Americas News
Navigator: No Impact on Charter Environment from Low Bunker Prices, "We're All in the Same Boat"
Navigator Holdings Ltd. [NYSE:NVGS] says the charter environment has not been affected by the recent drop in bunker prices as most companies are "in the same boat," but the development has nevertheless helped the company's bottom line.
"Everybody is buying the bunkers, everybody is exposed to the bunker market," CFO Niall Nolan said last week during the company's first quarter 2015 earnings call as quoted by SeekingAlpha.
"We are all in the same boat, when it comes to bunker price and freight rates are adjusted accordingly."
However, the liquefied petroleum gas (LPG) carrier owner said that the "significant reduction in global bunker fuel costs," had led Navigator to save $3 million in the first quarter of 2015.
The company also announced revenues of $22 million for the quarter and earnings per share (EPS) of $0.40, missing analyst expectations of $0.42, according to reports.
"Navigator is a long-term play on the structural, not cyclical changes taking place hydrocarbon space as the world gradually moves into greater use of cleaner fuels," said CEO David Butters.
"Major shifts do not take place instantly but evolve over time to create a sustainable business model to accommodate that change."
He added that the U.S. is now on the cusp of becoming an exporter of LPG rather than an importer, with Navigator moving to position itself accordingly as infrastructure develops.
Butters also noted that Navigator saw a pickup in demand for its handysize ships in the first quarter.
"We anticipated this shift long before it began and built and continued to build highly sophisticated vessels that will become a meaningful participant structural shift," he said.
At the end of 2014, Navigator ordered two new fuel-efficient LPG carriers late last year as part of its fleet expansion.
