Capital Product Partners L.P. Announces Fourth Quarter 2014 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 fourth quarter of 2014 were
Total expenses for the fourth quarter of 2014 were
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"), in the quarter endedSeptember 30, 2014 , - the difference of
$36.4 million between the average fair market value of the five vessels that the Partnership agreed in September, 2014 to acquire from Capital Maritime and the agreed price for these vessels, - the payment of
$102.8 million in distributions sinceDecember 31, 2013 , and - the net income of
$44.0 million for the year endedDecember 31, 2014 .
As of
Fleet Developments
The M/T '
The M/T 'Akeraios' (47,781 dwt, Ice Class 1A IMO II/III Chemical/ Product Tanker, built 2007, Hyundai Mipo Dockyard,
Moreover, the Partnership announced on
The M/T '
The M/T 'Arionas' (36,725 dwt, Ice Class 1A 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 7.9 years.
Market Commentary
Product tanker spot rates registered strong gains in the fourth quarter of 2014, rising to the highest level since the third quarter of 2008. Plunging oil and oil products prices were key factors behind the strong performance, helping to open up arbitrage opportunities in the Atlantic and resulting in inventory building, which in return increased demand for product tankers. High product exports from the U.S. Gulf and new refinery capacity coming on line in the
The positive developments in the spot market saw MR time charter product tanker rates increasing during the fourth quarter, while activity in the period market was firm.
On the supply side, the ordering activity for MR product tankers slowed significantly in 2014, as most quality shipyards have now exhausted their capacity through 2016.
The Suezmax spot market improved significantly in the fourth quarter of 2014, as average earnings climbed to the highest levels since the fourth quarter of 2008. Seasonally strong demand, inventory building resulting from falling oil prices and delays in the Turkish Straights resulted in high activity levels for Suezmaxes, while stronger demand from the Far East economies for
As a result of the improving spot market, the Suezmax period market continued to see more activity and at significantly 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 14.0% of the current fleet. Suezmax tanker demand is projected to continue growing in 2015, on the back of an expected increased growth in long-haul trades to
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Management Commentary
Mr. Petros Chistodoulou, Chief Executive and Chief Financial Officer of the Partnership's General Partner, commented:
"We are very pleased to see the improved operating surplus of the Partnership for the fourth quarter 2014, which reflects the employment of the Partnership's fleet at higher daily rates. In addition, we are pleased that the strong fundamentals of the product and crude tanker markets are increasingly reflected in their respective period markets. Another positive development is the emergence of profit sharing into our trading operations. A number of our product and suezmax tanker charters expire throughout 2015 and we expect to take advantage of the improving market conditions going forward. This should provide us with the opportunity to employ these vessels at higher rates and for longer periods. In the previous quarter, we agreed and secured both debt and equity financing for the addition of three eco wide beam container vessels and two eco MR product tankers in 2015. Given the improving backdrop of the underlying markets, we remain convinced that the Partnership has entered into a new growth phase. We expect that this will provide the basis for reviewing the Partnership's annual distribution guidance with an eye toward an upward revision in the first quarter 2015, concurrent with the expected timing of the delivery of the first of five agreed vessel acquisitions from Capital Maritime."
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 (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 net income / (loss) per unit) | |||||||||||||
For the three months period ended |
For the year ended |
||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||
Revenues | $ | 29,492 | $ | 33,710 | $ | 119,907 | $ | 116,520 | |||||
Revenues - related party | 20,223 | 13,308 | 72,870 | 54,974 | |||||||||
Total Revenues | 49,715 | 47,018 | 192,777 | 171,494 | |||||||||
Expenses: | |||||||||||||
Voyage expenses | 1,045 | 1,523 | 5,907 | 5,776 | |||||||||
Voyage expenses related party | 95 | 86 | 338 | 314 | |||||||||
Vessel operating expenses | 12,473 | 11,295 | 48,714 | 38,284 | |||||||||
Vessel operating expenses - related party | 2,752 | 4,101 | 13,315 | 17,039 | |||||||||
General and administrative expenses | 1,550 | 1,373 | 6,316 | 9,477 | |||||||||
Loss on sale of vessel to third parties | -- | 7,073 | -- | 7,073 | |||||||||
Depreciation and amortization | 14,359 | 14,307 | 57,476 | 52,208 | |||||||||
Operating income | 17,441 | 7,260 | 60,711 | 41,323 | |||||||||
Non operating (expense) / income: | |||||||||||||
(Loss) / gain on sale of claim | -- | (644) | -- | 31,356 | |||||||||
Gain from bargain purchase | -- | -- | -- | 42,256 | |||||||||
Total non operating (expense) / income: | -- | (644) | -- | 73,612 | |||||||||
Other income / (expense): | |||||||||||||
Interest expense and finance cost | (4,865) | (4,661) | (19,225) | (15,991) | |||||||||
Gain on interest rate swap agreement | -- | -- | -- | 4 | |||||||||
Other income | 1,109 | 2 | 2,526 | 533 | |||||||||
Total other expense, net | (3,756) | (4,659) | (16,699) | (15,454) | |||||||||
Net income | $ | 13,685 | $ | 1,957 | $ | 44,012 | $ | 99,481 | |||||
Preferred unit holders' interest in Partnership's net income | $ | 3,041 | $ | 3,807 | $ | 14,042 | $ | 18,805 | |||||
General Partner's interest in Partnership's net income / (loss) | $ | 211 | $ | (36) | $ | 593 | $ | 1,598 | |||||
Common unit holders' interest in Partnership's net income / (loss) | $ | 10,433 | $ | (1,814) | $ | 29,377 | $ | 79,078 | |||||
Net income / (loss) per: | |||||||||||||
Common unit basic | $ | 0.10 | $ | (0.02) | $ | 0.31 | $ | 1.04 | |||||
Weighted-average units outstanding: | |||||||||||||
Common units basic | 104,079,960 | 86.682,014 | 93,353,168 | 75,645,207 | |||||||||
Net income / (loss) per: | |||||||||||||
Common unit diluted | $ | 0.10 | $ | (0.02) | $ | 0.31 | $ | 1.01 | |||||
Weighted-average units outstanding: | |||||||||||||
Common units diluted | 104,079,960 | 86,682,014 | 93,353,168 | 97,369,136 | |||||||||
Comprehensive income: | |||||||||||||
Partnership's net income | 13,685 | 1,957 | 44,012 | 99,481 | |||||||||
Other Comprehensive income: | |||||||||||||
Unrealized gain on derivative instruments | -- | -- | -- | 462 | |||||||||
Comprehensive income | $ | 13,685 | $ | 1,957 | $ | 44,012 | $ | 99,943 |
Unaudited Condensed Consolidated Balance Sheets | ||||||
(In thousands of United States Dollars) | ||||||
Assets | ||||||
Current assets | As of |
As of |
||||
Cash and cash equivalents | $ | 164,199 | $ | 63,972 | ||
Trade accounts receivable, net | 2,588 | 4,365 | ||||
Due from related parties | 55 | 667 | ||||
Above market acquired charters | -- | 612 | ||||
Prepayments and other assets | 1,839 | 1,376 | ||||
Inventories | 3,434 | 2,740 | ||||
Total current assets | 172,115 | 73,732 | ||||
Fixed assets | ||||||
Advances for vessels under construction - related party (1) | 66,641 | -- | ||||
Vessels, net | 1,120,070 | 1,176,819 | ||||
Total fixed assets | 1,186,711 | 1,176,819 | ||||
Other non-current assets | ||||||
Above market acquired charters | 115,382 | 130,770 | ||||
Deferred charges, net | 3,887 | 5,451 | ||||
Restricted cash | 15,000 | 15,000 | ||||
Total non-current assets | 1,320,980 | 1,328,040 | ||||
Total assets | $ | 1,493,095 | $ | 1,401,772 | ||
Liabilities and Partners' Capital | ||||||
Current liabilities | ||||||
Current portion of long-term debt | $ | 5,400 | $ | 5,400 | ||
Trade accounts payable | 5,351 | 7,519 | ||||
Due to related parties | 17,497 | 13,686 | ||||
Accrued liabilities | 5,636 | 5,387 | ||||
Deferred revenue, current | 11,684 | 6,936 | ||||
Total current liabilities | 45,568 | 38,928 | ||||
Long-term liabilities | ||||||
Long-term debt | 572,515 | 577,915 | ||||
Deferred revenue | 2,451 | 3,503 | ||||
Total long-term liabilities | 574,966 | 581,418 | ||||
Total liabilities | 620,534 | 620,346 | ||||
Commitments and contingencies | ||||||
Partners' capital1 | 872,561 | 781,426 | ||||
Total liabilities and partners's capital | $ | 1,493,095 | $ | 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 year ended |
||||||
2014 | 2013 | |||||
Cash flows from operating activities: | ||||||
Net income / (loss) | $ | 44,012 | $ | 99,481 | ||
Adjustments to reconcile net income / (loss) to net cash provided by operating activities: | ||||||
Vessel depreciation and amortization | 57,476 | 52,208 | ||||
Gain from bargain purchase | -- | (42,256) | ||||
Amortization of deferred charges | 809 | 405 | ||||
Amortization of above market acquired charters | 16,000 | 13,594 | ||||
Equity compensation expense | -- | 3,528 | ||||
Gain on interest rate swap agreements | -- | (4) | ||||
Loss / (gain) on sale of vessels to third parties | -- | 7,073 | ||||
Accrual on gain on sale of claim | -- | 644 | ||||
Changes in operating assets and liabilities: | ||||||
Trade accounts receivable | 1,777 | (1,171) | ||||
Due from related parties | 612 | (667) | ||||
Prepayments and other assets | (463) | (117) | ||||
Inventories | (694) | (407) | ||||
Trade accounts payable | (1,570) | 2,066 | ||||
Due to related parties | 3,811 | (3,761) | ||||
Accrued liabilities | 178 | 1,573 | ||||
Deferred revenue | 3,919 | (1,852) | ||||
Drydocking costs | (590) | (761) | ||||
Net cash provided by operating activities | 125,277 | 129,576 | ||||
Cash flows from investing activities: | ||||||
Vessel acquisitions and improvements | (103) | (363,038) | ||||
Advances for vessels under construction - related party | (30,224) | -- | ||||
Increase in restricted cash | -- | (4,500) | ||||
Proceeds from sale of vessels | -- | 32,192 | ||||
Net cash used in investing activities | (30,327) | (335,346) | ||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of Partnership units | 173,932 | 195,771 | ||||
Expenses paid for issuance of Partnership units | (416) | (3,410) | ||||
Repurchase from Capital Maritime and cancellation of Partnership's units | (60,000) | -- | ||||
Proceeds from issuance of long-term debt | -- | 129,000 | ||||
Payments of long-term debt | (5,400) | (4,050) | ||||
Loan issuance costs | (41) | (2,879) | ||||
Dividends paid | (102,798) | (88,241) | ||||
Net cash provided by financing activities | 5,277 | 226,191 | ||||
Net increase / (decrease) in cash and cash equivalents | 100,227 | 20,421 | ||||
Cash and cash equivalents at beginning of period | 63,972 | 43,551 | ||||
Cash and cash equivalents at end of period | 164,199 | 63,972 | ||||
Supplemental Cash Flow Information | ||||||
Cash paid for interest | $ | 16,564 | $ | 14,845 | ||
Non-Cash Investing and Financing Activities | ||||||
Excess between the acquisition cost of the contracted vessels and their respective fair value | $ | 36,417 | $ | -- | ||
Capital expenditures included in liabilities | $ | 183 | $ | 103 | ||
Offering expenses included in liabilities | $ | 12 | $ | (7) | ||
Capitalized dry docking and deferred costs included in liabilities | $ | -- | $ | 628 | ||
Acquisition of above market time charter | $ | -- | $ | 97,256 | ||
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, loss on sale of vessels 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 | $ | 13,685 | $ | 1,957 | $ | 11,269 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||
Depreciation and amortization | 14,655 | 14,500 | 14,703 | ||||||
Deferred revenue | 3,738 | 5,714 | 3,818 | ||||||
Loss on sale of vessel | -- | 7,073 | -- | ||||||
OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS DISTRIBUTION | 32,078 | 29,244 | 29,790 | ||||||
Class B preferred units distribution | (3,040) | (4,045) | (3,040) | ||||||
ADJUSTED OPERATING SURPLUS | 29,038 | 25,199 | 26,750 | ||||||
Increase in recommended reserves | (4,346) | (4,226) | (2,058) | ||||||
AVAILABLE CASH | $ | 24,692 | $ | 20,973 | $ | 24,692 | |||
Contact Details:
CEO and CFO
+30 (210) 4584 950
E-mail: p.christodoulou@capitalpplp.com
Investor Relations / Media
Capital
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Chief Operating Officer
+30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
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