Navigator Holdings Ltd.

Good morning and good afternoon, and thank you all for joining this Navigator Gas Earnings Call for Q3 2025. As a start, I'll just review the key data from our Q3 2025 performance, and then I'll go over the outlook for the coming quarter. After that, as usual, Gary and Oivin and Randy will discuss the results in more detail. The quarter was in many ways a return to more calm waters after the unusual and difficult Q2. In Q3, we saw geopolitical tensions recede somewhat. Port fees from the US and later China now seem to be gone, and tariffs appear to have found their level. However, for Navigator, we still saw an impact from the trade turmoil in our Q3 trading, particularly from the significantly lower ethylene exports from US to China. Øivind is going to bring a little bit more color to this topic shortly. Please turn to slide number four. With that background and moving to our results, in Q3, we generated revenues of $153 million, up 18% compared to the previous quarter and 8% compared to same period last year. The main drive of revenue was both higher time chart equivalent rates, but also robust utilization. We're pleased to disclose that we achieved the highest EBITDA on record at $86 million and an adjusted EBITDA of $77 million the latter number which excludes the $13 million of book gain from selling Navigator Gemini. You may recall that we sold Navigator Venus last quarter at a book gain of $12 million, and I think if we combine the two, I believe it gives pretty strong credence to our estimated net asset value. The balance sheet is very strong with a cash position of $216 million at quarter end plus drawing rights, which leaves us with $308 million of liquidity. You will note on 4th November, we increased our capital return to 30% of net income from previously 25%. Similarly, we have increased the fixed dividend from $0.05 per share to $0.07 per share. This reflects our strong balance sheet and equally important, our commitment to increasing the return of capital to shareholders. Commercially, we achieved average TCE rates of $30,966 per day during Q3, which is a 10-year high and well above the just over $28,000 that we achieved in Q2. We reached a utilization of 89.3%, well above the 84.2% we saw in Q2. Average utilization was supported by a steep recovery for our ethylene spot fleet, while our semi-ref fleet stayed robust. Throughout the throughput at our joint venture, ethylene export terminal increased to 271,000 tons for the quarter, roughly similar to Q2, but still below full capacity. We paid further installments on our Panda new builds, and we paid the first installments of the new two ammonia-fueled vessels that we have charted out to Yara. Due to our balance sheet strength, the contract cover, and robust financing markets, we expect to finance all of our new builds at attractive margins and low-to-value. So they'll tie up limited equity capital and be earning secretive from delivery in 2027 and 2028. While I already covered the sale of navigator Gemini, I should mention that you should expect to see more sale of older vessels that will enhance earnings over the coming months. Headwinds experienced in the first half of 25 have eased but not disappeared. We hope to see more stable market conditions going forward when geopolitical uncertainties ease. As a result, we expect both utilization and average TCE rates to remain near Q3 2025 levels. And we're noting both September 2025 and October 2025 utilization were above 90%. Now, we can't really predict the outcome of trade discussions between the U.S. and trading partners such as China, and much can still change. But with the diversified customer base we have, the trading capability and the strong balance sheet we have, we remain resilient even if the geopolitical situation takes an unexpected turn. And with that, I'll just hand it over to Gary, who will talk a little bit more about our financial result. Go ahead, please, Gary.

Thank you very much Mads and hello everybody. During this quarter, as Mads mentioned, we've continued to experience headwinds from geopolitics that have affected our markets. So it's very pleasing to us to be able to report strong results despite this backdrop and compared to the results we delivered in the previous second quarter of this year. These results are a function of many things, including our cargo diversification, our geographical flexibility, our market position, our strong financial foundations, and very importantly, as a result of the people side of our business, being our colleagues here internally, and also the strength and depth of our customer relationships and market knowledge. And arising from this, our third quarter 2025 results are the best so far this year, and some data points are even record-breaking for Navigator, where we've been able to push charter rates and maintain utilization, supported by our operational flexibility and efficiency and our cost controls. On slide six, We report the highest quarterly TCE in the last 10 years of $30,966 per day, leading to quarterly net operating revenue of $133 million and our highest quarterly EBITDA on record of $85.7 million. The high TCE this quarter was primarily due to the performance of our ethylene vessels and our semi-refrigerated handy-sized fleet, supported by a solid performance from our fully refrigerated and mid-sized vessels. Utilisation was 89.3% in the third quarter, practically at our preferred benchmark of 90%, which is down 2% compared to the second quarter of 2024, but up 5% compared to the second quarter of 2025. In this third quarter, we sold another of our vessels, the Navigator Gemini, as Mads has mentioned, for net proceeds of $30.4 million, resulting in a book gain of $12.6 million, which demonstrates our ability to refresh our fleet on both buy and sell sides as opportunities arise. Excluding this gain from EBITDA as the main difference, we get to an adjusted EBITDA result of $76.5 million, considerably above the still respectable $60 million we posted in the second quarter of this year. Vessel operating expenses were up compared to the third quarter of 2024 at 49.3 million, with the increase primarily driven by the net increase in our fleet size following the purchase of three second-hand vessels in the first quarter of this year, which you can see is reflected in the table shown bottom right. as well as simply the timing and maintenance costs incurred. We expect to close the year on or close to budget for our OPEX costs, adjusting for the extra vessels, and we'll see our guidance on slide 9 shortly. Depreciation is slightly down compared to previous quarters, despite our now increased fleet, mainly due to two older vessels that have reached the end of their accounting life during the quarter and hence no longer will be depreciated. Unrealized movements on non-designated derivative instruments resulted in a loss in the third quarter of 2.6 million, this being related to movements in the fair value of our long-term interest rate swaps, which affects net income, but which has no impact on our cash or liquidity. Our income tax line reflects movements in current tax and mainly deferred tax in relation to our equity investment in the Ethylene Export Terminal and in relation to the Navigator Ares, which was sold on October 1st, 2025 to another group company. And under US GAAP, accounting rules state that that intra-group sale required us to recognise an associated deferred tax liability at September 30th, 2025. The ethylene terminal throughput volumes in the third quarter of 2025 were solid at 270,594 tonnes, up from 268,000 tonnes in the previous quarter, resulting in us recording a profit this quarter of $3.3 million. Then overall for the third quarter of 2025, net income attributable to stockholders was 33.2 million, which is our highest quarterly net income on record, with basic earnings per share of 50 cents, which is our highest quarterly EPS in the last 10 years. Our balance sheet, shown on slide seven, continues to build and be strong with a cash equivalence and restricted cash balance of $216.6 million at September 30th, 2025, which, if you include our available but undrawn revolving credit facilities, gives us total available liquidity of $308 million at the same date. This is despite paying out 31 million for scheduled loan repayments, 5.4 million under our return of capital policy in respect of the second quarter of 2025, 37 million as payments for our vessels under construction, and a further 20.4 million of share buybacks as part of the $50 million share repurchase plan that we have just executed. Our liquidity in the quarter was also boosted by the 30 million net proceeds from the sale of the Navigator Gemini, which completed in September. It's worth noting that our investment in the Morgan's Point Terminal on our balance sheet sits at an equity value of $252 million. It is almost fully unencumbered now with only $4 million of debt remaining, which will be repaid in December this year. Alongside this, we paid from our own cash a total of $99 million at September 30th, 2025, towards the vessels we have under construction. The small difference to the balance sheet figure represents capitalised interest under US GAAP. I think the unencumbered terminal and the construction payments made from our cash on hand, together with still a growing liquidity profile, are further reflections of the financial stability and strength that Navigator is able to demonstrate. And to bring you up to date, including our available but undrawn revolving facilities, we continue to have over $300 million of liquidity at the close on November 3rd, 2025. On slide eight, we show a summary of the main capital events across the quarter where, with a very supportive banking group and a strong underlying business, we were able to return capital to shareholders, boost our liquidity and continue to work towards managing our debt, financing needs and interest rate risk. Following two particularly active quarters this year, during which the company successfully entered into new secured term loan, refinanced two existing loan facilities, and issued a 40 million tap of our existing senior unsecured bonds, this quarter we completed a full 50 million share repurchase plan that commenced in the second quarter of 2025, with a total of 3.4 million shares repurchased at an average price of $14.68, against the company's estimated net asset value of around $28 per share. We also returned 25% of net income to shareholders in respect of the second quarter of 2025, $2.1 million as share buybacks and 3.3 million as a cash dividend at 5 cents per share. And as announced, we will now return 30% of net income in respect of this third quarter of 2025, which Randy will cover in more detail shortly. But we think the uplift in the return of capital policy strikes the right balance at this point, rewarding our shareholders with higher returns while ensuring that our steps here are considered and sustainable. In addition to our scheduled repayments, we now only have two small debt balloons due in the next 24 months, with payments due in 2026 of $54 million in total. And on the right side of this slide is a summary of our main debt movements across the last quarter. Our next priority is to close financing in relation to our now six new build vessels. And this work has already started with the transactions being pursued. We're currently targeting to complete the finance for all six vessels in the early part of 2026. And I'd like to thank all of the finance partners who have worked with us so far on this. And we look forward to being able to report on a successful outcome when this work is all done. In this third quarter, we further strengthened the company's interest rate hedging position, whereby we entered into two interest rate swap agreements to boost our fixed rate position and reduced our exposure to variability in interest rates and interest expenses associated with our variable rate borrowings. Then as at September 30th, 2025, 59% of the company's debt was either hedged or on a fixed interest rate basis with 41% open to interest rate variability. And whilst we keep the subject under close review, we believe this split of fixed to floating is about the right balance for the company at this time, such that if US dollar rates fall, we can to a degree benefit, but we are majority protected should rates rise. We continue to make substantial loan repayments with 31.3 million in this third quarter, and we have an average of 122 million of annual scheduled pro forma debt amortization per year across 2025 through 2027, with our net debt adjusted EBITDA last 12 months sitting at a comfortable 2.6 times as of September 30th, 2025. In addition, our net debt to our on-water fleet value resulted in a loan-to-value LTV of 33%, which falls below 30% if you include a reasonable value against our Morgan's Point terminal. On slide nine, showing again our estimated all-in-cash breakeven for 2025, which at $20,510 per day per vessel, is significantly below our average TCE revenue for this third quarter of 2025 of $30,966 per day, The difference, or headroom, this quarter being over $10,000. The graph, bottom left, shows how this headroom has developed over the last few years, and you'll see in there the consistency of our business, particularly over the last four years, but even going further back. The all-in breakeven rate includes forecast scheduled debt repayments and our scheduled dry dock commitments, and the latest figure here is materially unchanged from the estimate we provided in our last earnings call back in August 2025. On the right is our updated OPEX guidance for 2025 across our differing vessel size 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 also remains materially unchanged from our last quarterly call in August 2025. And following below that is further next quarter and four year guidance across vessel OPEX general and admin cost depreciation and net interest expense in dollar terms. The full year guidance for vessel OPEX towards the bottom is now slightly lower in total than previous guidance given in August, as we have one less vessel across the remainder of 2025. And net interest expense is also a little lower than previous guidance given at that same time. However, both are materially unchanged. Slide 10 outlines our historic quarterly adjusted EBITDA, adding this third quarter's strong results. On the right side, as we have done before, we show our historic adjusted EBITDA for 2024 and our last 12 months adjusted EBITDA. In addition, the EBITDA bars then to the right provide some sensitivity and continue to illustrate, as we have done in the past, that an increase in adjusted EBITDA of approximately $90 million, all of the things being equal, for each $1,000 incremental increase in average time charter equivalent rates per day. And then finally, an update on our vessel's dry dock schedule, projected costs and time taken can be found in the appendix, slide 30. And I'll leave you to look at that if you would like. But for now, I'm going to hand you over to Oivind to provide an update on the commercial picture. Thank you very much, Oivind.

Thank you, Gary. And good morning, everyone. Let's turn to page 12 for the rate environment. I'd like to start off with echoing Mats and Gary who mentioned earlier that the 10-year record average TCE and utilization is climbing back above 90%. Tells me one thing. The second quarter was a one-off and we're back more or less on track. Now, while uncertainties around US and China trade and tariffs are still hanging over us, trade has picked up elsewhere. to compensate. We've seen tremendous growth in demand for semi-refrigerated LPG vessels out of the Middle East in recent months. Iraq has ramped up both production and export capacity and is now taking in additional handy-sized vessels to cover the demand. At the same time, a steady stream of handy-sized ships has been moving butadiene from the US, from Brazil and from Europe to Asia, either via Cape of Good Hope or the Panama Canal. Together, these flows have tightened the supply-demand balance in the segment, pushing rates and utilization higher. That trend is shown in the dark and light blue lines in the graph. Because we have more vessels in the semi and fully refrigerated segments, totaling 29 compared to 15 in ethylene, the positive momentum that I just mentioned carries more weight on our overall TC and utilization numbers. On the ethylene side, lingering trade and tariff uncertainty has softened rates by about $2,500 per day. Traders remain cautious, hesitant to commit to long haul ethylene cargoes. Remember that it can take more than two months from contracting a ship until it discharges in Asia, which is a long time if one is worried about potential tariffs coming. Instead, we're seeing a more active, shorter haul voyages to Europe, which carry less tariff risk and are perceived as safer from a trade perspective. I'll touch a bit more on these nuances in the next few slides. If we look at page 13, you can see the recent increase in our LPG earnings days. LPG accounted for 42% of our demand during the quarter, the highest share since first quarter of 2023. while petrochemicals remain the largest segment at 44%. The benefits of our flexibility to switch between cargoes and trades are further highlighted on page 14. In the bottom left graph, utilization for our semi-refrigerated vessels climbed to 98%, meaning that effectively all our semi-refrigerated vessels were employed during the quarter with almost zero idle time. This is driven mainly by the stronger LPG demand and also The fully refrigerated feed shown on the bottom right, so incremental demand both from LPG and importantly, also long-haul butadiene cargoes. It's been five years since our fully refrigerated vessels were employed in what we call easy petrochemical trades. As mentioned, the segment still feeling the effects of trade and tariff uncertainty is our ethylene capable vessels. You can see in the top right graph that utilization for these vessels are averaging around the 85% level. Overall though, for the fleet utilization for third quarter was about 5% a punch higher compared to the second quarter. On page 15, We take a closer look at quarter-on-quarter US exports and ethylene to Europe and Asia on handy-sized vessels. Since April, US exports of ethane and ethylene have been impacted by trade uncertainties. It is interesting to note that shipments to Asia Pacific have halved from averaging 195,000 tons per quarter to averaging 97,000 tons per quarter. Conversely, European imports are up 30% when doing the same comparison. This suggests Europe has structural short and is plugging it with US volumes, whereas Asia remains more opportunistic and is more sensitive to external factors. Turning to page 16, Here we track the US ethylene arbitrage. Right now, it is open to Europe at around $200 per ton, which works. So exports continue to flow across the Atlantic. But the Asia arbitrage at roughly $250 per ton is harder to make work. As a result, and for the time being, most of Morgan Point ethylene exports are heading to Europe. On the supply side, on the next page, There are only minor changes since our last presentation and none that materially affect the hand size segment. The order book remains low. So to summarize, trade and tariff uncertainties between US and China are still influencing parts of our trades. But despite that, we delivered a very solid quarter. The flexibility for our fleet allows us to capture opportunities across multiple trades. The fourth quarter has started in line with how September ended, which suggests a degree of normalization, especially when it compared to the second quarter. Happy to take more questions on this after, but first, the one and only Randy Givens, the floor is yours.