Avance Gas Holding Ltd: Third Quarter 2023 Earnings Release

BERMUDA, November 28, 2023 – Avance Gas Holding Ltd (OSE: AGAS) ("Avance Gas” or the "Company”) today reports unaudited results for the third quarter 2023.

HIGHLIGHTS
• The average time charter equivalent (TCE) rate basis discharge-to-discharge was $55,300/day versus guidance in the high $50s and compares to $50,800/day for the second quarter. The TCE rate was impacted by FFA losses of $10.6 million or $8,300/day for the fleet in the third quarter.

• TCE/day on load to discharge basis was $46,700/day compared to $52,000/day for the second quarter 2023. Adjustment related to load to discharge was negative $10.9 million for the third quarter as the spot market reached elevated levels by the end of the quarter resulting in a decrease of $8,600/day in TCE/day for the fleet on a load to discharge basis.

• For the third quarter, we had a TC coverage of 36% at an average TCE rate of $41,700/day and spot voyages of 64% at $75,700/day excluding FFA impact and load to discharge adjustment.

• Daily operating expenses (OPEX) were $8,070/day, compared to $8,000/day for the second quarter of 2023.

• Net profit of $30.1 million compared to $35.7 million for the second quarter 2023, or earnings per share of 39 cents compared to 47 cents for the second quarter.

• During the quarter, the Company paid $0.50 per share in dividend, or $38.3 million, for the second quarter 2023.

• In July 2023, the Company entered into an agreement to sell VLGC Iris Glory (2008) for a cash consideration of $60 million. The delivery to the new owners is expected to take place within January 2024.

• In August 2023, the Company declared options to acquire two dual fuel mid-sized LPG/ammonia carriers at a contract price of $61.5 million per vessel with delivery in the second and fourth quarter 2026.

• In October 2023, the Company obtained credit approval for the refinancing of VLGC Pampero (2015) in a $43.0 million bank facility at attractive financing terms.

• For the fourth quarter of 2023, we estimate a TCE rate for the quarter to be ~ $70-75,000/day on a discharge-to-discharge basis.

• The board declared a dividend of $0.50 per share or $38.3 million for the third quarter 2023.

Øystein Kalleklev, CEO of Avance Gas, commented:
"The LPG freight market continues to rip with the best market conditions since 2015. Consequently, we are also delivering our strongest Year-to-Date numbers since 2015 with Net Profit of $102 million, and the best is yet to come as we do expect that Q4 will be by far our best quarter this year. From September onwards the freight market has been exceptionally strong fueled by Panama congestion, strong US export growth and a very high arbitrage between LPG prices in US compared to Far East supporting freight levels.

For the third quarter we sailed-in average Time Charter Equivalent Earnings of $55,300/day on discharge-to-discharge basis when taking into account hedging losses of $8,280/day related to our Freight Forward Agreements (FFA). The FFAs are utilized to hedge part of our spot exposure as an alternative to TC coverage, and we have hedged two of our spot ships at an average of approximately $50,000/day and $55,000/day for Q3 and Q4 respectively.

With the market rallying from September, we expect average spot TCE in Q4 to be about $90-100,000/day while our TC ships are expected to generate an average TC rate of around $50,000. We therefore estimate to generate substantially higher TCE in Q4 with fleet average of around $70,000 to $75,000 on a discharge-to-discharge basis after deducting our FFA hedges. With the freight market rallying, TCE on a load-to-discharge basis is lower, but this timing effect will be reversed over time. Given the extended ballast legs from Asia to US Gulf Coast via Suez, we are now booking voyages with loading end of the year and are therefore also securing healthy earnings well into first quarter of next year.

Given our strong financial position, healthy booking levels and general favorable outlook for LPG shipping, the Board has therefore decided to declare a quarterly dividend of $0.50 per share once again bringing the dividend per share for the last twelve months to $2.00 per share.”

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 2023 on Tuesday, 28 November 2023, at 14:00 CET. There will be a Q&A session following the presentation.
The presentation and webcast will be hosted by:
• Mr. Øystein Kalleklev - CEO
• 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 or using the link: https://edge.media-server.com/mmc/p/9o2zpamx
Guests can log into the conference call using the following link https://register.vevent.com/register/BI88bdc5e2ea204870817e5ad1048857dd

For further queries, please contact:
Media contact:
Øystein Kalleklev, CEO
Tel: +47 23 11 40 00

Investor and Analyst contact:
Randi Navdal Bekkelund, CFO
Tel: +47 23 11 40 00

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

Attachments

• Avance Gas - Q3 2023 Presentation
• Avance Gas - Q3 2023 Interim financial information