LONDON, UNITED KINGDOM--(Marketwired - Nov 17, 2015) - Navig8 Chemical Tankers Inc. (the "Company") (N-OTC: CHEMS), an international shipping company focused on the transportation of chemicals, today announced its unaudited financial and operating results for the three and nine months ended September 30, 2015.
Highlights
- Revenue of $28.7 million and a net gain of $9.6 million, or $0.25 per share, for the three months ended September 30, 2015.
- The second full quarter with an operating fleet after the Company accepted initial vessel deliveries of its newbuilding fleet during the first quarter of 2015.
- Continued growth of the Company's operating fleet with the delivery of six vessels; 17 of the Company's 36-vessel newbuilding fleet had been delivered as of September 30, 2015.
- All delivered vessels have been deployed in pools managed by the Navig8 Group.
"We are pleased to report another quarter of solid results and the continued on time progress and expansion of our newbuilding program. The operational performance of our vessels delivered to date has exceeded expectations, mostly specifically the Interline coating, which continues to gain acceptance among leading chemical industry participants," said Nicolas Busch, Chief Executive Officer of Navig8 Chemical Tankers Inc. "We remain bullish on our outlook for increasing long-haul trades as additional chemical manufacturing capacity comes online in the U.S. and Middle East. As a result, we are excited to enhance our strategic position as the leading owner of large, specialized vessels targeting these expanding markets with the announcement of four additional firm and six optional newbuildings."
Fleet Update
The Company has entered into contracts to acquire 36 modern, fuel-efficient newbuilding chemical tankers. As of the date of this press release, 18 of these vessels have been delivered and are in operation. The fleet is scheduled to be fully delivered by September 2017. One additional vessel is scheduled to be delivered during the remainder of 2015, nine in 2016 and the final eight in 2017. Upon their respective deliveries, the Company's vessels will be deployed in commercial pools managed by the Navig8 Group, including the Chronos8, Delta8, and Stainless8 pools. The Company's newbuilding fleet is composed of:
Eighteen 37,000dwt IMO2 Interline coated tankers built at Hyundai Mipo, Korea ("A-Class vessels"), of which sixteen have been delivered as of the date of this press release. The delivered A-Class vessels have been deployed in the Delta8 pool. During the three months ended September 30, 2015, the Company took delivery of six A-Class vessels. The Company took delivery of one additional A-Class vessel in October 2015 and expects to take delivery of the two remaining A-Class vessels in November 2015 and January 2016.
Eight 49,000dwt IMO2 Interline coated medium range tankers ("T-Class vessels") built at STX Offshore & Shipbuilding Co., Ltd. in Korea ("STX"). In October 2015, the Company entered into contracts to purchase four T-Class vessels to be built to the same technical specifications as the Company's preexisting orders with STX, including the capability to transport methanol and other specialty cargoes. The Company also announced that it has secured options to purchase six additional sister vessels from STX. The Company's eight T-Class vessels will be deployed in the Chronos8 pool. The Company expects the T-Class vessels to be delivered between March 2016 and July 2017.
Two 49,000dwt IMO2 Epoxy coated medium range tankers built at Hyundai, Vinashin ("V-Class vessels"). Both V-Class vessels were delivered in the first quarter of 2015 and are currently deployed in the Chronos8 pool.
Eight 25,000dwt IMO2 stainless steel tankers built at Kitanihon and Fukuoka (Japan) ("S-Class vessels"). The S-Class vessels will be deployed in the Stainless8 pool. The Company expects the S-Class vessels to be delivered between July 2016 and September 2017.
Financing Update
Four of the A-Class vessels delivered during the three months ended September 30, 2015 were financed with the Company's existing $304 million debt financing facility with a group of European banks and the Export-Import Bank of Korea. The loan facility covers approximately 60% of the contract price of 14 of the Company's A-Class vessels.
The remaining two A-Class vessels delivered during the three months ended September 30, 2015 were financed via the previously announced sale and leaseback agreements with Ocean Yield ASA ("Ocean Yield") for four A-Class vessels, all of which have been delivered, and four T-Class vessels. Under the agreements, the A-Class vessels were purchased by Ocean Yield from the Company upon their respective deliveries. Simultaneously the Company agreed to bareboat charter the vessels for 15-year terms from Ocean Yield. The Company has purchase options that it can exercise to re-acquire the vessels during the charter period, with the first of such options exercisable on the fifth anniversary of each vessel delivery. Under the sale and leaseback agreements, Ocean Yield will also provide financing for the pre-delivery instalment payments for four of the Company's T-Class vessels. These sale and leaseback agreements were treated as financing transactions increasing the financing obligation from $64.8 million as of June 30, 2015 to $129.3 million as of September 30, 2015.
The Company has secured financing on all of the A-Class vessels and four of the T-Class vessels.
The two V-Class vessels that were delivered earlier in 2015 are currently on 12-month bareboat charters which commenced at their respective delivery dates. The Company has purchase obligations at the end of these charters and will take ownership of these vessels during the first three months of 2016. The Company is currently in the process of arranging financing for these vessels and has also simultaneously started discussions in connection with the financing of the S-Class vessels. The Company expects to have financing in place for the remaining unfinanced vessels well ahead of the respective deliveries.
Results for the three months ended September 30, 2015 and 2014
For the three months ended September 30, 2015, the Company reported a net gain of $9.6 million, or $0.25 per share, an increase of $10.9 million from a net loss of $1.3 million for the three months ended September 30, 2014, when the Company had not yet taken delivery of any of the vessels in its newbuilding program.
Results for the nine months ended September 30, 2015 and 2014
For the nine months ended September 30, 2015, the Company reported a net gain of $11.5 million, or $0.32 per share, an increase of $14.2 million from a net loss of $2.6 million for the nine months ended September 30, 2014.
Management's Discussion and Analysis of Financial Results
Revenue for the three months ended September 30, 2015 was $28.7 million, compared to no revenue for the three months ended September 30, 2014. The total number of vessel operating days for the three months ended September 30, 2015 was 1,283, compared to zero for the three months ended September 30, 2014.
The gross average daily time charter equivalent ("TCE")(1) earned by the A-Class vessels and the V-Class vessels in the three months ended September 30, 2015, were $22,958 per day and $24,052 per day, respectively. The Company had 17 vessels operating during the three months ended September 30, 2015, all of which operate in pools from which they derive TCE revenue.
Vessel operating expenses were $8.0 million for the three months ended September 30, 2015, an increase of $8.0 million from the three months ended September 30, 2014, when the Company had not yet taken delivery of any of the vessels in its newbuilding program. Average fleet operating costs per day, including technical management fees, were $5,308 for the three months ended September 30, 2015.
Depreciation expense for the three months ended September 30, 2015 was $5.3 million, an increase of $5.3 million compared to the three months ended September 30, 2014. This is due to the Company beginning to depreciate vessels in its newbuilding fleet as they are delivered.
General and administrative expenses for the three months ended September 30, 2015, were $1.6 million, an increase of $0.3 million from $1.3 million for the three months ended September 30, 2014. This increase is related to the growing size of the company's operations and hence various management and administrative fees.
Interest expense for the three months ended September 30, 2015 was $4.3 million, as compared to no interest expense in the three months ended September 30, 2014, when the Company had not yet taken delivery of any of the vessels in its newbuilding program.
(1) Time charter equivalent, a non-US GAAP measure, is vessel revenues less voyage expenses (including bunkers and port charges but excluding pool commission).
Conference Call
On Wednesday, November 18, 2015, 2015 at 5:00PM GMT, the Company's management team will host a conference call to discuss its results for the three months ended September 30, 2015.
Participant should dial into the call 10 minutes before the scheduled time using the following number: 0800 279 9489 (UK Toll Free Dial In) or +44 (0) 2075 441 375 (Standard International Dial In). Please inform the operator you wish to listen to the Navig8 Chemical Tankers Inc. conference call.
A telephonic replay of the conference call will be available until November 26, 2015 by dialing +44 (0) 2036 088 021 (Standard International Dial In) and using access code 10076418.
Slides and Webcast
There will also be a live webcast of the conference call and slide presentation, available through the Company's website (www.navig8chemicaltankers.com). Participants on the live webcast should register on the website approximately 10 minutes before the start of the webcast.
About Navig8 Chemical Tankers Inc.
Navig8 Chemical Tankers Inc. was established in 2013 as a joint venture between the Navig8 Group and Oaktree Capital Management to capitalize on significant structural changes in the petrochemical industry and the continuing development of long-haul chemical trades. Its best-in-class newbuilding fleet is comprised exclusively of large, fuel-efficient vessels with modern eco-designs to take greatest advantage of these shifts. The fully delivered fleet will feature a complementary mix of primarily Interline-coated and stainless steel vessels that are capable of servicing the full range of conventional and specialized chemicals cargoes.
The Company expects to take delivery of 19 chemical carriers in 2015 (18 vessels year-to-date), and anticipates delivery of its full 36-vessel fleet by Q3 2017, excluding option vessels. The Company's fleet is contracted to operate in various chemical tanker pools managed by the Navig8 Group, the world's largest independent pool and commercial management company.
Navig8 Chemical Tankers Inc. is listed on the Norwegian OTC market under the symbol CHEMS.
Visit our website: www.navig8chemicaltankers.com
NAVIG8 CHEMICAL TANKERS INC. AND SUBSIDIARIES OTHER OPERATING DATA (Unaudited) |
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Third Quarter 2015 | Second Quarter 2015 | ||||||
37k dwt HMD Vessels | 49k dwt Vinashin Vessels | 37k dwt HMD Vessels | 49k dwt Vinashin Vessels | ||||
Vessels on the water at the end of the month | 15 | 2 | 9 | 2 | |||
Total operating days | 1,099 | 184 | 537 | 181 | |||
Average distributed Gross TCE in $ / day | 22,958 | 24,052 | 19,757 | 20,759 | |||
Average OPEX in $ / day | 5,275 | 5,502 | 5,392 | 5,414 | |||
NAVIG8 CHEMICAL TANKERS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
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For the three months ended 30 Sep | For the nine months ended 30 Sep | ||||||||||||||
All in US$000, unless otherwise stated | 2015 | 2014 | 2015 | 2014 | |||||||||||
Operating revenue | |||||||||||||||
Vessel revenue | $ | 28,669 | - | $ | 46,391 | - | |||||||||
Operating expenses | |||||||||||||||
Vessel expenses | (7,954 | ) | - | (13,246 | ) | - | |||||||||
Depreciation and amortization | (5,275 | ) | - | (9,149 | ) | - | |||||||||
General and administrative expenses | (1,569 | ) | (1,343 | ) | (5,260 | ) | (2,673 | ) | |||||||
Total operating expenses | (14,798 | ) | (1,343 | ) | (27,655 | ) | (2,673 | ) | |||||||
Net operating income/(loss) | $ | 13,871 | $ | (1,343 | ) | $ | 18,736 | $ | (2,673 | ) | |||||
Financial Items | |||||||||||||||
Interest income | 19 | 34 | 45 | 34 | |||||||||||
Interest expense | (4,302 | ) | - | (7,238 | ) | - | |||||||||
Net financial items | (4,283 | ) | 34 | (7,193 | ) | 34 | |||||||||
Net income/(loss) | $ | 9,588 | $ | (1,309 | ) | $ | 11,543 | $ | (2,639 | ) | |||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.25 | $ | (0.05 | ) | $ | 0.32 | $ | (0.13 | ) | |||||
Diluted | $ | 0.25 | $ | (0.05 | ) | $ | 0.32 | $ | (0.13 | ) | |||||
EBITDA: | |||||||||||||||
Net income/(loss) | $ | 9,588 | $ | (1,309 | ) | $ | 11,543 | $ | (2,639 | ) | |||||
Depreciation and amortization | (5,275 | ) | - | (9,149 | ) | - | |||||||||
Interest income | 19 | 34 | 45 | 34 | |||||||||||
Interest expense | (4,302 | ) | - | (7,238 | ) | - | |||||||||
EBITDA | $ | 19,146 | $ | (1,343 | ) | $ | 27,885 | $ | (2,673 | ) | |||||
NAVIG8 CHEMICAL TANKERS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
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All in US$000, unless otherwise stated | As of 30 September 2015 | As of 31 December 2014 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 52,855 | $ | 40,405 | ||||
Trade receivables | 12,620 | 0 | ||||||
Prepaid expenses and other assets | 11,823 | 25 | ||||||
Inventories | 1,536 | 0 | ||||||
Total current assets | $ | 78,834 | $ | 40,430 | ||||
Non-current assets | ||||||||
Restricted cash | 8,250 | - | ||||||
Vessels, net | 559,030 | - | ||||||
Vessels, finance lease | 83,095 | - | ||||||
Vessels under construction | 150,277 | 284,826 | ||||||
Vessel related deposits | - | 9,154 | ||||||
Total non-current assets | $ | 800,652 | $ | 293,980 | ||||
Total assets | $ | 879,486 | $ | 334,410 | ||||
Liabilities and shareholders' equity | ||||||||
Current liabilities | ||||||||
Obligations under finance lease | 72,848 | - | ||||||
Current portion of loans | 51,619 | - | ||||||
Accounts payables and accrued expenses | 7,175 | 984 | ||||||
Total current liabilities | $ | 131,642 | $ | 984 | ||||
Non-current liabilities | ||||||||
Long-term loans | 338,044 | - | ||||||
Total liabilities | $ | 469,686 | $ | 984 | ||||
Shareholders' equity | ||||||||
Common stock | 385 | 328 | ||||||
Paid-in capital | 403,641 | 338,868 | ||||||
Retained deficit | 5,774 | (5,770 | ) | |||||
Total shareholders' equity | 409,800 | 333,426 | ||||||
Total liabilities and shareholders' equity | $ | 879,486 | $ | 334,410 | ||||
NAVIG8 CHEMICAL TANKERS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) |
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For the nine months ended 30 September | |||||||||
All in US$000, unless otherwise stated | 2015 | 2014 | |||||||
Operating activities: | |||||||||
Net gain/ (loss) | $ | 11,543 | $ | (2,639 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Depreciation and amortization | 9,149 | - | |||||||
Changes in operating assets and liabilities: | |||||||||
Trade receivables | (12,620 | ) | - | ||||||
Prepaid expenses and other assets | (11,797 | ) | (15 | ) | |||||
Inventories | (1,536 | ) | - | ||||||
Accounts payables | 893 | - | |||||||
Accrued expenses | 3,978 | (435 | ) | ||||||
Net cash used in operating activities | (390 | ) | (3,089 | ) | |||||
Investing activities | |||||||||
Changes in restricted cash | (8,250 | ) | - | ||||||
Payments for vessels under construction | (431,551 | ) | (164,800 | ) | |||||
Vessel related deposits | - | (8,800 | ) | ||||||
Net cash used in investing activities | (439,801 | ) | (173,600 | ) | |||||
Financing activities | |||||||||
Proceeds from issuance of common stock | 64,830 | 255,556 | |||||||
Proceeds from long-term bank loan | 397,148 | - | |||||||
Repayment of long-term bank loan | (7,484 | ) | - | ||||||
Repayment of finance lease | (1,853 | ) | - | ||||||
Net cash provided by financing activities | 452,641 | 255,556 | |||||||
Increase in cash and cash equivalents | 12,450 | 78,867 | |||||||
Cash and cash equivalents, beginning of year / period | 40,405 | 11 | |||||||
Cash and cash equivalents, end of year / period | $ | 52,855 | $ | 78,878 | |||||
Fleet List as of November 17, 2015
Name | DWT | Yard | Built | Status | |||||
Delivered Vessels | |||||||||
1 | Navig8 Victoria | 49,000 | Hyundai Vinashin | Q1 2015 | Delivered | ||||
2 | Navig8 Almandine | 37,000 | Hyundai Mipo | Q1 2015 | Delivered | ||||
3 | Navig8 Violette | 49,000 | Hyundai Vinashin | Q1 2015 | Delivered | ||||
4 | Navig8 Amber | 37,000 | Hyundai Mipo | Q1 2015 | Delivered | ||||
5 | Navig8 Amethyst | 37,000 | Hyundai Mipo | Q1 2015 | Delivered | ||||
6 | Navig8 Ametrine | 37,000 | Hyundai Mipo | Q2 2015 | Delivered | ||||
7 | Navig8 Aventurine | 37,000 | Hyundai Mipo | Q2 2015 | Delivered | ||||
8 | Navig8 Andesine | 37,000 | Hyundai Mipo | Q2 2015 | Delivered | ||||
9 | Navig8 Aronaldo | 37,000 | Hyundai Mipo | Q2 2015 | Delivered | ||||
10 | Navig8 Aquamarine | 37,000 | Hyundai Mipo | Q2 2015 | Delivered | ||||
11 | Navig8 Amazonite | 37,000 | Hyundai Mipo | Q2 2015 | Delivered | ||||
12 | Navig8 Amessi | 37,000 | Hyundai Mipo | Q3 2015 | Delivered | ||||
13 | Navig8 Ammolite | 37,000 | Hyundai Mipo | Q3 2015 | Delivered | ||||
14 | Navig8 Axinite | 37,000 | Hyundai Mipo | Q3 2015 | Delivered | ||||
15 | Navig8 Azotic | 37,000 | Hyundai Mipo | Q3 2015 | Delivered | ||||
16 | Navig8 Adamite | 37,000 | Hyundai Mipo | Q3 2015 | Delivered | ||||
17 | Navig8 Azurite | 37,000 | Hyundai Mipo | Q3 2015 | Delivered | ||||
18 | Navig8 Aragonite | 37,000 | Hyundai Mipo | Q4 2015 | Delivered | ||||
Newbuildings | |||||||||
1 | Navig8 Alabaster | 37,000 | Hyundai Mipo | Q4 2015 | On order | ||||
2 | Navig8 Achroite | 37,000 | Hyundai Mipo | Q1 2016 | On order | ||||
3 | Navig8 Turquoise | 49,000 | STX | Q1 2016 | On order | ||||
4 | Navig8 Topaz | 49,000 | STX | Q2 2016 | On order | ||||
5 | Navig8 Tourmaline | 49,000 | STX | Q3 2016 | On order | ||||
6 | Navig8 Tanzanite | 49,000 | STX | Q3 2016 | On order | ||||
7 | Navig8 Sirius | 25,000 | Kitanihon | Q3 2016 | On order | ||||
8 | Navig8 Sky | 25,000 | Kitanihon | Q3 2016 | On order | ||||
9 | Navig8 Spark | 25,000 | Kitanihon | Q4 2016 | On order | ||||
10 | Navig8 Stellar | 25,000 | Kitanihon | Q4 2016 | On order | ||||
11 | Navig8 Saiph | 25,000 | Kitanihon | Q1 2017 | On order | ||||
12 | Navig8 Sceptrum | 25,000 | Kitanihon | Q2 2017 | On order | ||||
13 | Navig8 Spica | 25,000 | Fukuoka | Q2 2017 | On order | ||||
14 | Navig8 Sol | 25,000 | Fukuoka | Q3 2017 | On order | ||||
15 | N8CT N/B | 49,000 | STX | Q1 2017 | On order | ||||
16 | N8CT N/B | 49,000 | STX | Q2 2017 | On order | ||||
17 | N8CT N/B | 49,000 | STX | Q2 2017 | On order | ||||
18 | N8CT N/B | 49,000 | STX | Q3 2017 | On order | ||||
Forward-Looking Statements and Distribution
This press release contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Navig8 Chemical Tankers Inc. management's examination of historical operating trends. Although the Company believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Navig8 Chemical Tankers Inc. cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Important factors that, in the Company's view, could cause actual results to differ materially from those discussed in this press release include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC's petroleum production levels and world wide oil consumption and storage, changes in the Company's operating expenses including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission.
This communication is not for publication or distribution, directly or indirectly, in or into any state or jurisdiction into which doing so would be unlawful. The distribution of this communication may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes, should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions. The Company assumes no responsibility in the event there is a violation by any person of such restrictions.
Contact Information:
For Further Information, Please Contact:
Nicolas Busch:
Chief Executive Officer
+ 44 207 467 5888
Rose & Company:
+1 212 359 2228
navig8chems@rosecoglobal.com