A – Randy Giveans: Thank you, Mads. Operator, we’ll now open the lines for some Q&A. So to raise your hand, press star 9, and then you have to unmute yourself by pressing star 6. Or if using zoom, just use the raise hand function. So first question on your line [indiscernible].
Unidentified Analyst : Good morning, team. This is Emily on for Omar. Thank you for taking our questions. We first wanted to ask for more detail on how the Panama Canal congestion is impacting demand on your business. Are you seeing higher demand as these issues have tightened VLGC availability trickling into the midsize and smaller segments? Wondering if you could please provide some more color there?
Oeyvind Lindeman: Thank you, Emily. It’s a very topical question. And you’re right. I mean the Panama Canal will — by reducing capacity by 50% will obviously have an impact on the shipping trade lanes. Longer voyages will be a result, which is generally good for shipping and also good for Navigator. We have seen immediate impact on ethane. So ethane demand for handysize ships have — we’ve seen some examples of that where the rates are high because there’s little availability of ethylene or ethane-capable vessels in the spot market. So that is an immediate positive impact. On the ethylene trade, the voyages clearly will be longer. There is room in the arbitrage today to add the freight of $75, as we mentioned in the prepared remarks, to facilitate Houston connecting with Asia Pacific customers through the Suez or Cape.
The immediate changes we’ve had, so which you will see on Thursday, if you come to Houston Morgan’s Point for our Investor Day. We’ll go on board and Navigator Orion. She was scheduled to go via Panama. However, she will not deviate via Cape and go to Indonesia to discharge. So longer voyages already. So this will tighten the market generally, which in shipping speak is a positive.
Unidentified Analyst : Thank you for that explanation. I wanted to follow up with a question on fleet utilization. You started this year off very strong with 96% utilization, and it fell to 89% in 2Q and bounced up to 93% this quarter, so nicely done. Your presentation revealed that 4Q utilization is expected to be around 90%. But I’m wondering how should we think about modeling it in 2024? Any detail that you could provide there would be super helpful. Thank you.
Mads Peter Zacho: Sorry, I can just say a few comments here before you had to take it over for in — when we look at our utilization, typically, when it’s 90% or slightly above that, that’s a good number. And it’s a robust market. As we’ve indicated in the previous discussion here, we think that the supply-demand situation overall for Navigator looks good with the order book of new ships that are coming in is very limited and also with natural gas liquids production, in particular, in North America continuing to grow. So that means that with the growing demand and the supply situation that isn’t really changing much. And that overall is good for utilization. So I think, you should expect that there’ll be numbers going up and down, when we are at 95% above, that’s pretty exceptional.
And it’s not something that you should count on as just being the normal. So looking at 90% or just over that, it’s really good number and it’s something that allows us to push the rate upwards. But Oeyvind please anything to add any color you’d like.
Oeyvind Lindeman: I think you hit the nail on the head. Thank you.
Unidentified Analyst : That makes sense. Thank you. I’ll turn it over.
Randy Giveans: Thanks so much, Emily. You sounded much better than Omar. Next question. Your line is open.
Unidentified Analyst : This is Ben Nolan. Hopefully, you can hear me. Actually, I was going to follow up on Emily’s question there. You were at — was over 93% in the third quarter on the utilization number, which is, as you said, normally a little bit softer period as it relates to utilization. I’m curious why you’re expecting a little bit of a dip or at least not — well, I guess, a little bit of a dip in the fourth quarter in that utilization numbers that just sort of to be determined and may be conservatism?
Mads Peter Zacho: I think here that I don’t think that we’re guiding that there will be a dip as such. I think we’re guiding that in the 90% neighborhood that probably includes 93% or so, is very difficult to forecast with a high level of precision whether it’s going to be 90% or 92% or 93%. I think overall, you should be left with the impression here that we are relatively confident around the supply-demand outlook, and we think that the utilization is going to remain robust as you’ve seen in recent quarters. So that’s probably more the conclusion rather than you can say, looking at 1 or 2 percentage points up and down is simply the operating pattern here that can influence it. And sometimes having a little bit of a downtime is not a bad thing. It may be an opportunity for us to maybe sit back and be — holding back, let’s say, shift for a little bit or too.
Unidentified Analyst : Okay. Understood. I was going to also ask on the Azane announcement. It’s small here, but understandably, hopefully leading to bigger things. Was curious though, as and when it does make its final investment decision, are there future cash calls or anything else that would be necessary on your part as and when it moves forward?
Randy Giveans: No. The $3 million investment is for now, the total investment, right, additional units will not be held at the company, they will pay us for the order, pay us upon delivery, and then we have the option of operating those assets. But in terms of additional investment dollars, we do not foresee that going forward.
Unidentified Analyst : Okay. And I was going to also ask on the JV. The volumes were good, the contribution was a little bit lower than it was in the second quarter. Was there anything specific around that? Or how should we think about the JV contribution going forward?
