Avance Gas Holding Ltd Reports Unaudited Results for the Second Quarter and First Half of 2019
BERMUDA, 22 August 2019 – Avance Gas Holding Ltd (OSE: AVANCE) today reported unaudited results for the second quarter and first half of 2019.
US export growth fuels freight market strength
- The average time charter equivalent (TCE) rate for the fleet was $32,275/day, up from $11,133/day in Q1 2019
- Daily operating expenses (OPEX) were $8,214/day, compared to $7,952/day in Q1 2019
- A&G expenses were $1,220/day, up from $907/day in Q1 2019, impacted by one-off costs
- In process of ordering three additional exhaust gas cleaning systems, with delivery in primo Q1 2020
- At the date of this report, the company held $91 million in cash
- Approx. 80% of Q3 ship days have been fixed at a TCE rate of approx. $45,000/day. $45,000/day represents approx. $29 million per quarter in free cash flow
Following a weak first quarter the freight markets improved significantly from March, driven by improvements in terminal capacity and infrastructure in the US Gulf and East Coast.
Middle East LPG exports in Q2 2019 were 8.0 million tons, up by 0.2 million tons compared to Q1 2019. The average quarterly exports in 2018 was 9.6m tons. Comparing year to date 2019 to 2018, the main reduction has come from Saudi Arabian and United Arab Emirates, largely relating to OPEC production cuts. Iran have maintained higher export levels on a relative basis. Average monthly cargoes exported in Q2 was 61, up from 59 in Q4 2018 and an average of 64 cargoes per month in 2018.
US Gulf and USEC VLGC exports were 8.5 million tons in Q2 2019, up from 7.0 million tons in Q1 2019 and 6.4 million in Q2 2018. In Q1, US exports were impacted by a period of cold temperatures in February, resulting in higher domestic consumption and increasing LPG prices. In March, the Mariner East II pipeline to Markus Hook commenced operations, which together with further infrastructure improvements and favorable trading economics increased export activity in the US. US Gulf and USEC monthly VLGC exports totaled average 62 cargoes in Q2, of which average 9 cargoes from Marcus Hook. This compares to 51 monthly cargoes in Q1 2019 and 48 cargoes in Q2 2018.
Per year end July 2019 the global fleet totaled approx. 276 ships with an orderbook totaling 36 ships (13%). Eleven ships have been delivered, leaving seven ships due for delivery in the balance of the year. Seven new orders have been placed and no recycling activity has been reported. Although depending on the strength of the freight market, we continue to expect efficiency disruptions and removal of older ships from active trade in connection with the implementation of the IMO 2020 emission rules in January 2020.
The full report and interim financial statements are attached to this press release.
For further queries, please contact:
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.
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.