Awilco LNG Sees Earnings Improve

Awilco-LNG

Awilco LNG reported net freight income of MUSD 4.6 (MUSD 12.5 in Q1 2018) and EBITDA of MUSD 1.9 (MUSD 9.5 in Q1 2018).

– Vessel utilisation of 71 % compared to 97 % in Q1 2018

– On 5 July 2018 WilForce was fixed on a 9-12 month time charter contract to an oil and gas major. The vessel is scheduled for delivery to the charterer early September and is expected to contribute an annualised EBITDA of about MUSD 26 during the charter period

– WilForce completed scheduled dry-docking in mid-August 2018 at a total cost of about MUSD 3.5 and incurring 21 offhire days, on time and on budget. WilPride is scheduled for dry-docking in Q4, which will include installment of certain upgrades to the vessel which will reduce boil-off and improve marketability. The dry-dock budget on WilPride is therefore about MUSD 2.5 higher than WilForce, and off-hire in connection with dry-docking may be extended by a few extra days

Freight income for the quarter was MUSD 6.4, down from MUSD 13.8 in Q1 2018 due to seasonal effects impacting activity and rates. Fleet utilisation for the quarter ended at 71 %, compared to 97 % in Q1 2018. Voyage related expenses amounted to MUSD 1.8, compared to MUSD 1.4 in Q1 2018.

Operating expenses were MUSD 2.0 in the quarter, same level as in Q1 2018 (MUSD 1.9). Administration expenses were MUSD 0.7 in Q2, down from MUSD 1.0 in Q1 2018, mainly due to depreciation of NOK vs USD. EBITDA for the quarter was MUSD 1.9 (MUSD 9.5 Q1 2018). Depreciation for the quarter was MUSD 3.3, marginally up from MUSD 3.2 in Q1 2018.

Net financial items were MUSD (5.2) compared to MUSD (5.3). Interest expenses on the WilForce and WilPride financial leases amounted to MUSD 5.4, same as in the previous quarter.

Loss for the period was MUSD 6.5, compared to a profit for the period of MUSD 1.0 in Q1 2018.

Income statement first half year 2018

For the first half of 2018 freight income was MUSD 20.2, compared to MUSD 5.1 same period last year. Voyage related expenses were MUSD 3.2 (MUSD 3.2), operating expenses MUSD 3.9 (MUSD 3.8) and administration expenses were MUSD 1.7 (MUSD 1.8). EBITDA in the first half of 2018 was MUSD 11.5, compared to MUSD (3.7) in the first half of 2017. Net loss for the period was MUSD 5.5, compared to MUSD 20.5 in the first half of 2017.

Statement of financial position

Book value of vessels was MUSD 360.6 as at 30 June 2018 (MUSD 361.8 Q1 2018). The decrease reflected ordinary depreciation during the quarter, offset by capitalisation of certain items. MUSD 1.9 in dry-dock long lead items and periodic overhauls of main engines was capitalised in the quarter.

Total current assets were MUSD 31.6 as at 30 June 2018 (MUSD 36.5 Q1 2018), of which cash and cash equivalents were MUSD 26.5 (MUSD 30.1 Q1 2018).

Total equity as at 30 June 2018 was MUSD 121.5 (MUSD 128.0 Q1 2018).

Total current liabilities were MUSD 7.6 as at 30 June 2018 (MUSD 5.1 Q1 2018). MUSD 5.1 of the current liabilities relates to the short-term portion of the WilForce and WilPride financial leases (MUSD 3.9 as at 31 March 2018).

Total non-current liabilities were MUSD 263.0 as at 30 June 2018 (MUSD 265.1 Q1 2018), of which the long-term portion of the WilForce and WilPride financial leases was MUSD 260.7 (MUSD 262.8 Q1 2018).

OUTLOOK

Although rates and activity softened at the start of Q2 in line with normal seasonal patterns, increased LNG production coupled with strong power generation demand in the Far East in the latter part of the quarter saw average market rates in the quarter 50 % above Q2 2017 levels. Activity in Q3 initially softened but has again started to improve as buyers already start to prepare for winter, and owner’s expectations are correspondingly high.

The long-term outlook for LNG shipping remains promising. To meet the growing demand for gas, estimated at 2 % per year according to Shell Energy Outlook and twice the growth rate of total global energy demand, several new LNG production plants are expected to be sanctioned in the near future.

Awilco LNG has one vessel commencing a 9-12 month contract in September and one vessel trading in the spot market, and is well positioned for the improving market.

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