Avance Gas Holding Ltd. · OTC:AVACF
Avance Gas — Q1 2023 Earnings Presentation
24 slides from Avance Gas's earnings presentation, May 30, 2023
Slide 1: First Quarter Results 2023
First Quarter Results 2023 May 30, 2023
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains 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
Slide 3: Q1-23 Highlights
Q1-23 HIGHLIGHTS Q1-23 TCE (load-to-discharge) of $58,400/day in line with guidance of ~$58,000/day. RESULTS Q1-23 TCE (discharge-to-discharge) of $55,500/day also in line with guidance of ~$55,000/day Q1-23 Net Profit of $36.3 million (EPS of $0.47) vs. $34m in Q4-22 (EPS of $0.45) We took delivery
Slide 4: Strong Commercial in H1-2023
STRONG COMMERCIAL IN H1-2023 Q1-Commercial Performance Q2-Commercial Guidance 41% Spot Rates: Spot Rates: 40% $71,000/day $60,000/day Fleet TCE/day Q1-23: TC Rates: $40,000/day Fleet TCE/day Q2-23: TC Rates: $58,400 reported $36,000/day ~$50,000 expected 1) $62,100 excl. FFA impact ~$52,000 excl. FF
Slide 5: High Spot Exposure in a Strong Market
HIGH SPOT EXPOSURE IN A STRONG MARKET 2023 2024 ▪ Docking scheduled for Venus Vessel Size (CBM) Built EGCS LPG Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Glory during Q3. Iris Glory Iris Glory 83,700 2008 Venus Glory 83,700 2008 docked during Q1. Breeze 83,000 2015 v ▪ We have mutually agreed to Chinook 83,000 2015 te
Slide 6: Ramping Up Dividend in Line with Increased Earnings
RAMPING UP DIVIDEND IN LINE WITH INCREASED EARNINGS 10x Strongest first quarter since 2015 with TCE/day of $58,400 Q2-23 bookings are ~$50,000/day and FFA suggest higher levels in 2H-23 Three ships on fixed hire rate, two on variable hire and ~1.9 ship on FFA Ample cash position of $220m at end of t
Slide 7: Strongest VLGC Freight Market Since 2015
STRONGEST VLGC FREIGHT MARKET SINCE 2015 $ TCE/day 160 000 Strong export growth coupled with firm Asian demand 140 000 120 000 Elevated arbitrage levels due to low gas prices in the US 100 000 80 000 Owners looking to avoid Panama canal due to volatile waiting time 60 000 40 000 Slippage on schedule
Slide 8: Income Statement and Key Financial Figures
INCOME STATEMENT AND KEY FINANCIAL FIGURES Income Statement (in million $) Q1 2023 Q4 2022 Variance ▪ TCE of $58,400/day for Q1, in line with TCE earnings 62 53 9 guidance of $58,000/day Operating Profit before depreciation 51 41 10 ▪ Spot market considerably stronger than FFA Depreciation (11) (11)
Slide 9: Balance Sheet and Key Financial Figures
BALANCE SHEET AND KEY FINANCIAL FIGURES Balance Sheet (in million $) Q1 2023 Q4 2022 Variance Cash & cash equivalents 220 224 (4) ▪ Total assets consist primarily of 13 VLGCs on VLGCs & newbuildings under construction 850 800 50 water and 3 dual fuel newbuildings under Other assets 42 44 (2) constru
Slide 10: Solid and Stable Cash Position of $220M at End Q1
SOLID AND STABLE CASH POSITION OF $220M AT END Q1 Delivery of Avance Rigel 10
Slide 11: Flexible Financing Structure & Newbuilds Fully Funded
FLEXIBLE FINANCING STRUCTURE & NEWBUILDS FULLY FUNDED Total committed financing as of Q1-2023 Newbuilding financing exceeds remaining capex (in million $) (in million $) $200 $193 $185 Final Maturity 2033 $180 Cash positive on deliveries $160 $ 77 First Maturity 2027 $ 135 SLB $140 Undrawn SLB $ 104
Slide 12: Seaborne LPG Freight Demand Continues to Grow
SEABORNE LPG FREIGHT DEMAND CONTINUES TO GROW Seaborne LPG export (Jan-May) Seaborne LPG Imports (Jan-May) VLGCs share1 KT KT 30 000 YTD 2023 14 000 +18% +28% 25 000 12 000 +15% +27% 10 000 +14% 70% 20 000 8 000 15 000 6 000 VLGC Other YTD 2021 10 000 4 000 5 000 2 000 66% - - N. America Middle East
Slide 13: US LPG Export Estimated to Grow by 14% in 2023
US LPG EXPORT ESTIMATED TO GROW BY 14% IN 2023 US LPG Production US Propane and Propylene stocks Barrels mt (million) 100 120 High inventories further strengthens 90 the availability of exports in the short 100 term 80 Last 10yrs CAGR + 7% 70 80 60 50 60 40 EIA forecast US LPG export to grow by 14%
Slide 14: Arbitrage Supporting High Freight Rates
ARBITRAGE SUPPORTING HIGH FREIGHT RATES FFA price spread US-Japan Strong correlation between arbitrage and freight rates 1 000 250 750 $ / ton 500 200 250 0 150 May-20 May-21 May-22 May-23 May-24 $ / ton FEI Asia propane price (lhs) Mont Belvieu (US) propane (lhs) 300 100 200 $ / ton 50 100 0 - May-
Slide 15: Current Status of the VLGC Market
CURRENT STATUS OF THE VLGC MARKET Source: Fearnleys numbers. TCE theoretical numbers calculated basis fuel consumption and waiting days. Numbers is for non scrubber eco ships. 15
Slide 16: Slippage Holding Back Fleet Growth
SLIPPAGE HOLDING BACK FLEET GROWTH 18 Schedueld newbuilding deliveries by quarter Deliveries by year 16 50 25% slippage in Q1-23 as 16 Orderbook currently 45 14 VLGCs were originally scheduled stands at 21% (73 VLCGs) delivery, whilst 12 were delivered 40 12 35 10 # VLGCs 30 28 # VLGCs 8 25 20 6 16
Slide 17: Renewal of the VLGC Fleet Ahead of New Regulations
RENEWAL OF THE VLGC FLEET AHEAD OF NEW REGULATIONS 60 50% Orderbook of 21% well below 2007 46% 46% and 2015 levels and consist of dual 45% 13% of fleet is >25 years i.e. fuel only ahead of new CII and EU 50 scrapping candidates ETS rules 2023/2024 40% 25+ years: 32 vessels 20-25 years: 35% >25 years
Slide 18: Q1-23 Highlights
Q1-23 HIGHLIGHTS Q1-23 TCE (load-to-discharge) of $58,400/day in line with guidance of ~$58,000/day. RESULTS Q1-23 TCE (discharge-to-discharge) of $55,500/day also in line with guidance of ~$55,000/day Q1-23 Net Profit of $36.3 million (EPS of $0.47) vs. $34m in Q4-22 (EPS of $0.45) We took delivery
Slide 19: Thank you! Q&A and Appendix
Avance Gas Q&Aand . Appendix © ~
Slide 20: Appendix – Comments to the Income Statement
APPENDIX – COMMENTS TO THE INCOME STATEMENT Q1 2023 Q4 2022 Variance Income Statement (in thousands $) 3-months 3-months 3-months Operating revenue 77,042 67,410 9,632 • TCE earnings (net of operating revenue and voyage expenses) of $62.3 million for the first quarter, up from $53.5 million in previ
Slide 21: Appendix – Comments to the Balance Sheet
APPENDIX – COMMENTS TO THE BALANCE SHEET Q1 2023 Q4 2022 Variance Balance Sheet (in thousands $) 31.03.2023 31.12.2022 3-months ASSETS Cash and cash equivalents 219,469 224,243 (4,774) • Total assets consist primarily of cash and 13 VLGCs on water and 3 dual Trade and other receivables 13,883 12,229
Slide 22: Appendix – Comments to the Cash Flow
APPENDIX – COMMENTS TO THE CASH FLOW Q1 2023 Q4 2022 Cash flow statement (in thousands $) Variance 3-months 3-months Cash flows from operating activities: Cash generated from operations 53,455 41,559 11,896 • Cash and cash equivalents were $219.5 million on 31 March 2023, Interest paid (5,845) (5,68
Slide 23: 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 24: 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