Q4 2015 Oslo, 9 February 2016 Disclaimer This presentation - - PowerPoint PPT Presentation

Q4 2015

Oslo, 9 February 2016

Disclaimer

This presentation contains forward looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as “anticipate”, “believe”, “continue”, “estimate”, “expect”, “intends”, “may”, “should”, “will” and similar expressions. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although Avance Gas believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this presentation by such forward-looking statements. The information, opinions and forward-looking statements contained in this presentation speak only as at its date, and are subject to change without notice.

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Hig ighlig ights Financ nancial als Fleet & t & Mar arket t Updat ate Summar mmary & Ou Outl tlook

Agenda

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Christi stian A an And nderse sen n – Pr Presi sident nt Ped eder er S Sim imonsen en – Chief ief Fin inancia cial O Offic fficer er

Company Representatives

Highlights

• TCE rate of US$ 61 144/day compared to US$ 96 865/day in Q3

and US$ 64 629/day in Q4 2014 (3 months)

• Newbuildings delivered:
• Pampero – 19th October
• All eight newbuildings now delivered and operating in

the spot market

• Voluntary offer for Aurora LPG withdrawn in December
• EPS of US$ 1.31 in Q4
• Board declared a dividend of US$ 0.65 per diluted share

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Highlights

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Q4 2015 Comments Average Time Charter Equivalent

Avance Gas Spot VLGC Index 1 Month prior to Calendar Quarter

USD (000s (000s) Th Three mo mont nths e end nded 31 D 31 Decemb mber 2015 2015 Th Three mo mont nths e end nded 30 S 30 Septemb mber 2015 2015 Oper eratin ing R Rev even enue 84, 84,123 123 109, 109,943 943 Voyage expenses (13, (13,030 030) (15, (15,499 499 ) Operating expenses (9, (9,579 579) (7, (7,727 727 ) Administrative and general expenses (2, (2,118 118) (1, (1,409 409 ) Oper eratin ing P Profit it bef efore D e Dep eprec ecia iatio ion E Expen ense 59, 59,396 396 85, 85,308 308 Depreciation expenses (9, (9,732 732) (8, (8,833 833 ) Op Operating ng Pr Profit (L (Loss) 49, 49,664 664 76, 76,475 475 Non

• n-Op

Operating ng Inc ncome me (E (Expens nses): ): Finance expense (4, (4,430 430) (3, (3,587 587 ) Finance income 100 100 31 31 Foreign currency exchange gain (193 (193) (88 (88 ) Income tax expense (1 (1) — (4, (4,524 524) (3, (3,644 644 ) Net t Profit ( t (Loss) 45, 45,140 140 72, 72,831 831 Earnin ings p per er Share: e: Net profit (loss) Basic 1. 1.31 31 2. 2.12 12 Diluted 1. 1.31 31 2. 2.11 11

Financials – Q4 2015

• Operating revenue decreased to US$ 84 million, from US$

110 million, with TCE earnings of US$ 71 million, reflecting seasonal decline in rates

• Higher operating expenses due to the larger fleet
• Financial expenses increased by US$ 0.8 million, due to

higher debt and costs associated with the Aurora offer

• A&G expenses increased by US$ 0.7 million, mainly due to

professional fees in relation to the Aurora offer

• Net profit of US$ 45 million (US$ 1.31/share), down from

US$ 73 million (US$ 2.11/share) in Q3

• Net profit for 2015 was US$ 183.2 million, compared to

US$ 78.9 in the 12 months ended 31 December 2014

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Financials

Income Statement Comments

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USD (000s (000s) 31 D 31 Decemb mber 2015 2015 30 S 30 Septemb mber 2015 2015 Cash and cash equivalents 70, 70,033 033 63, 63,347 347 Receivables 71, 71,238 238 69, 69,049 049 Related party receivables 27 27 130 130 Inventory 4, 4,895 895 5, 5,235 235 Prepaid expenses 2, 2,635 635 — Other current assets 1, 1,962 962 2, 2,078 078 Total tal C Current t As Assets ts 150, 150,790 790 139, 139,839 839 Property, plant and equipment 965, 965,742 742 896, 896,560 560 Newbuildings deposit — 17, 17,475 475 Goodwill and intangible assets 2, 2,262 262 2, 2,290 290 Total tal N Non-current As t Assets ts 968, 968,004 004 916, 916,325 325 Total tal As Assets ts 1, 1,118, 118,794 794 1, 1,056, 056,164 164 Current portion of long-term debt 42, 42,931 931 39, 39,806 806 Revolving credit facility 50, 50,000 000 — Accounts payable 1, 1,003 003 1, 1,138 138 Related party payable balances 58 58 692 692 Accrued voyage expenses 6, 6,723 723 5, 5,201 201 Accrued expenses 886 886 477 477 Derivative financial instruments 7, 7,573 573 10, 10,169 169 Other current liabilities 1, 1,243 243 1, 1,280 280 Total C Curren ent Lia iabil ilit ities ies 110, 110,417 417 58, 58,763 763 Long-term debt 508, 508,432 432 473, 473,062 062 Total tal N Non-curren ent L Lia iabil ilit ities ies 618, 618,849 849 473, 473,062 062 Common shares 35, 35,278 278 35, 35,278 278 Paid-in capital 350, 350,359 359 350, 350,359 359 Contributed capital 94, 94,531 531 94, 94,779 779 Retained earnings 39, 39,277 277 66, 66,661 661 Treasury shares (11, (11,867 867 ) (12, (12,381 381 ) Accumulated other comprehensive income (7, (7,633 633) (10, (10,357 357) Total tal S Shar areholders’ ’ Equity ty 499, 499,945 945 524, 524,339 339 Total tal L Liab abiliti ties an and S Shar areholders’ ’ Equity ty 1, 1,118, 118,794 794 1, 1,056, 056,164 164

Balance Sheet Comments

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Financials

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Financials – Q4 2015

• Total assets of US$ 1,119 million, up from US$ 1,056 million,

reflecting delivery of Pampero

• Receivables increased slightly, reflecting the impact of the full

fleet offset by lower seasonal freight rates

• Net interest bearing debt increased by US$ 88 million, mainly

reflecting the delivery of Pampero, and utilization of revolving credit lines

• Free cash and cash equivalents totaled US$ 70 million, up

from US$ 63 million

• Equity ratio of 44.7%

Cash Flow Statement Comments

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Financials

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Financials – Q4 2015

USD (000s (000s) ) Three m ee months ended ed 31 31 Dec ecem ember er 2015 2015 Three m ee months ended ed 30 30 Sep eptem ember er 2015 2015 Cash gen ener erated ed from ( (used ed in in) o

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eratio ions 56, 56,179 179 66, 66,126 126 Debt-issuance costs (468 (468) (445 (445) Interest paid (4, (4,736 736) (2, (2,659 659) Net t cash gen ener erated ed by (used ed in in) o

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eratin ing a activ ivit ities ies 50, 50,975 975 63, 63,022 022 Cash flows u used ed in in in inves estin ing a activ ivit ities ies: Capital expenditures (57, (57,670 670) (199, (199,512 512) Net t cash u used ed in in in inves estin ing activ ivit ities ies (57, (57,670 670) (199, (199,512 512) Cash sh f flows ws from (u m (used in) n) fin inancin ing a activ ivit ities ies: Proceeds from issuance of long-term debt 50, 50,000 000 150, 150,000 000 Proceeds from revolving credit facility 50, 50,000 000 Dividends (72, (72,523 523) (41, (41,244 244) Repayment of long-term debt (14, (14,137 137) (7, (7,889 889) Purchase of own shares — — Exercise of share options 255 255 48 48 Net t cas ash provid ided ed b by fin inancin ing activ ivit ities ies 13, 13,595 595 100, 100,819 819 Effect of exchange rate changes on cash (214 (214) (4) (4) Net t dec ecrea ease e in c cas ash an and cas ash e equival alents ts 6, 6,686 686 (35, (35,675 675) Cash and cash equivalents at beginning of period 63, 63,347 347 99, 99,022 022 Cas ash an and c cas ash equival alents ts at e at end o

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70, 70,033 033 63, 63,347 347

• Net operating cash flow was US$ 51 million, down from US$

63 million in Q3

• Net cash flow from financing and investment activities was

negative US$ 44 million, of which US$ 73 million was paid as dividends

• A net increase in cash of US$ 7 million in Q4

Av Avance Built: 2003 Capacity (cbm): 82,557 Yard: Kawasaki (JPN) Iri ris G Glory ry Built: 2008 Capacity (cbm): 83,783 Yard: Daewoo (KOR) Th Thetis G Glory Built: 2008 Capacity (cbm): 83,783 Yard: Daewoo (KOR) Venus G Glor

• ry

Built: 2008 Capacity (cbm): 83,765 Yard: Daewoo (KOR) Pr Prov

• vidence

Built: 2008 Capacity (cbm): 84,597 Yard: Daewoo (KOR) Pr Promi

• mise

Built: 2009 Capacity (cbm): 84,597 Yard: Daewoo (KOR) Mi Mistral Built: 2015 Capacity (cbm): 83,000 Yard: Jiangnan (PRC) Mon

• nsoon
• on

Built: 2015 Capacity (cbm): 83,000 Yard: Jiangnan (PRC)

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Breez eeze Built: 2015 Capacity (cbm): 83,000 Yard: Jiangnan (PRC) Passa ssat Built 2015 Capacity (cbm): 83,000 Yard: Jiangnan (PRC) Sirocco cco Built: 2015 Capacity (cbm): 83,000 Yard: Jiangnan (PRC) Le Levant Built 2015 Capacity (cbm): 83,000 Yard: Jiangnan (PRC) Chinook

• ok

Built: 2015 Capacity (cbm): 83,000 Yard: Jiangnan (PRC) Pa Pamp mpero Built: 2015 Capacity (cbm): 83,000 Yard: Jiangnan (PRC)

Fleet Overview

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Fleet & Market Update

Fleet Utilization Outlook

Orderbook

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Fleet & Market Update

Market Utilization VLGCs – Current Orderbook

• Source: Nordic Shipping; Company

Waiting Days per Ship 3

Fleet & Market Update

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Avance Gas Spot Index vs Avance Gas Spot Fixtures

Strong Performance

• Avance Gas Spot Index based on Baltic weekly, reflecting estimated USD per day for a roundtrip Ras Tanura – Chiba –

Ras Tanura (13,642 nm), 24 hours for bunkering, 3% sea margin, bunkers prices as quoted on Fridays, lowest of Singapore and Fujairah

• Source: Company

LPG Exports – Q4 2015

LPG Exports from the Middle East VLGC LPG Exports from the US Gulf

• Source: Waterborne LPG Report

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Fleet & Market Update

US Gulf VLGC Exports 2015

VLGC Exports from US Gulf Destination direct US Gulf VLGC export

• Source: Waterborne LPG Report

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Fleet & Market Update

Summary and Outlook

• Average TCE 2015 = US$ 77,000/day
• 14 ships on water with cash-break even below US$ 22,500/day
• The company withholds 50% of earnings to strengthen the balance

sheet and increase financial flexibility

• Strengthening of the balance sheet will reduce cash break-even

further

• Dividends decided by the Board each quarter
• US Gulf export volumes in line with expectations
• Larger volume going long-haul to Asia than expected
• Spot market exposure focusing on increasing COA portfolio
• Freight market expected volatile through winter season 15/16 with

recovery spring 2016

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Summary & Outlook

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Questions?