Capital Product Partners L.P. Announces Third Quarter 2015 Financial Results, Increases in Its Common and Class B Unit Distributions and Fleet Employment Updates
The Partnership's net income for the quarter ended
Operating surplus prior to Class
Total revenues for the third quarter of 2015 were
Total expenses for the third quarter of 2015 were
Total other expense, net for the third quarter of 2015 amounted to
As of
As of
Right of First Refusal Over Two Additional Newbuild Eco MR Product Tankers
As announced on
Fleet Developments
The M/T 'Miltiadis M II' (162,397 dwt, Ice Class 1A Crude/Product Tanker built 2006, Daewoo Shipbuilding & Marine Engineering Co., Ltd.
The M/T 'Atrotos' and the M/T 'Apostolos' (ca. 47,800 dwt, Ice Class 1A IMO II/III Chemical/ Product Tankers built 2007,
Capital Maritime exercised an option under its current charter of the M/T 'Agisilaos' (36,760 dwt, Ice Class 1A IMO II/III Chemical/ Product Tanker built 2006,
On
The M/T 'Amore Mio II' (159,982 dwt, Crude Oil Tanker built 2001, Daewoo Shipbuilding & Marine Engineering Co., Ltd.,
The M/V 'Agamemnon' (108,892 dwt / 8,266 TEU, container carrier built 2007, Daewoo Shipbuilding & Marine Engineering Co., Ltd.,
As a result of the above fleet developments, the Partnership's charter coverage for 2015 and 2016 stands at 94% and 79%, respectively.
Market Commentary
Product & Crude Tanker Markets
The crude and product tanker markets maintained the positive momentum of the first half of the year into the third quarter of 2015, with lower oil prices favoring increased oil movements and higher refinery throughputs.
Regarding product tankers, spot freight rates for the period rose to the highest level since the second quarter of 2007. The
The positive developments in the spot market saw MR product tanker time charter rates remain at the highest levels 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 third quarter of 2015 was limited, as most quality shipyards have exhausted their capacity through the first half of 2017. In addition, the product tanker orderbook continued to experience slippage during the first nine months of 2015, as approximately 38% 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 5.7%, while overall demand for product tankers for the year is estimated to grow at 5.5%.
Suezmax spot rates remained at solid levels in the third quarter of the year and markedly higher compared to the third quarter of 2014, but modestly weaker compared to second quarter of 2015. High oil production, robust European and Chinese imports and delays in certain ports in
The consistently firm spot market in the quarter saw Suezmax period rates further improving, currently at the highest level since the first quarter of 2009.
On the supply side, the Suezmax orderbook represented approximately 19.6% of the current fleet by the end of the third quarter of 2015. Analysts however estimate that slippage for the first nine months of 2015 amounted to 35% of the expected deliveries for the same time period. Suezmax tanker demand is projected to continue growing in 2015 on the back of low oil prices, which support growth in demand and particularly in
Post-Panamax Container Market
The container market saw positive activity and firm charter rates during the early part of the third quarter of 2015 and in line with the second quarter of 2015. However later in the quarter, the container market experienced a decrease in activity due to a previously unanticipated low level of cargo bookings on the Far East - Europe trade combined with an increased supply of new Ultra Large Container Vessels (ULCV). In addition, the decreased demand on most secondary routes and the impact of cascading from the larger vessels resulted in an increase of the idle fleet to 4%, which is the highest level since
The container orderbook stands today at 19.6% of the current fleet, which is the lowest since 2003. Analysts estimate that slippage for the first nine months of 2015 amounted to approximately 19% of the expected deliveries during that time period. Overall, industry analysts forecast that container vessel demand will grow by approximately 5.5% in the full year 2016, while the container fleet is projected to expand by 4.5%.
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Management Commentary
Mr.
"In line with our established long term distribution growth objective, we have increased our quarterly distribution to our unitholders for the third consecutive quarter. The tanker charter market, where the majority of our fleet operates and where we have the bulk of our charter renewals in the next couple of years, enjoys multi year highs on the back of the strong industry fundamentals and the lower oil price environment that boosts global oil demand. Furthermore, during the third quarter of 2015, we took timely delivery of one additional dropdown vessel that we had agreed to acquire from Capital Maritime in 2014. Based on our previously completed equity offerings and credit facilities in place, we have secured the financing for the acquisition of the last dropdown vessel expected in
"Finally, we are pleased to see a number of our vessels being re-chartered at higher daily rates. The employment of two of our product tankers to Petrobras for three years is yet another important step in securing cash flow visibility at increased rates and further underpins our distribution growth objective.
"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
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, 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.
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 |
|||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues | $ | 44,451 | $ | 29,156 | $ | 111,797 | $ | 90,415 | ||||||||
Revenues - related party | 13,138 | 19,015 | 49,190 | 52,647 | ||||||||||||
Total Revenues | 57,589 | 48,171 | 160,987 | 143,062 | ||||||||||||
Expenses: | ||||||||||||||||
Voyage expenses | 1,822 | 1,226 | 4,233 | 4,862 | ||||||||||||
Voyage expenses - related party | 101 | 82 | 307 | 243 | ||||||||||||
Vessel operating expenses | 15,244 | 12,165 | 42,880 | 36,241 | ||||||||||||
Vessel operating expenses - related party | 3,312 | 3,031 | 9,175 | 10,563 | ||||||||||||
General and administrative expenses | 2,167 | 1,876 | 5,340 | 4,766 | ||||||||||||
Depreciation and amortization | 16,250 | 14,374 | 45,662 | 43,117 | ||||||||||||
Operating income | 18,693 | 15,417 | 53,390 | 43,270 | ||||||||||||
Other income / (expense), net: | ||||||||||||||||
Interest expense and finance cost | (5,162 | ) | (4,903 | ) | (14,687 | ) | (14,360 | ) | ||||||||
Other income | 263 | 755 | 1,351 | 1,417 | ||||||||||||
Total other expense, net | (4,899 | ) | (4,148 | ) | (13,336 | ) | (12,943 | ) | ||||||||
Net income and comprehensive income | $ | 13,794 | $ | 11,269 | $ | 40,054 | $ | 30,327 | ||||||||
Preferred unit holders' interest in Partnership's net income | 2,853 | 2,997 | 8,481 | 11,001 | ||||||||||||
General Partner's interest in Partnership's net income | 218 | 166 | 629 | 382 | ||||||||||||
Common unit holders' interest in Partnership's net income | 10,723 | 8,106 | 30,944 | 18,944 | ||||||||||||
Net income per: | ||||||||||||||||
• Common unit (basic and diluted) | $ | 0.09 | $ | 0.09 | $ | 0.27 | $ | 0.21 | ||||||||
Weighted-average units outstanding: | ||||||||||||||||
• Common units (basic and diluted) | 119,559,456 | 92,186,212 | 113,504,765 | 89,738,279 | ||||||||||||
Unaudited Condensed Consolidated Balance Sheets
(In thousands of United States Dollars)
Assets | |||||
Current assets | As of 2015 |
As of |
|||
Cash and cash equivalents | $ | 89,771 | $ | 164,199 | |
Trade accounts receivable, net | 2,948 | 2,588 | |||
Due from related parties | 55 | 55 | |||
Prepayments and other assets | 1,866 | 1,839 | |||
Inventories | 4,408 | 3,434 | |||
Total current assets | 99,048 | 172,115 | |||
Fixed assets | |||||
Advances for vessels under construction - related party | 18,172 | 66,641 | |||
Vessels, net | 1,331,392 | 1,120,070 | |||
Total fixed assets | 1,349,564 | 1,186,711 | |||
Other non-current assets | |||||
Above market acquired charters | 104,019 | 115,382 | |||
Deferred charges, net | 6,419 | 3,887 | |||
Restricted cash | 17,000 | 15,000 | |||
Prepayments and other assets | 1,212 | - | |||
Total non-current assets | 1,478,214 | 1,320,980 | |||
Total assets | $ | 1,577,262 | $ | 1,493,095 | |
Liabilities and Partners' Capital | |||||
Current liabilities | |||||
Current portion of long-term debt | $ | 11,068 | $ | 5,400 | |
Trade accounts payable | 8,566 | 5,351 | |||
Due to related parties | 24,557 | 17,497 | |||
Accrued liabilities | 6,217 | 5,636 | |||
Deferred revenue, current | 9,308 | 11,684 | |||
Total current liabilities | 59,716 | 45,568 | |||
Long-term liabilities | |||||
Long-term debt | 561,898 | 572,515 | |||
Deferred revenue | 1,268 | 2,451 | |||
Total long-term liabilities | 563,166 | 574,966 | |||
Total liabilities | 622,882 | 620,534 | |||
Commitments and contingencies | |||||
Partners' capital | 954,380 | 872,561 | |||
Total liabilities and partners' capital | $ | 1,577,262 | $ | 1,493,095 | |
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of United States Dollars)
For the nine month periods ended |
|||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 40,054 | $ | 30,327 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Vessel depreciation and amortization | 45,662 | 43,117 | |||||
Amortization of deferred charges | 640 | 573 | |||||
Amortization of above market acquired charters | 11,363 | 12,122 | |||||
Changes in operating assets and liabilities: | |||||||
Trade accounts receivable | (360 | ) | 2,268 | ||||
Prepayments and other assets | (1,239 | ) | (336 | ) | |||
Inventories | (974 | ) | (880 | ) | |||
Trade accounts payable | 1,431 | 1,065 | |||||
Due from related parties | - | 667 | |||||
Due to related parties | 7,060 | 1,197 | |||||
Accrued liabilities | 459 | (173 | ) | ||||
Deferred revenue | (3,426 | ) | 3,892 | ||||
Dry-docking costs paid | (419 | ) | (323 | ) | |||
Net cash provided by operating activities | 100,251 | 93,516 | |||||
Cash flows from investing activities: | |||||||
Vessel acquisitions and improvements | (207,698 | ) | (30,398 | ) | |||
Increase in restricted cash | (2,000 | ) | - | ||||
Net cash used in investing activities | (209,698 | ) | (30,398 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of Partnership units | 133,327 | 173,932 | |||||
Expenses paid for issuance of Partnership units | (739 | ) | (4 | ) | |||
Proceeds from long-term debt | 115,000 | - | |||||
Repurchase from CMTC and cancelation of Partnership's units | - | (60,000 | ) | ||||
Loan issuance costs | (1,797 | ) | (12 | ) | |||
Payments of long-term debt | (119,949 | ) | (4,050 | ) | |||
Dividends paid | (90,823 | ) | (75,065 | ) | |||
Net cash provided by financing activities | 35,019 | 34,801 | |||||
Net (decrease) / increase in cash and cash equivalents | (74,428 | ) | 97,919 | ||||
Cash and cash equivalents at beginning of period | 164,199 | 63,972 | |||||
Cash and cash equivalents at end of period | 89,771 | 161,891 | |||||
Supplemental cash flow information | |||||||
Cash paid for interest | 12,814 | 12,404 | |||||
Non-Cash Investing and Financing Activities | |||||||
Excess between the fair value of the contracted vessels and the contractual cash consideration | - | 36,417 | |||||
Issuance costs of Partnership's units included in liabilities | - | 392 | |||||
Capitalized and dry-docking vessel cost included in liabilities | 1,906 | 277 | |||||
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 2015 |
||||||||
Net income | $ | 13,794 | $ | 11,269 | $ | 14,109 | |||||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||||||
Depreciation and amortization | 16,542 | 14,703 | 15,307 | ||||||||
Deferred revenue | 2,648 | 3,818 | 2,308 | ||||||||
OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS DISTRIBUTION | 32,984 | 29,790 | 31,724 | ||||||||
Class B preferred units distribution | (2,853 | ) | (3,040 | ) | (2,827 | ) | |||||
ADJUSTED OPERATING SURPLUS | 30,131 | 26,750 | 28,897 | ||||||||
(Increase) in recommended reserves | (1,034 | ) | (2,058 | ) | (44 | ) | |||||
AVAILABLE CASH | $ | 29,097 | $ | 24,692 | $ | 28,853 | |||||
CPLP-F
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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