Avance Gas (AGAS) Q3 2024 earnings summary

Executive summary

• Announced wind-down after selling entire fleet, including 12 VLGCs to BW LPG for $1,050 million and four MGC newbuildings to Exmar for $282.4 million, with all proceeds and BW LPG shares to be distributed to shareholders before final liquidation in 2025.

• Declared Q3 2024 dividend of $3.50 per share ($268 million), prepaying gains from asset sales, with further distributions planned in Q4 and 2025.

• Shareholders to receive BW LPG shares (approx. 0.25 per Avance share) as part of the settlement, maintaining exposure to the LPG shipping market.

• Company to be wound up in a cost-efficient manner, with a special general meeting to reduce capital and finalize liquidation.

• Layoffs and cost reductions implemented ahead of company wind-up.

Financial highlights

• Q3 2024 net profit was $25.8 million ($0.34/share); year-to-date net profit reached $233 million ($3.04/share), marking the best-ever nine-month result.

• Q3 TCE (load-to-discharge) was $41,900/day; discharge-to-discharge TCE at $38,700/day.

• Total gains from ship sales in 2024 estimated at $450 million, with $1.8 billion in total sales proceeds.

• Cash and cash equivalents at quarter-end were $192.6 million, down from $268.3 million in Q2, mainly due to dividend payments.

• No debt expected at year-end; all interest rate swaps terminated, generating $11.3 million gain in 2024.

Outlook and guidance

• Q4 expected to be softer, with TCE bookings around $28,000 per day and only 67% of capacity booked due to ongoing fleet deliveries.

• Pro forma cash of $264 million expected after December dividend, with further distributions in February and April 2025.

• Most remaining value to be distributed in Q4 report, with final milestone payment from Exmar in April/May 2025.

• Market outlook for 2025 is constructive, with US LPG export volumes and terminal capacity expected to increase.

• VLGC FFA market for 2025 indicates supportive rates, with 12-month TC agreements quoted at $44,000/day.