Q4 2017 Oslo, 15 February 2018 Di Disc scla laimer er This - - PowerPoint PPT Presentation

Q4 2017

Oslo, 15 February 2018

Di Disc scla laimer er

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

Ag Agend enda

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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

Com

• mpany

ny Repr epresent esentati tives es

Highli ghlights ghts

• Ton-miles increase as US Gulf exports continue to

grow - Middle East exports are down in line with expectations

• Eight ship delivered from shipyards in South Korea

and Japan during Q3, having an negative impact on supply/demand balance and Q4 freight market

• TCE rate of $12,163/day, up from $7,524/day in Q3
• Available liquidity at quarter-end of $ 112.3 million,

including $50 million in available RCF

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Highlights

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Q4 2017 Comments Average Time Charter Equivalent

Avance Gas Spot VLGC Index 30 days prior to calendar quarter

($ 000s ($ 000s) Th Three mo mont nths e end nded 31 D 31 Decemb mber 2017 2017 Th Three mo mont nths e end nded 30 S 30 Septemb mber 2017 2017 Oper eratin ing r rev even enue 27, 27,369 369 23, 23,679 679 Voyage expenses (12, (12,113 113) (14, (14,025 025 ) Operating expenses (9, (9,836 836) (9, (9,655 655 ) Administrative and general expenses (1, (1,303 303) (1, (1,297 297 ) Oper eratin ing p profit it (loss) b bef efore d e dep eprec ecia iatio ion ex expen ense 4, 4,117 117 (1, (1,298 298 ) Depreciation and amortization expenses (9, (9,917 917) (10, (10,034 034 ) Operati ating l loss (5, (5,800 800) (11, (11,332 332 ) Non

• n-oper

eratin ing ( (ex expen enses es) in income: e: Finance expense (6, (6,521 521) (6, (6,510 510 ) Finance income 5 10 10 Foreign currency exchange gain 5 22 22 (6, (6,511 511) (6, (6,478 478) Inc ncome me tax tax ex expen ense (55 (55) — Net l t loss (12, (12,366 366) (17, (17,810) 810) Loss ss per er s share: e: Basic (0. (0.19 19) (0. (0.28 28 ) Diluted (0. (0.19 19) (0. (0.28 28 )

Fi Finan ancials ls – Q4 2 2017

• TCE earnings of $15.3 million, up from $9.7 million,

reflecting the improved freight market in Q4

• Operating expenses of $9.8 million, marginally up from

$9.7 million Q3 2017

• Administrative and general expenses of $1.3 million, in

line with last quarter

• Non-operating expenses—mainly financial expenses—
• f $6.5 million, unchanged since Q3 2017
• A reported net loss of $12.3 million, compared to a net

loss of $17.8 million in Q3 2017

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Financials

Income Statement Comments

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($ 000s ($ 000s) As As o

• f

31 D 31 Decemb mber 2017 2017 As As o

• f

30 S 30 Septemb mber 2017 2017 Cash and cash equivalents 62, 62,316 316 58, 58,106 106 Receivables 16, 16,920 920 12, 12,165 165 Inventory 3, 3,993 993 5, 5,850 850 Other current assets 3, 3,566 566 2, 2,903 903 Total tal current as t assets ts 86, 86,795 795 79, 79,024 024 Property, plant and equipment 823, 823,495 495 831, 831,373 373 Goodwill and intangible assets 150 150 178 178 Total tal n non-current as t assets ts 823, 823,645 645 831, 831,551 551 Total tal as assets ts 910, 910,440 440 910, 910,575 575 Current portion of long-term debt 20, 20,598 598 20, 20,598 598 Accounts payable 5, 5,867 867 4, 4,715 715 Accrued expenses (inc voyage expenses) 4, 4,219 219 3, 3,093 093 Current portion of derivative financial instruments 2, 2,538 538 3, 3,622 622 Other current liabilities 1, 1,317 317 1, 1,381 381 Total curren ent l lia iabil ilit ities ies 34, 34,539 539 33, 33,409 409 Long-term debt 367, 367,000 000 372, 372,063 063 Long-term revolving credit facilities 100, 100,000 000 85, 85,000 000 Long-term derivative financial instruments 4, 4,969 969 7, 7,392 392 Total tal n non-curren ent l lia iabil ilit ities ies 471, 471,969 969 464, 464,455 455 Share capital 64, 64,528 528 64, 64,528 528 Paid-in capital 379, 379,851 851 379, 379,851 851 Contributed capital 95, 95,185 185 95, 95,102 102 Retained loss (116, (116,316 316) (103, (103,951 951) Treasury shares (11, (11,867 867 ) (11, (11,867 867 ) Accumulated other comprehensive loss (7, (7,449 449) (10, (10,952 952) Total tal s shar areholders’ ’ equity ty 403, 403,932 932 412, 412,711 711 Total l lia iabil ilit ities ies a and shareh eholder ers’ eq equit ity 910, 910,440 440 910, 910,575 575

Balance Sheet Comments

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Financials

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Fi Finan ancials ls – Q4 2 2017

• Cash at end Q4 of $62.3 million up from $58.1 million

end Q3, due to higher freight rates and drawdown of $15.0 million on the revolving credit facility

• Total assets of $910.4 million, versus $910.6 million in

the prior quarter, mainly reflecting depreciation of the fleet offset by increased cash and receivables

• Net total interest-bearing debt of $487.6 million,

compared with $477.7 million, reflecting scheduled debt repayments offset by a $15.0 million drawdown

• n the revolving credit facility
• Shareholders’ equity ratio of 44.4%, compared with

45.3% in Q3 2017

Cash Flow Statement Comments

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Financials

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Fi Finan ancials ls – Q4 2 2017

($ 000s ($ 000s) ) Three ee months en ended ed 31 D 31 Decemb mber 2017 2017 Three ee months en ended ed 30 S 30 Septemb mber 2017 2017 Cash flows ( (used ed in in) f from o

• per

eratin ing a activ ivit ities ies: Cash flow from operations 2, 2,830 830 (4, (4,621 621) Interest paid (6, (6,035 035) (6, (6,322 322) Net et cash flows ( (used ed in in) f from o

• per

eratin ing a activ ivit ities ies (3, (3,205 205) (10, (10,943 943) Cash flows u used ed in in in inves estin ing a activ ivit ities ies: Capital expenditures (2, (2,334 334) (324 (324) Net et c cash f flows used ed in in in inves estin ing activ ivit ities ies (2, (2,334 334) (324 (324) Cash flows f from ( (used ed in in) f fin inancin ing activ ivit ities ies: Repayment of long-term debt (5, (5,506 506) (5, (5,506 506) Drawdown revolving credit facility 15, 15,000 000 10, 10,000 000 Net et cash flows f from ( (used ed in in) f fin inancin ing activ ivit ities ies 9, 9,494 494 4, 4,494 494 Effect of exchange rate changes on cash 255 255 2 Net et in increa ease e (dec ecrea ease) e) in in cash a and cash eq equiv ivalen ents 4, 4,210 210 (6, (6,771 771) Cash and cash eq equiv ivalen ents at beg egin innin ing of p per erio iod 58, 58,106 106 64, 64,887 887 Cas ash an and c cas ash equival alents ts at e at end o

• f period

62, 62,316 316 58, 58,106 106

• Net cash flow from operating activities negative of

$3.2 million in Q4, up from $10.9 million in Q3 reflecting higher freight rates during the quarter

• Cash flows impacted by timing of freight payments

and voyage expenses

• Net cash flow from financing activities was $9.5

million, reflecting drawdown of $15.0 million on the revolving credit facilities, offset by scheduled debt repayments

• The cash position at quarter-end was $62.3 million,

with total available liquidity of $112.3 million, including available undrawn credit lines

Cash br sh break-even a en and nd CAPE APEX

• Cash break-even for 2017 was $17,200/day,

including a 50% reduction in principal payments as part of the bank amendment agreement from Q4 2016

• Avance Gas continues to focus on maintaining a

low cash break-even rate with ongoing prudent and cost efficiency measures

• Total estimated CAPEX for periodical drydockings
• f the Avance Gas fleet is $9.5 million in 2018

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Financials

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Comments Cash break-even

Based on reported results for the third quarter and estimated cash cost for the remaining of 2017, divided by calendar days $7,600 $1,000 $4,300 $4,300 $17,200 Based on reported results for the full year of 2017, divided by calendar days, rounded.

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Fleet & Market Update

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Avance Gas Spot Index vs Avance Gas Spot Fixtures

Charter ering ng an and d Flee Fleet t

• 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, bunker prices as quoted on Fridays, lowest of Singapore and Fujairah

• Source: Company
• Six spot fixtures Q4/2018;
• three Middle East, two US Gulf and one USWC
• Seven COA nominations Q4/2017
• “Avance “ periodical dry dock 29 days in China November
• “Iris Glory” periodical dry dock 33 days in China January
• “Thetis Glory” periodical dry dock 27 days in China February
• “Venus Glory” and “Providence” is scheduled for dry dock Q2
• “Promise” is scheduled for dry dock Q4
• “Passat” will proceed to repair yard upon completion

discharge this week; expected back in service in April

Global VLGC Fleet Utilization

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Fleet & Market Update

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Avance Gas’ Waiting Days per Ship

Uti Utili lizati ation n

• 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, bunker prices as quoted on Fridays, lowest of Singapore and Fujairah

• Source: Company

Source: Clarkson Platou

2017 Fleet Utilization 92%

Flee Fleet Ou t Outlo tlook

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Orderbook

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Fleet & Market Update

2017 Deliveries

• Source: Nordic Shipping; Company

Orderbook at 13% of existing fleet

VLGC GC L LPG E G Exports

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

• Source: Waterborne LPG Report

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Fleet & Market Update

2017: 36.4m tons (2016: 38.7m tons) 2017: 24.0m tons (2016: 19.7m tons)

LPG G Expo ports ts – 2016 and nd 2 2017

VLGC LPG Exports from the US Gulf 2017 (# cargoes) VLGC LPG Exports from the US Gulf (# cargoes)

• Source: Waterborne LPG Report

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Fleet & Market Update

Harvey

LPG G Expo ports ts – 2016 and nd 2 2017

VLGC Destinations from the US Gulf 2016 VLGC Destinations from the US Gulf 2017

• Source: Waterborne LPG Report

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Fleet & Market Update

Summary an and Outloo d Outlook

• US VLGC exports continue to grow
• 12 new VLGC orders placed in Q4 and January 2018
• Four of 11 2018 deliveries entered the global fleet
• Two VLGC sold for recycling January 2018
• Sea Dolphin – 78 500 cbm - built 1990
• Everrich 8 – 77 500 cbm - built 1990
• Continued growth of US shale oil and gas production

expected to drive increased long-haul US LPG exports

• US infrastructure improvements provide upside potential
• Focusing on operational efficiency and reducing costs
• Preserving strong liquidity position and balance sheet

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Summary & Outlook

15 “Pampero – Passing clear”

Photo by Lukaz Serozynski, Pampero

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Questions?