Avance Gas Holding Ltd: Avance Gas Holding Ltd Reports Unaudited Results for the First Quarter of 2019

08:00
BERMUDA, 15 May 2019- Avance Gas Holding Ltd (OSE: AVANCE) today reported unaudited results for the first quarter 2019.
Rates rebound with higher US activity - Marcus Hook volumes come on stream

* The average time charter equivalent (TCE) rate for the fleet was
$11,133/day, compared to $12,637/day in Q1 2018 and $21,314/day in Q4 2018.

* Daily operating expenses (OPEX) were $7,952/day, down from $8,183/day in Q4
2018.
* A&G expenses were $1.1 million or $907/day, down from $995/day in Q4 2018.
* Avance Gas available liquidity at quarter end was $65.2 million, following
drawdown of revolving credit facilities of $25 million during the quarter.
The cash position at the date of this release is approx. $67.3 million.

Key events after quarter end:

* Received commitments for a $515 million credit facility, enabling full
refinancing the companys outstanding debt, evidencing the strong support
from the shipping banks, maintaining attractive cash break even of
$22,500/day.
* 66% of total Q2 2019 ship days have been fixed at a rate approx.
$26,000/day.
* Agreed with the Wartsila group to acquire two exhaust gas cleaning systems,
with the option for further six units. The estimated total project cost is
$2.9 million per unit.
* Mr. Ulrik Andersen appointed new CEO of Avance Gas, starting in August
2019.

We normally see lower trading activity in the first quarter as colder weather
increases domestic demand in exporting regions, impacting product prices and
trading activity. Further, Middle East normally performs maintenance on
exporting facilities, reducing export volumes.

Middle East LPG exports in Q1 2019 were 7.7 million tons, down 1.6 million
tons from Q4 2018. Compared to three year average exports for Q1, volumes are
down by 1.2 million tons. Exports volumes vary between the main export
terminals but compared to three year averages, 2019 volumes generally
indicate lower Saudi Arabian and UAE exports, while Qatar have maintained
higher volumes on a relative basis. Iran exported 1.1 million tons in Q4
2019, in line with 2018 average. Average monthly cargoes exported was 59,
down from 62 in Q1 2018 and down from an average of 64 cargoes per month in
2018.

US Gulf and USEC VLGC exports were 6.9 million tons in Q1 2019, slightly down
from 7.1 million tons in Q4 2018 but up from 6.2 million in Q1 2018. As for
2018, the Q1 US exports were impacted by a period of cold temperatures in
February, resulting in higher domestic consumption and increasing LPG prices.
In March, operational problems caused lower than expected exports and delays,
at the same time causing freight rates to improve due to lack of available
tonnage.

After recording 55 cargoes in January, US Gulf and USEC VLGC exports fell to
37 cargoes in February. March volumes rebounded to 56 cargoes, of which 7
cargoes were lifted from Marcus Hook terminal, as the Mariner East II
pipeline commenced operations. The average of 50 cargoes in Q1 2019 compares
to 46 cargoes in Q1 2018 and 50 cargoes per month in 2018.

Per year end 2018 the global fleet totaled approx. 265 ships with an orderbook
totaling 38 ships (14%). During the quarter, three ships have been delivered,
leaving 15 ships due for delivery for the balance of the year. Three new
orders have been placed, bringing the global fleet and orderbook to 268 and
38 ships respectively at quarter end. As we move closer to implementation of
the IMO 2020 emission rules in January 2020, we expect to see further ships
removed from active trade. This may be further emphasized as US sanctions on
Iranian trade are intensified.

The full report and interim financial statements are attached to this press
release.