Avance Gas Holding Ltd Positive About Freight Rates Moving Forward
Avance Gas Holding Ltd reported unaudited results for the third quarter 2021.
• The average time charter equivalent (TCE) rate was $27,548/day compared to $27,730/day in Q2 2021. TCE includes a ballast cost of $689/day for three TC contracts entered in Q3.
• Daily operating expenses (OPEX) were $8,610/day, down from $9,311/day in Q2 2021. OPEX was impacted by Covid-19 crew and freight cost of $650/day. A&G expenses were $1,549/day, compared to $1,357/day in Q2 2021.
• In September 2021, the Company entered into three Time Charter Agreements for a period of 2 years at an average hire level of approximately $30,000/day net to Owners.
• In October 2021, the Company signed a term sheet for the refinancing of the VLGC Iris Glory (2008) by way of a sale leaseback transaction. The loan amount is $41.65 million and bears an implied 22-year age adjusted profile and a tenor of 9 years and will generate net cash proceeds of approximately $16.6 million subject to credit approval, normal documentation and closing procedures.
• In October 2021, the final results of the mandatory offer were announced and following the settlement, Hemen Holding Limited owns 59,382,696 shares in Avance Gas representing approximately 76.70% of the registered share capital and voting rights in the Company.
• The board declared a dividend of $0.05 per share for Q3 2021 corresponding to $3.8 million.
• For the fourth quarter of 2021, we estimate TCE rate of approximately $28,000/day contracted for 94% of vessel days including approximately 50 waiting days (Northbound) in the Panama Canal.
The VLGC freight market was impacted by low US inventory levels, high US LPG prices and thereby a narrowed US-Asia arbitrage. Despite the unfavorable LPG price differential, Asian demand and US export volumes stayed firm.
US Gulf and USEC VLGC exports increased to 80 cargoes on a monthly average for Q3, slightly up from 78 cargoes in Q2 and up 20% from Q3 last year (68 cargoes/month). The increase reflects higher volumes primarily from the terminals Enterprise and Markus Hook. In Q3, Middle East VLGC exports were slightly up recording 50 cargoes (excluding Iran) on a monthly average, compared to 48 cargoes per month in Q2 2021.
Source: Avance Gas