Navig8 subsidiaries in profit

Feb 12 2016

Navig8 Chemical Tankers has reported revenue of $35.3 mill and net income of $9.1 mill for the three months ended 31st December, 2015.

The $9.1 mill net income was an increase of $11.1 mill from a net loss of $2 mill recorded for 3Q14, at which time, the company had not taken delivery of any of the vessels in its newbuilding programme.

For the 12 months ended 31st December, 2015, the company reported net income of $20.7 mill, an increase of $25.3 mill from a net loss of $4.6 mill recorded for 2014.

The gross average daily TCE earned by the A-class vessels and the V-class vessels in 3Q15, was $21,654 per day and $21,440 per day, respectively.

Vessel operating expenses were $10.3 mill for 4Q15. Average fleet opex per day, including technical management fees, was about $5,441 for the period.

During the quarter, the company entered into contracts to purchase five IMOII 49,000 dwt chemical tankers at STX Offshore & Shipbuilding with options to buy five additional sisterships.

In addition, Navig8 Chemical Tankers agreed a $52 mill debt facility with DVB Bank to finance the purchase of two ECO 49,000 dwt chemical tankers on bareboat charter, one of which was purchased by the company in December, 2015.

With the delivery of two vessels, 19 vessels of the company's 37-vessel newbuilding fleet had been delivered as of 31st December, 2015. All of the delivered vessels have been deployed in pools managed by the Navig8 Group.

"We are pleased to report strong earnings results on the back of additional deliveries in our newbuilding programme. Greater than half of our fleet has now been delivered, and we are beginning to generate substantial revenue," said Nicolas Busch, Navig8 Chemical Tankers CEO.

"The increasing acceptance of vessels with Interline coatings among leading chemical industry participants, as well as the continued increase in long-haul petrochemical trades, particularly the growing movement of methanol cargoes from the Caribbean and US Gulf to Asia, has us very optimistic about our strategic position. We remain bullish on our outlook for increasing long-haul trades as additional chemical manufacturing capacity comes online in the US and Middle East and China transitions from an industrial to a consumer led economy.

“We reaffirmed our commitment to this investment thesis by entering into contracts to purchase four IMOII 49,000 dwt Interline coated tankers in October and exercising an option to purchase a fifth sister ship in December," he concluded.

Navig8 Product Tankers reported revenue of $9.1 mill and net income of $0.2 mill for 4Q15.

The net income represented a decrease of $0.9 mill from 4Q14, when the company had not yet taken delivery of any of the vessels in its newbuilding programme and had therefore not begun to depreciate the vessels.

For the full year, the company recorded a net income of $26.7 mill, an increase of $27.9 mill from a net loss of $1.2 mill for 2014. Of the increase, $24.1 mill related to the gain on sale of three vessels.

In November, 2015, the company entered into a $64.3 mill secured loan facility to finance the first two of the company’s eight LR1s under construction at STX Offshore & Shipbuilding.

Navig8 Product Tankers increased this loan facility to $128.5 mill in January of this year to provide financing for two more LR1s also under construction at STX.

“We are pleased to report that we have begun to take deliveries of our newbuilding fleet and have taken further steps to finance the newbuilding programme. Thus far, we have closed senior debt, and sale and leaseback, financings for 19 vessels, including four since the third quarter ended. Our newbuilding programme is substantially funded at this point, and we are in advanced discussions for financing the remaining vessels,” explained Busch. “We expect our newbuilding fleet to be fully delivered by the end of 2016 and well-positioned to begin to generate significant cash flow on the back of anticipated growth in long-haul trades resulting from new large projects in the Middle East and North America and the corresponding increase in long-haul shipping demand to reach end-markets.

“We continue to benefit from our relationship with our sponsor, the Navig8 Group, which has provided us with construction supervision, commercial and technical management, and related services since our inception,”he said.

The average TCE earned by the three LR2 chartered-in tankers in 4Q15, was $26,104 per day. The gross average daily TCE for the owned vessels were $23,235 and $27,364 for the LR1 and LR2s, respectively. These rates were achieved over an aggregate of 88 operating days for the two owned vessels that were delivered in November, 2015.  

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