Good day and thank you for standing by. Welcome to the Advanced Gas Holdings Ltd. Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.
And to ask a question during the session, you will need to press star and 1 on your telephone. And also you can send your question to your webcast online. And please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Christian Sorensen. Thank you.
Please go ahead.
Thank you very much, and hi, everyone, and welcome to this Q2 presentation. As mentioned, my name is Christian I am the CEO of the company. I'm joined today by our CFO, Randy Nadeau. I'd like to start with presenting some of the highlights for this quarter. So if we go on to Slide number 3, please.
We experienced solid export levels this quarter from the U. S, But the high domestic FOG prices in the States close to spot arbitrage opportunities, which we need to ignite the U. S. Gulf freight markets. The other engine in the market, which is the Middle East exports, were on the lower side and slightly underperformed compared to what we had anticipated.
And even today, it's mainly the Indian charters who keep up the pace in the spot market, while activity on the conventional AG Far East runs is pretty limited. The combination of lower activity in the Middle East combined with limited Arbitrage opportunities from the U. S. Gulf to the Far East has had a dampening effect on the freight market, which turned out slightly weaker than what we anticipated if you asked us 6 months ago. As you can see, we reported a TCE per vessel day of $27,730 As Randy will show you, we continue to experience certain operational issues linked to COVID, which in turn is reflected in a higher OpEx in the first half of the year than budgeted.
Our EBITDA was $18,100,000 with a net profit of $1,500,000 and earnings per share of $0.02 Given our solid cash position and market outlook, the Board has decided to pay 100% of the net profit in dividend equaling the said $0.02 per share. Other key wins from the quarter, which should be well known To all of you, our private placement of $65,000,000 back in April. And late in the quarter, we got Avangaz First Sustainability Linked So Randy, I leave the word to you to go through the financials.
Thank you, Christian, and good afternoon to you all. I will now walk you through the financial highlights of the quarter on Slide 5. Looking at our chartering results, we recorded a time charter equivalent earnings of $30,700,000 down from $47,800,000 previous The Q2 was impacted by this extreme cold in the U. S. Leading into 1st part of the quarter.
We also finalized the scrubber installation on our last vessel Breeze in May, which was a good timing as the market picks up again in June. The TCE per vessel day came in at 28,774 in accordance with our guidance. And as the market was stronger in June compared to March, We had a negative load to discharge adjustment of $1,200,000 and reporting a TCE per vessel day of 27,730. Operating expenses were $11,000,000 or $9,300 per vessel day and is still impacted by the pandemic affecting our crew change especially in Asia. Freight of Spears and Equipment is Our OpEx of approximately $1,000,000 or $800 per vessel day in the second quarter.
Administrative and general expense were slightly higher than last quarter due to 1 personnel expense and is expected to come down to 1,400,000 next quarter and going forward. This leaves us with a reporting operating profit or EBITDA of $18,000,000 Depreciation expense were $12,300,000 slightly higher in the second quarter and first As we reverse the impairments Q4 last year and start the depreciation of dry dockings and scrubber installation now fully completed. And we will come down to $11,500,000 next quarter and going forward. Finance expense is on par with previous quarter and down €2,000,000 for the 6 months ended compared to last year and is driven by lower average Debt and a lower margin on the debt financing combined with the decline in the floating LIBOR interest rate. And with that, we recorded a net profit of €1,500,000 or €0.02 per share for the 2nd quarter and $20,400,000 or $0.29 per share year to date.
Turning to the next Slide 6, We have an overview of our cash flow during the first half twenty twenty one. We had a cash position of €108,000,000 as of June 2021, up €32,000,000 from year end, driven by cash flow from operations of €50,600,000 and net Equity raise of NOK 64,000,000 offset by interest payment of NOK 8,900,000 And capital expenditure of $34,000,000 mainly related to our newbuilding program and to cash dividend payment of $17,700,000 and debt repayment of 22,000,000 Looking at our estimated cash breakeven level on the next Slide 7, we have revised our cash breakeven levels For the financial year 2021, a bit down to $22,700 per vessel day as the LIBOR floating interest rate curve is down for the second half for the financial year 'twenty one. A few comments on our financing profile. Our outstanding secured bank loan amounted at $398,700,000 as of June 2021, with no maturity before June 2024. We have a diversified pool of bank lenders consisting of 7 banks And one new bank coming in on our new sustainability linked financing to be drawn upon delivery of the 2 first new buildings, Avams Polaris and Avams Capella, scheduled for delivery in within the next The facility has a maturity at the earlier of 5 years from delivery of the 2nd newbuilding and June 27.
And with a profile of 18 years, this utilized the cash breakeven level of approx and $19,500 per vessel day, decreasing the average cash breakeven level for the fleet with $300 to 400 The facility has an annual sustainability margin adjustment linked to the company's ambition to reduce and outperform the carbon intensity targets set in the Poseidon Principles. The dual fuel newbuildings will lower our operational carbon footprint and the sustainability linked financing further demonstrates Our commitment to the decarbonization of the shipping industry with support from the bank syndicate in this facility. And with that, I leave the word over to you, Christian, for the market update.
Thank you. So we can go on to the Next slide please. So like I mentioned initially, we have robust exports From the U. S. Despite the lack of spot arbitrage opportunities.
And this has continued into the Q3. In Middle East, however, they are not really firing on all the cylinders, but we expect the AG exports to increase on the back of reversed OPEC cutbacks. There is a lot of focus on the congestion around the Panama Canal and rightly so, because it is very unpredictable logistics Now that the LNG and container vessels are prioritized and the waiting time for LPG carriers varies from 5 to 10 days and even up to 14 days on the north as well as the southbound transits. In the short picture, ship owners are facing increased waiting time on their accounts on the balance leg into the U. S.
Gulf. But in the grander scheme of things, it's obviously absorbing capacity from the fleet and it's not unlikely that more ships will be heading around South Africa and Suez to and from the Far East. All in all, the market is quite well balanced at the moment And with continued LPG stock building in the U. S, increased congestion in the Panama Canal and more vessels likely to trade around the Cape of Good Hope, We see signs of an exciting winter market. Next slide please.
Looking a bit further ahead, we maintain our fundamental positive view for 20212022. The latest figure is showing Continued increased demand for LPG in Asia with the 2 most populous countries, China and India, showing robust demand growth. LPG is a clean energy source and countries around the Indian subcontinent like Pakistan and Bangladesh as well as in Southeast Asian countries Our reporting and demand growth as the need for clean residential fuel is high on the agenda in this part of the world. Next slide, please. Exports from the states are also being revised upwards for the period towards the end of 2022.
And we see increased utilization from the newly expanded terminals such as Targa and Nedland in the U. S. Gulf And Markus Zuk on the U. S. East Coast.
The U. S. LPG market is extremely dynamic, and we can see that the stock build continues towards The winter season, which under normal circumstances should pave way for increased spot activity with lower Domestic LPG prices in the U. S, which in turn will allow for the ARB windows to open up. Next slide, please.
The order book is something we are not particularly happy about. Throughout the Q2, we saw a flurry of new buildings being contracted. And especially in 2023, the number of deliveries is high. Although there are some mitigating effects in stricter environmental regulations, especially hitting the older part of the fleet, We are not naive and we are working on several measures to take down the risk towards 2023. Looking beyond 2023 and towards 2025, we are hopeful that we will see more of a 2 tier market where ships with a smaller CO2 footprint will be preferred And eventually less preferred vessels being phased out from the conventional trade routes.
Looking towards 2025, it's not an unlikely consequence as far as we can see that the large order book of dual fuel newbuildings will accelerate the green transition in the VLGC segment As the supply of more environmental friendly tonnage automatically sets a new standard. Next slide please. So to summarize, We reported the TC for the 2nd quarter in line with our guidance and are happy to announce another quarter where we return value to our shareholders Through dividend payments. We are looking forward to what seems to be an exciting winter market And maintain our positive view on the next 18 months ahead. And we are very proud of having secured our first sustainability linked financing, demonstrating the green profile of our new buildings.
So on that note, I would like to Open up for questions. Please go ahead.
Please go There are no further questions at the phone line.
And we will now take questions from the webcast. We have received one Question and that's have you sold a vessel?
And to that, the comment is that we are working on various opportunities To offload some of our older units in a market where they are priced at a good level. But I if we have when and if we have anything to announce, it will be announced through the stock exchange. Any other questions?
No question at this time. Please continue.
So we got one more question Peter van der Beel, has PetroDek made their intention clear Wither stake build.
Well, the reply to Petrileg's stake build is All the stakeholders, obviously, that we welcome all shareholders to Allonskatz. And we're very happy to see that they As an industry specialist, believe in the market and in the company and As we can see, it's a sign of untapped potential in the company. So apart from that, I don't really have any further comment to that question. So it's That's all I can say at the moment. Any further questions?
We got one more question from the webcast from Ulla Sordijk. Do you have any thoughts on M and A opportunities?
I'd like to say that we obviously want to we are exploring all M and A opportunities out there, which We find attractive. I think it's natural for any ship owner that you want to look at And the exposure and you believe the time and the price is right. And M and A opportunities is obviously a part of this. So we are obviously exploring opportunities, but so far there have been no Firm opportunities arising.
Okay. Please take a note that you can ask questions through the webcast and you're welcome to have any questions. Currently, we don't have any further, but we can wait a bit. Let's see. There's one more.
So we have another question here. What is Petrodex intentions?
That is unclear to me. We have no further comments apart from what I commented on earlier, Which is that we obviously welcome them as an even bigger shareholder in the company. Apart from that, I can't really
So another follow-up question on Pet Trudek came in. Will you co work with Petrodek LCT?
Yes. Obviously, I mean, Petrodek is It's already a well established client of ours, and we co work and do business with Hatchtech in the market On a frequent basis. So the answer to that is yes. I mean, we have already established well established client relationship with them as of today.
Okay. There are no further questions at this time. Thank you for dialing in and listening to Avanska's Holding Earnings conference call, and we wish you a nice day.
And this concludes today's conference call. Thank you for participating. You may now disconnect.