Thank you for standing by, ladies and gentleman, and welcome to the Navigator Holdings' conference call for the Fourth Quarter 2023 Financial Results. On today's call, we have Gary Chapman, Chief Financial Officer; Oeyvind Lindeman, Chief Commercial Officer; and myself, Mads Peter Zacho, CEO. I must advise you that this conference 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's assumptions, forecasts and expectations as of today's date and are 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, please go ahead to Page #3, and we'll get going on the presentation. Good morning, everybody, and thanks a lot for taking part in this Navigator Gas earnings call. I'll begin with an overview of the highlights for the fourth quarter of 2023, and then I'll talk a little bit about the outlook for the year that we just started. As always, Gary and Oeyvind will follow up in a couple of minutes with more color on our business. We generated a solid top-line with growth in operating revenues compared to both Q3 '23 and same period 2022. This was mainly driven by higher time charter rates. Adjusted EBITDA for Q4 was equal to the record of $72 million that we set in Q3, and it was a significant improvement over last year's $55 million. The progress was reflected in adjusted net income, which more than doubled compared to same period last year. Our cash…

Thank you very much, Mads, and good morning or good afternoon, everybody. I'm pleased to report our latest fourth quarter 2023 results, in which we've continued our momentum with again some very positive results. On Slide 6, we see our total operating revenue up over $18 million or 14.9% to $141.6 million in the fourth quarter of 2023 compared to the fourth quarter of 2022, with much of this increase due to stronger time charter equivalent rates, as Mads has pointed out, that were on average 28,428 per day in the quarter compared to 23,622 in the fourth quarter of 2022. There were further positive effects as a result of having our five Navigator Greater Bay vessels fully operational in the fourth quarter of 2023. And this was also reflected in our ownership days, available days and operating days figures as shown on the right-hand side. Against this, utilization was a little down in the fourth quarter of 2023 compared to the fourth quarter of 2022, but at 91.3%, it is still very healthy, as Mads has already said, and Oeyvind will confirm later. Our ethylene terminal throughput volumes in 2023 were 987,000 tonnes, closely in line with nameplate capacity of 1 million tonnes, and we currently expect to remain near capacity in 2024. Our daily vessel operating expense in the fourth quarter of 2023 was essentially in line with the fourth quarter of 2022 at 9,067 per day. Noting that the fourth and the last quarter of the year is typically a little higher than the other quarters, and 2023 was no different. We are providing some full year 2024 expense guidance on Slide 9 for those that are interested in this. Depreciation was up slightly over the same period in 2022, mainly due to the addition of the…

Thank you, Gary, and good morning, all. Let's move to Slide 13 to take a closer look at the recent developments of American gas fundamentals. The U.S. reported 210 million barrels of natural gas liquids production at year-end, which is up 10 million barrels since of last earnings call. This is a meaningful increase, but why is it important? Well, remember, one barrel of natural gas liquids consists on average 42% of ethane, 45% of LPG, and the remaining natural gas liquids. U.S. domestic consumption of ethane and LPG is relatively flat. And therefore, any additional production is more or less solely aimed for export markets. As a consequence, American midstream companies are investing in additional gas processing plants, fractionators and terminal expansions to allow for the increase in production. This is good for gas transportation. In general, it is great for Navigator and our growing ethane and ethylene business. The graph in the middle shows global handysize demand measured in volume transported. The volume includes LPG, ammonia and petrochemical cargoes. As you can see, the total tonnes carried dropped during the last months of 2023. This is mostly due to disruptions at the Suez and Panama Canals. Many of the handysize petrochemical voyages were rerouted. Longer voyages reduce frequency of loading operations, which in turn reduce volume. However, as we can see, for the first two months of 2024, the total volumes is more or less tracking historical seasonality. If you look at handysize ethane and ethylene exports specifically, we see a positive development. The right-hand graph shows a positive counter seasonal development. We see more exports from the U.S. of these cargoes compared to previous years. It tells us that despite the longer voyages, U.S. ethane and ethylene remains highly attractive to international buyers. The updated ethylene arbitrage…

Thank you, Oeyvind. So, yes, following up on several announcements we made in recent months, we want to provide some additional details on these developments regarding a few of those announcements. So, turning to Slide 19. We are pleased to announce our return of capital for the fourth quarter, in line with our recently announced return of capital policy and the table below. We're returning 25% of net income or $4.5 million to shareholders this quarter. The Board declared a cash dividend of $0.05 per share, that will be payable on April 25 to all shareholders of record as of April 4, and that will be a quarterly dividend payment totaling $3.7 million. Additionally, with our shares trading well below our NAV of at least $24 a share, we'll use the variable portion of this policy to repurchase shares. As a reminder, between December '22 and May of 2023, we repurchased 3.8 million shares at an average price of $13.12 per share for a total of $50 million. And subsequently, the Board authorized a new $25 million repurchase program, of which we've used $4.1 million thus far. Now looking ahead, we expect to purchase at least $800,000 of NVGS common shares between now and the quarter-end, such that the dividend and the share purchases together equals 25% of net income. Return of capital to shareholders will remain a core focus for us. On the next slide, following up on our previous announcement regarding the expansion of our Ethylene Export Terminal, the project is, frankly, progressing nicely. Engineering is now fully complete. All the long-lead items have been ordered, and many of the key components have started to become delivered. If you want to come down in Houston and see for yourself, just let me know. Construction is expected to occur…

Good. Thanks a lot, Randy. And on this page, we'll just take a quick look back at 2023. And as you can see here, we finished the year with strong earnings improvements over previous years and with progress on pretty much all parameters. Entering into an exciting 2024, Navigator is heading in the right direction and is well positioned for the future. Our leading market position, strong customer relationships, an experienced and engaged team and our efficient fleet of handysize gas carriers leaves us with a really strong foundation for growth. The balance sheet is in its best shape ever, and it gives us the flexibility now to grow our business and return capital to shareholders at the same time. The best is yet to come. And with that, I'll just hand it back to you, Randy.

Thanks so much, Mads. Operator, we'll now open the lines for some Q&A. [Operator Instructions] First question, your line should be open.

Thanks, Randy. Hi, guys. This is Omar Nokta from Jefferies. Am I coming through okay?

Howdy, Omar? Loud and clear.

All right. Thank you, Randy. Yes. Well, thanks for the update, and good morning, good afternoon. Just a couple of questions for me. I wanted to get a sense of how the market thus far for your ships has progressed, say, the first couple of months. You mentioned, obviously, I think, Mads, in your -- one of the early slides that showed utilization being kind of maybe closer to 90% so far in 1Q, which is still obviously strong, slightly down, and you mentioned rates being firm. I just wanted to get a sense the -- in terms of, say, the volatility that we saw in the larger VLGCs, we saw a good amount of volatility with rates starting the year on very strongly, then they fell off a cliff and then they've started to rebound again. And I just wanted to get a sense from you, has that same type of dynamic translated into the handy segment?

Oeyvind, why don't you give a few words to that one?

Yes, of course, Omar, the very large gas carriers dropped off a cliff earlier in the year. That did not happen with the handysize segment. Contrary, it increased, both in the broker assessments that we show every earnings call, but it filtered through to the rates that we were able to renew at or some of the ethylene -- ethane spot fixtures. So, we did not experience the same as the VLGCs where it was positive for us and remains positive.

Okay. Thank you. And then I guess maybe just perhaps maybe for you, Randy, or just for everyone, just in terms of the terminal expansion, thinking about the contracts that could be entered into, how do you envision those starting to develop as we move through '24? Do you think that there is -- you obviously have the existing nameplate capacity with a big chunk of that 1 million contract, 1 million tonnes. But for the expansion part, there's a 550,000 tonnes that are coming on. Do we think of -- is that where we can see contracts coming? And then also, what about contracts for the potential upwards of, say, the extra 1.5 million? Does that become contracted also this year? Or is it more of a spot?

Yeah, Omar, I'll start on that. So in terms of the scale of contracting, clearly, we have the 94% on the existing 1 million contracted, but those unwind over the coming years. So, we expect some extensions there. And then, for additional new contracting, we expect that to happen, frankly, this year. So, when you look at it as a portfolio, we'll have about 1.55 million tonnes that we can sell forward starting January 1, 2025, let's call it. The plan, the goal is to sell probably 90% of that forward. I think that's the enterprise and Navigator model for this asset. So, that would be 1.4 million tonnes roughly, that we'd want to have sold in advance, right? And we think the first few of these contracts, both on the upsized extension, new customers, should be happening here in the coming weeks, months at the latest. So that's kind of your first part. In terms of contracting additional tonnage, for now, we are guaranteed the 550,000 tonnes from the new train, the Flex Train that can do up to 2.2 million tonnes in addition to the million that we already have. Now, in terms of contracting that, we cannot contract that forward because we are not guaranteed that capacity. Now maybe in future years, we will start buying additional guaranteed capacity per se. But for contracting purposes, the most we could sell forward is 1.55 million tonnes and then incremental cargoes would be then sold on a spot basis.

Okay. Thanks, Randy. That's a -- okay. That is very, very clear. Final one for me, and I'll pass over. It is a separate topic, but something you guys have highlighted for several quarters now, and that's the ammonia trade as an area of growth, and you guys are very active in that already. And you mentioned recently seeing a good amount of cargoes there. We have seen owners in the shipping segment kind of -- or shipping side to kind of go after the VLACs as a way to capitalize on this trade going forward over the long term? I guess, one, is that something that Navigator has an interest in to explore the larger ammonia carriers? And then -- or do you think that perhaps ammonia is more easily or realistically shipped on the midsize and smaller ships that you currently operate?

Maybe I can just kick us off on this and then I'll invite my colleagues to add to it. We think that the majority of ammonia in the future is going to be transported on midsize. They're very flexible, and they're very well suitable for ammonia trade. It's not very expensive for VLGC owners today if they want to order a new-built VLGC to add, you could say, a small cost on to that and then make it capable of transporting ammonia. So, you could say it's not -- I don't think necessarily you should assume that these VLGC owners necessarily expect that they will be transporting ammonia on those new build orders that they put in. When it comes to our view on it, we are talking to a number of customers around this, and we do expect that over time, we'll be building vessels that being handysize or midsize vessels that will be carrying ammonia. For now, we would probably be looking to do it against an offtake contract so that we have, you could say, at least the first couple of years covered particularly if it comes to building vessels that are propelled also by ammonia. So, we do expect to take part in this market. We also expect to take part in the wider supply chain. Azane Fuel Solutions is a good example of that. And we think also upstream replicating a setup like we have with enterprise today on Morgan's Point for ethylene, if we can do something similar on production of ammonia or the marine logistics around it, would be quite interested in doing so.

Okay. Thank you, Mads, for that. Very helpful color. And thanks guys for the time. I'll turn it over.

Appreciate it.

Thanks, Omar. Next caller, your line should be open. [Operator Instructions] Okay. While we wait for that one, we had a question come in around Azane. So, Oeyvind, I'll turn this over to you for the Azane joint venture. It seems like there is a lack of ammonia infrastructure to use as a dual for the shipping community. How will Azane meet this need?

So, it's very simple. In order to encourage the ship-owning industry to construct, be confident in constructing vessels that use ammonia's fuel, the fuel needs to be available. Therefore Azane Fuel Solutions, which is one of the first infrastructure companies covering that particular challenge, is there to unlock that problem. So, since Azane [indiscernible] investment and so forth, et cetera, a few people have come confidently ordering vessels with ammonia fuel knowing that ammonia fuel will be available in their short sea trades. Also, oil majors, particularly one in Norway, have since then launched a tender for offshore vessels exactly using ammonia fuel. So, you can see the start is the forefront and pushing the button to start the change and it will happen slowly in the first instance and then grow exponentially. That is our belief and Azane is part of that transition.

Thank you, Oeyvind. Operator, any other questions with their hands raised? Now, I have one last question here on drydocking. Are we anticipating any delays in materials, equipment, which might delay the drydocking or make it longer? How confident are you in the schedule that you provide?

I can kick us off here and say that we are well underway in terms of planning and executing on the drydockings that were planned for 2024 and we don't expect per se that there will be any delays in these, and we also expect that they will stick to the schedule in terms of duration and also in terms of cost that we laid out. So yes, there is inflationary pressure in the world around us. It's abating somewhat now, and we think we planned well for this. So, we don't expect that there will be cost overruns or delays.

Sounds good. I know we have one other analyst looking to ask the question. Is your line available? All right. Well, you know where to find us, so we'll take that offline. But thank you again for joining us for our 4Q '23 earnings call. Feel free to e-mail investor relations at navigatorgas.com, if you have any follow-ups, and we look forward to speaking with you in May for our first quarter 2024 results. Have a great day.

Thank you.

Thank you.