Avance Gas Holding ((NO:AGAS)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Avance Gas Holding’s recent earnings call highlighted a robust financial performance marked by strategic asset sales and notable dividend payouts. Despite facing some challenges with market volatility and unrealized losses on BW shares, the overall sentiment was positive, reflecting the company’s successful financial strategies.
Record Net Profit for Q4 2024
Avance Gas achieved a record net profit of $210 million for the fourth quarter of 2024, translating to earnings per share of $2.74. This milestone was largely driven by the sale of 12 Very Large Gas Carriers (VLGCs) to BW, showcasing the company’s strategic prowess in asset sales.
Asset Sales Boost Annual Profit
The sale of 16 ships throughout 2024 significantly boosted Avance Gas’s annual profit, bringing it to an impressive $443 million. This marked the company’s best full-year financial result ever, underscoring the effectiveness of its asset disposal strategy.
Significant Dividend Payouts
In a move to reward shareholders, Avance Gas declared a regular cash dividend of $2 per share and an extraordinary dividend of $0.75 per share. Additionally, the company announced a dividend in kind of BW shares valued at $3.25 per share, further enhancing shareholder value.
Strong Cash Position
The company concluded the quarter with a robust cash position of $176 million and an impressive free cash flow of $630 million for the year. These figures were largely attributed to the successful execution of asset sales.
Successful Strategy Execution
Avance Gas effectively executed its strategy by selling ships at premium prices, resulting in a total book gain of nearly $0.5 billion. This strategic execution was pivotal to the company’s strong financial performance.
Unrealized Loss on BW Shares
Despite the positive financial results, Avance Gas recorded an unrealized mark-to-market loss of $97 million due to a decline in BW share prices, impacting finance expenses and highlighting market volatility challenges.
Volatile Market Conditions
The LPG market faced volatility with reduced rates due to increased ship availability, which affected potential earnings. This market challenge was acknowledged during the earnings call.
Pending Transaction Delays
The completion of the MGC fleet sale was delayed, pending confirmation of a refund guarantee from the bank. This delay was noted as a key point during the earnings call, reflecting ongoing operational challenges.
Forward-Looking Guidance
During the Avance Gas Fourth Quarter 2024 Earnings Conference Call, CEO Oystein Kalleklev elaborated on the company’s profitable quarter and strategic actions. With a net profit of $210 million and earnings per share of $2.74 driven by the sale of 12 VLGCs, the company demonstrated its financial acumen. Expectations for a $2 regular cash dividend per share and an extraordinary dividend of $0.75 were announced, pending a transaction with Exmar. Additionally, shareholders will receive one BW share for every four Avance Gas shares owned, with plans to liquidate the company following the final dividend payout in April 2025.
In summary, Avance Gas Holding’s earnings call revealed a strong financial performance despite market volatility and certain unrealized losses. The company’s strategic asset sales and significant dividend payouts highlighted its successful execution of financial strategies, promising a positive outlook for investors.
