Epic Gas Ltd. – First Quarter 2014 Results – 16 June 2014

EPIC GAS LTD.
FINANCIAL STATEMENTS FOR THE PERIOD TO
March 31,  2014

SINGAPORE, June 16, 2014 – Epic Gas Ltd. (“Epic Gas” or the “Company”) today announced its unaudited financial and operating results for the first quarter ended March 31, 2014.

Highlights

  • Total Revenues of US$23.3 million
  • Adjusted EBITDA of US$4.9 million
  • Average time charter equivalent revenues of US$9,171 per day, or US$278,951 per month
  • Fleet utilisation of 96.4%
  • US$75 million private placement of common stock on NOTC completed February 2014
  • As of June 16, 2014, owned and operated fleet of 32 ships as compared to 22 ships as of
    January 1, 2013 and 25 ships as of January 1, 2014
  • As of June 16, 2014, newbuilding program of 12 ships (incl. 2 ships on bareboat-in contracts)

1Q2014 Results

Revenues for the three months ended March 31, 2014 amounted to US$23.3 million compared to revenues of US$18.8 million for the three months ended March 31, 2013 and include revenues from ship management of US$0.5 million (US$ 0.4 million in 1Q2013). The increase is primarily due to a 16.0% increase in voyage days resulting from additional vessels entering the fleet. During the period, the fleet earned average time charter equivalent revenues of US$9,171 per day as compared to US$8,712 per day in 1Q2013.

Voyage expenses were US$1.9 million, compared to US$1.3 million for the three months ended March 31, 2013, mainly due to increased spot market days.

Vessel operating expenses increased to US$13.0 million from US$10.5 million for the three months ended March 31, 2013 in line with the growth in the owned fleet over the period. Operating expenses include charter-in costs of US$2.1 million (US$ 2.1 million in 1Q2013) related to seven bareboat chartered-in ships. They also include drydocking provisions of US$ 0.8 million (US$0.1 million in 1Q2013) made upon the extension of bareboat contracts on four ships during the period.

Depreciation and amortization, including depreciation of capitalised drydocking expenses, was US$4.2 million (US$3.3 million in 1Q2013). The increase is due to the purchases of additional vessels during the period.

General and administrative expenses (“G&A”) were US$4.0 million compared to US$5.2 million for the three months ended March 31, 2013 and include one-off expenses of US$0.6 million related to the termination of the service agreement with Diamantis Pateras Maritime Ltd. G&A also include non-cash charges related to stock-based compensation of US$0.3 million (US$0.1 million in 1Q2013).

Finance expenses increased to US$2.2m from US$1.7 million, reflecting financing costs on increased borrowings as more owned vessels delivered.

Net Income / Loss – The Company recorded a net loss of US$2.5 million for the first quarter of 2014, as compared to a net loss of US$3.6 million for the first quarter of 2013.

Adjusted EBITDA for the first quarter of 2014 was US$4.9 million (US$2.2 million in 1Q2013).

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.

Fleet Development

January 2014

Epic Gas took delivery of Epic St. Thomas, a 5,000cbm LPG carrier, from
Sasaki Shipyard. The Company also took over two second-hand ships, Epic
Barbados (7,200cbm, 2001 built) and Epic St. George (5,000cbm, 2007 built) and
sold the 1991 built ship DP Azalea (3,300cbm).

March 2014

Epic Bell (7,200cbm) delivered directly from the yard and the Company has a
long term BB charter, and a purchase option, from the vessel owner.

Subsequent Events

In April 2014, Epic Gas took delivery of Epic St. Croix, a 5,000cbm LPG
carrier, from Sasaki Shipyard. The Company ordered two 7,500cbm fully
pressurised LPG carriers at Sasaki Shipyard to be delivered in 1Q2016 and 3Q2016
respectively.

In June 2014, 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.

In June 2014, the Company 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.

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 44 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, West Africa and the Americas.

Epic Gas also provides commercial and technical management for external owners.

For further information visit our website www.epic-gas.com

Company Contact
Uta Urbaniak
Chief Financial Officer
uurbaniak@epic-gas.com

 

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.