Navigator Holdings Ltd. reported on Monday net income of $18.8 million in the first quarter supported by a sustained boost in ethylene and liquefied petroleum gas (LPG) shipments from the US.
With earnings per share of $0.25, the London-based gas company’s net profit was up from $0.13 in the previous three-month period, but down from $0.35 in the corresponding quarter in 2022.
Navigator brought in $136 million in operating income for both October-December 2022 and January-March 2022.
“Charter rates for the practical LPG vessel segment continued an upward trajectory during the first quarter of 2023,” he said in a press release. “Both the 12-month market assessment for semi-refrigerated and fully refrigerated vessels increased by $10,000 per calendar month (‘pcm’) to $760,000 per month and $740,000 per year, respectively, and the “Practical size ethylene assessment increased by $85,000 for each month during the first quarter”.
Navigator attributed the higher rates to a shift in the ammonia shipping pattern induced by the “geopolitical conflict around Ukraine,” as well as increased exports of LPG and sustained ethylene from the U.S. .
“The Ukrainian port of Yuzhnyy, which historically exported approximately 10% of the world’s seaborne ammonia, remains out of service. In addition, ammonia originating in the Baltic Sea area of Russia continues to experience delays and therefore European consumers of ammonia were obtained. [sic] freight from longer distances, increasing the tonne-mile and therefore increasing demand for practical-sized shipments,” the New York-listed company said.
Although the normalization of natural gas prices affected European demand for ammonia, demand from ships for the gas has remained in the practical size segment, he noted.
“Second, the US continues to export record volumes of LPG, increasing week over week, compared to the same period last year,” Navigator said. “The US exported a record 5.5 million tonnes of LPG during March 2023, providing enhanced employment opportunities across all gas carrier segments.
“Finally, U.S. ethane remains competitively priced, allowing a sustainable floor for cheap domestic ethylene production. The arbitrage of U.S.-produced ethylene versus international markets remains open, both for in Europe as well as for consumers in the Asia-Pacific, which has resulted in continued performance from our ethylene export terminal, as well as demand for our ethylene-capable vessels.”
Navigator closed higher at $13.14 on the New York Stock Exchange on Monday compared to last week’s close of $13.04, starting the week with a two-week high of 185,766 traded volumes.
To contact the author, please email jov.onsat@rigzone.com
