Capital Product Partners L.P. Announces Third Quarter 2013 Financial Results, Charter Renewals for a Number of Its Vessels, and the Agreements to Acquire One Modern Eco-Type MR Product Tanker and to Sell the M/T Agamemnon II
The Partnership's net income for the quarter ended
Operating surplus for the quarter ended
Revenues for the third quarter of 2013 were
Total expenses for the third quarter of 2013 were
As discussed above, in the third quarter of 2013, the Partnership reported a gain from bargain purchase of
Total other expense, net for the third quarter of 2013 amounted to
As of
As of
Issuance of 13,685,000 Common Units, Entry into a New Up To
The Partnership announced on
In
The Partnership used the net proceeds from the issuance of the 13,685,000 common units together with approximately
Fleet Developments
The Partnership announced on
The M/T British Ensign will continue its bareboat charter with
The M/T British Envoy will continue its bareboat charter with
The M/T British Emissary will continue its bareboat charter with
The M/T Avax (47,834 dwt, IMO II/III Chemical Product Tanker built 2007 Hyundai Mipo Dockyard,
The M/T Apostolos (47,782 dwt, IMO II/III Chemical Product Tanker built 2007,
The M/T Anemos I (47,782 dwt, IMO II/III Chemical Product Tanker built 2007,
The charters of each of the M/T Avax, M/T Apostolos and M/T Anemos I 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 acquisitions and charter extensions, the weighted average remaining charter duration of our fleet is 8.9 years as of
In
It is expected that the M/T Aristotelis will be employed on a period time charter for
Each of the transactions of M/T Aristotelis and M/T Agamemnon II have been unanimously approved by our Board of Directors.
Market Commentary
Overall, product tanker spot earnings in the third quarter of 2013 were at levels higher than in the third quarter of 2012. Strong petroleum product exports from the U.S. Gulf, stemming from increasing oil production and high refinery throughputs, continued to support the market. However, softer rates compared to the earlier part of 2013, were seen in the Atlantic as declining
The product tanker period market remained active during the course of the third quarter of 2013, as more charterers sought to take period coverage and at slightly higher time charter rates compared to the previous quarter.
On the supply side, the product tanker order book continued to experience slippage during 2013, as approximately 21% of the expected MR and handy size tanker newbuildings were not delivered on schedule. Analysts expect that net fleet growth for product tankers for 2014 will be in the region of 3.5%, while overall demand for MR product tankers for the year is estimated to grow at 4.8%. We believe the improving demand and supply balance of the product tanker market should continue to positively affect spot and period charter rates going forward.
The Suezmax spot market remained at seasonally low levels as increased vessel supply, reduced U.S. crude imports and lower Libyan production at the end of the third quarter put downward pressure on rates.
Slippage for the Suezmax tanker order book continues to affect tonnage supply as approximately 35% of the expected crude newbuildings were not delivered on schedule. Industry analysts expect the Suezmax tanker order book slippage and cancellations to increase going forward due to the historically weak spot market, the soft shipping finance environment and downward pressure on asset values. Suezmax tanker demand is expected to grow by 4.1% in the full year 2014 with net fleet growth projected at 2.3%.
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Management Commentary
Mr.
"During the third quarter we have taken more steps to grow the Partnership. At the same time the period charter market in product tankers, where the majority of our fleet operates, has continued to improve. As a number of the charters for our product tankers expire during the remainder of 2013 and throughout 2014, we expect to benefit from our exposure to the improving fundamentals of the product tanker sector.
"We have successfully concluded an important transaction for the Partnership with the acquisition of three additional 5,023 TEU container vessels with long term period charters, partly financed by the proceeds from our issuance of 13.7 million common units earlier in the quarter. We believe that this transaction, the effects of which will be fully reflected in the fourth quarter, enhances the cash flow visibility to our shareholders, further diversifies our revenue stream, and will further underpin our existing distribution level and allow for potential distribution growth ahead.
"In addition, we are pleased to have fixed three product tanker on new period business and to have extended the charters of three existing product tankers with
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 (US Toll Free Dial In), 0800 953 0329 (
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
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, ability to pursue growth opportunities and grow our 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
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 | For the nine month | ||||||||||||||||
period ended | period ended | ||||||||||||||||
|
|
||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | $ | 29,084 | $ | 19,280 | $ | 82,810 | $ | 63,063 | |||||||||
Revenues - related party | 13,658 | 18,674 | 41,666 | 52,578 | |||||||||||||
Total Revenues | 42,742 | 37,954 | 124,476 | 115,641 | |||||||||||||
Expenses: | |||||||||||||||||
Voyage expenses | 1,371 | 1,078 | 4,253 | 4,337 | |||||||||||||
Voyage expenses related party | 68 | 137 | 228 | 421 | |||||||||||||
Vessel operating expenses - related party | 4,442 | 5,485 | 12,938 | 18,907 | |||||||||||||
Vessel operating expenses | 9,467 | 5,820 | 26,989 | 15,650 | |||||||||||||
General and administrative expenses | 2,120 | 2,360 | 8,104 | 6,907 | |||||||||||||
Gain on sale of vessel to third parties | - | - | - | (1,296 | ) | ||||||||||||
Depreciation & amortization | 13,221 | 12,020 | 37,901 | 36,241 | |||||||||||||
Operating income | 12,053 | 11,054 | 34,063 | 34,474 | |||||||||||||
Non operating income (expense),net: | |||||||||||||||||
Gain on sale of claim | - | - | 32,000 | - | |||||||||||||
Gain from bargain purchase | 24,781 | - | 42,256 | - | |||||||||||||
Total non operating income (expense), net | 24,781 | - | 74,256 | - | |||||||||||||
Other income (expense), net: | |||||||||||||||||
Interest expense and finance cost | (3,973 | ) | (3,877 | ) | (11,330 | ) | (22,806 | ) | |||||||||
Gain/(Loss) on interest rate swap agreement | - | (24 | ) | 4 | 1,423 | ||||||||||||
Interest and other income | 331 | 70 | 531 | 727 | |||||||||||||
Total other expense, net | (3,642 | ) | (3,831 | ) | (10,795 | ) | (20,656 | ) | |||||||||
Net income | $ | 33,192 | $ | 7,223 | $ | 97,524 | $ | 13,818 | |||||||||
Preferred unit holders' interest in Partnership's net income | 4,458 | 3,325 |
14,998 | 7,484 | |||||||||||||
575 | 78 |
1,651 | 127 | ||||||||||||||
Common unit holders' interest in Partnership's net income | 28,159 | 3,820 |
80,875 | 6,207 | |||||||||||||
Net income per: | |||||||||||||||||
Common unit basic | $ | 0.35 | $ | 0.06 | $ | 1.11 | $ | 0.09 | |||||||||
Weighted-average units outstanding: | |||||||||||||||||
Common units basic | 78,892,067 | 68,266,345 | 71,925,843 | 68,213,293 | |||||||||||||
Net Income per: | |||||||||||||||||
Common unit diluted | $ | 0.32 | $ | 0.06 | $ | 1.02 | $ | 0.09 | |||||||||
Weighted-average units outstanding: | |||||||||||||||||
Common units diluted | 101,911,889 | 68,266,345 | 94,001,263 | 68,213,293 | |||||||||||||
Comprehensive income: | |||||||||||||||||
Partnership's net income | 33,192 | 7,223 | 97,524 | 13,818 | |||||||||||||
Other Comprehensive income: | |||||||||||||||||
Unrealized gain on derivative instruments | - | 455 | 462 | 10,295 | |||||||||||||
Comprehensive income | $ | 33,192 | $ | 7,678 | $ | 97,986 | $ | 24,113 | |||||||||
Unaudited Condensed Consolidated Balance Sheets | |||||
(In thousands of United States Dollars, except number of units and earnings per unit) | |||||
As of |
As of |
||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 66,608 | $ | 43,551 | |
Trade accounts receivable, net | 3,660 | 2,346 | |||
Prepayments and other assets | 1,397 | 1,259 | |||
Above market acquired charters | 1,237 | - | |||
Inventories | 2,706 | 2,333 | |||
Total current assets | 75,608 | 49,489 | |||
Fixed assets | |||||
Vessels, net | 1,191,780 | 959,550 | |||
Total fixed assets | 1,191,780 | 959,550 | |||
Other non-current assets | |||||
Trade accounts receivable, net | - | 848 | |||
Above market acquired charters | 134,648 | 47,720 | |||
Deferred charges, net | 4,854 | 2,021 | |||
Restricted cash | 15,000 | 10,500 | |||
Total non-current assets | 1,346,282 | 1,020,639 | |||
Total assets | $ | 1,421,890 | $ | 1,070,128 | |
Liabilities and Partners' Capital | |||||
Current liabilities | |||||
Current portion of long-term debt | $ | 5,400 | $ | - | |
Trade accounts payable | 7,759 | 4,776 | |||
Due to related parties | 11,151 | 17,447 | |||
Derivative instruments | - | 467 | |||
Accrued liabilities | 4,125 | 2,781 | |||
Deferred revenue | 8,310 | 10,302 | |||
Total current liabilities | 36,745 | 35,773 | |||
Long-term liabilities | |||||
Long-term debt | 579,265 | 458,365 | |||
Deferred revenue | 1,422 | 2,162 | |||
Total long-term liabilities | 580,687 | 460,527 | |||
Total liabilities | 617,432 | 496,300 | |||
Commitments and contingencies | |||||
Partners' capital | 804,458 | 573,828 | |||
Total liabilities and partners' capital | $ | 1,421,890 | $ | 1,070,128 | |
Unaudited Condensed Consolidated Statements of Cash Flows | |||||
(In thousands of United States Dollars) | |||||
For the nine months period ended |
|||||
2013 | 2012 | ||||
Cash flows from operating activities: | |||||
Net income | 97,524 | 13,818 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Vessel depreciation and amortization | 37,901 | 36,241 | |||
Gain from bargain purchase | (42,256 | ) | - | ||
Amortization of deferred charges | 266 | 393 | |||
Gain on interest rate swap agreements | (4 | ) | (1,424 | ) | |
Gain on sale of vessel to third parties | - | (1,296 | ) | ||
Amortization of above market acquired charters | 9,091 | 5,884 | |||
Equity compensation expense | 3,528 | 3,051 | |||
Changes in operating assets and liabilities: | |||||
Trade accounts receivable | (466 | ) | 617 | ||
Dry-docking costs | (509 | ) | - | ||
Prepayments and other assets | (138 | ) | 81 | ||
Inventories | (373 | ) | 1,560 | ||
Trade accounts payable | 1,357 | (3,845 | ) | ||
Due to related parties | (6,296 | ) | (56 | ) | |
Accrued liabilities | 1,198 | 1,041 | |||
Deferred revenue | (2,613 | ) | (496 | ) | |
Net cash provided by operating activities | 98,210 | 55,569 | |||
Cash flows from investing activities: | |||||
Vessel acquisitions and improvements | (325,000 | ) | (210 | ) | |
Increase in restricted cash | (4,500 | ) | (3,750 | ) | |
Net proceeds from sale of vessel to third parties | - | 19,675 | |||
Net cash (used in) / provided by investing activities | (329,500 | ) | 15,715 | ||
Cash flows from financing activities: | |||||
Net proceeds from issuance of Partnership units | 193,202 | 138,908 | |||
Proceeds from issuance of long-term debt | 129,000 | - | |||
Loan issuance costs | (1,899 | ) | (141 | ) | |
Payments of long-term debt | (2,700 | ) | (170,066 | ) | |
Dividends paid | (63,256 | ) | (53,533 | ) | |
Net cash provided by / (used in) financing activities | 254,347 | (84,832 | ) | ||
Net increase / (decrease) in cash and cash equivalents | 23,057 | (13,548 | ) | ||
Cash and cash equivalents at beginning of period | 43,551 | 53,370 | |||
Cash and cash equivalents at end of period | 66,608 | 39,822 | |||
Supplemental cash flow information | |||||
Cash paid for interest | 10,632 | 22,111 | |||
Non-cash investing and financing activities | |||||
Capitalised and dry-docking vessel costs included in liabilities | 900 | 34 | |||
Unpaid issuance costs | 830 | 2,489 | |||
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, the gain from bargain purchase 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 |
|||
Net income | $ | 33,192 | ||
Adjustments to reconcile net income to net cash provided by operating activities | ||||
Depreciation and amortization | 14,218 | |||
Deferred revenue | 3,160 | |||
Gain from bargain purchase | (24,781 | ) | ||
OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS DISTRIBUTION | 25,789 | |||
Class B preferred units distribution | (4,458 | ) | ||
ADJUSTED OPERATING SURPLUS | 21,331 | |||
Increase in recommended reserves | (808 | ) | ||
AVAILABLE CASH | $ | 20,523 |
Contact Details:
CEO and CFO
+30 (210) 4584 950
E-mail: i.lazaridis@capitalpplp.com
Finance Director
+30 (210) 4584 950
j.kalogiratos@capitalpplp.com
Investor Relations / Media
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source:
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