Navigator Holdings Ltd. Aktie

Ladies and gentlemen, welcome to the Navigator Holdings Conference Call for the First Quarter 2026 Financial Results.

On today's call, we have Mads Peter Zacho, Chief Executive Officer; Gary Chapman, Chief Financial Officer; Oeyvind Lindeman, Chief Commercial Officer; and myself, Randy Giveans, Chief Investor Relations Officer. I must advise you that this conference call is being recorded today.

Now, as we conduct today's presentation, we'll be making various forward-looking statements. These statements include, but are not limited to, the future expectations, plans and prospects from both a financial and operational perspective and are based on our assumptions, forecasts and expectations as of today, May 6, 2026, and are as such, subject to material risks and uncertainties.

Actual results may differ significantly from our forward-looking information and forecast. Additional information about these factors and assumptions are included in our annual and quarterly reports filed with the Securities and Exchange Commission.

With that, I now pass the floor to our CEO, Mads Peter Zaco. Go ahead, Mads.

Thank you, Randy. Good morning and good afternoon and thank you for joining this Navigator Gas earnings call for Q1 2026.

Before I get into the highlights of the quarter, let me again address the Middle East. As of today, we have no vessels operating in or transiting the Hormuz Strait. And just to be clear, we have experienced no significant negative operational or financial impact from the conflict, only commercial tailwinds. We are watching the developments closely. And we will keep our crew and assets safe.

Please turn to Slide #4. The first quarter of 2026 was a quarter of resilient trading, and a quarter of record net income for Navigator Gas. And now in Q2, which is starting strong. In terms of our operations during Q1, TCE rates came in just below $30,000 per day, about $1,000 below Q4 and just below same period 2025. Utilization was slightly better than Q4 and within our guided range.

Net income was $36 million or $0.55 per share and EBITDA was $80 million. All 3 are strong numbers. The balance sheet remains strong. Total liquidity less restricted cash was $241 million at quarter end. This is essentially flat versus year-end even after paying down debt and returning capital to shareholders and completing a significant share repurchase.

On that note, in March, we repurchased and canceled 3.5 million shares from BW Group at $17.50 per share for a total of $61.2 million. This is a substantial transaction. And it reflects our strong conviction of the value in our company.

We're also improving our capital return policy. From Q2 onwards, our policy will be to return 35% of net income each quarter, up from the 30%. The Board has declared a fixed dividend of $0.07 per share for Q1. And we expect to add $6.3 million worth of buybacks to bring the total to 30% of Q1 net income.

Now, to what I consider the real highlight of the quarter. Our ethylene export terminal at Morgans Point delivered record throughput at over 300,000 tons. This is up 57% from Q4 and more than 2.5x up compared to the volumes from Q1 of last year.

Both European and Asian demand for U.S. ethylene is growing. European crackers are undergoing restructuring and Asian producers are switching away from naphtha-based production given the elevated oil prices. Three new offtake contracts for the Morgans Point terminal were signed in the quarter and more are expected shortly.

On vessel sales, in January, we sold the Navigator Saturn and the Happy Falcon, at attractive prices and generating substantial book gains as we communicated last quarter. In April, we also sold the Navigator Pegasus, for approximately $31 million, generating a book gain of about $15 million.

As I've said a couple of times before, I view these asset sales as recurring income stream. We have been able to consistently sell well above book and at or above market estimates. The proceeds fund capital return and our fleet renewal ambitions.

And then, there's the Unigas news. In April, we signed a letter of intent to sell our 8 gas carriers in the Unigas pool for an aggregate price of approximately $183 million. This is a significant strategic step. And I'd be pleased to discuss any of this in more detail during the Q&A.

On newbuilds, financing is in place for the first 2 of the 6 vessels that we've ordered at an attractive margin of 150 basis points, equal to the best ever. Expect more good news on our newbuilding financings to come in shortly.

Looking at the Middle East, the commercial angle, only 3% of global handysize volumes load in the Persian Gulf. These exports have been disrupted, but that creates demand for substitute product, U.S. ethane-based ethylene over Middle East and naphtha-based production and longer ton miles on ammonia. We also expect to see more LPG volumes from Venezuela that will come into the regular fleet.

The supply side remains in our favor. The handysize order book is only 10% of the fleet, while 22% of the fleet is more than 20 years of age. Net fleet growth is likely to be flat or even negative.

And then on to the outlook for Q2. This is where it gets exciting. Both TCE and utilization are expected to be above Q1 levels. April has already set some monthly Navigator records. Ethylene export volumes are also expected to set a new record in Q2.

But I'll leave it to Gary to talk a little bit more about the financial details. So over to you, Gary.

Thank you very much, Mads. Hello, everyone. As we entered 2026, we saw a slightly softer start to the quarter than we would have liked, but we ended with a resilient outcome overall for the quarter. And by the time we reached the end of March, supported by the strength and diversification of our platform. This was, of course, against the backdrop of ongoing geopolitical uncertainty, including continued disruption and risk across key global shipping corridors, which influenced and continues to influence trading patterns. However, many of these influences have turned into a positive tailwind for Navigator as we entered the second quarter and Oeyvind will talk more about this later.

Turning back specifically to the first quarter on Slide 6. We're reporting an average TCE of $29,684 for this first quarter of 2026 compared to $30,647 in the fourth quarter of 2025 and $30,476 in the first quarter of last year.

The slight softness in TCE this quarter arises principally from quarter end revenue recognition under U.S. GAAP due to having more vessels on voyage charters at the end of this first quarter compared to the end of the fourth quarter of 2025 or at the end of the first quarter of last year. And considering loading dates, revenue from a number of these vessels being recognized in the second quarter as a result.

Utilization was above our benchmark at 90.6% for the quarter and was above 95% for April 2026. EBITDA for the quarter was $80.3 million, benefiting from strong terminal performance and fleet renewal gains on vessel disposals and adjusted EBITDA was $65.9 million, lower mainly due to the factors around TCE revenue recognition mentioned just now.

Vessel operating expenses were down compared to the first quarter of 2025 at $45.8 million, but very slightly below in dollar per vessel per day terms due to timing of vessel sales, and there's more guidance for 2026 on Slide 9.

Depreciation was slightly down compared to previous quarters, due to our now slightly reduced fleet size, and due to our remaining older vessel, Navigator Pluto, that reached the end of her 25-year accounting life during the fourth quarter last year and hence, is no longer depreciated.

General and admin costs are higher in this quarter, primarily due to one-off project-related activities and associated legal and professional fees, which are not expected to recur at the same level.

Randy will discuss more about our ethylene terminal. But as Mads mentioned, throughput volumes for the first quarter were a record high of 300,537 tons, up compared to 191,707 tons in the fourth quarter of 2025 and up from 85,553 tons in the first quarter of 2025, resulting in a profit to Navigator from our Morgan's Point terminal in this first quarter of $2.6 million.

Our income tax line reflects movements in current tax and mainly deferred tax in relation to our equity investment in the ethylene export terminal.

Net income attributable to stockholders for the first quarter of 2025 was $35.5 million or $0.55 per share, as Mads mentioned, and is the highest Navigator has ever reported. And in the quarter, we completed the sale of 2 vessels recording a gain of $12.1 million and completed the $61.2 million share buyback as part of the secondary offering from BW Group. The EPS figure also represents a significant increase versus both the prior quarter and the same quarter in the prior year.

We continue to actively use, strengthen and build our already strong balance sheet, as shown on Slide 7. Our cash, cash equivalents and restricted cash balance was $199.6 million at March 31, 2026, and including our available but then undrawn revolving credit facilities of $91 million gave total liquidity of $291 million at the same date.

Taking out restricted cash leaves a total available liquidity of $241 million. This strong liquidity position is despite paying out $29 million for scheduled loan repayments, $5 million under our capital return policy in respect of the fourth quarter of 2025 and over $61 million for the 3.5 million shares repurchased and then canceled as part of the secondary offering from BW Group.

Our ethylene export terminal is currently unencumbered. And we also owned 9 unencumbered vessels at March 31, which gives us significant additional available leverage to tap when and as needed.

Alongside this, we have paid from our own cash a total of $110 million as at March 31, 2026, towards the 6 vessels we have under construction. The difference of this figure to our balance sheet figure represents capitalized interest under U.S. GAAP.

A significant part of these construction payments will be recouped as we fix financings for our newbuild vessels. And together with a still growing operational cash flow, this all helps to demonstrate our financial stability and strength. And to bring you up to date, we had around $310 million of available liquidity or $360 million, including restricted cash at the close of business on May 4, 2026. We continue to maintain a conservative and well-managed capital structure.

And on Slide 8, across the quarter, where with a very supportive banking group and a strong underlying business, we were able to return capital to shareholders, raised funds for the construction of our newbuilds, reward our shareholders through buybacks and continue working on managing our debt and financing needs.

We successfully entered into a new secured term loan, signing a 5-year post-delivery facility for up to $133.8 million, which will be used to finance up to 65% of the delivery and also predelivery installments for the construction of 2 of our new ethylene Panda newbuild vessels.

As of March 31, we have partially drawn down $26.8 million of this facility to recoup some of our cash already paid out for these vessels. This transaction was executed at a very low margin of 150 basis points plus SOFR. And we would very much like to thank our banking group for supporting Navigator on this transaction.

We believe the deal and the very keen pricing not only reflects the banking market today, but also the strong and stable credit position of the company.

We expect financing for the remaining 2 of our 4 Panda vessels to be completed in May 2026 and financing for our 2 Coral ammonia vessels to be completed in June 2026. This would result in all 6 of our newbuild vessels being financed by the end of the second quarter this year.

Then in terms of debt repayments, in addition to scheduled repayments of $29.3 million in this first quarter, we have only 2 relatively small debt balloons due before 2028, with payments due in 2026 of $54 million in total. And we expect to pay down an average of $128 million of annual scheduled pro forma debt amortization per year across 2025 through 2028.

Net debt to last 12 months adjusted EBITDA stood at 2.5x at March 31, materially consistent with prior periods and remains at a level where we believe is comfortable for the business. Our loan-to-fleet value ratio was approximately 32% or below 30% when including a reasonable value for our Morgan's Point, terminal investment.

Then finally, as at March 31, 2026, 56% of the company's debt was either hedged or was on a fixed interest rate basis with 44% open to interest rate variability. And this is another key metric that we keep under close review, particularly in today's economic environment.

Hopefully, that you can see we continue to prioritize returning capital to shareholders, while maintaining balance sheet strength. And we'll continue to balance growth, deleveraging and shareholder returns in a disciplined and careful manner.

On Slide 9, this slide highlights 2 of the core strengths of our Navigator platform, our ability to generate consistent operating cash flow and our structurally lower all-in cash breakeven.

Starting with cash flow. Over the last 12 months to March 31, 2026, the business has continued to generate strong underlying operating cash flows with a pre-CapEx cash flow yield averaging around 15%.

Whilst post-CapEx free cash flow has seen some variability, this is largely a function of CapEx timing and investment in our newbuild program rather than any change in the underlying earnings capacity of the business. Operating cash flow generation itself has remained quite stable.

Our latest estimate for 2026 all-in cash breakeven shown below is $21,230 per vessel per day, which incorporates over $180 million of operating costs, $119 million of debt amortization and approximately $44 million of net interest expense. This level remains significantly below current and historic TCE levels, providing significant headroom for the business and should allow us to deliver positive EBITDA and cash generation even through more challenging market conditions.

Our cost guidance for 2026 remains materially unchanged from that provided in the fourth quarter 2025 when adjusting for changes in fleet composition. And you can also see the expense guidance across vessel OpEx, G&A, depreciation and interest expense for both the second quarter and the full year.

As noted, this guidance includes our 8 Unigas vessels. And of course, should the sale of those vessels complete, there would be a corresponding reduction in certain of those cost lines, particularly OpEx and depreciation, reflecting what would then be a smaller fleet.

Slide 10 outlines our historic quarterly adjusted EBITDA, adding this first quarter's results. We now have 13 quarters in a row since the beginning of 2023 of reporting at least $60 million of quarterly adjusted EBITDA at an average of $71 million over that period.

On the right-hand side, as we've highlighted previously, our earnings remain sensitive to TCE movements with approximately $17 million to $18 million of annual EBITDA uplift for every $1,000 increase in TCE rates, all other things being equal.

As for previous quarters, an update on our vessel drydock schedule, projected costs and time taken can be found in the appendix, Slide 30, should that detail be of interest. So then overall, Q1 started a little more slowly than we would have liked, but accelerated well as we moved into March.

And the resilience of our results and the flexibility of our fleet have again been shown with another very solid set of numbers and record net income. And with market tailwinds translating into improving second quarter conditions, we can look forward with confidence and from a position of strength.

So with that, I hand you over to Oeyvind to provide some more details on Q1, but also on what we're seeing as we move forward. Oeyvind?

Thank you very much, Gary, and good morning, everyone. Let me start with one of the big topics, the Strait of Hormuz on Page 12. The Strait has essentially been closed for over 2 months now. Since the 28th of February, we've seen commodity prices across the board, LNG, LPG, petrochemical gases and of course, oil moved sharply higher. And that makes sense because the Strait of Hormuz carries roughly 20% of the world's energy supply. When that gets turned down, prices goes up.

Now there's still some traffic moving through, but it's a trickle. And most of what's moving are what we call shadow fleet vessels, ships that are sanctioned in one country or another. Many of them switch off their tracking equipment, so it's genuinely difficult to know exactly what is passing through.

What we can say with confidence is that LPG flows have fallen from around 1 million metric tons per week down to about 1/5 of that. The vessels still moving these cargoes are largely Iranian flagged or ships that have specific permission from the Iranian government to discharge into places like India.

For Navigator directly, our exposure is limited. As Mads mentioned, we do not have any vessels inside. And we do not have any vessels waiting to enter. Our last vessels actually loading LPG from Iraq passed through the Strait exactly on the 28th of February. So we got out just in time.

But the indirect impact on our business has been very meaningful and very positive. With traditional supply chains disrupted, buyers around the world started looking hard at North America as an alternative to Middle East supply. And that shift in behavior has created a strong tailwind for us and I want to walk you through what that looks like.

Turning to Page 13, which covers fleet utilization and our ethylene terminal. I'm pleased to say that our first quarter utilization came in about 90%. And April has continued building on this strength, reaching 95%. What happened is that when the Strait first closed, the market was a bit caught off guard. No one knew, if this was going to last a week or a month or longer. But once it became clear that this wasn't going away quickly, our customers moved decisively to lock in stable supply from North America and that drove our utilization higher as we moved into April.

That same urgency showed up at our joint venture ethylene export terminal. From March onwards, the volumes have been at record levels, not just above normal capacity, but above the expanded nameplate capacity as well. That means the flex feature we built into the terminal is actively adding value today. More volume means more ship movements, which feeds directly into higher utilization and stronger rates. These things go hand-in-hand, and I'll come back to spot rates in a moment.

Now, Page 14 gives you a really clear picture of the competitive position North America finds itself in right now. The chart on the left tracks the price of U.S. ethane and U.S. ethylene compared to international markets. And here is what's remarkable with every other energy commodity has been impacted by what's happening at the Strait of Hormuz. U.S. ethane, however, that price have barely moved.

[ Technical Difficulty ]

I think we will need to just hold off a second while Oeyvind is getting back on. And if he's not back in half a minute, then, we will take over and continue on his behalf.

I'll keep going while we wait for him. So the chart on the left tracks the price of U.S. ethane, U.S. ethylene versus the international markets. And really, the more remarkable thing is while every other energy commodity was squeezed by what's happening at the Strait of Hormuz, U.S. ethane prices, as Oeyvind was saying, has really barely moved. So this is an extraordinary situation. So think about it from a producer's perspective.

If you can buy ethane in the U.S. for under $200 per ton, cracking into ethylene versus dealing with oil at $100, $110 a barrel, there's really no contest. Now North America is, by a long way, the cheapest place in the world to make ethylene right now. And the gap to Asian naphtha producers is enormous. It's about $1,800 per metric ton in terms of a U.S. advantage.

And the arbitrage, really the price difference between U.S. ethylene and markets in Europe and Asia, it's at an all-time high, a $900 per metric ton gap to Europe means much higher revenues for us as a shipowner and higher revenues for us as a terminal owner, which I'll get to in a minute.

So you might ask, is this really a short-term bump or something more lasting? We believe it's the new normal, not just the situation in the Middle East, but the competitiveness of America, right? Yes, maybe the Strait of Hormuz reopen soon, but the U.S. cost competitiveness remains.

Now on Page 15, we'll explain why. So the 3 major U.S. shale gas basins, they're all producing gas that is getting richer and richer over time, right? The crude depletion curve is much steeper than that of gas. So the gas streams are what we call wetter, right, meaning they contain more NGLs, which means more LPG and more ethane. That's really the raw material that underpins everything that Oeyvind and us have been talking about.

So for the global handysize fleet, North America has really become the center of gravity. Around 45% of all of our handysize cargo is linked here to North America. Now 4x what it was back in 2017. So this is clearly a structural shift, not just a cyclical change.

Turning to the supply side on Page 16. Picture really hasn't changed much since our last update. We're looking at around 10% of our order book in terms of potential fleet growth over the next 3 years. Conversely, 22% of the existing fleet is already over 20 years of age. So it's a pretty healthy setup from a supply standpoint.

So what does this all mean for freight rates? Looking at the next slide, ethane and ethylene capable vessels are earning record daily numbers right now in the range of $45,000 to $750,000 that is not a typo, $1,000 per day for some spot voyage charters.

Now to understand really what you're looking at, we want to explain something important. So this green line you see on chart, it's the 12-month assessment. So this is not the spot rates, right? In other words, what it would cost to hire one of our ships for a 1-year contract today. That number is assessed by third-party brokers to be around $33,000 a day.

Now, that line is almost theoretical because the time charter market has really gone quiet. Customers don't want to really lock in rates at these very elevated levels at this time of uncertainty. And ship owners like us have really little incentives to tie up our vessels for a year long when the spot market is offering such strong elevated levels.

So if you're trying to understand the real earnings power of the ships right now, look past the green line and focus on those spot fixtures. That's where the real premiums are. Now clearly, not all of our vessels are able to capture those spot rates. Some are committed to time charters. Some, frankly, aren't even capable of carrying ethane and ethylene on our semi-raps, on our fully raps.

So Page 18 gives you a breakdown of our 2026 time charter coverage profile, again, with most of them being on time charters. Now our semi-ref vessels, they're around half and half. But the ethane and ethylene capable ships, those are the ones that are predominantly in the spot market earning those premium rates. So those are the ones capturing the upside right now.

So bringing it all together, the gap between North American commodity prices and the rest of the world has widened dramatically. Buyers are chasing U.S. supply. Demand for ethane and ethylene shipping is strong. Our terminal is running at record volumes.

Utilization is up. Rates are up and the underlying competitiveness of North American supply, driven by that shale gas that just keeps getting richer means it isn't going away. So April shaping up to be a record month. May is looking very strong as well.

So with that, I'll turn it over to myself to find out what else is happening at Navigator Gas.

So with that, we've made several announcements in recent months. We want to provide some additional details and updates on these recent developments. So starting on Slide 20. We've been saying how attractive we valued our shares are. And we've been putting our money where our mouth has been, right? In March, we repurchased and canceled 3.5 million shares of NVGS directly from BW for $61 million or $17.50 per share.

Now a few things to note. This transaction was done at a discount to the prevailing market price at the time. It removed some of the overhang. It had no negative impact on our free float and has further increased our earnings per share and NAV per share. So importantly, our recent buybacks really answer 3 key questions.

Do we have a strong balance sheet and ample liquidity? As Gary said, yes. Is the earnings outlook attractive? As Oeyvind said, yes. Is the share price undervalued? As Mads has been saying, yes. So for a quick recap, you can see on the bottom left chart, we had about 56 million shares outstanding for many years up until the merger with Ultragas in 2021, in which we issued 21 million shares in exchange for those 18 vessels.

So since peaking at around 77 million shares outstanding in December 2022 and including the capital return here in March, we just continued to reduce this number. We've repurchased and canceled 16 million shares, totaling $236 million for an average price of around $15 per share.

Additionally, we paid $41 million of cash dividends for a total of $277 million of capital return to shareholders over just the past 3.5 years. So this equates to around $4 a share, greater than 26% return during that time.

Now as seen over the past few years, and you'll hear about it here in a minute. We want to reiterate that returning capital to shareholders will remain a priority for us going forward.

Now looking at Slide 21, we recently celebrated the 5-year anniversary of the Navigator Gas Ultragas merger, a match made in handysize heading. So I want to show you 3 graphs that cover the past half decade.

Now starting on the left, our share price has more than doubled from $11 to about $22. And thus far this year, we're up around 30%, but still trading at a 25% discount to NAV, which we do not think is warranted based on the positive outlook for our shipping business, terminal throughput, our strong balance sheet and our steadily climbing earnings.

Now, focusing on the center chart, our ownership structure has had quite the transition during this time. Our shares are now 55% in free float that's publicly traded. Ultranav owns 34% and BW is down to 11%.

Looking at the table on the right, this increased free float, coupled with many new shareholders coming aboard has led to much higher daily trading liquidity, right? We're currently averaging more than 7 million per day and that's year-to-date. Some days, we're doing 10 million, 15 million as you see there on the table. So that covers the past.

But now let's look to Slide 22. Looking ahead. Our capital return policy, it includes a fixed quarterly cash dividend of $0.07 per share. And as part of that quarterly payout percentage of 30% of net income.

So as a result, for the first quarter, we paid a $0.07 quarterly cash dividend totaling $4.3 million and repurchased over 50,000 additional common shares in the open market. And that totaled $1 million for an average price of around $19.34 per share.

Looking ahead, we are announcing that we're returning 30% of net income, a total of $10.6 million to shareholders during the second quarter. The Board has declared a cash dividend of $0.07 per share payable on June 10 to all shareholders of record as of May 20, equating to a quarterly cash dividend payment of $4.3 million.

And additionally, with our shares still trading below our NAV of more than $30 a share, we'll use the variable portion of the return of capital policy for share buybacks.

As such, we plan to repurchase $6.3 million of our shares between now and the quarter end, so that the dividend and the share repurchases together equal 30% of net income, $10.6 million this quarter. But wait, there's more.

Now starting next quarter, we'll be increasing our capital return policy to 35%, more than 1/3 of our net income. Now to fund this incremental capital return policy, the Board has also approved a new $50 million share repurchase plan authorization. So based on our current expectation of improved earnings in 2Q '26, coupled with a higher payout percentage. We expect to announce even more than $10.6 million of return to shareholders under our quarterly capital return policy next quarter. Stay tuned.

Now turning to our ethylene export terminal on Slide 23. All of us touched on it earlier because it's pretty exciting news here. But ethylene throughput volumes rebounded to a record high of 300,000 tons during the first quarter. And that was including a monthly record high of 150,000 tons in March. And this was despite the domestic ethylene prices ticking up, but multiple European crackers underwing turnarounds and both European and Asian demand for U.S. ethylene also increased due to that recent surge in oil-based naphtha prices that Oeyvind was discussing earlier.

Now, to even better news, as you'll see in the bottom of the chart, that strong demand for U.S.-sourced ethylene has continued into the second quarter, leading to another record high monthly throughput in April of around 151,000 tons. And we expect a third consecutive record high month in May with around 160,000 tons currently scheduled.

To note, this is above the nameplate capacity of 130,000 tons per month. That's really proving the upside of the flex train that we've alluded to in recent quarters. So as such, we expect to report another record quarter of throughput on our next earnings call for the second quarter.

Now, looking at the bottom right chart, despite that near-term increase in U.S. ethylene prices, the ARB remains wide open, and that's driven by the much higher international ethylene prices. So that's led to numerous new spot customers buying cargoes from the terminal. And longer term, the forward curve remains very stable at around $0.25 per pound throughout 2027.

So and when it comes to contracting the expansion volumes, we recently signed 3 new offtake contracts for various quantities and durations. And the robust demand has resulted in multiple customers now in advanced discussions for take-or-pay contracts commencing in the coming months.

So as such, we expect that additional offtake capacity will be contracted soon as new customers continue to request updated terms for the terminal and for shipping. So in the meantime, we'll continue to sell those volumes on a spot basis at very attractive rates.

Now, finishing with our fleet and the fleet renewal on Slide 24. We're continuing to rightsize our fleet by selling our older vessels and our noncore assets. So on the same day in January, we sold both the Navigator Saturn and the Navigator Falcon. And then in April, we sold the Navigator Pegasus, a 2009-built 22,000 cubic meter semi-refrigerated gas carrier for $30.5 million. And that's netting a book gain of $15.2 million, which will be booked in our second quarter 2026 results.

Furthermore, as Mads was mentioning, we announced the upcoming sale of 8 Unigas vessels for $183 million. We'll repay around $54 million of associated debt so that the net cash proceeds will be around $129 million.

Now these 8 vessels will also result in a book gain of about $65 million, which we will book upon vessel deliveries throughout the second, third and maybe into the fourth quarter of this year.

So looking at all 17 of our vessel sales over the last 4 years and including those Unigas vessels, the total proceeds are expected to be $342 million. And after all the associated debt repayments, total net cash proceeds of $288 million, which we'll be sure to use prudently.

Now, our current fleet consists of 54 vessels with an average fleet age of 12.3 years, average fleet size of 21,000 cubic meters. Now excluding the Unigas vessels, our fleet would be a little younger on average at 12.2 years and a little larger on average of close to 23,000 cubic meters.

So we continue to upgrade our vessels with some various energy savings technology. You can see that on Slide 30. And we continue to roll out new artificial intelligence AI programs to make our fleet even more efficient.

So with all that, I'll now turn it back to Mads for some closing remarks.

Good. Thank you, Randy. And it's great that you illustrate we have good redundancy, not only in our vessel operations and our financing structures, but also in our investor presentation. So that's great.

The first quarter of 2026 was a quarter of resilient cash generation, continued structural tailwinds and once more a demonstration of our disciplined capital allocation. It was also a quarter where we delivered the strongest quarterly net income in the history of Navigator Gas.

The strong net results include both tailwinds from vessel sales, but also some headwinds. Importantly, some of those headwinds that Gary just reviewed with us, they will translate into tailwind in Q2, which is a quarter that has already taken off to a good start.

Our resilient earnings and strong cash generation are underpinned by the structural advantaged U.S. exports, particularly the low-cost ethane and a tightening supply fundamental. These effects will outlast the more cyclical effects that we are seeing from the war in the Persian Gulf.

With record terminal throughput anticipated and improving fleet utilization and TCE and supportive macro dynamics into Q2 of 2026. We enter the remainder of the year from a position of strength and we are well positioned to sustain this momentum. A strong balance sheet and clear capital return policy continues to drive attractive shareholder returns.

So with that, I'll round it off. Thank you for listening. And back to you, Randy, to open the Q&A.

Thanks so much, Mads, and great to see Oeyvind. It looks like he's back. We missed his calm and strong Norwegian voice. Operator, we'll now open the lines for some Q&A. [Operator Instructions]

Spiro here from Citi. I want to start with the Middle East. Obviously, a very fluid situation, seeing some of that play out today. But you did note the disruption has been a net positive for you commercially. And so to the extent you do see a return to normal, however you defined it. It doesn't sound like you guys are expecting business to go back as usual. So curious to get your thoughts on maybe the durability of some of these tailwinds to last longer.

Oeyvind, you talked about renewed interest in U.S. cargoes. So I kind of wanted to get a glimpse of maybe what you're hearing from customers? How those conversations are going? And when do you think this starts to convert maybe into longer term commercial success for you guys?

I think the most important feature, what is happening now is what we mentioned at the boardrooms around the world when they're looking at the supply chains. They're looking for reliability. And what the issue in the Middle East have shown is that it is not reliable.

So when you're running your multibillion-dollar production system crackers and so forth, you can't rely on that anymore. So that has highlighted that issue. And that is hurting many of those customers to the U.S. talking about ethane and ethylene. So I think that is a lasting change in the supply chain strategies around the different companies or customers.

In short term, in terms of freight and so forth, et cetera, I think this is going to be if the Strait opens, there's going to be a long lag on the prices and to settle and so forth, et cetera. So I think long term, it's a structural shift. Short term, I think we'll see a strong market continue for the foreseeable future until things are settled. But when that happens, it may takes time.

Understood. That's great color. Second one, maybe just going to capital redeployment here. Liquidity getting pretty healthy, looks strong at these levels following these vessel sales. And just wondering if you guys provide a little more color on how you're thinking about redeploying that capital. Maybe where the best value is, if there's any obvious holes in your portfolio? And if some of that capital can maybe find its way to infrastructure development.

Yes. There's still a continuation of the strategy we have communicated in previous occasions that we still see some opportunity for consolidating the markets that we are in. That goes for both the handysize market and also the midsized market that we're looking at. The midsized market is a little bit more fragmented and there may be more opportunities. And here, we just need to find the right deals at the right price at the right time. But we clearly see that there are opportunities for consolidation here.

We also see opportunities in infrastructure. And that can be both export infrastructure out of North America and it can be import infrastructure into Europe. We have a pretty active business development portfolio. The infrastructure projects will tend to take a little bit longer before they materialize. Whereas you could say the secondhand consolidation on vessels could maybe happen a little bit faster.

But we still -- we are a company that want to grow over time, nothing wild, but just gradually, as you've seen in the past, quite predictable in how we look at it. And that leaves also ample cash on hand to deploy both into repayment of debt and at the same time, in particular, capital return to shareholders.

So it's a little bit the same story that you heard before that we think we can do all of the things at the same time, growing gradually, but also deploying gradually more cash over time to shareholders.

This is Chris Robertson at Deutsche Bank. Just wanted to start with the terminal. I think you're currently around 23% over nameplate capacity at these levels, around 160,000 tons for April. How confident are you in maintaining throughput at that level sustainably, I guess, across the year without periods of increased maintenance due to the increased throughput?

Are there any technical or physical limitations that you could continue to optimize further on here? And is there any low-hanging fruit in terms of some minimal CapEx investment to continue to improve the total capacity number?

Yes. I'll start there. A few questions. I was actually up there on Monday at the terminal. So back in February, you saw that dip. We did 60,000-ish tons. And during that time, we did some maintenance, did a few little capital improvements, added an additional pump, and that really bode well for us. Obviously, in the last few months, you're seeing us operating above nameplate capacity. Now this is our partner, the operating partner, enterprise products, more than Navigator turning screws.

But all that being said, we can operate above nameplate for an extended period, not at the 160,000 ton level probably for multiple months. Once we get into the summer, June, July, especially August, you're here in Houston, you know very well, when the temps are over 100 degrees Fahrenheit, it's a lot harder to chill this commodity down to negative 104 Celsius, right? So there are some technical difficulties to keep going at these levels.

On the commercial standpoint, right, the flex train does ethane and ethylene. So there's a balance there. So we have a contractual agreement that we're buying 1/4 of the capacity. There's upside above and beyond that when it's not being used for ethane. So it's hard to really say, yes, every month we'll be at x level. We have the kind of the throughput that we expect and hope 130,000 tons a month. But it would be hard to get above that continuously in the short term.

Now, longer term, when some of those contracts roll over to the Neches River ethane export facility that Enterprise has, there will be some opportunities for that. But for the time being, yes, I think the 130,000 tons, 140,000 tons, 150,000 tons is a great level, probably not going to stay at those levels perpetually. But we're hoping for some strong throughput here in the second quarter and beyond.

Got it. Fair. This is a follow-up question. Just as it relates to the ethylene pricing we're seeing in both Europe and Asia have moved up. Obviously, Europe is still at an advantage here, but less so, let's say, from a ton-mile perspective as Asia is a further distance away.

So as it relates to ethylene, are you guys still doing 100% of the cargoes to Europe? Is there any Asian buyers on that? Or is that more on the ethane side?

Oeyvind, welcome.

The ARB to Europe is the widest. So logically, most of the volumes will go there, because that's the -- those are the guys who pays the most for the product, which means that there's scope -- more scope for the terminal, which we're part owner and for the freight side to extract more additional value. So most of the ethylene is currently heading to Europe for those reasons.

Some are starting to go to Asia as well. We believe that the Asian producers, the naphtha producers and so forth had quite large storage available in oil. Now those are dwindling and therefore, appetite for ethylene to Asia is coming on the scene. Ethane, however, have been flowing to both locations simultaneously.

Climent Molins from Value Investor's Edge. My first one, I think, is going to be for Gary. Considering that if the sale of the Unigas vessels goes forward, it will include the pool, will any working capital be included? Would the $183 million transaction price be adjusted for that? Or is it already accounted for?

You're muted, Gary.

Climent, yes, good question. The price that we've quoted for the vessels, there's a small administrative pool that we own 1/3 of. And there's a small couple of millions attached to the value of that pool entity. But the vast majority of the value here is on the vessels.

I can go into a lot more detail should you want me to, but that's the crux of the answer, I think.

Yes, makes sense. And I also had a question regarding the ethylene export terminal. You may not be able to provide exact commentary, but pro forma for the addition of the 3 contracts you mentioned year-to-date. What percentage of the 1.55 MTPA are currently fully fixed?

Yes. We won't go into the exact percentages. But the vast majority, we're still in some offtake discussions with additional customers. So we'll just leave it at that.

Thank you. All right. It looks like that's all the questions we have. Mads, final thoughts.

No, good. Thanks a lot. Thanks a lot for listening in. As you can see, we had a quite resilient first quarter. And it seems like the Q2 is going to be a pretty exciting one. And we definitely look forward to meeting same place, same time in about a quarter and just reviewing with you the Q2 results.

So thanks a lot for all the good questions from the analysts and thanks for listening in. So have a fantastic day and evening, and see you next time.

Thank you.

Thank you for standing by ladies and gentlemen, and welcome to the Navigator Holdings Conference Call for the Fourth Quarter 2025 Financial Results. On today's call, we have Mads Peter Zacho, Chief Executive Officer; Gary Chapman, Chief Financial Officer; Oeyvind Lindeman, Chief Commercial Officer; and myself, Randy Giveans, Executive Vice President of Investor Relations and Business Development in North America. I must advise you that this conference call is being recorded today. As we conduct today's presentation, we'll be making various forward-looking statements.

These statements include, but are not limited to, the future expectations, plans and prospects from both a financial and operational perspective and are based on management assumptions, forecasts and expectations as of today's date, March 12, 2026, and are as such, subject to material risks and uncertainties. Actual results may differ significantly from our forward-looking information and financial forecast and additional information about these factors are included in our annual and quarterly reports filed with the Securities and Exchange Commission. With that, I now pass the floor to our CEO, Mads Peter Zacho. Please go ahead, Mads.

Good morning, and good afternoon. Thanks a lot for joining the Navigator Gas earnings call for Q4 2025. And just to get us started on the right foot, I'd like to clarify that Navigator Gas currently has no vessels inside the Hormuz Strait. We'll later touch more on the war in the Middle East and what it means for Navigator, we'll explain why the impact is limited. As usual, I'll review the key data from our Q4 '25 performance and then go over the outlook for the coming quarter. After that, Gary, Oeyvind and Randy will discuss our results in more detail, and then there'll be Q&A afterwards. Please turn to Page #4. As you can see in summary, we decided to call Q4 2025 a steady finish to a dynamic year, 2026 looking better. In Q4, we generated revenues of $153 million, same as previous quarter and up 6% compared to same period previous year. The main driver of the increase in revenue over same period last year was 8% higher charter -- time charter equivalent rates and partially offset by lower utilization.

Adjusted EBITDA was $73 million, down from $77 million in Q3 and similar to the same period previous year. The balance sheet is strong with total liquidity position less restricted cash of $246 million at quarter end, significantly higher than same date the year before. In November, we increased our capital return to 30% of net income from previously 25%, and we increased the fixed dividend from $0.05 per share to $0.07 per share. And this reflects our strong balance sheet and equally important also our commitment to increasing the return of capital to shareholders. We achieved very attractive financing for 2 of our 6 newbuildings at margins of 150 basis points, equal to the lowest ever for Navigator. You should watch this space because more will come. On the commercial side, we achieved average TCE rates of $30,647 per day during Q4. This is about $300 less than the 10-year high achieved in Q3 and is 8% above same period previous year. We utilized our vessels as guided at 90%, almost the same as last quarter, but below the 92% a year prior.

Throughout -- or throughput at our joint venture Ethylene Export Terminal was about 192,000 tonnes for the quarter below Q3, but it was 20% higher than the same period previous year. It continues to be European demand driving U.S. ethylene exports, and we expect continued strong demand from Europe, but we also now see signs that Asian demand is emerging. Two ethylene offtake contracts have been signed for our terminal, and we will see renewed interest from customers to sign more. We continued the sale of older tonnage with Navigator Saturn and the Happy Falcon that was sold in January. I'd like to make 2 comments on this. First, over the past few years, we have consistently sold older vessels with attractive book gains and on average, well above market value estimates. I consider this a recurring income stream and an integral part of our business model. Secondly, the older vessels are typically unencumbered and release significant cash. This cash has been and can be expected to be used for capital return.

Looking ahead, it's obvious that the war in the Middle East creates uncertainty, but also commercial opportunities for Navigator. Overall, we expect both TCE rates and utilization to remain or exceed those achieved in the fourth quarter of '25. We also expect exports out of Morgan's Point to strengthen towards or above the record export volumes that we saw in Q3 of 2025. Only 3% of global handysize volumes are loaded in the Gulf. Oil and gas exports from the Gulf have stopped, and that opens for alternative trading routes and substitute products. Producing ethylene from U.S. ethane is a substitute to Middle East and naphtha-based ethylene production. Ammonia also now sees longer ton-mile transportation. And on top of this, we see LPG volumes from Venezuela starting to be exported on the regular fleet, and that means not the shadow fleet.

Lastly, I want to point out to the aging handysize fleet with almost twice as many vessels being older than 20 years, which compares well to the newbuilding book. This can lead to negative fleet growth in the near to midterm. And with that, I'll just pass it on to you, Gary, so you can give a little bit more detail on our financial results. And before I do so, sorry, maybe I should just not forget to just have a quick look at the slide here. We are quite proud to show the overview here of the Webber's ranking of stock exchange listed shipping companies and how they are ranked on governance. You can see that Navigator Gas was ranked #16 back in '21, and we gradually improved to #11, 7, 3 and to #1 in the most recent ranking here. I think it's important for us as a company that the corporate governance work that we are doing is being recognized by Webber Research Advisory. And we'll, of course, do everything we can to stay in the top ranking here and continue to deliver very strong results, not only financially, but also governance-wise. So not to be forgotten, and on to you, Gary.

Yes, that's great. Thank you, Mads. Hello, everyone. During the final quarter of 2025, we continued wrestling, as Mads has said, with headwinds from geopolitics, but perhaps looking at events in 2026 so far, it perhaps makes the fourth quarter feel quite calm. However, so far, as Mads alluded to, Navigator has not been materially affected financially or operationally, and Oeyvind will talk some more about this. But turning back to the fourth quarter last year, we were able to report a very solid set of results, as always, helped by our cargo type diversification, our geographical trading flexibility, our market position and our strong financial foundations. Our fourth quarter 2025 results have even contributed to some annual data points that are record-breaking for Navigator, where we've been able to push and keep charter rates up and also maintain utilization, supported by our flexibility, efficiency and cost management.

On Slide 7, we report strong fourth quarter TCE of $30,647 per day, leading to total quarterly operating revenue of $152.8 million and quarterly EBITDA of $70.9 million. The positive TCE result this quarter reflected a good performance across all our vessel segments and led to an annual TCE of $30,110 per day, which is the highest level since the previous cycle peak in 2015. Utilization was 90% in the fourth quarter, right on our benchmark and is slightly up by 0.7% compared to third quarter of 2025, but down 2.2% compared to the fourth quarter of 2024. Fourth quarter adjusted EBITDA was $73.4 million, which is the same level we posted in the fourth quarter of last year. Then following the record revenue generated across 2025, we're reporting a record annual EBITDA for Navigator in 2025 of $302.8 million. Vessel operating expenses were up compared to the fourth quarter of 2024 at $47.6 million, with the increase primarily driven by the net increase in our fleet size following the purchase of the 3 secondhand vessels in the first quarter of 2025 as well as simply the timing of maintenance costs incurred.

We've closed the year close to budget for our OpEx costs, adjusting for the extra vessels, and there's more guidance for 2026 on Slide 10. Depreciation is very slightly down compared to previous quarters despite our now increased fleet, mainly due to 2 older vessels, the Navigator Pluto and Navigator Saturn reaching the end of their 25-year accounting life during the fourth quarter, and hence, they're no longer depreciated. And whilst it doesn't yet impact our income statement, we wanted to mention that we received around $9.7 million in November 2025 being the first tranche of the Norwegian government grant from their agency Enova towards construction of our 2 new ammonia fueled ammonia gas carrier vessels. This represents just over half of the total grant, which the remainder will be paid based on construction progress.

Our income tax line reflects movements in current tax and mainly deferred tax in relation to our equity investment in the ethylene export terminal and also in relation to the natural ending of our Indonesian joint venture business, which happened in 2025, which is not considered a recurring item and effectively represents the cost of our exiting the joint venture and repatriating our assets and profits. Randy will discuss our ethylene terminal shortly, but throughput volumes in the fourth quarter of 2025, as Mads mentioned, were 191,700 tonnes, down from 270,000 tonnes in the previous quarter, but up compared to the same quarter last year of 159,000 tonnes, resulting in us recording a profit this quarter of $0.9 million. Then overall for the fourth quarter of 2025, net income attributable to stockholders was $18.5 million, with basic earnings per share of $0.28 and adjusted basic earnings per share of $0.32. This performance in the quarter contributed to Navigator delivering record annual net income of $100.2 million and our highest annual earnings per share of $1.49 since the previous cycle peak in 2015.

Our balance sheet shown on Slide 8, continues to build and be strong. Our cash, cash equivalents and restricted cash balance was $204.9 million at December 31, 2025, which if you include our available but undrawn revolving credit facilities, gives total liquidity of $296 million at the same date. Taking out restricted cash gives total available liquidity of $246 million. This strong liquidity position is despite paying out $34 million for scheduled loan repayments, $10 million under our return of capital policy in respect of the third quarter of 2025, $10 million as payments for our vessels under construction in the quarter and paying cash consideration of $16.8 million to increase our ownership interest in our Navigator Greater Bay joint venture by 15.1%. Morgan's Point ethylene export terminal investment on our balance sheet sits in an equity value of $245 million, but is fully unencumbered now with the final $4 million of remaining debt having been repaid in December 2025.

Alongside this, we paid from our own cash a total of $110 million as at December 31, 2025, towards the 6 vessels we have under construction. The difference of this figure to our balance sheet figure represents capitalized interest under U.S. GAAP. The unencumbered terminal, a number of unencumbered vessels and the construction payments made from our cash on hand that we will partially recoup as we fix financings for our newbuild vessels, together with a still growing operational cash flow are reflective of the financial stability and strength that Navigator is able to demonstrate. And to bring you up to date, including our available but undrawn facilities, we had around $300 million of available liquidity at the close of business on March 11, 2026. On Slide 9, we show a summary of the main capital events across the quarter, where with a very supportive banking group and a strong underlying business, we were able to return capital to shareholders, raise funds for the construction of our newbuilds, reward our shareholders and continue working on managing our financing needs.

We had a particularly active 2025 from a financing perspective in which the company successfully entered into a new secured term loan to buy 3 vessels, refinanced existing loan facilities, issued a $40 million tap of our senior unsecured bonds and executed several new interest rate swaps to reduce our interest rate risk. We continued that activity into the first quarter of 2026, such that on March 2, we signed a 5-year post-delivery secured term loan facility of up to $133.8 million, which will be used to finance up to 65% of the delivery and also pre-delivery installments and the construction of 2 of our new ethylene Panda Newbuild vessels. This transaction was executed at a very low margin cost of 150 basis points plus SOFR. And we would like to thank our banking group for supporting Navigator, and we really believe the deal and the very keen pricing not only reflects the banking market today, but also the strong and stable credit story of Navigator.

In addition to our scheduled repayments, we now have only 2 relatively small debt balloons due in the next 24 months with payments due in 2026 of $54 million in total, you can see on the bottom left. We continue to make substantial scheduled loan repayments with $34 million in the fourth quarter, and we have an average of $126 million of annual scheduled pro forma debt amortization per year across 2025 through 2028 with our net debt to 2025 adjusted EBITDA sitting at 2.5x at December 31, 2025. In addition, our net debt to our on-water fleet value results in a loan-to-value or LTV of 32%, which falls below 30% if you attribute any reasonable value against our Morgan's Point terminal. We try to use our balance sheet efficiently to allow us to reward our equity holders whilst also ensuring we maintain a sensible position for the business and our bond and credit investors. And this balance is something we're continually evaluating, especially in today's environment.

Our next priority is to close financing in relation to our remaining 4 newbuild vessels, and this work has already started with transactions well progressed. We're currently targeting to complete the finance for the remaining 2 ethylene Panda vessels in March or latest April 2026 and our 2 ammonia vessels within the second quarter of 2026, and we look forward to being able to report on a successful outcome when this work is complete. Then finally, at December 31, 2025, 58% of the company's debt was either hedged or was on a fixed interest rate basis with 42% open to interest rate variability, and this is another key metric that we keep under close review. On Slide 10, we show our estimated all-in cash breakeven for the full year 2026, which at $20,970 per day per vessel remains significantly below our average TCE revenue for 2025 of $30,110 per day.

The graph bottom left shows how this headroom has developed over the last few years. And you'll see in there the consistency of our business, particularly in the last 4 years, but even going back further. You can see on the top left that the all-in breakeven rate includes forecast scheduled debt repayments and our scheduled dry dock commitments. And the latest figure here is materially unchanged from the estimate we provided on our last earnings call in November 2025. On the right is our updated OpEx guidance for 2026 across our different vessel segments, ranging from $7,900 per day for our smaller vessels to $11,400 per day for our larger, more complex ethylene vessels. And this guidance also remains materially unchanged from our last quarterly call in November 2025.

And below that is further next quarter and full year guidance across vessel OpEx, general and admin costs, depreciation and net interest expense in total dollar terms. The full year guidance for vessel OpEx towards the bottom is now lower in total than previous guidance given in November, given we have reduced our fleet size somewhat through vessel sales. Net interest expense is also a little lower than previous guidance given at the same time. However, both are materially unchanged. Slide 11 outlines our historic quarterly adjusted EBITDA, adding this fourth quarter's result. We now have 12 quarters in a row since 1Q 2023 of reporting at least $60 million of quarterly adjusted EBITDA at an average of $71 million over that period. This comes back to our diversification of cargo types and geography that protects the business.

On the right side, we show our adjusted EBITDA for 2025 and our fourth quarter 2025 annualized adjusted EBITDA. In addition, the bars then to the right provide some sensitivity and illustrate an increase in adjusted EBITDA of approximately $18 million, all other things being equal, for each $1,000 incremental increase in average TCE rates per day. As previous quarters, an update on our vessel dry dock schedule, projected costs and time taken can be found in the appendix, Slide 28, should that detail be of interest. And with that, I'll hand you over to Oeyvind to provide an update on the commercial picture. Oeyvind?

Thank you, Gary, and good morning, everyone. We will go straight to the topic everyone is focused on, namely the war involving Iran. And this morning, oil is trading above $100 per barrel, second time since it started. Natural gas in Europe is up by 70% since the bond started falling. The straight of foremost remains closed. Roughly 1,000 vessels are currently trapped inside the Gulf and an estimated 3,000 more are stalled across the broader region. A significant number of oil tankers, gas carriers and bulkers are caught up in the disruption. 3 handysize vessels are trapped inside, none from Navigator Gas. A major portion of Middle East exports of oil products, LNG and LPG, representing roughly 20% to 30% of global supply in some categories is effectively shut in. That leaves producers, consumers and shipowners in a very difficult position. India, for example, relies heavily on Middle East and LPG for heating and cooking.

Asia more broadly, it depends on Middle East for energy and refineries depend on crude oil to produce derivatives such as naphtha, which in turn is a critical feedstock for petrochemicals, including ethylene. Naturally, this has triggered an immediate scramble to source alternative supply. So how does this affect our handysize business? Let's turn to Page 13. The map shown here was taken from our operating system this morning. It shows the entire Navigator fleet. It has a very important story though. First, to repeat, we have 0 vessels inside the Middle East Gulf. Second, we have 0 vessels positioned nearby in ballast waiting for the strait to reopen. Third, the vast majority of our fleet is deployed elsewhere, trading from the U.S. to Europe, trading from U.S. to Asia, trading from Europe to Asia via the Cape of Good Hope and in regional trades within Europe, within the Mediterranean and within Southeast Asia. Out of our 55 vessels, only 4 had been engaged in Iraq LPG exports.

Importantly, those vessels are on time charter. That means whether they are actively sailing or temporarily idle, fire continues to be paid, much like a leased car where payment is due whether the vehicle is being driven or not. Even so, those vessels have already demonstrated the flexibility of the handysize segment by securing alternative supply position, loading LPG from places such as South China and Australia. We are frequently asked a version of the following question. If 30% of LPG supply is effectively shut off from the Middle East Gulf and now that the VLGC Baltic Index has stalled due to the lack of concluded trades and most VLGCs are ballasting toward the only major alternative export region, U.S. and Canada, is the situation the same for Navigator? The answer often surprises people. Mads mentioned it, but across the entire global handysize segment, only 3% of total transported volume originates from inside the Arabian Gulf.

And that, again, is 3% only. It's a very small number, and it means that there has been far less knee-jerk repositioning, speculative ballasting or dislocation in the handysize segment than what is apparent in larger vessel classes. In fact, many operators in larger segments would welcome the degree of geographic and cargo diversification that we have. I have said it many times before, and it's worth repeating again, we are not a one-trick pony reliant on one loading region for one cargo. That diversification, both geographic and by cargo type is working to our advantage in the current environment, which is shown on Page 14. Demand for C2 cargoes such as ethylene and ethane is firm. Demand for easy petrochemicals such as butadiene is firm. Demand for ammonia is increasing. LPG demand remains steady. We do not yet have final March figures, but utilization, as you see on the top left graph, improved over the first couple of months of the first quarter. And at this moment in time, we do not expect any material change to our quarterly outlook.

If we go a level deeper in the diversification story on Page 15, the picture becomes even clearer. As mentioned, the Arabian Gulf accounts for only 3% of total global handysize volumes over the last few years. That is modest, especially compared to with crude tankers and larger gas carriers as we mentioned. By contrast, for Navigator specifically, approximately 60% of our earning days are generated from North America. And those earning days are, in turn, diversified across 3 categories: 67% petrochemicals, 21% LPGs and 12% ammonia. We also see incremental opportunities emerging elsewhere. Venezuela is beginning to come back into the market. 2 LPG cargoes have been exported so far this year, 1 discharged in the U.S., believe it or not, and 1 in the Dominican Republic. We fully expect to be contracting handysize vessels for Venezuela LPG exports in the near term. That would represent incremental demand for our fleet. Butadiene continues to be an important source of ton-mile demand.

To put that into perspective, a single handysize cargo of 13,000 metric tons shipped from Europe to Asia via the Cape of Good Hope can generate roughly 3 months of vessel employment, and that is pretty meaningful to us. On ammonia, we are beginning to see some of the same dynamics that we saw 4 years ago following the outbreak of the war in Ukraine as natural gas prices rise, ammonia production economics become more challenged in certain regions, especially in Europe, with consumers looking for more cost-effective alternatives. Instead of producing, they can import. We are actively engaging on a number of customer inquiries in this particular area. A similar pattern is developing in the U.S. ethane and ethylene exports as shown on Page 16. Ethane prices remain stable. And just as a reminder, ethane is the most efficient feedstock for ethylene production.

In a world where ethylene producers are paying extremely high prices for naphtha or in some cases, are struggling to source naphtha at all, those producers with access to ethane-based cracking enjoy a significant competitive advantage. Ethane exports should, therefore, remain resilient, and we have ethane-capable vessels currently employed in this trade and others positioned to serve exactly this demand. U.S. ethylene prices have risen in response to stronger international pull. However, import prices internationally have risen even more, which means the arbitrage has widened. Today, Europe is the highest priced destination and unsurprisingly, that is where the product is moving. From our perspective, we are happy with that dynamic as long as fleet utilization remains high and day rates remain robust, which they are. At our Morgan's Point ethylene export terminal, March is on track to be an all-time record month for volumes.

In fact, we are receiving indications that throughput may exceed even what you see here being the Kepler forecast in the graph. So this is definitely a space to watch closely. More broadly, we continue to see structurally increasing flow of hydrocarbons from the United States of America to Europe. Europe needs American hydrocarbons and our Atlantic trade is becoming increasingly structural in nature. By contrast, the transpacific trade to Asia remains more ad hoc and opportunistic. Turning to fleet supply on Page 17. The outlook remains supportive, as Mads mentioned in his opening remarks. Fleet supply has been unchanged for more than a year. The order book stands at only around 10% of the existing fleet, while 17% of current vessels are already more than 20 years of age. That creates a healthy supply-demand balance over the medium term. And importantly, if a new vessel were to be ordered today, they would not be delivered before 2029.

Finally, on earnings and chartering condition on Page 18. Our all-in cash breakeven has already been discussed earlier on the call. Current charter rates remain well above that level of $20,970 per day. Time charter discussions are taking place at levels above what you're looking at here, which represents the assessed 12-month charter rates from independent brokers. And certain spot rates due to all the volatility and the attractiveness of American NGLs that we are involved in are achieving materially high returns due to this volatility. So when we step back and look at the overall picture, what we see is this. While the geopolitical situation is clearly severe and highly disruptive for global energy markets, our fleet positioning cargo flexibility and geographical diversification, leave us comparatively well placed. In periods like this, resilience matters, and our handysize platform is demonstrating exactly that. Over to you, Randy.

Thank you, Oeyvind. Now following up on several announcements we made in recent months, we want to provide some additional details and updates on those developments. So on Slide 20. As a reminder, our recently improved return of capital policy includes a fixed quarterly cash dividend of $0.07 per share as part of our quarterly payout percentage of 30% of net income. As a result, during the fourth quarter, we paid a $0.07 quarterly cash dividend totaling $4.6 million, and we repurchased over 300,000 common shares of NVGS in the open market, totaling $5.4 million for an average price of $17.68 per share. Now looking ahead, in line with that new return of capital policy, we're returning 30% of net income or a total of more than $5.5 million to shareholders this quarter. The Board has declared a cash dividend of $0.07 per share payable on March 31, 2026, to all shareholders of record as of March 23, 2026, equating to a quarterly cash dividend payment of $4.6 million.

Additionally, with Navigator shares trading well below our estimated NAV of north of $29 a share, we will use the variable portion for the return of capital policy for share buybacks. As such, we expect to repurchase $1 million of our shares between now and quarter end, such that the dividend and share repurchases together equal 30% of net income. And as Mads alluded to, we continue to repurchase shares and believe there is upside from here. Turning to our ethylene export terminal on Slide 21. As guided, ethylene throughput volumes fell slightly to almost 192,000 tons during the fourth quarter as European ethylene demand softened and end users reduced inventories and vessel availability remained relatively tight. Now despite the lower volumes, it was encouraging to see some new customers step in to take cargoes -- spot cargoes to both Europe and Asia during the quarter. Now to the really good news.

As you'll see in the bottom left chart, we expect volumes in March to reach a record high of close to, if not more than 120,000 tons, which could result in a quarterly high in the first quarter of 2026. Now looking at the bottom right chart, despite the near-term increase in U.S. ethylene prices, the arb remains wide open as multiple European crackers are undergoing turnarounds and Asian demand for U.S. ethylene is also increasing due to that recent surge in oil-based naphtha prices, as Oeyvind was mentioning. Longer term, the forward curve remains stable around $0.21 per pound or $460 per ton. Now as for contracting the expansion volumes, we've been saying that new offtake contracts would be coming soon, and we're pleased to announce that 2 new offtake contracts have been signed in recent months. Now we continue to expect additional offtake contracts will be signed throughout this year as customers continue to request updated terms for both the terminal and for shipping. In the meantime, we'll continue to sell volumes on a spot basis.

Now turning to our fleet on Slide 22. Our fleet renewal program continues to progress, most recently through the sale of 2 of our oldest vessels. On the same day in January, we sold the Navigator Saturn, a 2,000-built, 22,000 cubic meter ethylene-capable handysize gas carrier to a third party for almost $16 million, netting a gain of over $10 million. And we also sold the Happy Falcon, a 2002-built 3,700 cubic meter semi-refrigerated small gas carrier to a third party for $4 million, netting a gain of almost $2 million. So that roughly $12 million profit will be booked in our first quarter 2026 results. We now have 8 vessels over 15 years of age, all of which are debt-free, and we continue to engage buyers who are showing interest in acquiring these older vessels.

Now on the other side of the equation, we'll continue to pursue accretive secondhand vessel acquisitions as well, and we will also acquire more of our own vessels through share buybacks. Now as a result of our recent sales, our current fleet now consists of 55 vessels with an average age of 12.6 years and an average size of over 21,000 cubic meters. To note, we continue to upgrade our vessels with various energy savings technologies, more details on Slide 28. And we recently started rolling out new artificial intelligence or AI programs to make our fleet even more efficient. With that, I'll now turn it back over to Mads for some closing remarks before we get to Q&A.

Good. Thanks a lot, Randy. As you can all see, Q4 was a steady quarter with financial and operational performance that was much in line with the previous quarters. Our financial standing remains strong with ample financial reserves, few upcoming maturities and a well-managed interest rate risk. Looking into this first quarter, we already delivered the first 2 newbuilding financings at record low margins, and we are well on track to secure the remaining 4 within the first half of 2026. Cash reserves are expected to be further strengthened through the sale of older tonnage at attractive prices.

The war in the Middle East brings uncertainty, but also opportunities for Navigator. As just described, we experienced increased demand from customers due to new trading patterns emerging, especially for U.S. exports. Venezuela is another emerging opportunity in front of us. This all comes on top of what we consider a fundamentally sound demand and supply outlook where growth in the U.S.-based NGL production is very likely to exceed the global vessel supply growth. Thanks a lot for listening, and back to you, Randy.

Thank you, Mads. Operator, we will now open the line for Q&A. [Operator Instructions]

First question, your line should be open.

This is Chris Robertson at Deutsche Bank. So just to recap on the Middle East situation, what might be the impact from the larger segments here? I know that you guys don't necessarily compete in the same trades as VLGCs. But any risk here that the VLECs or ACs can cannibalize some of the trade if they ballast to the U.S.? And can you talk about the potential on that? I guess it depends on the duration of the current situation, of course, but any downside risk from that?

I think you have to look at it. So VLGCs, they do LPG. So clearly, if I was a VLGC owner and Strait of Hormuz is shut that delivers up to 30% of my exports. Then I would ballast to the U.S. and see if I can get a cargo slot or both availability, which is scarce because they've been running quite full anyways. That's a VLGC conundrum at the moment. How does it impact Navigator? You need to understand that we, Navigator, we do not do LPG from U.S. to Asia. We do ethane and ethylene. And VLGCs cannot do that physically. So the impact from that dimension limited. Now our Atlantic trade for handysize is -- remains LPG ammonia. VLGCs don't never do ammonia and also ethane and ethylene. So yes, limited impact on the downside should it be a pile up of VLGCs in the U.S. Gulf, different businesses.

Just looking at March here in terms of ethylene, a lot going on, on price inputs and all these types of things. But in the meantime, there's also some unplanned and planned disruptions and turnarounds in the U.S. Gulf Coast. I think 6% of North American ethylene capacity is going to be offline this month by some of your competitors. Can you talk about maybe the landscape here? You mentioned it earlier, but incomings on both the contracted and spot basis, are you seeing an impact, of course, from the Middle East situation, but are you seeing an impact from this outage situation making your volumes more competitive here?

March is looking very strong as we showed, sentiment continues the same into April. So I think whilst there might be a reduction in production in the U.S. domestically, I think the international demand outweighs that. And that's why you see U.S. prices increasing. However, international markets needs it and therefore, bidding even higher than that, encouraging exports. So I think what's the direct impact of Middle East is taking the driver's seat in this one.

Spiro Dounis from Citi. Glad to hear your crews are staying out of harm's way. I hope that continues. And maybe starting kind of on that topic. Just kind of trying to think about your chartering strategy as you think about the rest of the year in the context of some of this Middle East volatility. It sounds like you're constructive on prices and rates moving up from here. At the same time, you probably want to preserve some of that upside optionality. So Oeyvind, how are you thinking about locking in vessels for term here, maybe leaning into some of the stronger market to do that once things have settled down a bit?

It's very dynamic. We have never been in a position where we want to go 100% term. And conversely, never been in a -- it's not part of our strategy to be 100% spot either. So generally, we've been operating in the last 10 years between 30% and 50% cover. So if there's an opportunity to lock in an attractive rate historically, then yes, we definitely pursue that. But it's more of with 55 ships, then I think we're pretty well covered today, we are looking at some extensions and so forth at decent rates, which we will probably do, but nothing huge change from what we've been doing over the last few years.

Understood. The second question, maybe going to the fleet renewal. You called out in the slide about 8 more vessels older than 15 years old that could be sales candidates here, I think all of which are unencumbered. So I guess on my math, I think those are worth collectively over $200 million. And so I'm curious, is that consistent with your view on the valuation there? And as you think about reallocating that capital, what would be optimal and best use today if you were able to sell those in the near term here?

Yes. I think doing it in the very near term would be difficult. I mean, these vessels are not sold in a very liquid market. And as you've seen also over the past 2, 3 years, what we've done is we've sold 2, 3, 4 years per year. And we might be able to do that a little bit faster, but I think you should assume that this is going to take at least a year or 2. So I think that the valuation is quite attractive, as you suggest here, and it would free up a lot of additional capital. And as Gary was just talking about and me also, we have a robust balance sheet at this point in time.

So it would constitute, you could say, excess capital that would open up for further capital repatriation and we would not go and plow into a newbuilding market or buy vessels at high prices for the time being. So we'd be selective as we always have been. Last year, we bought 3 vessels that were in a distressed situation, and we bought them at very attractive prices. We always are on the lookout for that. But other than that, the consolidation opportunities are few and far between. So I think we would be in a situation where we'd probably have more cash coming in than good uses for it in the newbuilding or secondhand market. So capital return would be a big proportion of that.

It's Omar Nokta from Clarksons Securities. Thanks for the update. Obviously, a lot going on. I wanted to maybe just touch base back to the Middle East situation. And just on our ethylene exports from the U.S., you highlighted that in the fourth quarter, about maybe 84% of U.S. exports went to Europe and really just 11% to Asia. How do you see that mix evolving here? You mentioned it a bit in your comments, and you can see from the terminal that you've had a nice move up in throughput for March. But I guess, how do you think of that mix shaping up here for, say, the month of March? And what would that impact be on freight rates?

Thank you, Omar. I'll take that and perhaps, Randy, you can add some additional color. So in one of the graphs in the presentation, we included up to February up to February, January, February, 100% to Europe. Now Iran happened on the 28th of February, I believe. And what's going to happen in March. So we're just on the 12th of March, and you'd expect that some of that ethylene exported in March will head to Asia because naphtha and these other things we talked about, the dynamics there are completely turned upside down. So we expect that to happen. Now on the ton-mile demand, that obviously is a positive. Our voyage to Asia from U.S. Gulf is longer than the voyage to Europe. So we welcome those changes. Should the ethylene go -- continue to 100% go to Europe, I think in a situation today where utilization is quite high and rates are quite good, then we will be happy with that, too. But obviously, the more that goes to Asia, the better it is.

And then just a follow-up. I saw the 5-year charter or perhaps it's an extension on the Navigator Aurora, taking that vessel's employment up to 2031. Any details you're able to give us on the terms of the charter? I know, obviously, you don't necessarily give specifics on rates, but what it's going to be doing -- well, what it's going to be carrying for the duration of the charter? And then given that you have those 4 ethylene MGCs now fully contracted, how confident are you with the 4 that you have under construction about getting long-term contracts as well?

I guess the first part of the question, the Navigator Aurora since delivery has been trading with Borealis, a petrochemical producer, bridging or taking ethane from U.S. East Coast, primarily from Marcus Hook to Stenungsund cracker that they converted to be able to use ethane and therefore, take -- bring the U.S. advantage to Sweden ethylene production. And she will continue to do that. So over the next 5 years, she'll maintain that commercial pipeline between the U.S. East Coast and Sweden.

And then just in terms of expectations on the newbuildings, does this -- do you have conviction that you'll be able to secure them on long-term charter as well increased or [indiscernible]?

We're very confident when we ordered it. And today, with everything that happened in the Middle East, we are even more confident. Why? Because if you're running an ethylene production plant in, say, Asia and you are facing these immense disruptions, you think twice about continuing how you have been doing it and rather contract attained from U.S. So in any case, we are confident.

This is Climent Molins. I'm from Value Investor's Edge. This is kind of a follow-up to Oeyvind's latest commentary. And although it may be too early to ask, have you seen increased interest or urgency, let's say, from potential customers for the ethylene export terminal since the war in Iran started? And secondly, have you sold spot cargoes in recent weeks from the terminal? To what extent should we expect a contribution from this in Q1?

The answer is -- for the first part of the question is yes. We've seen increased interest for U.S. ethylene. You can see that in one of the pricing graphs. So why is the U.S. domestic price -- ethylene prices have gone up? Why have they gone up? Because there's obviously demand, international demand pulling prices up. And then the commentary also was that international prices are gone up even more than the U.S. increase, therefore, encouraging trade. Ethylene are being sold, both on contract and spot in March. March is looking very healthy on the terminal side, as Randy and I mentioned. And that was also before what happened because nominations for the terminal happens sort of in the middle of the month for the previous month. So the terminal is pretty full even before this thing happened. So yes, we remain quite optimistic.

Yes. So a lot of the flurry of incremental spot cargoes, they're asking, can you get as soon as possible, right? But in March, we're pretty much sold out. So a lot of that will bleed into April. So that bodes well for the start of the second quarter as well. We have a few other questions. This one for Gary that was included here in terms of the newbuild financing, congrats on that. Do we have any updates for the remaining 4 newbuild vessels in terms of financing and the potential timing of those? Should we expect similar terms for those?

Yes. Thanks, Randy. As I mentioned in the first half of the call, we've got 2 more vessels under a financing package that we're hoping to close either this month or the very latest next month. And that's for the other 2 financings. And then the ammonia vessels, we're hoping and expecting to get that done within the second quarter, certainly by the end of June. I think that's very comfortable. And in terms of terms, as I also mentioned, I think Navigator's credit at the moment is very good. And the banking market is also very good. So we've got 2 things that are working very much in our favor. So we're very much expecting strong terms on all 6 vessels by the time we close. Obviously, there are some external factors here. But so far, we've not really seen any impact on financing or banking activity and behavior so far. I think that probably will hold because I think this hopefully is a short-term situation compared to, say, a 5- or plus year financing arrangement.

Thank you. Oeyvind, for you. Can you please discuss the force majeure clauses in your time charters?

Yes, time charters are generally like you lease a car. And if that road is blocked, you take a different road, same for shipping. So you charter -- you lease a ship, you charter a ship and it's up to you to decide where you're going to sail her. So even if former states are closed, it does not constitute a cancellation for those ships.

Perfect. Question here on the magnitude of the ethylene offtake agreements. Are Asian buyers looking at spot cargoes or longer-term commitments? And will the export terminal performance be more consistent in '26 than '25? I'll start there. We have not disclosed the terms in terms of the duration or the magnitude of the offtake agreements. But clearly, you've seen that already coming through the system, both more offtake in terms of term as well as spot cargoes pushing up volumes in the first quarter and beyond. We are still actively negotiating some of the volumes, so we don't want to go into too many details there. In terms of the Asian buyers, it's a combination of spot cargoes coming to the market immediately and also longer-term commitments.

Again, a lot of that is based on the higher naphtha prices. And the third part here, will the export terminal performance be more consistent in '26 than '25? We certainly hope so. But yes, I think if you saw in the first quarter of '25, it was a loss right? We had 85,000 tons for the entire quarter. First quarter of '26 will certainly be a gain and at least triple that. So the first quarter is certainly at a much stronger start than the first quarter of 2025. And as I mentioned, a lot of that strength is already bleeding into April and beyond, more offtake commitments, all of those things. So I think we can confidently say that from today, 2026 should be much better than '25 from a terminal perspective. I think that completes our Q&A. So Mads, any final comments before we end the call.

I just want to say thanks a lot for listening here and for the great questions that you brought. You know where to catch us if you have more questions. And other than that, we look forward to reporting next time in early May on the Q1, a quarter that has started with business as usual, but surely brought March, which will brought an entirely new dynamics here. And as we've discussed in the call so far that there are a lot of opportunities that are coming our way, and we'll, of course, take advantage of those. Thanks a lot.

Thank you for standing by ladies and gentlemen, and welcome to the Navigator Holdings conference call for the third quarter 2025 financial results. On today's call, we have Mads Peter Zacho, Chief Executive Officer; Gary Chapman, Chief Financial Officer; Oyevind Lindeman, Chief Commercial Officer; and myself, Randy Giveans, Executive Vice President of Investor Relations and Business Development in North America.

Now I must advise you that this conference call is being recorded today. As we conduct today's presentation, we'll be making various forward-looking statements. These statements include, but are not limited to, the future expectations, plans and prospects from both a financial and operational perspective and are based on management assumptions, forecasts and expectations as of today's date, November 5, 2025, and are as such, subject to material risks and uncertainties. Actual results may differ significantly from our forward-looking information and financial forecast. Additional information about these factors and assumptions are included in our annual and quarterly reports filed with the Securities and Exchange Commission.

With that, I now pass the floor to our CEO, Mads Peter Zacho. Please go ahead, Mads.

Thank you. Good morning and good afternoon, and thank you all for joining this Navigator Gas earnings call for Q3 2025. As a start, I'll just review the key data from our Q3 '25 performance, and then I'll go over the outlook for the coming quarter. After that, as usual, Gary and Oeyvind and Randy will discuss the results in more detail. The quarter was, in many ways, a return to more calm waters after the unusual and difficult Q2. In Q3, we saw geopolitical tensions recede somewhat. Port fees from the U.S. and later China now seem to be gone and tariffs appear to have found their level. However, for Navigator, we still saw an impact from the trade turmoil in our Q3 trading, particularly from the significantly lower ethylene exports from U.S. to China. Oyevind is going to bring a little bit more color to this topic shortly.

Please turn to Slide #4. With that background and moving to our results. In Q3, we generated revenues of $153 million, up 18% compared to the previous quarter and 8% compared to same period last year. The main driver of revenue was both higher time charter equivalent rates, but also robust utilization. We're pleased to disclose that we achieved the highest EBITDA on record at $86 million and an adjusted EBITDA of $77 million, the latter number, which excludes the $13 million of book gain from selling Navigator Gemini. You may recall that we sold Navigator Venus last quarter at a book gain of $12 million. And I think if we combine the 2, I believe it gives pretty strong credence to our estimated net asset value.

The balance sheet is very strong with a cash position of $216 million at quarter end plus drawing rights, which leaves us with $308 million of liquidity. You will note on 4th November, we increased our capital return to 30% of net income from previously 25%. Similarly, we have increased the fixed dividend from $0.05 per share to $0.07 per share. This reflects our strong balance sheet and equally important, our commitment to increasing the return of capital to shareholders. Commercially, we achieved average TCE rates of $30,966 per day during Q3, which is a 10-year high and well above the just over $28,000 that we achieved in Q2. We reached a utilization of 89.3%, well above the 84.2% we saw in Q2. Average utilization was supported by a steep recovery for our ethylene spot fleet, while our semi-ref fleet stayed robust.

Throughout the throughput at our joint venture ethylene export terminal increased to 271,000 tons for the quarter, roughly similar to Q2, but still below full capacity. We paid further installments on our [ Panda ] newbuilds, and we paid the first installments of the new 2 ammonia-fueled vessels that we have chartered out to Yara. Due to our balance sheet strength, the contract cover and robust financing markets, we expect to finance all of our newbuilds at attractive margins and loan to value. So they'll tie up limited equity capital and be earnings accretive from delivery in 2027 and 2028.

While I already covered the sale of Navigator Gemini, I should mention that you should expect to see more sale of older vessels that will enhance earnings over the coming months. Headwinds experienced in the first half of '25 have eased but not disappeared. We hope to see more stable market conditions going forward when geopolitical uncertainties ease. As a result, we expect both utilization and average TCE rates to remain near Q3 '25 levels. And we're noting both September '25 and October '25 utilization were above 90%. Now we can't really predict the outcome of trade discussions between the U.S. and trading partners such as China and much can still change. But with the diversified customer base we have, the trading capability and the strong balance sheet we have, we remain resilient even if the geopolitical situation takes an unexpected turn.

And with that, I'll just hand it over to Gary, who will talk a little bit more about our financial results. Go ahead, please, Gary.

Thank you very much, Mads, and hello, everybody. During this quarter, as Mads mentioned, we've continued to experience headwinds from geopolitics that have affected our markets. So it's very pleasing to us to be able to report strong results despite this backdrop and compared to the results we delivered in the previous second quarter of this year. These results are a function of many things, including our cargo diversification, our geographical flexibility, our market position, our strong financial foundations and very importantly, as a result of the people side of our business being our colleagues here internally and also the strength and depth of our customer relationships and market knowledge. And arising from this, our third quarter 2025 results are the best so far this year, and some data points are even record-breaking for Navigator, where we've been able to push charter rates and maintain utilization, supported by our operational flexibility and efficiency and our cost controls.

On Slide 6, we report the highest quarterly TCE in the last 10 years of $30,966 per day, leading to quarterly net operating revenue of $133 million and our highest quarterly EBITDA on record of $85.7 million. The high TCE this quarter was primarily due to the performance of our ethylene vessels and our semi-refrigerated handysize fleet, supported by a solid performance from our fully refrigerated and midsized vessels. Utilization was 89.3% in the third quarter, practically at our preferred benchmark of 90%, which is down 2% compared to the second quarter of 2024, but up 5% compared to the second quarter of 2025.

In this third quarter, we sold another of our vessels, the Navigator Gemini, as Mads has mentioned, for net proceeds of $30.4 million, resulting in a book gain of $12.6 million, which demonstrates our ability to refresh our fleet on both buy and sell sides as opportunities arise. Excluding this gain from EBITDA as the main difference, we get to an adjusted EBITDA result of $76.5 million, considerably above the still respectable $60 million we posted in the second quarter of this year. Vessel operating expenses were up compared to the third quarter of 2024 at $49.3 million, with the increase primarily driven by the net increase in our fleet size following the purchase of 3 secondhand vessels in the first quarter of this year, which you can see is reflected in the table shown bottom right, as well as simply the timing of maintenance costs incurred. We expect to close the year on or close to budget for our OpEx costs, adjusting for the extra vessels, and we'll see our guidance on Slide 9 shortly.

Depreciation is slightly down compared to previous quarters despite our now increased fleet, mainly due to 2 older vessels that have reached the end of their accounting life during the quarter, and hence, no longer will be depreciated. Unrealized movements on non-designated derivative instruments resulted in a loss in the third quarter of $2.6 million. This being related to movements in the fair value of our long-term interest rate swaps, which affects net income, but which has no impact on our cash or liquidity. Our income tax line reflects movements in current tax and mainly deferred tax in relation to our equity investment in the ethylene export terminal and in relation to the Navigator Aries, which was sold on October 1, 2025, to another group company. And under U.S. GAAP accounting rules state that intra-group sale required us to recognize an associated deferred tax liability at September 30, 2025.

The ethylene terminal throughput volumes in the third quarter of 2025 were solid at 270,594 tons, up from 268,000 tons in the previous quarter, resulting in us recording a profit this quarter of $3.3 million. But overall for the third quarter of 2025, net income attributable to stockholders was $33.2 million, which is our highest quarterly net income on record, with basic earnings per share of $0.50, which is our highest quarterly EPS in the last 10 years.

Our balance sheet, shown on Slide 7, continues to build and be strong with a cash, cash equivalents and restricted cash balance of $216.6 million at September 30, 2025, which if you include our available but undrawn revolving credit facilities, gives us total available liquidity of $308 million at the same date. This is despite paying out $31 million for scheduled loan repayments, $5.4 million under our return of capital policy in respect to the second quarter of 2025, $37 million as payments for our vessels under construction and a further $20.4 million of share buybacks as part of the $50 million share repurchase plan that we've just executed.

Our liquidity in the quarter was also boosted by the $30 million net proceeds from the sale of the Navigator Gemini, which completed in September. It's worth noting that our investment in the Morgan's Point terminal on our balance sheet sits at an equity value of $252 million. It is almost fully unencumbered now with only $4 million of debt remaining, which will be repaid in December this year. Alongside this, we paid from our own cash a total of $99 million at September 30, 2025, towards the vessels we have under construction. The small difference to the balance sheet figure represents capitalized interest under U.S. GAAP.

I think the unencumbered terminal and the construction payments made from our cash on hand, together with still a growing liquidity profile are further reflections of the financial stability and strength that Navigator is able to demonstrate. And to bring you up to date, including our available but undrawn revolving facilities, we continue to have over $300 million of liquidity at the close on November 3, 2025.

On Slide 8, we show a summary of the main capital events across the quarter where with a very supportive banking group and a strong underlying business, we were able to return capital to shareholders, boost our liquidity and continue to work towards managing our debt financing needs and interest rate risk. Following 2 particularly active quarters this year, during which the company successfully entered into new secured term loan, refinanced 2 existing loan facilities and issued a $40 million tap of our existing senior unsecured bonds. This quarter, we completed a full $50 million share repurchase plan that commenced in the second quarter of 2025 with a total of 3.4 million shares repurchased at an average price of $14.68 against the company's estimated net asset value of around $28 per share.

We also returned 25% of net income to shareholders in respect to the second quarter of 2025, $2.1 million of share buybacks and $3.3 million as a cash dividend of $0.05 per share. And as announced, we will now return 30% of net income in respect of this third quarter of 2025, which Randy will cover in more detail shortly. But we think the uplift in the return of capital policy strikes the right balance at this point, rewarding our shareholders with higher returns while ensuring that our steps here are considered and sustainable. In addition to our scheduled repayments, we now only have 2 small debt balloons due in the next 24 months with payments due in 2026 of $54 million in total.

And on the right side of this slide is a summary of our main debt movements across the last quarter. Our next priority is to close financing in relation to our now 6 newbuild vessels, and this work has already started with the transactions being pursued. We're currently targeting to complete the finance for all 6 vessels in the early part of 2026. And I'd like to thank all of the finance partners who have worked with us so far on this, and we look forward to being able to report on a successful outcome when this work is all done.

In this third quarter, we further strengthened the company's interest rate hedging position, whereby we entered into 2 interest rate swap agreements to boost our fixed rate position and reduce our exposure to variability in interest rates and interest expenses associated with our variable rate borrowings. And as of September 30, 2025, 59% of the company's debt was either hedged or on a fixed interest rate basis with 41% open to interest rate variability. And whilst we keep the subject under close review, we believe this split of fixed to floating is about the right balance for the company at this time, such that if U.S. dollar rates fall, we can to a degree, benefit, but we are majority protected, should rates rise.

We continue to make substantial loan repayments with $31.3 million in this third quarter, and we have an average of $122 million of annual scheduled pro forma debt amortization per year across 2025 through 2027, with our net debt adjusted EBITDA last 12 months sitting at a comfortable 2.6x as of September 30, 2025. In addition, our net debt to our on-water fleet value resulted in a loan-to-value LTV of 33%, which falls below 30% if you include a reasonable value against our Morgan's Point terminal.

On Slide 9, showing again our estimated all-in cash breakeven for 2025, which at $20,510 per day per vessel is significantly below our average TCE revenue for this third quarter of 2025 of $30,966 per day. The difference or headroom this quarter being over $10,000. The graph bottom left shows how this headroom has developed over the last few years, and you'll see in there the consistency of our business, particularly over the last 4 years, but even going further back. The all-in breakeven rate includes forecast scheduled debt repayments and our scheduled dry dock commitments. And the latest figure here is materially unchanged from the estimate we provided in our last earnings call back in August 2025.

On the right is our updated OpEx guidance for 2025 across our different vessel size segments, ranging from $8,050 per day for our smaller vessels to $11,100 per day for our larger, more complex ethylene vessels. This guidance also remains materially unchanged from our last quarterly call in August 2025. And following below that is further next quarter and full year guidance across vessel OpEx, general and admin costs, depreciation and net interest expense in dollar terms. The full year guidance for vessel OpEx towards the bottom is now slightly lower than in total than previous guidance given in August as we have 1 less vessel across the remainder of 2025. And net interest expense is also a little lower than previous guidance given at that same time. However, both are materially unchanged.

Slide 10 outlines our historic quarterly adjusted EBITDA, adding this third quarter's strong results. On the right side, as we have done before, we show our historic adjusted EBITDA for 2024 and our last 12 months adjusted EBITDA. In addition, the EBITDA bars then to the right provide some sensitivity and continue to illustrate as we have done in the past, but an increase in adjusted EBITDA of approximately $19 million, all other things being equal for each $1,000 incremental increase in average time charter equivalent rates per day. And then finally, an update on our vessels dry dock schedule, projected costs and time taken can be found in the appendix, Slide 30.

And I'll leave you to look at that if you would like. But for now, I'm going to hand you over to Oyevind to provide an update on the commercial picture. Thank you very much, Oyevind?

Thank you, Gary, and good morning, everyone. Let's turn to Page 12 for the rate environment. I'd like to start off with echoing Mads and Gary, who mentioned earlier that the 10-year record average TCE and utilization is climbing back above 90% tells me one thing; the second quarter was a one-off, and we're back more or less on track. Now while uncertainties around U.S. and China trade and tariffs are still hanging over us, trade has picked up elsewhere to compensate. We've seen tremendous growth in demand for semi-refrigerated LPG vessels out of the Middle East in recent months. Iraq has ramped up both production and export capacity and is now taking in additional handysize vessels to cover the demand.

At the same time, a steady stream of handysize ships has been moving butadiene from the U.S. from Brazil and from Europe to Asia, either via Cape of Good Hope or the Panama Canal. Together, these flows have tightened the supply-demand balance in the segment, pushing rates and utilization higher. That trend is shown in the dark and light blue lines in the graph. Of course, we have more vessels in the semi and fully refrigerated segments totaling 29 compared to 15 in ethylene, the positive momentum that I just mentioned carries more weight on our overall TCE and utilization numbers.

On the ethylene side, lingering trade and tariff uncertainty has softened rates by about $2,500 per day. Traders remain cautious, hesitant to commit to long-haul ethylene cargoes. Remember that it can take more than 2 months from contracting a ship until it discharges in Asia, which is a long time if one is worried about potential tariffs coming. Instead, we're seeing a more active shorter-haul voyages to Europe, which carry less tariff risk and are perceived as safer from a trade perspective. I'll touch a bit more on these nuances in the next few slides.

If we look at Page 13, you can see the recent increase in our LPG earnings days. LPG accounted for 42% of our demand during the quarter, the highest share since first quarter of 2023, while petrochemicals remained the largest segment at 44%. The benefits of our flexibility to switch between cargoes and trades are further highlighted on Page 14. In the bottom left graph, utilization for our semi-refrigerated vessels climbed to 98%, meaning that effectively all our semi-refrigerated vessels were employed during the quarter with almost 0 idle time. This is driven mainly by the stronger LPG demand and also the fully refrigerated fleet shown on the bottom right, saw incremental demand both from LPG and importantly, also long-haul butadiene cargoes.

It's been 5 years since our fully refrigerated vessels were employed in what we call easy petrochemical trades. As mentioned, the segment still feeling the effects of trade and tariff uncertainty is our ethylene-capable vessels. You can see in the top right graph that utilization for these vessels are averaging around the 85% level. Overall, though, for the fleet, utilization for third quarter was about 5 percentage points higher compared to the second quarter.

On Page 15, we take a closer look at quarter-on-quarter U.S. exports and ethylene to Europe and Asia on handysize vessels. Since April, U.S. exports of ethane and ethylene have been impacted by trade uncertainties. It is interesting to note that shipments to Asia Pacific have halved from averaging 195,000 tons per quarter to averaging 97,000 tons per quarter. Conversely, European imports are up 30% when doing the same comparison. This suggests Europe has structural short and is plugging it with U.S. volumes, whereas Asia remains more opportunistic and is more sensitive to external factors.

Turning to Page 16. Here, we track the U.S. ethylene arbitrage. Right now, it is open to Europe at around $200 per ton, which works. So exports continue to flow across the Atlantic, but the Asia arbitrage at roughly $250 per ton is harder to make work. As a result, and for the time being, most of Morgan's Point ethylene exports are heading to Europe. On the supply side on the next page, there are only minor changes since our last presentation and none that materially affects the handysize segment. The order book remains low.

So to summarize, trade and tariff uncertainties between U.S. and China are still influencing parts of our trades. But despite that, we delivered a very solid quarter. The flexibility of our fleet allows us to capture opportunities across multiple trades. The fourth quarter has started in line with how September ended, which suggests a degree of normalization, especially when it compared to the second quarter.

Happy to take more questions on this after, but first, the one and only Randy Giveans, the floor is yours.

Thank you, Mr. Oyevind. Following up on several announcements we made in recent months, we want to provide some additional details here and updates on our recent developments. So starting on Slide 19, we're pleased to announce our new and improved return of capital policy that is effective immediately, which includes a fixed quarterly cash dividend of $0.07, up 40% from $0.05 per share, but that's not all. We want you to have your cake and eat it too. So we're also increasing the payout percentage to 30%, up from 25% of net income. Now before we go further into that, I want to highlight that during the third quarter and specifically as part of our return of capital policy, we repurchased almost 130,000 common shares of NVGS in the open market, totaling $2.1 million for an average price of around $16 per share.

Now looking ahead, in line with our new return of capital policy and the illustrative table below, we are returning 30% of net income or a total of almost $10 million to shareholders during this fourth quarter. The Board has declared a cash dividend of $0.07 per share payable on December 16 to all shareholders of record as of November 25, equating to a quarterly cash dividend payment of $4.6 million. So in order to get your $0.07 dividend, do not wait until Black Friday or Cyber Monday to buy some NVGS shares as the record date is prior to Thanksgiving. Additionally, with NVGS shares trading well below our estimated NAV of $28 a share, we will use the variable portion of this return of capital policy for share buybacks. As such, we expect to repurchase $5.4 million of our shares between now and quarter end, such that the dividend and share repurchases again equal $10 million this quarter.

Now continuing on the topic of share buyback, let's turn to Slide 20. During the first quarter, as you all know, we announced a new $50 million share buyback program back in May. As you can see, the announcement was not just a positive headline. We immediately put it to good use and completed the program in July after repurchasing 3.4 million shares at an average price of $14.68 per share. Now as you can see in the bottom left chart, we've historically had around 56 million shares outstanding for many years, and that was up until the merger with Ultragas back in 2021, in which we issued 21 million shares in exchange for the 18 vessels.

Now since peaking around 77 million shares 3 years ago in December of 2022 and including those aforementioned share buybacks coming in the next few weeks, we'll have repurchased more than 12 million shares totaling $174 million for an average price of around $14.20 per share. Now additionally, by year-end, we'll have paid out $36 million of cash dividends for a total of $210 million of capital returned to shareholders over the past 3 years. So this equates to $3 a share, which is greater than a 20% return during that time. So as seen over the last few years and demonstrated again today with our increased return on capital policy, I want to look you squarely in the eyes and reiterate that returning capital to shareholders will remain a priority for us going forward.

Now turning to our ethylene export terminal on Slide 21. Ethylene throughput volumes have remained strong, reaching 270,000 tons during the third quarter. To note, following first quarter very low throughput, volumes increased substantially and the Flex Train was utilized in both the second and third quarters. Now looking at the bottom right chart, U.S. ethylene prices fell during the third quarter, resulting in multiple ethylene spot cargoes being completed to both Europe and Asia. And although the internal spreads have tightened temporarily entering the fourth quarter here, the longer term outlook is for U.S. ethylene prices to stay at an attractive level around $440 per ton in the coming quarters and years.

As for the contracting of the expansion values, we're still in active dialogue with multiple new customers for potential offtake contracts. As such, we continue to expect that additional offtake capacity will be contracted in the coming months, but the global uncertainty we've seen, and as Oyevind mentioned earlier, has slightly delayed some of our customers from making those longer-term commitments right now, but stay tuned.

Now turning to our fleet on Slide 22. Our fleet renewal program continues to be implemented as we sell our older vessels and replace them with more modern tonnage. Now starting with the divestiture. As you've heard in September, we completed the sale of the Navigator Gemini, a 2009-built 20,750 cubic meter gas carrier to a third party for over $30 million, resulting in a $12.6 million profit. That was our sixth vessel sale since January '22, and we continue to engage buyers who are showing interest in acquiring other older assets, as Mads mentioned earlier.

Now on the purchase side of the equation, in October, a few weeks ago, we acquired an additional 15.1% ownership in each of the 5 vessels owned via the Navigator Greater Bay joint venture for a total of $16.8 million, and that was paid from cash on hand. Based on an average of the last few years, this additional ownership should increase our net income by around $3 million per year. So a very attractive return on investment. Now as a result of our recent sale and purchase activity, our current fleet is now 12.4 years of age with an average size of 20,818 cubic meters. To note, we continue to upgrade our vessels with various energy savings technologies. And starting in 2026, we'll be rolling out new artificial intelligence, or AI, programs to make our fleet even more efficient.

Now looking at Slide 23. Our average fleet is set to decrease further while our average vessel size is also set to increase. In July, we announced a new joint venture in which we'll own 80% and Amon, our partner in Azane Fuel Solutions will own 20% of 2 new 51,000 cubic meter ammonia-fueled liquefied ammonia carriers. The newbuildings are scheduled to be delivered in June and October of 2028 at a price of $87 million each. Now importantly, each vessel will receive a NOK 90 million or USD 9 million grant from the Norwegian government agency, Enova, resulting in a net price of $78 million. And assuming 70% LTV debt financing, we expect the total equity needed to be only $17 million per vessel, and that will be split between us and Oman.

To note, these ice-class newbuilding vessels will be the largest in our fleet. They'll have dual fuel engines for clean ammonia and be able to transit through both the old and new Panama Canal locks. Additionally, each of the vessels will be employed on a 5-year time charter upon delivery to Yara Clean Ammonia. Lastly, in terms of vessel financing and future capital requirements, we've included an illustrative CapEx table on this slide. We paid the first 10% shipyard deposits in August, and we're currently targeting to complete financing arrangements in the early part of 2026.

Now finishing on Slide 24. I want to personally invite you to our 2025 Analyst Investor Day happening next week here in Houston, Texas. On Tuesday afternoon, we'll be hosting our Morgan's Point tours at the ethylene export terminal in one of our vessels. Tuesday evening, the management team and Board of Directors will host a dinner for our analysts and investors. The following day, on Wednesday, we'll host company and industry presentations covering current market trends, a financial update as well as our medium-term strategy. We'll then have lunch followed by an appreciation event for our analysts, shareholders, customers and partners. So let me pull up the weather here. And yes, the forecast seems to match our outlook, warm and sunny. So we hope you can join us next week.

With that, I'll turn it back over to Mads.

Thanks a lot, Randy. Q4, as you can see or that we've indicated with our utilization numbers has come off to a robust start, and we are currently seeing a gradual normalization of our operating environment. If we don't see any further geopolitical surprises, we think we are back on our previous trajectory. This will be driven by the continued growth in U.S. natural gas liquids production and the significant build-out in U.S. export infrastructure over the next 4 years. We expect that this will support exports of natural gas liquids and thereby also transport demand for the products that we carry. The vessel supply picture remains attractive with small handysize order book, which is low and also an aging global fleet.

We'd like to leave you with the impression that return of capital is very high on our list of priorities, and this is why we've decided to increase our earnings payout and our fixed dividend. We have a little bit of work ahead of us in terms of financing our 6 newbuildings. Financing markets are competitive and Navigator is a good credit. So we expect competitive terms. We'll continue to renew our older vessels so that you should expect to see more earnings-enhancing vessel sales, but potentially also further consolidation initiatives whenever accretive vessel acquisition opportunities are rising.

So thanks a lot for listening. Back to you, Randy, and for some Q&A.

Thank you, Mads. [Operator Instructions]

This is Chris Robertson at Deutsche Bank. Happy to be on my first inaugural call here since launch. I had a couple of questions for you guys here. So one, in the dry bulk space and in the tanker space, we've seen a few companies target either net debt 0 or net debt below kind of the scrap value of the fleet. I was wondering, just in general, how you guys think about the net debt position over time as it relates to lowering breakevens and kind of what the general strategy would be over the long run?

Yes. Maybe I can kick us off and then Gary, you can take over. But in general, I think we have a comfortable balance sheet right now. I don't think there's any reason for us to go to a net debt zero position. We are in a capital-intensive business. We do see financing markets, which are very competitive, and we can source debt at attractive cost. I think it is to the benefit of our shareholders, the equity holders to have some debt on the balance sheet in order to enhance returns. We have 2.6x net debt to EBITDA right now. I think we could even carry a little bit more, but overall, I think we're in a good position.

My next question is more just general market related. I think there's some prevailing fear in the market with low oil prices that will impact U.S. oil and gas production, and therefore, translate into lower NGL and LPG exports. So if you could comment on what you're seeing on the upstream side, just in terms of the dynamics domestically to continue to support NGL production, which specific kind of gas fields people are looking at? I think Enterprise has been out there with some commentary as well around their positive outlook here. So just some commentary to maybe assuage some fears in the market that around low oil gas prices.

Yes. We'll give more details on that in the Investor Day next week, but in short, generally, in our conversations with Enterprise and other midstream companies here in the U.S., then they are all very confident for NGL production, the midstream part specifically, which is also export terminals and hence, for us, export volumes. So over the next 5 years up to 2030, the graphs that we have seen are pointing upwards in terms of NGL production, which is then ethane and propane and butane, which is important to us. And we believe that most of those infrastructure projects to support that growth are already been FID-ed. They're under construction. Most of them are under take-or-pay. So that brings some comfort to us in talking about the next few years in terms of volume growth from the U.S.

This is Omar Nokta from Jefferies. Thanks for the update. Always a lot of good detail and information. Just had a couple of questions. Maybe just perhaps on the capital allocation. You've been very clear, especially with this call that that's a key part of the dividends and buybacks are a focal point of the strategy going forward. But just wanted to get a sense from you in terms of what drove you to do this bump here from, say, a 25% to 30% payout and the $0.05 going to $0.07. I know it's not perhaps maybe a big change in the grand scheme but just what drove that? And can we expect perhaps that this base payout will grow over time?

Yes. Maybe I can kick us off and then I'll ask my colleagues to chime in. It is -- we think over time, we should be growing our payout. What we paid out so far, it's a good decent dividend, but it's not a high dividend. We have the financial strength, and we have the operating cash flow that can support the payout that we are increasing it to now. And I think also bar, difficult market situation, geopolitical tension and trade wars, et cetera, we should be in a position where we could support higher payouts in the future also.

Now that said, this is, of course, always a Board decision, but you can see the trend in the cash flows that we have delivered, and you've seen the trend in our debt that we paid down over time. So we will -- if we do nothing see and markets stay as benign as they are right now, you'll see a gradual buildup in our capacity to pay out dividends. So I think any good company should strive towards having a stable but growing payout over time.

Yes. I think in addition, Omar, I mean, from my perspective, I mentioned in my commentary there that what we want to do is be sustainable and be fairly predictable as a business. And we do want to do all of those things that Mads has just said around growing our distribution. I think also getting the balance. We've done a lot of buybacks. Our share price has been where it is, and we believe that's very cheap. So we've been doing a lot of buybacks in the background. And I think Randy illustrated really well the strength of returns to shareholders that we've actually done over the last 3 years, albeit not all of it in cash direct back to shareholders. So I think we're trying to strike the right balance in that as well. But certainly, as Mads said, we'd certainly be looking to do more in the future, all things being equal and if the business keeps going in the way that we think it's going to.

Yes. And quickly on the scale, we went back and forth between 6%, 7% in terms of the dividend, but went up to 7%. Obviously, we're going for more there. But we also don't want to cannibalize the buybacks on a quarterly basis. So obviously increasing that payout percentage to 30% as well.

Got it. And then maybe just one follow-up I had is, Randy, you mentioned in the Greater Bay $16.8 million in the fourth quarter to pay for that step-up in ownership, which will maybe yield, say, $3 million in net income annually. Not a bad return, fairly, I would say, decent. Just I guess, in terms of going forward with that joint venture, is there a mechanism to get that to the full 100% ownership for Navigator? Is that something that you aim to do, if possible?

The ownership, we don't have a mechanism you could say that mechanically will increase it. We would probably be looking to continue that discussion with our partner. We are very happy with our partner, Greater Bay. We think they give us a good inroad into the Chinese market and to opportunities that arise both with Chinese shipyards, but also business in the region. So I think we have a great interest in sustaining the partnership that we have with them. But of course, we control the vessels, we operate them. So we do consider them, you could say, an integrated part of our fleet.

Okay. All right. Great. And then final one, and Gary, I think I may have asked you this perhaps last quarter, the one before, but just on the terminal, as you were highlighting in your opening remarks, it's held, I think, you said $252 million. You've got a final $4 million debt to pay off here in the fourth quarter, and then it's owned debt free. Just as you mentioned, looking to lock up financing for the new buildings, but what do you think about this -- about the terminal itself, given the long-term sort of contract nature of that business, it sort of lends itself perhaps to a nice financing package. What are you thinking? Is this something that you expect to finance in '26 or do you still want to own it fairly debt-free?

Yes. I think what we've said before probably still stands and to a degree, goes back to a little bit maybe what Chris was talking about with our net debt being 0. I think the terminal itself, if we do put finance on it, it's not, at this stage, going to be cheaper financed than our vessels, and we've got vessels that we can use as collateral and raise money on those. So I think at the minute, we're not in a rush to do that. I think part of me raising it in this call as well is just to remind folks that it is there. It's substantial. And we don't, at the moment, leverage that asset on a financial basis, but it is a substantial asset for us as a business, and it's returning pretty good money over the long term.

To answer your question, we probably will put finance on it at some point. I mean one of our strategic aims is to expand our port-to-port, if you like, business in terms of it supporting our shipping. So if another Morgan's Point opportunity came along somewhere else, then we may look at that, and that may be a really good opportunity to take the money out of that project and maybe put it into a new project. But at this moment, it's not top of our priority list, but it's certainly available to us, and we've had no shortage of people wanting to come and talk to us about it, put it that way.

Most has already been covered, but I want to ask you a modeling question. In the press release, total outstanding CapEx for newbuild additions is quoted at $480 million. And I was wondering, does it include 80% or 100% of the total CapEx associated to the ammonia and newbuild carriers? And secondly, is the $480 million figure net of the Enova grant?

If you're referring to CapEx, then that will be the gross cost of the vessel, we would show financing separately to that. I'd have to go back and just check that number and make sure what's in and what's out. But essentially, we have put in the CapEx payable to the yard, not the sources of funds. So I can come back to you after this call and clarify with you, but I would expect that, that number is the gross cost of the vessels.

Yes. But I mean, is that only your proportionate amount that you need to put in or does that include also your partners?

That would be our commitment.

And final question from me. Could you remind us what's your proportionate depreciation run rate on the ethylene export terminal?

Yes. On an annual basis, the initial terminal is coming down by about for us, a little over $3 million per year. And then on the expansion, it's another $2 million or so. So we use about $5 million a year.

Gary, target for financing the newbuildings in terms of size. Is there a goal to finance all remaining newbuilding costs or payments due on delivery?

Yes. We're looking to answer that question right now. We've got some proposals out with various potential lenders. We're looking at a range of things to try and look to have an average LTV across all of the 6 vessels. We're not in a position where we need to over leverage those vessels but obviously, in the competitive banking market that we're at, at the moment and with Navigator's credit, we can push that a little bit higher than perhaps normal. So I think we're not going to be in very high leverage territory on average across all the 6 vessels, but maybe we'll have a difference between some of the vessels under different deals and transactions. Sorry, Randy, I don't have the question in front of me, so I'm not sure if I answered that.

No, I think that covered it. And Paul, feel free to reach out to me, and we'll chat after this call but thanks again. Mads, last words?

No. Thank you so much for listening in. I hope you got the impression that our laser focus is on ensuring that capital is returned to our shareholders. And with the Q3, the strength of the results here and the robust outlook for the next quarter or so that, that capacity should be sustained. So look forward to seeing you all in Houston. And I guess, Randy, you have another comment here.

One more question. Charles, I think your line should be open now -- Chad, sorry.

Can you hear me now?

Got you, Chad.

Great. So just on charter rates, moved to record levels in your business. I know it's early, but any insights on how 2026 is shaping up from a charter rate perspective? And any reason why this momentum that you've seen can't continue into next year?

I think I'm going to lean on Mads comments. Barring external changes in tariffs or geopolitics, et cetera, et cetera, then the supply-demand balance looks positive, meaning that there are not that many ships coming, there's more growth in demand. So we remain optimistic on that. But the caveat is like we've seen this year, many things can happen that influences the business. But all things being equal, I think we're ending the year on a good note, as we mentioned, and then preparing for next year.

Okay. Got it. And then just on Morgan's Point contracting, what are the remaining items that potential customers kind of need to clear to start signing contracts? And is this a situation where we could see several come in quick order once kind of the first one gets signed?

Yes. Thanks for the question. The first is securing supply domestically. I don't think that's a huge issue, right? We are oversupplied in ethylene here in the U.S. So on the other side, it's securing buyers. Now we're hearing about and seeing firsthand that European rationalization taking place where older, less efficient ethylene crackers are being shut in. So that has to be replaced. And a lot of that will be replaced by direct imports of U.S. ethylene. So that won't happen tomorrow, right, but it certainly has been happening in recent months and will continue in the coming quarters. To answer your second question, we believe so, right? We have term sheets out to several, I won't give you the exact number, but several potential offtakers. And I think once 1 or 2 sign, the others will quickly come as well because there is some scarcity here, right? There's a limited amount of offtake that is available.

Sorry I cut you off there, Mads. Now we're done.

No, no. Yes. Good. Thanks a lot, and I look forward to updating you all on our next quarterly call. And in the meantime, I hope many of you will join us in Houston in next week too, so we can show our terminal, our vessels and our plans for the year to come.

Thank you for standing by, ladies and gentlemen, and welcome to the Navigator Holdings Conference Call for the Second Quarter 2025 Financial Results.

On today's call, we have Mads Peter Zacho, Chief Executive Officer; Gary Chapman, Chief Financial Officer; Oeyvind Lindeman, Chief Commercial Officer; and myself, Randy Giveans, Executive Vice President of Investor Relations and Business Development here in North America.

I must advise you that this conference call is being recorded today. As we conduct today's presentation, we will be making various forward-looking statements. These statements include, but are not limited to, the future expectations, plans and prospects from both a financial and operational perspective and are based on management assumptions, forecasts and expectations as of today's date, August 13, 2025 and are as such, subject to material risks and uncertainties. Actual results may differ significantly from our forward-looking information and financial forecast. Additional information about these factors and assumptions are included in our annual and quarterly reports filed with the SEC.

With that, I now pass the floor to our CEO, Mads Peter Zacho. Please go ahead, Mads.

Thank you. Good morning, and good afternoon, and thanks a lot for joining this Navigator Gas Earnings Call for Q2 2025.

As I start, I'll just review the key data on our Q2 2025 performance and then go over the outlook for the rest of the year. After that, as usual, Gary and Oeyvind and Randy will discuss our results in more detail. Geopolitical backdrop for our Q2 result was certainly unusual and very difficult. Ahead of and during the quarter, we experienced a number of significant challenges, including the announcement of U.S. port tariffs, unprecedented high import tariffs on commodities that we transport, ethane export licenses, which were effective export bans, and new military conflicts flaring up, including the bombing of Iran's nuclear facilities.

Several of the conflicts receded during and after Q2, but the effect on our customers and our business during Q2 brought a lot of uncertainty, disruption and hence, lower trade volumes. The quarter also brought new opportunities such as ambient temperature LPG exports out of Iraq to Asia and the opportunity to buy back our own shares at a high discount to our estimated NAV. So this was a quarter of shipping at its worst and at its best.

Please turn to Slide #4. With that background and moving to our results. In Q2, we generated revenues of $130 million, down 12% compared to the same period last year. This reduction is the direct result of customers halting new business and for a time, even in some cases, canceling committed fixtures with us, for which we still got paid. However, notwithstanding the backdrop, we generated EBITDA of $72 million and adjusted EBITDA, which excludes a $12 million book gain from selling Navigator Venus of $60 million, and that showed really the resilience of our business. Earnings per share was $0.31.

The gain on the sale of Navigator Venus gives credence to the estimated net asset value. We did a lot of work optimizing our capital structure during the second quarter. The balance sheet is very strong with a cash position of $287 million at quarter end. It was supported by the $300 million refinancing, which was signed and drawn down as planned and at the lowest margin ever for Navigator. The return of capital continued in Q2 with both the $0.05 fixed dividend and a share buyback up to, in combination, 25% of net income. We also progressed the additional $50 million share repurchase program, completing $30 million in Q2 and the remainder in July. So done and dusted, 3.4 million shares bought back at an attractive price. Randy will elaborate on this one in a few minutes.

Commercially, we achieved average TCE rates of $28,216 per day during Q2. This is lower than the approximately $30,000 achieved in previous quarters. We achieved utilization of 84%, also lower than prior quarters. Our ethylene spot fleet was impacted the most, whereas the semi-ref fleet fared better. Throughout throughput at our joint venture Ethylene Export Terminal rebounded to 268,000 ton for the quarter, which was more than 3x Q1, but still below full capacity. We are pleased to announce the two 51,500 cubic meter dual-fuel ammonia vessel orders and the associated 5-year time charter contracts.

The combination of attractive yard prices, the grant from the Norwegian authorities and expected attractive financing makes this transaction accretive to shareholders and strengthens Navigator position in the ammonia supply chain. It's also an important step in our gradual fleet renewal and goes hand-in-hand with our sale of older vessels like Navigator Venus. We expect to be able to report more sales of older tonnage and associated book gains as the year progresses.

Looking forward, we also expect that most of the headwinds that we saw in Q2 are gone. Global trade in commodities we transport have restored during July and into August. So today, we see utilization and rates returning to normal levels. We expect LPG exports from Iraq to Asia to continue, and we expect ethylene exports from U.S. to Europe and ethane exports from U.S. to Asia to continue. The latter will be further supported by the opening of Enterprise's new Beaumont terminal that will free up more ethane export capacity. This means more business for our ethylene and ethane vessels. Of course, trade discussions between U.S. and its trading partners continue and much can still change. But with our diversified customer base, trading capability and strong balance sheet, we remain resilient even if geopolitics take an unexpected turn.

So now over to you, Gary, and talk a little bit more about the details on our financial results, please.

Thank you, Mads, and welcome, everybody. During this quarter, as Mads mentioned, we've seen a number of geopolitical announcements and events across the world that have affected our markets that we were not able to predict or foresee at the beginning of the year or indeed some of them we were not able to predict at the beginning of the second quarter. However, I'm very pleased to report that despite the unpredictability that we've experienced, we're able to report a healthy set of results, not as high as we would like, but focusing on our strengths, we've been able to maintain solid progress in many areas across the quarter, and we believe we're also able to look forward to a strong second half of the year.

Our second quarter 2025 financials show a healthy result due to the quality, diversity and flexibility of our fleet and business, which allowed us to maintain charter rates and utilization at profitable levels, supported by our operational efficiency and cost controls.

On Slide 6, we report TCE of $28,216 per day, leading to a quarterly net operating revenue of $129.6 million and an EBITDA of $71.9 million. Our lower TCE this quarter came about primarily due to the performance of our ethylene vessels across the quarter, stemming from the trade licensing and tariff-related issues that Mads has already mentioned and that Oeyvind will also cover. Whilst our fully refrigerated handysize fleet also did not perform so well, we only have 6 vessels in this category. In contrast, our semi-refrigerated and midsized vessels performed almost as normal throughout.

So overall, the quarter was affected by certain specific global issues that we do not believe are long term, and we're seeing a bounce back already in our third quarter performance to date. We sold one of our oldest vessels, as mentioned, the Navigator Venus for net proceeds of $17.5 million, resulting in a strong book gain of $12.6 million in the quarter. And excluding this from EBITDA as the main difference, we get to an adjusted EBITDA result of $60.1 million. Hence, the vessel sale in this quarter made up for the sequential drop in earnings, leaving EBITDA for this quarter at $71.9 million, broadly in line with our first quarter 2025 results.

Then for the reasons we've already covered, utilization was 84.2% in the second quarter, down 9.2% compared to the second quarter of 2025 -- 2024, sorry. You will see that voyage expenses have decreased by $1.9 million compared to the same quarter last year, mainly due to lower utilization in the second quarter this year as these are pass-through costs to our customers, hence they're reflective of the decrease in operating revenue. Vessel operating expenses were up compared to the second quarter of 2024 at $47.4 million, with the increase primarily driven by the increase in our fleet following the purchase of the 3 secondhand vessels in the first quarter of this year, which you can see is reflected in the table shown bottom right, as well as simply the timing of maintenance costs incurred during the 3 months ended June 30, 2025, compared to the same period in 2024.

We do currently expect to close the year on or close to budget for our OpEx costs adjusting for the extra vessels. Depreciation is also slightly up compared to previous quarters due to our now increased fleet. Unrealized movements on non-designated derivative instruments resulted in a loss in the second quarter of $1.4 million. This being related to movements in the fair value of our long-term interest rate swaps, which affects net income, but which has no impact on our cash or liquidity. Our income tax line reflects current tax and mainly deferred taxes primarily derived from our investment and share of profits in our Ethylene Export Terminal at Morgan's Point. Randy will shortly explain more about the terminal throughput volumes in the second quarter, but they were up to 268,000 tons from 85,000 tons in the previous quarter, resulting in us reporting a profit this quarter of $4.8 million. Then overall, for the second quarter of 2025, net income attributable to stockholders was $21.5 million with basic earnings per share of $0.31.

Our balance sheet, shown on Slide 7, continues to build and be strong with a cash, cash equivalents and restricted cash balance of $287.4 million at June 30, 2025, which if you include our available but undrawn liquidity was $316 million at the same date. This is despite paying out $26.4 million for scheduled loan repayments, $6.8 million under our return of capital policy in respect to the first quarter of 2025 and a further $29.6 million of share buybacks as part of the new $50 million share repurchase plan. Our liquidity in the quarter was boosted by the $40 million bond tap issue that was settled in early April, the sale of the Navigator Venus, which completed in May and the debt refinancing that we drew down in mid-June 2025, which added $142 million of net liquidity. Including our available but undrawn revolving facilities, we had $314 million of cash, cash equivalents and restricted cash at close on August 11, 2025.

On Slide 8, we show a summary of the main capital events across the quarter, where with a very supportive banking group and a strong underlying business, we were able to return capital to shareholders, extend our debt maturity, boost our liquidity and reduce our finance costs. We completed our latest share repurchase program on July 30, 2025, having bought back $50 million of our common stock, and Randy will also provide some more details on this shortly. We continue to pay out under our return of capital policy at a level of 25% of net income. And we sold one of our oldest vessels, the Navigator Venus, as we've mentioned, for net proceeds of $17.5 million, resulting in a book gain of $12.6 million.

Also in May, we entered into a new senior secured term loan and revolving credit facility of up to $300 million that was used to repay the company's existing September 2020 and October 2023 secured outstanding loan facilities of $143 million and $15 million, respectively, and thereafter be available for general corporate purposes. The facility has a tenure of 6 years, maturing in 2031. Amounts outstanding bear interest on a quarterly basis at SOFR plus 170 basis points, and the facility is secured by 8 of the company's vessels.

And then following our successful issuance of $100 million of new senior unsecured bonds in October 2024, which at the time closed with the lowest spread for an unsecured U.S. dollar-denominated shipping bond in the Nordic market since 2008, we took advantage of favorable market -- and on March 28, 2025, we successfully issued a further $40 million tap of our bonds, which also priced at 7.25%, which funds settled with us in early April, right at the start of the second quarter. The borrowing limit under the bonds is $200 million. Hence, a further $60 million is available to us as the aggregate principal amount to be issued by the company under the bond term should we choose to do so in the future.

We now have only 2 relatively small debt maturities due in the next 24 months with balloon payments due in 2026 of $54 million in total. On the right-hand side of this slide is a summary of our main debt movements across the last quarter, which also demonstrates our progress in reducing our cost of debt, which is ongoing and which is possible due to the strength of our business and the confidence in Navigator of our banking partners. Our next priority is to close finance in relation to our now 6 newbuild vessels, and this work is already ongoing with several options being pursued. We're currently targeting to complete this work within the next 6 months.

On Slide 9, our leverage against earnings remains in a strong position with net debt to adjusted EBITDA at 2.7x for the last 12 months to June 30, 2025. In the quarter, we returned $36.4 million to shareholders through a combination of cash dividends and share buybacks. And by the end of July 2025, that figure had risen to $56.8 million as we completed our new $50 million share repurchase program. We also made substantial loan repayments of $26.4 million in the quarter, as mentioned, and our net debt to on-water fleet value, i.e., loan-to-value ratio was 34%. And if you include the ascriber value to our terminal at Morgan's Point, that ratio falls to below 30%. As we have shown before, we're continuing to make substantial debt repayments with around $124 million of average annual scheduled debt amortization payments expected across the coming 3 years, 2025 to 2027, to manage our financial risk, but whilst also still being able to raise more capital to invest and to grow.

On Slide 10, this remains one of our most important slides showing our estimated all-in cash breakeven for 2025, which at $20,270 per day is significantly below our average TCE revenue even for this slightly softer second quarter of 2025 of $28,216 per day, the difference being nearly $8,000 per day. The all-in breakeven rate shown here is materially unchanged from the estimate we provided on our last earnings call back in May 2025. And this estimated cash breakeven figure is all in and includes forecast scheduled debt repayments and our scheduled dry dock commitments.

On the right-hand side is our updated OpEx guidance for 2025 across our different vessel size segments, ranging from $8,050 per day for our smaller vessels to $11,100 per day for our larger, more complex ethylene vessels. This guidance is unchanged from our last quarterly call in May 2025. And following below is further next quarter and full year guidance across vessel OpEx, general and admin costs, depreciation and net interest expense in total dollar terms. The full year guidance for vessel OpEx towards the bottom is now slightly lower in total than the previous guidance given in May 2025 as we have one less vessel across the remainder of 2025. Net interest expense is also a little lower than the previous guidance given in May 2025.

Slide 11 outlines our historic quarterly adjusted EBITDA, having the second quarter's figures and demonstrating that whilst this quarter was not another record due to the political issues we've discussed, particularly impacting our ethylene and ethane capable vessels, still remains a very positive result. On the right-hand side of the slide, we show our historic adjusted EBITDA for 2024 and our last 12 months adjusted EBITDA. In addition, the EBITDA bars then to the right provide some sensitivity and illustrate an increase in adjusted EBITDA of approximately $90 million for each $1,000 incremental increase in average time charter equivalent rates per day.

In terms of an update on our vessels dry dock schedule, projected costs and time taken, we've moved this slide to the appendix as although this is important information, the slide itself is quite data heavy. On this topic, we're continuing to invest in our energy and fuel saving initiatives, which we believe are great investments to make, both for financial and environmental reasons. where they're also typically showing very short payback periods.

So with that very quick run through, I will hand you over to Oeyvind, who can provide some more color on the commercial environment that we have seen and what we are seeing today. Oeyvind?

Thank you, Gary, and good morning, everyone. Let's turn to Page 13 for the rate environment. Despite market uncertainty and various geopolitical curveballs, the handysize market actually held up pretty well during the second quarter, all things considered. The handysize ethylene 12-month time charter rate stayed steady at around $36 per day or $1.1 million per month. Semi-refrigerated rates dipped a little, settling at about $30,000 per day and fully refrigerated rates saw the largest correction, ending the period at $25,000 per day. We only have 6 out of our 58 vessels in that segment, 3 of them on time charter, so the overall impact on us was small.

Two things worth keeping in mind. Firstly, as you can clearly see, these rates are well above our all-in-fleet breakeven of $20,270 per day. Secondly, having 3 vessel categories gives us great diversification, spreading exposure across petrochemicals, LPG and ammonia and cushioning us against market swings. Historically, we see external factors impacting the 3 markets in very different ways, and this was the case in the second quarter.

Page 14, earnings days. We always show our earnings days mix in our presentations. And this time around, LPG really stands out for this second quarter. When the U.S. ethane export license slowed down demand for our ethane-capable vessels, other parts of the fleet benefited from incremental demand elsewhere in the world. In this case, for more LPG exports from Iraq, we added 3 extra vessels into that trade during the quarter, pushing our fleet LPG earnings days to a 2-year high, almost matching that of petrochemicals. This is a real example of how the fleet versatility kicks in. One market is down, another one is up. Another good sign, as you can see to the far right, is our July utilization, which was -- which hit 90%, suggesting the market is settling into a more normal steady state. So between the diversification and this normalization, our earnings are already looking healthier.

Page 15, utilization. The top left graph illustrates our 5-year highs and lows for our fleet utilization. You can see the green dotted line representing year-to-date dip in the second quarter for reasons that Mads and Gary already mentioned. But as you can see, it then rebound 5 points in July. We have always maintained that any utilization above 90% represents quite a healthy market, and we are in this zone today. The other graphs show the benefits of diversification. LPG employment is growing in our semi-refrigerated segment, and utilization is rising across all 3 vessel types.

Page 16, ethane. Ethane and ethylene exports from U.S. makes up a fair portion of our petrochemical vessel demand. And it makes sense then to address the ethane export license restriction and its immediate and short-lived impact. Firstly, let's take a step back and look at why U.S. ethane matters. The U.S. has a major cost advantage in producing ethylene from ethane, matched only by the Middle East. European and Asian naphtha-based producers are placed much higher on the cost curve. So for them, importing U.S. ethane or ethylene can dramatically improve their cost position and sustain their operations.

China is the largest buyer of U.S. ethane. When the export license requirement came in effect during May and June, trade to China essentially stopped. But it was short-lived. Exports rebounded in July, hitting a record high. Almost immediately, new spot requirements for handysize ethane vessels were quoted in the market. In addition, that same month, Enterprise newly constructed Beaumont ethane export terminal began operations. Extra terminal capacity means more demand for ships like ours. As an aside, one of our vessels loaded the very first cargo from the new Beaumont terminal.

Page 17, Europe's ethylene rationalization. As mentioned, European producers are facing a challenging position in the ethylene cost curve. Many of these producers are shutting down uncompetitive plants. The first graph is showing a downward trend in European ethylene production capacity. The good thing for us is that the Europeans are leaning towards U.S. to backfill lost ethylene production with imports. In July, the Europeans imported 75% of their seaborne demand from U.S., the highest portion on record. This trend is likely to continue. Instead of producing at high cost, they import from a more competitive producing country, i.e., the U.S. I've added Italy as an example. And you can see there's -- after shutting down their own production, there's a sudden spike in U.S. imports of ethylene.

Page 18, U.S. ethylene exports. Even though U.S. ethylene prices have risen since April, which is the bottom left graph, the gray line, delivered prices in Europe have moved in lockstep. The theoretical transatlantic ethylene arbitrage is about $210 per ton for freight, more than enough to support the trade. In recent months, nearly all U.S. ethylene exports have gone to Europe, reinforcing the structural long/short dynamic between the 2 regions.

Page 19, vessel supply. Vessel supply remains well balanced. just 12% of the handysize segment is on order or 9% if you exclude 4 CO2 carriers on order, and 22% of the fleet is over 20 years of age. So in summary, second quarter was messy at times, but July brought a welcome return to normality, higher utilization and rates maintaining well above breakeven. In addition to the day-to-day freight trading, we've been working on some other exciting developments, which Randy will talk to.

Over to you, Randy.

Thank you, Oeyvind. So following up on several announcements we've made in recent months, we want to provide some additional details and updates on our recent developments.

Starting on Slide 21. We're pleased to announce our return of capital for the second quarter of 2025. But before we get into that, I want to highlight that during the second quarter and specifically as part of our return of capital policy, we repurchased more than 234,000 common shares of NVGS totaling $3.3 million for an average price of $14.12 per share. Now looking ahead, in line with our return of capital policy and the illustrative table below, we're returning 25% of net income or a total of $5.4 million to shareholders during this third quarter.

The Board has declared a cash dividend of $0.05 per share payable on September 17 to all shareholders of record as of August 28, equating to a quarterly cash dividend payment of $3.3 million. Additionally, with the shares trading well below our estimated NAV of $28 a share, we'll use the variable portion of the return of capital policy for share buybacks. As such, we expect to repurchase another $2.1 million of NVGS shares between now and quarter end, so that the dividend and the share buybacks equal 25% of net income or $5.4 million this quarter.

Now continuing on the topic of share buybacks, let's turn to Slide 22. During the first quarter call in May, we announced a new $50 million share buyback program. And as you can see, the announcement was not just to make a positive headline, but we immediately put it to good use and recently completed the program by repurchasing 3.4 million shares at an average price of $14.68 per share. As you can see on the bottom left chart, we had about 56 million shares outstanding for many years, and that was up until the merger with Ultragas in 2021 and in which we issued 21 million shares in exchange for 18 vessels at an implied value of $16.82 per share. Since then, we've repurchased more than half of those shares back or 11.8 million shares totaling $166 million for an average price of $14.15 per share. For further details, look at the table in the bottom right, Slide 23.

So as we said before, there are several compelling reasons for us to repurchase shares, buying them back at a discount, boosts the NAV per share, reduces the share count, increasing our EPS, supports the share price, diversifies the uses of cash to that 5 pillars of capital deployment. And as you've seen over the past few years and even more so over the past few months, returning capital to shareholders will remain a primary focus for us going forward.

Now turning to our Ethylene Export Terminal on Slide 23. Following the first quarter of very low throughput, volumes during the second quarter more than tripled to 268,000 tons as multiple U.S. Gulf ethylene crackers ramp production, resulting in lower U.S. ethylene prices, allowing us to utilize the flex train in both May and June. Looking at the bottom right chart, despite a recent increase in U.S. ethylene prices, European prices have also increased. So we expect third quarter volumes to remain firm near second quarter levels. And longer term, U.S. ethylene prices are expected to stay at an attractive level for the coming quarters and years.

Additionally, with the widening of the arbitrage, we have completed multiple spot cargoes in recent months, many of which have discharged ethylene to new ports throughout Europe. As for contracting the expansion volumes following the original contracts, we've signed 2 new offtake contracts in recent quarters and many conversations with new customers are progressing. As such, we continue to expect that additional offtake capacity will be contracted in the coming months.

Now on Slide 24, we are very pleased to announce our recent inclusion in the Russell 2000, the premier Small Cap Index and the Russell 3000 Total Market Index, further expanding our shareholder base and increasing our trading liquidity. So on May 23, the Russell Indexes announced their upcoming additions, including Navigator Gas in both. This is when the active managed funds start positioning their portfolios. Now on June 27, which was this year's reconstitution day, that was completed after market close, and this is a meaningful event, as you can see, 4.5 million shares of NVGS traded that day.

Now as you can see on the chart on the bottom left, both our share price and our daily trading liquidity have increased since May 23. And taking a longer-term view, as you see on the table on the right, daily trading liquidity has increased significantly in recent years with a more pronounced step-up in recent months. Our trading liquidity has steadily increased despite that ongoing reduction in shares outstanding, as mentioned earlier. Now for the year-to-date 2025, we're averaging almost 400,000 shares traded per day, totaling almost $6 million per day, with several days well above $10 million. So with that, there are many funds that require around $5 million of daily trading liquidity. So we are now on the radar screen of a much larger group of investors.

Now turning to our fleet. Starting with the first part of our fleet renewal on Slide 25. Our fleet renewal program continues to be implemented as we sell our oldest vessels and replace them with more modern tonnage. Starting with the divestiture. In May, we completed the sale of our oldest vessel, Navigator Venus, a 2,000-built, 22,000 cubic meter gas carrier to a third party for $17.5 million, resulting in a $12.6 million profit. That leaves us with only 2 of our original vessels built in 2000, and we continue to engage buyers who are showing interest in acquiring those older assets. Additionally, we expect to sell another unencumbered vessel during the third quarter, in line with current market valuations, resulting in a substantial book gain and cash inflow. So as a result of our recent sale and purchase activity, our current fleet is now 12.2 years of age on average with an average size of 20,816 cubic meters.

Now looking at Slide 26, our average fleet age is set to decrease while our average vessel size is set to increase. In July, we announced a new joint venture in which we'll own 80% in Amon, our partner in Azane Fuel Solutions, will own 20% to construct 2 new 51,530 cubic meter ammonia-fueled liquefied ammonia carriers. The new buildings are scheduled to be delivered in June and October of 2028 at a price of $84 million each. Now importantly, each vessel will receive a NOK 90 million or $9 million grant from the Norwegian government agency, Enova, resulting in a net price of $75 million. And assuming 70% LTV debt financing, we expect the total equity needed to be only around $16 million per vessel, which will be split between ourselves and Amon. These vessels will be the largest in our fleet, are the dual fuel engines for clean ammonia, and we'll be able to transit both the old and new Panama Canal locks.

Additionally, each of the vessels will be employed on a 5-year time charter upon delivery to a blue-chip industry leader. Lastly, in terms of vessel financing and capital needs, we've included that CapEx table on this slide, and we're currently targeting to complete financing arrangements within the next 6 months.

Finishing on Slide 27, I want to personally invite all of you to our upcoming 2025 Analyst Investor Day here in Houston, Texas in a few months from now. On Tuesday afternoon, November 11, we'll be hosting our Morgan's Point tours of the Ethylene Export Terminal and flex train as well as one of our vessels. So just take a picture -- take a look at that picture to the right and imagine yourself climbing on board that beautiful ethylene carrier and seeing the flex train operate in all of its splendor. Later that evening, the management team and members of our Board will host a dinner for our analysts and investors. Then the next day, November 12, we'll host company and industry presentations covering current market trends, our financial update as well as our medium-term strategy. We'll then have lunch followed by an appreciation event for analysts, shareholders, customers and partners. And looking at the farmer's almanac, the weather is expected to be fantastic. So we hope to see you in November.

With that, I'll now turn it back over to Mads for closing remarks.

Thank you very much, Randy. And let's move to Page 28. So it's time to summarize an eventful second quarter, where waves of port fees and import tariffs and export licenses tested our resilience and negatively impacted our profitability. But we did not sit on our hands during Q2 because Q2 was also a quarter of opportunities where we took advantage of strong financial markets and optimized our balance sheet. We lowered the cost of debt and used excess cash for buying back 5% of outstanding shares at attractive prices. And we look through the fog and we took another step in positioning Navigator as a leader within not only the ethylene/ethane supply chain, but also the clean ammonia supply chain.

Q3 has come off to a robust start, and we now see a normalization of our operating environment. By any further geopolitical surprises, we expect to be back on the previous trajectory. This will be driven by the continued growth of U.S. natural gas liquids production and the significant build-out in U.S. export infrastructure over the next 4 years. We expect this will support exports of natural gas liquids and thereby also transport demand for the products that we carry. And as in previous quarters, the vessel supply picture remains attractive with small handysize order book and an aging global fleet.

So thanks a lot for listening, and I'll hand it back to you, Randy, now for the Q&A.

Thank you, Mads. Operator, we'll now open the lines for some Q&A. [Operator Instructions] So first question, your line is open.

This is Omar Nokta, from Jefferies. As usual, very detailed presentation. And just had a couple of follow-ups to that. And maybe just in terms of the business from a big picture perspective, the -- obviously, 2Q was quite volatile with the geopolitics kind of really having a pretty significant impact. It sounds like from your commentary that third quarter and the second half in general is going to be quite a bit better. Just in terms of how we think about that, do you think 3Q as a whole can return to how things were prior to the second quarter? Or is it more of a gradual improvement you see in the third quarter, and it's really the fourth quarter where things start to get back to "normal."

Yes. And I can't help thinking back to when we had this discussion back in the middle of Q2 talking about the Q1 result. At that time, we were looking at port fees that had disappeared for our segment. We also saw the trade war between China and U.S. kind of receding. But then came the export licenses, which were really a surprise. And even though at the time, we argued they were coming, they would be a bargaining chip. They did lead to some disruption and some reduced utilization for our fleet in Q2.

So when we talked a quarter ago, I thought that maybe we communicated that we were seeing a gradual improvement, but then came this knock. That's different now because now the effects have gone away. And as Oeyvind was talking about, we see the utilization back up at just above 90% for July, and we can also confirm that the rates have reacted similarly. So we would say that Q3 as a whole is back to the levels that we saw before Liberation Day, and we see a normalization of the business in Q3, then we'll deal with Q4 once it comes. But so far, that looks good, too.

Okay. Very good. So good to hear. And then just wanted to ask about the terminal contracts. You mentioned the 2 contracts were signed here recently for the expanded part of the terminal. And also, it sounds like there's potentially more in the works in the next few months. Just -- can you give us maybe a sense of what portion now do you have of the expansion that's now contracted? And then maybe overall, in terms of the 1.55 of total capacity, how much of that is contracted?

Yes. Thanks, Omar. We don't want to go into too many of those details because we're still having those commercial conversations. So we won't go into the quantum of the new contracts. But it's certainly a large portion. We have 4 existing offtake customers. We have multiple term sheets out to many new customers, especially here in the last few months when we've been doing a lot of these spot cargoes, they have been to new customers, right? So that's why we do expect additional longer-term offtake contracts to be signed here in the coming months. Duration still to be determined. Some want just a couple of years, some want multiple years, whereas in terms of size, it ranges as well. So there's still a lot of variables to be determined, but we should have more updates on this in the November call.

Thanks, Randy. I appreciate that. I understand the sensitivity. And maybe just one final one, and I'll pass it back. And it's kind of maybe just back to the terminal in terms of the capacity of the 1.55 and the potential to ratchet that up to potentially as high as 3, depending, I think -- and correct me if I'm wrong, in terms of -- I think it's Enterprise, they sort of direct the flexing potentially of the volumes that would switch from, say, ethane to ethylene. And so as I think about or as we think about going into '26, do you know when that decision is made on how much of that capacity will end up being ethylene?

Yes, it's really going to be on a month-to-month basis. Now there's a few positive developments. One is the Beaumont facility, the Neches River facility is now online for Enterprise. One of our vessels took the inaugural cargo very recently here. So now that there's a new ethane export facility for Enterprise to operate out of, that frees up some capacity at Morgan's Point. Secondly, the new ethane storage tank, which you've been out to Morgan's Point, we have the ethylene storage tank in place for almost 5 years now. They are just now completing or soon to complete their ethane storage tank.

So that will also give them more flexibility and some optionality around the cargo switching between ethane and ethylene. And it is an Enterprise decision operationally, but really, it's a market decision, right? If the customers and the offtakers want ethylene, they can switch it to ethylene pretty much immediately, right? The damper setting is it only takes a couple of hours. So it's really going to be every week decision in terms of flexing between ethane and ethylene. But for those 2 positive developments, the new terminal in Neches River as well as the ethane storage tank will give us more optionality for more ethylene cargoes above and beyond the 1.55 million tons in coming years.

Thank you, Omar. Next up looks like Climent Molins. Your hand is raised.

This is Climent Molins, from Value Investor's Edge. I wanted to start by asking about the ammonia carriers you recently ordered. Does the Enova grant come with strings attached? Or are those minimal? And should we think about the grants as a kind of a one-off? Or could this be repeated in the future?

Thanks for that question. And there are always strings attached when it comes to grants. They're really linked to the -- you could say, the technology features of the ship, the add-ons that you would put on -- had it been compared to, you could say, a regular fossil fuel ammonia carrier. So this is for -- this is paying partly for the ammonia propulsion, but also many of the other bells and whistles that we are adding in terms of energy efficiency for the vessel. So it is to fund, you could say, the upgrade compared to a very standard vessel.

But that being said, it doesn't mean that we need to burn, you could say, a high percentage of ammonia during the first couple of years. It doesn't mean that we can trade or we have to trade, let's say, near Norway or similarly. It is for global trading, and we have a lot of flexibility in operating these ships. So it's a very attractive grant because it doesn't really limit us in anything that we wanted to do on it. So it will be operated on Norwegian flag, which is a very efficient and professional flag.

So in all aspects, this is a pure add-on and a pure benefit for us without any downside really. If the question is around whether it can be repeated, then the answer is yes because the Norwegian authorities are really interested in maximizing, you could say, the volume of new green propulsion, green shipping in the world. It's not quite likely that we can just do a complete carbon copy of this one. But if we were to be innovative and take a further step onwards, there would be opportunities for this. They recently granted another grant to Amon for bulk carriers, and there's more coming here also.

That's very helpful. And Randy, you mentioned you continue to engage potential buyers to divest the remaining 2,000-built handysizes. Once those vessels are sold, should we expect you to redeploy proceeds on more modern tonnage? Or have you already done that with the acquisition of the 3 mill ethylene carriers and the new build additions?

Oeyvind, I'll let you take this.

Yes. I mean once they are sold, the funds will go into the capital allocation program, the 3 pillars, and they will be distributed accordingly to which pillar we deem necessary at that time. So it's flexible. We'll put it to work where we deem it's...

And maybe I can just add here that if you were to ask us if there was -- the likelihood was that we were going to buy more ships or sell more ships in the near term, it's probably going to be sell more ships because I think we have done quite well in both the new-building program and also buying the 3 German built vessels in the spring. So I think we've done most of the work there in renewing the fleet from adding new ones. And I think now we have a little bit of work to do in terms of selling a couple of the older ones.

[Operator Instructions] We've had one come in here, just looking at the tariffs. So it seems like the tariff announcements in trade news was negative during the second quarter. But recently, there have been some positive developments around trade deals. So Mads, how do you think these announcements will impact your business, specifically U.S. commodity exports going forward?

Yes. I think they will bring much wanted clarity to the customer base of ours and for us to see that we will have a more stable trading environment. And that's always very positive. I mean, what happens is once you get this volatility, you don't quite know where the -- what the direction is, you tend to step back and say, "Oh, let's see how this all falls into place." I think now we have a number of trade deals between the U.S. and its major trading partners. There's still some details to be fully agreed on, but I think we have the overall framework in place, and that gives the stability and the ability for us to forecast for us and our customers, which is really what we've all been looking forward to.

So again, we don't know what the future will bring. There will be unknown unknowns. But from how we can see it, we think it's a quite positive development that we get some clarity and some -- yes, some trade deals falling into place. And most of them, they don't really put any tariffs on products that are exported out of the U.S. and into the various other countries, it's mainly been leading to tariffs from imports into the U.S., and we don't do much of that. So in essence, there haven't been put tariffs on much of the transportation that we do.

Thank you, Molins. Gary, this one is for you. For the 6 newbuilding financings, should we expect similar terms as your most recent debt financings?

Yes. That's a very good question. We are hoping to at least match what we've done in the past. I think at the moment, we've got a number of different structures, and we've got quite a lot of conversations going on with all kinds of different potential capital providers. So I think given the nature of the ammonia vessels in particular, but also the [ Panda ] vessels, I think we've got 6 really attractive projects there, and we'll probably group those vessels, whether it's 6 or whether it's 4 and 2 or 2 and 4. But certainly, we will be looking to do those in the next 6 months. We've got plenty of opportunity. And I think the capital providers that we're talking to are very keen. And I think we'll get some really good terms. And certainly, we're shooting for as low as we can get in the best terms that we can get, and we'll see where that lands.

Perfect. Great. We see another hand raised here, Dalton. We still can't hear you.

Can you guys hear me okay now?

We got you now.

Dalton Willett with Sharmos Capital Partners. One question I had on the new builds that you guys are working on financing out. How do you think about the risk of like IMOs, new rules for how ships have to be fueled or carbon-related issues. How do you think about going and making those investments knowing that the goalpost could be changed in a 6-, 12-, 18-month period? How are you guys managing that risk?

Yes. I think we should look at the 2 different orders that we've made. You could say the 4 ethane/ethylene vessels that we ordered, they're not really -- they don't really have much of a link to whatever the IMO is putting into place. They will be most likely fueled by ethane, which is incredibly cost competitive compared to regular fuel oil. So they will be having an advantage to pretty much any other vessel in the global fleet regardless.

When it comes to the 2 ammonia carriers, we have the 5-year contract coverage, which means that we will have a secured return on the ships for the first 5 years. And what then comes after, we will see. The good news is that those vessels are dual fuel. So even if we were to see a situation where ammonia was less competitive than we had forecasted, they'll still be able to operate very efficiently on regular fuel oil. So in that sense, they are very flexible vessels, and they are very attractive regardless of what the direction of the IMO is going to be.

Yes. No, that's helpful. And then on the kind of the restructuring of the balance sheet, getting yourself in a better capital position, can you kind of talk about the timing of that and why it made sense to go now versus, say, towards the end of the year? How are you guys thinking about getting your balance sheet where it is today?

Maybe I can just kick us off and you can fill in, Gary also. When it comes to the share buybacks, I think we have been pretty consistent over the past 3 years in having share buyback programs at the right point in time during the year, adding or buying back about 5% of outstanding shares. And then on top of that, we have the regular quarterly dividends and share buybacks. That model has kind of worked well for us. So we think it's a good way to do it. It's, of course, up to the Board. If they were to decide to do something in addition or not, we'll see about that. We have good liquidity in the balance sheet right now. So it gives us a lot of flexibility to allocate between the different opportunities of investing, paying or buying back shares or other uses of our cash.

But Gary, you can add.

Yes. I mean I think we've taken advantage a lot of the fact that there's a lot of liquidity out there at the moment. Navigator is in a great place. We've got a strong business, a flexible business. Our banking partners are very keen to work with us. That's allowed us to refinance and push out the maturities, lower the cost of our debt, and we're going to continue to do that. What that's also doing is it's providing plenty of liquidity for these projects that we're doing. We paid $64 million towards the cost of our new build Panda vessels already. We don't have finance for those vessels yet, but we've paid all of that out of cash so far. So it buys us some really good flexibility. We've got to be careful that we don't carry too much liquidity and too much cash, and we're constantly monitoring that.

But I think at the moment, from our perspective, we've got a number of older debt facilities that we would perhaps like to refinance and refresh. And so I think there's some work to do on that and alongside the newbuild vessels as well. So I think we've taken advantage of a strong market using our strong business model to be able to do what we've done. We've ended up being able to do pretty much everything that we want to do, including buying back the shares, as Mads was talking about. So I think we're trying our best to be efficient with what we do, but also lower the cost of what we do. And I think we've been able to do that so far, and we expect to be able to continue to do that.

Great. Fantastic. I appreciate it. I think that's going to be the last thing I have. Pass it back to you guys. I appreciate it.

Thank you, Dalton. So that completes our Q&A for today. Thank you again for joining us for our second quarter earnings results. We'll be reporting our third quarter earnings results in early November and hope to see many of you here in Houston on November 11 and 12. Thanks again, and have a great day.