Navig8 Chemical Tankers Inc. Reports Results for the Three Months Ended March 31, 2016

Highlights

• Generated revenue of $36.5 million and net income of $10.4 million, or $0.27 per share, for the three months ended March 31, 2016.
• Expanded vessel operating days against a stable industry backdrop.
• Continued growth of the Company's operating fleet with the delivery of two vessels; 20 vessels of the Company's 37-vessel newbuilding fleet had been delivered as of March 31, 2016.
• All delivered vessels have been deployed in pools managed by the Navig8 Group.
• Entered into $140.0 million sale and leaseback agreements with Bank of Communications Financial Leasing Co., Ltd ("BCFL") in April 2016 for four IMO2 49,000 DWT Interline coated medium range tankers being built at STX Offshore & Shipbuilding Co., Ltd. ("STX").
• Issued $93.0 million in amortizing notes due 2027, guaranteed by The Export-Import Bank of Korea ("KEXIM") with an interest rate fixed at 2.90% per annum in April 2016.

"We continued to take timely deliveries of our newbuilding vessels in the first quarter and thus continued to expand our operating days," said Nicolas Busch, Chief Executive Officer of Navig8 Chemical Tankers Inc. "The daily rates we achieved were roughly in line with the prior quarter and remained strong despite unforeseen market dynamics. Notably, a decrease in palm oil production in South East Asia caused by the El Nino weather pattern contributed to a vessel oversupply in the region. This in turn mitigated the effect of strong demand for methanol cargoes to China, which we anticipate will remain a significant demand driver for the foreseeable future. Nonetheless, we generated incremental revenues and earnings per share on the back of organic fleet growth."

"We look forward to continuing to take deliveries of our newbuilding vessels, with a further seven deliveries expected to occur by the end of 2016. On a fully-delivered basis, Navig8 Chemical Tankers will be the largest independent owner of chemical tankers in the world. As we have previously stated, we anticipate that our focus on modern, large chemical tankers with specialized Interline 9001 and stainless steel coatings will provide a significant competitive advantage as the shift to long haul chemical trades continues."

Fleet Update

The Company has entered into contracts to acquire 37 modern, fuel-efficient newbuilding chemical tankers. As of the date of this press release, 21 of these vessels have been delivered and are in operation. The fleet is scheduled to be fully delivered by September 2017. Seven additional vessels are scheduled to be delivered during the remainder of 2016, and the final nine in 2017. Upon their respective deliveries, the Company's vessels will be deployed in commercial pools managed by the Navig8 Group, including the Chronos8, Delta8 and Stainless8 pools. The Company's newbuilding fleet is composed of:

Eighteen IMO2 37,000 DWT Interline coated tankers built at Hyundai Mipo, Korea ("A-Class vessels"), all of which have been delivered and have been deployed in the Delta8 pool. The Company took delivery of its final A-Class vessel during the three months ended March 31, 2016.

Nine IMO2 49,000 DWT Interline coated medium range tankers ("T-Class vessels") built at STX. In October 2015, the Company entered into contracts to purchase four T-Class vessels to be built to the same technical specifications as the Company's preexisting orders with STX, including the capability to transport methanol and other specialty cargoes. The Company also announced that it had secured options to purchase six additional sister vessels from STX (each, an "Option vessel"). In December 2015, the Company announced that it had exercised an option to acquire, and entered into a contract to purchase, an Option vessel. The Company's nine T-Class vessels will be deployed in the Chronos8 pool. The Company took delivery of its first T-Class vessel, the Navig8 Turquoise, in April 2016 and expects three T-Class vessels to be delivered between July and September 2016 and the remaining five by June 2017. The Navig8 Turquoise is the first of four T-Class vessels to be delivered to under the sale and leaseback arrangements with Ocean Yield ASA announced in April 2015.

Two IMO2 49,000 DWT Epoxy coated medium range tankers built at Hyundai, Vinashin ("V-Class vessels"). Both V-Class vessels were delivered to the Company on bareboat charters in the first quarter of 2015; the Company purchased one of these vessels in December 2015 and the other in March 2016 pursuant to purchase obligations. The V-Class vessels are currently deployed in the Chronos8 pool.

Eight IMO2 25,000 DWT stainless steel tankers built at Kitanihon and Fukuoka (Japan) ("S-Class vessels"). The S-Class vessels will be deployed in the Stainless8 pool. The Company expects four S-Class vessels to be delivered in 2016 and the remaining four by September 2017.

Financing Update 

The two V-Class vessels, the Navig8 Victoria and the Navig8 Violette, were delivered to the Company earlier in 2015 under 12-month bareboat charters, which commenced at their respective delivery dates, with purchase obligations at the end of the charters. In December 2015, the Company entered into a $52 million debt facility to finance the purchase of the two V-Class vessels pursuant to its purchase obligations upon expiry of their bareboat charters. The loan facility covers approximately 65% of the purchase price of the vessels, and has been provided by DVB Bank SE. The Company took ownership of the Navig8 Victoria in December 2015 and the Navig8 Violette in March 2016.

On April 7, 2016, the Company entered into sale and leaseback agreements with BCFL for four T-Class vessels. Under the sale and leaseback agreements, BCFL will provide funding for pre-delivery as well as the delivery instalments for these vessels. The net proceeds from the transaction (after a 12% sellers' credit) will be $140.0 million. The vessels will be delivered to BCFL on their respective deliveries from STX. The Company has entered into 10-year bareboat charters for the vessels, commencing upon their respective deliveries. The Company has purchase options to re-acquire the vessels during the charter period, with the first such option exercisable on the fourth anniversary of each vessel's delivery.

On April 29, 2016, a 100% indirect subsidiary of the Company issued $93.0 in aggregate principal amount guaranteed amortizing notes due 2027 (the "Notes") in a private offering to institutional buyers outside of the United States pursuant to Regulation S of the Securities Act of 1933, as amended. The interest rate for the Notes is fixed at 2.9% per annum. Payment of 100% of all regularly scheduled installments of principal of, and interest on, the Notes will be guaranteed by KEXIM. The Notes were issued in connection with the credit facility announced by the Company on February 3, 2015 (the "Credit Facility") and replace the bank notes previously issued by certain lenders under the Credit Facility. The Notes will not be listed on any securities exchange, listing authority or quotation system.

Results for the three months ended March 31, 2016 and 2015 

For the three months ended March 31, 2016, the Company reported net income of $10.4 million, or $0.27 per share, an increase of $11.3 million from a net loss of $0.9 million for the three months ended March 31, 2015. The Company accepted its first two newbuilding deliveries in February of 2015 and therefore recognized little revenue during the three months ended March 31, 2015.

Revenue for the three months ended March 31, 2016 was $36.5 million, compared to revenue of $3.8 million for the three months ended March 31, 2015. The total number of vessel operating days for the three months ended March 31, 2016 increased to 1,682.

The gross average daily time charter equivalent ("TCE")(1) earned by the A-Class vessels and the V-Class vessels in the three months ended March 31, 2016, were $20,910 per day and $22,454 per day, respectively. The Company had 20 vessels operating during the three months ended March 31, 2016, all of which operate in pools from which they derive TCE revenue.

Vessel operating expenses were $11.3 million for the three months ended March 31, 2016, an increase of $10.1 million from the three months ended March 31, 2015, when the Company did not have meaningful vessel operations. Average fleet operating costs per day, including technical management fees, were approximately $5,670 for the three months ended March 31, 2016.

Depreciation expense for the three months ended March 31, 2016 was $7.3 million, an increase of $6.4 million compared to the three months ended March 31, 2015. The Company accepted its first two newbuilding deliveries in February of 2015 and begins to depreciate vessels in its newbuilding fleet as they are delivered.

General and administrative expenses for the three months ended March 31, 2016, were $1.8 million, a decrease of $0.1 million from $1.9 million for the three months ended March 31, 2015.