Norway's Avance Gas has rebounded into the black in the second quarter as rates jumped on the back of increased US exports.
The VLGC owner said net profit was $9.83m, against a loss of $19.26m in the same period of 2018.
Revenue surged to $61.66m against $22.64m a year ago as the average time charter equivalent (TCE) rate for the fleet hit $32,275 per day, up from $11,133 in the first quarter.
Daily operating expenses grew to $8,214 per day, compared to $7,952 in the previous three months.
"Following a weak first quarter the freight markets improved significantly from March, driven by improvements in terminal capacity and infrastructure in the US Gulf and East Coast," the company said.
Middle East LPG exports were 8m tons in the period, up 0.2m tons from the first three months, it added, while US Gulf and US east coast monthly VLGC exports totalled an average of 62 cargoes in the second quarter, up from 51 in the first quarter.
Avance added: "Depending on the strength of the freight market, we continue to expect efficiency disruptions and removal of older ships from active trade in connection with the implementation of the IMO 2020 emission rules in January 2020."
It has 80% of third-quarter ship days fixed at a TCE rate of $45,000 per day, representing $29m per quarter in free cash flow.
Avance also said it is in the process of ordering three additional exhaust gas cleaning systems, with delivery set for the start of 2020.
The company holds $91m in cash.
Higher than expected
Clarksons Platou Securities said the figures were above expectations, with EBITDA coming in at $28m versus its estimate of $25m and a consensus of $22m.
It had also estimated TCE of $29,100 per day, which assumed a circa 10% discount to its projected market rate of $34,000 for a VLGC in the period, factoring in that Avance "historically has achieved lower rates with their China-built vessels compared to Japanese/Korean built vessels."
"The fact that the company achieved $32,300 per day reflects a lower than expected discount and perhaps illustrates management’s improved ability to secure attractive contracts, in our view," Clarksons Platou added.
It is estimating a fleet TCE of $44,000 per day for the third quarter, translating into EBITDA of $43m.