Capital Product Partners L.P. Announces First Quarter 2024 Financial Results
Highlights
Three-month periods ended |
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2024 | 2023 | Increase / (Decrease) | |
Revenues | 29% | ||
Expenses | 22% | ||
Interest expense and finance cost | 43% | ||
Net Income | 239% | ||
Adjusted Net Income (excluding gain on sale of vessels)1 | 75% | ||
Net Income per common unit | 24% | ||
Adjusted Net Income per common unit (excluding gain on sale of vessels)1 | (35%) | ||
Average number of vessels2 | 23.3 | 21.4 | 9% |
- Operating Surplus3 and Operating Surplus after the quarterly allocation to the capital reserve for the first quarter of 2024 were
$48.3 million and$9.6 million , respectively. - Announced common unit distribution of
$0.15 for the first quarter of 2024. - On
January 2, 2024 , the Partnership took delivery of the LNG/C Axios II. This is the second delivery under the Partnership’s agreement to acquire 11 latest generation two-stroke (MEGA) Liquefied Natural Gas Carriers (“LNG/C and the “LNG/C Transaction”), which closed onDecember 21, 2023 . - Concluded the sale of the M/V Long Beach Express and the M/V Akadimos recognizing a gain on sale of
$16.4 million . - Entered into memoranda of agreement for the sale of five additional container vessels.
____________
1 Adjusted Net Income (excluding gain on sale of vessels) and Adjusted Net Income per common unit (excluding gain on sale of vessels) are non-GAAP financial measures used to measure the financial performance of the Partnership and we believe these non-GAAP measures are useful to analysts and investors in comparing the results of operations between periods. These non-GAAP measures are not required by accounting principles generally accepted in the United States (“GAAP”) and should not be considered a substitute for Net income and Net Income per common unit prepared in accordance with GAAP or as a measure of profitability.
2 Average number of vessels is measured by aggregating the number of days each vessel was part of our fleet during the period and dividing such aggregate number by the number of calendar days in the period.
3 Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other limited partnerships. Please refer to Appendix A at the end of the press release for a reconciliation of this non-GAAP measure with net income.
Overview of First Quarter 2024 Results
Net income for the quarter ended
Total revenue for the quarter ended
Total expenses for the quarter ended
Total other expense, net for the quarter ended
Capitalization of the Partnership
As of
As of
As of
Operating Surplus
Operating surplus for the quarter ended
Delivery of the LNG/C Axios II
On
Container Divestment Update
Sale of M/V Long Beach Express: On
Sale of Three 10,000 TEU Container Vessels: On
Sale of M/V Akadimos: On
Sale of M/V Seattle Express and M/V Fos Express: On
The expected proceeds from the sale of the M/V Long Beach Express, the M/V Athos, the M/V Aristomenis, the M/V Athenian, the M/V Akadimos, the M/V Seattle Express and the M/V Fos Express after debt repayment are estimated to be approximately
Management Commentary
Mr.
“I am pleased to see the Partnership’s continued progress in executing the business plan outlined in
Quarterly Common Unit Cash Distribution
On
LNG Market Update
After a period of historically high rates following the start of the Russia-Ukraine Conflict, rates are normalizing toward pre-war levels. Term charter rates for one to three years have softened and are standing at approximately
Currently, 332 vessels are on order, while the on-the-water fleet grew by 10 vessels in the same period. The Orderbook-to-fleet ratio stands at 50.8% of the total fleet. Appetite still remains strong for LNG carrier newbuilds with 44 newbuilding orders having been placed in the first quarter of 2024.
The LNG shipping market appears balanced for this and next year with multiple newbuildings being delivered and only incremental new LNG volumes coming on stream. The LNG shipping supply-demand balance is expected to start tightening from 2026 as the next wave of LNG capacity comes online.
Conference Call and Webcast
Today,
Conference Call Details
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: +1 877 405 1226 (US Toll-Free Dial In) or +1 201 689 7823 (US and Standard International Dial In). Please quote “Capital Product Partners” to the operator and/or conference ID 13746395. Click here for additional participant International Toll-Free access numbers.
Alternatively, participants can register for the call using the “call me” option for a faster connection to join the conference call. You can enter your phone number and let the system call you right away. Click here for the “call me” option.
Slides and Audio Webcast
There will also be a live, and then archived, webcast of the conference call and accompanying slides, available through the Partnership’s website. To listen to the archived audio file, visit our website http://ir.capitalpplp.com/ and click on Webcasts & Presentations under our Investor Relations page. Participants in the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
About
For more information about the Partnership, please visit: www.capitalpplp.com.
Forward-Looking Statements
The statements in this press release that are not historical facts, including, among other things, the expected financial performance of CPLP’s business, the transactions contemplated pursuant to the Umbrella Agreement, CPLP’s ability to pursue growth opportunities, CPLP’s expectations or objectives regarding future distributions, unit repurchases, market, vessel deliveries and charter rate expectations, and, in particular, the expected effects of recent vessel acquisitions on the financial condition and operations of CPLP and the container and LNG industries in general, 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. For a discussion of factors that could materially affect the outcome of forward-looking statements and other risks and uncertainties, see “Risk Factors” in CPLP’s annual report filed with the
CPLP-F
Contact Details:
CEO
Tel. +30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Nikos Kalapotharakos
CFO
Tel. +30 (210) 4584 950
E-mail: n.kalapotharakos@capitalmaritime.com
Investor Relations / Media
Capital Link, Inc. (
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source:
Unaudited Condensed Consolidated Statements of Comprehensive Income
(In thousands of United States Dollars, except for number of units and earnings per unit)
For the three-month | ||||||
periods ended |
||||||
2024 | 2023 | |||||
Revenues | $ | 104,494 | $ | 81,016 | ||
Expenses / (income), net: | ||||||
Voyage expenses | 3,857 | 3,842 | ||||
Vessel operating expenses | 19,555 | 16,820 | ||||
Vessel operating expenses - related parties | 3,123 | 2,522 | ||||
General and administrative expenses | 4,421 | 2,783 | ||||
Vessel depreciation and amortization | 23,962 | 19,178 | ||||
Gain on sale of vessels | (16,411 | ) | - | |||
Operating income, net | 65,987 | 35,871 | ||||
Other income / (expense), net: | ||||||
Interest expense and finance cost | (34,043 | ) | (23,682 | ) | ||
Other income / (expense), net | 1,952 | (2,161 | ) | |||
Total other expense, net | (32,091 | ) | (25,843 | ) | ||
Partnership’s net income | $ | 33,896 | $ | 10,028 | ||
General Partner’s interest in Partnership’s net income | 213 | 170 | ||||
Partnership’s net income allocable to unvested units | 152 | 242 | ||||
Common unit holders’ interest in Partnership’s net income | 33,531 | 9,616 | ||||
Net income per: | ||||||
Common units, basic and diluted | $ | 0.61 | $ | 0.49 | ||
Weighted-average units outstanding: | ||||||
Common units, basic and diluted | 54,816,555 | 19,728,416 | ||||
Unaudited Condensed Consolidated Balance Sheets
(In thousands of United States Dollars)
As of March 31, 2024 | As of December 31, 2023 | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 146,504 | $ | 192,422 | |
Other current assets | 193,155 | 33,082 | |||
Total current assets | 339,659 | 225,504 | |||
Fixed assets | |||||
Advances for vessels under construction – related party | 143,000 | 174,400 | |||
Vessels, net and vessels under construction | 2,721,324 | 2,632,285 | |||
Total fixed assets | 2,864,324 | 2,806,685 | |||
Other non-current assets | |||||
Restricted cash | 11,216 | 11,721 | |||
Other non-current assets | 101,369 | 96,389 | |||
Total non-current assets | 2,976,909 | 2,914,795 | |||
Total assets | $ | 3,316,568 | $ | 3,140,299 | |
Liabilities and Partners’ Capital | |||||
Current liabilities | |||||
Current portion of long-term debt, net | $ | 102,423 | $ | 103,116 | |
Other current liabilities | 137,795 | 80,814 | |||
Total current liabilities | 240,218 | 183,930 | |||
Long-term liabilities | |||||
Long-term debt, net | 1,776,573 | 1,672,179 | |||
Other non-current liabilities | 95,845 | 109,257 | |||
Total long-term liabilities | 1,872,418 | 1,781,436 | |||
Total liabilities | 2,112,636 | 1,965,366 | |||
Total partners’ capital | 1,203,932 | 1,174,933 | |||
Total liabilities and partners’ capital | $ | 3,316,568 | $ | 3,140,299 | |
Cash Flow Data
(In thousands of United States Dollars)
For the three-month periods ended |
||||||
2024 | 2023 | |||||
Net cash provided by operating activities | 47,307 | 38,602 | ||||
Net cash provided by / (used in) investing activities | 37,497 | (335,224 | ) | |||
Net cash (used in) / provided by financing activities | (131,227 | ) | 241,611 | |||
Net decrease in cash, cash equivalents and restricted cash | (46,423 | ) | (55,011 | ) | ||
Cash, cash equivalents and restricted cash at beginning of the period | 204,143 | 154,848 | ||||
Cash, cash equivalents and restricted cash at end of the period | $ | 157,720 | $ | 99,837 |
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 depreciation and amortization expense, exchange differences on Bonds and cash and cash equivalents, change in fair value of derivatives, impairment and gain on sale of vessels, amortization / accretion of above / below market acquired charters and straight-line revenue adjustments.
Operating Surplus is a quantitative measure used in the publicly traded partnership investment community to assist in evaluating a partnership’s financial performance and ability to make quarterly cash distributions. Operating Surplus is not 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 |
|||||
Partnership’s net income | 33,896 | 12,730 | 10,028 | |||||
Adjustments to reconcile net income to operating surplus prior to Capital | ||||||||
Depreciation, amortization, unrealized Bonds exchange differences and change in fair value of derivatives1 | 27,022 | 24,111 | 23,235 | |||||
Impairment of vessels | - | 3,541 | - | |||||
Gain on sale of vessels | (16,411 | ) | - | - | ||||
Amortization / accretion of above / below market acquired charters and straight-line revenue adjustments | 3,798 | 73 | 3,055 | |||||
Operating Surplus prior to capital reserve | 48,305 | 40,455 | 36,318 | |||||
Capital reserve | (38,693 | ) | (38,954 | ) | (33,350 | ) | ||
Operating Surplus after capital reserve | 9,612 | 1,501 | 2,968 | |||||
(Increase) / decrease in recommended reserves | (1,327 | ) | 6,807 | 103 | ||||
Available Cash | 8,285 | 8,308 | 3,071 |
Depreciation, amortization, unrealized Bonds exchange differences and change in fair value of derivatives line item includes the following components:
- Vessel depreciation and amortization;
- Deferred financing costs and equity compensation plan amortization;
- Unrealized Bonds exchange differences;
- Unrealized cash, cash equivalents and restricted cash exchange differences; and
- Change in fair value of derivatives.
Source: Capital Product Partners, L.P.