Avance Gas Holding Ltd. · OTC:AVACF
Avance Gas — Q4 2023 Earnings Presentation
30 slides from Avance Gas's earnings presentation, Feb 14, 2024
Slide 1: Fourth Quarter & Full Year 2023 Results
Fourth Quarter & Full Year 2023 Results February 14, 2024
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Matters discussed in this announcement may constitute forward-looking statements. All statements other than statements of historical facts included in this announcement, including those regarding Avance Gas' plans, strategies, business prospects, changes and trends in its
Slide 3: Q4 Highlights
Q4 HIGHLIGHTS Q4-23 TCE (discharge-to-discharge) of $76,200/day, slightly ahead guidance ~$70-75,000/day Q4 Net Profit of $61 million and EPS of $0.80, second best quarterly results ever RESULTS FY-23 Net Profit of $164 million and EPS of $2.14, second best full year results ever Sale of Iris Glory
Slide 4: Strong bookings both in Q4-23 and Q1-24
STRONG BOOKINGS BOTH IN Q4-23 AND Q1-24 Q4-23-Commercial Performance1: Q1-24-Commercial Performance2: (Discharge-to-discharge) (Discharge-to-discharge) Spot Rates: Spot Rates: 20% TC Rates: $100,900/day 29% $80,200/day $47,200/day TC Rates: Fleet TCE/day Q4-23 $48,900/day Fleet TCE/day Q1-24 $85,900
Slide 5: The evolving life of the Avance fleet
THE EVOLVING LIFE OF THE AVANCE FLEET 2015 eco class DF class MGC/MACs 16 Vessels 1 8 Dual-fuel vessels Scrubber Avg. Age ~ 4.7 years 6 2 fitted vessels Chinook Mistral (scrubber) Polaris (2022) MGC #1 (2025) 2008/2009 class Capella (2022) Pampero Monsoon (scrubber) MGC #2 (2026) Venus Glory (2008)
Slide 6: Ramping up dividend in line with earnings
RAMPING UP DIVIDEND IN LINE WITH EARNINGS Dividend distribution Dividend decision criteria's $ / Share Q3-23 Q4-23 0,90 1 Earnings and cashflow Net Profit $164m – second highest ever 0,80 Q1-24 impacted by cold weather in the US but about 2 Market outlook to rebound - FFA rates at $47,000 for Q2-Q4
Slide 7: Key financial figures for 2023 – second highest result ever
KEY FINANCIAL FIGURES FOR 2023 – SECOND HIGHEST RESULT EVER TCE Earnings EBITDA $ million Net profit & EPS $ million $ million $300 $227 $180 $274 $164 $160 $250 $200 +50% +67% $140 +84% $200 $183 $120 $150 $136 $100 $89 $150 $80 $100 $78 $61 $100 $90 $60 $62 $63 $59 $51 $52 $46 $36 $36 $50 $40 $30
Slide 8: Robust and clean balance sheet
ROBUST AND CLEAN BALANCE SHEET Assets (in $ million) 31.12.23 Liabilities & Equity (in $ million) 31.12.23 ▪ Total assets consist primarily of 14 Other liabilities $26 VLGCs on water (incl. asset held for sale) Cash & cash equivalent $132 ▪ Two dual fuel VLGCs and four MGCs Other assets $88 under co
Slide 9: Solid cash position of $132m which will grow
SOLID CASH POSITION OF $132M WHICH WILL GROW… $m -$14m Newbuild CAPEX VLGC & MGCs 9
Slide 10: Boosted by $185m from sale of vessels
…BOOSTED BY $1 M FROM SALE OF VESSELS… Newbuilding price developement1 $185m cash release from vessel sales $m Castor & Pollux ordered in Jan ‘21 and agreed sale in Dec ‘23 Iris ris l r 2 Glory 120 Venus 110 en s l r Glory 100 Avance ance ll Pollux 90 Avance 80 ance as r Castor We have paid in ~$24m
Slide 11: And refinancings increasing pro-forma cash to $362m
….AND REFINANCINGS INCREASING PRO-FORMA CASH TO $362M $43 million Bank Term Facility Total Cash post refinancing & sales $m ▪ Financing amount: $43 million for the VLGC Pampero (2015-built) $185m from sales ▪ Repayment profile: 20 years age-adjusted ▪ Maturity: January 2028 ▪ Margin: SOFR + 190bps $
Slide 12: While securing no debt maturities prior 2028
….WHILE SECURING NO DEBT MATURITIES PRIOR 2 2 Debt maturity profile1 Maintaining industry low cash break-even2 $250 $220 million $1,000 $4,700 $200 $150 22,500 $ $100 per day $8,800 $73 million $8,000 $50 Debt maturity for Avance Polaris & Avance Capella extended from 2027 to 2034 $0 2024 2025 2026
Slide 13: Review of VLGC spot freight market in 2023
REVIEW OF VLGC SPOT FREIGHT MARKET IN 2023 2023 avg. VLGC BLPG1 & BLPG3 TCE: $94,000/day +84% Y-o-Y $98/pmt TCE: $108,800/day 2023 Avg. LPG price arbitrage $257/pmt +60% Y-o-Y $172/pmt TCE: $95,500/day $108/pmt TCE: $92,600/day Exports & Imports: Exports: +13% Y-o-Y Imports: +22% Y-o-Y Source: Clark
Slide 14: Strong US LPG fundamentals
STRONG US LPG FUNDAMENTALS US LPG production continues to increase US consumption to remain flat Cold snap brought inventories to average levels mill bbls/day mill. bbls/day Million Bbl 2,0 120 3,8 1,8 100 1,6 3,5 1,4 80 +16% 3,2 1,2 60 1,0 2,9 0,8 40 2,6 0,6 20 0,4 2,3 0,2 - Jan Mar May Jul Sept No
Slide 15: Secures high growth in seaborne volumes
SECURES HIGH GROWTH IN SEABORN VOLUMES Seaborne LPG export1 Seaborne LPG Import2 KT KT 70 000 35 000 +35% +17% 60 000 30 000 +13% 50 000 +23% 25 000 +6% 40 000 20 000 30 000 15 000 +5% 20 000 10 000 -3% 10 000 5 000 - - US US Middle East Middle East Europe Europe Northern Northern China China India
Slide 16: While lid on US prices enables attractive arbitrage levels
WHILE LID ON US PRICES ENABLES ATTRACTIVE ARBITRAGE LEVELS Propane price west east arbitrage 1 Spot freight rates are driven by the arbitrage1 $/t $/day 400 150 000 300 200 125 000 100 0 100 000 Oct-20 Apr-21 Oct-21 Apr-22 Oct-22 Apr-23 Oct-23 Apr-24 Oct-24 Arbitrage driving spot freight rates 75 00
Slide 17: Current status of VLGC fleet
CURRENT STATUS OF VLGC FLEET No ships in Black Sea Very few ships in Red Sea Increased Panama routing Loaded Ballast Mostly CGH routing Open Source: Kpler 17
Slide 18: Suez traffic almost halted while Panama has rebounded
SUEZ TRAFFIC ALMOST HALTED WHILE PANAMA HAS REBOUNDED Share of US monthly export to Asia by route % Owners and charterers avoiding Red Sea 100% although some cargos are being lifted out of Yanbu through Suez/MED 80% In terms of importance to shipping US – China via Suez routes, Panama efficiency iss
Slide 19: Going from high to moderate fleet growth
GOING FROM HIGH TO MODERATE FLEET GROWTH 50 VLECs vessels not included as Age split VLGC fleet: these vessels do not operate in 45 the VLGC spot market 384 VLGCs currently on water, < 5y 27 % 25y + 40 vessels delivered in 2023 against ~45 9% 40 scheduled for delivery 20-24y 6% Recent newbuilding 35
Slide 20: We told you to worry less about the VLGC market a year ago
WE TOLD YOU TO WORRY LESS ABOUT THE VLGC MARKET A YEAR AGO 20
Slide 21: Tonne-mile took care of fleet growth
TONNE-MILE TOOK CARE OF FLEET GROWTH 1 2 3 Orderbook was not too big after all and High US production coupled with high par l “red ced” d e slippage Volatility persisted, but at high freight levels Chinese demand $kpd ~12% growth 150 ~45 scheduled for bn tonne miles # Vessels delivery vs 40 actual 7
Slide 22: Hence being worried did not pay off
HENCE BEING WORRIED DID NOT PAY OFF 4 5 “In my office, you will not see the degree that I got from the University of Nebraska. No, Naphtha did not kill economics And No, it wasn't too late to buy the stock You will not see the master's degree I got from Columbia University. But you will see Indexed1
Slide 23: Recap of Q4 Highlights
RECAP OF Q4 HIGHLIGHTS Q4-23 TCE (discharge-to-discharge) of $76,200/day, slightly ahead guidance ~$70-75,000/day Q4 Net Profit of $61 million and EPS of $0.80, second best quarterly results ever RESULTS FY-23 Net Profit of $164 million and EPS of $2.14, second best full year results ever Sale of Ir
Slide 24: Q&A and Appendix
Q&A and Appendix y
Slide 25: Appendix – Comments to the income statement
APPENDIX – COMMENTS TO THE INCOME STATEMENT Q4 2023 Q3 2023 Q4 2023 Q4 2022 Income Statement (in thousands $) 3-months 3-months 12-months 12-months Operating revenue 111,219 79,475 352,310 254,540 • TCE earnings (net of operating revenue and voyage expenses) of $89.6 million for the fourth quarter,
Slide 26: Appendix – Comments to the balance sheet
APPENDIX – COMMENTS TO THE BALANCE SHEET Variance Balance Sheet (in thousands $) 31.12.2023 31.12.2022 12-months ASSETS Cash and cash equivalents 131,515 224,243 (92,728) Trade and other receivables 42,962 12,229 30,733 • Total assets consist primarily of 14 VLGCs on water (incl. asset held for Inve
Slide 27: Appendix – Comments to the cash flow
APPENDIX – COMMENTS TO THE CASH FLOW Q4 2023 Q3 2023 Q4 2023 Q4 2022 Cash flow statement (in thousands $) 3-months 3-months 12-months 12-months Cash flows from operating activities: Cash generated from operations 68,497 33,720 191,154 142,180 • Cash and cash equivalents were $131.5 million on 31 Dec
Slide 28: Employment overview
EMPLOYMENT OVERVIEW 2024 2025 Vessel Size (CBM) Built EGCS LPG NH3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Iris Glory 83 700 2008 v Vessel sold at $60m Venus Glory 83 700 2008 v Vessel sold at $66m Breeze 83 000 2015 v Chinook 83 000 2015 Levant 83 000 2015 v Mistral 83 000 2015 v Monsoon 83 000 2015 v Pampero 83 0
Slide 29: Glossary
GLOSSARY A&G = Administrative and general CBE = Cash break even CAPEX = Capital expenditure EEXI = Energy Efficiency Existing Ship Index EPS = Earnings Per Share FY = Fiscal year IFRS = International Financial Reporting Standards IMO = International Maritime Organisation LPG = Liquefied Petroleum Ga
Slide 30: Contact Details
Contact Details Avance Gas Bryggegata 3 0112 Oslo, Norway +47 23 11 40 00 www.avancegas.com Investor Relations https://www.avancegas.com/Investor-Relations Stock Exchange ticker: AGAS