From Tariffs to Export Bans: How Navigator Gas Kept Cash Flow Afloat

In a revealing conversation from Capital Link’s Deep Dive Webinar Series, Navigator Gas (NYSE: NVGS) CEO Mads Peter Zacho detailed how the company weathered significant market disruptions while positioning itself for future growth in specialized gas transport markets.

Navigator Gas, which controls approximately one-third of the Handysize gas tanker market, demonstrated the value of its diversified business model during a challenging second quarter marked by geopolitical disruptions. “Had we been exposed to only one trade, we would have had a much harder hit to our cash flow generation,” Zacho explained during the webinar with DNB Carnegie analyst Jostein Aschjem.

The company faced three major geopolitical headwinds in Q2 2025: proposed U.S. port fees targeting China-connected vessels, potential 135% tariffs that threatened to halt U.S.-China trade, and most directly impactful, Bureau of Industry and Security restrictions on ethane export licenses to China that stopped shipments for about a month.

These disruptions caused overall fleet utilization to drop to 84% from 92% in Q1, with ethylene carriers hit hardest as utilization fell to 75%. However, the company’s semi-refrigerated fleet carrying LPG and ammonia maintained utilization above 90% due to strong export flows from the Persian Gulf to India and South Asia.

By July, conditions had significantly improved with fleet utilization rebounding to over 90% and normalized trade patterns. The company has secured 41% of next-12-month days at approximately $31,040 per day.

Looking forward, Navigator Gas is expanding its fleet with specialized vessels, including two dual-fueled carriers capable of running on clean ammonia through a joint venture with Amon Maritime. The company is also ordering four mid-sized ethylene-capable vessels and purchasing three second-hand Handysize ethylene carriers.

Zacho indicated the company is shifting toward more specialized markets like ethylene and ammonia where they can be “a large fish in a small pond rather than competing head-on in the saturated standard MGC market”.

For shareholders, Navigator Gas maintains a 25% quarterly earnings dividend policy with a $0.05 per share minimum, while also conducting additional share repurchases. The company maintains a strong balance sheet with $314 million in cash and liquidity as of August 11, 2025.

Catch the full episode: Navigator Gas Recent Developments, Capital Allocation & The Petrochemical Gas Outlook:

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