Avance Gas Q4 2023

Announced on 02/14/24
Very positive results and interesting developments

  • Rev of $111.2M
  • Net income of $61.5M
  • TCE (load-to-discharge) was $71.9K daily. Q3 2023 was also good, but $46.7K daily
  • Company had been monetizing on its older vessels. The last of their older vessels, a 2008-build, was delivered in Jan 2024
  • Avance Gas has also decided to monetize on its newbuilds, selling its two newest vessels (have not yet delivered) a $120M each.
  • Declared a dividend of $0.65/sh for Q4

$72M gain from the sale of two VLGC newbuilds? Certainly, each vessel from a high quality yard. Does Avance mgmt worry about the vessel supply dynamics in 2024 and early 2025? The company will take delivery of MGCs in 2025 - but I am guessing those vessels will focus on the Ammonia market.

Avance Gas only trades on the Norwegian market. I guess, one could trade the shares on the OTC market - just not sure if one gets the dividend.

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The ROI on those two VLGC newbuilds is probably a lot higher. But, on the surface,
Each vessel cost around $84M - $85M, and Avance close a deal making $36M per vessel, or 42% return. That’s without ever operating the vessel, so no initial costs of fueling the vessel, stocking the vessel with any necessary supplies, etc. Definitely a good move from a monetization perspective.

That said, each vessel is definitely a top-of-the-line VLGC vessel - dual fueled, with Ammonia as a fuel. Also, the vessels are already capable of carrying Ammonia (Per Dorian LPG mgmt comments, I don’t think most VLGCs are Ammonia-carrying capable without some type of upgrade )