20 August 2014
Epic Gas Ltd. – Second Quarter 2014 Results
Epic Gas Ltd. Financial Statements For The Period To June 30, 2014
Singapore – Epic Gas Ltd. (“Epic Gas” or the “Company”) today announced its unaudited financial and operating results for the second quarter ended June 30, 2014. All dollar amounts reported in US Dollars unless otherwise stated.
Highlights – Second Quarter 2014
- Total Revenues of $27.4 million
- Adjusted EBITDA of $6.5 million
- Average time charter equivalent revenues of $8,688 per day, or $264,260 per month
- Fleet operational utilisation of 94.9%
- As of August 20, 2014, owned and operated fleet of 36 ships as compared to 22 ships as of
January 1, 2013 and 25 ships as of January 1, 2014
- As of August 20, 2014, newbuilding program of 11 ships (incl. 2 ships on bareboat-in contracts) with remaining capital expenditure of approximately $182 million
Second Quarter 2014 Results
Revenues for the three months ended June 30, 2014 amounted to $27.4 million compared to revenues of $19.3 million for the three months ended June 30, 2013 and include revenues from ship management of $0.6 million ($0.5 million in 1Q2013). The increase is driven by a 33.8% increase in voyage days due to increased fleet size. During the period, the fleet earned average time charter equivalent revenues of $8,688 per day as compared to $8,618 per day in 2Q2013.
Voyage expenses were $4.1 million, compared to $2.0 million for the three months ended June 30, 2013, mainly due to increased spot market days.
Vessel operating expenses increased to $13.0 million from $10.9 million for the three months ended June 30, 2013. The increase reflects the increased number of vessels in the fleet with 2,643 calendar days compared to 2,002 calendar days for the equivalent period in 2013. Operating expenses include charter-in costs of $2.8 million related to eight bareboat chartered-in ships ($2.1 million related to six bareboat chartered-in ships in 2Q2013).
Depreciation and amortization was $4.3 million compared with $3.2 million in 2Q2013. The increase results from additional vessels being purchased during the period.
General and administrative expenses (“G&A”) were $4.3 million compared to $0.7 million for the three months ended June 30, 2013. In 2Q2014, the Company incurred one-off project cost of $1.0 million on IT consulting in order to cater for the rapid fleet expansion. Transaction and legal fees of $3.9 million, which were expensed in 1Q2013, were reversed and capitalised in 2Q2013.
Finance expenses increased to $2.3 million from $1.7 million primarily due to increased interest costs on the financing of newly acquired vessels.
Net Income / Loss – The Company recorded a net loss of $1.4 million for the second quarter of 2014, as compared to a net profit of $0.4 million for the second quarter of 2013.
Adjusted EBITDA for the second quarter of 2014 was $6.5 million ($2.3 million in 2Q2013).
First Six Months 2014 Results
Revenues for the six months ended June 30, 2014 amounted to $50.7 million compared to revenues of $38.1 million for the six months ended June 30, 2013 and include revenues from ship management of $1.1 million ($0.9 million in 1H2013). The increase was mainly due to additional voyage days (increase by 24.9% compared to 1H2013). The average time charter equivalent was $8,913 per day as compared to $8,666 per day during the six months ended June 30, 2013.
Voyage expenses were $6.0 million for the six months ended June 30, 2014, a rise from $3.3 million during the same period in 2013 due to increased spot market days.
Vessel operating expenses increased to $26.0 million from $21.3 million for the six months ended June 30, 2013, primarily reflecting the increased number of vessels in the fleet with 5,008 calendar days compared to 3,982 calendar days for the equivalent period in 2013. Operating expenses include charter-in costs of $4.9 million related to eight bareboat chartered-in ships ($4.2 million related to six bareboat chartered-in ships in 1H2013).
Depreciation and amortization was $8.6 million compared with $6.5 million for the six months ended June 30, 2013. The increase results from additional vessels being purchased during the period.
General and administrative expenses (“G&A”) were $8.2 million compared to $5.9 million for the six months ended June 30, 2013. The increase was due to the increase in the number of staff involved in the direct management of the expanded fleet and the aforementioned one-time cost related to the IT consulting project.
Finance expenses increased from $3.4 million in the first six months of 2013 to $4.5 million year to date 2014, reflecting increased interest costs on the financing of newly acquired vessels.
Net Income / Loss – The Company recorded a net loss of $3.8 million for the six months ended June 30, 2014, as compared to a net loss of $3.2 million for the same period of 2013.
Adjusted EBITDA year to date 2014 was $11.5 million ($8.4 million for six months ended June 30, 2013).
1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
2) Total calendar days are the total days the vessels were in our possession for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys.
3) Total voyage days for fleet reflect the total days the vessels were in our possession for the relevant period net of off-hire days associated with major repairs, drydockings or special or intermediate surveys.
4) Total charter days for fleet are the number of voyage days the vessels in our fleet operated on time charters for the relevant period.
5) Total spot market charter days for fleet are the number of voyage days the vessels in our fleet operated on spot market charters for the relevant period.
6) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.
7) Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days (excluding commercially idle days) by fleet calendar days for the relevant period.
8) Time Charter Equivalent (TCE) is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract. TCE revenues is a non-U.S. GAAP measure which provides additional meaningful information in conjunction with revenues from our vessels, the most directly comparable U.S. GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. It is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. Please see below for a reconciliation of TCE rates to voyage revenues.
Took delivery of Epic St. Croix, a 5,000cbm LPG carrier, from Sasaki Shipyard.
Epic Bird (7,200cbm) delivered directly from the yard and the Company has a long term BB charter, and a purchase option, from the vessel owner.
Epic Curacao (3,500cbm) delivered from Kitanihon Shipbuilding Co., Ltd. and delivered directly into a long-term time charter in the Caribbean.
Ordered a 7,500cbm fully pressurised gas carrier to be built at Sasaki Shipbuilding of Japan. The vessel is scheduled for delivery in the fourth quarter of 2016.
Purchased the Mayfair, 2007 built, and Charlton, 2006 built, both 9,500cbm fully-pressurised gas carriers. The deal includes long-term time charter arrangements for both vessels with delivery scheduled for 2H 2014.
In July 2014, Epic Gas concluded long-term inward bareboat charter contracts with the Siva Group for two 7,200cbm fully-pressurised gas carriers, 2010 built.
In August 2014, Epic Gas took delivery of Epic Caledonia, a 3,500cbm LPG carrier, from Kitanihon Shipbuilding Co., Ltd. The ship delivered directly into a long-term time charter in the Caribbean.
In August 2014, Epic Gas took delivery of the Mayfair. The vessel is on long-term time charter heading to the Caribbean.
Newbuildings on order
|Bareboat Chartered InFleet|
|Epic Sicily||11,000||Pressurised||1Q 2015||Sasaki|
|Epic Sardinia||11,000||Pressurised||3Q 2016||Kyokuyo|
|Hull 582 TBN Epic St. Agnes||5,000||Pressurised||1Q 2015||Kitanihon|
|Hull 583 TBN Epic St. Ivan||5,000||Pressurised||1Q 2015||Kitanihon|
|Hull 691 TBN Epic Borinquen||7,500||Pressurised||1Q 2016||Sasaki|
|Hull 693 TBN Epic Bonaire||7,500||Pressurised||3Q 2016||Sasaki|
|Hull 694 TBN Epic Baluan||7,500||Pressurised||4Q 2016||Sasaki|
|Hull 523 TBN Epic Sentosa||11,000||Pressurised||1Q 2016||Kyokuyo|
|Hull 524 TBN Epic Shikoku||11,000||Pressurised||2Q 2016||Kyokuyo|
|Hull S-525 TBN Epic Samos||11,000||Pressurised||4Q 2016||Kyokuyo|
|Hull S-526 TBN Epic Salina||11,000||Pressurised||1Q 2017||Kyokuyo|
About Epic Gas Ltd.
Epic Gas, headquartered in Singapore, owns and operates a fleet of fully pressurised gas carriers providing seaborne services for the transportation of liquefied petroleum gas and petrochemicals. Including newbuildings, the Company controls a fleet of 47 vessels which serve as a link in the international gas and petrochemical supply chains of leading oil majors and commodity trading houses throughout Asia, Europe, Africa and the Americas.
For further information visit our website www.epic-gas.com
Chief Financial Officer
Forward Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private
Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “feel,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending” and similar expressions identify forward-looking statements.