Avance Gas: Slight fall in Q1 net profit

Avance-Gas-Sending-Another-Newbuild-to-Drydock
Avance Gas Holding Ltd (OSE: AVANCE) today reported unaudited results for the first quarter of 2016.

 Q1 2016 results reflected the impact of seasonally lower trading volumes and global fleet growth – Board declares dividend of $0.30 per share:
  • Net profit for Q1 2016 was $21.1 million, compared with $45.1 million in Q4 2015.
  • The average time charter equivalent (TCE) rate for the fleet was $38,707/day in Q1 2016, down from $61,144/day in Q4 2015.
  • TCE earnings in Q1 2016 were $48.5 million, down from $71.1 million in Q4 2016.
  • Average daily operating expenses (OPEX) for Q1 2016 were $7,788/day, compared with $7,620/day in Q4 2015.
  • Avance Gas’ Board declared a dividend of $0.30 per share. The shares will trade ex-dividend on and after 2 May 2016.

Significant recent events:

  • In March, the company and its banking group agreed to amend Avance Gas’ credit facilities, by conversion of term loans to revolving loans for $100.0 million, increasing the revolving credit capacity to $150.0 million. Further, the minimum cash covenant was reduced from 7.5% to 5.0% of interest-bearing debt, while maintaining a nominal threshold of $35.0 million.

Results for the first quarter were impacted by the seasonal decline in LPG trading volumes combined with the effects of a large number of newbuildings delivered towards the end of 2015 and into 2016, mainly from South Korean yards. This resulted in lower freight rates and increased waiting time. US Gulf VLGC export volumes continued to increase, averaging 37 cargoes per month in Q1 2016, up from an average of 29 cargoes per month in Q4 2015. The majority of the reported US Gulf VLGC exports in Q1 2016 were bound for the Far East. The Avance Gas Spot Index averaged $39,460/day in the quarter, compared with $63,847/day in Q4 2015.

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