Capital Product Partners L.P. Announces Fourth Quarter 2015 Financial Results and Fleet Employment Updates
The Partnership's net income for the quarter ended
Operating surplus, prior to Class
Total revenues for the fourth quarter of 2015 were
Total expenses for the fourth quarter of 2015 were
Total other expense, net for the fourth quarter of 2015 amounted to
As of
As of
Fleet Developments
The M/T 'Anemos I' (47,782 dwt, Ice Class 1A IMO II/III Chemical/ Product Tanker built 2007,
The M/T 'Akeraios' (47,781 dwt, Ice Class 1A IMO II/III Chemical/ Product Tanker, built 2007, Hyundai Mipo Dockyard,
The M/T 'Ayrton II' (51,260 dwt, IMO II/III Chemical Product Tanker built 2009,
The M/T 'Aristotelis' (51,604 dwt IMO II/III Chemical Product Tanker built 2013,
Finally, the M/T 'Arionas' (36,725 dwt, Ice Class 1A IMO II/III Chemical/ Product Tanker, built 2006, Hyundai Mipo Dockyard,
The early termination of certain charters with Capital Maritime for re-employment of the vessels with their new charterers and the employment of M/T 'Aristotelis' and M/T 'Ayrton II' with Capital Maritime were unanimously approved by the
As a result of the above fleet developments, the Partnership's charter coverage for 2016 and 2017 stands at 89% and 70%, respectively.
Market Commentary
Product & Crude Tanker Markets
The product tanker market experienced solid rates in the fourth quarter of 2015, albeit weaker in comparison with the previous quarter. In the West, rates were under pressure at the beginning of the quarter due to a lack of arbitrage trades across the
In the time charter market,
On the supply side, order activity for MR product tankers in the fourth quarter of 2015 increased compared to previous quarters but remained at relatively low levels. In addition, the product tanker orderbook continued to experience slippage during 2015 as approximately 32% of the expected MR and handy size tanker newbuildings were not delivered on schedule. Analysts expect that net fleet growth for product tankers for 2016 will be in the region of 4.6%, while overall demand for product tankers for the year is estimated to grow at 3.6%.
Suezmax crude tankers finished 2015 on a strong note, as spot freight rates for the fourth quarter of 2015 reached the highest level since the fourth quarter of 2008. Chinese crude demand was particularly strong over the three-month period, lifting demand for Suezmaxes, as the country continues to take advantage of the low oil prices to build its Strategic Petroleum Reserves. Suezmax tankers also benefited from limited tonnage availability due to increased delays in the Turkish Straits and high chartering volumes that significantly increased waiting times at several ports in the East. For the year 2015, Suezmax spot rates were at the highest levels since 2008.
The firm spot market resulted in higher period activity for Suezmax tankers in the quarter ended
On the supply side, the Suezmax orderbook represented, at the end of the fourth quarter of 2015, approximately 21.4% of the current fleet. Analysts, however, estimate that slippage for 2015 amounted to 38% of the expected deliveries for the same time period. Suezmax tanker demand is projected to continue growing in 2016 on the back of robust European seaborne crude oil import growth and increased crude exports from the Middle Eastern Gulf to
Post-panamax Container Market
The fourth quarter of 2015 saw substantially weaker demand for post-panamax container vessels due to the continued low level of cargo bookings on the Far East - Europe trade combined with the seasonal weakness in the months prior to the Christmas holiday. As a result the idle fleet increased to 6.8% at the end of 2015 to a total of approximately 1.4 million TEU.
The drop in oil prices as well as the uncertainty regarding future growth prospects of
Analysts have consequently revised their demand growth expectations for 2016 to 4.0%, with supply of new vessels also expected at 4.0%. The orderbook compared to the current container fleet stands today at 19.1%, which is the lowest since 2003.
The full year of 2015 saw only around 90 containerships of a combined 193,156 TEU being scrapped, however scrapping activity increased at the end of the year, due to the weaker container market conditions.
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Management Commentary
Mr.
"We completed the year having successfully executed against our growth strategy by acquiring an additional four vessels during the course of 2015, all employed under long term charters, and with a strong balance sheet, having repaid approximately
Importantly, we are pleased to see that the tanker charter market, where the majority of our fleet operates and where we have the vast majority of our charter renewals in the next couple of years, enjoys multi-year highs on the back of the strong industry fundamentals and the low oil price environment. As a result, we have secured employment for a number of our vessels at increased rates and for longer durations. Over the last 12 months, we have fixed a total of 16 vessels for 2 years or longer and expanded our customer base with the addition of Petrobras,
Looking ahead, our ability to grow through further dropdown opportunities from our Sponsor and to maintain a strong balance sheet will depend on, among other things, the Partnership's continuous access to the financial markets. In view of the severe pricing dislocation that has affected publicly traded master limited partnerships, our Board believes that the Partnership is best served by maintaining the unit distribution for the quarter at
Conference Call and Webcast
Today,
Conference Call Details:
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (
A replay of the conference call will be available until
Slides and Audio Webcast
There will also be a simultaneous live webcast over the
About
For more information about the Partnership, please visit our website: www.capitalpplp.com.
Forward-Looking Statements
The statements in this press release that are not historical facts, including, among other things, fleet developments, such as the acquisitions and vessel delivery dates of certain vessels from our Sponsor, our expectations regarding employment of our vessels, redelivery dates and charter rates, fleet growth, demand and newbuilding deliveries, as well as market and charter rate expectations, charterers' performance, and our expectations or objectives regarding future distribution amounts, our ability to pursue growth opportunities and grow our distributions and annual distribution guidance, are 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 units.
Unaudited Condensed Consolidated Statements of Comprehensive Income | |||||||||||||||||
(In thousands of United States Dollars, except number of units and net income per unit) | |||||||||||||||||
For the three months period ended |
For the year ended |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Revenues | $ | 44,816 | $ | 29,492 | $ | 156,613 | $ | 119,907 | |||||||||
Revenues - related party | 14,541 | 20,223 | 63,731 | 72,870 | |||||||||||||
Total revenues | 59,357 | 49,715 | 220,344 | 192,777 | |||||||||||||
Expenses: | |||||||||||||||||
Voyage expenses | 2,246 | 1,045 | 6,479 | 5,907 | |||||||||||||
Voyage expenses - related party | 104 | 95 | 411 | 338 | |||||||||||||
Vessel operating expenses | 15,745 | 12,473 | 58,625 | 48,714 | |||||||||||||
Vessel operating expenses - related party | 2,533 | 2,752 | 11,708 | 13,315 | |||||||||||||
General and administrative expenses | 1,268 | 1,550 | 6,608 | 6,316 | |||||||||||||
Depreciation & amortization | 17,045 | 14,359 | 62,707 | 57,476 | |||||||||||||
Operating income | 20,416 | 17,441 | 73,806 | 60,711 | |||||||||||||
Other income / (expense): | |||||||||||||||||
Interest expense and finance cost | (5,456 | ) | (4,865 | ) | (20,143 | ) | (19,225 | ) | |||||||||
Other income | 396 | 1,109 | 1,747 | 2,526 | |||||||||||||
Total other expense, net | (5,060 | ) | (3,756 | ) | (18,396 | ) | (16,699 | ) | |||||||||
Partnership's net income | $ | 15,356 | $ | 13,685 | $ | 55,410 | $ | 44,012 | |||||||||
Preferred unit holders' interest in Partnership's net income | $ | 2,853 | $ | 3,041 | $ | 11,334 | $ | 14,042 | |||||||||
$ | 250 | $ | 211 | $ | 879 | $ | 593 | ||||||||||
Common unit holders' interest in Partnership's net income | $ | 12,253 | $ | 10,433 | $ | 43,197 | $ | 29,377 | |||||||||
Net income per: | |||||||||||||||||
• | Common unit basic | $ | 0.10 | $ | 0.10 | $ | 0.38 | $ | 0.31 | ||||||||
Weighted-average units outstanding: | |||||||||||||||||
• | Common unit basic | 119,559,456 | 104,079,960 | 115,030,879 | 93,353,168 | ||||||||||||
Net income per: | |||||||||||||||||
• | Common unit diluted | $ | 0.10 | $ | 0.10 | $ | 0.38 | $ | 0.31 | ||||||||
Weighted-average units outstanding: | |||||||||||||||||
• | Common unit diluted | 119,642,608 | 104,079,960 | 115,051,838 | 93,353,168 | ||||||||||||
Comprehensive income: | |||||||||||||||||
Partnership's net income | 15,356 | 13,685 | 55,410 | 44,012 | |||||||||||||
Comprehensive and other comprehensive income: | $ | 15,356 | $ | 13,685 | $ | 55,410 | $ | 44,012 | |||||||||
Unaudited Condensed Consolidated Balance Sheets | ||||||
(In thousands of United States Dollars) | ||||||
Assets | ||||||
Current assets | As of 2015 |
As of 2014 |
||||
Cash and cash equivalents | $ | 90,190 | $ | 164,199 | ||
Trade accounts receivable, net | 2,680 | 2,588 | ||||
Due from related parties | -- | 55 | ||||
Prepayments and other assets | 2,547 | 1,839 | ||||
Inventories | 4,407 | 3,434 | ||||
Total current assets | 99,824 | 172,115 | ||||
Fixed assets | ||||||
Advances for vessels under construction - related party | 18,172 | 66,641 | ||||
Vessels, net | 1,315,485 | 1,120,070 | ||||
Total fixed assets | 1,333,657 | 1,186,711 | ||||
Other non-current assets | ||||||
Above market acquired charters | 100,518 | 115,382 | ||||
Deferred charges, net | 7,288 | 3,887 | ||||
Restricted cash | 17,000 | 15,000 | ||||
Prepayments and other assets | 1,394 | -- | ||||
Total non-current assets | 1,459,857 | 1,320,980 | ||||
Total assets | $ | 1,559,681 | $ | 1,493,095 | ||
Liabilities and Partners' Capital | ||||||
Current liabilities | ||||||
Current portion of long-term debt | $ | 12,957 | $ | 5,400 | ||
Trade accounts payable | 8,431 | 5,351 | ||||
Due to related parties | 22,154 | 17,497 | ||||
Accrued liabilities | 7,872 | 5,636 | ||||
Deferred revenue, current | 10,867 | 11,684 | ||||
Total current liabilities | 62,281 | 45,568 | ||||
Long-term liabilities | ||||||
Long-term debt | 558,659 | 572,515 | ||||
Deferred revenue | 921 | 2,451 | ||||
Total long-term liabilities | 559,580 | 574,966 | ||||
Total liabilities | 621,861 | 620,534 | ||||
Commitments and contingencies | ||||||
Total partners' capital | 937,820 | 872,561 | ||||
Total liabilities and partners' capital | $ | 1,559,681 | $ | 1,493,095 | ||
Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||
(In thousands of United States Dollars) | ||||||||
For the year ended |
||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 55,410 | $ | 44,012 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Vessel depreciation and amortization | 62,707 | 57,476 | ||||||
Amortization of deferred charges | 908 | 809 | ||||||
Amortization of above market acquired charters | 14,864 | 16,000 | ||||||
Equity compensation expense | 34 | -- | ||||||
Changes in operating assets and liabilities: | ||||||||
Trade accounts receivable | (92 | ) | 1,777 | |||||
Due from related parties | 55 | 612 | ||||||
Prepayments and other assets | (2,102 | ) | (463 | ) | ||||
Inventories | (973 | ) | (694 | ) | ||||
Trade accounts payable | 1,929 | (1,570 | ) | |||||
Due to related parties | 4,657 | 3,811 | ||||||
Accrued liabilities | 1,114 | 178 | ||||||
Deferred revenue | (2,207 | ) | 3,919 | |||||
Drydocking costs | (2,095 | ) | (590 | ) | ||||
Net cash provided by operating activities | 134,209 | 125,277 | ||||||
Cash flows from investing activities: | ||||||||
Vessel acquisitions and improvements | (207,937 | ) | (103 | ) | ||||
Advances for vessels under construction - related party | -- | (30,224 | ) | |||||
Increase in restricted cash | (2,000 | ) | -- | |||||
Net cash used in investing activities | (209,937 | ) | (30,327 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of Partnership units | 133,327 | 173,932 | ||||||
Expenses paid for issuance of Partnership units | (739 | ) | (416 | ) | ||||
Repurchase from Capital Maritime and cancellation of Partnership's units | -- | (60,000 | ) | |||||
Proceeds from issuance of long-term debt | 115,000 | -- | ||||||
Payments of long-term debt | (121,299 | ) | (5,400 | ) | ||||
Loan issuance costs | (1,797 | ) | (41 | ) | ||||
Dividends paid | (122,773 | ) | (102,798 | ) | ||||
Net cash provided by financing activities | 1,719 | 5,277 | ||||||
Net (decrease) / increase in cash and cash equivalents | (74,009 | ) | 100,227 | |||||
Cash and cash equivalents at the beginning of the year | 164,199 | 63,972 | ||||||
Cash and cash equivalents at the end of the year | 90,190 | 164,199 | ||||||
Supplemental Cash Flow Information | ||||||||
Cash paid for interest | $ | 16,759 | $ | 16,564 | ||||
Non-Cash Investing and Financing Activities | ||||||||
Excess between the fair value of the contracted vessels and the contractual cash consideration | $ | -- | $ | 36,417 | ||||
Capital expenditures included in liabilities | $ | 769 | $ | 183 | ||||
Offering expenses included in liabilities | $ | -- | $ | 12 | ||||
Capitalized dry docking and deferred costs included in liabilities | $ | 1,687 | $ | -- | ||||
Appendix A - Reconciliation of Non-GAAP Financial Measure
(In thousands of
Description of Non-GAAP Financial Measure - Operating Surplus
Operating Surplus represents net income adjusted for non-cash items such as depreciation and amortization expense and deferred revenue. 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 a non-GAAP financial measure and should not be considered as an alternative to net income or any other indicator of the Partnership's performance required by accounting principles generally accepted in
Reconciliation of Non-GAAP Financial Measure - Operating Surplus | For the three month period ended |
For the three month period ended |
For the three month period ended |
|||||||||
Net income | $ | 15,356 | $ | 13,685 | $ | 13,794 | ||||||
Adjustments to reconcile net income to operating surplus prior to class B preferred units distribution | ||||||||||||
Depreciation and amortization | 17,376 | 14,655 | 16,542 | |||||||||
Deferred revenue | 2,429 | 3,738 | 2,648 | |||||||||
OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS DISTRIBUTION | 35,161 | 32,078 | 32,984 | |||||||||
Class B preferred units distribution | (2,853 | ) | (3,041 | ) | (2,853 | ) | ||||||
ADJUSTED OPERATING SURPLUS | 32,308 | 29,037 | 30,131 | |||||||||
Increase in recommended reserves | (3,008 | ) | (4,345 | ) | (1,034 | ) | ||||||
AVAILABLE CASH | $ | 29,300 | $ | 24,692 | $ | 29,097 | ||||||
CPLP-F
Contact Details:
CEO and CFO
Tel. +30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Investor Relations / Media
Capital
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
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