Epic Gas Ltd.- Third Quarter 2014 Results – September 30, 2014

EPIC GAS LTD.
FINANCIAL STATEMENTS FOR THE PERIOD TO
September 30,  2014

SINGAPORE, 13 November 2014 – Epic Gas Ltd. (“Epic Gas” or the “Company”) today announced its unaudited financial and operating results for the third quarter ended September 30, 2014.  All dollar amounts reported in US Dollars unless otherwise stated.

Highlights – Third Quarter 2014

  • Revenue of $33.1 million
  • Adjusted EBITDA of $6.7 million
  • Average time charter equivalent revenues of $8,523 per day
  • Fleet operational utilisation of 93.8%
  • 33.5 average vessels during the period, up from 22.5 average vessels during Q3 2013
  • Newbuilding program with 11 vessels and $164 million in remaining capital expenditures

Third Quarter 2014 Results

Revenue for the three months ended September 30, 2014 amounted to $33.1 million compared to revenue of $18.4 million for the three months ended September 30, 2013. The increase is driven by a 51% increase in voyage days due to increased fleet size. During the period, the fleet earned average time charter equivalent revenues of $8,523 per day as compared to $8,507 per day in 3Q2013.

Voyage expenses were $6.6 million, compared to $0.7 million for the three months ended September 30, 2013, mainly due to increased spot market days.

Vessel operating expenses increased to $14.8 million from $10.5 million for the three months ended September 30, 2013. The increase reflects the increased number of vessels in the fleet with 3,079 calendar days compared to 2,072 calendar days for the equivalent period in 2013. Operating expenses include $3.1 million in operating lease payments on eight vessels ($2.1 million in operating lease payments on six vessels in 3Q2013).

Depreciation and amortization was $5.0 million compared with $3.3 million in 3Q2013. The increase results from additional vessels being purchased during the period.

General and administrative expenses (“G&A”) were $4.5 million compared to $2.8 million for the three months ended September 30, 2013.  The increase was driven by additional hiring to support the commercial and technical management of our growing fleet.

Foreign exchange – during 3Q2014, the Company incurred a $1.5 million in unrealized exchange losses.

Finance expenses increased to $2.9 million from $1.8 million primarily due to increased interest costs on the financing of newly acquired vessels.

Net Income / Loss – The Company recorded a net loss of $3.0 million for the third quarter of 2014, as compared to a net loss of $1.3 million for the third quarter of 2013.

Adjusted EBITDA for the third quarter of 2014 was $6.7 million ($4.3 million in 3Q2013).


First Nine Months 2014 Results

Revenue for the nine months ended September 30, 2014 amounted to $83.8 million compared to revenue of $56.5 million for the nine months ended September 30, 2013. The increase driven by additional voyage days which increased 34% compared to the first nine months of 2013. The average time charter equivalent was $8,762 per day as compared to $8,612 per day during the nine months ended September 30, 2013.

Voyage expenses were $12.6 million for the nine months ended September 30, 2014, a rise from $4.0 million during the same period in 2013 due to increased spot market days.

Vessel operating expenses increased to $40.8 million from $31.9 million for the nine months ended September 30, 2013, primarily reflecting the increased number of vessels in the fleet with 8,087 calendar days compared to 6,054 calendar days for the equivalent period in 2013. Operating expenses include operating lease payments of $8.0 million on eight vessels ($6.3 million in operating lease payments on six vessels during same period of 2013).

Depreciation and amortization was $13.5 million compared with $9.9 million for the nine months ended September 30, 2013. The increase results from additional vessels being purchased during the period.

General and administrative expenses (“G&A”) were $12.9 million compared to $8.6 million for the nine months ended September 30, 2013. The increase was primarily due to the increase in the number of staff involved in the direct management of the expanded fleet as well as $1.0 million in one-time costs related to IT system implementation and $0.6 million related to the buy-out of third party management contracts.

Foreign exchange – For the nine months ended September 30, 2014, the Company incurred $1.3 million in unrealized exchange losses.

Finance expenses increased from $5.2 million in the first nine months of 2013 to $7.5 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 $6.8 million for the nine months ended September 30, 2014, as compared to a net loss of $4.5 million for the same period of 2013.

Adjusted EBITDA of$17.9 million for the nine months ended September 30, 2014 ($12.7 million for nine months ended September 30, 2013).


Operating Highlights

2014Sep3QResultsTable1

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.
2014ThirdQuarterResultsTable2

 

Fleet Development

July 2014

Epic Borneo (7,200cbm, 2010 built) delivered under inward bareboat charter.

Mayfair (9,500cbm, 2007 built) delivered and was employed on an 18 month time charter.

August 2014

Epic Caledonia (3,500cbm, 2014 built) delivered from Kitanihon Shipbuilding Co., Ltd. and was directly employed on a three year time charter.

Epic Bali (7,200cbm, 2010 built) delivered under inward bareboat charter.

 

Newbuildings on order

Bareboat Chartered In Fleet
Vessel cbm Type Scheduled Delivery Yard
Epic Sicily 11,000 Pressurised 1Q 2015 Sasaki
Epic Sardinia 11,000 Pressurised 3Q 2016 Kyokuyo
Owned Newbuildings
Vessel cbm Type Scheduled Delivery Yard
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

Company Contact
Cullen Schaar
Interim Chief Financial Officer
cschaar@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.

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