Rates boost Avance

Avance Gas has moved into profit for the second quarter of 2014 on the back of the very strong VLGC freight market.
Christian Andersen of Avance Gas.

Christian Andersen of Avance Gas.

The Oslo-listed shipowner booked net income of $9.6m for the three months ended 31 May 2014 versus a loss of $5m a year ago.

“The freight market bottomed out in February and as we entered March, spot rates started to improve,” Avance said Wednesday.

“The market continued to strengthen, reaching levels above $100,000 p/d by the end of April. Activity slowed down in May before picking up again in June.

“The market has been driven by steady export volumes from the Middle East combined with increased exports from the US Gulf.”

Operating revenue increased year-on-year by nearly 43% to $32m as the average time charter equivalent (TCE) rate for the fleet reached $45,084 p/d.

Avance Gas, which operates a fleet of six VLGCs with eight units under construction, is a main driver of consolidation within the VLGC sector.

Last week company president Christian Andersen told the Marine Money conference in New York that Avance had not abandoned plans to pursue a merger with rival Dorian LPG.

“We believe the best fit is for Avance Gas and Dorian to go together,” he explained, adding: “It’s more likely than unlikely that we will give a bid for Dorian in June.”

Andersen indicated that his company would like to assemble a fleet of 30 to 40 ships in total and said, on the chartering front, it intends to focus on contracts of affreightment instead of spot or time charters.

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