Capital Product Partners L.P. Announces Third Quarter 2014 Financial Results
The Partnership's net income for the quarter ended
Operating surplus for the quarter ended
Revenues for the third quarter of 2014 were
Total expenses for the third quarter of 2014 were
Total other expense, net for the third quarter of 2014 amounted to
As of
- the issuance of 17,250,000 common units in the quarter ended
September 30, 2014 , which raised gross proceeds of approximately$181.6 million , - the repurchase and cancellation of 5,950,610 common units from the Partnership's sponsor,
Capital Maritime & Trading Corp. ("Capital Maritime", or the "Sponsor"), - the difference of
$36.4 million between the average fair market value of the five vessels that the Partnership has agreed to acquire from Capital Maritime and the agreed price for these vessels, combined with - the payment of
$75.1 million in distributions sinceDecember 31, 2013 and - the net income for the nine months period ended
September 30, 2014 .
As of
Issuance of 17,250,000 Common Units and Cancelation of 5,950,610 Common Units
The Partnership announced in
The net proceeds of
Conversion of 4,048,484 Class B Preferred Units to Common Units
In
Fleet Developments
The M/T Miltiadis M II (162,397 dwt, ice-class 1A Crude/Product Carrier, built 2006, Daewoo Shipbuilding & Marine Engineering Co Ltd) extended its employment to Petróleos
The Partnership also announced on
The M/T 'Alkiviadis' (36,721 dwt, IMO II/III Chemical Product Tanker built 2006, Hyundai Mipo Dockyard,
The M/T 'Avax' (47,834 dwt, IMO II/III Chemical Product Tanker built 2007, Hyundai Mipo Dockyard,
Finally, the M/T 'Agisilaos' (36,760 dwt, IMO II/III Chemical Product Tanker built 2006, Hyundai Mipo Dockyard,
As a result of the above employments, the Partnership's total weighted average remaining charter duration is 8.5 years (weighted by contracted charter hire) as of
Market Commentary
Product tanker spot earnings modestly improved in the third quarter of 2014 compared to the previous quarter, but remained overall at fairly soft levels, as lack of arbitrage opportunities in the Atlantic kept rates under pressure for most of the quarter. However the U.S. Gulf and Atlantic product tanker spot market experienced a marked improvement on the back of increased activity towards the end of the quarter and into the fourth quarter of 2014. The market's performance in the Eastern Hemisphere was more positive throughout the quarter, as rates experienced some notable gains on the back of strong
The product tanker period market remained active during the third quarter of 2014, but rates declined due to the weaker spot market.
On the supply side, the ordering activity for medium range (MR) tankers slowed significantly year-to-date 2014, as most quality shipyards have now exhausted their capacity through 2016. Analysts expect that net fleet growth for product tankers for 2014 will be in the region of 3.9%, while overall demand for product tankers for the year is estimated to grow at 3.8%.
The Suezmax spot market improved considerably in the third quarter of 2014, as average earnings more than doubled year-on-year from 2013. Strong gains were registered in the first half of the third quarter of 2014 on the back of increased European and Chinese demand, and due to supply concerns in the Arabian Gulf. As the third quarter progressed, activity and rates gradually retreated as a result of slower Chinese crude imports and seasonally lower demand out of
As a result of the improving spot market compared to a year ago, the Suezmax period market saw more activity and at increased rates, when compared to the same quarter last year.
On the supply side, the Suezmax orderbook is among the lowest in the industry, corresponding to 11.5% of the current fleet. Suezmax tanker demand is expected to continue growing in 2014, driven by increased crude oil shipments from the Atlantic basin to the Far East and
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Appointment of Chief Operating Officer (COO)
In an effort to further strengthen Operational and Commercial activities, the Board of Directors of the Partnership has unanimously approved the appointment of
Management Commentary
Mr.
"We are very pleased to have completed a number of important transactions for the Partnership over the course of the third quarter of 2014 which ensure its continued growth potential. Firstly, a substantial majority of our common and Class B unitholders approved an amendment to our Partnership Agreement, which reset the thresholds for the Partnership's Incentive Distribution Rights ("IDRs"), thus enabling the Partnership to pursue a continuous growth strategy with the attending agreement to acquire, at prices below current market value, three 9,160 TEU eco-flex wide beam container vessels and two eco MR 50,000 dwt product tankers, all with period employment attached. Secondly, the Partnership secured a right of first refusal over six additional eco MR product tankers currently on order by our Sponsor for delivery in 2015 and 2016. Thirdly, the Partnership received
approximately
Conference Call and Webcast
Tomorrow,
Conference Call Details
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 866 819 7111 (U.S. 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
Forward-Looking Statements
The statements in this press release that are not historical facts, including the expected use of proceeds from the offering of our common units, 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, newbuilding deliveries and slippage, as well as market and charter rate expectations and expectations regarding our quarterly distributions, amortization payments, 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 common 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 periods ended |
For the nine month periods ended |
|||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenues | $ | 29,156 | $ | 29,084 | $ | 90,415 | $ | 82,810 | ||||||||
| Revenues - related party | 19,015 | 13,658 | 52,647 | 41,666 | ||||||||||||
| Total Revenues | 48,171 | 42,742 | 143,062 | 124,476 | ||||||||||||
| Expenses: | ||||||||||||||||
| Voyage expenses | 1,226 | 1,371 | 4,862 | 4,253 | ||||||||||||
| Voyage expenses - related party | 82 | 68 | 243 | 228 | ||||||||||||
| Vessel operating expenses | 12,165 | 9,467 | 36,241 | 26,989 | ||||||||||||
| Vessel operating expenses - related party | 3,031 | 4,442 | 10,563 | 12,938 | ||||||||||||
| General and administrative expenses | 1,876 | 2,120 | 4,766 | 8,104 | ||||||||||||
| Depreciation and amortization | 14,374 | 13,221 | 43,117 | 37,901 | ||||||||||||
| Operating income | 15,417 417 | 12,053 | 43,270 | 34,063 | ||||||||||||
| Non-operating income: | ||||||||||||||||
| Gain from bargain purchase | - | 24,781 | - | 42,256 | ||||||||||||
| Gain on sale of claim | - | - | - | 32,000 | ||||||||||||
| Total non-operating income | - | 24,781 | - | 74,256 | ||||||||||||
| Other income / (expense), net: | ||||||||||||||||
| Interest expense and finance cost | (4,903 | ) | (3,973 | ) | (14,360 | ) | (11,330 | ) | ||||||||
| Gain on interest rate swap agreement | - | - | - | 4 | ||||||||||||
| Other income | 755 | 331 | 1, 417 | 531 | ||||||||||||
| Total other expense, net | (4,148 | ) | (3,642 | ) | (12,943 | ) | (10,795 | ) | ||||||||
| Net income | $ | 11,269 | $ | 33,192 | $ | 30,327 | $ | 97,524 | ||||||||
| Preferred unit holders' interest in Partnership's net income | 2,997 |
4,458 |
11,001 |
14,998 |
||||||||||||
| General Partner's interest in Partnership's net income | 166 |
575 |
382 |
1,651 |
||||||||||||
| Common unit holders' interest in Partnership's net income | 8,106 |
28,159 |
18,944 |
80,875 |
||||||||||||
| Net income per: | ||||||||||||||||
| Common unit basic | $ | 0.09 | $ | 0.35 | $ | 0.21 | $ | 1.11 | ||||||||
| Weighted-average units outstanding: | ||||||||||||||||
| Common units basic | 92,186,212 | 78,892,067 | 89,738,279 | 71,925,843 | ||||||||||||
| Net income per: | ||||||||||||||||
| Common unit diluted | $ | 0.09 | $ | 0.32 | $ | 0.21 | $ | 1.02 | ||||||||
| Weighted-average units outstanding: | ||||||||||||||||
| Common units diluted | 92,186,212 | 101,911,889 | 89,738,279 | 94,001,263 | ||||||||||||
| Comprehensive income: | ||||||||||||||||
| Partnership's net income | 11,269 | 33,192 | 30,327 | 97,524 | ||||||||||||
| Other Comprehensive income: | ||||||||||||||||
| Unrealized gain on derivative instruments | - | - | - | 462 | ||||||||||||
| Comprehensive income | $ | 11,269 | $ | 33,192 | $ | 30,327 | $ | 97,986 | ||||||||
| Unaudited Condensed Consolidated Balance Sheets | ||||||
| (In thousands of United States Dollars, except number of units and earnings per unit) | ||||||
| Assets | ||||||
| Current assets | As of |
As of |
||||
| 2014 | 2013 | |||||
| Cash and cash equivalents | $ | 161,891 | $ | 63,972 | ||
| Trade accounts receivable, net | 2,097 | 4,365 | ||||
| Due from related parties | - | 667 | ||||
| Above market acquired charters | 717 | 612 | ||||
| Prepayments and other assets | 1,712 | 1,376 | ||||
| Inventories | 3,620 | 2,740 | ||||
| Total current assets | 170,037 | 73,732 | ||||
| Fixed assets | ||||||
| Advances for vessels under construction (1) | 66,641 | - | ||||
| Vessels, net | 1,134,294 | 1,176,819 | ||||
| Total fixed assets | 1,200,935 | 1,176,819 | ||||
| Other non-current assets | ||||||
| Above market acquired charters | 118,543 | 130,770 | ||||
| Deferred charges, net | 4,318 | 5,451 | ||||
| Restricted cash | 15,000 | 15,000 | ||||
| Total non-current assets | 1,338,796 | 1,328,040 | ||||
| Total assets | $ | 1,508,833 | $ | 1,401,772 | ||
| Liabilities and Partners' Capital | ||||||
| Current liabilities | ||||||
| Current portion of long-term debt | $ | 5,400 | $ | 5,400 | ||
| Trade accounts payable | 8,602 | 7,519 | ||||
| Due to related parties | 14,883 | 13,686 | ||||
| Accrued liabilities | 5,276 | 5,387 | ||||
| Deferred revenue, current | 10,803 | 6,936 | ||||
| Total current liabilities | 44,964 | 38,928 | ||||
| Long-term liabilities | ||||||
| Long-term debt | 573,865 | 577,915 | ||||
| Deferred revenue | 3,363 | 3,503 | ||||
| Total long-term liabilities | 577,228 | 581,418 | ||||
| Total liabilities | 622,192 | 620,346 | ||||
| Commitments and contingencies | ||||||
| Partners' capital (1) | 886,641 | 781,426 | ||||
| Total liabilities and partners' capital | $ | 1,508,833 | $ | 1,401,772 | ||
| (1) | Following the successful completion of the issuance and sale of 17,250,000 common units of the Partnership in |
| Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||
| (In thousands of United States Dollars) | ||||||||
| For the nine month periods ended |
||||||||
| 2014 | 2013 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 30,327 | $ | 97,524 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Vessel depreciation and amortization | 43,117 | 37,901 | ||||||
| Gain from bargain purchase | - | (42,256 | ) | |||||
| Amortization of deferred charges | 573 | 266 | ||||||
| Gain on interest rate swap agreements | - | (4 | ) | |||||
| Amortization of above market acquired charters | 12,122 | 9,091 | ||||||
| Equity compensation expense | - | 3,528 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade accounts receivable | 2,268 | (466 | ) | |||||
| Prepayments and other assets | (336 | ) | (138 | ) | ||||
| Inventories | (880 | ) | (373 | ) | ||||
| Trade accounts payable | 1,065 | 1,357 | ||||||
| Due from related parties | 667 | - | ||||||
| Due to related parties | 1,197 | (6,296 | ) | |||||
| Accrued liabilities | (173 | ) | 1,198 | |||||
| Deferred revenue | 3,892 | (2,613 | ) | |||||
| Dry-docking costs paid | (323 | ) | (509 | ) | ||||
| Net cash provided by operating activities | 93,516 | 98,210 | ||||||
| Cash flows from investing activities: | ||||||||
| Vessel acquisitions and improvements | (30,398 | ) | (325,000 | ) | ||||
| Increase in restricted cash | - | (4,500 | ) | |||||
| Net cash used in investing activities | (30,398 | ) | (329,500 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of Partnership units | 173,932 | 195,771 | ||||||
| Expenses paid for issuance of Partnership units | (4 | ) | (2,569 | ) | ||||
| Repurchase and retirement of Partnership units | (60,000 | ) | - | |||||
| Proceeds from issuance of long-term debt | - | 129,000 | ||||||
| Loan issuance costs | (12 | ) | (1,899 | ) | ||||
| Payments of long-term debt | (4,050 | ) | (2,700 | ) | ||||
| Dividends paid | (75,065 | ) | (63,256 | ) | ||||
| Net cash provided by financing activities | 34,801 | 254,347 | ||||||
| Net increase in cash and cash equivalents | 97,919 | 23,057 | ||||||
| Cash and cash equivalents at beginning of period | 63,972 | 43,551 | ||||||
| Cash and cash equivalents at end of period | $ | 161,891 | $ | 66,608 | ||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | 12,404 | 10,632 | ||||||
| Non-Cash Investing and Financing Activities | ||||||||
| Difference between acquisition cost and average fair value of acquired vessels | 36,416 | - | ||||||
| Issuance costs relating to Partnership's units included in liabilities | 392 | 830 | ||||||
| Capitalised and dry-docking vessel costs included in liabilities | 277 | 900 | ||||||
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. 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 | $ | 11,269 | $ | 33,192 | $ | 7,816 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||
| Depreciation and amortization | 14,703 | 14,218 | 14,579 | |||||||||
| Deferred revenue | 3,818 | 3,160 | 4,457 | |||||||||
| Gain from bargain purchase | - | (24,781 | ) | - | ||||||||
| OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS DISTRIBUTION | 29,790 | 25,789 | 26,852 | |||||||||
| Class B preferred units distribution | (3,040 | ) | (4,458 | ) | (3,970 | ) | ||||||
| ADJUSTED OPERATING SURPLUS | 26,750 | 21,331 | 22,882 | |||||||||
| Increase in recommended reserves | (2,058 | ) | (808 | ) | (1,828 | ) | ||||||
| AVAILABLE CASH | $ | 24,692 | $ | 20,523 | $ | 21,054 | ||||||
Contact Details:
CEO and CFO
+30 (210) 4584 950
E-mail: p.christodoulou@capitalpplp.com
Investor Relations / Media
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Finance Director
+30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Source:
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