers Inc.
Navig8 Chemical Tankers Inc. was established in 2013 as a joint venture between the Navig8 Group and funds managed by Oaktree Capital Management to capitalize on significant structural changes in the petrochemical industry and the continuing development of long-haul chemical trades. Its best-in-class newbuilding fleet is comprised exclusively of large, fuel-efficient vessels with modern eco-designs to take greatest advantage of these shifts. The fully delivered fleet will feature a complementary mix of primarily Interline-coated and stainless steel vessels that are capable of servicing the full range of conventional and specialized chemicals cargoes.
The Company has taken delivery of 31 chemical carriers and anticipates delivery of its full 32-vessel fleet in the third quarter of 2017. The Company's fleet is contracted to operate in various chemical tanker pools managed by the Navig8 Group, the world's largest independent pool and commercial management company.
Navig8 Chemical Tankers Inc. is listed on the Norwegian OTC market under the symbol CHEMS.
Visit our website: www.navig8chemicaltankers.com
| NAVIG8 CHEMICAL TANKERS INC. AND SUBSIDIARIES |
||||||||
| OTHER OPERATING DATA |
||||||||
| (Unaudited) |
||||||||
| Second Quarter 2017 |
First Quarter 2017 |
|||||||
| 37k dwt
("A-Class") |
49k dwt
("V-Class") |
49k dwt
("T-Class") |
25k dwt
("S-Class") |
37k dwt
("A-Class") |
49k dwt
("V-Class") |
49k dwt
("T-Class") |
25k dwt
("S-Class") |
|
| Vessels on the water at the end of the period |
18 |
2 |
4 |
7 |
18 |
2 |
4 |
5 |
| Total operating days |
1,606 |
182 |
364 |
537 |
1,602 |
179 |
360 |
436 |
| Average distributed Gross TCE in $ / day |
14,135 |
14,016 |
15,406 |
16,608 |
15,326 |
14,330 |
15,725 |
14,688 |
| Average OPEX in $ / day |
6,055 |
5,832 |
5,520 |
5,672 |
5,890 |
6,210 |
5,823 |
5,855 |
| NAVIG8 CHEMICAL TANKERS INC AND SUBSIDIARIES |
||||
| For the three months ended 30 June |
For the six months ended 30 June |
|||
| All in US$000, unless otherwise stated |
2017 |
2016 |
2017 |
2016 |
| Operating revenue |
||||
| Vessel revenue |
38,431 |
39,923 |
76,293 |
76,450 |
| Operating expenses |
||||
| Vessel expenses |
(17,105) |
(11,401) |
(33,023) |
(22,685) |
| Depreciation and amortization |
(11,487) |
(7,656) |
(22,388) |
(14,937) |
| General and administrative expenses |
(1,645) |
(1,634) |
(3,250) |
(3,415) |
| Total operating expenses |
$(30,237) |
$(20,691) |
$(58,661) |
$(41,037) |
| Net operating income/(loss) |
$8,194 |
$19,232 |
$17,632 |
$35,413 |
| Financial Items |
||||
| Interest income |
8 |
5 |
14 |
16 |
| Interest expense and finance costs |
(11,770) |
(9,608) |
(22,392) |
(15,394) |
| Other financial items |
(6) |
(1) |
(14) |
(8) |
| Net financial items |
$(11,768) |
$(9,604) |
$(22,392) |
$(15,386) |
| Net income/(loss) |
$(3,574) |
$9,628 |
$(4,760) |
$20,027 |
| Earnings per common share: |
||||
| Basic |
$(0.09) |
$0.25 |
$(0.12) |
$0.52 |
| Diluted |
$(0.09) |
$0.25 |
$(0.12) |
$0.52 |
| EBITDA: |
||||
| Net income/(loss) |
$(3,574) |
$9,628 |
$(4,760) |
$20,027 |
| Depreciation and amortization |
11,487 |
7,656 |
22,388 |
14,937 |
| Interest income |
(8) |
(5) |
(14) |
(16) |
| Interest expense |
11,770 |
9,608 |
22,392 |
15,394 |
| Other financial items |
6 |
1 |
14 |
8 |
| EBITDA |
$19,681 |
$26,888 |
$40,020 |
$50,350 |
| NAVIG8 CHEMICAL TANKERS INC AND SUBSIDIARIES |
||
| All in US$000, unless otherwise stated |
As at 30 June |
As at 31 December |
| Assets |
||
| Current assets |
||
| Cash and cash equivalents |
26,882 |
28,686 |
| Trade receivables |
23,381 |
23,256 |
| Prepaid expenses and other assets |
15,466 |
14,391 |
| Inventories |
3,095 |
3,008 |
| Total current assets |
$68,824 |
$69,341 |
| Non-current assets |
||
| Restricted cash |
18,200 |
17,430 |
| Vessels, net |
1,158,620 |
1,049,917 |
| Vessels under construction |
17,453 |
51,474 |
| Total non-current assets |
$1,194,273 |
$1,118,821 |
| Total assets |
$1,263,097 |
$1,188,162 |
| Liabilities and shareholders' equity |
||
| Current liabilities |
||
| Current portion of loans |
63,826 |
46,138 |
| Accounts payables and accrued expenses |
6,939 |
14,645 |
| Total current liabilities |
$70,765 |
$60,783 |
| Non-current liabilities |
||
| Long-term loans, net of unamortised debt |
757,438 |
688,216 |
| Accrued expenses |
673 |
183 |
| Total non-current liabilities |
$758,111 |
$688,399 |
| Total liabilities |
$828,876 |
$749,182 |
| Shareholders' equity |
||
|
385 |
385 |
|
| Common stock; $0.01 par value per share; 38,489,108 shares issued and outstanding as of June 30, 2017 (December 31, 2016: 38,489,108) |
||
| Paid-in capital |
403,641 |
403,641 |
| Retained earnings / (deficit) |
30,195 |
34,954 |
| Total shareholders' equity |
$434,221 |
$438,980 |
| Total liabilities and shareholders' equity |
$1,263,097 |
$1,188,162 |
| NAVIG8 CHEMICAL TANKERS INC AND SUBSIDIARIES |
||
| For the six months ended 30 June |
||
| All in US$000, unless otherwise stated |
2017 |
2016 |
| Operating activities: |
||
| Net income / (loss) |
(4,760) |
20,027 |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||
| Depreciation of vessels |
22,388 |
14,937 |
| Net debt extinguishment costs |
(23) |
- |
| Amortisation of deferred financing charges |
747 |
3,273 |
| Changes in operating assets and liabilities: |
||
| Trade receivables |
(124) |
(3,643) |
| Prepaid expenses and other assets |
(1,075) |
(1,252) |
| Inventories |
(88) |
(431) |
| Accounts payables and accrued expenses |
(891) |
2,325 |
| Net cash provided by operating activities |
$16,174 |
$35,236 |
| Investing activities |
||
| Changes in restricted cash |
(770) |
(930) |
| Payments for vessels under construction |
(103,338) |
(120,736) |
| Payments for vessels, capital lease |
- |
(50) |
| Payments for vessels |
(169) |
(162) |
| Net cash used in investing activities |
$(104,277) |
$(121,878) |
| Financing activities |
||
| Proceeds from loans, net of debt issuance costs |
163,519 |
212,004 |
| Repayment of loans |
(77,220) |
(76,053) |
| Payment of obligation under capital lease |
- |
(36,149) |
| Net cash provided by financing activities |
$86,299 |
$99,802 |
| Increase (decrease) in cash and cash equivalents |
(1,804) |
13,160 |
| Cash and cash equivalents, beginning of period |
28,686 |
18,438 |
| Cash and cash equivalents, end of period |
$26,882 |
$31,598 |
| Fleet List as of August 14, 2017 |
||||||||||
| Name |
DWT |
Yard |
Built |
Status |
||||||
| Delivered Vessels |
||||||||||
| 1 |
Navig8 Victoria |
49,000 |
Hyundai Vinashin |
Q1 2015 |
Delivered |
|||||
| 2 |
Navig8 Violette |
49,000 |
Hyundai Vinashin |
Q1 2015 |
Delivered |
|||||
| 3 |
Navig8 Almandine |
37,000 |
Hyundai Mipo |
Q1 2015 |
Delivered |
|||||
| 4 |
Navig8 Amber |
37,000 |
Hyundai Mipo |
Q1 2015 |
Delivered |
|||||
| 5 |
Navig8 Amethyst |
37,000 |
Hyundai Mipo |
Q1 2015 |
Delivered |
|||||
| 6 |
Navig8 Ametrine |
37,000 |
Hyundai Mipo |
Q2 2015 |
Delivered |
|||||
| 7 |
Navig8 Aventurine |
37,000 |
Hyundai Mipo |
Q2 2015 |
Delivered |
|||||
| 8 |
Navig8 Andesine |
37,000 |
Hyundai Mipo |
Q2 2015 |
Delivered |
|||||
| 9 |
Navig8 Aronaldo |
37,000 |
Hyundai Mipo |
Q2 2015 |
Delivered |
|||||
| 10 |
Navig8 Aquamarine |
37,000 |
Hyundai Mipo |
Q2 2015 |
Delivered |
|||||
| 11 |
Navig8 Amazonite |
37,000 |
Hyundai Mipo |
Q2 2015 |
Delivered |
|||||
| 12 |
Navig8 Amessi |
37,000 |
Hyundai Mipo |
Q3 2015 |
Delivered |
|||||
| 13 |
Navig8 Ammolite |
37,000 |
Hyundai Mipo |
Q3 2015 |
Delivered |
|||||
| 14 |
Navig8 Axinite |
37,000 |
Hyundai Mipo |
Q3 2015 |
Delivered |
|||||
| 15 |
Navig8 Azotic |
37,000 |
Hyundai Mipo |
Q3 2015 |
Delivered |
|||||
| 16 |
Navig8 Adamite |
37,000 |
Hyundai Mipo |
Q3 2015 |
Delivered |
|||||
| 17 |
Navig8 Azurite |
37,000 |
Hyundai Mipo |
Q3 2015 |
Delivered |
|||||
| 18 |
Navig8 Aragonite |
37,000 |
Hyundai Mipo |
Q4 2015 |
Delivered |
|||||
| 19 |
Navig8 Alabaster |
37,000 |
Hyundai Mipo |
Q4 2015 |
Delivered |
|||||
| 20 |
Navig8 Achroite |
37,000 |
Hyundai Mipo |
Q1 2016 |
Delivered |
|||||
| 21 |
Navig8 Turquoise |
49,000 |
STX |
Q2 2016 |
Delivered |
|||||
| 22 |
Navig8 Sirius |
25,000 |
Kitanihon |
Q2 2016 |
Delivered |
|||||
| 23 |
Navig8 Topaz |
49,000 |
STX |
Q3 2016 |
Delivered |
|||||
| 24 |
Navig8 Sky |
25,000 |
Kitanihon |
Q3 2016 |
Delivered |
|||||
| 25 |
Navig8 Tourmaline |
49,000 |
STX |
Q4 2016 |
Delivered |
|||||
| 26 |
Navig8 Spark |
25,000 |
Kitanihon |
Q4 2016 |
Delivered |
|||||
| 27 |
Navig8 Stellar |
25,000 |
Kitanihon |
Q4 2016 |
Delivered |
|||||
| 28 |
Navig8 Tanzanite |
49,000 |
STX |
Q4 2016 |
Delivered |
|||||
| 29 |
Navig8 Saiph |
25,000 |
Kitanihon |
Q1 2017 |
Delivered |
|||||
| 30 |
Navig8 Sceptrum |
25,000 |
Kitanihon |
Q2 2017 |
Delivered |
|||||
| 31 |
Navig8 Spica |
25,000 |
Fukuoka |
Q2 2017 |
Delivered |
|||||
| Newbuildings |
||||||||||
| 1 |
Navig8 Sol |
25,000 |
Fukuoka |
Q3 2017 |
On order |
|||||
Forward-Looking Statements and Distribution
This press release contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including the Navig8 Chemical Tankers Inc.'s management's examination of historical operating trends. Although the Company believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, the Company cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in this press release include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the chemicals market as a result of changes in OPEC's petroleum production levels and worldwide oil consumption and storage, changes in the Company's operating expenses including bunker prices, dry- docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company on the Norwegian OTC trading support system.
This communication is not for publication or distribution, directly or indirectly, in or into any state or jurisdiction into which doing so would be unlawful. The distribution of this communication may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes, should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions. The Company assumes no responsibility in the event there is a violation by any person of such restrictions.
Share this article