BERMUDA, 25 November 2020 – Avance Gas Holding Ltd (OSE: AVANCE) today reported unaudited results for the third quarter 2020.
HIGHLIGHTS
- An achieved time charter equivalent (TCE) rate of $23,283 on a discharge to discharge basis and $21,524/day on the basis of IFRS 15 accounting standard, compared to $28,453/day and $28,932/day in Q2 2020 respectively.
- The TCE rates in Q3 reflects ballast cost of approx. $4,000/day, corresponding to an adjusted TCE rate of $27,283 in Q3. The ballast cost will recover into the following quarter.
- Daily operating expenses (OPEX) were $9,256/day, compared to $8,576/day in Q2 2020. OPEX was impacted by change of technical manager and Covid-19 related crew change expense representing approx. $900/day in Q3.
- A&G expenses were $727/day, up from $608/day in Q2.
- Secured funding for predelivery CAPEX of newbuilding program through two transactions
- In September, the sale of the 2003-built VLGC Avance was successfully completed. Following repayment of debt, the transaction generated approx. $17 million in net cash proceeds and a book profit of approx. $6 million recorded in Q3.
- In November, the Company signed a $45 million sale leaseback transaction with a Chinese leasing house for the VLGC Pampero previously announced in August. Expected closing early December.
- Successfully completed the change of technical manager for six ships by end October. The investment in change of technical manager is expected to reduce operating expense and improve the technical efficiency of our fleet.
- By Q4, the eighth and final ship will have completed the scheduled special survey and five scrubbers will have been installed.
- For the fourth quarter of 2020, we estimate TCE rate on a discharge-to discharge basis of approx. $40,000/day contracted for 90% of vessel days.
Q3 has been a strong period for LPG freight despite fluctuations in export volumes from US basins. US Gulf and USEC VLGC exports were 8.6 million tons, compared to 9.0 million tons in Q2 2020, 68 cargoes in July, 65 cargoes in August and 58 cargoes in September, illustrating this volatility. Preliminary numbers show a high activity into Q4, recording 76 cargoes in October, with continued high activity levels in November.
Middle East export activity has followed changes on OPEX+ production during 2020 adding significant volatility to the freight market. In Q3, Middle East VLGC exports totaled 7.5 million tons equaling a monthly average of 56 cargoes, compared to 7.8 million tons or 59 cargoes per month in Q2 2020.
Covid-19 and oil price volatility has disrupted LPG trade through temporary lower demand from the petrochemical industry and challenging US- Asia price differential. With a continued strong Asian retail demand and improving oil prices, the VLGC market has rebounded more quickly than expected and remained strong throughout the fall.
We continue to see inefficiencies driving the freight market with turn-time in China, slow discharge in India coupled with delays in Panama creating a lasting positive sentiment leading in to Q4.
The global fleet was 304 ships at end Q3 with approx. 18 of those operating as storage vessels. The order book is 12.5%, of which one ship expected for delivery in Q4. The effect of the order book will be partly mitigated by ~20-25% of the fleet due for special surveys 2020-2022 suggesting a positive outlook for the next few years.
PRESENTATION AND WEBCAST
Avance Gas will host an audio webcast and conference call to discuss the company’s results for the period ended 30 September 2020 on Wednesday, 25 November 2020, at 14:00 CET. There will be a Q&A session following the presentation.
The presentation and webcast will be hosted by:
·Mr. Ben Martin – CCO
·Mrs. Randi Navdal Bekkelund - CFO
The presentation will also be available via audio webcast, which can be accessed at Avance Gas’ website www.avancegas.com. Dial in details are +44 (0)2071 928 000 (UK and International), +1 631-510-7495 (US) or +47 23 96 02 64 (Norway). Please quote the passcode: 6259105. Phone lines will open 10 minutes before the conference call.
For further queries, please contact:
Ben Martin, CCO
Tel: +41 77 526 47 28
Email: ben.martin@avancegas.com
Randi Navdal Bekkelund, CFO
Tel: +47 22 00 48 29
Email: randi.navdal@avancegas.com
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 thirteen modern ships and two Dual Fuel LPG newbuildings due for delivery in 2021 and 2022. For more information about Avance Gas, please visit: www.avancegas.com (http://www.avancegas.com).
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act
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