Navig8 Chemical Tankers Inc. Reports Results for the Three and Six Months Ended June 30, 2018
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LONDON, Aug. 14, 2018 /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, 2018.
Highlights
- Generated revenue of $40.4 million and net loss of $5.7 million, or $0.15 per share, for the three months ended June 30, 2018.
- Generated EBITDA of $20.1 million for the three months ended June 30, 2018
"While there was a noteworthy level of chemical and product market movements out of the Middle East, combining both COA-related and spot volumes, weaker activity levels in other core trading regions resulted in an unremarkable chemical tanker market in the second quarter," said Nicolas Busch, Chief Executive Officer of Navig8 Chemical Tankers, Inc. "We expect the Middle East market to remain relatively firm in the near-term. Coupled with some positive early signs of market improvement in the third quarter, significant new petrochemical infrastructure demand emerging in the US Gulf and demonstrably low orderbook growth, we are constructive on the earnings landscape for the Company over the balance of the year. Having spent considerable time marketing the capabilities of the Company's fleet, whether in terms of capacity or enhanced coatings, we are firmly of the belief that recent and upcoming developments in chemicals production/transportation position the Company's fleet very well to maximise its competitive advantage."
Fleet Update
All the Company's vessels are deployed in commercial pools managed by Navig8 Group except for one S-Class Vessel, which is commercially managed by Navig8 Group and has been employed on time-charter to a third party since December 2017. The Company's fleet is fully operational and comprises:
- Eighteen IMO2 37,000 DWT Interline-coated tankers built at Hyundai Mipo, Korea ("A-Class Vessels");
- Four IMO2 49,000 DWT Interline-coated medium-range tankers ("T-Class Vessels") built at STX Offshore & Shipbuilding Co., Ltd. ("STX");
- Two IMO2 49,000 DWT Epoxy-coated medium range tankers built at Hyundai Vinashin ("V-Class Vessels"); and,
- Six IMO2 25,000 DWT stainless steel tankers built at Kitanihon Shipbuilding Co. Ltd and two IMO2 25,000 DWT stainless steel tankers built at Fukuoka (Japan) (together, "S-Class Vessels").
Results for the three months ended June 30, 2018
For the three months ended June 30, 2018, the Company reported a net loss of $5.7 million, or $0.15 per share, compared to a net loss of $3.6 million, or $0.09 per share, for the three months ended June 30, 2017. The increase in net loss is mainly attributable to lower gross average daily time charter equivalent ("TCE")1 rates achieved by the A-Class and S-Class Vessels in the three months ended June 30, 2018 , partially offset by an increase in total operating days compared to the same period in the prior year, and year-on-year increases in vessel operating expense, depreciation and interest expense.
Revenue for the three months ended June 30, 2018 was $40.4 million, compared to revenue of $38.4 million for the three months ended June 30, 2017. The total number of vessel operating days for the three months ended June 30, 2018 increased by 202 to 2,891 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, 2018, were $13,451, $14,299, $15,658 and $15,184 per day, respectively. The A-Class, V-Class, T-Class and S-Class vessels earned $14,135, $14,016, $15,406 and $16,608 per day, respectively, during the same period in the prior year. The Company had 32 vessels operating during the three months ended June 30, 2018, all but one of which operate in pools from which they derive TCE revenue (the other deriving time-charter revenue).
Vessel operating expense was $18.7 million for the three months ended June 30, 2018, an increase of $1.6 million from the three months ended June 30, 2017. Average fleet operating cost per day, including technical management fees, was approximately $5,900 for the three months ended June 30, 2018, which was consistent with the three months ended June 30, 2017.
Depreciation expense for the three months ended June 30, 2018 was $12.5 million, an increase of $1.0 million compared to the three months ended June 30, 2017. The Company depreciates the vessels in its fleet from yard delivery.
General and administrative expense for the three months ended June 30, 2018, was $1.6 million, unchanged from the three months ended June 30, 2017.
Interest expense for the three months ended June 30, 2018 was $13.2 million, an increase of $1.4 million from the three months ended June 30, 2017.
Conference Call
On Wednesday, August 15, 2018 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, 2018.
Participants 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 that 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, 2018 by dialing +1 412 317 0088 (Standard International Dial In) and using access code 10123113.
______________________
1Time charter equivalent, a non-US GAAP measure, is vessel revenues less voyage expenses (including bunkers and port charges but excluding pool commission).
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 in 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 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 32-vessel fleet exclusively comprises large, fuel-efficient vessels with modern eco-designs that take greatest advantage of these shifts and features 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's fleet is contracted to operate in various chemical tanker pools managed by 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 2018 |
First Quarter 2018 |
||||||||
| 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 |
8 |
18 |
2 |
4 |
8 |
|
| Total operating days |
1,636 |
170 |
359 |
726 |
1,615 |
172 |
359 |
720 |
|
| Average distributed Gross TCE in $ / day |
13,451 |
14,299 |
15,658 |
15,184 |
14,387 |
15,054 |
16,003 |
15,327 |
|
| Average OPEX in $ / day |
5,858 |
6,708 |
5,908 |
5,761 |
5,752 |
6,309 |
5,899 |
6,049 |
|
| 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 |
2018 |
2017 |
2018 |
2017 |
| Operating revenue |
||||
| Vessel revenue |
40,366 |
38,431 |
81,413 |
76,293 |
| Operating expenses |
||||
| Vessel expenses |
(18,692) |
(17,105) |
(37,468) |
(33,023) |
| Depreciation |
(12,499) |
(11,487) |
(24,859) |
(22,388) |
| General and administrative expenses |
(1,598) |
(1,645) |
(3,230) |
(3,250) |
| Total operating expenses |
($32,789) |
($30,237) |
($65,557) |
($58,661) |
| Net operating income |
$7,577 |
$8,194 |
$15,856 |
$17,632 |
| Financial Items |
||||
| Interest income |
12 |
8 |
28 |
14 |
| Interest expense and finance costs |
(13,196) |
(11,770) |
(25,689) |
(22,392) |
| Other financial items |
(90) |
(6) |
(100) |
(14) |
| Net financial items |
($13,274) |
($11,768) |
($25,761) |
($22,392) |
| Net loss |
($5,697) |
($3,574) |
($9,905) |
($4,760) |
| Loss per common share: |
||||
| Basic |
($0.15) |
($0.09) |
($0.26) |
($0.12) |
| Diluted |
($0.15) |
($0.09) |
($0.26) |
($0.12) |
| EBITDA: |
||||
| Net loss |
($5,697) |
($3,574) |
($9,905) |
($4,760) |
| Depreciation |
12,499 |
11,487 |
24,859 |
22,388 |
| Interest income |
(12) |
(8) |
(28) |
(14) |
| Interest expense and finance costs |
13,196 |
11,770 |
25,689 |
22,392 |
| Other financial items |
90 |
6 |
100 |
14 |
| EBITDA |
$20,076 |
$19,681 |
$40,715 |
$40,020 |
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 |
12,677 |
21,498 |
| Trade receivables |
17,538 |
19,069 |
| Prepaid expenses and other assets |
13,823 |
14,199 |
| Inventories |
3,121 |
3,071 |
| Total current assets |
$47,159 |
$57,837 |
| Non-current assets |
||
| Restricted cash |
18,700 |
18,700 |
| Vessels, net |
1,153,954 |
1,178,156 |
| Total non-current assets |
$1,172,654 |
$1,196,856 |
| Total assets |
$1,219,813 |
$1,254,693 |
| Liabilities and shareholders' equity |
||
| Current liabilities |
||
| Current portion of loans |
55,704 |
55,181 |
| Deferred revenue |
251 |
- |
| Accounts payables and accrued expenses |
7,125 |
6,824 |
| Total current liabilities |
$63,080 |
$62,005 |
| Non-current liabilities |
||
| Long-term loans, net of unamortised debt |
738,606 |
765,582 |
| Accrued interest expenses |
2,469 |
1,543 |
| Total non-current liabilities |
$741,075 |
$767,125 |
| Total liabilities |
$804,155 |
$829,130 |
| Shareholders' equity |
||
|
385 |
385 |
|
| Common stock; $0.01 par value per share; 38,489,108 shares |
||
| Paid-in capital |
403,641 |
403,641 |
| Retained earnings |
11,632 |
21,537 |
| Total shareholders' equity |
$415,658 |
$425,563 |
| Total liabilities and shareholders' equity |
$1,219,813 |
$1,254,693 |
NAVIG8 CHEMICAL TANKERS INC AND SUBSIDIARIES |
|||
| For the six months ended 30 June |
|||
| All in US$000, unless otherwise stated |
2018 |
2017 |
|
| Operating activities: |
|||
| Net loss |
(9,905) |
(4,760) |
|
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|||
| Depreciation of vessels |
24,859 |
22,388 |
|
| Amortisation of deferred financing charges |
905 |
747 |
|
| Changes in operating assets and liabilities: |
|||
| Trade receivables |
1,531 |
(124) |
|
| Prepaid expenses and other assets |
376 |
(1,075) |
|
| Inventories |
(50) |
(88) |
|
| Deferred Revenue |
251 |
- |
|
| Accounts payables and accrued expenses |
808 |
(891) |
|
| Net cash provided by operating activities |
$18,775 |
$16,197 |
|
| Investing activities |
|||
| Payments for drydock |
(235) |
- |
|
| Payments for vessels under construction |
- |
(103,338) |
|
| Payments for vessels |
- |
(169) |
|
| Net cash used in investing activities |
($235) |
($103,507) |
|
| Financing activities |
|||
| Proceeds from loans, net of debt issuance costs |
- |
163,519 |
|
| Repayment of loans |
(27,361) |
(77,220) |
|
| Debt extinguishment costs |
- |
(23) |
|
| Net cash (used in) / provided by financing activities |
($27,361) |
$86,276 |
|
| Decrease in cash, cash equivalents and restricted cash |
(8,821) |
(1,034) |
|
| Cash, cash equivalents and restricted cash, beginning of period |
40,198 |
46,116 |
|
| Cash, cash equivalents and restricted cash, end of period |
$31,377 |
$45,082 |
|
|
Fleet List as of August 14, 2018 |
|||||||||
| Name |
DWT |
Yard |
Built |
||||||
| Delivered Vessels |
|||||||||
| 1 |
Navig8 Victoria |
49,000 |
Hyundai Vinashin |
2015 |
|||||
| 2 |
Navig8 Violette |
49,000 |
Hyundai Vinashin |
2015 |
|||||
| 3 |
Navig8 Almandine |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 4 |
Navig8 Amber |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 5 |
Navig8 Amethyst |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 6 |
Navig8 Ametrine |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 7 |
Navig8 Aventurine |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 8 |
Navig8 Andesine |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 9 |
Navig8 Aronaldo |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 10 |
Navig8 Aquamarine |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 11 |
Navig8 Amazonite |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 12 |
Navig8 Amessi |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 13 |
Navig8 Ammolite |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 14 |
Navig8 Axinite |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 15 |
Navig8 Azotic |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 16 |
Navig8 Adamite |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 17 |
Navig8 Azurite |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 18 |
Navig8 Aragonite |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 19 |
Navig8 Alabaster |
37,000 |
Hyundai Mipo |
2015 |
|||||
| 20 |
Navig8 Achroite |
37,000 |
Hyundai Mipo |
2016 |
|||||
| 21 |
Navig8 Turquoise |
49,000 |
STX |
2016 |
|||||
| 22 |
Navig8 Sirius |
25,000 |
Kitanihon |
2016 |
|||||
| 23 |
Navig8 Topaz |
49,000 |
STX |
2016 |
|||||
| 24 |
Navig8 Sky |
25,000 |
Kitanihon |
2016 |
|||||
| 25 |
Navig8 Tourmaline |
49,000 |
STX |
2016 |
|||||
| 26 |
Navig8 Spark |
25,000 |
Kitanihon |
2016 |
|||||
| 27 |
Navig8 Stellar |
25,000 |
Kitanihon |
2016 |
|||||
| 28 |
Navig8 Tanzanite |
49,000 |
STX |
2016 |
|||||
| 29 |
Navig8 Saiph |
25,000 |
Kitanihon |
2017 |
|||||
| 30 |
Navig8 Sceptrum |
25,000 |
Kitanihon |
2017 |
|||||
| 31 |
Navig8 Spica |
25,000 |
Fukuoka |
2017 |
|||||
| 32 |
Navig8 Sol |
25,000 |
Fukuoka |
2017 |
|||||
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 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.
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