Øystein M. Kalleklev, chief executive of Avance Gas gave today the company´s second quarter results of 2023.
The Oslo-listed company of VLGCs expects better times to come ahead of Christmas after record profits in the first half of 2023.
The company has posted net profits of $35.7 million compared to $36.3 million for the first quarter 2023, giving in total $72 million in profits for the first half of the year, the highest ever profits for the first half of the year, with better to come in the rest of 2023.
The owner and operator of VLGCs Avance Gas mentioned today that with a tight shipping market and high product arbitrage between US and Asia supporting strong freight levels, it anticipates doing even better in the second half of the year.
The shipowner expects TCE/day in the third quarter in the high $50s compared to an average of mid $50’s in the first half of the year.
“With two new large dual fuel VLGCs delivered during the first half of the year, we also have more vessel days available in the second half of the year compared to the first half which increase our earnings capacity,” commented Øystein M. Kalleklev.
The Oslo-listed VLGC specialist invested during the last three months close to $250 million by contracting four medium sized dual fuel combination carriers for LPG and ammonia (MGC).
The ships which are scheduled for delivery at end of 2025 into 2026 have been contracted at a “very favourable price point” as the company explains.
“We are financing the expansion into a new attractive sub segment by way of divesting our older 2008/2009 vintage VLGCs,” Øystein M. Kalleklev notes.
Last year the company sold three VLGCs of this vintage and recently announced the sale of the 2008 built VLGC, Iris Glory, at $60.0 million, which will generate a book gain of about $22.0 million once the ship is delivered to its new owners.
The top management reports that with these four ship divestures, Avance Gas has only one remaining 2008 vintage VLGC left in the fleet, the Venus Glory which is on time charter until end of 2023.
Avance Gas logs record profit and is continuously renewing its fleet portfolio by selling older ships. At the same time it is taking delivery of new dual fuel VLGCs and contracting the new dual fuel MGCs, which can carry ammonia as well as LPG.
“This enables us to further improve our carbon footprint while at the same time diversifying the cargo types which our ships can transport. This means we are well positioned to comply with the stricter decarbonization rules the industry is now facing,” points out the chief executive Kalleklev.
