Navigator Holdings Ltd.

recording in progress navigator holdings conference call for the third quarter 2023 financial results live from houston texas we have with us mr maz peter zacco chief executive officer mr gary chapman chief financial officer mr organ lindeman chief commercial officer and myself randy givens executive vice president of investor relations and business development in north america i must advise you that this conference is being recorded today And as we conduct today's presentation, we will be making various forward-looking statements. These statements include but are not limited to the future expectations, plans, and prospects from both the financial and operational perspective and are based on management assumptions, forecasts, and expectations as of today's date. and as such are subject to material risk and uncertainties. Actual results may differ significantly from our forward looking information and financial forecasts. With that, I now pass the floor to Mads Pieterzakko, the company's chief executive officer. Please go ahead, Mads.

Thank you so much, Randy, and good morning and thank you for dialing in to the Navigator Gas Earnings call. First of all, I'd like to tell you how excited I am about introducing you to Gary Chapman, our new CFO who joined Navigator just over a month ago. Gary's long experience as a leader, as well as a shipping and finance professional, has ensured that he's hit the ground running, and he's now already a valued co-part of the Navigator leadership team. You'll soon see and hear more from him. As Gary, he'll review the financial results with you in a couple of minutes. I'll now kick us off by reviewing the highlights of the third quarter and what a quarter it was. We generated operating revenues of $138 million in Q3 2023. This is up a strong 29% compared to the same period last year. Adjusted EBITDA hit a new record, 72 million for Q3, a vast improvement over last year's 42 million, and higher than the results for the same quarters or the recent quarters this year. You may recall that Q3 is seasonally our weakest quarter, so we are pretty excited about this result for Q3. Adjusted earnings per share was 27 cents for Q3 2023. Our cash position remained robust at just below $180 million at quarter end, and that compares to $153 million when we entered 2023. As part of that picture, you should also be aware that this September, we bought $9 million worth of our own unsecured notes in open market using cash on hand. During the quarter, we paid a cash dividend of 5 cents per share and repurchased $3 million worth of our own shares. We also now declare further 5 cents per share dividends plus just over a million worth of new share buybacks following our Q3 result. An important factor in our better operating result was fleet utilization running above 93% in Q3, comparing to just 85% same period last year. At the same time, our average TCE per day earned by our vessels were above $26,000 for Q3 2023 compared to about 22,000 in Q3 2022. Throughput at our joint venture Ethylene Export Terminal were a quarter of a million tons for Q3 2023 compared to 189,000 tons same period last year. The new expansion of the terminal is well underway, and we've already contributed progress payments of 27 million made up of three payments of 9 million in each of April, August, and October this year. We also announced a new investment alongside Yara Growth Ventures to acquire a 14.5% interest in the same fuel solutions. The first green ammonia boundary units are expected to be delivered in 2025. And that means that we are now really kicking off ammonia as a fuel for shipping, and that's a central part of our navigator company strategy. In recent news, you'll have seen that a number of Panama Canal transits are being reduced due to the lack of rainfall in Panama. This will increase the duration of voyages from US to Asia. This in turn will impact tonnage availability and likely our utilization in a positive way. Our utilization expected to hoover around 90% in the final quarter of this year. And TCE rates are typically stronger in the winter period. Ethylene export volumes through the mortgage point terminal is expected to remain near nameplate capacity in Q4. Adding to this, the supply picture remains attractive with a minimum handy size order book and large part of the global fleet is already more than 20 years old. And now I'll hand it over to Gary, who will for the first time present as CFO for Navigator Gas. Here you go, Gary.

Thank you very much Mads and good morning everyone. Slide six please. I'm really pleased to be with you today taking part in the story of Navigator and building on all the great work done up to this point. And I'm pleased to say that the third quarter of 2023 has continued that momentum with some very positive results. We saw operating revenue up 29% to 137.8 million in the third quarter compared to the third quarter of 2022. and up from £135 million in the second quarter of 2023, despite the summer months and hence Q3 traditionally being seasonally quieter. Time Charter Equivalent Rates, or TCE, was strong at £26,278 in the third quarter, as Matt said, up from $22,022 in the third quarter last year. The bottom right table on slide six shows TCE together with utilisation for the quarter, which was 93.4% above the 90% we guided last quarter, driven mainly by our ethylene capable vessels and also ethane movements where there have been higher tonne miles that help us. This utilisation is better than the 89% we reported last quarter and better than the 84.9% we reported this time last year. Although we have seen the overall TCE rate fall just a little compared to last quarter, this has been more than offset by the better utilisation, leaving us with higher operating revenues than last quarter and a strong result overall. So when you have good rates and you have good utilization, you also need to look to your costs and total operating expenses decreased to 102 million compared to 104 million last quarter. If you exclude the one off 5 million profit on the sale of the Navigator Orion that happened in the second quarter this year and 103 million for the same quarter in 2022. Within those total operating expenses, average daily vessel operating expenses decreased by $250 per vessel per day, or 3.2%, to $7,680 per vessel per day for the three months ended September 30, 2023, compared to $7,930 per vessel per day for the three months ended September 30, 2022. Following all of this, this quarter, we're reporting a record adjusted EBITDA of 72.2 million, the fourth quarter in a row that adjusted EBITDA has increased. Depreciation was steady and both interest income and interest expense for the third quarter of 2023 were affected by the higher interest rate environment we're living in today when compared to the figures reported for the third quarter last year, noting that we have fixed interest rates and have entered into interest rate swaps for around 45% of our total debt. Net income attributable to stockholders of Navigator was $19.1 million for the three months ended September 30 compared to $2.4 million for the three months ended September 30, 2022. Earnings per share was $0.26 for the three months ended September 2023 compared to $0.03 per share for the three months ended September 30, 2022. And adjusted earnings per share, excluding unrealised gains and losses on derivative instruments, was 27 cents for the three months ended September 30, 2023, compared to a loss of seven cents for the three months ended September 30, 2022. The Greater Bay Joint Venture, which is 60% owned by Navigator, acquired its final vessel during the second quarter of this year, and the vessel acquisitions under that programme are now complete. This has resulted in an increase in vessel available days during the quarter and going forward. And now our operating revenue from the lunar pool is nil also as the vessels are fully consolidated into our financial statements such that they are no longer featuring as operating revenues or voyage expenses from the lunar pool collaborative arrangements. The share of the results of the company's 50% ownership in the export terminal joint venture was an income of 3.8 million for the three months ended September 30, 2023 with increased volumes exported through the terminal of 249,857 tonnes for the three months ended September 30, compared to 189,140 tonnes for the three months ended September 30 last year. The tax charge for the quarter again relates to current tax and deferred taxes, mainly on our share of profits from the ethylene export terminal. The balance sheet shown on slide seven remains strong with a cash balance of a little over 178 million at September 30. This compares to a minimum liquidity covenant on our bank loans and credit agreements of 50 million. This cash balance is after all of our recent buybacks. The strong cash balance will be used for capital redistribution, the Ethylene terminal expansion, and for projects and investments that can enhance shareholder returns. The increase in net long-term debt is due to the financing of the five Greater Bay joint venture vessels, but noting that our net debt to adjusted EBITDA is now only 2.9 times as at September 30, 2023, giving us a really healthy position to work from and with no low maturities until 2025, as shown on slide eight. Maturities for 2025 include the $100 million senior unsecured bond, which may or may not be refinanced depending on any investment opportunities that may occur. And the two bank facilities totaling 190 million will likely be refinanced at a higher than current loan to value as the vessels serving as collateral are amongst our younger vessels. As a result, we expect that refinancing to be a cash positive event in 2025. On slide nine, we outline the estimated cash breakeven for 2023 at $19,260 per day. This low level relative to charter rates recalling TCE for the third quarter was 26,278, enables us to generate positive EBITDA throughout the shipping cycle. To the right on this slide is daily OPEX expectations for 2023 across our differing vessel size segments ranging from $7,600 per day for the smaller vessels to $10,100 per day for the larger, more complex ethylene vessels. We also provide a range for the expected annual spends for vessel OPEX, G&A costs, depreciation and net interest expense. On slide 10, we outline our historical quarterly adjusted EBITDA showing a step up over the past several quarters and a further step up this quarter. On the right of slide 10, we show our historical 2022 adjusted EBITDA bar, our LTN bar incorporating the latest quarter and an annualised adjusted EBITDA based on this quarter result. In addition, the EBITDA bars further to the right of those show the effects of an increase on adjusted EBITDA if average charter rates were to increase by increments of $1,000 per day. Then on slide 11, given the numerous scheduled dry dockings next year, we've included a final slide to help guide on this important topic. We have 19 vessels scheduled for dry docking during 4Q2023 through 4Q2024, with a total of 456 off-hire days and total dry docking capex expected of 24.8 million during 4Q23 through 4Q24. We'll take these opportunities to install energy saving technologies during these dry docks, such as some of those listed here. And we have also guided on 2025 and 2026 dry docks for those that are interested in looking further ahead. So that's the conclusion of the finance section for this third quarter. And I'll now pass the mic to Oyvind. Thank you. Over to you.

Thank you, Gary. And good morning from Houston. If you take a look at slide 13, US natural gas liquid production continues to grow, surpassing the 200 million barrels per day production milestones reached in August. The Energy Information Administration predicts further growth by end of the year. This strong production trend bolsters two key aspects for us. Competitive prices for American LPG and ethane and increased throughput at various US export terminals. Notably, LPG exports in August exceeded 60 million barrels per day, making a 10% increase from the same period in 2022. During the third quarter, US handy-sized export cargo saw a slight increase compared to the second quarter. Despite the typical inventory build-up during the pre-winter months, we anticipate that North American handy-sized LPG volumes will continue exceeding 100,000 metric tons per month. In the handy-sized segment, LPG is an important but secondary story when talking about current North American shipping demand. The primary focus is linked to ethane, the largest component of the natural gas liquids production. On slide 14, we direct attention to the graph in the lower left, illustrating the market dynamics. History shows that as long as ethane prices remain below 400 metric dollar per tonne, ethylene, being ethane's derivative, continues to flow from the US to international markets. Currently, ethylene is priced around $200 per metric ton, leading to an ethylene sale price in the US of $480 per ton. This ethylene can be sold in Europe or Asia Pacific region for approximately $900 per ton today, leaving ample margin for terminal and marine transportation costs. Our joint venture ethylene export terminal and our fleet both benefit from this reality. Additionally, which is important to keep in mind, a high oil price environment further enhances the attractiveness of US ethylene to ethylene production and exports, as the alternative substitute oil to ethylene becomes more costly. The distribution of ethylene export volumes is shifting back to a balance between European and Asia-Pacific destinations, as seen in the middle graph. However, current challenges with the Panama Canal locks causing disruptions in transit numbers are likely to temporarily shift more volumes towards Europe due to the shorter distance. We'll take a closer look at the impacts of the Panama Canal in a moment. While the total US volume of ethane has decreased slightly in recent months, on the right-hand graph, the combined volume of ethane and ethylene for handy-sized shipments has increased. Data on page 15 shows that 2023 has been the highest level of ethane and ethylene exports volumes in the handy-sized segment over the past five years. It is also important to note that while US ethylene export capacity is currently capped at around 100,000 metric tons per month, that is until our expansion is complete, ethane does not face the same infrastructure constraints. Nearly 250,000 tons of ethane was exported on handy-sized vessels in September compared to 150,000 tons during September of 2022. Therefore, NavigateGas is strategically positioned not just in the ethylene market, but also in the ethane market, all directly linked to the North American upstream natural gas liquids production. Our vessels regularly navigate the ore blocks of the Panama Canal, creating a vital link between the US Gulf exports and demand centers across the Pacific Ocean. On page 16, We can see to date this year Navigating has scheduled nearly 100 transits through the Panama Old Docks with an average journey time of just over two days, regardless of whether the vessels are in ballast or laden. This efficient transit process has facilitated a reliable and economical delivery service of both Etain and Etolin to our customers in the Asia-Pacific region. However, this situation is poised to change. The water level in Gatun Lake, which provides essential fresh water to Panama City and its surroundings, as well as for the canal's lock operation, is at a historical low point. To address this, the Panama authorities have reduced the number of transits for both new and old locks until the onset of the monsoon season. We've been informed that additional transits won't be permitted until at least April of 2024 next year. Until that point, the canal will provide transits at half capacity. So what does this mean in practical terms? The primary implication will be longer voyage times. The duration of round trips from US exports to Asia of LPG, ethane and ethylene is expected to increase by 20 to 30 days on a round voyage, depending on whether the route is via Suez Canal or Cape of Good Hope. As a note, the Suez Canal, which has spare capacity, has started enticing vessels traffic in this direction by offering discounts. As you can imagine, the trades are starting to shift. The secondary implication is that of vessel type preference through the Panama Canal. Even those granted canal transit might not be able to travel fully laden due to the reduced draft limitations as shown on page 17. Additionally, vessels able to transit will likely face severe delays being queued behind prioritized container ships, LNG carriers and cruise ships. For our ethane and ethylene trade, we anticipate two developments to happen. First, we expect an increase in demand for handy-sized vessels to transport ethane. This uptick is likely as larger ethane carriers face challenges in fulfilling their take-or-pay contracts at the three ethane export terminals in the US as the voyages are longer. Second, to facilitate the profitable arbitrage of ethylene to Asian markets, midstream companies and upstream producers may need to manage their profit margins to allow the trade to continue at full tilt. All things being equal, there is about $75 per ton of additional freight cost to sail east via Suez or Cape versus the Panama Canal without waiting days. Despite these changes, our third quarter performance remains largely unaffected, as shown on page 18. Our earnings composition has only shifted slightly, with an increase in petrochemical cargoes at the expense of LPG. Ammonia continues to account for nearly 20% of our earning days, supporting other cargo segments, which all told, resulting in our utilization around the 90% level. Page 19 showcases the overall robust market across the various gas carry segments. The time charter levels currently being discussed and extended and negotiated are higher than those presented on this page, indicating strong market fundamentals for LPG, petrochemicals and ammonium. Finally, as indicated on page 20, the supply of handy-sized tonnage remains steady from last quarter, with only 5 vessels or 4% of the existing fleet on order within our segment, which is a manageable figure, especially considering the expected phasing out of older vessels nearing 30 years of age. We will stand by for Q&A shortly, as I'm sure there are a few questions regarding the Panama Canal in particular. But first over to Randy for his update on recent announcements. Randy.

Thank you, Oiven. So following up on several announcements we made in recent months, we want to provide additional details on updated developments regarding a few of those announcements. So slide 22, we are pleased to announce our return of capital for the third quarter of 2023. In line with our recently announced return of capital policy and the table below, we're returning 25% of net income or $4.8 million to shareholders this quarter. The board has declared a cash dividend of $0.05 per share payable on December 21st to all shareholders of record as of December 7th, equaling to a quarterly dividend payment of $3.7 million. Additionally, with MVGS shares trading well below our NAV of greater than $22 a share, we will use the variable portion of the return of capital policy to repurchase additional shares. As a reminder, between December and May of 2023, we repurchased 3.8 million shares at an average price of $13.12 per share for a total of $50 million. Subsequently, the board authorized a new $25 million share repurchase program, of which we used 3 million during the third quarter. And looking ahead, we will repurchase at least 1.1 million of NVGS common shares between now and the quarter end. such that the dividend plus the share repurchases equal 25% of net income. Returning capital shareholders is relatively new to Navigator, but something we see as a requirement for a shareholder-friendly company. Turning to slide 23 and following up on our previous announcement regarding the expansion of our ethylene export terminal under the existing 50-50 joint venture with Enterprise, Over at Morgan's Point, we agreed to a capital project to increase the export capacity from around 1 million tons per year to at least 1.55 million tons and up to 3.2 million tons by converting an existing ethane refrigeration train. to also refrigerate ethylene. The project is underway, the long lead items have been ordered, and the groundwork is progressing, the irrigation and electricity prep underway, and construction is expected to occur throughout 2024 to be completed by the end of next year. The total capital contribution required from us to the joint venture for the project are expected to be around $124, $125 million. the majority of which will be paid in 2024. To date, we have already made three progress payments totaling $27 million, and the remaining CapEx is expected to be paid from cash on hand until new financing agreements are completed in early 2024. As you can see on the bottom left chart, the terminal continues to run at or above nameplate capacity with 3Q throughput reaching 250,000 tons. Discussions are ongoing with current and new customers for multi-year off-day contracts, and we expect the vast majority of the additional guaranteed capacity to be contracted during the construction phase again throughout 2024. On slide 24, to further reduce our net interest expense, we opportunistically purchased $9 million of the $100 million unsecured notes maturing in September of 2025 at an average price of $100.53. Assuming we call the bonds at par in March of 2025, the yield to maturity at these prices is 7.6%, well above the 5% or so we would earn for a 12 to 24-month Treasury note. Going forward, we have plenty of options for the current unsecured notes, including repaying them with cash, extending the notes or issuing new notes for less or more than the outstanding $100 million. And this decision will be made based on the interest rate environment, potential uses of capital and other sources of capital. Now, as for our most recent announcement on slide 25, and as Mads mentioned earlier, we recently announced a new investment alongside Yara Growth Ventures to acquire a 14.5% interest in Azane Fuel Solutions, the world's first provider of ammonia bunkering solutions. As you can see, Azane already has grant financing secured. And importantly, the company has a partnership with Yara Clean Ammonia and a commercial agreement for the pre-order of 15 units to be built over time. FID is likely in the first quarter of 24, and the first green ammonia bunkering units are expected to be delivered by the end of 2025. We continue to believe ammonia will be a key future fuel for the shipping industry, so we're putting our money where our mouth is with this strategic investment. Now, finishing on slide 26, there is still time to make it down to Houston, Texas for upcoming 2023 Analyst Investor Day this week. On Wednesday, we'll be touring the Morgan's Point Ethylene Export Terminal and climbing aboard one of our beautiful vessels loading ethylene, followed by a dinner with management and some members of the board. And then on Thursday, we'll host company and industry presentations covering current market trends, a financial update, as well as our medium term strategy. We'll then have lunch, followed by an appreciation event for analysts, shareholders, customers, and partners. The outlook for the weather forecast is looking bright, but not as bright as the outlook for Navigator Gas. So hopefully you can join us in the coming days to hear more about it. With that, I'll turn it back over to Mads for closing remarks. Good.

Thanks a lot, Randy.

Yeah.

And as you can see here, Navigator is sailing strong and it's well positioned for the future. I do hope that you like the direction that we're heading. We're delivering a growing and consistent amount of revenues and earnings. Utilization in the gas tanker fleet stays tight and it allows for higher charter rates. And now we're going into the typically strong winter months. The mid-term outlook for our gas tanker business is robust with a limited number of handy-sized vessels on order. and with continued strong natural gas liquids production growth, not least here in Houston. Our balance sheet is in its best shape ever, with leverage and cash allowing us to return capital and grow our business at the same time. We remain strongly committed to growing Navigator's business. The good progress in expanding our MortgagePoint terminal joint venture as well as our investment into a SANE is shown in this. The best is yet to come. And with that, I'll hand it back to you, Randy.

Thank you, Mats. Operator, we'll now open the lines for some Q&A. So to raise your hand, press star nine, and then you'll have to unmute yourself by pressing star six. Or if using Zoom, just use the raise hand function. So first question, your line should be open.

good morning team this is emily on for omar thank you for taking our questions we first wanted to ask for more detail on how the panama canal congestion is impacting demand on your business are you seeing higher demand as these issues have tightened vlgc availability and are trickling into the mid-size and smaller segments wondering if you could please provide some more color there thank you emily is a very topical question and uh

You're right. I mean, the Panama Canal will, by reducing capacity by 50%, will obviously have an impact on the shipping trade lanes. Longer voyages will be a result, which is generally good for shipping and also good for navigator. We have seen immediate impact on ethane. So ethane demand for hand-sized ships have increased. We've seen some examples of that whereby the rates are high because there's a little availability of ethylene or ethane capable vessels in the spot market. So that is an immediate positive impact. On the ethylene trade, the voyages clearly will be longer. There is room in the arbitrage today to add the freight of $75, as we mentioned in the prepared remarks. to facilitate Houston connecting with Asia-Pacific customers through the Suez or Cape. The immediate changes we have, so which you will see on Thursday, if you come to Houston, Morgan's point for our investor day, we'll go on board and navigate Oberon. She was scheduled to go via Panama. However, she will now deviate via Cape. and go to Indonesia to discharge. So a longer voyages already. So this will tighten the market generally, which in shipping speak is a positive.

Thank you for that explanation. I wanted to follow up with a question on fleet utilization. You started this year off very strong with 96% utilization and it fell to 89% in 2Q and bounced up to 93% this quarter. So nicely done. Your presentation revealed that 4Q utilization is expected to be around 90%, but I'm wondering how should we think about modeling it in 2024? Any detail that you could provide there would be super helpful. Thank you.

Sorry, I can just say a few comments here before you take it over. When we look at our utilization, typically when it's 90% or slightly above that, that's a good number. And it's a robust market. As we've indicated in the previous discussion here, we think that the supply demand situation overall for Navigator looks good with the order book of new ships that are coming in is very limited and also with natural gas liquids production in particular North America continuing to grow. So that means that we see growing demand and the supply situation that isn't really changing much and that overall is good for utilization. So I think You should expect that there will be numbers going up and down. When we are at 95 or above, that's pretty exceptional, and it's not something that you should count on as being the norm. So looking at 90% or just over that, it's a really good number, and it's something that allows us also to push the rates upwards. But, Øyvind, please add any comment you'd like. I think you hit the nail on the head. Thank you.

That makes sense. Thank you. I'll turn it over.

Thanks so much, Emily. You sounded much better than Omar. Next question. Your line is open.

Hey, guys. This is Ben Nolan. Hopefully you can hear me. Actually, I was going to follow up on Emily's question there. You were at was over 93% in the third quarter on the utilization number, which is, as you said, normally a little bit softer period as it relates to utilization. I'm curious why you're expecting a little bit of a dip or, you know, at least not, well, I guess a little bit of a dip in the fourth quarter in that utilization numbers that just sort of, you know, to be determined that maybe conservatism.

I don't think that we're guiding that there will be a dip as such. I think we're guiding that in the 90% neighborhood, that probably includes 93 or so. It's very difficult to forecast with a high level of precision whether it's going to be 90 or 92 or 93. I think overall, you should be left with the impression here that we are relatively confident around the supply-demand outlook, and we think that the utilization is going to remain robust as you've seen in recent quarters. So that's probably more the conclusion rather than, you could say, looking at one or two percentage points up and down. It's simply the operating pattern here that can influence it. And sometimes having a little bit of A little bit of a downtime may not be a bad thing. It may be an opportunity for us to maybe sit back and be holding back, let's say, a shift for a little bit or similar.

Okay, understood. I was going to also ask on the Zane announcement. It's small here, but understandably, hopefully leading to bigger things. Was curious, though, as and when it does make its final investment decision, are there future cash calls or anything else that would be necessary on your part as and when it moves forward?

No, the $3 million investment is, for now, the total investment, right? Additional units will not be held at the company. They will pay us for the order, pay us upon delivery, and then we have the option of operating those assets. But in terms of additional investment dollars, we do not foresee that going forward.

Okay. And I was going to also ask on the JV, the volumes are good. The the contribution was a little bit lower than it was in the second quarter. Was there anything specific around that or how should we think about the JV contribution? Yeah, going forward.

Yeah, higher in 4Q. I think we mentioned that on one of the slides there. But they had a very high electricity pricing in August here in Houston. It was extremely hot most summers, but especially this August. So electricity really went up. And then we had a little bit of deficiencies, some accounting that will roll forward positively in the fourth quarter. So the fourth quarter contribution will certainly be higher than third quarter.

All right. Very good. I appreciate it. Thanks, guys.

Thank you, Ben. Next question. I see a hand there.

Good morning. This is Glenn Mullins. I'm from Value Investors Edge. Thank you for taking my questions. You provided ample commentary on Panama Canal congestion, but I was wondering whether you've seen cascading effects from sky-high VLGC rates we've seen over the past few months.

Hi, Clement. You're correct. So when the larger ship segments above the handy size segment are doing well, it does trickle down. So it's very a mental game whereby when the larger ships are doing better, it is easier, funnily enough, for us to push rates also higher. Because conceptually, it is very difficult to think about paying more for a ship that is half the size than a bigger ship. So it helps, and it's a cascading effect. What dollars and cents that translates into for the handy size, that's a more difficult question. Because we do ethylene, we do ethane, we do ammonia, we do easy petrochemicals in addition to LPG. So as you as you as you know the larger ships only do lpg largely but there is a positive effect uplift from the larger ships doing better correct that's helpful i was wondering about the the nuances about that that's all from me thank you for taking my questions thank you clement i see another hand here from uh poe

yes sorry emailed the question but hey um what's your long-term plan for the morgan point investment you know is it a strategic asset for you over the next decade does apd have a buyout option sort of can you just give me an idea of you know what you're thinking longer term on that investment

Yeah, I can maybe start us out and you can add your call also right here. We're super happy with the joint venture and the partnership that we have with Enterprise. It's a very stable, it's a very well functioning joint venture we have here. And that's, of course, also evidenced by us now together expanding the terminal with a relatively large addition to it. So we see it as stable relationship. It's a 50-50 joint venture. We do not have a purchase option, neither does Enterprise. So we see this remaining a 50-50 joint venture for the long term. We see it as a very cash generative asset. So it's good holding and we see some very clear commercial synergies also for our shipping business in being part of the bigger part of the value chain than just the shipping part. It gives us much better opportunity to commercially manage our ships and understanding what the customers are doing and how the flows are materializing. So it has tremendous value for our shipping business. So we are very pleased and would like to hold on to it.

then can you talk about are there any does enterprise have any preferred terms on shipments or sort of how you know how that um that arrangement works with once you you know once you're actually exporting or you know um you know shipping out of that terminal so it's a it's an open terminal

And it should be like that. But it's a little bit akin to the George Bush International Airport here in Houston, whereby if you go to the airport, there's a lot of United flights. Is there hub? Same here. If you go to Morgan's Point, if you're joining on Thursday, you'll see a navigator ship. And there's a lot of navigator ships calling that terminal. So that's the analogy I usually use for that question.

Okay, great. Thank you so much.

Thank you, Poe. I believe that concludes our Q&A. So just wanted to thank you again on behalf of the management team of Navigator Gas. Hopefully we'll see a lot of you this week. And if not, we'll certainly talk soon. Happy holidays.