Quarter Highlights:
- Net Income and Earnings per common unit (basic and diluted) of
$11.8 million and$0.23 , respectively; - Adjusted Net Income(1) of
$12.4 million and Adjusted Earnings per common unit(1) (basic and diluted) of$0.25 ; - Adjusted EBITDA(1)
$29.0 million ; - 100% fleet utilization(2); and
- Declared and paid a cash distribution of
$0.5625 per unit on its Series A Preferred Units (NYSE: “DLNG PR A”) for the period fromNovember 12, 2023 toFebruary 11, 2024 and$0.71764025 per unit on the Series B Preferred Units (NYSE: “DLNG PR B”) for the period fromNovember 22, 2023 toFebruary 21, 2024 .
Subsequent Events:
- Declared a quarterly cash distribution of
$0.5625 on the Partnership’s Series A Preferred Units for the period fromFebruary 12, 2024 toMay 11, 2024 , which was paid onMay 13, 2024 to all preferred Series B unit holders of record as ofMay 6, 2024 ; - Declared a quarterly cash distribution of
$0.69853375 on the Partnership’s Series B Preferred Units for the period fromFebruary 22, 2024 toMay 21, 2024 , which was paid onMay 22, 2024 to all preferred Series B unit holders of record as ofMay 15, 2024 ; and - On
June 19, 2024 , the Partnership entered into definitive documentation with subsidiaries of China Development Bank Financial Leasing Co. Ltd. (“CDBL”) for a$345.0 million lease financing agreement of four out of its six LNG carriers. OnJune 27, 2024 , the new lease facility, together with available cash, were used to fully prepay the$675 million Credit Facility, which was scheduled to mature inSeptember 2024 .
(1) Adjusted Net Income, Adjusted Earnings per common unit and Adjusted EBITDA are not recognized measures under
(2) Please refer to Appendix B for additional information on how we calculate fleet utilization.
CEO Commentary:
We are pleased to report the results for the three months ended
For the first quarter of 2024, we reported Net Income of
All six LNG carriers in our fleet are operating under their respective long-term charters with international gas companies with an average remaining contract term of 6.6 years. Barring any unforeseen events, the Partnership will have no contractual vessel availability until 2028. Our estimated contract backlog currently stands at approximately
We are pleased to announce a new lease financing agreement with China Development Bank Financial Leasing Co. Ltd for four of our LNG carriers. This financing, totaling
Russian Sanctions Developments
Due to the ongoing Russian conflicts with
As of today’s date:
- Current
U.S. sanctions regimes do not materially affect the business, operations or financial condition of the Partnership and, to the Partnership’s knowledge, its counterparties are currently performing their obligations under their respective time charters in compliance with applicableU.S. and E.U. rules and regulations. - On
June 24, 2024 , the E.U. issued its 14th sanctions package which, for the first time, targets the LNG sector of the Russian economy. E.U. laws now prohibit reloading services in the territory of the E.U. for the purposes of transshipment operations where such services are used to transship Russian LNG, except in the case of such transshipments to E.U. member states. That prohibition covers both ship-to-ship transfers and ship-to-shore transfers and re-loading operations. Ancillary services related to such transshipments are also banned. Also, information requirements apply to legal persons performing unloading operations. Certain limited exemptions apply. The Partnership is currently in the process of assessing the impact this new set of sanctions will have on its operations. - Sanctions legislation has been changing and the Partnership continues to monitor such changes as applicable to the Partnership and its counterparties.
The full impact of the commercial and economic consequences of the Russian conflict with
Financial Results Overview:
Three Months Ended | ||||||
( | ||||||
Voyage revenues | $ | 38,055 | $ | 37,263 | ||
Net Income | $ | 11,750 | $ | 9,600 | ||
Adjusted Net Income (1) | $ | 12,354 | $ | 6,519 | ||
Operating income | $ | 19,337 | $ | 19,344 | ||
Adjusted EBITDA(1) | $ | 29,003 | $ | 23,564 | ||
Earnings per common unit | $ | 0.23 | $ | 0.18 | ||
Adjusted Earnings per common unit (1) | $ | 0.25 | $ | 0.10 | ||
(1) Adjusted Net Income, Adjusted EBITDA and Adjusted Earnings per common unit are not recognized measures under
Three Months Ended
Net Income for the three months ended
Adjusted Net Income (a non-GAAP financial measure) for the three months ended
Voyage revenues for the three months ended
The Partnership reported average daily hire gross of commissions(1) of approximately
Vessel operating expenses were
Adjusted EBITDA (a non-GAAP financial measure) for the three months ended
Interest and finance costs, net were
For the three months ended
Adjusted Net Income, Adjusted EBITDA and Adjusted Earnings per common unit are not recognized measures under
Amounts relating to variations in period on period comparisons shown in this section are derived from the unaudited condensed financial statement contained herein.
(1) Average daily hire gross of commissions is a non-GAAP financial measure and represents voyage revenue excluding the non-cash time charter deferred revenue amortization, divided by the Available Days in the Partnership’s fleet as described in Appendix B.
Liquidity/ Financing/ Cash Flow Coverage
During the three months ended
As of
On
Vessel Employment
As of
As of the same date, the Partnership’s estimated contracted revenue backlog (2) (3) was
(1) Time charter coverage for the Partnership’s fleet is calculated by dividing the fleet contracted days on the basis of the earliest estimated delivery and redelivery dates prescribed in the Partnership’s current time charter contracts, net of scheduled class survey repairs by the number of expected Available Days during that period.
(2) The Partnership calculates its estimated contracted revenue backlog by multiplying the contractual daily hire rate by the expected number of days committed under the contracts (assuming earliest delivery and redelivery and excluding options to extend), assuming full utilization. The actual amount of revenues earned and the actual periods during which revenues are earned may differ from the amounts and periods disclosed due to, for example, dry-docking and/or special survey downtime, maintenance projects, off-hire downtime and other factors that result in lower revenues than the Partnership’s average contract backlog per day.
(3) The amount of
Conference Call and Webcast:
As announced, the Partnership’s management team will host a conference call on
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 877-405-1226 (US Dial-In), or +1 201-689-7823 (US International Dial-In). To access the conference call, please quote “Dynagas” to the operator and/or conference ID 13746983. For additional participant International Toll- Free access numbers, click here.
Alternatively, participants can register for the call using the “call me” option for a faster connection to join the conference call. You can enter your phone number and let the system call you right away. Click here for the “call me” option.
Audio Webcast - Slides Presentation:
There will be a live and then archived webcast of the conference call and accompanying slides, available on the Partnership’s website. To listen to the archived audio file, visit our website http://www.dynagaspartners.com and click on Webcast under our Investor Relations page. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
The slide presentation on the first quarter ended
About Dynagas LNG Partners LP
Visit the Partnership’s website at www.dynagaspartners.com. The Partnership’s website and its contents are not incorporated into and do not form a part of this release.
Contact Information:
Attention:
Tel. +30 210 8917960
Email: management@dynagaspartners.com
Investor Relations / Financial Media:
Capital Link, Inc.
Tel. (212) 661-7566
E-mail: dynagas@capitallink.com
Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The Partnership desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “project,” “will,” “may,” “should,” “expect,” “expected,” “pending” and similar expressions identify forward-looking statements. These forward- looking statements are not intended to give any assurance as to future results and should not be relied upon.
The forward-looking statements in this press release are based upon various assumptions and estimates, many of which are based, in turn, upon further assumptions, including without limitation, examination by the Partnership’s management of historical operating trends, data contained in its records and other data available from third parties. Although the Partnership believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Partnership’s control, the Partnership cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in the Partnership’s view, could cause actual results to differ materially from those discussed, expressed or implied, in the forward- looking statements include, but are not limited to, the strength of world economies and currency fluctuations, general market conditions, including fluctuations in charter rates, ownership days, and vessel values, changes in supply of and demand for liquefied natural gas (LNG) shipping capacity, changes in the Partnership’s operating expenses, including bunker prices, drydocking and insurance costs, the market for the Partnership’s vessels, availability of financing and refinancing, changes in governmental laws, rules and regulations or actions taken by regulatory authorities, economic, regulatory, political and governmental conditions that affect the shipping and the LNG industry, potential liability from pending or future litigation, and potential costs due to environmental damage and vessel collisions, general domestic and international political conditions, potential disruption of shipping routes due to accidents, political events, or international hostilities, including the recent escalation of the
Please see the Partnership’s filings with the
APPENDIX A
Condensed Consolidated Statements of Income
(In thousands of | Three Months Ended | ||||||
2024 (unaudited) | 2023 (unaudited) | ||||||
REVENUES | |||||||
Voyage revenues | $ | 38,055 | $ | 37,263 | |||
EXPENSES | |||||||
Voyage expenses (including related party) | (857 | ) | (714 | ) | |||
Vessel operating expenses | (7,700 | ) | (7,296 | ) | |||
General and administrative expenses (including related party) | (526 | ) | (469 | ) | |||
Management fees -related party | (1,641 | ) | (1,575 | ) | |||
Depreciation | (7,994 | ) | (7,865 | ) | |||
Operating income | 19,337 | 19,344 | |||||
Interest and finance costs, net | (8,655 | ) | (9,180 | ) | |||
Loss on debt extinguishment | — | (154 | ) | ||||
Gain/ (Loss) on derivative instruments | 1,260 | (341 | ) | ||||
Other Expense | (110 | ) | — | ||||
Other, net | (82 | ) | (69 | ) | |||
Net income | $ | 11,750 | $ | 9,600 | |||
Earnings per common unit (basic and diluted) | $ | 0.23 | $ | 0.18 | |||
Weighted average number of units outstanding, basic and diluted: | |||||||
Common units | 36,802,247 | 36,802,247 | |||||
Consolidated Condensed Balance Sheets
(Expressed in thousands of
2024 (unaudited) | 2023 (unaudited) | ||||
ASSETS: | |||||
Cash and cash equivalents and restricted cash (current and non-current) | $ | 76,155 | $ | 73,752 | |
Derivative financial instrument (current and non-current) | 10,637 | 15,631 | |||
Due from related party (current and non-current) | 1,447 | 1,350 | |||
Other current assets | 12,015 | 15,874 | |||
Vessels, net | 789,369 | 797,363 | |||
Other non-current assets | 5,210 | 4,943 | |||
Total assets | $ | 894,833 | $ | 908,913 | |
LIABILITIES | |||||
Total long-term debt, net of deferred financing costs | $ | 407,959 | $ | 419,584 | |
Total other current liabilities | 27,108 | 37,622 | |||
Due to related party (current and non-current) | 114 | 1,555 | |||
Total other non-current liabilities | 2,929 | 1,912 | |||
Total liabilities | $ | 438,110 | $ | 460,673 | |
PARTNERS’ EQUITY | |||||
General partner (35,526 units issued and outstanding as at | 110 | 102 | |||
Common unitholders (36,802,247 units issued and outstanding as at | 329,899 | 321,424 | |||
Series A Preferred unitholders: (3,000,000 units issued and outstanding as at | 73,216 | 73,216 | |||
Series B Preferred unitholders: (2,200,000 units issued and outstanding as at | 53,498 | 53,498 | |||
Total partners’ equity | $ | 456,723 | $ | 448,240 | |
Total liabilities and partners’ equity | $ | 894,833 | $ | 908,913 | |
Consolidated Condensed Statements of Cash Flows
(Expressed in thousands of
Three Months Ended | |||||||
2024 (unaudited) | 2023 (unaudited) | ||||||
Cash flows from Operating Activities: | |||||||
Net income: | $ | 11,750 | $ | 9,600 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 7,994 | 7,865 | |||||
Amortization and write-off of deferred financing fees | 375 | 447 | |||||
Deferred revenue amortization | 1,700 | (3,629 | ) | ||||
Amortization and write off of deferred charges | 54 | 53 | |||||
Loss on debt extinguishment | — | 154 | |||||
(Gain)/ Loss on derivative financial instrument | (1,260 | ) | 341 | ||||
Changes in operating assets and liabilities: | |||||||
Trade accounts receivable | 344 | (379 | ) | ||||
Prepayments and other assets | 2,731 | (45 | ) | ||||
Inventories | (11 | ) | 23 | ||||
Due from/ to related parties | (1,538 | ) | 1,204 | ||||
Trade accounts payable | (1,493 | ) | (821 | ) | |||
Accrued liabilities | (678 | ) | (726 | ) | |||
Unearned revenue | (8,399 | ) | (431 | ) | |||
Net cash from Operating Activities | $ | 11,569 | $ | 13,656 | |||
Cash flows from Investing Activities | |||||||
Ballast water treatment system installation | (27 | ) | (86 | ) | |||
Net cash used in Investing Activities | $ | (27 | ) | $ | (86 | ) | |
Cash flows from Financing Activities: | |||||||
Distributions declared and paid | (3,267 | ) | (2,891 | ) | |||
Repayment of long-term debt | (12,000 | ) | (43,270 | ) | |||
Payment of derivative instruments | 6,128 | 5,601 | |||||
Net cash used in Financing Activities | $ | (9,139 | ) | (40,560 | ) | ||
Net increase/ (decrease) in cash and cash equivalents and restricted cash | 2,403 | (26,990 | ) | ||||
Cash and cash equivalents and restricted cash at beginning of the year | 73,752 | 79,868 | |||||
Cash and cash equivalents and restricted cash at end of the period | $ | 76,155 | $ | 52,878 | |||
APPENDIX B
Fleet Statistics and Reconciliation of
Three Months Ended | |||||||
(expressed in United states dollars except for operational data and Time Charter Equivalent rate) | 2024 | 2023 | |||||
Number of vessels at the end of period | 6 | 6 | |||||
Average number of vessels in the period (1) | 6 | 6 | |||||
Calendar Days (2) | 546.0 | 540.0 | |||||
Available Days (3) | 546.0 | 540.0 | |||||
Revenue earning days (4) | 546.0 | 539.9 | |||||
Time Charter Equivalent rate (5) | $ | 68,128 | $ | 67,683 | |||
Fleet Utilization (4) | 100.0 | % | 100.0 | % | |||
Vessel daily operating expenses (6) | $ | 14,103 | $ | 13,511 | |||
(1) | Represents the number of vessels that constituted the Partnership’s fleet for the relevant period, as measured by the sum of the number of days that each vessel was a part of the Partnership’s fleet during the period divided by the number of Calendar Days (defined below) in the period. |
(2) | “Calendar Days” are the total days that the Partnership possessed the vessels in its fleet for the relevant period. |
(3) | “Available Days” are the total number of Calendar Days that the Partnership’s vessels were in its possession during a period, less the total number of scheduled off-hire days during the period associated with major repairs, or dry-dockings. |
(4) | The Partnership calculates fleet utilization by dividing the number of its Revenue earning days, which are the total number of Available Days of the Partnership’s vessels net of unscheduled off-hire days (which do not include positioning/ repositioning days for which compensation has been received) during a period by the number of Available Days. The shipping industry uses fleet utilization to measure a company’s efficiency in finding employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons such as unscheduled repairs but excluding scheduled off-hires for vessel upgrades, dry-dockings or special or intermediate surveys. |
(5) | Time Charter Equivalent rate (“TCE rate”), is a measure of the average daily revenue performance of a vessel. For time charters, we calculate TCE rate by dividing total voyage revenues, less any voyage expenses, by the number of Available Days during the relevant time period. Under a time charter, the charterer pays substantially all vessel voyage related expenses. However, the Partnership may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time charter, during periods of commercial waiting time or while off-hire during dry-docking or due to other unforeseen circumstances. The TCE rate is not a measure of financial performance under |
Three Months Ended | |||||||
2024 | 2023 | ||||||
(In thousands of | |||||||
Voyage revenues | $ | 38,055 | $ | 37,263 | |||
Voyage Expenses * | (857 | ) | (714 | ) | |||
Time Charter equivalent revenues | $ | 37,198 | $ | 36,549 | |||
Available Days | 546 | 540 | |||||
Time charter equivalent (TCE) rate | $ | 68,128 | $ | 67,683 |
*Voyage expenses include commissions of 1.25% paid to
(6) | Daily vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, spares and repairs and flag taxes, are calculated by dividing vessel operating expenses by fleet Calendar Days for the relevant time period. |
Reconciliation of Net Income to Adjusted EBITDA
Three Months Ended | |||||||
(In thousands of | 2024 | 2023 | |||||
Net income | $ | 11,750 | $ | 9,600 | |||
Net interest and finance costs (1) | 8,655 | 9,180 | |||||
Depreciation | 7,994 | 7,865 | |||||
Loss on Debt extinguishment | — | 154 | |||||
(Gain)/ Loss on derivative financial instrument | (1,260 | ) | 341 | ||||
Amortization of deferred revenue | 1,700 | (3,629 | ) | ||||
Amortization and write- off of deferred charges | 54 | 53 | |||||
Other Expense(2) | 110 | — | |||||
Adjusted EBITDA | $ | 29,003 | $ | 23,564 | |||
(1) Includes interest and finance costs and interest income, if any.
(2) Includes other expense from provisions for insurance claims for damages incurred prior years
The Partnership defines Adjusted EBITDA as earnings before interest and finance costs, net of interest income (if any), gains/losses on derivative financial instruments, taxes (when incurred), depreciation and amortization (when incurred), dry-docking and special survey costs and significant non-recurring items (if any). Adjusted EBITDA is used as a supplemental financial measure by management and external users of financial statements, such as investors, to assess the Partnership’s operating performance.
The Partnership believes that Adjusted EBITDA assists its management and investors by providing useful information that increases the ability to compare the Partnership’s operating performance from period to period and against that of other companies in its industry that provide Adjusted EBITDA information. This increased comparability is achieved by excluding the potentially disparate effects between periods or against companies of interest, other financial items, depreciation and amortization and taxes, which items are affected by various and possible changes in financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. The Partnership believes that including Adjusted EBITDA as a measure of operating performance benefits investors in (a) selecting between investing in the Partnership and other investment alternatives and (b) monitoring the Partnership’s ongoing financial and operational strength.
Adjusted EBITDA is not intended to and does not purport to represent cash flows for the period, nor is it presented as an alternative to operating income. Further, Adjusted EBITDA is not a measure of financial performance under
Reconciliation of Net Income to Adjusted Net Income available to common unitholders and Adjusted Earnings per common unit
Three Months Ended | |||||||
(In thousands of | 2024 | 2023 | |||||
Net Income | $ | 11,750 | $ | 9,600 | |||
Amortization of deferred revenue | 1,700 | (3,629 | ) | ||||
Amortization and write-off of deferred charges | 54 | 53 | |||||
Loss on debt extinguishment | — | 154 | |||||
(Gain)/ Loss on derivative financial instrument | (1,260 | ) | 341 | ||||
Other Expense | 110 | — | |||||
Adjusted Net Income | $ | 12,354 | $ | 6,519 | |||
Less: Adjusted Net Income attributable to preferred unitholders and general partner | (3,275 | ) | (2,894 | ) | |||
Net Income available to common unitholders | $ | 9,079 | $ | 3,625 | |||
Weighted average number of common units outstanding, basic and diluted: | 36,802,247 | 36,802,247 | |||||
Adjusted Earnings per common unit, basic and diluted | $ | 0.25 | $ | 0.10 | |||
Adjusted Net Income represents net income before non-recurring expenses (if any), charter hire amortization related to time charters with escalating time charter rates and changes in the fair value of derivative financial instruments. Net Income available to common unitholders represents the common unitholders interest in Adjusted Net Income for each period presented. Adjusted Earnings per common unit represents Net Income available to common unitholders divided by the weighted average common units outstanding during each period presented.
Adjusted Net Income, Net Income available to common unitholders and Adjusted Earnings per common unit, basic and diluted, are not recognized measures under
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