Navigator (NYSE:NVGS) reported record third-quarter net income and earnings per share, helped by gains from vessel sales, while executives said shipping utilization and rates strengthened toward the end of the quarter.
The gas carrier operator earned $78.3 million, or $1.28 per share, attributable to stockholders in the third quarter of 2026. Approximately $48 million of profit from vessel sales was the principal driver of the reported result, Chief Financial Officer Gary Chapman said on the company’s Nov. 4 earnings call.
Excluding adjustments, net income attributable to stockholders was $25.4 million, or $0.42 per share. Adjusted EBITDA was $67.8 million, compared with record reported EBITDA of $120.8 million. Operating revenue rose to $155 million from $153 million a year earlier.
Chief Executive Officer Mads Peter Zacho said the underlying business remained solid through what management had expected to be a seasonally softer quarter. Executives expect utilization, time charter equivalent rates and earnings from the company’s ethylene export terminal to improve sequentially in the fourth quarter.
Utilization recovers as voyages lengthen
Navigator’s average time charter equivalent, or TCE, was $30,314 per day in the third quarter, down from nearly $34,000 in the second quarter and $30,966 a year earlier. Fleet utilization averaged 87.9%, compared with 90.8% in the prior quarter and 89.3% a year earlier.
Chapman said utilization was around 85% in July and August before recovering to approximately 94% in September. It remained firm through October, executives said.
Chief Commercial Officer Øyvind Lindeman said disruption around the Strait of Hormuz and constraints at the Panama Canal were lengthening voyages and tying up vessels. Some ships carrying cargoes from the United States to Asia are traveling around the Cape of Good Hope, he said.
Navigator has not had ships trading in the Strait of Hormuz for eight months, Zacho said. He described the commercial effect of the disruption on the company as positive, citing support for U.S. natural gas liquids and petrochemical exports and longer voyages.
Lindeman said ethylene spot rates had nearly doubled from the quieter months of June and July, while liquefied petroleum gas rates were also rising. He said the recovery was broader than in the second quarter, with both LPG and petrochemical markets strengthening. Zacho declined to predict whether fourth-quarter operating performance would exceed the second quarter’s record.
Fleet sales reduce debt as new vessels approach delivery
Navigator completed the sale of eight vessels operating in the Unigas pool and its shares in the pool company for approximately $183 million. The transactions produced a total book gain of about $70 million, including the $48 million recognized in the third quarter and approximately $22 million expected in the fourth, Chief Investor Relations Officer Randy Giveans said.
Following the sales, the fleet consists of 46 vessels with an average age of 12.8 years, Giveans said. The company’s six-vessel newbuilding program comprises four mid-sized dual-fuel ethane and ethylene carriers and two ammonia-fueled ammonia carriers. The total shipyard cost is $586 million, of which $153 million has been paid, and Navigator has secured $461 million in debt financing.
The first new vessel is due for delivery in December and will begin a one-year charter, Lindeman said. The two ammonia vessels have five-year charters, while the company is working on employment for the three remaining ethane and ethylene vessels.
Net debt fell by approximately $153 million during the quarter to just under $500 million, and net debt to trailing 12-month adjusted EBITDA declined to 1.7 times from more than two times at the end of June, Chapman said. Available liquidity, excluding restricted cash, was approximately $434 million at Oct. 31.
Zacho said Navigator continues to examine consolidation opportunities but is reluctant to overpay for secondhand vessels when sellers’ price expectations are high. He did not rule out additional newbuilding orders and said the company would also continue selling some older, non-core vessels.
Dividend rises as terminal demand improves
The board declared a quarterly dividend of $0.08 per share, up from $0.07, payable Dec. 3 to shareholders of record on Nov. 17. Navigator also anticipates repurchasing $22.6 million of shares by year-end, subject to its capital return policy and applicable approvals. Together with the dividend, the planned return represents $27.4 million, or 35% of third-quarter net income attributable to stockholders.
Throughput at the Morgan’s Point ethylene export terminal fell to 264,000 tons in the third quarter as European demand softened and customers worked through inventories, Giveans said. He said throughput was rising in the fourth quarter, supported by inventory restocking and stronger demand from Asia.
Giveans said the majority of the terminal’s capacity is sold going forward under a mix of shorter-term and multiyear contracts. Navigator expects the terminal to remain profitable next year even if only contracted volumes are sold, he said, while declining to disclose specific contract volumes or profitability figures.
The company’s planned U.K. redomiciliation also remains on track, Zacho said, with shareholder approval to be sought Nov. 16 and completion targeted by year-end.
About Navigator (NYSE:NVGS)
Navigator Holdings Ltd., operating under the name Navigator Gas, is a maritime transportation company that owns and operates a fleet of specialized gas carriers. The company transports liquefied petroleum gas (LPG), petrochemical gases such as ethylene and ethane, ammonia and other liquefied gases for energy, industrial and chemical customers.
Its fleet includes semi-refrigerated and fully pressurized vessels, as well as ethylene-capable carriers designed to handle cargoes requiring specialized containment and temperature controls.
