Avance Gas Holding Ltd

Thank you, everybody, for joining our webcast today. We have some exciting news for you all, which you might already be aware of. I'm joined as usual by our CFO, Randi Navdal-Bekkelund, who will run you through the financials a bit later in the presentation. Just to remind you, you can also ask questions either by the chat or by the chat function. And once we conclude the presentation, we will do some Q&A. in case there are some questions to today's presentation. Before we begin, I'm just going to remind you about our disclaimer. We will be giving some forward-looking statements and use non-GAAP measures like TCE. And there are limits to how many details we can cover in this presentation, so I recommend that you read the presentation together with the earnings release, which we also published today, this morning, 7 o'clock. So let's kick off. I think one of the big highlights today is the dividend. We've been ramping up the dividend quite a lot the last couple of years. And for this quarter, we are prepaying some of the gains we are booking for the BW transaction. So back in 2022, we paid $1.1. We almost doubled that in 2023, $2.15 per share. And then given the sale gains we recorded in the first quarter of this year, we actually paid off the same number, $2.15 per share, 165 million in total in just one single quarter. We paid off 135 in Q2. We also had some sale gains in that quarter. So altogether, for the first half of the year, we paid out $3.50 or $268 million. With all of the fleets now sold, we don't see any reason for you guys to be waiting for the money. Interest rate for dollar is not zero anymore. It's actually quite attractive returns on cash. So in contrast to when cash was trash, cash actually is king these days. So we don't see any need for you to be waiting for this money. So we are prepaying some of the gains. And we are paying $3.50 in dividend just for Q3 alone for $268 million, which gives our payout ratio of around 10 times earnings. So that's why we included the Galaxy Brain meme showing the serotonin and dopamine levels of, I hope, most of the advanced investors. So dividends following the Fibonacci rule, where you have quite a few doublings there. Okay, let's go to the other highlights for the quarter. In terms of great income, we are delivering numbers in line with guidance. Discharge to discharge numbers, which is the number we focus the most on, $38,700. Slightly higher on our low to discharge basis as rates were softening during the quarter. That resulted in a net profit for the quarter, $25.8 million. or earnings per share of 34 cents, which is a pretty good number, given that this is a number which excludes any gains from sales. It's just pure freight income. Q4, a bit softer. It's also been a bit more difficult for us to fix the ships. We announced the sale of the VLGC fleet to VW on August 15th, and this market is very much broker-driven, which means that the brokers get the cargoes and they are calling people around and when we are saying that we are divesting the VLGC fleet, we are not really the first guys the brokers will call, which could be an advantage in a rising market because then you would be fixing on higher numbers, but in a softening market, it entails waiting time and we are thus delivering We have booked TCE numbers for around $28,000 per day for that quarter. Keep in mind, we are also delivering some ships to BW. We already delivered four ships. We have one more ship scheduled for this week, and then the remaining ships scheduled for the rest of the year, higher new year. So we are only booking about 67% of our capacity in Q4, which is okay because market's been pretty soft. But we are booking the ship. and delivering them once they are discharged to BW. And then the big news today, except for the dividend maybe, is the sale of the MGCs. For those who are followers, for some time we did a speculative order of two plus two MGCs last summer. So we did the two first shifts during north shipping, and then we did two more shifts in August last year. We paid about $50 million in yard installments backed by bank guarantees. And we are selling them today at $282.4 million or $70.6 million, booking a gain of around $34 million on this sale. And these ships will then be novated to Exmar, which is a big player in the MGC space. They have a big fleet on water. They have a big order book. We really do see that they have a higher value of owning these ships, that they can consolidate. Being a listed shipping company with only four ships, it would not be that investable. So we found a very good owner for these ships, who I'm sure is going to be satisfied with the ships. The ships are ultra-modern, dual-fuel, ships with charge generators, so they will fit very well into the portfolio of Exmark. Once we have all the paperwork in order, we will get refunded for the yard installments that we have paid, currently about 50 million. And then we will have our milestone payment once the steel cutting occurs for the fourth new building, which is scheduled for April next year, where we will get 34.2 million as the last payment. And that's why we're also there today announcing that we are Closing down Avanscat, it's been a fantastic journey. We have sold, we started the year with 20 ships. We are closing it now with zero. We sold four wheeled disease in the first half of the year, 12 ships to BW and now four ships to Expo. In terms of the BW deal, as I mentioned, things are progressing according to plan. Four ships delivered. We have scheduled one more ship for delivery this week and then the remainder in December. When we announced the deal, we were expecting a profit of $315 million. As the BW stock has slumped a bit, we are now at the estimate of $296 million, still a very nice profit. And we do think that getting settlement in BW shares where we will become the second biggest shareholder with a 12.88%. percent shareholding is attractive, given where that stock is trading today, and I will cover that in more detail later in the presentation. Then, again, with declaring the dividend, $3.50 per share, $268 million, and this is to be paid on the day before Christmas, December 23rd. Following this payment, we expect to have performer cash of $264 million, and then the So there will still be some nice dividends there for shareholders. We intend to pay everything out in a timely and cost efficient manner. And that's why we also are planning to close the shop so we can avoid any more audit, legal fee, listing fees and all the costs associated by running a company. So we intend to call a special general meeting to reduce the capital and wind up the company and pay everything out to our shareholders. So looking then at the next slide, a summary of the transactions we have done, paying off the dividend on 23rd of December, 23 transactions. We did three of those in 2022, selling off some of the older ships, generating a profit from those transactions of around 20 million. And then we have around $450 million in gains from the sale of 20 ships this year. On this slide, it says gains 490 million. It's really that we have reduced that value by 20 million because the BW stocks come from the 17.25 dollar per share, which means we think it's a fair value compared to around $13 today, but still $1.8 billion in sales for these ships with a considerable gain and then also a pretty big cash release, which the shareholders are benefiting from now by us paying it out as dividend and return of capital. Looking a bit more into detail on the recent transaction being the MGC, as mentioned, contracted $248 million, contracted June and August last year. We haven't incurred much supervision costs. Really, the building phase is ramping up now. First ship is due for delivery Q4 next year, and then Q1 and Q2 and Q4. And then we are novating these to Exmar and making a pretty good return on this investment, and where we do think that these ships, once we have scaled on our business activity, these ships, it has a better home with Exmar, first-class operator of this kind of asset. Commercial guidance and performance, we are spot on what we guided. We guided 79% books at 41,400 in August. The market softened a bit in September, so we're ending up at 38,700. Slightly better on the low to discharge, 41.9. And then for Q4, as I mentioned, the market's been a bit soft, and for us, it's been a bit more challenging fixing out the shifts given the fact that we are leaving the business. We have booked the 67% of the available days now, taking into account that we are delivering ships to BW, doing slightly better on the TC, close to 40,000 on those. Spot's been pretty dismal, 23,800 we do expect on the spot days for this quarter. So then looking into the dividend once again, we put Algor on the, Sizzle lift in Q1 when we ramped up the dividend from $0.65 to $2.15 in one quarter, down again to $1.35 in Q2. And then we're taking the helicopter up to $3.50 on the Q3. And you do see that we are deviating a bit there in terms of dividend per share compared to earnings per share, both in Q2 and Q3. And this is really about prepaying the gains. We like the shareholders to get the money. They belong to shareholders. They don't belong to us. So we are distributing the dividend prior to us booking these gains so that the investors can have the benefit of having this money given where interest rates are and where there are pretty good opportunities in the market given the slump in especially shipping stocks and energy stocks these days. So once we have paid out this $268 million, what remains? We do expect to have a free cash flow in Q4 of around $20 million. giving us a performer cash close to the dividend, $264 million. And then we have this 19.3 million BW shares, currently valued around $250 million. We do think they look compelling at this stock price, which means that we can distribute slightly more than a half a billion dollars yet to be distributed to shareholders. We will distribute most of this when we are reporting in February, the lockup on the BW stock will then have collapsed. The cash will be there. We will be debt free at year end. So we will be distributing most of this money in our Q4 report in February. And then there is this residual amount of 34.2 million payable around April, which we will have to wait for paying out maybe in April, May. So with that, before handing over to Randi, I'm just going to give a bit more picture on the biggest asset we have now together with the cash is the BW shares. As you might recall, we agreed to deal with them on 15th August, selling off 12 VLDCs for 1 billion and 50 million, where we took 69% settlement in cash or innovation of theft. 31% settlement in BW shares. And where we had to negotiate with BW, what was the fair price of those BW shares. At that time, the stock price of BW was around $16.2. They, of course, had higher ideas, and we eventually agreed on a fair value of those stocks at $17.25 per share. You know, the assets of BW, the base case here, there are 15 dual fuel VGCs. These are regular VGCs upgraded close to $15 million by having dual fuel propulsion. We peg them at around $90 million. They have some eco, non-dual fuel ships. Three of those, we peg them at $80 million. One non-eco ship, we peg this at $65 million. And then the advanced fleet. 1 billion and 50 million, as mentioned, giving an average value of those ships at 88. Then they have 52% ownership share in BW India. We peg the value at 62. They recently sold the oldest ship, a 2007-built ship, at 65. So we do feel that value very much holding up. BW Confidence in India downstream investment, 30 million. They have a good TC book, chartered in some ships, also with options attached to buy some of these ships, which they recently illustrated by buying BV Kuzuka. 2009 built ship at $69.5 million, which is around $17 million lower than the market value. So certainly there is some value in the TC book, not only in chartering in ships at lower rates than you're chartering them out, but having these options attached. Last item is the product services, which they have done very well on. They have... net profit for this business unit just in Q3 of 60 million, bringing the year-to-date profit for this business unit as end of Q3 at $108 million. We kind of peg this value on $100 million, but we do expect them to make maybe $150 million on this business unit just in 2024. So meaning that you are getting it at less than one time price earnings. Then we need to adjust for the working capital. It has some working capital. Working capital really depends a bit on shipping. Are you doing voyage charter? You will have working capital. Are you doing time charter? You will have negative working capital. So it really depends a bit on your trading. When you're doing voyage charter instead of TC, you should usually be compensated by having to take that working capital. So we are valuing working capital, a dollar to a dollar, because you can easily liquidate it. by taking all your shifts on TC. Then they have to pay off the cash settlements, as I mentioned, 69% of the purchase price, including the debt innovation. They have very limited debt. They paid a dividend, pretty good dividend there, payable in September, which we deduct. And then we put in the consensus earnings for the second half of the year, because most of our shareholders, they will benefit from the earnings of BW. in the second half of the year as we will be collecting stocks where we can get dividends for Q3 and Q4. So when we're putting this together, we end up at an NAV of 2.6 billion. After we have received all our shares, there will be 151 million shares in the company where we own 19.3 million, giving us 12.8% shareholding. So that's how we compile this fair price of the stock of 17.25. So yesterday the stock price was $13.2, which means that, you know, let's call it all the working capital and debt and cash. We should keep that as is. I think the value on Odosa is fairly stable, which means that today you're getting that stock at 25% discount to gross asset value. So keep in mind the 25% discount on NAV. That's a pretty big number, but as we are actually talking about 25% discount on gross asset value, where you're not taking into account the leverage factor. So we think that that stock is attractively priced and we are happy to own it. Our intention is to distribute this share to our shareholders once the lockup is elapsed, which means that In general, for an advanced gas shareholder, you will get a quarter of a BW stock for every advanced gas share you have, which means that you will still keep some exposure to this market, and we think that we have done a good swap there, selling out of fleet, mostly spot-oriented, into BW with less leverage, and also more different business units, making that business a bit more diversified. With that, I hand it over to Randi. No, actually, I have one more slide here. We have a to-do list now. As I mentioned, we are planning to close down the company. A lot of people will ask us about the timeline, so we provided that timeline for you here. The dividend, as I mentioned, we declare $3.50 per share, payable December 23rd. During December, we will also be organizing the remaining deliveries to BW so that by year end all the ships should be delivered to BW. And then for every transaction there is a 40-day lock-up on each of the share settlements, which means we should have all the shares in BW free in early February. We then also intend to call a special general meeting with two objectives. One is to reduce the paid-in capital in order to make this tax-efficient for our shareholders, that they get return of the principal, meaning return of capital rather than return on capital, which, depending on jurisdiction, have lower tax, because the return of principal from all tax jurisdictions, that will be tax-free. Then we're also planning to wind up the company in order to reduce the cost, listing fees and auditors and such. We are working on closing the MGC sale, where the main item to be closed is the issuance of new refund guarantees to Exmo. And as mentioned initially, we will have a milestone payment scheduled for April for the profit element of 34.2 million. So we will be reporting Q4 in February, paying off the excess cash and the BW shares, working on the windup process. And then once we collect the remaining 34.2 million, hopefully around April, we will report Q1 in May, pay out this residual amount. And that's it. And that's the final voyage. And then our intention is to close the company as we have returned all the money back to where it belongs, which is with the shareholders. So with that, I hand it over to you, Randi.

Thank you, Einstein. Let's go to slide 11 for the key financial figures from the income statement. Well, the third quarter was a good quarter. We reported a TCE earnings of 46 million corresponding to a TCE per day of 41,900, which is actually above or about twice our cash break even. And despite being 5 million lower than previous quarter, we're actually 5 million ahead of the last year's results by looking at the year-to-date figures. In TCE numbers year-to-date, we reported $56,000 a day for 24. compared to $52,000 a day last year.

I'm not planning to pester you, but you said $5 million last year. We're at $10 million.

Yeah, but on the PC year.

Okay, okay, okay. In profits, I was thinking in profits.

Now we're speaking in PC. Okay, okay. Although we didn't record any gain on sale this quarter, the sale of the VWC fleet resulted, though, in an accounting effect in the third quarter. We announced the transaction in August, and in accordance with the accounting standards I have read, the VWC fleet was reclassified to asset help for sale from the announcement date, and as a result of that, the depreciation stopped. As I said, this is an accounting effect, and if the sea fleet were depreciating following the lifetime of the vessel, the 5 million would have been allocated to the gain and fail, which explains the 5 million lower depreciation for the quarter compared to previous. The operating expenses are a bit high this quarter, mainly explained by timing effects in relation to spares, repairs, and maintenance, resulting in an uptick per day of 9,400, while we will come closer to 8,500 for the full year, which is more or less in line with our year-to-date uptick. The AMG remains at the lowest of our pairs, 1,300 for the quarter, and by including the net finance expense, we reported a net profit of 26 million, equal to 34 cents per share, and a net profit of 233 million year-to-date, corresponding to $3.04 per share, which is the best-ever result for a nine-month period. Despite including the 121 million gain on the sale of the four VGCs at the first half of the year, we are still ahead of the last year's results by 10 million ASINs. By looking into the next quarter on slide 12, we have prepared a pro forma income statement. which is estimated non-recurring effect following the sale of both the VMGC fleet announced in August and the MGC fleet announced today. Both sales are expected to be recorded in the fourth quarter. Book gain on sale from the VMGC fleet is expected to be 284 million presented as a separate line in the P&L. And in accordance with IFRS accounting, percent settlement in BWLG shares will initially be booked at the share price at the announcement date on August 15th. And yeah, basically it's $16.18, which calculates to the gain 284 million. Additionally, depreciation expense stops on the announcement date, resulting in 5 million lower depreciation in Q3 as explained. and 7 million in lower depreciation, bringing the total gain on sale to 296 million. Subsequently, at each period end, the BW LPG shares are measured at fair value, the share price with the market-to-market changes recognized through the P&L presented as a finance item. Based on yesterday's share price of BW, The market-to-market effect is negative 57 million, as presented in the table on the left-hand side. However, this will change as the actual effect is based on the last trading day on the stock exchange before year-end. At year-end, we don't have any debt, basically, and thereby we have terminated all the interest rate swap positions. We expect a positive effect to the finance net finance expense of 10 million of which 4.4 million is gain on swap terminated in October and remaining relates to interest rate swap terminated the last two years which has actually been sitting on our balance sheet and has been amortized of the maturity of the loan and we also have some transaction cost or debt issuance cost in relation to the debt financing that needs to be taken through the P&L, which will offset the gain on the swaps, negative effect of 5 million. All in all, we expect a positive effect to the net finance line of 5 million, which will be recorded through our P&L in Q4. Net cash proceeds from the VGC sale 235 up from the previous guidance of 217. This is mainly due to schedule debt repayments. Positive low to discharge effect of 5.3 million to our TCE income or earnings corresponding to $7,000 a day. This is positive basically because we don't have any spot wages to adjust for at the quarter end. We can jump to slide 13 by looking at our cash movement. We started the year with a cash of 268 million. We generated 38 million in operating cash flow net of scheduled repayment of debt. We have paid 7 million in capex, primarily related to pre-delivery yard installments for one of our MGCs. This brings the total capex for the MGCs to 50 million since we acquired these vessels last year. And the last bridge that brings us to the cash position of 193 is the dividend payment of 103 million, equaling $1.35, which was paid in September. And there's more to come. During the fourth quarter, We have, as you know, a lot of net cash proceeds from the vessel sales, which we aim to distribute as soon as possible. And we have therefore announced a dividend payment of 268. In total, we will receive 319 in net cash proceeds from the VGC and the MGC sale, of which almost all of it, except of 34 million, is expected to be received within year end. Looking on slide 14, as I mentioned already, we don't have any debt by year end. We had 490 million in outstanding debt at the end of the third quarter. And as we have delivered four vessels so far in Q4, in November, we have already paid 155 million, paid and novated 155 million of outstanding debt. And as we don't have any debt to hedge, we have also terminated the interest rate swap in October at a gain of 4.4 as mentioned, bringing actually the total gains on the interest rate swaps to 11.3 million for the full year 2024, which we're pretty happy with, aren't we?

Yeah, I think so. We were able to terminate the swaps at the right time. We did wait until October, as some of you recall, Interest rates in America plummeted during August and especially September when Fed cut 50 basis points. And then we've been on this ballistic rally in interest rates since the probability of a Trump election started to become high, and then especially when it was the result. So we would have made even more if we had terminated in November. We're pretty happy about the termination of our swaps that we waited until at least October to get a really good more profit on these swaps. Looking at the market, of course, we don't really have much market exposure. We have already booked all our ships, but it's an interesting story anyway. For a lot of our investors, they might become now VW investors, so it's nice to also look at the market. In terms of exports, the export market is pretty healthy. We still have U.S. fantastic growth on the export volumes. So there's nothing wrong with the supply side here in terms of products, for sure. Middle East, pretty flat. We have the OPEC holding back barrels. Iran is shipping out a lot of volumes. So we don't really see a lot of growth in this area unless OPEC changed their stance in terms of holding back barrels. And I will come back to that because it's a bit interesting dynamic here. It's not really only about Middle East volumes. It's also about who in the Middle East is producing these barrels. In terms of the import side, not surprisingly, China is ramping up a lot of PDH plants, increasing imports by 11% and India is the second biggest market, also healthy growth of 8% year on year, which is also healthy on the import side. So then you might wonder with these kind of fundamentals, why it's rates so low. So we will cover that on next slide. So again, looking at US healthy metrics, inventories on very high levels, which means production is high, inventories are high. giving a very low domestic US price for LPG, giving a very high arbitrage or price difference between the American market and the main markets in Asia. So if you look at the price arbitrage, we are hovering here around $200 per ton. We've been even higher. So it's a bit, we have a disconnect in price compared to product spreads. And as you can see it here, you will usually also have a seasonal effect in Q4, where that tends to be the strongest market. There's quite a few shipping segments this year experience that Q4, which tends to be a peak market, is not developing as a peak market. You only have to look into LNG and tankers for that matter. But we see Q4, which everybody thought would be the best quarter, is turning out to be maybe the softest quarter of the year. The same goes for LPG, where we've hit very low levels, but especially very low levels when compared to the price arbitrage, how much money can be made by shifting a cargo from US to Asia. So where is this money ending up? So that's something we cover on the next slide, which is actually a very good analysis by RBN Energy, which is a research shop I like quite a lot. Generally, in the past, historically, the terminaling fee for LPG in America has been around six cents per gallon. And then we've been in a market with a lot of growth in US exports and where freight has been able to skyrocket. And that's why also, if you look at our stock price the last couple of years, it's been a fantastic journey. I just read in the Pareto analysis today, where they pegged our total return the last five years at 400%. So, of course, we've been benefiting from the fact that America has been putting more barrels in the market and arbitrage has been healthy. But this year is different. Actually, this year is different in the sense that it's a soft Q4. Despite all these issues, as Randy mentioned, we deliver actually better trading results for the nine first months. So we're 10 million ahead of last year, and last year was fantastic. But gradually we've seen a creep up in the terminal fees. And why is that? And it's really about, we had this growth in Panama last year. Panama transit was reduced by about 50, 55%. And when that happens, it's the villages being pushed out of the market. container ships and to some extent LNG ships are willing to pay more in order to get a slot in Panama, which means the VGC was pushed out and a lot of the VGCs had to do longer voyages, going Houston to Chiba via Panama. It's a 60-day round trip. But if you're going via Cape of Good Hope, because Suez hasn't really been an alternative this year, you're talking 90 days. So we had last year a situation where toll mileage on those voyages grew 50%. But with the drought over in Panama, going from El Niño to La Niña and the water levels in Lake Atan back to normal level, transits are also back to normal level, which means that the high fleet growth experience last year was a lot of ships for delivery last year, 40 in total. That was masked by the issues in Panama. But this year it's become evident that there's a lot of ships in the market. when Panama Canal is working in a normal manner again. So that means that somebody else has been able to extract the super profit here, and that's been the cargo owners, as evident from the product services research in BW for Q3, where they generated $60 million in that quarter. So people who have a contract to buy cargoes at a terminal fee of, let's say, 6 cents per gallon, those are the winners, and also the terminals who are able to send sell spot voyages, where they can actually charge a much higher terminal fee than the regular fee, and where this fee has gone up from all the way up to 30 cents, where we have a situation. It's been coming down a bit now, and freight's been staying stable, so today the paradox is that both freight and the terminal fee is around 20 cents per gallon, which means A great thing is that it's the same cost of shipping the LPG through a 100 feet pipe from the shore terminal to the ship as it costs to ship that cargo from Houston to Japan, which is 11,000 nautical mile. That translates to 67 million feet. So the cost of doing 100 feet versus 67 million feet is the same. So it's really that the arbitrage has ended up with somebody else than the ship owners. It's ended up with cargo owners and terminals who have had the scarce capacity this year, this not being ships. So what can we expect going forward? We're just going to look at the next slide. Deliveries of ships come up, come down. We had a high fleet growth last year. This is normalizing now, and it looks even better in 25 and 26. We've fairly muted the growth in shipping. So we think that will give a better balance. However, as I mentioned, the ton mileage due to the reopening of Panama Canal has really reduced demand for shipping. And then it's been slightly less congestion also in Panama. This is also related to the fact that they changed the booking system where you have to pre-book a slot and there's not really a lot of ships idling around Panama Canal waiting for a slot anymore. So it's kind of, despite having less growth in number of ships coming to the market. The ton mileage effect has killed off the market and sent the super profit to the other actors in the industry. But looking forward now for 2025 and 2026, we really do see a period here with muted growth. Very few ships for delivery in 2025 and 2026 before you have a new wave of the so-called very large ammonia carriers, which can also carry LPG, coming from 2027 and 2028. However, that said, this typical ordering cycle in VLDC goes in cycles. So you have some year where you have a lot of more deliveries, which means this year has been a year with very few ships going to dry dock. That's not going to be the case next year. Next year, dry docking is up a lot. And it's even up more in 26. So that will take ships out of the market and give less fleet growth. On top of that, you also have an aging fleet. 15% of the fleet is older than 20%. And this is due to a lot of the older ships going into sanctioned trade, or basically a dark trade, shipping cargoes from Iran to China. And that's why you have had very limited staffing. A lot of older ships ended up in that trade. But I'm coming now back to this with the Middle East, because in the FLEX presentation, we had some effects from Componomics 2.0. It's a bit same here for For LNG, it's really about deregulation and bringing a lot of more LNG, US LNG to the market. For the LPG, and I would say also the tanker market, it's a different dynamic. And it's really about, Trump has declared he's going to be putting in a maximum pressure 2.0. So during his first four years, he had a lot more harder sanctions on Iran. In the Biden administration, it's been softer regulation, which has made Iran be able to ship a lot more both crude oil, refined oil, and LPG. So the big question now is a billion dollar question, you might say, is how is this going to develop under the Trump administration? If it's going to put in maximum pressure of 2.0, how does it involve reducing the number of cargoes from Iran? where Saudi would be the natural swing factor here to provide more barrels to the market being both oil, petroleum and LPG, which means that the demand for the white fleet rather than the dark fleet will increase because the ships involved in the dark fleet will not be able to ship compliant products. So that could also have a big effect on this market in 2025-2026. We will know more January 20 next year once Trump gets into the White House, how much pressure he's going to put on Iran. And that might have a big implication for the product tankers, crew tankers, and also LPG. So with that, I think we conclude today's presentation. As I mentioned, numbers in line with guidance. We generated strong results, trading results for Iran. The ninth first month of the year, 112 million net profit from trading, 10 million higher than last year, which I think is a really good number given the softer market. So we've been able to navigate the market in a good manner. Q4, a bit softer also for us because it's been harder to fix the chips once everybody knows we're leaving the industry. Then today we are leaving also the listed environment soon. with the sale of the four remaining new builds on the MGC side to Exmar. I think it's a deal that makes 100% industrial sense, just like the BW deal, where we're selling to one actor who can benefit from scale and scope. And the same goes with Exmar, and I wish them the best of luck running these ships, which I'm sure they're going to do a terrific job on. And our job now is to close down the shop, return all the money to your shareholders. And we're starting off today with $268 million payable for Q3, where we are pre-funding some of the gains. And as mentioned, we have a process and a timeline and a to-do list for calling the general meeting, reducing the capital, doing the wind-up process, and trying to return the money to your shareholders in a cost-efficient, quick manner. So you can reinvest in whatever you like. So thank you, everybody. And I think we then conclude with the Q&A session.

Thank you, ladies and gentlemen. If you'd like to ask a question over the phone, you will need to press star 1 1 on your touch-tone phone and wait for your name to be announced. To withdraw your question, simply press star 1 1 again. You may also submit your questions on the web by tapping in the question box. Please send by mobile compiled Q&A roster. And at this time, we have a question coming from the line of Clement Mullins with Value Investor Edge. Your line is open.

Hi. Good afternoon. Thank you for taking my questions. Hi, Clement.

It's always a pleasure.

I wanted to start by delving a bit deeper into terminaling costs. Could you talk, I mean, broadly speaking, about what portion of propane exporting capacity is priced at spot? Is the large portion of the market? And secondly, do you expect terminaling costs to remain relatively elevated compared to the 6 cent per gallon average until additional export capacity comes online?

Okay. How this generally works, it's a bit similar to LNG. It's like Once you are starting an expansion project, it involves some costs. So you want to be able to finance those capex costs involved, typically by having some off-take agreements, not like in LNG where it's 20 years or so. But you have off-take agreements where some are subscribing to a certain volume and where they can then take those volumes FOB and where they have a fixed terminal fee. We've seen some tenders lately, and we are talking in six to eight cents per gallon range for kind of agreed term deals on the terminal fees. However, you might have situations where the terminal have had some term deals which have elapsed and not been renewed, and then of course they can price this based on the market, and the market is really about product and tightness of shipping. like last year when you had like a super tight shipping market and basically sold out, then the terminals is the price taker and they need to ship that cargo and the marginal cost for them is very low. So then they might sell at a very low terminal fee. No, when shipping has been oversupplied, they're able to take out a rent on that. And it's not only the terminal, it's also actors with a term fee. So let's say they've been buying a certain number of barrels on a term contract. So rather than shipping that volume, they might find out why do we do it? We can rather sell the cargo FOB and extract this super profit on the terminal fee because the FOB price will then deflect the tightness or looseness of shipping. So I don't have the exact number on the term contract, how much of the terminal capacity in America is contracted and not contracted. But we also see that people who have contracted volumes are telling the volumes in the spot market and just taking benefit of this huge super profit on the terminal fee.

Makes sense. That's very helpful. Thank you. I also wanted to ask about Iran ending up utilizing the other side of the fleet. could you provide some commentary on the number of BLGCs owned or operated currently by Iran? And secondly, on the 20-year-old PLAS cohort, could you talk a bit about the traits these vessels are usually employed on?

Yeah, I think last time I checked the number of ships in the Dark Fleet, which is basically, you know, in Dark Fleet, in tankers, you have Venezuela, you have Iran, you have... The grey fleet, which is Russia, if you don't adhere to the price cap. So in LPG, it's a bit simpler. It's really about Iran, China. Last time I checked, 54 wheel disease in that business. So basically most of the ships above 20 years. So as I mentioned, it will be interesting to see what will happen next year here, whether there will be a crackdown and some of these ships not being able to find jobs. So most of these ships are doing this freight, Iran, ship to ship transfer somewhere in the Middle East and then going to China. Keep in mind, some of these old ships are quite old, cost a lot of money to maintain them. They're not very fuel efficient. They might have less cargo space. So if you look at the kind of unit freight cost of these ships compared to a dual fuel, we'll just see it's a hell of a lot more, but In this game, efficiency doesn't really matter. It's about shipping this cargo and Iran being able to monetize their gas resources or oil resources.

Thanks for the call. And a final question from me. As you wind up advance, could you give us some guidance on the costs you expect to incur?

Costs to incur on what?

On winding up the company, per se.

We're already starting laying off people. Some left, some will be leaving at the 1st of January, once we've divested the village's sea fleet. It's really, we need to do certain filings with the Bermuda. We need to liquidate some SPVs. Randi, she's a, what do you call it, CPA? In Norway. So she is doing a lot of that work. It's really about the kind of filling out papers and liquidating. So the cost is so small that we're not even putting it in as an item because it's fairly low cost of liquidating a company. Nobody really has big, there's no golden parachute for anybody. We are a Norwegian company with Norwegian terms, so nobody is getting golden parachutes for sure.

All right, makes sense. That's all from me. Thank you for taking my questions and congratulations on the work done in advance over the past few years.

Thank you, Clement.

Thank you. And there are no further questions from the phone lines.

We do have a couple of them on the chat. I can go through some of them. Which funds will be used to pay off the loans and when? So we already, once we're settling and selling some of the ships, we are quite flushed on cash. As I said in the CEO statement, we are as liquid as the seven seas. So what we're actually doing is that we have some ship scheduled for delivery to BW. It just makes life simpler if we have repaid the debt prior to delivery of those ships to BW and the ship being unencumbered. So we typically paid on the mortgages on the ships prior to them delivered to BW. And we also paid on some which are scheduled for delivery so we can save banking costs because there is a cost associated with having a mortgage. So we're just using internal funds and trying to kind of optimize that and making sure that we are not lending too much from the banks and having that money on the cash. Just today, SOFA is today around 4.5%. On average, we have a margin on our loans of around 200 basis points, meaning that we will get 4.5% on our cash, but we will have to pay the bank 6.5%. So we rather pay as many loans as we can. So all of this are made from our internal funds. And our internal funds are affected by the delivery situation to BW, where we typically get a certain amount for each chip delivered. We get a certain number of shares in BW and then a certain cash release for each chip delivered. How many BW shares will be divided per Avanscast share? I think I mentioned this earlier in the presentation. It's about 77 million shares in Avanscast. we will be receiving 19.3 million shares in BW. So for every share you have in advanced gas, you will be getting around a quarter of a share in BW. Is Russian dark market a significant factor in LPG? No, actually not. Russia is not really a big exporter of LPG. They use most of it internally. They do ship a bit by train, but they... They've never been a player in the VGC market. So in that sense, the Russian dark market for LPG is irrelevant because it doesn't exist for the MGCs at all. Yeah, LNG has ship over supply concerns. What is the status in LPG? Yeah, I think we covered this. We have had too many ships this year because of the Panama improvements. improvements for the panama canal not really an improvement for ship owners actually we like inefficiencies and that's usually when the rates goes up however we do see that the market is balancing very few ships for delivery 25 and 26 more dry docking and and then we do see more container ships being delivered more lng ships being delivered so there will be a scarce place for the villages in the Panama Canal going forward. So we do think that taking the shares in BW looks like a good proposition for our shareholders. So that was pretty much it, I think. That's it. I think we will be back then in February. We'll then have closed the BW deal, hopefully also closed and organized all the MGC papers with the exception of the final milestone payment scheduled for April. So our plan then is to provide you with another juicy dividend and the BW shares. But yeah, until then, you have to enjoy yourself with the dividend paid out today. And we thank you all for listening.