Capital Product Partners L.P. Announces Second Quarter 2013 Financial Results, Reports Sale of OSG Claims and Reiterates Its Commitment to Its $0.93 Per Unit Annual Distribution Guidance
The Partnership's net income for the quarter ended
After taking into account the
Operating surplus for the quarter ended
Revenues for the second quarter of 2013 were
Total expenses for the second quarter of 2013 were
In the second quarter of 2013, we reported a gain of
Excluding the gain of
As of
As of
OSG Claim
As previously reported by the Partnership, on
After discussions with OSG, the Partnership agreed to enter into new charters with OSG on substantially the same terms as the prior charters, but at a bareboat rate of
On
The Partnership has since transferred to
Fleet Developments
The M/T Avax (47,834 dwt built 2007,
In addition, the M/T Akeraios (47,782 dwt built 2007,
All transactions were unanimously approved by the conflicts committee of our Board of Directors.
Market Commentary
Overall, product tanker spot earnings in the second quarter of 2013 continued their positive momentum as average earnings in the second quarter of 2013 remained at elevated levels for the season. Demand for product tankers benefited from a strong transatlantic market early in the second quarter and from exports out of
The product tanker period market remained active during the course of the second quarter of 2013, as more charterers entered into time charter contracts and at slightly higher time charter rates compared to the previous quarter.
On the supply side, the product tanker order book continues to experience substantial slippage during 2013, as approximately 51% of the expected MR and handy size tanker newbuildings were not delivered on schedule. Analysts expect that net fleet growth for product tankers for 2013 will be in the region of 3.7%, while growth in overall demand for product tankers for the year is estimated at 4.6 %. We believe the improving demand and supply balance of the product tanker market should continue to positively affect spot and period charter rates going forward.
The Suezmax spot market remained at seasonally low levels, as increased vessel supply continued to put downward pressure on rates.
Slippage for the Suezmax tanker order book increased over the last few months and continued to affect tonnage supply as approximately 27% of the expected Suezmax newbuildings year to date were not delivered on schedule. Industry analysts expect the crude tanker order book slippage and cancellations to increase going forward due to the historically weak spot market, the soft shipping finance environment and downward pressure on asset values. Suezmax tanker demand is expected to grow by 3.2% in the full year 2013 with net fleet growth projected at 8.5%.
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Results of Annual General Meeting
On
Management Commentary
Mr.
"We are very pleased to see the improved operating surplus of the Partnership for the second quarter 2013, which reflects the full contribution of the two 5,023 TEU container vessels with 12 year period charters, which we took delivery of at the end of the previous quarter. The product tanker market continues to improve with solid period fixture activity on the back of an improving spot market following continuous growth of U.S. exports of refined products. To that end, I would like to reiterate our commitment to the
"In addition, the successful assignment of the Partnership's claim against OSG to Deutsche Bank and the funds received in connection with this transaction, as well as the positive fundamentals of the product tanker market going forward, further enhance our financial flexibility in order to pursue growth opportunities and further forge a pathway to distribution growth."
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 our expectations regarding employment of our vessels, redelivery dates and charter rates, fleet growth and demand, newbuilding deliveries and slippage as well as market and charter rate expectations and expectations regarding our quarterly distributions, ability to pursue growth opportunities and grow our distributions and annual distribution guidance as well as the transactions described herein and their effects on the Partnership, the actual claim amount allowed by the
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 period ended |
For the six-month period ended |
||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues | $ | 27,215 | $ | 20,124 | $ | 53,726 | $ | 43,783 | |||||||||
Revenues - related party | 14,554 | 17,724 | 28,008 | 33,904 | |||||||||||||
Total Revenues | 41,769 | 37,848 | 81,734 | 77,687 | |||||||||||||
Expenses: | |||||||||||||||||
Voyage expenses | 1,110 | 437 | 2,882 | 3,259 | |||||||||||||
Voyage expenses related party | 80 | 143 | 160 | 284 | |||||||||||||
Vessel operating expenses - related party | 4,199 | 6,133 | 8,496 | 13,422 | |||||||||||||
Vessel operating expenses | 9,223 | 5,038 | 17,522 | 9,830 | |||||||||||||
General and administrative expenses | 3,383 | 2,259 | 5,984 | 4,547 | |||||||||||||
Gain on sale of vessel to third parties | - | (341 | ) | - | (1,296 | ) | |||||||||||
Depreciation and amortization | 12,813 | 12,025 | 24,680 | 24,221 | |||||||||||||
Operating income | 10,961 | 12,154 | 22,010 | 23,420 | |||||||||||||
Non operating income (expense), net: | |||||||||||||||||
Gain from bargain purchase | - | - | 17,475 | - | |||||||||||||
Other income / (expense), net: | |||||||||||||||||
Interest expense and finance cost | (3,642 | ) | (10,101 | ) | (7,357 | ) | (18,929 | ) | |||||||||
Gain on sale of claim | 32,000 | - | 32,000 | - | |||||||||||||
Gain on interest rate swap agreement | - | 808 | 4 | 1,447 | |||||||||||||
Interest and other income | - | 509 | 200 | 657 | |||||||||||||
Total other income / (expense), net | 28,358 | (8,784 | ) | 24,847 | (16,825 | ) | |||||||||||
Net income | $ | 39,319 | $ | 3,370 | $ | 64,332 | $ | 6,595 | |||||||||
Preferred unit holders' interest in Partnership's net income | 5,270 | 4,159 |
10,540 | 4,159 | |||||||||||||
$ | 681 | $ | (16 | ) | $ | 1,076 | $ | 49 | |||||||||
Common unit holders' interest in Partnership's net income / (loss) | 33,368 | $ | (773 |
) | 52,716 | $ | 2,387 | ||||||||||
Net income / (loss) per: | |||||||||||||||||
• Common units basic | $ | 0.48 | $ | (0.01 | ) | $ | 0.76 | $ | 0.03 | ||||||||
Weighted-average units outstanding: | |||||||||||||||||
• Common units basic | 68,386,078 | 68,187,547 | 68,385,001 | 68,186,476 | |||||||||||||
Net income / (loss) per: | |||||||||||||||||
• Common unit diluted | $ | 0.41 | $ | (0.01 | ) | $ | 0.70 | $ | 0.03 | ||||||||
Weighted-average units outstanding: | |||||||||||||||||
• Common units diluted | 94,027,631 | 68,187,547 | 89,980,394 | 68,186,476 | |||||||||||||
Comprehensive income: | |||||||||||||||||
Partnership's net income | 39,319 | 3,370 | 64,332 | 6,595 | |||||||||||||
Other Comprehensive income: | |||||||||||||||||
Unrealized gain on derivative instruments | - | 5,668 | 462 | 9,840 | |||||||||||||
Comprehensive income | $ | 39,319 | $ | 9,038 | $ | 64,794 | $ | 16,435 | |||||||||
Unaudited Condensed Consolidated Balance Sheets | |||||
(In thousands of United States Dollars, except number of units and earnings per unit) | |||||
As of June 30, 2013 |
As of |
||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | 74,648 | $ | 43,551 | ||
Trade accounts receivable, net | 2,899 | 2,346 | |||
Prepayments and other assets | 1,319 | 1,259 | |||
Above market acquired charters | 1,863 | - | |||
Inventories | 2,416 | 2,333 | |||
Total current assets | 83,145 | 49,489 | |||
Fixed assets | |||||
Vessels, net | 1,042,900 | 959,550 | |||
Total fixed assets | 1,042,900 | 959,550 | |||
Other non-current assets | |||||
Trade accounts receivable, net | 848 | 848 | |||
Above market acquired charters | 79,753 | 47,720 | |||
Deferred charges, net | 2,403 | 2,021 | |||
Restricted cash | 13,500 | 10,500 | |||
Total non-current assets | 1,139,404 | 1,020,639 | |||
Total assets | 1,222,549 | $ | 1,070,128 | ||
Liabilities and Partners' Capital | |||||
Current liabilities | |||||
Current portion of long-term debt | 5,400 | $ | - | ||
Trade accounts payable | 5, 444 | 4,776 | |||
Due to related parties | 21,062 | 17,447 | |||
Derivative instruments | - | 467 | |||
Accrued liabilities | 3,686 | 2,781 | |||
Deferred revenue | 7,396 | 10,302 | |||
Total current liabilities | 42,988 | 35,773 | |||
Long-term liabilities | |||||
Long-term debt | 505,615 | 458,365 | |||
Deferred revenue | 1,561 | 2,162 | |||
Total long-term liabilities | 507,176 | 460,527 | |||
Total liabilities | 550,164 | 496,300 | |||
Commitments and contingencies | |||||
Partners' capital | 672,385 | 573,828 | |||
Total liabilities and partners' capital | 1,222,549 | $ | 1,070,128 | ||
Unaudited Condensed Consolidated Statements of Cash Flows | ||||||
(In thousands of United States Dollars) | ||||||
For the six-month period ended |
||||||
2013 | 2012 | |||||
Cash flows from operating activities: | ||||||
Net income | 64,332 | 6,595 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Vessel depreciation and amortization | 24,680 | 24,221 | ||||
Gain from bargain purchase | (17,475 | ) | - | |||
Amortization of deferred charges | 98 | 304 | ||||
Gain on interest rate swap agreements | (4 | ) | (1,447 | ) | ||
Gain on sale of vessels to third parties | - | (1,296 | ) | |||
Amortization of above market acquired charters | 5,579 | 3,909 | ||||
Equity compensation expense | 2,739 | 1,991 | ||||
Changes in operating assets and liabilities: | ||||||
Trade accounts receivable | (553 | ) | 1,515 | |||
Prepayments and other assets | (60 | ) | 282 | |||
Inventories | (83 | ) | 2,117 | |||
Trade accounts payable | 431 | (2,004 | ) | |||
Due from related parties | - | (33 | ) | |||
Due to related parties | 3,615 | (1,424 | ) | |||
Accrued liabilities | 788 | (340 | ) | |||
Deferred revenue | (3,429 | ) | (155 | ) | ||
Dry-docking costs | (196 | ) | - | |||
Net cash provided by operating activities | 80,462 | 34,235 | ||||
Cash flows from investing activities: | ||||||
Vessel acquisitions and improvements | (130,000 | ) | (185 | ) | ||
Increase in restricted cash | (3,000 | ) | (3,250 | ) | ||
Net proceeds from sale of vessels to third parties | - | 19,675 | ||||
Net cash (used in) / provided by investing activities | (133,000 | ) | 16,240 | |||
Cash flows from financing activities: | ||||||
Proceeds from issuance of Partnership units | 75,075 | 139,400 | ||||
Expenses paid for issuance of Partnership units | (2,568 | ) | - | |||
Proceeds from issuance of long-term debt | 54,000 | - | ||||
Loan issuance costs | (11 | ) | (133 | ) | ||
Payments of long-term debt | (1,350 | ) | (170,066 | ) | ||
Dividends paid | (41,511 | ) | (32,916 | ) | ||
Net cash provided by / (used in) financing activities | 83,635 | (63,715 | ) | |||
Net increase/(decrease) in cash and cash equivalents | 31,097 | (13,240 | ) | |||
Cash and cash equivalents at beginning of period | 43,551 | 53,370 | ||||
Cash and cash equivalents at end of period | 74,648 | 40,130 | ||||
Supplemental cash flow information | ||||||
Cash paid for interest | 7,021 | 18,432 | ||||
Non-Cash Investing and Financing Activities | ||||||
Private placement costs relating to Class B preferred units included in liabilities | (28 | ) | 2,975 | |||
Capitalised and dry-docking vessel costs included in liabilities | 321 | 59 | ||||
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 |
|||
Net income | $ | 39,319 | ||
Adjustments to reconcile net income to net cash provided by operating activities | ||||
Depreciation and amortization | 14,472 | |||
Deferred revenue | 2,837 | |||
OPERATING SURPLUS PRIOR TO CLASS B PREFERRED UNITS DISTRIBUTION | 56,628 | |||
Class B preferred units distribution | (5,270 | ) | ||
ADJUSTED OPERATING SURPLUS | 51,358 | |||
Increase in recommended reserves | (34,900 | ) | ||
AVAILABLE CASH | $ | 16,458 |
Contact Details:
CEO and CFO
+30 (210) 4584 950
E-mail: i.lazaridis@capitalpplp.com
Finance Director
+30 (210) 4584 950
j.kalogiratos@capitalpplp.com
Investor Relations / Media
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source:
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