Avance Gas Reports Unaudited Results for the Third Quarter of 2019

Avance Gas

Avance Gas reported unaudited results for the third quarter 2019.

HIGHLIGHTS

  • The average time charter equivalent (TCE) rate calculated on a discharge-to-discharge basis was $44,295/day, up from $34,520/day in Q2 2019
  • On the basis of IFRS 15 accounting standard the TCE was $42,700/day, up from $32,275/day in Q2 2019.
  • TCE on a discharge to discharge basis adjusted for waiting days was $45,902/day
  • Daily operating expenses (OPEX) were $8,089/day, compared to $8,214/day in Q2 2019
  • A&G expenses were $1,003/day, down from $1,220/day in Q2 2019
  • Avance Gas has in November repaid the $35 million top up tranche, removing the related restricting covenants.  At the date of this report, the company held $65 million in cash.
  • Agreed to acquire one additional exhaust gas cleaning system. The total number on order is six scrubbers and installment will be completed in Q1 2020.
  • Extension of the time charter contract for Mistral until December 2021, at a TCE rate of $1.2 million per month
  • Approx. 88% of Q4 ship days have been fixed at an average rate exceeding $50,000/day.

The freight markets remained firm in Q3 as the US LPG exports continued to grow, while the fleet growth continued at modest levels.

US Gulf and USEC VLGC exports were 8.5 million tons in Q3 2019, up from 8.3 million tons in Q2 2019 and 7.0 million in Q3 2018. Supported by strong production and record high inventory levels, the healthy US LPG export continued throughout the quarter. The Mariner East II pipeline to Markus Hook has added significant volumes, with exports averaging 10 cargoes per month since March 2019. US Gulf and USEC VLGC monthly exports totaled an average of 59 cargoes in Q3, compared to 62 and 51 monthly cargoes in Q2 and Q1 2019, respectively.

Middle East LPG exports in Q3 2019 were 8.2 million tons, up from 7.9 million tons in Q2 2019 and 7.8 million in Q1 2019. We have seen temporary disruptions related to oil tanker and refinery attacks in the area and we have seen lower Iranian export volumes compared to last quarter. Average monthly cargoes exported in Q3 was 62, up from 61 in Q2 but down from the average of 64 cargoes per month in 2018.

Per October, the global fleet totaled approx. 280 ships, with an orderbook totaling 37 ships (13.2%), of which three ships are due for delivery in Q4 2019 and 21 ships are due for delivery in 2020. As expected we have seen efficiency disruptions relating to scrubber retrofits as well as fuel tank preparations ahead of the IMO 2020 emission rules in taking effect in January 2020.

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