Q2 2016 results reflected the impact of weaker freight rates, as fleet growth resulted in increased competition in the spot market:
- Avance Gas reported a net loss of $14.5 million in Q2 2016, compared with a net profit of $21.1 million in Q1 2016.
- Adjusted for the impact of an impairment loss of $6.1 million related to the LNG carrier Gaea, the net loss in Q2 2016 was $8.4 million.
- The average time charter equivalent (TCE) rate for the fleet was $15,142/day in Q2 2016, down from $38,707/day in Q1 2016.
- TCE earnings in Q2 2016 were $19.2 million, down from $48.5 million in Q1 2016.
- Average daily operating expenses (OPEX) for Q2 2016 were $8,228/day, compared with $7,788/day in Q1 2016. Adjusted for one-off expense, the OPEX was 7,930/day.
- The Board agreed not to declare a dividend for the quarter.
- The cash break-even rate is expected to be below $21,500 per ship per day for the next 12 months.
Events after quarter end:
- Following a drawdown of $25.0 million under its revolving credit facilities and further receipt of demurrage payments, the company's cash position as of today is $91.9 million.
The freight market in 2016 has been disappointing, despite global fleet utilization of above 90%, and Avance Gas' fleet utilization at 91% in the 1st half of 2016.
LPG exports from the Middle East increased slightly to 18.8 million tons in 1st half of 2016, from 17.1 million tons in 1st half of 2015, and 17.8 million tons in 2nd half of 2015. The VLGC export from US Gulf and US East Coast increased to 10.8 million in 1st half of 2016 versus 7.7 million tons in 1st half of 2015, and 8.6 million tons in 2nd half of 2015. Furthermore, the long-haul US - Far East export has continued its high pace with 5.6 million tons during 1st half of 2016, representing 51% of total US VLGC exports. The Avance Gas Spot Index (adjusted 30 days) averaged $17,816/day in the quarter, compared with $39,460/day in Q1 2016.
The full report and interim financial statements are attached to this press release.
For further queries, please contact:
Christian Andersen, President
Tel: +47 22 00 48 05
Email: c.andersen@avancegas.com
Peder C. G. Simonsen, CFO
Tel: +47 22 00 48 15
Email: p.simonsen@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 14 modern ships.
For more information about Avance Gas, please visit: www.avancegas.com.
FORWARD LOOKING STATEMENTS
Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "anticipate", "believe", "continue", "estimate", "expect", "intends", "may", "should", "will" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Avance Gas believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice.
This information is subject to disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.
Avance Gas - Q2 2016 Interim Financial Statements (http://hugin.info/161089/R/2036830/758817.pdf)
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Avance Gas Holding Ltd via Globenewswire
