5/15/2025

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

conference call for the first quarter 2025 financial results. On today's call we have Mads Peter Zackel, Chief Executive Officer, Gary Chapman, Chief Financial Officer, Oivin 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 call is being recorded today. As we conduct today's presentation, we'll be making various forward-looking statements. These statements include but are not limited to the future expectations, plans, and prospects from both a financial and operational perspective, and are based on management assumptions, forecasts, and expectations as of today's date, May 15, 2025. Actual results may differ significantly from our forward-looking information and financial forecast. Additional information about these factors and assumptions are included in our annual and quarterly reports filed with the Securities and Exchange Commission. With that, I now pass the floor to Mads Peter Zackel, the company's Chief Executive Officer. Please go ahead, Mads.

speaker
Mads Peter Zackel
Chief Executive Officer

Thank you so much. Good morning, good afternoon, and thank you for joining this Navigator Gas Earnings call for Q1 2025. As a start, I'll just review the key data from our Q1 2025 performance, and then I'll go over the outlook for the rest of the year. After that, Gary, Oivin, and Randy will discuss our results in more detail. In the first quarter, we again generated more revenues up 13% compared to same period last year. This was a new record quarterly revenue, and it was driven by both high utilization and higher rates. Income from our joint venture terminal was down significantly. Adjusted EBITDA for Q1 was $73 million in line with both same period of 2024 and also Q4. The balance sheet is strong with a robust cash position, even after investments into three secondhand vessels and further investments, installments paid into the MGC new buildings. With the recent $40 million bond tap and the $300 million refinancing proceeds, the cash balance will be substantially stronger this second quarter. I'd like to add that the $300 million refinancing was signed as planned in the middle of the most volatile trade environment that we've seen in decades. This is at the lowest margins ever for Navigator and also, I think, showing the rock solid support and trust that we have from our banking partners. The return of capital continued in Q1 with both the five cents fixed dividend and a share buyback up to, in combination, 25% of net income. We're also pleased to announce another share repurchase authorization in the Q1, which included a 6% return on returns, earnings per share and return on equity. Commercially, we pushed TCE rate back up higher and secured average Q1 TCE rates of $30,475. This is 8% higher than both previous quarter and same period last year. We achieved utilization above 92% in line with our guidance and higher than both Q4 24 and higher than the same period last year. We are again quite pleased with our ability to maintain robust TCE rates and utilization in a market that was hit by softer ethylene transport demand. To illustrate the softness throughput at our joint venture ethylene export terminal was limited to 86,000 tons for the quarter and this is of course much lower than the already soft fourth quarter and much below capacity. This was caused by continued effects from the US cracker turn rounds leading to reduced domestic supply leading to higher domestic prices and as consequence a narrow arbitrage. We expanded our fleet by acquiring three secondhand ethylene capable vessels at attractive prices. All three have now been taken over and deployed as planned. We also sold Navigator Venus, one of the original Navigator vessels which was about to reach 25 The sale secured 17.5 million dollars of cash and a book gain of almost 13 million dollars. Gradual fleet renewal remains a priority and we are likely to sell more of our older tonnage. The four last months have been challenging strategically to say the least. It now seems that uncertainty is receding somewhat. We believe that the port fees as announced by the US trade representative will not affect Navigator gas negatively due to our vessel size and due to us being a service provider to US energy exports. It now also seems that tariffs on Chinese import from the US may be limited to 10%. I guess in this context it should be mentioned that over the past five years China has received less than 10% of ethylene shipped from Morgan's point. But anyway much can still change with our diversified customer base, our trading capability and strong balance sheet. I believe we remain resilient even if geopolitics take an unexpected turn. April utilization was weaker than usual due to cargo cancellations and some customers pausing new vessel fixtures. The effect has now already been reversed and the month of May showed gradual normalization in vessel utilization and likely a record high throughput at Morgan's point. The vessel supply picture remains attractive with a handy size order book of 9% and in addition to this now 22% of the global handy size vessels on the water they're more than 20 years of age. So the supply picture continues to look good. Now I'll pass it over to you Gary so you can tell a little bit more about the financial result. Go ahead please.

speaker
Gary Chapman
Chief Financial Officer

Thank you Mads. Welcome everybody. As Mads alluded to we've been really busy in the last few months for all kinds of reasons. Our first quarter 2025 financials show yet another strong result maintaining our trend over many quarters now showing the quality and diversity of our business not least as a result of our flexible fleet, resilient charter rates and utilization and our operational efficiency and cost controls. This all comes through in the numbers on slide six where we see TCE jump above $30,000 per day. This leads on to a record high quarterly net operating revenue of $151 million, adjust to debit die of $72.8 million in the first quarter of 2025. Utilization was up .4% up .1% compared to first quarter 2024 and the average time charter equivalent rate of $30,476 per day is in this first quarter is the highest rate achieved by Navigator in almost a decade. You'll see that voyage expenses have increased substantially partially as a result of our increased fleet size but primarily as these are pass-through costs to our customers there being a corresponding increase in operating revenues. Vessel operating expenses were somewhat up compared to the first quarter of 2024 at 47 million with the increase primarily driven by the three months ended March 31 2025 compared to the same period in 2024. Depreciation is slightly up compared to previous quarters due to our now increased fleet and our general and admin costs of 8.1 million in the first quarter whilst up year on year is down compared to the fourth quarter of 2024. Our unrealized movements on non-designated derivative instruments resulted in a loss in this quarter of 2.3 million dollars this being related to movements in the fair value of our long-term interest rate swaps which affects our net income but which has no impact on our cash or liquidity. We also report a lower net interest expense in the first quarter of 2025 compared to the first quarter of 2024 partly due to lower software rates. Other income shown in this quarter of 4.8 million relates to a historic but successful legal settlement for damages caused to Navigator Ares in a collision with a container ship some 10 years ago. As we were uncertain about this claim we did include any provision in our accounts and so this settlement has gone straight into our income statement for the quarter. This is a full settlement and we don't expect anything further in this in respect of this particular incident. Our income tax line reflects current tax and mainly deferred taxes which are significantly down compared to Q1 2024 as they're primarily derived from our investment and share of profits in our ethylene export terminal at Morgan's Point. Randy will shortly explain more but the ethylene terminal throughput volumes in Q1 2025 were low as Mads mentioned at 85,553 tonnes resulting in us reporting a loss of 0.9 million dollars but as already mentioned we're anticipating materially higher throughput back towards more normal trading levels in the second quarter and beyond this year. Then overall for the first quarter of 2025 net income attributable to stockholders was 27 million which is our highest quarterly net income in the last three years and the second highest in the last nine years with basic earnings per share of 39 cents and adjusted net income which excludes unrealised gains losses on derivative instruments for an exchange and other income of 25.5 million dollars or 37 cents per share. Our balance sheet shown on slide seven continues to be strong with a cash cash equivalence and restricted cash balance of 139 million dollars at March 31st 2025. This is despite paying out 26.3 million for scheduled loan repayments, over 1.9 million in share buybacks in respect to the fourth quarter of 2024, 21 million as further progress payments towards our MGC new bill vessels and a further 4 million final payment for our ethylene terminal expansion project. Our liquidity will be boosted further by a few things not included in these first quarter numbers such as the 40 million bond tap issue which settled in early April, the sale of the refinancing that we have signed and that we're targeting to draw down by the end of May 2025. On slide eight I apologize for the slightly busy slide here but we've been busy extending our maturities, improving our liquidity and reducing our financing costs. We were able to enter into a new senior secured loan facility in February 2025 to partially finance the purchase of the three German-built 17,000 cubic meter ethane ethylene capable liquefied gas carriers that we've since taken delivery of and of which vessels are already positively contributing to our bottom line. Following our successful issuance of 100 million of new senior unsecured bonds in October 2024 which at the time closed with the lowest spread for an unsecured dollar denominated shipping bond in the Nordic market since 2008, we took advantage of a favorable market and on March 28 2025 we successfully issued a further 40 million tap of our bonds which also priced at 7.25 percent. We closed this just three business days before Mr Trump's Liberation Day announcements and although we saw some upward movement in interest rates at the time we believe the tap pricing represented a credit spread that was around 15 basis points tighter than even our original 100 million issue, showing Navigator to be an attractive credit story as well as an attractive equity story. Then on May 2nd 2025 we entered into a new senior secured term loan and revolving credit facility for up to 300 million dollars that will be used to repay the company's existing September 2020 and October 2023 secured outstanding loan facilities of 143 million and 15 million respectively and thereafter be available for general corporate purposes. The facility has a tenor of six years maturing in 2031. Amounts outstanding will bear interest on a quarterly basis at SOFA plus 170 basis points and the facility is secured by or to be secured by eight of the company's vessels. We now have no debt maturities due in the next 12 months. I would just like to take this opportunity to say thank you to the Club of Lenders here for their faith in Navigator and for working with us on this given the macro environment we have seen just recently. We think our business model is robust and it's good to see others thinking the same also and taking a longer term view as we do. On the right side of this slide is a summary of our main debt movements in the last four months and we also show towards the bottom a pro forma loan to value calculation which we think is important to demonstrate that we're operating conservatively while still trying to be efficient with our balance sheet and looking for opportunities to reduce our cost of finance. On slide nine our leverage against earnings remains in a strong position with net debt to adjust to debit die at 2.6 times for the last 12 months to March 31st 2025 and our net debt capitalisation was 38% at the end of this first quarter of 2025. As we've shown before we're continuing to make substantial debt repayments with around $124 million of average annual scheduled debt and mortisation payments expected across the coming three years 2025 to 2027. And again the last bullet we've finished the quarter with a healthy cash balance despite the many calls on our funds where we're actively pursuing a number of important work streams. On slide 10 this is one of our most important slides as it shows our estimated all-in cash break even for 2025 which at $20,600 per day is significantly below our average TCE revenue for this first quarter of 2025 of $30,476 per day and is materially unchanged from the estimate we provided on our last earnings call back in March. The estimated cash break even figure is an all-in figure and it includes our forecast schedule debt repayments and our dry docking costs. On the right is our updated OPEX guidance for 2025 across our differing vessel segments ranging from 8,050 per day for our smaller vessels to 11,100 per day for our larger more complex ethylene vessels. This guidance is unchanged from our last quarterly call in March. And following below is guidance for this year and for the first quarter of 2025 across vessel OPEX, general and admin cost, depreciation and cash interest expenses in dollar terms. The full year guidance for vessel OPEX for 2025 towards the bottom is now slightly higher in total than the previous guidance given in March as we now have a net two extra vessels across the remainder of the year. Slide 11 outlines our historic quarterly adjusted EBITDA adding this first quarter solid figure and demonstrating yet another very positive and consistent result as seen for many quarters now and this is despite a slightly prolonged dip in the ethylene arbitrage which we will cover shortly and which has impacted the results from our terminal this quarter. On the right side we show our historic adjusted EBITDA for 2024, our last 12 months adjusted EBITDA and an annualized adjusted EBITDA based on the first quarter's result. In addition the EBITDA bars then to the right provide some sensitivity and illustrate an increase in adjusted EBITDA of approximately $19 million for each $1,000 incremental increase in average time charter equivalent rates per day. Then in terms of our vessel's dry duct schedule projected costs and time taken we've moved this slide to the appendix as although this is very important information the slide itself is quite heavy and you don't need me to read it out to you. The only point I want to make is that we're continuing to invest in our energy and fuel saving initiatives which we believe are great investments to make for both financial and environmental reasons typically having very short payback periods. So with that and having to been able to report some strong results and activities this quarter I will hand you over to Oivind who can guide us through our commercial environment amidst some of the macro uncertainties we have all been seeing. Thank you.

speaker
Oivin Lindeman
Chief Commercial Officer

Oivind. Thank you Gary and good morning good afternoon everyone. I'll spend the next few minutes walking you through the freight markets, our utilization trends and the recent impact of tariffs. I'll also touch on the latest ethylene arbitrage and wrap up with a quick view on vessel supply. So let's start with the market. If you turn to page 13 you'll see the latest time charter assessments across the gas carrier segments. The story here is stability rates for our core segments ethylene and semi-refrigerated vessels which cover 88 percent of our fleet have held firm. That's reassuring especially given the recent backdrop of tariffs trade uncertainties and most people pushing the pause button. Now on to utilization. On page 14 it shows the makeup of our earnings stays across petrochemicals LPG and ammonia as well as fleet utilization. We came in strong in the first quarter with utilization of 92.4 percent but things took a sharp turn in April. On 10th of April China imposed tariffs up to 125 percent of a range of US energy products including ethane, ethylene and LPG. That made the trade between the two countries completely uneconomical. We had three hand-sized ethane cargos to China cancel and zero new inquiries followed during this time. We worked alone. The industry saw widespread disruptions and cancellations but right after Easter China quietly dropped the ethane tariff back down to one percent. Immediately activity came back. We concluded two ethane fixtures overnight and that's how quickly tariffs can swing the markets. With tariffs down and sentiment improving utilization is now recovering and we expect a more normalized trading pattern from May onwards. Our forward cover helps smooth things out. As of today 41 percent of our ship days over the next 12 months are fixed at an average rate of $31,040 per day. Now let's take a closer look at the tariff situation. On the next page we added three charts showing the direct impact of the tariff spike. First on LPG this isn't a core trade for us but the ripple effect has some impact on the overall freight markets and sentiment. The 125 percent tariff made US to China LPG and the US market. The US market is now a global market for the US economy. Cargos diverted instantly to South Korea, Japan, Indonesia, India while China turned to Middle East and nearby suppliers to backfill their demand. These ships increase in efficiencies which can actually benefit shipping. In the middle chart you'll see hand-sized Etane liftings dropped in April. Not surprising as most of these these trades are on a spot basis. All spot activity was put on pause but with the tariff now back to 1 percent I fully expect May volumes to bounce back. On the right it shows Etoline. China has never been the main buyer of US Etoline. They have on average imported about 10 percent of US Etoline exports during the first five the last five years. Last year in 2024 just 85,000 tons went to China and have declined since 2023 and yet our Etoline freight rates are up. It illustrates that China is not an essential driver for US Etoline exports or our Etoline freight markets. In any event and similar to Etane and LPG the 125 percent tariff shut the trade during April for Etoline. Now with an 11 percent tariff and a healthy arbitrage we could see China come back to play for this commodity. Speaking of arbitrage the Etoline arbitrage is wide open. On page 16 if you take a look at the gray line on the left left hand chart US Etoline prices have come down to around 400 dollars per ton. Significantly down and that's great news. Rate for trade for our terminal and for freight. The mid graph shows where freight sits in the Etoline value chain and if you look in the in the light blue box 300 dollars per ton to Europe or Asia on paper it works for us. Terminal volumes in April were up and as Mats mentioned May is shaping up even better. Our terminal is set to use its flex capacity to meet that demand. On supply on page 17 it shows the fleet picture. Supply in our hand-sized segment remains very manageable single digit growth from the yards. A good chunk of the fleet is over 20 years of age. The larger segments are seeing more new builds but we're in a comfortable position in the segments we operate. So to wrap it up April was turbulent but the fundamentals are back for Etane and Etoline. Utilization is rising rates are holding and volumes are flowing through the terminal. So we're entering May with solid momentum and a bit of spring optimism. With that I'll hand over to Randy for the latest corporate developments.

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

Randy. Thank you Oivind. So following up on several announcements we made in recent months we want to provide some additional details and updates on our recent developments. Starting on slide 19 we're pleased to announce our return of capital for the first quarter of 2025 but before we get to that I want to highlight that during the first quarter we repurchased more than 136,000 common shares in the open market totaling 1.9 million dollars for an average price of 14.17 cents per share. Now looking ahead in line with our return of capital policy and the illustrative table below we're returning 25% of net income or total of 6.8 million dollars to shareholders during this second quarter. The board has declared a cash dividend of five cents per share payable on June 17th to all shareholders of record as of May 29th equating to a quarterly cash dividend payment of 3.5 million dollars. Additionally with MBGS shares trading well below estimated NAV of around $27 a share we will use the variable portion of the return of capital policy for share buybacks. As such we expect to repurchase 3.3 million dollars of common shares between now and quarter end such that the dividend and share purchases repurchases together equal 25% of net income again 6.8 million dollars in total this quarter. As seen over the past few years returning capital shareholders will remain a primary focus for us going forward and that's not all for capital returns just wait there's more. Now looking at slide 20 included in our earnings release yesterday afternoon we announced the board's authorization for a new share repurchase program of up to 50 million dollars of MBGS common stock most likely to be implemented via open market purchases. To be clear this new share repurchase authorization is in addition to our quarterly share repurchases connected to our return of capital policy so the 3.3 million dollars mentioned earlier will not into this new 50 million dollar authorization. Now there's several compelling reasons for us to repurchase shares buying back at discount boost our NAV per share it reduces the share count and increases earnings per share supports the share price and as we explained through our five pillars of capital deployment it diversifies our uses of cash. In terms of funding the buybacks we've recently raised almost 200 million dollars of excess liquidity through the unsecured bond tap the most recent credit facility refinancing and the sale of the Navigator Venus which I'll touch on in a second. As Gary displayed on slide eight a large portion of the excess cash will be used to repay more expensive debt some will be used for growth projects some will be kept on the balance sheet and some will be used for this share repurchase program and as you can see on the bottom left of the slide the extremely intelligent equity analysts who cover us agree that our share price is very attractive with lots of upside from here. So all that being said there are many factors that come into play regarding the timing and scale of incremental repurchases but we do plan on implementing this program in the near future especially at the current very cheap share price. Now turning to our ethylene export terminal on slide 21 as we mentioned on a previous earnings call US golf ethylene cracker turnarounds persisted throughout the first quarter resulting in reduced US ethylene supply and high US ethylene prices as a result throughput values during the first quarter decreased to 85,000 tons however as the US crackers ramped production in April the domestic ethylene price fell from 30 cents a pound or 660 dollars per metric ton to 20 cents a pound or 440 dollars per metric ton as you can see on the bottom right chart substantially widening the arbitrage to both Europe and Asia. So this led to throughput in April increasing to a six month high of 66,000 tons and with the domestic ethylene price now back down to 400 dollars a ton throughput in May will exceed the values in April and the flex train will be utilized soon. So looking at the forward curve for ethylene prices we expect the terminal throughput to remain fairly strong and our net income from the joint venture to return to historical profitability levels this quarter. As a reminder we completed the final flex train capex payment of four million dollars in January for a total contribution of 128 million dollars all paid from cash on hand. As for the contracting of the expansion volumes interest in the off-take contracts has increased in recent weeks and we continue to expect that additional off-take capacity will be contracted in the coming months as new customers continue to request terms. Now finishing on slide 22 our fleet renewal program continues to be implemented as we sell our oldest vessels and replace them with modern secondhand tonnage. So starting with the divestiture two days ago we completed the sale of our oldest vessel Navigator Venus a 2000 built 22,000 cubic meter gas carrier to a third party for 17.5 million dollars resulting in a 12.8 million dollar profit to be included in our second quarter net income. That leads us with only two of our original vessels built in 2000 and we continue to engage buyers who are showing interest in acquiring those older vessels. On the replacement side during the first quarter we took delivery of all three secondhand handy-sized ethylene carriers that we agreed to acquire in December of 2024 complementing the increased export capacity from our ethylene export terminal joint venture. Now the vast majority of that 83.9 million dollar total purchase price was financed through new debt totaling 74.6 million dollars so the acquisition only required less than 10 million dollars of our cash. As a result of our recent sale and purchase activity our current fleet is now 11.9 years of age with an average size of 20,816 cubic meters so not too young not too old not too big not too small basically the Goldilocks fleet. With that I'll now turn it back over to Mads for closing remarks. All right

speaker
Mads Peter Zackel
Chief Executive Officer

thanks

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

a lot Randy.

speaker
Mads Peter Zackel
Chief Executive Officer

Yes in summary I guess that we can conclude here that Navigator Gas got off to a robust start to 2025. I probably should add here that the past month has added quite a few sleepless nights and probably also some gray hairs but I think in Q1 we delivered another solid quarter with strong operating cash flows and we have in front of us a Q2 that maybe started a little bit shaky but has now returned to almost normal dare I say so. We've built resilience by refinancing well ahead of maturity at lower margins and better terms and this is why we despite less overall visibility than usual can continue to pay quarterly cash dividends and add another substantial share buyback program at 50 million dollars. This buyback program will significantly enhance the shareholder returns our EPS and our return on equity. We remain confident about the demand fundamentals of the business. Continued growth in US natural gas liquid production and the significant build out in US export infrastructure over the next four years will support exports and thereby transport demand. Near term we expect the terminal throughput for Q2 to be materially higher than Q1 and with a widening ethylene arbitrage. The vessel supply picture remains attractive with a small hand-sized order book and an aging global fleet. So thanks a lot for listening and now I'll hand it back to you Randy and we'll go to Q&A.

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

Thank you Miles. Operator we'll now open the lines for some Q&A. So to raise your hand press star 9 and then you'll have to unmute yourself by pressing star 6 or if using zoom just use the raise hand function. So first question your line should be open.

speaker
Unknown
Unknown

Randy thank you. Thanks for the update guys. A couple questions from my end. I think Oivind you spent a good amount of time talking about the market in April and how things have improved thus far in May as the tariffs have gotten you know removed or lowered. I just wanted to ask when the China-US trade got to a bit of a standstill as you highlighted what ended up happening elsewhere? Did you see any cargo opportunities to send to other areas in the Far East or was it just a complete no lull in the market?

speaker
Oivin Lindeman
Chief Commercial Officer

No I mean LPG is quite it's a deep market. It's a big market and it's quite fungible meaning that you can fight other outlets. So positively for navigator in that situation so no LPG from US to China. So what does China do? They buy from other sources. So we actually did some trades that we haven't done before. LPG on the hand is sized from at least two China. So usually those ships are too small for such a long deep sea voyage on LPG. It's more for the VLGCs but it happened and that is a sort of a positive blip if you see it that way. But LPG generally caused inefficiencies so ships were waiting and fully deviating. Different trades going to new places and generally that was a positive for the market generally for LPG. It then stopped until China announced that no it's exempt from import duties. I only 1% going from 126 to 1% so that's clearly helpful. So those two things had an impact.

speaker
Unknown
Unknown

Okay thank you. And then just in terms of how we saw things in the first quarter it seems that your realized rate stayed fairly strong even as you were highlighting the arbitrage to move cargo kind of favored going the short haul route to Europe instead of to the Far East. Is that a bit of would you say that's a delayed reaction maybe that we will see some of that into the second quarter where we'll see a softer rate because you know obviously 30,000 is still quite strong in spite of that shorter haul.

speaker
Oivin Lindeman
Chief Commercial Officer

I think when there was no smaller volumes of ethylene going through the terminal in the first quarter and rates were kept high and now you're facing a situation whereby there's more volumes so you know that's a positive if you're thinking about the second quarter. That's more supply that more volumes that needs to move on the same amount of caps. First quarter most of it went transatlantic to Europe so on Etta and Etta lead. Shorter voyages but now we're seeing also voyages going to Indonesia and other places are longer so yeah we are optimistic.

speaker
Unknown
Unknown

Okay and one final one and I'll turn it over. Maybe to you Gary you've got the new credit facility in place now that refinances you know this year's maturity. You've made for the terminal expansion with your cash resources and on the last call you mentioned that you're aiming to put some debt in place on the terminal now that it's completed. You've got the small balance left on that original loan for the pre-expansion part of the terminal. What are you thinking right now in terms of you know putting some debt on the project now? Any sense of timing or amount?

speaker
Gary Chapman
Chief Financial Officer

Yeah I think what we can say it's not imminent. I don't think it's top of our list. I think it's something that we've been looking at for a while and I think there are various different things we can look at. Obviously for Navigator it's not ships so it's something a little bit different for us to finance and I think you know with the contractual situation from the flex train there we've been waiting for that situation which is coming along nicely but because we've not been in a rush I think we've been prioritizing our more expensive bank debt and our other facilities and getting that out of the way first but it's certainly still on our list but in terms of priority and timing yeah it's probably not right up at the top of the list. I think we've got other things that we can go for first.

speaker
Unknown
Unknown

Okay thanks Gary. Thanks guys.

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

Thank you. All right next question your line should be open.

speaker
Charles
Unknown

Hi just starting off on the buyback program how do you think about deploying the new buyback program and is there a mechanism for how you determine the amount of buybacks in any given quarter?

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

Yeah thanks for that Charles. So in terms of scale you know looking back over the last couple of years we bought back around 55 or so million dollars each year. In 2022 we announced the program the first 50 million dollar share buyback program and implemented it pretty soon thereafter so certainly planning on putting this one to good use as well. In terms of the scale there are certain parameters and volume limitations that you can buy back on any given day and kind of an open market share repurchase program so obviously we'll have to stay in line with those but that said again we're going to do the 3.3 million for sure in terms of share buybacks based on the return of capital policy and the incremental one we plan on utilizing here in the near term as well so a lot of variables will determine the exact timing and scale of that but it is something we plan on implementing in the near term.

speaker
Charles
Unknown

Understood and just second question has volatility that you've seen in the market recently changed how you're approaching the chartering strategy.

speaker
Oivin Lindeman
Chief Commercial Officer

Charles we mentioned we put in a note which we haven't done before in terms of our percentage cover over the next 12 months and the average rate of that that certainly helped in April. I think that 41 percent is probably a little bit low so we're looking to nudge it up a few percentage points so it's something we look at and of course you are influenced by what's happening around you but on a long term we generally are just shy of 50 percent on cover because we believe petrochemicals generally spot driven so and we believe in that market is coming back now and then of course it's beneficial to have some spot open ships.

speaker
Charles
Unknown

Understood thanks for the time.

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

Thank you Charles. I believe that is it in terms of Q&A so I'll turn it back to Mads for one final goodbye.

speaker
Mads Peter Zackel
Chief Executive Officer

Good thanks for staying with us listening in to our Q1 results. I think you can see that this is better than expected Q1 it was a quite robust result that we demonstrated here with good cash returns and of course that cash return then is translated into returning cash to shareholders so we are pleased to see that even in a time when things have been very dynamic around us that we can finance our vessels with strong support from our banks and we can also generate excess liquidity so we can launch another share buyback and we've seen that as being a very good instrument in the past to returning capital to shareholders and this is one that we'll keep prioritizing so stay tuned and thank you so much for

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

listening in. Wait one more second looks like we have a late addition to the Q&A. Clement there he is your line is open.

speaker
Clement
Unknown

Hi Dimm thank you for taking my questions. I wanted to delve a bit further into the TC increase quarter over quarter. Was the bulk the uplift attributable to solid performance or on the spot market or was it mostly due to vessels on time charters being rolled at higher rates?

speaker
Mads Peter Zackel
Chief Executive Officer

You muted Ivan.

speaker
Oivin Lindeman
Chief Commercial Officer

Oh boy mostly on the time charter market Clement. The spot market was getting a little bit choppy leading into to April so generally attributed to the time charter which proves the point that also customers are viewing 2025 as being quite tighter or tighter on ship so that's just a reflection of that.

speaker
Clement
Unknown

Right that's helpful and this one is more on the modeling side but should we expect the core pay payments on the Athelene export terminal to provide the tailwind to the JB's contribution in the second quarter?

speaker
Mads Peter Zackel
Chief Executive Officer

Yep and I guess I'll

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

go ahead Martin. No

speaker
Mads Peter Zackel
Chief Executive Officer

no that will certainly be the case the deficiency payments tend to vary from contract to contract so it depends on which the customer is but typically they will fall into the following quarter portion of it so yeah you'll see a benefit or positive impact from it.

speaker
Clement
Unknown

That's helpful thank you that's everything from me thank you for taking my questions. Absolutely thanks for joining.

speaker
Randy Givens
Executive Vice President of Investor Relations and Business Development (North America)

All right with that for real this time thanks again and we look forward to seeing you all in August.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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