BERMUDA, 28 August 2018 - Avance Gas Holding Ltd (OSE: AVANCE) today reported unaudited results for the second quarter and first half of 2018.
HIGHLIGHTS
Q2 2018 was impacted by weaker US LPG exports and deliveries of new tonnage to the global fleet:
- The average time charter equivalent (TCE) rate for the fleet was $7,711/day, down from $12,637/day in Q1 2018.
- TCE earnings for Q2 2018 were $9.3 million, down from $14.5 million in Q1 2018.
- Daily operating expenses (OPEX) were $7,967/day, up from $7,408/day in Q1 2018. First half 2018 OPEX was $7,689/day.
- A&G expenses were $1.3 million or $991/day in Q1 2018. First half 2018 A&G expenses were $954/day.
- A net loss of $19.3 million in Q2 2018, compared with a net loss of $12.3 million in Q1 2018.
- Avance Gas' available liquidity at quarter end was $81.2 million, consisting of available undrawn revolving credit facilities of $25 million and the company's cash balance of $56.2 million.
The VLGC freight market has been suffering from the large newbuilding program over the past 2.5 years, with 70 ships delivered into the fleet. Although global seaborne LPG trade has been growing in the period, it has not been enough to fully employ the increasing fleet.
Seven out of the ten ships scheduled for delivery in 2018 were delivered during Q1. The low February US export combined with seasonally low trading activity in the Middle-East in Q1 resulted in a build-up of excess shipping capacity going into Q2. In Mid-April we saw this years' lowest quotation of the Baltic VLGC index (US$/ton for a voyage from Middle East to Far East) at US$19.9, giving only marginal revenue to shipowners. Since then, the Baltic index has more than doubled and is quoted at above US$40/ton by mid-August.
Taking into account seasonal variations, the Middle-East VLGC export has been stable with 19.2 million tons or 65 cargoes per month in first half 2018 (Q1: 63 and Q2: 68), and 17.7 million tons or 61 cargoes per month in first half 2017. The US Gulf and US East Coast VLGC export was 12.6 million tons, or 47 cargoes per month in first half 2018, compared to 12.3 million tons or, or 45 cargoes in first half 2017. February was exceptionally low with only 38 US cargoes loaded. Exports in Q2 2018 was 48 cargoes per month compared to 42 cargoes in Q2 2017. The US summer export level has been higher than in the last two-three years, supporting improvement in tonnage demand and freight rates into second half 2018.
Avance Gas' average TCE in first half 2018 was $10,113/day, compared with the Avance Gas Spot Index (30-days adjusted) of $7,980/day.
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
Email: c.andersen@avancegas.com
Peder C. G. Simonsen, CFO
Tel: +47 22 00 48 15
Email: p.simonsen@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.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Avance Gas Holding Ltd via Globenewswire
