John Fredriksen’s Avance Gas has posted its best-ever interim earnings, with better to come in the rest of 2023.
The Oslo-listed VLGC specialist said net profit was $35.7m in the second quarter, compared to $18.4m in the same period of 2022.
Revenue grew to $84.6m, against $65.2m a year ago.
Chief executive Oystein Kalleklev said the result was again solid and pointed to a “constructive outlook for the VLGC market and our healthy financial position.”
The six-month profit figure of $72m was a record for the company.
“With a tight shipping market and high product arbitrage between the US and Asia supporting strong freight levels, we anticipate doing even better in the second half of the year,” the CEO added.
“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 … which increase our earnings capacity,” he said.
Average earnings per vessel came in at $52,015 per day, down from $58,379 in the first quarter.
But this was ahead of guidance of about $50,000 per day.
Freight hedging using forward freight agreements resulted in a loss of $2,500 per day for the fleet.
Rates on the up
For the third quarter, Avance Gas estimates rates in the "high $50,000s" per day.
Avance Gas is paying a dividend of $0.50 per share or $38.3m for the April to June period.
The owner has sold four older ships since 2022, with only one 2008-built vessel left. This is on charter until the end of the year.
The company is using the money to pump $250m into ordering four new mid-sized LPG and ammonia carriers (MGCs).
“Hence, we are continuously renewing the fleet by selling older ships while at the same time taking delivery of new dual fuel VLGCs and contracting the new dual fuel MGCs which can carry ammonia as well as LPG,” Kalleklev said.
