Navigator Holdings Ltd. · NYSE:NVGS
Navigator — Investor Day (September 2019)
60 slides from Navigator's investor day presentation, Sep 25, 2019
Slide 1: Company Presentation, Houston, September 25, 2019
Company Presentation Houston, September 25, 2019 “Navigator Holdings Ltd. (NYSE:NVGS)” Confidential
Slide 2: NVGS - A Global Leader in Shipping of Liquefied Gases
NVGS - A GLOBAL LEADER IN SHIPPING OF LIQUEFIED GASES Highlights Revenue & EBITDA 2013 – 2019H1(LTM) Balance Sheet ■ Navigator Gas is the market leading shipper of liquefied Net operating revenue EBITDA Total assets Total equity gases (LPG, petchems and ammonia) in the handysize segment $282 52% $26
Slide 3: Table of Contents
TABLE OF CONTENTS GAS COURSE - FUNDAMENTALS INDUSTRY TRENDS PROJECT MILESTONES FOR THE NEXT 12 MONTHS FINANCIAL INFORMATION 3 Confidential
Slide 4: Gas experts together
Gas experts together = 0333+ Liquefied = petroleum gases Petrochemical Our vessels can load up to three fully segregated cargoes and have |Toaded propane at 86°F, cooling [to -44°F for transportation
Slide 5: Vital role in the liquefied gas supply chain
We play a vital role in the liquefied gas supply chain. Our sophisticated vessels provide an efficient and reliable floating pipe line connecting producers and end users.
Slide 6: Cargo Types That Can Be Carried: LPG, Petchems & Ammonia
CARGO TYPES THAT CAN BE CARRIED: LPG; PETCHEMS & AMMONIA Source Cargo LPG Use Energy Liquefied Petroleum Gases Natural Gas (LNG) Production (LPG) A derivative from production of other fuels and LNG, used as an energy source Pet. Chem Feedstock Petrochemical Gases Crude Oil Production Produced from s
Slide 7: Gas Carrier Fleet Overview
GAS CARRIER FLEET OVERVIEW 282 34 12% Total Fleet 8 - - Ethylene LPG Sector Fully-Refrigerated 94 2 3% Ethylene / Ethane 14 1 Fully-Refrigerated 21 1 Semi-Refrigerated 63 - 3% Ethylene 32 2 Handysize Semi-Refrigerated / 332 16 Navigator 5% Pressure Semi-Refrigerated / Pressure 633 6 1% Source: Fearn
Slide 8: Gas Carrier Sizes
GAS CARRIER SIZES Pressurised : Small (< 10k m3) Semi-Refrigerated: Medium (> 10k < 35k m3) Fully Refrigerated: Large (> 49 < 85k m3) 6 Confidential
Slide 9: Fully-Ref / Semi-Ref / Pressurised
FULLY-REF / SEMI-REF / PRESSURISED Fully Refrigerated Semi Refrigerated Pressurised Prismatic Cylindrical Bi Lobe Cylindrical Bottle Steel thickness = 10 mm Steel thickness = 20 mm Steel thickness = 32 mm Max pressure = 0.2 bar Max pressure = 5-7 bar Max pressure = 18 bar 7 Confidential
Slide 10: Fully-Ref / Semi-Ref / Pressurised
FULLY-REF / SEMI-REF / PRESSURISED 2 Confidential
Slide 11: Fully-Ref / Semi-Ref / Pressurised
FULLY-REF / SEMI-REF / PRESSURISED 2 Confidential
Slide 12: Fully-Ref / Semi-Ref / Pressurised
FULLY-REF / SEMI-REF / PRESSURISED 2 Confidential
Slide 13: We call a port every 5 hours
We call a port every 5 hours Almost 6 million tonnes per year 11 Confidential
Slide 14: Operational Support
OPERATIONAL SUPPORT 7 12 Confidential
Slide 15: Gassing Up Cycle
GASSING UP CYCLE GASSING UP Drydock – Inerting – Gassing up – Loading – Discharging – Inerting – Aerating - Drydock 13 Confidential
Slide 16: Cooling Cycle - LPG
COOLING CYCLE - LPG 14 Confidential
Slide 17: Cooling Cycle - Ethylene
COOLING CYCLE - ETHYLENE 15 Confidential
Slide 18: Cooling Cycle - Ethylene
COOLING CYCLE - ETHYLENE 16 Confidential
Slide 19: Pocket Plan: 21,000 cbm Ethylene Carrier
POCKET PLAN 21,000 cam ETHYLENE CARRIER DISTANCE TO STERN: 79m DISTANCE TO BOW: 81m MAIN ENGINE CARGO TANKS Hudong MAN B&W 6S50ME-C8.2 NOM RATING: 7,170 kW / 114 rpm Bi-lobe x 4 Independent Type C (-104°C; 5.3 Bar) DEADWEIGHT 17,700 mt DECK TANK 200 CBM (-104°C; 18.0 Bar) SERVICE SPEED 16 knots HFO
Slide 20: Captain Fabian Schulz C2 Houston to Antwerp
Captain Fabian Schulz C2 Houston to Antwerp In-house managed Confidential
Slide 21: Table of Contents
TABLE OF CONTENTS GAS COURSE - FUNDAMENTALS INDUSTRY TRENDS PROJECT MILESTONES FOR THE NEXT 12 MONTHS FINANCIAL INFORMATION 21 Confidential
Slide 22: Navigator Gas Global Footprint
NAVIGATOR GAS GLOBAL FOOTPRINT LPG 4,250,000 mts¦ 5,449 Petrochemicals 850,000 mts ¦ 3,932 Cargo Volume (mts) Earnings Days Ammonia 650,000 ¦ 802 We enable the extension of the midstream business model to international markets by means of a ‘virtual pipeline’ 22 Confidential
Slide 23: Offering Flexibility Across All NGLs
OFFERING FLEXIBILITY ACROSS ALL NGLS: FEEDSTOCK & DERIVATIVES Loading C3 Propane Discharging C4 Butadiene Loading C2 Ethylene 23 Confidential
Slide 24: Earnings Days & Utilisation
EARNINGS DAYS & UTILISATION 100% 90.5% 90.1% 89.9% 89.3% 88.1% 90% 86.4% 84.6% 84.5% 82.3% 81.9% 83.0% 80.1% 79.9% 80% Petchems Spot 70% 60% Petchems TC 50% LPG Spot 40% 30% LPG TC 20% 10% Ammonia Spot Ammonia TC 0% 08/2018 09/2018 10/2018 11/2018 12/2018 01/2019 02/2019 03/2019 04/2019 05/2019 06/2
Slide 25: Global Footprint: LPG
NAVIGATOR GAS GLOBAL FOOTPRINT: LPG 140 Million metric tons 120 LPG 100 80 60 40 20 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Viamar Handysize represent regional distribution of LPG, ambient LPG transportation and service delivery to ‘restricted’ locations 25 Confidential
Slide 26: Global Footprint: Petrochemicals
NAVIGATOR GAS GLOBAL FOOTPRINT: PETROCHEMICALS 25 Million metric tons Petrochemicals 20 15 10 5 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Viamar Handysize gas carriers offers an economically viable virtual pipeline in connecting producers and consumers across continents 26 Confiden
Slide 27: Global Footprint: Ammonia
NAVIGATOR GAS GLOBAL FOOTPRINT: AMMONIA 20 Ammonia Million metric tons 15 10 5 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Viamar The handysize ammonia trade is evolving servicing regional ports alongside population growth and agricultural demand 27 Confidential
Slide 28: Global Footprint: Ethane
NAVIGATOR GAS GLOBAL FOOTPRINT: ETHANE We enable the transfer of U.S. feedstock competitiveness to international end-users and improving their domestic cost base 28 Confidential
Slide 29: Inaugural ME II Ethane Cargo Loaded End November 2018
INAUGURAL MEII ETHANE CARGO LOADED END NOVEMBER 2018 Loading C2 Ethane 29 Confidential
Slide 30: Table of Contents
TABLE OF CONTENTS GAS COURSE - FUNDAMENTALS INDUSTRY TRENDS PROJECT MILESTONES FOR THE NEXT 12 MONTHS FINANCIAL INFORMATION 30 Confidential
Slide 31: Handysize Demographics and TC Rates
15,000-25,000 CBM HANDYSIZE DEMOGRAPHICS AND TC R ATES LPG Handysize Global Fleet Ethane/Ethylene Global Fleet >15,000 cbm Existing & Newbuild Owner Semi Ref. Fully Ref. Total Owner Total Handysize Midsize VLEC Navigator Gas 17 6 23 Navigator Gas 10 4 - 14 Ultragas 8 - 8 Evergas - 8 2 10 Naftomar 3
Slide 32: Road to 2020 Transformational Milestones
ROAD TO 2020 TRANSFORMATIONAL MILESTONES Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Petrochemicals The terminal will have a throughput Sudden increase of specialized petrochemical capability of 1 million metric tons (Mts) of PPL expansion products supporting deep sea Handysize ton- Enterprise doubling
Slide 33: Pembina: Prince Rupert Export Terminal
PEMBINA: PRINCE RUPERT EXPORT TERMINAL 33 Confidential
Slide 34: Pembina: Prince Rupert Export Terminal
PEMBINA: PRINCE RUPERT EXPORT TERMINAL 34 Confidential
Slide 35: Pembina: Prince Rupert Export Terminal
PEMBINA: PRINCE RUPERT EXPORT TERMINAL 35 Confidential
Slide 36: Pembina: Freight
PEMBINA: FREIGHT 11 days 7 days 7 days Volume Vessel Load Mexico Hawaii Asia 25,000bbls day 150,000bbls Every 6 days 25 days 30 days+ 30 days Incremental vessel demand per annum 4.5 6+ 5+ 36 Confidential
Slide 37: FI&T: Repauno Export Terminal near Gibbstown, NJ
FI&T: REPAUNO EXPORT TERMINAL NEAR GIBBSTOWN, NJ 37 Confidential
Slide 38: Source: Repauno
Source: Repauno 38 Confidential
Slide 39: Confidential
39 Confidential
Slide 40: Confidential
40 Confidential
Slide 41: FI&T: Repauno Export Terminal
FI&T: REPAUNO EXPORT TERMINAL Source: Repauno 41 Confidential
Slide 42: FI&T: Repauno Export Terminal
FI&T: REPAUNO EXPORT TERMINAL Source: Repauno 42 Confidential
Slide 43: FI&T: Repauno Export Terminal Freight
FI&T: REPAUNO EXPORT TERMINAL FREIGHT 10 days 10 days 14 days 4 days Volume Vessel Load Africa Europe Caribs 40,000bbls day 150,000bbls Every 4 days 35 days+ 25 days 13 days Incremental vessel demand per annum 9 6+ 3.25 43 Confidential
Slide 44: Enterprise Navigator MP: 1st Phase Is Nearing Completion
ENTERPRISE NAVIGATOR MP: 1ST PHASE IS NEARING COMPLETION Phase 2 expected to be completed in late Phase 1 on schedule to become operational from the end of Q4 2019 2020 Loading arms – final testing Liquefaction train – to be completed Q4 2019 Current ENE terminal construction Refrigerated storage ta
Slide 45: Enterprise Navigator Ethylene Terminal: Freight
ENTERPRISE NAVIGATOR ETHYLENE TERMINAL: FREIGHT 15 days 30 days 37 days Volume Vessel Load Europe Far East SE Asia 1M tons yearly 11,500 tons 35 days 65 days 79 days Incremental vessel demand per annum 8.33 15.5 19 45 Confidential
Slide 46: U.S. Ethylene Competitive Fundamentals
U.S. ETHYLENE COMPETITIVE FUNDAMENTALS US ethylene production is expected to outpace demand going forward International ethylene price arbitrage continue, but further exports is as new projects are coming on stream capped by current insufficient export infrastructure US Production and Consumption US
Slide 47: Project Impact Over Next 12 Months
PROJECT IMPACT OVER NEXT 12 MONTHS Milestone Long (short) Comment 2019 Estimated Demand (103) 12% from total fleet (Delta between 86% and 98%) 2019 Handy Fleet 117 Oversupplied 14 Ship length 1Q20 ME2X (3) ME2X 275kbbls day 1Q20 Phase I ENE (partial) (8) 60% capacity, 25/75 Eur/Asia 2Q20 Repauno (6)
Slide 48: Table of Contents
TABLE OF CONTENTS GAS COURSE - FUNDAMENTALS INDUSTRY TRENDS PROJECT MILESTONES FOR THE NEXT 12 MONTHS FINANCIAL INFORMATION 48 Confidential
Slide 49: Ethylene Terminal - Finance Overview
ETHYLENE TERMINAL - FINANCE OVERVIEW Capex schedule and financing overview Current Offtake Status ■ Navigator’s share of total capital commitments estimated Navigator’s share of Capex: Already Paid Remaining Installments to be USD 155 million which is materially below initial budget (progressing ahe
Slide 50: Gas Carrier Charter Rates
GAS CARRIER CHARTER R ATES Navigator’s Daily TC Rates (US$) 78,000cbm - VLGC $33,000 $28k $30k $30k $30,000 $29k $2,200 22,000cbm - Semi-ref - Handy $27,000 $26k $24k $24k $26k 22,000cbm - Fully-ref - Handy $24,000 $21k $22k $21k $2,000 $21,000 $1,950 $18,000 Average 2009 –Q2 2019 $15,000 US$25,800
Slide 51: Daily Operating Expenses
DAILY OPERATING EXPENSES Daily Operating Expenses Net Income after Tax $120 $9,000 100.0 $8,115 $8,068 $8,270 98.1 $7,916 $7,779 $7,925 $100 $8,000 $7,635 $7,694 87.7 $7,000 $80 59.3 $6,000 $60 44.6 $5,000 $40 $4,000 $20 $3,000 5.3 $0 $2,000 2014 2015 2016 2017 2018 2019 2020 2021 -5.7 $1,000 -$20 -
Slide 52: Capital Expenditure
CAPITAL EXPENDITURE Drydockings 2019 2020 2021 2022 No of Vessels 9 9 11 6 Drydocking days 124 142 148 73 Drydocking costs $10.8m $11.2m $12.0m $7.0m Marine Export Ethylene Terminal 2018 2019 2020 Capital Contributions $41.5m $94.0m $19.5m 52 Confidential
Slide 53: Break Even Analysis
BREAK EVEN ANALYSIS Comments Break even and TCE rates 30,000 For the quarter ended June 30, 2019, the Company had a cash break even rate of US$ $27,233 10,317 per day per vessel, before interest expenses and debt repayment 25,000 $22,975 $22,758 $21,712 $21,601 $21,782 Including interest expenses, t
Slide 54: Vessel Value
VESSEL VALUE Navigator vessels Navigator newbuild vessels Outstanding Vessel Built Size (Cbm) 1 NBV (US$’M) Debt2 Loan to value Available US$’M NBV11 Debt2 Vessel Built Size (Cbm) US$’M US$’M Loan to value Navigator Leo 2011 20,600 42.2 Navigator Aries 2008 22,750 41.1 Navigator Libra 2012 20,600 42
Slide 55: Strong Balance Sheet & Banking Relationships
STRONG BALANCE SHEET & BANKING RELATIONSHIPS Actual Debt Loan to Debt maturities per year (US$’M) As of June 30, 2019 (US$'M) (US$’M) Value % US$100 million Bond US$107 million facility US$160.8 million facility US$278 million facility Vessel Net Book Value 1,640 863.7 52.7% US$290 million facility
Slide 56: Contact details
NGT Services (UK) Limited Verde Building 10 Bressenden Place SW1E 5DH United Kingdom Tel: +44 (0) 20 7340 4850 Navigator Gas US, LLC 650 Madison Avenue 25th Floor New York NY 10022 United States of America Tel: +1 (212) 355 5893 www.navigatorgas.com Confidential
Slide 57: Large Shareholders
LARGE SHAREHOLDERS Company Milestones Top 20 shareholders Name Shares ('000s) Ownership Navigator Holdings was formed with the purpose of 1997 building and operating a fleet of five semi-refrigerated, 1 Invesco (W.L. Ross & Co. LLC) 21,864 39.2% ethylene-capable gas carriers 2 BUTTERS DAVID J 2,101
Slide 58: Finance: Balance Sheet
FINANCE: BALANCE SHEET (US$'M) 2015 2016 2017 2018 Q2 2019 Assets Cash and cash equivalents 87.8 57.3 62.1 71.5 47.3 Other current assets 37.2 36.5 50.0 46.6 57.7 Vessels in operation (net) 1,264.4 1,480.4 1,740.1 1,670.9 1,639.8 Vessels under construction 170.8 150.5 - - - Investment in equity acco
Slide 59: Finance: Cash Flow Statement
FINANCE: CASH FLOW STATEMENT (US$'M) 2015 2016 2017 2018 Q2 2019 Net Income 98.1 44.6 5.3 -5.7 -11.0 Depreciation and amortisation 53.5 62.3 73.6 76.1 37.9 Drydocking payments -11.6 -9.9 -0.3 -5.8 -5.2 Non cash movements 5.9 4.9 6.6 5.6 1.6 Change in working capital 3.6 -15.2 -9.3 7.5 -6.6 Net Cash
Slide 60: Finance: Income Statement
FINANCE: INCOME STATEMENT (US$'M) 2015 2016 2017 2018 Q2 2019 Net operating revenue 281.5 251.9 243.1 248.4 119.9 Operating expenses: Address and brokerage commissions 7.0 5.8 5.4 5.1 2.5 Charter in costs - - - - - Vessel operating expenses 78.8 90.9 101.0 106.7 56.9 Depreciation and amortization 54