Capital Product Partners L.P. Announces First Quarter 2012 Financial Results and Reiterates Its Commitment to Its $0.93 per Unit Annual Distribution Guidance
The Partnership's net income for the quarter ended
Operating surplus for the quarter ended
Revenues for the first quarter of 2012 were
Total expenses for the first quarter of 2012 were
Total other expense, net for the first quarter of 2012 amounted to
As of
Fleet Developments and Sale of M/T Attikos and M/T Aristofanis
On
On the same day, the Partnership announced that the M/T Amore Mio II (159,982 dwt, built 2001 by Daewoo Shipbuilding and Marine Engineering Co., Ltd.,
Following the commencement of the above charters, all crude vessels acquired as a result of the acquisition of Crude Carriers have secured period employment and the Partnership's charter coverage of total fleet days is estimated at 83% for the remainder of 2012.
The Partnership announced on
Market Commentary
Overall, product tanker average spot earnings for the first quarter of 2012 softened slightly when compared to the fourth quarter of 2011, as a weaker spot market east of Suez and above average temperatures in the Northern hemisphere translated into softer demand for product tankers.
Despite softer spot earnings, the period charter market remained robust with increased activity for both shorter and longer term employment with a number of traders and operators seeking longer term charter coverage. As a result, the number of period charter fixtures in the first quarter of 2012 for employment longer than six months for
On the supply side, the product tanker order book experienced substantial slippage during 2011, as approximately 56% of the expected MR and handy size tanker new buildings were not delivered on schedule. Slippage as of the end of
The VLCC and Suezmax tanker spot charter markets saw marked improvement in average earnings, as they experienced the highest average since the second and fourth quarters of 2010, respectively. Demand for VLCCs, and to a lesser extent for Suezmaxes, increased due to tighter sanctions on Iranian crude, increased oil imports out of the Middle Eastern Gulf to the US and increased Chinese crude oil import demand which reached historical highs. These factors contributed to the absorption of most of the excess crude tanker vessel supply and led to substantially higher spot rates compared to the fourth quarter of 2011.
The crude tanker long term period market saw more activity when compared to the second half of 2011, as the improving spot market encouraged certain oil majors and traders to take vessels on period at slightly higher rates. However, overall period rates remain close to historically low levels and the longer term period market remains illiquid as charterers remain reluctant to fix for longer than 12 months.
The crude tanker order book experienced substantial slippage during 2011, as approximately 31% of the expected crude tanker newbuilding deliveries for the year have not materialized. Slippage as of the end of
Quarterly Cash Distribution
On
Management Commentary
Mr.
"During the first quarter, we continued to enjoy a solid environment for the period charter market in product tankers, which is the focus of our commercial activity. We are pleased to have completely eliminated the Partnership's current exposure to the crude tanker spot charter market by fixing the remaining crude tanker on a one year time charter to our Sponsor, Capital Maritime. During the first quarter we have started to experience the benefit of increased revenues and cash flow stability from the crude tanker period charters we have previously announced, and we expect to see their full impact from the second quarter of 2012 onwards. Following the commencement of all the above charters, the Partnership's charter coverage of total fleet days is estimated at 83% for 2012.
"In March and
"Given all of the above, we take this opportunity to reiterate our commitment to our annual distribution guidance of
Conference Call and Webcast
Today,
Conference Call Details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-(866) 966-9439 (from the US), 0871 700-0345 (from the
A replay of the conference call will be available until
Slides and Audio Webcast:
There will also be a simultaneous live webcast over the Internet, through the
Forward-Looking Statements:
The statements in this press release that are not historical facts, including our expectations regarding the current and future employment of our vessels, redelivery dates and charter rates, expected fleet coverage for 2012, newbuilding deliveries and slippage as well as market and rate expectations as well as expectations regarding our cash flow outlook, quarterly distribution and annual distribution guidance may be forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended). These forward-looking statements involve risks and uncertainties that could cause the stated or forecasted results to be materially different from those anticipated. Unless required by law, we expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, to conform them to actual results or otherwise. We assume no responsibility for the accuracy and completeness of the forward-looking statements. We make no prediction or statement about the performance of our common units.
About
For more information about the Partnership, please visit our website: www.capitalpplp.com.
CPLP-F
Capital Product Partners L.P. Unaudited Condensed Consolidated Statements of Comprehensive Income (In thousands of United States Dollars, except number of units and earnings per unit) For the three-month period ended March 31, 2012 2011 Revenues $ 23,659 $ 21,425 Revenues -- related party 16,180 6,229 ----------- ----------- Total Revenues 39,839 27,654 ----------- ----------- Operating expenses/(income): Voyage expenses 2,822 735 Voyage expenses - related party 140 - Vessel operating expenses -- related party 7,290 7,048 Vessel operating expenses 4,791 - General and administrative expenses 2,288 1,292 Gain on sale of vessel to third parties (956) - Depreciation 12,195 8,117 ----------- ----------- Operating income 11,269 10,462 ----------- ----------- Other income (expense), net: Gain on interest rate swap agreement 640 - Interest expense and finance cost (8,829) (8,225) Interest and other income 145 156 ----------- ----------- Total other expense, net (8,044) (8,069) ----------- ----------- Partnership's net income $ 3,225 $ 2,393 ----------- -----------General Partner's interest in Partnership's net income $ 65 $ 48 Limited Partners' interest in Partnership's net income $ 3,160 $ 2,345 Net income per: -- Common units (basic and diluted) 0.05 0.06 Weighted-average units outstanding: -- Common units (basic and diluted) 68,185,404 37,150,983 Comprehensive income: Partnership's net income $ 3,225 $ 2,393 Other Comprehensive income: Unrealized gain on derivative instruments 4,172 4,847 ----------- ----------- Total comprehensive income: $ 7,397 $ 7,240 ----------- -----------Capital Product Partners L.P. Unaudited Condensed Consolidated Balance Sheets (In thousands of United States Dollars, except number of units and earnings per unit) As of As of March 31, December 31, 2012 2011 Assets Current assets Cash and cash equivalents $ 56,804 $ 53,370 Trade accounts receivable 4,555 3,415 Prepayments and other assets 1,106 1,496 Inventories 1,616 4,010 ------------- ------------- Total current assets 64,081 62,291 ------------- ------------- Fixed assets Vessels, net 1,052,926 1,073,986 ------------- ------------- Total fixed assets 1,052,926 1,073,986 ------------- ------------- Other non-current assets Above market acquired charters 49,169 51,124 Deferred charges, net 2,013 2,138 Restricted cash 6,500 6,750 ------------- ------------- Total non-current assets 1,110,608 1,133,998 ------------- ------------- Total assets $ 1,174,689 $ 1,196,289 ------------- ------------- Liabilities and Partners' Capital Current liabilities Current portion of long-term debt $ 26,737 $ 18,325 Trade accounts payable 10,309 8,460 Due to related parties 10,351 10,572 Derivative instruments 7,865 8,255 Accrued liabilities 1,922 2,286 Deferred revenue 7,829 7,739 ------------- ------------- Total current liabilities 65,013 55,637 ------------- ------------- Long-term liabilities Long-term debt 596,843 615,255 Deferred revenue 3,541 3,649 Derivative instruments - 4,422 ------------- ------------- Total long-term liabilities 600,384 623,326 ------------- ------------- Total liabilities 665,397 678,963 ------------- ------------- Partners' capital 509,292 517,326 ------------- ------------- Total liabilities and partners' capital $ 1,174,689 $ 1,196,289 ------------- -------------Capital Product Partners L.P. Unaudited Condensed Consolidated Statements of Cash Flows (In thousands of United States Dollars) For the three-month period ended March 31, 2012 2011 Cash flows from operating activities: Net income $ 3,225 $ 2,393 Adjustments to reconcile net income to net cash provided by operating activities: Vessel depreciation 12,195 8,117 Amortization of deferred charges 158 145 Gain on interest rate swap agreements (640) - Gain on sale of vessel to third parties (956) - Amortization of above market acquired charters 1,955 612 Equity compensation expense 1,027 603 Changes in operating assets and liabilities: Trade accounts receivable (1,140) (358) Due from related parties - (3) Prepayments and other assets 390 (746) Inventory 2,394 (102) Trade accounts payable 1,849 222 Due to related parties (202) 1,328 Accrued liabilities (364) (37) Deferred revenue (18) (925) ---------- ---------- Net cash provided by operating activities 19,873 11,249 ---------- ---------- Cash flows from investing activities: Vessel acquisitions and improvements (19) - Reduction of restricted cash 250 - Net proceeds from sale of vessel to third parties 9,821 - ---------- ---------- Net cash provided by investing activities 10,052 - ---------- ---------- Cash flows from financing activities: Payments of long-term debt (10,000) - Deferred expenses (33) (100) Distributions paid (16,458) (9,002) ---------- ---------- Net cash used in financing activities (26,491) (9,102) ---------- ---------- Net increase in cash and cash equivalents 3,434 2,147 ---------- ---------- Cash and cash equivalents at beginning of period 53,370 32,471 ---------- ---------- Cash and cash equivalents at end of period $ 56,804 $ 34,618 ---------- ---------- Supplemental cash flow information Cash paid for interest $ 8,548 $ 7,863
Appendix A - Reconciliation of Non-GAAP Financial Measure
(In thousands of U.S. dollars)
Description of Non-GAAP Financial Measure - Operating Surplus
Operating Surplus represents net income adjusted for non-cash items such as depreciation and amortization expense, deferred revenue. In prior periods the Partnership designated a separate reserve in its calculation of Operating Surplus for "Replacement Capital Expenditures." The intent of this reserve is to invest, rather than distribute, an amount of cash flow each quarter so that the Partnership will be able to replace vessels in its fleet as those vessels reach the end of their useful lives. Based on current estimates of future vessel replacement costs, prior levels of Replacement Capital Expenditure reserves and investment returns from previous Replacement Capital Expenditure reserves, the Board of Directors has determined not to reserve additional Replacement Capital Expenditures for the first quarter. The Board of Directors will continue to review its Replacement Capital
Expenditure requirements on a quarterly basis. Operating Surplus is a quantitative standard used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in
For the
three-month
period ended
Reconciliation of Non-GAAP Financial Measure - Operating March 31,
Surplus 2012
Net income $ 3,225
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation and amortization 12,740
Deferred revenue 2,460
Gain on sale of vessel (956)
------------
OPERATING SURPLUS 17,469
------------
Recommended reserves (1,011)
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AVAILABLE CASH $ 16,458
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Contact Details:Capital GP L.L.C. Ioannis Lazaridis CEO and CFO +30 (210) 4584 950 E-mail: i.lazaridis@capitalpplp.com Investor Relations / MediaMatthew Abenante Capital Link, Inc. (New York ) Tel. +1-212-661-7566 E-mail: cplp@capitallink.comCapital Maritime & Trading Corp. Jerry Kalogiratos Finance Director +30 (210) 4584 950 j.kalogiratos@capitalpplp.com
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