Avance Gas Holding Ltd

Fourth Quarter 2023 Earnings Release - Seite 2

“Fourth quarter was a blockbusting quarter for Avance Gas with quarterly net profit of $61.5 million as we delivered Time Charter Equivalent (TCE) earnings on a discharge-to-discharge basis of $76,200/day slightly ahead of guidance of $70-75,000/day. This quarterly net profit was the second highest in the Company’s history and increased the net profit for the year to $163.6 million or $2.14 per share, also the second highest full year results ever for Avance Gas.

In 2023, the freight market was fuelled by 13% US export growth, very favourable product price arbitrage between US Gulf Coast and Far East Asia which averaged $257 per metric ton and congestion issues in Panama driving up sailing distances. While the spot freight market slumped at the beginning of 2024 due to a severe cold snap in the US which significantly reducing the price arbitrage, we have also been able to book the first quarter at a very healthy level. As of today, we are currently ~70% booked for the first quarter with an average TCE of approximately ~$70,000/day on a discharge-to-discharge basis. While the freight market has rebounded from the lows, we expect the remaining days to be booked well below the current bookings. However regardless of this, the first quarter numbers are expected to be very solid. As our third quarter results were impacted by timing effects related to IFRS 15, we expect most of this effect to be reversed in the first quarter with load-to-discharge numbers expected to come in $10-20,000/day higher than the discharge-to-discharge numbers calculating roundtrip economics and utilized for guidance.

In the second half of 2023 we also agreed to sell four ships. Two ships were older 2008 vintage ships and thus part of our communicated fleet renewal process. The sale of the remaining two VLGC were more opportunistically in nature where we could secure a very attractive sales price and take some money of the table in a buoyant market. Aggregated profit from the vessel sales is expected to be approximately $120 million. One of these ships, Iris Glory, has already been delivered to new owners. In the first quarter we plan to deliver Venus Glory and the first VLGC newbuilding to new owners while the last remaining VLGC newbuilding is scheduled for delivery to new owners in the second quarter. Consequently, we expect to book about $84 million of profits from vessel sales in the first quarter and another $36 million in the second quarter. These sales will also significantly increase our cash balance from an already healthy level of $132 million at year-end. In the first quarter we expect to release about $125 million in cash from vessel sales with another $60 million in the second quarter. On top of this, we expect to release $45 million in cash from refinancings in the first quarter were $40 million is already released through the swap of the sale-and-leaseback financing for the two VLGC newbuilds sold to replace the bank financing for Avance Polaris and Avance Capella.