Avance Gas Holding Ltd. · OTC:AVACF
Avance Gas — Q2 2024 Earnings Presentation
30 slides from Avance Gas's earnings presentation, Aug 28, 2024
Slide 1: Second Quarter Results 2024
Second Quarter Results 2024 August 28, 2024 1
Slide 2: Disclaimer
DISCLAIMER 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 business and the
Slide 3: Q2 Highlights
Q2 HIGHLIGHTS Q2-24 TCE discharge-to-discharge of $50,100/day & $46,700/day load-to-discharge Q2-24 Net Profit of $61 million & EPS of $0.79, net profit of $24 million & EPS of $0.32 excl. gain on sale RESULTS H1-24 Net profit of $207 million and EPS of $2.70 – highest ever half year results driven
Slide 4: Mission Accomplished: VLGCs Sold at a Profit of ~$455M
MISSION ACCOMPLISHED: 19 VLGCs SOLD AT A PROFIT OF ~$455M 2015 eco class DF class MGC/MACs 4 Dual-fuel MGC vessels 1 Avg. age 0.0 years 2 Chinook Mistral (scrubber) Polaris (2022) MGC #1 (2025) 2008/2009 class Capella (2022) MGC #2 (2026) Pampero Monsoon (scrubber) Venus Glory (2008) Levant (scrubbe
Slide 5: What Is Avance Gas After the Sale of VLGC Fleet?
WHAT IS AVANCE GAS AFTER THE SALE OF VLGC FLEET? Overview of value pro forma transaction1,2,3 • Owner of four high-spec dual-fuel Medium- NAV estimate approx. $12.85/share or NOK135/share4 Sized Gas Carriers (MGC) newbuildings capable MGC owner of carrying full ammonia cargoes (98% filling) • To be
Slide 6: Transaction Overview - Crystalizing Shareholder Value
TRANSACTION OVERVIEW - CRYSTALIZING SHAREHOLDER VALUE Settlement1 Gain on sale Total shareholder proceeds1,3 $ million $ million + ~$315 $ million million2 1 200 1 050 ~30-60 ~595 1 000 800 ~735 600 400 200 0 Book value Sale price • In addition, the company sold four VLGCs in the first half of 2024
Slide 7: Locking in Very Attractive Returns for Our Investors
LOCKING IN VERY ATTRACTIVE RETURNS FOR OUR INVESTORS Attractive investment & divestment point1 Total shareholder return last 5-years2 Sale: $ million Four dual fuel VLGCs sold % Sale: to BW LPG in H2 2024 1000% Two dual fuel VLGCs sold 140 in H1 2024 Contracted: 800% 120 Four dual fuel VLGCs ordered
Slide 8: Commercial Performance and Guidance
COMMERCIAL PERFORMANCE AND GUIDANCE Q2-24-Commercial Performance1: Q3-24-Commercial Guidance2: (Discharge-to-discharge) (Discharge-to-discharge) Spot Rates: 25% Spot Rates: 25% $49,100/day $39,100/day TC Rates: TC Rates: Fleet TCE/day Q2-24 $50,100/day Fleet TCE/day Q3-24 $42,400/day $49,300 excl. F
Slide 9: Earnings and Excess Capital Will Be Repaid to Shareholders
EARNINGS AND EXCESS CAPITAL WILL BE REPAID TO SHAREHOLDERS Dividend distribution Dividend decision criteria's $ / Share Q1-24 Q2-24 2,50 1 Earnings and cashflow Net Profit of $61m in Q2 $2,15 2 Market outlook Market has strengthened in recent weeks. FFA rates at $55,000/day for Q4 2024 2,00 3 Backlo
Slide 10: Income Statement and Key Financial Figures Q2 2024
INCOME STATEMENT AND KEY FINANCIAL FIGURES Q2 2024 Q2 2024 Q1 2024 Q2 2024 ▪ TCE of $50,100/day for Q2 2024 on discharge-to- Income Statement (in million $) discharge basis and $55,700/day for H1 2024 3-months 3-months 6-months TCE earnings 51 92 143 ▪ TCE on load-to-discharge basis was $46,700/day
Slide 11: Pro Forma Key Financial Effects - Post Transaction
PRO FORMA KEY FINANCIAL EFFECTS – POST TRANSACTION ▪ Total estimated gain on sale estimate of $305 Post-transaction Income Statement (in million $) H1 2024 Pro-forma million and additionally $10 million in lower effect depreciation expense. Deprecation stops at TCE earnings 143 143 announcement date
Slide 12: Cash Flow Movements Q2 2024
CASH FLOW MOVEMENTS Q2 2024 $m Dividends -$86 Return of capital -$79 Total shareholder distributions of $2.15/share for Q2-2024 12
Slide 13: Pro-Forma Cash Post Transaction
PRO-FORMA CASH POST TRANSACTION $m + ~$271m ~$30-601 ~$523-553 ($539 mid) (1) Mid-point cash flow of ~45m based on booked days in Q3 2024 and FFA curve for Oct and Nov with delivery to BW LPG November/December. Cash flow can change given spot market development 13
Slide 14: All Outstanding Debt Repaid or Novated at Delivery
ALL OUTSTANDING DEBT REPAID OR NOVATED AT DELIVERY $368 million Bank Term Facility – Repaid at delivery Total outstanding debt of $500 million as of June 30, 2024 ▪ Two Bank Term Facilities financing 10 VLGCs: 1) $43 million Term Facility financing for the VLGC Pampero (2015) Novated at delivery • O
Slide 15: Continued Strong Demand for LPG Freight
CONTINUED STRONG DEMAND FOR LPG FREIGHT KT Seaborne LPG export1 KT Seaborne LPG Import2 40 000 25 000 +11% MGCs export volume growth exceeds VLGCs +13% 20 000 30 000 0% -5% 15 000 +10% +1% 20 000 10 000 +5% -5% +3% 10 000 0% +11% -10% -10% 5 000 - - United States Middle East Norhern Africa Europe Re
Slide 16: US LPG Production Grows While Consumption Remains Flat
US LPG PRODUCTION GROWS WHILE CONSUMPTION REMAINS FLAT US LPG production and consumption US inventories above the five-year average million tons/year Million bbl 120 120 CAGR 100 5.1% 100 80 80 60 60 40 40 CAGR 2.2% 20 20 0 - 2020 2021 2022 2023 2024E 2025E Jan Feb Mar Mar Apr May Jun Jul Aug Sept O
Slide 17: US Export Constraints Relieved by Near Term Capacity Addition
US EXPORT CONSTRAINTS RELIEVED BY NEAR TERM CAPACITY ADDITION Capacity vs export at US export terminals1 US LPG export capacity Thousand bbl/day Thousand bbl/day 3 000 3 300 +23% 3 100 2 500 2 900 2 000 2 700 2 500 1 500 2 300 1 000 2 100 1 900 500 1 700 0 1 500 2019 2020 2021 2022 2023 2024 2023 20
Slide 18: Spot Freight Market Has Rebounded
SPOT FREIGHT MARKET HAS REBOUNDED US Spot freight rates in TCE/day Arbitrage vs terminal/traders share of arbitrage $/day $/mt 180 000 Avance Gas to trade the VLGCs in the seasonal strong autmn market 400 Despite stronger price arbitrage, rates have been until delivery relative weak at the beginning
Slide 19: Muted VLGC Fleet Growth Medium Term - Growing Longer Term
MUTED VLGC FLEET GROWTH MEDIUM TERM - GROWING LONGER TERM VLGC delivery schedule Newbuilds driven by VLAC spec 50 20 395 VLGCs on water, 95 vessels on order, ~24% orderbook 40 18 30 Heavy delivery Limited deliveries schedule until H2 2026 20 16 from H2 2026 10 14 0 H2 2024 2025 2026 2027 2028 2029 1
Slide 20: Game Plan Going Forward: Three Alternatives for Avance Gas
GAME PLAN GOING FORWARD: THREE ALTERNATIVES FOR AVANCE GAS 1 2 3 Selling the vessels to a third party without a Selling the vessels to a third party after Avance Gas to be a fully operator and expand charter agreement in place securing charter agreemeents the MGC fleet ▪ Selling the vessels in the s
Slide 21: Our MGC Investment Is Well In-the-Money
OUR MGC INVESTMENT IS WELL IN-THE-MONEY MGC newbuilding prices Committed capex for the 4 MGCs $$ million $ million million 72 $60 MGC 1 70 delivery $50 MGC 3 $46 68 delivery $43 MGC 2 $40 MGC 4 66 delivery $40 delivery 64 $34 $34 62 $30 Attractive entry point 60 with vessels ordered for $61.5m each
Slide 22: MGCs Well Positioned to Meet LPG and Ammonia Demand
MGCs WELL POSITIONED TO MEET LPG AND AMMONIA DEMAND MGC seaborn export volumes out of US Import destinations from MGC out of US kt % kt 7 000 14% 1 600 +141% +18% +16% +21% +14% +43% 6 000 12% 1 400 1 200 5 000 10% 1 000 4 000 8% CAGR 800 3 000 29% 6% 600 2 000 4% 400 1 000 2% 200 0 0% 0 Jan-Jul Jan
Slide 23: MGC Rates Trending Upwards Towards Attractive Levels
MGC RATES TRENDING UPWARDS TOWARDS ATTRACTIVE LEVELS 38K CBM 12-month TC rate MGC fleet and deliveries $ / day # vessels 45 000 30 ~240 vessels on water 40 000 Orderbook: 39 vessels / orderbook to fleet: 16% 25 35 000 ~17% of fleet will be older than 20 years YE2026 30 000 20 Most of the newbuilds o
Slide 24: Recap Q2 Highlights
RECAP Q2 HIGHLIGHTS Q2-24 TCE discharge-to-discharge of $50,100/day & $46,700/day load-to-discharge Q2-24 Net Profit of $61 million & EPS of $0.79, net profit of $24 million & EPS of $0.32 excl. gain on sale RESULTS H1-24 Net profit of $207 million and EPS of $2.70 – highest ever half year results d
Slide 25: Q&A and Appendix
Q&A and Appendix
Slide 26: Appendix - Comments to the Income Statement
APPENDIX – COMMENTS TO THE INCOME STATEMENT Q2 2024 Q1 2024 Variance • TCE earnings (net of operating revenue and voyage expenses) of $50.9 Income Statement (in thousands $) million for the second quarter, down from $92.0 million in the first 3-months 3-months 3-months Operating revenue 67,691 116,1
Slide 27: Appendix - Comments to the Balance Sheet
APPENDIX – COMMENTS TO THE BALANCE SHEET Variance Balance Sheet (in thousands $) 30.06.2024 31.03.2024 3-months ASSETS Cash and cash equivalents 268,287 360,245 (91,958) Trade and other receivables 25,089 13,013 12,076 • Total assets consist primarily of 12 VLGCs on water and four MGCs under Invento
Slide 28: Appendix - Comments to the Cash Flow
APPENDIX – COMMENTS TO THE CASH FLOW Q2 2024 Q1 2024 Variance Cash flow statement (in thousands $) 3-months 3-months 3-months Cash flows from operating activities: • Cash and cash equivalents were $268.3 million on 30 June 2024, Cash generated from operations 35,337 123,530 (88,193) compared to $360
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 Organization 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