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Dynagas LNG Partners LP Reports First Quarter Net Income of $1.9 Million and 100% Fleet Utilization

07 Ιουνίου 2019.

dynagas17Dynagas LNG Partners LP, an owner and operator of liquefied natural gas (“LNG”) carriers, announced its results for the three months ended March 31, 2019.

Quarter Highlights:

Net income of $1.9 million,

Adjusted Net Income(1) and Adjusted EBITDA(1) of $1.7 million and $21.7 million, respectively,

Distributable Cash Flow(1) of $5.8 million,

Free cash of $112.3 million and available liquidity of $142.3 million, each as of March 31, 2019.

100% utilization of the Partnership’s vessels,

Declared and paid a cash distribution of $0.0625 per common unit in respect of the fourth quarter of 2018,

Declared and paid cash distribution of $0.5625 per unit on its Series A Preferred Units (NYSE: “DLNG PR A”) for the period from November 12, 2018 to February 11, 2019,

Declared and paid the initial cash distribution of $0.7231 per unit on the Series B Preferred Units (NYSE: “DLNG PR B”) for the period from October 23, 2018 to February 22, 2019.

Subsequent Events:

Declared in April and paid in May a quarterly cash distribution of $0.0625 per common unit in respect of the first quarter of 2019;

Declared in April and paid in May a quarterly cash distribution of $0.5625 per Series A Preferred Unit for the period from February 12, 2019 to May 11, 2019; and

Declared and paid in May a quarterly cash distribution of $0.546875 on the Series B Preferred Units for the period from February 22, 2019 to May 21, 2019.

CEO Commentary:

Tony Lauritzen, Chief Executive Officer of the Partnership, commented: “We are pleased to report the results for the quarter ended March 31, 2019. Our fleet performed with 100% fleet utilization reflecting our manager’s operational performance.

Our underlying charter business remains healthy with our fleet of six LNG carriers all contracted on charters to international gas producers with an average remaining duration of 9.3 years.

The Lena River is expected to commence employment under its long term charter with Yamal LNG in July 2019, following which, all of our LNG carriers will be fully contracted with the earliest potential availability in the third quarter of 2021, which is the earliest contracted re-delivery date for one of our six LNG carriers.

We continue to be focused on the refinancing of our 6.25% $250 million senior unsecured, non-amortizing notes, which are due on October 30, 2019 (the “2019 Notes”). In this respect, we are in an advanced stage with commercial banks and other capital sources for a potential financing transaction which, among other things, may provide funding for the payment due on the maturity date of our 2019 Notes, and/or Term Loan B, or a combination of the foregoing. Although we believe we will be successful in raising the requisite capital, we have not yet and may not enter into definitive binding documentation. Please refer to the Liquidity/Financing/Cash Flow Coverage section in this press release for further information.

We believe in the positive long term fundamentals of the LNG shipping industry as the production of LNG continues to grow and natural gas continues to gain market share as a reliable, abundant, price competitive and relatively cleaner energy resource.

We are looking forward to concluding our above-mentioned refinancing and thereafter, focusing on new projects in the future.”

Three Months Ended March 31, 2019 and 2018 Financial Results

Net Income for the three months ended March 31, 2019 was $1.9 million as compared to net income of $4.8 million in the corresponding period of 2018, which represents a decrease of $2.9 million, or 60.4%. The decrease in net income for the first quarter of 2019, was mainly attributable to:

the decrease in revenues and increase in operating expenses during the three months ended March 31, 2019, as compared to the same period in 2018, as further elaborated below; and

the increases in U.S. Libor rates, which correspondingly, increased the Partnership’s interest and finance costs with respect to Partnership’s $480 million senior secured term loan (the “Term Loan B”) in the first quarter of 2019 in comparison to the first quarter of 2018.

Adjusted Net Income for the three months ended March 31, 2019 was $1.7 million as compared to Adjusted Net Income of $7.2 million in the corresponding period of 2018, which represents a decrease of $5.5 million, or 76.4%. Adjusted EBITDA for the three months ended March 31, 2019 was $21.7 million compared to Adjusted EBITDA of $26.6 million for the corresponding period of 2018, which represents a decrease of $4.9 million, or 18.4%. The decrease in Adjusted EBITDA (which excludes non-cash and non-recurring items), was predominantly due to the lower revenues earned on certain of the Partnership’s LNG carriers as further discussed below. The decrease in Adjusted Net Income (which excludes non-cash and non-recurring items) was predominantly due to the lower revenues earned on certain of the Partnership’s LNG carriers as well as the increased financing costs, as also further discussed below.

The Partnership’s Distributable Cash Flow for the three-month period ended March 31, 2019 was $5.8 million, compared to $11.3 million in the corresponding period of 2018, which represents a decrease of $5.5 million, or 48.7%. This decrease was attributable to factors discussed in (i) and (ii) outlined above.

For the three-month period ended March 31, 2019, the Partnership reported loss per common unit and Adjusted Loss per common unit, basic and diluted, of $0.03 and $0.03, respectively, after taking into account the Series A Preferred Units’ interest and the Series B Preferred Units’ interest on the Partnership’s net loss/ Adjusted Net Income. Loss per common unit and Adjusted Loss per common unit, basic and diluted, are calculated on the basis of a weighted average number of 35,490,000 common units outstanding during the period, in the case of Adjusted Loss per common unit after reflecting the impact of the non-cash items presented in Appendix B of this press release.

Adjusted Net Income, Adjusted EBITDA, Distributable Cash Flow and Adjusted Earnings/(Loss) per common unit are not recognized measures under U.S. GAAP. Please refer to Appendix B of this press release for the definitions and reconciliation of these measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

Voyage revenues were $31.4 million for the three-month period ended March 31, 2019 as compared to $33.9 million for the corresponding period of 2018, which represents a decrease of $2.5 million, or 7.4%. This decrease was mainly due to:

lower revenues earned on the Arctic Aurora, which, in August 2018 rolled-over into its new charter with Equinor ASA (“Equinor”) at a lower charter rate;

lower revenues earned on the Ob River, which completed employment under its multi-year charter contract with Gazprom Global LNG Limited (“Gazprom”) in April 2018 and subsequently, began employment under a ten-year charter party with an entity that is part of the wider Gazprom group of companies at a lower charter rate; and

lower revenues earned on the Lena River, which completed its employment under its multi-year charter contract with Gazprom in October 2018 and in the same month, was delivered into its multi-month charter with a major energy company at a lower charter rate, pending its delivery to its multi-year charter with Yamal.

This decrease in voyage revenues was, however, partially offset by the increase in the first quarter 2019 voyage revenues on its steam turbine vessel, the Clean Energy, which was delivered to its eight-year charter party with Gazprom in July 2018. The vessel had been trading in the spot market in the first quarter of 2018 at a lower charter rate.

Vessel operating expenses were $6.9 million, which corresponds to a daily rate of $12,817 in the three-month period ended March 31, 2019, as compared to $6.3 million, or a daily rate of $11,741 in the corresponding period of 2018. This increase is mainly attributable to the increased operating expenses of the Yenisei River in the first quarter of 2019, as compared to the corresponding quarter of 2018. The Yenisei River has been employed by Yamal since August 2018.

Interest and finance costs were $13.1 million in the first quarter of 2019 as compared to $12.0 million in the first quarter of 2018, which represents an increase of $1.1 million, or 9.2%. As discussed above, this increase was due to the increase in the Partnership’s weighted average interest in the first quarter of 2019 related to increased interest charges on its variable interest bearing secured debt, as compared to the corresponding period of 2018.

The Partnership reported average daily hire gross of commissions(1) of approximately $57,700 per day per vessel in the three months ended March 31, 2019, compared to approximately $66,300 per day per vessel in the corresponding period of 2018. During both three-month periods ended March 31, 2019 and 2018, the Partnership’s vessels operated at a 100.0% utilization rate.

Amounts relating to variations in period-on-period comparisons shown in this section are derived from the condensed financials presented below.

(1) Average daily hire gross of commissions represents voyage revenue excluding the non-cash time charter deferred revenue amortization and amortization of prepaid charter revenue, divided by the Available Days in the Partnership’s fleet as described in Appendix B.

Full Report: Dynagas LNG Partners

 

 

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