Avance Gas seals new scrubber finance and ends 2019 in profit
Avance plans to fit six scrubber systems on its vessels as results reap benefits of better fourth-quarter market
Avance Gas has secured extra financing from its banks for scrubbers and has reported a profitable end to 2019.
The Oslo-listed LPG carrier has entered into agreement with its bank group for a $15m tranche under its existing $515m credit facility.
The cash will be used to partly finance scrubber installations on its 14-vessel fleet of VLGCs.
The tranche will have the same credit margin, tenor and covenants as the existing facility, Avance Gas said in its fourth-quarter report for 2019.
Avance plans to fit six scrubber systems on its vessels. In November it said the work would be completed by the end of the first quarter of 2020, but it has been experiencing disruptions.
Net profit for the full year was $56m, reversing the $43.2m net loss seen in 2018.
The fourth quarter last year ended with a positive result of $36.8m, a drastic improvement on the $2.8m loss booked for the same period 12 months earlier.
The company's board has declared a dividend of $0.30 per share for the fourth quarter.
It did not issue a payout to shareholders in the previous three-month period.
Fleet earnings
The improvement in Avance Gas' fortunes comes on the back of improved average time charter equivalent (TCE) rates this year.
On a discharge-to-discharge basis, the average TCE rate for its VLGCs was $35,220 per day during 2019, compared with $14,250 per day in 2018.
Average daily rates strengthened considerably during the last three months of the year, going from $44,295 in the third quarter to $51,358 in the fourth.
"The strong freight markets continued in Q4, driven by strong US export volumes, low fleet growth and fleet efficiency disruption relating to IMO 2020," Avance said in its report.
"The US has surpassed the Middle East as the largest exporting region, both in Q4 and for the full year 2019."
VLGC exports from the US Gulf and US East Coast were 8.6 million tons in the fourth quarter, up from 7.1m a year ago, the company said.
Today's Bunker Prices:
