Avance Gas Holding Ltd: Financial Results for Q2 2022

Bermuda - August 31 2022

Avance Gas Holding Ltd (OSE: AGAS) ("Avance Gas" or the "Company") today reports unaudited results for the second quarter 2022.

HIGHLIGHTS

• The average time charter equivalent (TCE) rate on load to discharge basis was $36,212/day compared to $37,608/day for the first quarter 2022. This was ahead of guidance of between $32,000/day to $33,000/day.

• Daily operating expenses (OPEX) were $8,200/day, down from $8,500/day for the first quarter.

• Net profit of $18.4 million compared to $24.3 million for the first quarter 2022, or earnings per share of 24 cents compared to 32 cents for the first quarter.

• During the second quarter 2022, the Company completed the sale of the 2008-built VLGC Providence with the vessel being delivered to the new owners in May. The sale generated a gain on sale of $4.5 million and a cash release of $25.8 million.

• In May 2022, the Company signed a $555 million sustainability-linked term facility with a bank syndicate. The facility is a refinancing of the previous bank facility financing the nine VLGCs including a financing of the newbuildings three and four, Avance Rigel and Avance Avior, for delivery in the first quarter of 2023, and an accordion option to finance the final two newbuildings for delivery in the fourth quarter of 2023 and first quarter of 2024.

• In August 2022, the Company signed an aggregate $135 million sale leaseback agreement with Bocomm Leasing for the financing of newbuildings five and six, Avance Castor and Avance Pollux, scheduled for delivery in the fourth quarter of 2023 and the first quarter of 2024. The transaction completes the financing of the newbuilding program with no unfunded capex remaining and is expected to release approximately $39 million in net cash at delivery.

• The Company has been ahead of the curve hedging its interest rate exposure at attractive levels resulting in gains of $5.1 million in the second quarter bringing the total gains in the first half of the year to $16.8 million under other comprehensive income.

• The Board declared a dividend for the second quarter 2022 of $0.20 per share.

• For the third quarter of 2022, we estimate a TCE rate of approximately 32,000/day on a load to discharge basis.

Oystein M. Kalleklev, Executive Chairman, commented: "We are pleased to deliver strong numbers for the second quarter. Time Charter equivalent (TCE) earnings came in at $36,200 per day, well ahead of guidance of $32-33,000 per day despite a very volatile freight market. We have also been able to raise very attractive long-term financing for the two last remaining dual fuel VLGC newbuildings which brings our unfunded remaining capex to below zero. With the worldwide energy crisis, we think the clean properties of LPG should be compelling especially when coupled with its affordable price compared to other fuels. Hence, we remain upbeat about the long-term prospects for LPG freight despite a rather large orderbook for next year. With a strong cash balance of close to $200 million, fully financed fleet and healthy earnings of 24 cents per share we are therefore again declaring a dividend of $20 cents per share which should provide our shareholders with a very attractive yield of around 16%."

Full report

About Avance Gas:
Avance Gas 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 carrier (VLGC) and operates a fleet of thirteen ships and four Dual Fuel LPG newbuildings due for delivery in Q4 2022 and Q1-Q4 2023.

Avance Gas, press release