Avance Gas Holding Ltd Reports Unaudited Results for the First Quarter 2020

BERMUDA, 28 May 2020 – Avance Gas Holding Ltd (OSE: AVANCE) today reported unaudited results for the first quarter 2020.

HIGHLIGHTS

• The average time charter equivalent (TCE) rate was $44,990/day on the basis of IFRS 15 accounting standard and $40,143/day on discharge to discharge basis, compared to $51,047/day and $51,358/day, respectively, in Q4 2019. 
• Daily operating expenses (OPEX) were $8,650/day, compared to $7,983/day in 2019.
• A&G expenses were $1,042/day, down from $1,082/day in 2019.
• In February the company entered into a $15 million credit facility to part finance the scrubber installments for our fleet.
• In March, the company made a dividend payment of $0.3/share or $19.1 million to the shareholders. 
• At the time of this report, five ships have completed special survey and four scrubbers have been installed. Further four ships are due for drydock during the remainder of 2020. 

The Covid-19 virus outbreak has had significant impact on global trade and in the capital markets. For the VLGC market, we have in Q1 seen temporary reductions in LPG demand in Asia and Europe, while travel bans, quarantines and lock downs has led to delays at shipyards and lower global fleet efficiency. While the latter has led to lower fleet capacity in support of the freight market, it has led to lower returns for those impacted by the delays. 

The freight market has remained at firm levels in Q1, with disruptions from IMO 2020 implementation and US exports being the key contributors. However, the freight market volatility has returned as LPG trading fundamentals have become less attractive. US Gulf and USEC VLGC exports were 8.9 million tons in Q1 2020, up from 8.6 million tons in Q4 2019 and 7.0 million in Q1 2019. US Gulf and USEC recorded 67 monthly VLGC cargoes in Q1 2020, compared to 62 cargoes in Q4 2019 and 52 cargoes in Q1 2019.

Middle East VLGC exports totaled 7.6 million tons in Q1 2020, down from 7.7 million tons in Q4 2019 and 7.8 million in Q1 2019. The increase in oil production impacted the spot market activity in the Middle East in March/April but has since then fallen back due to production cuts. Middle East exported on average 57 cargoes per month in Q1, down from 59 in both Q4 2019 and Q1 2019. 

The global fleet totaled 294 ships by end April 2020, with an orderbook of 33 ships (11%). Ten ships are due for delivery for the remainder of 2020, 19 ships are due for delivery in 2021 and 4 ships due for delivery in 2022. Shipbrokers are expecting slippage in the orderbook due to delays in delivery of key ship components to shipyards following the Covid-19 outbreak.

PRESENTATION AND WEBCAST

Avance Gas will host an audio webcast and conference call to discuss the company’s results for the period ended 31 March 2020 on Thursday, 28 May 2020, at 14:00 CET. There will be a Q&A session following the presentation.

The presentation and webcast will be hosted by: