Navigator Holdings Ltd.

thousand dollars for q4 2023. this compares to less than 24 000 in q4 of 2022. fleet utilization stayed above 90 in q4 and that was just shy of the utilization that we achieved in q3 and same period 2022. Utilization at or above 90% typically allows for higher TCE rates. Throughput at our joint venture Ethylene Export Terminal was slightly down at 208,000 tons for the quarter, but it was nevertheless brought to a total of the terminal capacity of 1 million tons per annum. The expansion of the terminal continues to be on track for completion in Q4-24. And in 23, we contributed progress payments of $35 million made up of four payments of around $9 million each in April, August, October, and December. The outlook for our business remains robust. We expect utilization to remain near 90% and we continue to renew our expiring time charters at higher rates. With solid NGL production and thereby demand for transportation on handy sized gas carriers, combined with limited supply from new buildings in our segment, we expect this to continue. We also do not expect that the trade patterns through Panama Canal and Suez will be restored in the near future. which may lead to more cubic meter miles transport work for us. We work intensively with our customers to improve the efficiency and avoid idling or ballast voyages. The most recent examples of backhauling properly in from Asia is a great example of that joint work. With that, I'll just hand it over to Gary for a more detailed of our financial results. Go ahead, Gary.

Thank you very much, Mads, and good morning or good afternoon, everybody. I'm pleased to report our latest fourth quarter 2023 results in which we've continued our momentum with again, some very positive results. On slide six, we see our total operating revenue up over 18 million or 14.9% to 141.6 million in the fourth quarter of 2023 compared to the fourth quarter of 2022. With much of this increase, due to stronger time charter equivalent rates, as Mads has pointed out, that were on average 28,428 per day in the quarter compared to 23,622 in the fourth quarter of 2022. There were further positive effects as a result of having our five navigator greater bay vessels fully operational in the fourth quarter of 2023. And this was also reflected in our ownership days, available days and operating days figures as shown on the right hand side. Against this, utilization was a little down in the fourth quarter of 2023 compared to the fourth quarter of 2022, but at 91.3%, it was still very healthy, as Mads has already said, and as Oibin will confirm later. Erethylene terminal throughput volumes in 2023 were 987,000 tons, close in line with nameplate capacity at a million tons, and we currently expect to remain near capacity in 2024. Our daily vessel operating expense in the fourth quarter of 2023 was essentially in line with the fourth quarter of 2022 at 9,067 per day, noting that the fourth and the last quarter of the year is typically a little higher than the other quarters and 2023 was no different. We are providing some full year 2024 expense guidance on slide nine for those that are interested in this. Depreciation was up slightly over the same period in 2022, mainly due to the addition of the five Navigator Greater Bay vessels that were acquired at various times from and after December 2022. The non-cash movement in the mark-to-market valuations of our interest rate swaps was a loss in the fourth quarter of £5.2 million as a result of softening forward interest rates, and our interest expenses were cushioned by interest income earned on our cash balances in the quarter. Our income tax line reflects current tax and deferred taxes, mainly on our share of profits from our Ethylene Export Terminal at Morgans Point. Overall, our earnings per share for the quarter was 24 cents for the fourth quarter of 2023, compared to 13 cents for the same period in 2022, with adjusted EPS up at 32 cents. And as Mads mentioned, the fourth quarter of 2023 results provide a record equaling 72 million adjusted EBITDA. Then taken across the full year, we're reporting the highest annual adjusted EBITDA in Navigator's recorded history at $282 million. The balance sheet shown on slide seven remains strong with a cash balance of over $158 million at December 31st. This compares to a minimum total liquidity covenant on all of our bank loans and credit agreements of around $50 million. This cash balance is after all of our recent buybacks, our dividends paid in 2023 and after repaying $23.8 million of the $111 million term loan and revolving credit facility, which funds remain available to be redrawn under the terms of the facility agreement. This basically means that we had around $182 million of liquidity at the end of 2023. Our net debt capitalisation was just under 35% as of December 31st, and net debt to adjusted EBITDA was 2.6 times for the 12 months to December 31st. We see our cash being needed for our Ethylene Export Expansion project until we fix finance for that later in the year, as well as for other projects and investments that enhance shareholder returns. As you'd expect, there are a number of projects that we're actively looking at. In addition, under our five pillars that we'll mention later, we'll continue to reduce our debt look to capital distributions and share buybacks, and we're always looking at how we can renew and potentially add to our fleet. Of course, finance is very important to all of this, and as shown on slide eight, we have no low maturities until 2025. The maturities for 2025 include $100 million senior unsecured bond, which we might refinance depending on investment opportunities, and the two bank facilities totaling $190 million that will likely be refinanced in a cash-positive transaction. On these 2025 maturing bank facilities, we already have commenced discussions with our lending group and we've received very positive feedback already. We'll provide further updates on these as discussions progress over the coming quarters. On slide nine, we outline our estimated cash breakeven for 2024, which is $20,705 per day, which figure includes scheduled debt repayments and our heavier dry dock scheduling this coming year compared to 2022 and 2023. Even considering this, with this relatively low breakeven level relative to charter rates, recalling our average TCE for the fourth quarter of 2023 was over $28,000, it enables Navigator to generate positive EBITDA throughout the shipping side. Then to the right on this slide is daily OPEX expectations for 2024 across our differing vessel size segments, ranging from our smaller vessels to our larger, more complex ethylene vessels. We also provide a range for the expected annual spends for Vessel OPEX, general and admin costs, depreciation and net interest expenses, all of which are broadly in line with 2023 figures. On slide 10, we outline our historic quarterly adjusted EBITDA, showing a step up over the past four quarters and a continuing trend this quarter, all nicely demonstrating the very positive results we've been able to report across the whole of 2023, culminating in our highest adjusted EBITDA on record of $282 million. We also expect the first quarter of 2024 to provide a healthy result. On the right side of slide 10, we show our historic adjusted EBITDA bar, our last 12 months bar, essentially 2023, and an annualized adjusted EBITDA based on this quarter's result. In addition, the EBITDA bars to the right show the effects of an increase in adjusted EBITDA based on incremental increases in average charter rates of $1,000 per day to give some further perspective. Then on slide 11, we cover the important topic of our vessels' scheduled dry docks. We have 17 vessels scheduled for dry docking during 2024, with an expected total of 399 off-hire days, and with total dry docking capex anticipated of 22.9 million, all of which is fully budgeted. Some more detail on the expected timing and costs of these dry docks is shown below, noting that one vessel has already successfully completed its docking in January of this year. Also, as we have announced before, we will take these dry docks as opportunities to install energy saving technologies on those vessels at a cost of around $4.8 million, with many of those technologies having a very short payback period. Finally, we also provide here some guidance on 2025 and 2026 scheduled dry docks for those that are interested. Then with that, at the end of a good quarter and at the end of a very strong year and with a great foundation set up for 2024, I'll stop there and I'll hand over to Oivind to give you an update on our commercial position. Thank you.

Thank you, Gary. And good morning all. Let's move to slide 13 to take a closer look at the recent developments of American gas fundamentals. The US reported 210 million barrels of natural gas liquids production at year end, which is up 10 million barrels since of last earnings call. This is a meaningful increase, but why is it important? Well, remember, one barrel of natural gas liquids consists on average 42% of ethane, 45% of LPG, and the remaining natural gas liquids. US domestic consumption of ethylene and LPG is relatively flat. And therefore, any additional production is more or less solely aimed for export markets. As a consequence, American midstream companies are investing in additional gas processing plants, fractionators and terminal expansions to allow for the increase in production. This is good for gas transportation, In general, it is great for Navigator and our growing Ethane and Ethylene business. The graph in the middle shows global handy-sized demand measured in volume transported. The volume includes LPG, ammonia and petrochemical cargoes. As you can see, the total tons carried dropped during the last months of 2023. This is mostly due to disruptions at the Suez and Panama canals. many of the handy-sized petrochemical voyages were rerouted. Longer voyages reduced frequency of loading operations, which in turn reduced volume. However, as we can see, for the first two months of 2024, the total volume is more or less tracking historical seasonality. If we look at handy-sized ethane and ethylene exports specifically, we see a positive development. The right-hand graph shows a positive counter-seasonal development. We see more exports from the US of these cargoes compared to previous years. It tells us that despite the longer voyages, US ethylene and ethylene remains highly attractive to international buyers. The updated ethylene arbitrage between US and Europe and Asia is shown on the left graph on slide 14. Growing NGL production puts pressure on the domestic price of ethane. Ethane price, which is the lower line, continues to slide. US ethylene price is represented by the gray line on the left-hand graph. And European and Asian landed price is shown by the two top lines. As we can see, the arbitrage between the continents has widened since last earnings call. This is positive, of course. It is also needed to cover additional freight due to the longer voyages. However, as you see on the middle graph, ethylene export volumes declined somewhat. This is counterintuitive. The explanation lies with the restricted transits at the Panama Canal. The number of gas-carried transits through the canal went rapidly downhill from September of last year onwards. The vast majority of vessels, including ours, were rerouted via Cape of Good Hope when bound to Asia. The duration of our round trips from Houston to Asia increased by 50%, which in turn stretched vessel availability at Morgan's Point export terminal. From a shipping perspective, this is not a bad thing, though. What is interesting to comment on is that of ethane exports. Rerouting of larger ethane vessels, which service take-or-pay supply contracts, created a demand for handy-sized vessels. We fill the cracks that open in their supply chains. This is a nice increase in the handy-sized ethane volumes, and you can see that on the right-hand graph. Our earnings days mixed on slide 15 reflects the flexibility in our fleet. 42% earnings days are derived from petrochemical cargoes, 20% from ammonia, leaving only 33% from LPG when taking into account the non-utilization factor for December. Canal disruptions and knock-on effects to logistics do cause fluctuation in utilization, And utilization is a dynamic metric. It also includes unforeseen technical issues and downtime across the fleet. We have mentioned in the past, and you heard Mats mention it too, and I will take the opportunity to mention it again, that utilization around and above 90% mark represents a very good market. Around this level, we are in an environment where freight rates are relatively healthy. These healthy freight rates are shown on slide 16. There was a knee-jerk upswing in the third-party market assessment immediately after the Panama Canal issues, particularly for the Green Ethylene Index. The assessment has now settled more in reality at quite robust levels. What we can say is that semi-refrigerated and fully refrigerated vessels coming off time charters are being renewed at higher rates than we have seen for many years. What typically ruins the shipping part is oversupply of vessels. We have said it in previous calls and it remains valid today. We have clear visibility of supply coming into the segment over the next few years. It is low at 7%, shown on slide 17. At the same time, the segment has 21% of existing vessels over 20 years of age. Therefore, we are quite comfortable with the supply side of things in our core segment. And that's a good thing. I'm happy to take questions on all the above topics, but first I'll hand it over to Randy for him to go over a few exciting developments at Navigator. Randy.