Q4 2016 saw an upward trend in freight rates, and a strengthening of the company's financial position:
- The average time charter equivalent (TCE) rate for the fleet was $9,602/day in Q4 2016, down from $10,131/day in Q3 2016. The average TCE for full-year 2016 was $18,324/day.
- TCE earnings in Q4 2016 were $12.1 million, compared with $12.9 million in Q3 2016, and $92.7 million in for full-year 2016.
- Average daily operating expenses (OPEX) for Q4 2016 were $7,686/day, compared with $7,361/day in Q3 2016. Average OPEX for full-year 2016 was $7,764/day.
- Avance Gas reported a net loss of $14.0 million in Q4 2016. This compares with an adjusted net loss of $13.5 million in Q3 2016, when excluding the $47.2 million impairment charge recorded in that quarter.
- The net loss for full-year 2016 was $68.2 million. Excluding $53.3 million in total impairment charges, the net loss for 2016 was $14.9 million, compared with a net profit of $183.2 million in 2015.
- As previously reported, in October 2016 the company reached an agreement with its lenders to reduce the scheduled loan repayments with 50% until Q2 2019, and amend the financial covenants under the company's credit facilities. The agreement was subject to an equity issue of minimum $55.0 million which was completed in November 2016, raising net proceeds of $58.7 million.
The VLGC freight market improved toward the end of Q4 2016 and into Q1 2017, mainly driven by improvement in the FOB/CIF differential, leading to increased export volumes from the US. Despite more newbuildings entering the market, fleet utilization remained at high levels. Avance Gas' fleet utilization was 96% in Q4 2016, compared with 95% in Q3 2016. As the global fleet continues to grow, increased competition in the freight market remains a challenge.
US VLGC exports averaged 40 cargoes per month in Q4 2016, compared with 30 cargoes per month in Q3 2016. More than 50% of these cargoes were bound for Asia, which helped to absorb the fleet growth. The new Phillips 66 terminal in Freeport, Texas commenced exports late Q4 2016, which contributed to the record high 50 cargoes exported from the US Gulf and East Coast in December.
Middle East export volumes declined somewhat following OPEC crude cut-backs, to 9.5 million tons in Q4 2016 from the record high 10.4 million tons in Q3 2016. The Baltic freight rate for the Middle East/Far East trade increased from $18.4 per ton in early September to $32.9 per ton at year-end 2016, subsequently rising to $34.4 per ton at the end of January 2017. The Avance Gas Spot index (adjusted 30 days) averaged $7,846/day in Q4 2016, compared with $10,223/day in Q3 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
Peder C. G. Simonsen, CFO
Tel: +47 22 00 48 15
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.
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