Navigator Holdings Ltd.

Going Concern. The Company has a responsibility to evaluate whether conditions and/or events raise substantial doubt over its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. The Company’s $210 million September 2020 Secured Revolving Credit Facility matures on September 17, 2025, which is within twelve months of the planned issuance of the consolidated financial statements. On that maturity date a repayment of $136 million in respect of the loan facility falls due. The Company anticipates that in the absence of further refinancings or other sources of liquidity, the Company would be unable to meet its future financial obligations. This represents substantial doubt about the Company’s ability to continue as a going concern. Management has commenced a process to refinance the September 2020 Secured Revolving Credit Facility and, through discussions with potential lenders, expects to complete this refinance in the second quarter of 2025. There can be no assurance that the Company will be able to refinance the $210 million September 2020 Secured Revolving Credit Facility.

Cash Dividend and Share Repurchases. The Company’s current Return of Capital policy, which is subject to operating needs, market conditions, legal requirements, stock price and other circumstances, consists of paying out quarterly cash dividends of $0.05 per share of common stock and returning additional capital in the form of additional cash dividends and/or share repurchases, such that the two elements combined equal at least 25% of net income for the applicable quarter.

As part of the Return of Capital policy, we expect to repurchase the Company’s common stock (the “Share Repurchases”) and any such Share Repurchases will be made via open market transactions, privately negotiated transactions or any other method permitted under U.S. securities laws and the rules of the U.S. Securities and Exchange Commission.

As of March 25, 2025, the Company has purchased and canceled 8,120,034 shares of common stock for a total amount of approximately $113.2 million (an average price of $13.94 per share) since inception of the share repurchase program.

Pursuant to the Return of Capital policy, we declared and paid cash dividends of $0.05 per share of the Company’s common stock, totaling an aggregate of $14.3 million during the year ended December 31, 2024. ($7.3 million during the year ended December 31, 2023).

On March 10, 2025, the Company's Board of Directors declared a cash dividend of $0.05 per share of the Company’s common stock for the three months ended December 31, 2024, payable on April 3, 2025 to all shareholders of record as of the close of business New York time on March 24, 2025.

The aggregate amount of the dividend is expected to be approximately $3.5 million, which the Company anticipates will be funded from cash on hand. Also as part of the Company's Return of Capital policy for the three months ended December 31, 2024, the Company has repurchased approximately $1.9 million of common stock between March 16, 2025, and March 31, 2025, such that the Dividend and Share Repurchases together equal 25% of net income for the three months ended December 31, 2024.

Declarations of any dividends in the future, and the amount of any such dividends, are subject to the discretion of the Company’s Board. The Return of Capital policy does not oblige the Company to pay any dividends or repurchase any of its shares in the future and it may be suspended, discontinued or modified by the Company at any time, for any reason. Further, the timing of any share repurchases under the Return of Capital policy will be determined by the Company’s management and will depend on operating needs, market conditions, legal requirements, stock price, and other circumstances. See "Item 3—Key Information—Risk Factors— We have recently declared quarterly dividends, but we can give no assurance that dividends will be paid in the future in any amount or at all.

Ethylene Export Terminal. The Ethylene Export Terminal throughput for the year ended December 31, 2024 was 732,378 metric tons of ethylene, compared to 986,666 tons for the year ended December 31, 2023.

Throughput in the Ethylene Export Terminal achieved 732,378 metric tons during 2024, compared to 986,666 metric tons for the year ended December 31, 2023. U.S. domestic ethylene prices continued on an upward trajectory during the year, largely due to ongoing maintenance at upstream supply facilities. Such increased prices narrowed the arbitrage between the U.S. and Asia, resulting in a dampening of shipping trading conditions for ethylene, however this was offset by strong ethane demand from China that boosted shipping conditions.

Together with Enterprise Products Partners L.P., our joint venture partner, we agreed to invest in an expansion of the Ethylene Export Terminal (the “Terminal Expansion Project”). The Terminal Expansion Project increases the export capacity of the Ethylene Export Terminal from approximately one million tons of ethylene per annum to at least 1.55 million tons per annum and was completed and put into service on December 19, 2024. Two new multi-year offtake contracts related to the expanded volume have been signed, and we continue to expect that additional capacity will be contracted throughout 2025. Until further offtake term contracts are signed, volumes will be sold on a spot basis.

The total capital contributions required from us for our share of the construction cost for the Terminal Expansion Project are expected to be approximately $128 million. The Company financed these capital contributions using existing cash resources. Of the expected total of $128 million, $124 million had been contributed as of December 31, 2024, with approximately $89 million of this being contributed during 2024. The final balance of approximately $4 million was contributed during the first quarter of 2025. It is anticipated that additional debt will be raised in 2025 to recoup some of the cash reserves expended on the Terminal Expansion Project and the Company is currently assessing options in this respect.

Shipping Trends. The Company’s average vessel utilization for the year ended December 31, 2024 was 91.5% compared to 92.5% for the year ended December 31, 2023. Our average vessel utilization for the fourth quarter of 2024 was on 92.2% compared to 91.3% for the fourth quarter of 2023.

According to broker reports, the handysized semi-refrigerated 12-month market assessment remained stable in 2024. It started the year at $975,000 per calendar month (“pcm”) on January 1, 2024 and decreased to approximately $965,000 pcm at December 31, 2024. Throughout 2024, handysized fully refrigerated vessel rates decreased by 11% from $915,000 pcm at the start of 2024 to $810,000 pcm at the end of 2024. For handysize ethylene vessels, rates decreased by 14%, from $1,400,000 pcm at the start of 2024 to $1,215,000 pcm at the end of 2024.

On December 31, 2024 the newbuild orderbook for handysize vessels stood at 10 vessels, which constitutes approximately 8% of the current global handysize fleet of 124 units. Although this is an increase compared to previous years, it is still a small orderbook, especially in comparison with the larger (midsize) segment, on which the orderbook is 60 units out of a current fleet of 139 units – corresponding to about 43% in terms of vessels. Out of the handysize orderbook, 4 units are combined CO2/LPG carriers, which should eventually and move into liquefied CO2 transportation.

Newbuild Vessels. On August 23, 2024, the Company entered into contracts to build two new 48,500 cubic meter capacity liquefied ethylene gas carriers with Jiangnan Shipyard (Group) Co., Ltd. and China Shipbuilding Trading Co., Ltd., in China (the “Original Newbuild Vessels”). As part of the agreements made on August 23, 2024, the Company had an option for two additional newbuild vessels of the same specification and price. On November 21, 2024 the Company exercised the option and entered into contracts to build an additional two new 48,500 cubic meter capacity liquefied ethylene gas carriers ("the Additional Newbuild Vessels"). The Original Newbuild Vessels and Additional Newbuild Vessels (together the "Newbuild Vessels") are scheduled to be delivered to the Company in March 2027, July 2027, November 2027 and January 2028 respectively, at an average shipyard price of $102.9 million per vessel.

The Newbuild Vessels are expected to be able to carry a wide variety of gas products, ranging from the most complex petrochemical gases, such as ethylene and ethane, to LPG and clean ammonia. The Newbuild Vessels are expected to be fitted with dual-fuel engines to facilitate ethane as a low-carbon intensity transitional fuel and made retrofit-ready for using ammonia as a fuel in the future. Additionally, the Newbuild Vessels will be capable of transiting through both the old and new Panama Canal locks, providing enhanced flexibility. The Company expects to finance the cost of the Newbuild Vessels using debt and cash on hand and the Company is currently assessing options in this respect.

The Company has signed its first time charter contract for a short-term period for one of its Newbuild Vessels, and discussions are ongoing with other customers who have expressed interest in chartering the Newbuild Vessels.