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In November 2022, Awilco LNG secured a charter deal with a firm duration of about 18 months for WilForce.
This medium-term contract started at the end of January 2023 and WilForce was redelivered to Awilco LNG at the very end of June, the LNG shipping firm said in its second-quarter results report.
“WilForce is currently trading in the spot market while we are actively seeking longer-term employment for the vessel,” Awilco LNG’s CEO, Jon Skule Storheill, said.
Besides WilForce, Awilco LNG also owns its sister vessel, WilPride.
In June 2022, the firm revealed a charter deal for a firm period of three years and the 2013-built WilPride serves this contract.
This contract started in December 2022 and lasts until late 2025.
Awilco LNG said the charterer has an option to extend the charterparty for two more years at the current rate, while notice is to be given about six months prior to expiry of the fixed period.
Sale and leaseback deal
In June, Awilco LNG has completed its previously announced sale and leaseback deal with China Development Bank Financial Leasing (CDB Leasing) for the two vessels.
Awilco LNG announced the closing and completion of the up to 12-year sale/leaseback facility in a statement issued on June 13.
The vessels are financed with a gross consideration of $100 million each, and are chartered back on a bareboat basis to subsidiaries of the company for a period of up to 12 years.
Awilco LNG said the facility bears a longer amortization profile and a longer tenor than the current facility and the floating interest rate structure has a lower margin.
This reduces the company’s running cost and cash break-even level with about $10,000 per day per vessel, it said.
The LNG shipping company has rolling purchase options from the second anniversary and a purchase obligation from the tenth anniversary until maturity.
Results
The Norwegian owner reported a net income of $8.7 million in the second quarter this year, down from $11 million in the same quarter in 2023. Net income rose compared to $7.2 million in the previous quarter.
Net freight income of $22.4 million in the second quarter rose from $22.1 million in the same quarter last year and $22.1 million in the previous quarter.
Also, Ebitda reached $18.8 million in the second quarter. This compares to $18.4 million the second quarter last year and $17.6 million in the prior quarter.
Net TCE came in at $122,900 and $121,700 per day for second quarter and first half year respectively, compared to $120,500 and $117,500 per day respectively for the same periods last year.
Awilco LNG’s board authorized a cash dividend payment of NOK 0.25 per share to be paid in
September.
The Company has thus declared a total of NOK 3.60 per share in dividends since the inception of dividends in March 2023.
Storheill said the completed refinancing of Awilco LNG’s vessels will “significantly reduce our financing cost, cash break even, and increase the company’s financial robustness going forward.
Discussing LNG shipping rates, he said “activity picked up this summer and towards the upcoming winter season although we have only seen a small improvement in rates so far as disruption of LNG production in the USG after hurricane Beryl mid-July led to several cargo cancellations and thereby increase of available vessels.”