GasLog Partners LP Reports Strong Financial Results for the Second Quarter

2016-07-29

GasLog Partners LP Reports Strong Financial Results for the Second Quarter

GasLog Partners LP, an international owner and operator of liquefied natural gas (“LNG”) carriers, reported its financial results for the three-month period ended June 30, 2016.

Quarterly Highlights

Declared cash distribution of $0.478 per unit for the second quarter of 2016, 10% higher than the second quarter of 2015.

Completed the refinancing of $305.50 million of current debt.

Revenue, Profit and EBITDA(1) of $49.64 million, $17.38 million and $35.56 million, 51%, 38% and 51% higher than the second quarter of 2015, respectively.

Distributable cash flow of $19.84 million, 41% higher than the second quarter of 2015.

Distribution coverage ratio of 1.26x(2).

(1) EBITDA and distributable cash flow are non-GAAP financial measures, and should not be used in isolation or as a substitute for GasLog Partners’ financial results presented in accordance with International Financial Reporting Standards (“IFRS”). For definition and reconciliation of these measures to the most directly comparable financial measures calculated and presented in accordance with IFRS, please refer to Exhibit III at the end of this press release.

(2) Distribution coverage ratio represents the ratio of distributable cash flow to the cash distribution declared.

CEO Statement

Mr. Andrew Orekar, Chief Executive Officer, commented: “We are pleased to report another quarter of strong financial results for GasLog Partners. Revenue, EBITDA, and distributable cash flow were in line with our expectations and include the impact of Methane Rita Andrea’s scheduled drydocking. The Partnership has no additional scheduled drydockings until 2018.

For the second quarter, GasLog Partners has declared a cash distribution of $0.478 per unit, which is unchanged from the first quarter of 2016 and represents a 13% compound annual growth rate since the Partnership’s initial public offering. Our cash distribution is supported by stable cash flows from multi-year charters with fixed-fee revenues. We remain committed to paying our distribution, and we have reduced indebtedness by approximately $66 million since our 2015 dropdown transaction to increase our capacity to fund growth.

On July 11, 2016, our general partner sponsor (the “GP sponsor”), GasLog Ltd. (“GasLog”), announced a new seven year time charter with Total Gas & Power Chartering Limited (“Total”) for Hull No. 2801, which is scheduled to be delivered in 2018. GasLog Partners has rights to acquire this vessel pursuant to the omnibus agreement with GasLog, and this successful charter increases the Partnership’s potential dropdown pipeline from twelve to thirteen vessels.

With a growing dropdown pipeline, diverse financing alternatives and a supportive GP sponsor, GasLog Partners remains well positioned to deliver predictable and growing cash distributions to our unitholders.”

The year-on-year increases in the Partnership Performance Results in the second quarter are mainly attributable to the additional vessel operating days in our fleet resulting from the acquisition of the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally on July 1, 2015 from GasLog.

The Partnership Performance Results reported in the first and second quarters of 2016 are the same as the IFRS Common Control Reported Results for the respective periods since there were no vessel acquisitions from GasLog during the last two quarters, which would have resulted in retrospective adjustment of the historical financial statements.

Cash Distribution

On July 27, 2016, the board of directors of GasLog Partners approved and declared a quarterly cash distribution of $0.478 per unit for the quarter ended June 30, 2016. The cash distribution is payable on August 12, 2016, to all unitholders of record as of August 8, 2016.

Liquidity and Financing

As of June 30, 2016, we had $59.70 million of cash and cash equivalents, of which $44.70 million is held in current accounts and $15.0 million is held in time deposits.

As of June 30, 2016, we had an aggregate of $727.99 million of indebtedness outstanding under our credit facilities. An amount of $45.57 million of outstanding debt is repayable within one year, including $5.0 million outstanding under the Partnership’s revolving credit facility with GasLog.

On April 5, 2016, $216.86 million and $89.87 million under the senior and junior tranche, respectively, of the credit agreements that the Partnership and GasLog entered into on February 18, 2016, were drawn by the Partnership to refinance $305.50 million of the outstanding debt of GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. The amounts drawn under the senior tranche facility shall be repaid in 20 quarterly equal installments commencing three months after the drawdown date. The amounts drawn under the junior tranche facility shall be repaid in full 24 months after the drawdown date. Amounts drawn bear interest at LIBOR plus a margin (variable margin for the junior tranche).

As of June 30, 2016, our current assets totaled $67.62 million and current liabilities totaled $72.49 million, resulting in a negative working capital position of $4.87 million. Current liabilities include $17.37 million of time charter hires received in advance that are classified as liabilities until such time as the criteria for recognizing the revenue as earned are met.

We anticipate that cash flow generated from operations will be sufficient to fund our operations, including our working capital requirements, and to make the required principal and interest payments on our indebtedness during the next 12 months.

Depending on market conditions, we may use derivative financial instruments to reduce the risks associated with fluctuations in interest rates. We expect over time to economically hedge a material proportion of our exposure to interest rate fluctuations by entering into new interest rate swap contracts. As of June 30, 2016, the Partnership had no interest rate swaps.

LNG Market Update and Outlook

Our demand outlook for LNG carriers with long-term charters remains positive. On July 11, 2016, GasLog announced a new seven-year time charter with Total at a rate that is consistent with GasLog’s long-term charter rates, demonstrating the resilience of long-term rates against the volatility of the shorter-term market. We continue to see a number of tenders for multi-year charters for vessels, which will be used to transport volumes from new liquefaction facilities coming online over the coming years.

In the second quarter, there were several announcements highlighting the ongoing demand for LNG carriers. In May, PETRONAS’ floating liquefied natural gas (“FLNG”) facility was delivered for operation in Malaysia. The facility is the first of a number of FLNG projects that are scheduled to come online in the next few years. In June, Kinder Morgan received Federal Energy Regulatory Commission (“FERC”) approval for its Elba Island project (“Elba Island”). The 2.5 million tonnes per annum (“mtpa”) project is expected to come online in 2018 and is supported by a 20-year contract with Shell for 100% of the liquefaction capacity. Elba Island is one of several liquefaction projects that has not taken final investment decision (“FID”), but continues to make progress in the current commodity price environment. The expanded Panama Canal also was completed in June 2016 and has seen a number of vessel transits. The opening of the expanded canal, which accommodates larger vessels including LNG carriers, should stimulate increased LNG trading activity between the Pacific and Atlantic basins due to greater destination optionality. On July 25, 2016, the first ever LNG carrier transit went through the expanded Panama Canal as the Maran Gas Apollonia, which is on charter to Shell, entered the locks on the Atlantic side carrying a cargo from the US Gulf Coast to Asia. Three more LNG transits have been booked in the next month.

New liquefaction projects representing approximately 140 million tonnes per annum of capacity have taken FID and are scheduled to come online between now and 2020. On the demand side, there have been sizeable year-on-year increases in import volumes from many new and existing nations looking to take advantage of low cost LNG. For example, for the six months to June 30, 2016, China and India have imported 29% and 45% more LNG, respectively, versus the same period in 2015. New importers such as Jordan, Egypt, Pakistan, and Lithuania have seen imports rise significantly in 2016 through the use of floating storage re-gasification units (“FSRUs”), which are typically quicker to market and offer greater flexibility than land-based terminals. We expect FSRUs to create additional demand in both new and existing markets for the new LNG coming online.

In the shorter term market, spot market rates through 2016 have plateaued around multi-year lows. Whilst it is too early to predict a sustained increase in the spot market, there has been a marked uptick in spot charter terms in recent weeks, with slightly improved freight rates and the ability to achieve round-trip economics on a more frequent basis.

Source from : International Shipping News

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