GasLog Partners LP Reports Financial Results for the Three-Month Period Ended March 31, 2015 and Declares Quarterly Cash Distribution
Highlights
- Quarterly cash distribution of
$0.4345 per unit for the first quarter of 2015, equivalent to$1.738 per unit on annual basis. - EBITDA(1) of
$23.67 million and Adjusted EBITDA(1) of$23.60 million for the first quarter of 2015. - Distributable cash flow (1) of
$14.19 million , an increase of 9% from the fourth quarter of 2014. - Vessels eligible for future dropdowns at
GasLog Ltd. (“GasLog”) increased to 12 as ofMarch 31, 2015 , and to 15, with a potential of up to 21, as ofApril 21, 2015 .
(1) EBITDA, Adjusted EBITDA and Distributable cash flow are non-GAAP financial measures. For definitions and reconciliations of these measurements to the most directly comparable financial measures calculated and presented in accordance with International Financial Reporting Standards (“IFRS”), please refer to Exhibit II at the end of this press release.
CEO Statement
Mr.
The pipeline of dropdown vessels at GasLog increased in the quarter to 12 ships following the closing of GasLog’s acquisition of two LNG carriers from BG Group plc (“BG Group”). In addition, on
Cash Distribution
On
Increase in Vessels Eligible for Dropdown
On
On
Financial Summary: Three-month periods ended
Our fleet currently consists of five LNG carriers, including three vessels with modern tri-fuel diesel electric propulsion technology (“TDFE”) and two steam-powered vessels (“Steam”) that operate under long-term charters with MSL. Three of our LNG carriers, the GasLog
| For the three months ended | ||||||
| (All amounts expressed in thousands of U.S. dollars) | ||||||
| Revenue | $ | 20,743 | $ | 32,578 | ||
| Profit | $ | 7,791 | $ | 12,897 | ||
| Adjusted Profit(2) | $ | 7,923 | $ | 12,827 | ||
| EBITDA(2) | $ | 16,214 | $ | 23,669 | ||
| Adjusted EBITDA(2) | $ | 16,278 | $ | 23,599 | ||
| Distributable cash flow(2) | n/a | $ | 14,187 | |||
| Cash distributions declared(3) | n/a | $ | 10,717 | |||
(1) Our results and summary financial data are derived from the unaudited condensed combined and consolidated financial statements of the Partnership. Prior to the closing of our IPO, we did not own any vessels. The presentation assumes that our business was operated as a separate entity prior to its inception. The transfer of the three initial vessels from GasLog to the Partnership at the time of the IPO and the transfer of the two vessels from GasLog to the Partnership in
(2) EBITDA, Adjusted EBITDA, Adjusted Profit and Distributable cash flow are non-GAAP financial measures. For definitions and reconciliations of these measurements to the most directly comparable financial measures calculated and presented in accordance with IFRS, please refer to Exhibit II at the end of this press release.
(3) For the reconciliation of Cash distributions declared to Distributable cash flow, please refer to Exhibit II at the end of this press release.
Revenues for the quarter ended
Vessel operating costs for the quarter ended
Depreciation for the quarter ended
The increases in revenues, vessel operating costs and depreciation are mainly attributable to the increased average number of vessels and operating days resulting from the acquisition of the Methane
General and administrative expenses were
Financial costs were
| For the three months ended | ||||||
| (All amounts expressed in thousands of U.S. dollars) | ||||||
| Financial costs | ||||||
| Amortization of deferred loan issuance costs | $ | 528 | $ | |||
| Interest expense on loans | 2,702 | 3,548 | ||||
| Realized loss on cash flow hedges | 573 | — | ||||
| Other financial costs | 44 | 25 | ||||
| Total financial costs | $ | 3,847 | $ | 3,950 | ||
In the three months ended
| For the three months ended | ||||||
| (All amounts expressed in thousands of U.S. dollars) | ||||||
| Loss on interest rate swaps | ||||||
| Realized loss on interest rate swaps held for trading | $ | 550 | $ | — | ||
| Unrealized gain on interest rate swaps held for trading | (124) | — | ||||
| Recycled loss of cash flow hedges reclassified to profit or loss | 192 | — | ||||
| Total loss on interest rate swaps | $ | 618 | $ | — | ||
Profit was
Adjusted Profit for the period was
EBITDA was
Adjusted EBITDA was
Fleet
Our fleet currently consists of the following vessels:
| LNG Carrier | Year Built | Cargo Capacity (cbm) |
Charterer(1) |
Propulsion |
Charter
Expiration |
Optional Period | |||||||
| GasLog Shanghai | 2013 | 155,000 | BG Group | TFDE | 2021–2026 (2) | ||||||||
| GasLog Santiago | 2013 | 155,000 | BG Group | TFDE | 2021–2026 (2) | ||||||||
| GasLog Sydney | 2013 | 155,000 | BG Group | TFDE | 2021–2026 (2) | ||||||||
| Methane |
2006 | 145,000 | BG Group | Steam | 2023–2025 (3) | ||||||||
| Methane |
2006 | 145,000 | BG Group | Steam | 2022–2024 (3) | ||||||||
(1) Vessels are chartered to
(2) The charters may be extended for up to two extension periods of three or four years at the option of the charterer, and each charter requires that the charterer provides us with 90 days’ notice before the charter expiration of its exercise of any extension option. The period shown reflects the expiration of the minimum optional period and the maximum optional period.
(3) Charterer may extend either or both of these charters for one extension period of three or five years, and each charter requires that the charterer provide us with advance notice of its exercise of any extension option. The period shown reflects the expiration of the minimum optional period and the maximum optional period.
(4) Charter expiration was amended based on the agreement signed with MSL on
We also have options and other certain acquisition rights under which we may acquire additional LNG carriers from GasLog. This currently includes options to purchase up to 12 LNG carriers from GasLog within 36 months after each such vessel’s acceptance by its charterer (or, in the case of certain vessels, 36 months after the closing of the IPO), in each case at fair market value as determined pursuant to the omnibus agreement.
We also have a right of first offer from GasLog to purchase any other LNG carriers with cargo capacities greater than 75,000 cbm engaged in ongoing LNG transportation under charters of five full years or more that GasLog owns or acquires (the “Five Year Vessels”) either at their acquisition cost plus certain break up costs (in the case of a newly acquired Five Year Vessel) or at their fair market value (in the case of a previously owned vessel that becomes a Five Year Vessel). The three newbuildings to be chartered under the agreement signed with BG Group on
We believe that such options and acquisition rights provide us with significant built-in growth opportunities. We may also acquire vessels from shipyards or other owners.
Liquidity and Financing
As of
As of
We believe our current resources are sufficient to meet our working capital requirements for our current business.
Depending on market condition, we may use derivative financial instruments to reduce the risks associated with fluctuations in interest rates. We expect to economically hedge a majority of our exposure to interest rate fluctuations in the future by entering into new interest rate swap contracts.
LNG Market Update
We continue to believe the medium- to long-term outlook for LNG shipping demand is positive, despite the decline in prices and spot charter rates over the last six months. There are a number of new projects in progress that have firm off-take agreements, secured financing or are under construction, and we expect a number of these to come online in 2015, which will materially increase global LNG production capacity. The projects that have reached final investment decision (“FID”) stage, but are yet to start production, represent over 120 million tons per annum (“mtpa”) of new LNG capacity, and we currently expect that these facilities will come online even if the current low commodity price environment continues. By the end of 2019, we forecast that the number of ships needed for LNG production from new and existing terminals will be greater than the current global on-the-water fleet and orderbook.
Recently, there have been several encouraging LNG project developments, which highlights the viability of many LNG projects in the current market conditions. Cameron LNG announced initiation of a
We remain positive on the medium- to long-term demand for LNG carriers. We believe
Royal Dutch Shell plc (“Royal Dutch Shell”) Planned Acquisition of BG Group
On
Conference Call
The dial-in numbers for the conference call are as follows:
+1 646 254 3360 (
+44(0)20 3427 1910 (
+33(0)1 76 77 22 24 (
Passcode: 5972182
A live webcast of the conference call will also be available on the investor relations page of the Partnership’s website at http://www.gaslogmlp.com/investor-relations.
For those unable to participate in the conference call, a replay will also be available from
The replay dial-in numbers are as follows:
+1 347 366 9565 (
+44(0)20 3427 0598 (
+33(0)1 74 20 28 00 (
Replay passcode: 5972182
About
Forward -Looking Statements
All statements in this press release that are not statements of historical fact are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that the Partnership expects, projects, believes or anticipates will or may occur in the future, particularly in relation to the Partnership’s operations, cash flows, financial position, liquidity and cash available for dividends or distributions, plans, strategies and business prospects, and changes and trends in the Partnership’s business and the markets in which it operates. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the Partnership’s expectations and projections. Accordingly, you should not unduly rely on any forward-looking statements. Factors that might cause future results and outcomes to differ include:
- LNG shipping market conditions and trends, including spot and long-term charter rates, ship values, factors affecting supply and demand of LNG and LNG shipping and technological advancements;
- our ability to enter into time charters with new and existing customers;
- changes in the ownership of our charterers;
- our customers’ performance of their obligations under our time charters;
- changing economic conditions and the differing pace of economic recovery in different regions of the world;
- our future financial condition, liquidity and cash available for dividends and distributions;
- our ability to obtain financing to fund capital expenditures, acquisitions and other corporate activities, the ability of our lenders to meet their funding obligations, and our ability to meet the restrictive covenants and other obligations under our credit facilities;
- our ability to enter into shipbuilding contracts for newbuildings and our expectations about the availability of existing LNG carriers to purchase, as well as our ability to consummate any such acquisitions;
- our expectations about the time that it may take to construct and deliver newbuildings and the useful lives of our ships;
- number of off-hire days, drydocking requirements and insurance costs; our anticipated general and administrative expenses;
- fluctuations in currencies and interest rates;
- our ability to maximize the use of our ships, including the re-employment or disposal of ships not under time charter commitments;
- environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities;
- requirements imposed by classification societies;
- risks inherent in ship operation, including the discharge of pollutants;
- availability of skilled labor, ship crews and management;
- potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists;
- potential liability from future litigation; and
- other risks and uncertainties described in the Partnership’s Annual Report on Form 20-F filed with the
SEC onFebruary 17, 2015 . Copies of the Annual Report, as well as subsequent filings, are available online at http://www.sec.gov.
The Partnership does not undertake to update any forward-looking statements as a result of new information or future events or developments except as may be required by law.
EXHIBIT I – Unaudited Interim Financial Information
Unaudited condensed combined andconsolidated statements of financial position
As of
(All amounts expressed in U.S. Dollars)
|
|
|
|||
| Assets |
|
|||
| Non-current assets | ||||
| Other non-current assets | 2,063,026 | 2,086,401 | ||
| Vessels | 851,285,729 | 844,454,190 | ||
| Total non-current assets | 853,348,755 | 846,540,591 | ||
| Current assets | ||||
| Trade and other receivables | 1,079,325 | 1,069,930 | ||
| Inventories | 1,089,997 | 1,063,169 | ||
| Prepayments and other current assets | 813,792 | 534,531 | ||
| Short-term investments | 17,700,000 | 4,000,000 | ||
| Cash and cash equivalents | 27,188,095 | 42,559,356 | ||
| Total current assets | 47,871,209 | 49,226,986 | ||
| Total assets | 901,219,964 | 895,767,577 | ||
| Partners’ equity and liabilities | ||||
| Partners’ equity | ||||
| Common unitholders (14,322,358 units issued and outstanding) | 324,967,226 | 328,362,771 | ||
| Subordinated unitholders (9,822,358 units issued and outstanding) | 77,087,950 | 75,829,006 | ||
| General partner (492,750 units issued and outstanding) | 6,085,438 | 6,129,042 | ||
| Total partners’ equity | 408,140,614 | 410,320,819 | ||
| Current liabilities | ||||
| Trade accounts payable | 1,671,942 | 1,767,311 | ||
| Amounts due to related parties | 2,350,812 | 445,688 | ||
| Other payables and accruals | 15,927,374 | 15,372,410 | ||
| Borrowings – current portion | 20,999,800 | 20,997,008 | ||
| Total current liabilities | 40,949,928 | 38,582,417 | ||
| Non-current liabilities | ||||
| Borrowings – non-current portion | 452,076,274 | 446,790,664 | ||
| Other non-current liabilities | 53,148 | 73,677 | ||
| Total non-current liabilities | 452,129,422 | 446,864,341 | ||
| Total partners’ equity and liabilities | 901,219,964 | 895,767,577 |
Unaudited condensedcombined and consolidated statements of profit or loss
For the three months ended
(All amounts expressed in U.S. Dollars)
| For the three months ended | ||||
| Revenues | 20,743,056 | 32,578,056 | ||
| Vessel operating costs | (3,936,786) | (6,917,683) | ||
| Depreciation | (3,961,354) | (6,831,539) | ||
| General and administrative expenses | (592,743) | (1,991,018) | Profit from operations | 12,252,173 | 16,837,816 |
| Financial costs | (3,847,003) | (3,949,800) | ||
| Financial income | 4,027 | 9,414 | ||
| Loss on interest rate swaps | (618,315) | — | ||
| Total other expenses, net | (4,461,291) | (3,940,386) | ||
| Profit for the period | 7,790,882 | 12,897,430 | ||
| Less: | ||||
| Profit attributable to GasLog’s operations | (7,790,882 | ) | — | |
| Profit attributable to Partnership’s operations | — | 12,897,430 | ||
| Partnership’s profit attributable to: | ||||
| Common units | — | 9,618,609 | ||
| Subordinated units | — | 3,020,872 | ||
| General partner units | — | 257,949 | ||
| Earnings per unit for the period, basic and diluted: | ||||
| Common unit | — | 0.67 | ||
| Subordinated unit | — | 0.31 | ||
| General partner unit | — | 0.52 | ||
Unaudited condensed combined and consolidated statements of cash flows
For the three months ended
(All amounts expressed in U.S. Dollars)
| For the three months ended | |||||
| Cash flows from operating activities: | |||||
| Profit for the period | 7,790,882 | 12,897,430 | |||
| Adjustments for: | |||||
| Depreciation | 3,961,354 | 6,831,539 | |||
| Financial costs | 3,847,003 | 3,949,800 | |||
| Financial income | (4,027 | ) | (9,414 | ) | |
| Unrealized gain on interest rate swaps held for trading | (124,218 | ) | — | ||
| Recycled loss of cash flow hedges reclassified to profit or loss | 191,651 | — | |||
| 15,662,645 | 23,669,355 | ||||
| Movements in working capital | (9,404,739 | ) | (1,690,119 | ) | |
| Cash provided by operations | 6,257,906 | 21,979,236 | |||
| Interest paid | (3,353,407 | ) | (3,654,433 | ) | |
| Net cash provided by operating activities | 2,904,499 | 18,324,803 | |||
| Cash flows from investing activities: | |||||
| Payments for vessels | (141,297 | ) | (11,104 | ) | |
| Financial income received | 5,935 | 13,201 | |||
| Purchase of short-term investments | — | (4,000,000 | ) | ||
| Maturity of short-term investments | 1,500,000 | 17,700,000 | |||
| Net cash provided by investing activities | 1,364,638 | 13,702,097 | |||
| Cash flows from financing activities: | |||||
| Borrowings repayments | (6,047,181 | ) | (5,625,000 | ) | |
| Payment of loan issuance costs | (29,385 | ) | (226,648 | ) | |
| Payment of offering costs | — | (86,766 | ) | ||
| Dividends paid | — | (10,717,225 | ) | ||
| Net cash used in financing activities | (6,076,566 | ) | (16,655,639 | ) | |
| (Decrease)/increase in cash and cash equivalents | (1,807,429 | ) | 15,371,261 | ||
| Cash and cash equivalents, beginning of the period | 14,403,785 | 27,188,095 | |||
| Cash and cash equivalents, end of the period | 12,596,356 | 42,559,356 | |||
EXHIBIT II
Non-GAAP Financial Measures:
EBITDA, Adjusted EBITDA and Adjusted Profit
EBITDA is defined as earnings before interest income and expense, gain/loss on interest rate swaps, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before foreign exchange losses/gains. Adjusted Profit represents earnings before non-cash gain/loss on interest rate swaps that includes (if any) (a) unrealized gain/loss on interest rate swaps held for trading, (b) loss at inception, (c) recycled loss of cash flow hedges reclassified to profit or loss and (d) ineffective portion of cash flow hedges and foreign exchange gains/losses. EBITDA, Adjusted EBITDA and Adjusted Profit, which are non-GAAP financial measures, are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and operating performance. The Partnership believes that these non-GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. The Partnership believes that including EBITDA, Adjusted EBITDA and Adjusted Profit assists our management and investors in (i) understanding and analyzing the results of our operating and business performance, (ii) selecting between investing in us and other investment alternatives and (iii) monitoring our ongoing financial and operational strength in assessing whether to continue to hold our common units. This increased comparability is achieved by excluding the potentially disparate effects between periods of, in the case of EBITDA and Adjusted EBITDA, interest, gains/losses on interest rate swaps, taxes, depreciation and amortization; in the case of Adjusted EBITDA, foreign exchange losses/gains; and in the case of Adjusted Profit, non-cash gain/loss on interest rate swaps and foreign exchange gains/losses, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect results of operations between periods.
EBITDA, Adjusted EBITDA and Adjusted Profit have limitations as analytical tools and should not be considered as alternatives to, or as substitutes for, or superior to profit, profit from operations, earnings per unit or any other measure of financial performance presented in accordance with IFRS. Some of these limitations include the fact that they do not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments, (ii) changes in, or cash requirements for our working capital needs and (iii) the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. They are not adjusted for all non-cash income or expense items that are reflected in our statement of cash flows and other companies in our industry may calculate these measures differently than we do, limiting its usefulness as a comparative measure.
Reconciliation of EBITDA and Adjusted EBITDA to Profit:
(Amounts expressed in U.S. Dollars)
| Three months ended | ||||
| Profit for the period | 7,790,882 | 12,897,430 | ||
| Depreciation | 3,961,354 | 6,831,539 | ||
| Financial costs | 3,847,003 | 3,949,800 | ||
| Financial income | (4,027) | (9,414) | Loss on interest rate swaps | 618,315 | — |
| EBITDA | 16,213,527 | 23,669,355 | ||
| Foreign exchange losses/(gains) | 64,725 | (69,986) | ||
| Adjusted EBITDA | 16,278,252 | 23,599,369 | ||
Reconciliation of Adjusted Profit to Profit
(Amounts expressed in U.S. Dollars)
| For the three months ended | ||||
| Profit for the period | 7,790,882 | 12,897,430 | ||
| Foreign exchange losses/(gains) | 64,725 | (69,986) | ||
| Non-cash loss on interest rate swaps | 67,433 | — | ||
| Adjusted Profit | 7,923,040 | 12,827,444 | ||
DISTRIBUTABLE CASH FLOW
Distributable cash flow with respect to any quarter means Adjusted EBITDA, as defined above, after considering cash interest expense for the period, including realized loss on interest rate swaps (if any) and excluding amortization of loan fees, estimated drydocking and replacement capital reserves established by the Partnership. Estimated drydocking and replacement capital reserves represent capital expenditures required to renew and maintain over the long-term the operating capacity of, or the revenue generated by our capital assets. Distributable cash flow is a quantitative standard used by investors in publicly-traded partnerships to assess their ability to make quarterly cash distributions. Our calculation of Distributable cash flow may not be comparable to that reported by other companies. Distributable cash flow is a non-GAAP financial measure and should not be considered as an alternative to profit or any other indicator of the Partnership’s performance calculated in accordance with GAAP. The table below reconciles Distributable cash flow to Profit for the period attributable to the Partnership.
Reconciliation of Distributable Cash Flow to Profit:
(Amounts expressed in U.S. Dollars)
|
|
For the three months ended |
||
| Partnership’s profit for the period | 12,897,430 | ||
| Depreciation | 6,831,539 | ||
| Financial costs | 3,949,800 | ||
| Financial income | (9,414) | ||
| EBITDA | 23,669,355 | ||
| Foreign exchange gains | (69,986) | ||
| Adjusted EBITDA | 23,599,369 | ||
| Cash interest expense excluding amortization of loan fees | (3,573,094) | ||
| Drydocking capital reserve | (1,499,068) | ||
| Replacement capital reserve | (4,340,466) | ||
| Distributable cash flow | 14,186,741 | ||
| Other reserves* | (3,469,516) | ||
| Cash distribution declared | 10,717,225 | ||
* Refers to reserves (other than the drydocking and replacement capital reserves) which have been established for the proper conduct of the business of the Partnership and its subsidiaries (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership and its subsidiaries).
Chief Financial Officer
or
Head of Investor Relations
Email: [email protected]
Source:
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