CST: 28/07/2016 05:35:12   

Navig8 Chemical Tankers Inc. Reports Results for the Three and Twelve Months Ended December 31, 2015

170 Days ago

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LONDON, UNITED KINGDOM--(Marketwired - Feb 9, 2016) - 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 twelve months ended December 31, 2015.

Highlights

  • Revenue of $35.3 million and net income of $9.1 million, or $0.24 per share, for the three months ended December 31, 2015.
  • Entered into contracts to purchase five IMO2 49,000 DWT chemical tankers at STX Offshore & Shipbuilding with options to purchase five additional sister ships.
  • Signed $52 million debt facility with DVB Bank SE 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.
  • Continued growth of the Company's operating fleet with the delivery of 2 vessels; 19 vessels of the Company's 37-vessel newbuilding fleet had been delivered as of December 31, 2015.
  • All 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 program. Greater than half of our fleet has now been delivered, and we are beginning to generate substantial revenue," said Nicolas Busch, Chief Executive Office of Navig8 Chemical Tankers Inc.

"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 U.S. 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 U.S. 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 IMO2 49,000 DWT Interline coated tankers in October and exercising an option to purchase a fifth sister ship in December."

Fleet Update

The Company has entered into contracts to acquire 37 modern, fuel-efficient newbuilding chemical tankers. As of the date of this press release, 20 of these vessels have been delivered and are in operation. The fleet is scheduled to be fully delivered by September 2017. Eight additional vessels are scheduled to be delivered during the remainder of 2016, and the final nine 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 IMO2 37,000 DWT Interline coated tankers built at Hyundai Mipo, Korea ("A-Class vessels"), all of which have been delivered. The A-Class vessels have been deployed in the Delta8 pool. The Company took delivery of two A-Class vessels during the three months ended December 31, 2015 and its final A-Class vessel in January 2016.

Nine IMO2 49,000 DWT 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 had secured options to purchase six additional sister vessels from STX (each, an "Option vessel"). In December 2015, the Company announced that it had exercised an option to acquire, and entered into a contract to purchase, an Option vessel. The Company's nine T-Class vessels will be deployed in the Chronos8 pool. The Company expects four T-Class vessels to be delivered between April and September 2016 and the remaining five by June 2017.

Two IMO2 49,000 DWT Epoxy coated medium range tankers built at Hyundai, Vinashin ("V-Class vessels"). Both V-Class vessels were delivered on bareboat charters in the first quarter of 2015; the Company purchased one of these vessels pursuant to its purchase obligation in December 2015 and expects to purchase the other vessel in the first quarter of 2016. The V-Class vessels are currently deployed in the Chronos8 pool.

Eight IMO2 25,000 DWT 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 four S-Class vessels to be delivered in 2016 and the remaining four by September 2017.

Financing Update

The two V-Class vessels, the Navig8 Victoria and the Navig8 Violette, were delivered to the Company earlier in 2015 under 12-month bareboat charters, which commenced at their respective delivery dates, with purchase obligations at the end of the charters. In December 2015, the Company entered into a $52 million debt facility to finance the purchase of the two V-Class vessels pursuant to its purchase obligations upon expiry of their bareboat charters. The loan facility covers approximately 65% of the purchase price of the vessels, and has been provided by DVB Bank SE. The Company took ownership of the Navig8 Victoria in December 2015 and expects to take ownership of the Navig8 Violette in March 2016.

The Company expects to have financing in place for the unfinanced T-Class and S-Class vessels well ahead of the respective deliveries.

Results for the three months ended December 31, 2015 and 2014

For the three months ended December 31, 2015, the Company reported net income of $9.1 million, or $0.24 per share, an increase of $11.1 million from a net loss of $2.0 million for the three months ended December 31, 2014, when the Company had not yet taken delivery of any of the vessels in its newbuilding program.

Results for the twelve months ended December 31, 2015 and 2014

For the twelve months ended December 31, 2015, the Company reported net income of $20.7 million, or $0.54 per share, an increase of $25.3 million from a net loss of $4.6 million for the twelve months ended December 31, 2014.

Management's Discussion and Analysis of Financial Results

Revenue for the three months ended December 31, 2015 was $35.3 million, compared to no revenue for the three months ended December 31, 2014. The total number of vessel operating days for the three months ended December 31, 2015 was 1,682, compared to 1,283 for the three months ended September 30, 2015 and zero for the three months ended December 31, 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 December 31, 2015, were $21,654 per day and $21,440 per day, respectively. The Company had 19 vessels operating during the three months ended December 31, 2015, all of which operate in pools from which they derive TCE revenue.

Vessel operating expenses were $10.3 million for the three months ended December 31, 2015, an increase of $10.3 million from the three months ended December 31, 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 approximately $5,441 for the three months ended December 31, 2015.

Depreciation expense for the three months ended December 31, 2015 was $6.6 million, an increase of $6.6 million compared to the three months ended December 31, 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 December 31, 2015, were $2.3 million, an increase of $0.2 million from $2.0 million for the three months ended December 31, 2014. This increase is related to the growing size of the Company's fleet and hence various management and general administrative costs.

Interest expense for the three months ended December 31, 2015 was $7.0 million, as compared to no interest expense in the three months ended December 31, 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 February 11, 2016 at 2:00PM GMT, the Company's management team will host a conference call to discuss its results for the three months ended December 31, 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 February 18, 2016 by dialing +44 (0) 2036 088 021 (Standard International Dial In) and using access code 10080602.

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 has taken delivery of 20 chemical carriers and anticipates delivery of its full 37-vessel fleet by Q3 2017. 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.

 
 
NAVIG8 CHEMICAL TANKERS INC. AND SUBSIDIARIES
OTHER OPERATING DATA
(Unaudited)
 
    Fourth Quarter 2015   Third Quarter 2015
    37k DWT HMD Vessels

("A-Class")
  49k DWT Vinashin Vessels

("V-Class")
  37k DWT HMD Vessels

("A-Class")
  49k DWT Vinashin Vessels

("V-Class")
Vessels on the water at the end of the month   17   2   15   2
Total operating days   1,498   184   1,099   184
Average distributed Gross TCE in $ / day   21,654   21,440   22,958   24,052
Average OPEX in $ / day   5,437   5,473   5,275   5,502
                 
                 
   
   
NAVIG8 CHEMICAL TANKERS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
                         
    For the three months ended 31 Dec     For the twelve months ended 31 Dec  
All in US$000, unless otherwise stated   2015     2014     2015     2014  
Operating revenue                                
Vessel revenue   $ 35,263       -     $ 81,654       -  
                                 
Operating expenses                                
Vessel expenses     (10,256 )     -       (23,502 )     -  
Depreciation and amortization     (6,631 )     -       (15,780 )     -  
General and administrative expenses     (2,254 )     (2,016 )     (7,514 )     (4,689 )
Total operating expenses     (19,141 )     (2,016 )     (46,796 )     (4,689 )
Net operating income/(loss)   $ 16,122     $ (2,016 )   $ 34,858     $ (4,689 )
                                 
Financial Items                                
Interest income     20       49       65       83  
Interest expense     (7,014 )     -       (14,252 )     -  
Other financial items     (6 )     -       (6 )     -  
Net financial items     (7,000 )     49       (14,193 )     83  
Net income/(loss)   $ 9,122     $ (1,967 )   $ 20,665     $ (4,606 )
                                 
                                 
Earnings per common share:                                
Basic   $ 0.24     $ (0.06 )   $ 0.54     $ (0.20 )
Diluted   $ 0.24     $ (0.06 )   $ 0.54     $ (0.20 )
                                 
EBITDA:                                
Net income/(loss)   $ 9,122     $ (1,967 )   $ 20,665     $ (4,606 )
Depreciation and amortization     (6,631 )     -       (15,780 )     -  
Interest income     20       49       65       83  
Interest expense     (7,014 )     -       (14,252 )     -  
Other financial items   $ (6 )   $ 0     $ (6 )   $ 0  
EBITDA   $ 22,753     $ (2,016 )   $ 50,638     $ (4,689 )
                                 
                                 
NAVIG8 CHEMICAL TANKERS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
           
All in US$000, unless otherwise stated   As at 31 December
2015
  As at 31 December
2014
 
Assets              
               
Current assets              
  Cash and cash equivalents   $ 18,438   $ 40,405  
  Trade receivables     15,161     0  
  Prepaid expenses and other assets     10,897     25  
  Inventories     2,008     0  
Total current assets   $ 46,504   $ 40,430  
               
Non-current assets              
  Restricted cash     16,000     -  
  Vessels, net     663,891     -  
  Vessels, capital lease     41,262     -  
  Vessels under construction     147,505     284,826  
  Vessel related deposits     -     9,154  
Total non-current assets   $ 868,658   $ 293,980  
               
Total assets   $ 915,162   $ 334,410  
               
Liabilities and shareholders' equity              
               
Current liabilities              
  Obligations under capital lease     36,149     -  
  Current portion of loans, net of unamortised debt issuance cost     56,281     -  
  Accounts payables and accrued expenses     13,827     984  
Total current liabilities   $ 106,257   $ 984  
               
Non-current liabilities              
  Long-term loans, net of unamortised debt issuance cost     389,984     -  
               
Total liabilities   $ 496,241   $ 984  
               
Shareholders' equity              
               
  Common stock     385     328  
  Paid-in capital     403,641     338,868  
  Retained earnings / (deficit)     14,895     (5,770 )
Total shareholders' equity     418,921     333,426  
               
Total liabilities and shareholders' equity   $ 915,162   $ 334,410  
               
               

NAVIG8 CHEMICAL TANKERS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 
    For the twelve months ended 31 December  
All in US$000, unless otherwise stated   2015     2014  
Operating activities:                
Net income/ (loss)   $ 20,665     $ (4,606 )
Adjustments to reconcile net income / (loss) to net cash provided by (used in) operating activities:        
Depreciation of vessels     15,780       -  
Amortisation of debt issuance costs     243       -  
Changes in operating assets and liabilities:                
  Trade receivables     (15,161 )     -  
  Prepaid expenses and other assets     (10,871 )     (25 )
  Inventories     (2,008 )     -  
  Accounts payables     342       375  
  Accrued expenses     5,057       (533 )
Net cash used in operating activities     14,047       (4,789 )
                 
Investing activities                
Changes in restricted cash     (16,000 )     -  
Payments for vessels under construction     (490,310 )     (201,219 )
Payments for vessels, capital lease     (1,852 )     -  
Payments for vessels     (1,596 )     -  
Vessel related deposits     500       (9,154 )
Net cash used in investing activities     (509,258 )     (210,373 )
                 
Financing activities                
Proceeds from issuance of common stock     64,830       255,556  
Proceeds from loans, net of debt issuance costs     460,746       -  
Repayment of loans     (13,785 )     -  
Payment of obligation under finance lease     (38,547 )     -  
Net cash provided by financing activities     473,244       255,556  
                 
Increase in cash and cash equivalents     (21,967 )     40,394  
Cash and cash equivalents, beginning of year     40,405       11  
Cash and cash equivalents, end of year   $ 18,438     $ 40,405  
                 
     
Fleet List as of February 9, 2016            
                     
    Name   DWT   Yard   Built   Status
    Delivered Vessels                
1   Navig8 Victoria   49,000   Hyundai Vinashin   Q1 2015   Delivered
2   Navig8 Violette   49,000   Hyundai Vinashin   Q1 2015   Delivered
3   Navig8 Almandine   37,000   Hyundai Mipo   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
19   Navig8 Alabaster   37,000   Hyundai Mipo   Q4 2015   Delivered
20   Navig8 Achroite   37,000   Hyundai Mipo   Q12016   Delivered
                     
    Newbuildings                
1   Navig8 Turquoise   49,000   STX   Q2 2016   On order
2   Navig8 Topaz   49,000   STX   Q3 2016   On order
3   Navig8 Tourmaline   49,000   STX   Q3 2016   On order
4   Navig8 Tanzanite   49,000   STX   Q3 2016   On order
5   Navig8 Sirius   25,000   Kitanihon   Q2 2016   On order
6   Navig8 Sky   25,000   Kitanihon   Q3 2016   On order
7   Navig8 Spark   25,000   Kitanihon   Q3 2016   On order
8   Navig8 Stellar   25,000   Kitanihon   Q4 2016   On order
9   Navig8 Saiph   25,000   Kitanihon   Q1 2017   On order
10   Navig8 Sceptrum   25,000   Kitanihon   Q2 2017   On order
11   Navig8 Spica   25,000   Fukuoka   Q2 2017   On order
12   Navig8 Sol   25,000   Fukuoka   Q3 2017   On order
13   N8CT N/B   49,000   STX   Q1 2017   On order
14   N8CT N/B   49,000   STX   Q2 2017   On order
15   N8CT N/B   49,000   STX   Q2 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
                     
                     

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.

For Further Information, Please Contact:
Nicolas Busch
Chief Executive Officer
+ 44 207 467 5888

Rose & Company
+1 212 359 2228
navig8chems@rosecoglobal.com

Visit our website: www.navig8chemicaltankers.com