Capital Product Partners L.P. Announces Third Quarter 2012 Financial Results and Charter Renewals for a Number of Its Vessels
The Partnership's net income for the quarter ended
Operating surplus for the quarter ended
Revenues for the third quarter of 2012 were
Total expenses for the third quarter of 2012 were
Total other expense, net for the third quarter of 2012 amounted to
As of
As of
Fleet Developments
The M/T Miltiadis M II (162,397dwt, Ice 1A Crude/Product Carrier, built 2006 Daewoo Shipbuilding & Marine Engineering Co Ltd) has been chartered through
The M/T Apostolos (47,782dwt, Ice 1A IMO II/III, built 2007 Hyundai Mipo Dockyard Co Ltd) secured employment for 12 (+/- 30 days) months with CMTC at a gross rate of
The M/T Akeraios (47,781dwt, Ice 1A IMO II/III, built 2007 Hyundai Mipo Dockyard Co Ltd) has extended its employment to CMTC for an additional 12 months (+/- 30 days) at a gross rate of
The M/T Agisilaos (36,760dwt, Ice 1A IMO II/III, built 2006 Hyundai Mipo Dockyard Co Ltd) has extended its employment to CMTC for an additional 12 months (+/- 30 days) at a gross rate of
The M/T Alkiviadis (36,721dwt, Ice 1A IMO II/III, built 2006 Hyundai Mipo Dockyard Co Ltd) has extended its employment to CMTC for an additional 12 months (+/- 30 days) at an increased gross rate of
The charters of each of the M/T Apostolos, M/T Akeraios, M/T Agisilaos and M/T Alkiviadis are subject to 50/50 profit sharing arrangements for breaching Institute Warranty Limits and were unanimously approved by the
As a result of the above employment agreements, the Partnership's charter coverage for the remainder of 2012 and 2013 now stand at 96% and 75%, respectively.
On
Market Commentary
Overall, product tanker average spot earnings for the third quarter of 2012 remained soft, as sluggish economic growth in the US, weak demand in
The product tanker period charter market remained active albeit with fewer fixtures and at lower levels compared to the first half of 2012 due to the softer rates prevailing in the spot market.
On the supply side, the product tanker order book continued to experience substantial slippage during 2012, as approximately 45% of the expected MR and handy size tanker newbuildings were not delivered on schedule. Analysts expect that net fleet growth for MR and handy size product tankers for 2012 will be in the region of 3.1%, while overall demand for product tankers for the year has been revised downwards to 2.8% as European and US demand for seaborne oil products continues to decline. We believe the current low product tanker order book is amongst the lowest in the shipping industry and given the demand fundamentals and the order book slippage, it should positively affect spot and period charter rates going forward.
The crude tanker spot market dropped sharply in July and remained at depressed levels for most of the remaining summer months as a result of a number of factors including low fixture activity due to seasonal weakness, the build-up of commercial crude inventories that occurred during the first half of the year, the shutdown of the
Slippage for the crude tanker order book as of the end of
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Management Commentary
Mr.
"Having completed a very important transaction for the Partnership during the second quarter of 2012 with the issuance of the Class
Although market conditions remain soft, we remain positive on the fundamentals of the product tanker market, as the improving supply side and the expected tonne mile demand growth should continue to drive period demand for product tankers and positively affect the future outlook of our cash flows."
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), or +(44) 1452 555 566 (from outside the US). Please quote "
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 employment of our vessels, redelivery dates and charter rates, fleet growth and demand, newbuilding deliveries and slippage as well as market and charter rate expectations and expectations regarding our quarterly distributions 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 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 For the nine-month period ended September 30, ended September 30, 2012 2011 2012 2011 Revenues 19,280 22,797 63,063 66,706 Revenues - related party 18,674 8,058 52,578 19,655 ------------ ------------ ------------ ------------ Total Revenues 37,954 30,855 115,641 86,361 ------------ ------------ ------------ ------------ Expenses: Voyage expenses 1,078 1,169 4,337 2,945 Voyage expenses related party 137 - 421 - Vessel operating expenses - related party 5,485 7,889 18,907 22,792 Vessel operating expenses 5,820 735 15,650 814 General and administrative expenses 2,360 3,035 6,907 8,230 Gain on sale of vessel to third parties - - (1,296) - Depreciation 12,020 8,611 36,241 24,960 ------------ ------------ ------------ ------------ Operating income 11,054 9,416 34,474 26,620 ------------ ------------ ------------ ------------ Non-operating income (expense),net: Gain from bargain purchase - 65,927 - 82,453 Other income (expense), net: Interest expense and finance cost (3,877) (8,158) (22,806) (24,627) (Loss) / gain on interest rate swap agreement (24) 1,267 1,423 1,267 Interest and other income 70 90 727 369 ------------ ------------ ------------ ------------ Total other expense, net (3,831) (6,801) (20,656) (22,991) ------------ ------------ ------------ ------------ Net income 7,223 68,542 13,818 86,082 ------------ ------------ ------------ ------------ Preferred unit holders' interest in Partnership's net income. 3,325 - 7,484 -General Partner's interest in Partnership's net income 78 1,371 127 1,722 Common unit holders' interest in Partnership's net income 3,820 67,171 6,207 84,360 Net income per: Common units (basic and diluted) 0.06 1.50 0.09 2.07 Weighted-average units outstanding: Common units (basic and diluted) 68,266,345 44,154,965 68,213,293 40,046,530 Comprehensive income: Partnership's net income 7,223 68,542 13,818 86,082 Other Comprehensive income: Unrealized gain on derivative instruments 455 4,325 10,295 12,953 ------------ ------------ ------------ ------------ Comprehensive income 7,678 72,867 24,113 99,035 ------------ ------------ ------------ ------------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 September 30, December 31, 2012 2011 Assets Current assets Cash and cash equivalents $ 39,822 $ 53,370 Trade accounts receivable 1,950 3,415 Prepayments and other assets 1,415 1,496 Inventories 2,450 4,010 ------------- ------------- Total current assets 45,637 62,291 ------------- ------------- Fixed assets Vessels, net 1,019,425 1,073,986 ------------- ------------- Total fixed assets 1,019,425 1,073,986 ------------- ------------- Other non-current assets Trade accounts receivable 848 - Above market acquired charters 45,240 51,124 Deferred charges, net 2,011 2,138 Restricted cash 10,500 6,750 ------------- ------------- Total non-current assets 1,078,024 1,133,998 ------------- ------------- Total assets $ 1,123,661 $ 1,196,289 ------------- ------------- Liabilities and Partners' Capital Current liabilities Current portion of long-term debt $ - $ 18,325 Trade accounts payable 7,149 8,460 Due to related parties 10,365 10,572 Derivative instruments 958 8,255 Accrued liabilities 3,408 2,286 Deferred revenue 8,462 7,739 ------------- ------------- Total current liabilities 30,342 55,637 ------------- ------------- Long-term liabilities Long-term debt 463,514 615,255 Deferred revenue 2,430 3,649 Derivative instruments -- 4,422 ------------- ------------- Total long-term liabilities 465,944 623,326 ------------- ------------- Total liabilities 496,286 678,963 ------------- ------------- Partners' capital 627,375 517,326 ------------- ------------- Total liabilities and partners' capital $ 1,123,661 $ 1,196,289 ------------- -------------Capital Product Partners L.P. Unaudited Condensed Consolidated Statements of Cash Flows (In thousands of United States Dollars) For the nine months period ended September 30, 2012 2011 Cash flows from operating activities: Net income 13,818 86,082 Adjustments to reconcile net income to net cash provided by operating activities: Vessel depreciation 36,241 24,960 Gain from bargain purchase - (82,453) Amortization of deferred charges 393 651 Gain on interest rate swap agreements (1,424) (1,268) Gain on sale of vessel to third parties (1,296) - Amortization of above market acquired charters 5,884 3,514 Equity compensation expense 3,051 1,611 Changes in operating assets and liabilities: Trade accounts receivable 617 50 Due from related parties - (106) Prepayments and other assets 81 (280) Inventories 1,560 (291) Trade accounts payable (3,845) 2,155 Due to related parties (56) 974 Accrued liabilities 1,041 1,817 Deferred revenue (496) 3,707 ------------ ------------ Net cash provided by operating activities 55,569 41,123 ------------ ------------ Cash flows from investing activities: Vessel acquisitions and improvements (210) (26,643) Cash and cash equivalents acquired in business acquisition - 11,847 Additions to restricted cash (3,750) (1,250) Net proceeds from sale of vessel to third parties 19,675 - ------------ ------------ Net cash provided by / (used in) investing activities 15,715 (16,046) ------------ ------------ Cash flows from financing activities: Net proceeds from issuance of Partnership units 138,908 1,470 Proceeds from issuance of long-term debt - 159,580 Loan issuance costs (141) (284) Repayments of long-term debt (170,066) (134,580) Dividends paid (53,533) (28,658) ------------ ------------ Net cash used in financing activities (84,832) (2,472) ------------ ------------ Net (decrease) / increase in cash and cash equivalents (13,548) 22,605 ------------ ------------ Cash and cash equivalents at beginning of period 53,370 32,471 ------------ ------------ Cash and cash equivalents at end of period 39,822 55,076 ------------ ------------ Supplemental cash flow information Cash paid for interest 22,111 23,581 Non-cash activities Units issued to acquire the vessel owning company of the M/V Cape Agamemnon - 57,056 Acquisition of above market time charter - 48,551 Capital expenditures included in liabilities 34 382 Unpaid private placement costs 2,489 - Crude's net assets at the completion of the business acquisition - 211,144 Units issued to acquire Crude - 155,559 Fair value of Crude's Equity Incentive Plan attributable to pre-combination services - 1,505
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 and 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 third 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 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 For the three-month period
Measure - ended
Operating Surplus September 30, 2012
Net income $ 7,223
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 13,193
Deferred revenue 1,475
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OPERATING SURPLUS PRIOR TO CLASS B
PREFERRED UNITS DISTRIBUTION 21,891
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Class B preferred units distribution (3,325)
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ADJUSTED OPERATING SURPLUS 18,566
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Increase in recommended reserves (2,108)
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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.comCapital Maritime & Trading Corp. Jerry Kalogiratos Finance Director +30 (210) 4584 950 j.kalogiratos@capitalpplp.com Investor Relations / MediaMatthew Abenante Capital Link, Inc. (New York ) Tel. +1-212-661-7566 E-mail: cplp@capitallink.com
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