Navigator Holdings Ltd.

Thank you for standing by, ladies and gentlemen, and welcome to the Navigator Holdings Conference call on the second quarter 2021 financial results. We have with us Mr. David Butters, Executive Chairman, Mr. Harry Deans, Chief Executive Officer, Mr. Niall Nolan, Chief Financial Officer, and Mr. Oeyvind Lindeman, Chief Commercial Officer. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-answer session Thank you, Annie. Good morning, everyone, and welcome to the Navigator Second Quarter Earnings 2021 Conference Call.

As we conduct today's conference call, we will be making various forward-looking statements. These statements include, but not limited to, future expectations, plans and prospects for both financial and operational perspective. These forward-looking statements are based upon management assumptions and forecasts and expectations as of today's date and are, as such, subject to material risk and uncertainties. Actual results may differ significantly from our forward-looking information and financial forecasts. Additional information about these factors and assumptions are included in our annual and quarterly reports filed with the Security and Exchange Commissions. Now, before I hand off the call to Harry, I just have some Brief comments and observations. You know, it's just about two weeks ago when we closed the acquisition of the UltraGas entity, the owner of 18 high-quality LPG vessels. Annie and the rest of our team will have more to say about the importance of these transactions later on the call, but first, I want to personally welcome the former UltraGas employees who have recently joined Navigator. From everything I've heard and seen, you possess the same professional skills and enthusiasm demonstrated by our own Navigator team over many years. We need you and trust you will continue to enjoy a work environment that excites I would also like to formally welcome our three new directors, Peter Stokes and Dodd Van Oppen. Join us and represent the Van Oppen family, the ultimate owner of now 20%, 28% of Navigator's common stock. I have known these two gentlemen for over two decades and I can attest that these two gentlemen are good business people and have strong judgment and of a fine character. Also joining our board is Andrea Sloman Powell. Mr. Powell also comes from a long history in shipping that goes back many decades. and crosses several continents. We are very pleased that all these three gentlemen have agreed to join the board and I am confident that they will contribute significantly to the ongoing success of the company. And I make an observation that Navigator is now a very special entity with two companies Two storied shipping companies in the business for many, many years, each owning a 28% interest in Navigator. It shows tremendous confidence and vision of what Navigator can do. We had great belief it could do it on its own, but now with two real pillars beside us, I think it is an extraordinary situation. and it can only be a sign of success. So Harry, let me pass the call over to you and the rest of your team to fill us in on what transpired over these last three months.

Thank you, David, and good morning to everyone on the call. I hope you're well. As you have seen from our statement today, this quarter has continued to be impacted by the hangover from the southern freeze and the other macroeconomic events which have impacted income. Despite this, however, this is our fifth profitable quarter in succession, with income translating into an earnings per share of one cent, and when combined with our Q1 performance, Navigator Gas has had the best start to the year since 2016. Further, our operating revenues have increased to $85.9 million and we have achieved an adjusted EBITDA of $28.2 million. Looking into the market more generally, Q2 2021 reflects the volatility in the U.S. orphans market. caused by the well-documented weather-related issues on the U.S. Gulf Coast, which significantly reduced cracker output in the region and led to substantially reduced production, a drawdown in inventories, and a curtailment of exports from the U.S. Gulf. Although production rates haven't increased, they have not risen as quickly as predicted and it has therefore taken some time to replenish the ethylene pipeline. This coupled with continued production hiccups, patchy cracker reliability and strong domestic demand and pricing has favoured US domestic supply over exports, which has had a knock-on impact on our shipping business and with it the overall handy-sized utilisation rates. These production headwinds have continued into Q3 and currently show no sign of abating. although they have been partially offset by the U.S. ethane exports and the U.S. propylene import tailwinds, which have helped increase black hole opportunities for vessels returning to the U.S. Gulf. With ethylene inventories at five-year lows and the hurricane season still upon us, producers have prioritized building inventory over exports. As a result of these headwinds, utilization rates were impacted and dipped to the mid-80s, with the overall fleet utilisation ending the quarter at 85.4%. These rates have continued into Q3, as orphan capacity restarts and the US domestic orphans pipeline begins to be replenished, bringing with it strong domestic demand and pricing. All of this puts pressure on export volumes and the equity in arbitrage. Thank you very much. which brings with it diminished tonne miles and a corresponding reduction in the number of vessels required to service that business. This is a short-term hiccup on our journey. Despite the lumpy orphan export supply, our business remains on track to capitalise on further growth as the macro-trading environment improves and as we have previously announced, we integrate the ultra-gas fleet in business with Navigators. This transformative combination, which solidifies navigator gas as the market leader in the space, has created a stronger, larger and more diverse fleet of 56 vessels, which will enhance our market offering and provide much needed flexibility and support to our customers. Ultragas is a fleet of 7 modern 22,000 cubic metre handy sized semi-rec vessels, Five 12,000 m3 ethylene vessels and six gas carriers under 9,000 m3 will position us to engage new clients and markets through increased coverage and geographical reach. The enhanced scale and combined fleet will provide cost savings, significant synergies, increased buying power and efficiencies throughout our business. which will allow us to capitalise on the structural growth of LPG and petrochemical gases being exported from Rupano, Pemina and of course our own Morgans Point JV terminals, all of which are now in stream. These incremental volumes combined with the extremely low level of handy sized new build activity, as can be seen in slide 19 of the supplemental pack, will, when often supply balance is normalised, and when the US to Asia ethnic arbitrage reopened, tightened the market, increased utilization and further improved TCE rates. The combination of our two businesses and the required due diligence went well. Our businesses and teams are so complementary and we were very pleased to complete the transaction on the 4th of August on exactly the same commercial terms as agreed in the LOI. In addition, the combination has introduced Ultranav as well as the BW Group as another major investor with long-standing experience in the maritime industry which will benefit all of its shareholders as intimated by David. We welcome to the board the three new directors who bring with them a wealth of maritime experience and financial knowledge. As previously discussed, the transaction is accretive to Navigator's stand-alone budget in terms of anticipated revenue, EBITDA and EPS. Now moving on from the merger, our core business remains strong. In addition to the four 12-month time charts as we previously announced, we are pleased that Mitsui has once again chosen Navigator to increase the capacity of propane moving from the permanent terminal in Canada to customers in Asia. Already in Q2, over 125,000 tonnes of product has been moved along this brand new trade route between the west coast of North America and Asia. Thus demonstrating why going directly across the Pacific, bypassing the need for a Panama transit and minimising transit times is so compelling. In addition, the underlying ethnic fundamentals remain unchanged. U.S. produced tons because of their advantage ethane feedstock costs generate some of the best margins in the world. This will ensure products as priced for export when the supply-demand balance returns to normal, bringing with it a resumption of export volumes and normalized pricing differentials between the U.S. and Asia. Production from the U.S. Gulf Coast oil and crackers continues to be very lumpy and many facilities are still suffering from poor reliability following the numerous recent outages. This has led to a number of unplanned technical stoppages and shutdowns which has rapidly swung pricing and balances. In the face of this, our diverse fleet has moved record ethane and propylene volumes. which have helped to partially offset this reduction in volume. As always, we expect stronger winter volumes to underpin the utilisation rates going forward. Our Morgan's Point Epping JV terminal exported 155,000 tonnes in the quarter and returned to profit as it ramped up following the Q1 pipeline outage. Furthermore, our unique and now increased market position also remains unchallenged, with the forward order book for new bills now standing at around 5%, with minimal vessel deliveries in 2021 and 2022. 20% of the entire handy-sized fleet is now more than 20 years old, so there is really no pressure available for supply in our growing market. Inefficiencies are also on the up, with increased transit times in the Panama Canal, prolonged dry dockings, and more COVID scares delaying better transits. With the three incremental US export terminals now completed, and with Marcus Hook ME2 now running at 50% and ramping up, ME2X scheduled for start-up in Q4, and We expect bonds to firm in the next few months. It is therefore no surprise that we maintain our positive outlook on short and medium term TCA rates and the handy size market in general as there are a lot of factors that should exert upward pressure on rates. To summarise, the macro trends are all pointing in the right direction. We have strengthened our business through our merger with UltraGas and created the clear market leader in the space. We expect the merger will deliver many synergies and will make our business safer and more efficient. This coupled with our 56 vessels, our scale and our flexibility and diversity of our fleet, together with the unparalleled infrastructure investment, our business is uniquely placed to seize new market opportunities. This enviable position will ensure that we are well poised to capture the market upside when the short-term F-lane supply issues are resolved. With this few remarks, I'd like to hand you over to our CFO, Niall Noland, who will take you through our Q3 financials.