Capital Product Partners L.P. Announces Second Quarter 2015 Financial Results And Increases In Its Common And Class B Unit Distributions
The Partnership's net income for the quarter ended
Operating surplus for the quarter ended
Total revenues for the second quarter of 2015 were
Total expenses for the second quarter of 2015 were
Total other expense, net for the second quarter of 2015 amounted to
As of
As of
Amendments to Certain of our Credit Facilities
(i) the prepayments made on
(ii) the deferral, following the prepayments described above, of any further scheduled amortization payments until
(iii) an extension of the final maturity date to
(iv) an increase of the interest rate under our 2007 credit facility to 3.0% over LIBOR from 2.0% over LIBOR.
All other terms in our existing credit facilities remained unchanged.
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Fleet Developments
On
On
During the second quarter of 2015, the Partnership also announced new time charter employment or time charter extensions for four of its vessels at increased daily rates:
The M/T 'Active' (50,000 dwt, IMO II/III Eco Chemical/Product Tanker built 2015, Samsung Heavy Industries (Nigbo) Co. Ltd.) has been chartered to
The M/T 'Anemos I' (47,782 dwt, Ice Class 1A IMO II/III Chemical/ Product Tanker built 2007,
Capital Maritime exercised an option under its current charter of the M/T 'Atrotos' (47,786 dwt, Ice Class 1A IMO II/III Chemical/ Product Tanker built 2007,
Finally, Total S.A. exercised the option to extend the current employment of the M/T 'Alkiviadis' (36,721 dwt, Ice Class 1A IMO II/III Chemical/ Product, built 2006 Hyundai Mipo Dockyard Company Ltd.,
As a result of the three newbuildings deliveries and the new charters, the Partnership's charter coverage for 2015 and 2016 stands at 93% and 74%, respectively.
International Business
Market Commentary
The product tanker market continued improving in the second quarter of 2015, with spot freight rates at the highest level since the third quarter of 2008. Growing global oil demand and high refining margins in both
The positive developments in the spot market saw medium range ('MR') time charter product tanker rates rising to the highest level, since the first quarter of 2009, while activity in the period market was firm during the quarter ended
On the supply side, ordering activity for MR product tankers in the second quarter of 2015 was minimal, in line with the slow contracting activity seen in the first quarter of 2015 and in the second half of 2014, as most quality shipyards have exhausted their capacity through 2016. In addition, the product tanker orderbook continued to experience slippage during the first half of 2015, as approximately 42% of the expected MR and handy size tanker newbuildings were not delivered on schedule. Analysts expect that net fleet growth for product tankers for 2015 will be in the region of 5.9%, while overall demand for product tankers for the year is estimated to grow at 4.7%.
Suezmax spot rates modestly declined in the second quarter of the year compared to the previous quarter but remained at very strong levels, particularly for this time of the year. Overall, the quarter was the strongest second quarter since 2009. The counter-seasonal surge has been driven by multi-decade highs in production, record
On the supply side, the Suezmax orderbook represented approximately 18.1% of the current fleet by the end of the second quarter of 2015. Analysts however estimate that slippage for the first half of 2015 amounted to 40% of the expected deliveries for the same time period. Suezmax tanker demand is projected to continue growing in 2015, on the back of stronger European crude imports and increased growth in long-haul trades to
Management Commentary
Mr.
"In line with our newly established long term distribution growth objective, we have increased our quarterly distribution to our unitholders for the second consecutive quarter. During the second quarter of 2015, we successfully completed an equity offering and raised net proceeds of
"Furthermore, during the second quarter, we took timely delivery of two additional dropdown vessels that we had agreed to acquire from Capital Maritime in 2014. Based on our previously completed equity offerings and credit facilities in place, we believe that we have secured the financing for the acquisition of the remaining two dropdown vessels and have established the basis for continued growth of the Partnership. Importantly, we maintain the option to grow our fleet by exercising the right of first refusal that our Sponsor granted us on six additional eco MR product tankers.
"Finally, we are pleased to see a number of our vessels being re-chartered at higher daily rates to an increasingly more diversified customer base and for longer periods, which reflects the improving fundamentals of the product and crude tanker markets and the strength of their respective period markets.
"Based on the above factors, it is our objective to continue to increase our common and Class B distributions between 2-3% per annum in the foreseeable future."
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
About
For more information about the Partnership, please visit our website: www.capitalpplp.com.
Forward-Looking Statements
The statements in this press release that are not historical facts, including, among other things, the expected use of proceeds from the offering of our common units, fleet developments, such as 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 and newbuilding deliveries, as well as market and charter rate expectations and our expectations or objectives regarding future distribution amounts, our ability to pursue growth opportunities and grow our distributions and annual distribution guidance, 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. 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.
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 six month periods ended |
||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Revenues | 37,216 | 30,491 | $ | 67,346 | $ | 61,259 | |||||||||||
Revenues - related party | 17,297 | 16,953 | 36,052 | 33,632 | |||||||||||||
Total Revenues | 54,513 | 47,444 | 103,398 | 94,891 | |||||||||||||
Expenses: | |||||||||||||||||
Voyage expenses | 1,367 | 2,620 | 2,411 | 3,636 | |||||||||||||
Voyage expenses - related party | 117 | 81 | 206 | 161 | |||||||||||||
Vessel operating expenses | 14,824 | 13,435 | 27,636 | 24,076 | |||||||||||||
Vessel operating expenses - related party | 2,908 | 3,346 | 5,863 | 7,532 | |||||||||||||
General and administrative expenses | 1,336 | 1,598 | 3,173 | 2,890 | |||||||||||||
Depreciation and amortization | 15,038 | 14,373 | 29,412 | 28,743 | |||||||||||||
Operating income | 18,923 | 11,991 | 34,697 | 27,853 | |||||||||||||
Other income / (expense), net: | |||||||||||||||||
Interest expense and finance cost | (4,829 | ) | (4,750 | ) | (9,525 | ) | (9,457 | ) | |||||||||
Other income | 15 | 575 | 1,088 | 662 | |||||||||||||
Total other expense, net | (4,814 | ) | (4,175 | ) | (8,437 | ) | (8,795 | ) | |||||||||
Net income and comprehensive income | $ | 14,109 | $ | 7,816 | $ | 26,260 | $ | 19,058 | |||||||||
Preferred unit holders' interest in Partnership's net income | 2,818 |
3,959 |
5,628 | 8,004 | |||||||||||||
General Partner's interest in Partnership's net income | 226 |
75 |
411 | 216 | |||||||||||||
Common unit holders' interest in Partnership's net income | 11,065 |
3,782 |
20,221 | 10,838 | |||||||||||||
Net income per : | |||||||||||||||||
• Common unit (basic and diluted) | $ | 0.09 | $ | 0.04 | $ | 0.18 | $ | 0.12 | |||||||||
Weighted-average units outstanding: | |||||||||||||||||
• Common units (basic and diluted) | 116,478,950 | 88,546,754 | 110,427,242 | 88,494,025 | |||||||||||||
Unaudited Condensed Consolidated Balance Sheets
(In thousands of United States Dollars)
Assets | ||||||
Current assets | As of June 30, 2015 |
As of December 31, 2014 |
||||
Cash and cash equivalents | $ | 116,618 | $ | 164,199 | ||
Trade accounts receivable, net | 2,208 | 2,588 | ||||
Due from related parties | 2,227 | 55 | ||||
Prepayments and other assets | 1,705 | 1,839 | ||||
Inventories | 4,234 | 3,434 | ||||
Total current assets | 126,992 | 172,115 | ||||
Fixed assets | ||||||
Advances for vessels under construction - related party | 36,318 | 66,641 | ||||
Vessels, net | 1,255,553 | 1,120,070 | ||||
Total fixed assets | 1,291, 871 | 1,186,711 | ||||
Other non-current assets | ||||||
Above market acquired charters | 107,751 | 115,382 | ||||
Deferred charges, net | 6,461 | 3,887 | ||||
Restricted cash | 16,500 | 15,000 | ||||
Prepayments and other assets | 789 | - | ||||
Total non-current assets | 1,423,372 | 1,320,980 | ||||
Total assets | $ | 1,550,364 | $ | 1,493,095 | ||
Liabilities and Partners' Capital | ||||||
Current liabilities | ||||||
Current portion of long-term debt | $ | 7,847 | $ | 5,400 | ||
Trade accounts payable | 10,030 | 5,351 | ||||
Due to related parties | 17,786 | 17,497 | ||||
Accrued liabilities | 5,425 | 5,636 | ||||
Deferred revenue, current | 11,563 | 11,684 | ||||
Total current liabilities | 52,651 | 45,568 | ||||
Long-term liabilities | ||||||
Long-term debt | 523,858 | 572,515 | ||||
Deferred revenue | 1,589 | 2,451 | ||||
Total long-term liabilities | 525,447 | 574,966 | ||||
Total liabilities | 578,098 | 620,534 | ||||
Commitments and contingencies | ||||||
Partners' capital | 972,266 | 872,561 | ||||
Total liabilities and partners' capital | $ | 1,550,364 | $ | 1,493,095 | ||
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of United States Dollars)
For the six month periods ended |
||||||||
2015 | 2014 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 26,260 | $ | 19,058 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Vessel depreciation and amortization | 29,412 | 28,743 | ||||||
Amortization of deferred charges | 364 | 301 | ||||||
Amortization of above market acquired charters | 7,631 | 8,243 | ||||||
Changes in operating assets and liabilities: | ||||||||
Trade accounts receivable | 380 | 2,110 | ||||||
Prepayments and other assets | (655 | ) | (227 | ) | ||||
Inventories | (800 | ) | (865 | ) | ||||
Trade accounts payable | 3,190 | 1,665 | ||||||
Due from related parties | (2,172 | ) | 664 | |||||
Due to related parties | 289 | (6,367 | ) | |||||
Accrued liabilities | (330 | ) | 14 | |||||
Deferred revenue | (867 | ) | 3,577 | |||||
Dry-docking costs paid | (419 | ) | (323 | ) | ||||
Net cash provided by operating activities | 62,283 | 56,593 | ||||||
Cash flows from investing activities: | ||||||||
Vessel acquisitions and improvements | (134,093 | ) | (112 | ) | ||||
Increase in restricted cash | (1,500 | ) | - | |||||
Net cash used in investing activities | (135,593 | ) | (112 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of Partnership units | 133,327 | - | ||||||
Expenses paid for issuance of Partnership units | (476 | ) | - | |||||
Proceeds from issuance of long-term debt | 72,389 | - | ||||||
Loan issuance costs | (1,769 | ) | (12 | ) | ||||
Payments of long-term debt | (118,599 | ) | (2,700 | ) | ||||
Dividends paid | (59,143 | ) | (50,036 | ) | ||||
Net cash provided by / (used in) financing activities | 25,729 | (52,748 | ) | |||||
Net (decrease) / increase in cash and cash equivalents | (47,581 | ) | 3,733 | |||||
Cash and cash equivalents at beginning of period | 164,199 | 63,972 | ||||||
Cash and cash equivalents at end of period | 116,618 | 67,705 | ||||||
Supplemental cash flow information | ||||||||
Cash paid for interest | $ | 8,170 | $ | 8,243 | ||||
Non-Cash Investing and Financing Activities | ||||||||
Issuance of Partnership's units costs included in liabilities | $ | 263 | $ | - | ||||
Capitalized and dry-docking vessel cost included in liabilities | $ | 1,344 | $ | 71 | ||||
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 | 14,109 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Depreciation and amortization | 15,307 | 14,579 | 14,586 | ||||||||
Deferred revenue | 2,308 | 4,457 | 3,126 | ||||||||
OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS DISTRIBUTION | 31,724 | 26,852 | 29,863 | ||||||||
Class B preferred units distribution | (2,827 | ) | (3,970 | ) | (2,801 | ) | |||||
ADJUSTED OPERATING SURPLUS | 28,897 | 22,882 | 27,062 | ||||||||
(Increase) in recommended reserves | (44 | ) | (1,828 | ) | 1,547 | ||||||
AVAILABLE CASH | 28,853 | $ | 21,054 | $ | 28,609 | ||||||
Contact Details:
CEO and CFO
Tel. +30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Investor Relations / Media
Capital
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
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