BERMUDA, 29 August 2017 - Avance Gas Holding Ltd (OSE: AVANCE) today reported unaudited results for the second quarter and first half of 2017.
Marginal positive market development in Q2, but fleet growth prevents significant near-term improvement:
- The average time charter equivalent (TCE) rate for the fleet was $12,445/day, up from $10,505/day in Q1 2017, primarily reflecting improved fleet utilization and also slightly firmer average spot rates.
- TCE earnings in Q2 2017 were $15.8 million, up from $13.1 million in Q1 2017.
- Average daily operating expenses (OPEX) for Q2 2017 were $7,824/day, versus $7,528/day in Q1 2017, mainly due to higher fleet maintenance and repair costs.
- Avance Gas reported a net loss of $11.1 million in Q2 2017, compared with a net loss of $13.5 million in Q1 2017.
- Avance Gas' available liquidity at quarter end was $139.9 million, reflecting available undrawn revolving credit facilities of $75.0 million and the company's cash balance of $64.9 million.
The freight market in 2017 has been affected by lower average US LPG exports, particularly in Q2. In addition, 12 ships have been delivered in the first half 2017, out of a total orderbook of 26 ships due for delivery in 2017.
Monthly US Gulf/US East Coast VLGC exports peaked at 53 cargoes in January 2017, the previous record being 47 cargoes in May 2016. With a number of "take or pay" terminal contracts expiring and not being renewed in 2016 and 2017, LPG traders of US volumes have had to rely on positive FOB/CIF differential margins to trade profitably. For the year to date 2017, those conditions have been challenging, and the export volumes have fallen, with only 32 cargoes recorded in June. Preliminary export figures suggest that US VLGC exports are rising, which could have a positive impact on VLGC freight rates.
In June and July, four new shipbuilding contracts were placed. The current fleet stands at 252 ships with 32 ships on order, or nearly 13% of the fleet, with 14 more ships scheduled for delivery this year.
Avance Gas' average fleet utilization increased to 89% from 84% in the prior period, largely as a result of higher COA volume during Q2, reducing the number of waiting days. The Avance Gas Spot index (adjusted 30 days) averaged $14,387/day in Q2 2017, compared with $11,798/day in Q1 2017.
The full report and interim financial statements are attached to this press release.
For further queries, please contact:
Christian Andersen, President
Tel: +47 22 00 48 05
Peder C. G. Simonsen, CFO
Tel: +47 22 00 48 15
ABOUT AVANCE GAS
Avance Gas Holding Ltd operates in the global market for transportation of liquefied petroleum gas (LPG). The company is one of the world's leading owners and operators of very large gas carriers (VLGCs), operating a fleet of 14 modern ships.
For more information about Avance Gas, please visit: www.avancegas.com.
FORWARD LOOKING STATEMENTS
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Avance Gas believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.
This information is subject to disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.