Capital Product Partners L.P. Announces First Quarter 2017 Financial Results and Fleet Employment Updates
The Partnership's net income for the quarter ended
Operating surplus prior to capital reserve and Class
Total revenues for the first quarter of 2017 reached
Total expenses for the first quarter of 2017 were
Total other expense, net for the first quarter of 2017 was
As of
Total cash as of
As of
Fleet Employment Update
The Partnership has agreed with
The M/T 'Amoureux' (149,993 dwt, Crude Oil Carrier, built 2008, Universal Shipbuilding,
As a result of the new charters listed above, our charter coverage for 2017 and 2018 has increased to 85% and 50%, respectively.
Quarterly Common and Class B Unit Cash Distribution
On
In addition, on
Market Commentary
Product & Crude Tanker Markets
Overall, product tanker spot rates remained at relatively low levels for the most part of the first quarter of 2017, with spot rates rebounding towards the end of the quarter. In the West, during the first part of the quarter,
In the period market, activity and short term charter rates increased marginally in the first quarter of 2017 compared to the previous quarter, but remained close to historically low levels as a result of the weak spot market overall.
On the supply side, there was minimal activity in terms of new orders for product tankers and the MR product tanker orderbook currently stands at 7.1%, the lowest level on record. In addition, product tanker deliveries continued to experience significant slippage during the first quarter of 2017, as approximately 38% of the expected MR and handy size tanker newbuildings were not delivered on schedule. Analysts estimate that net fleet growth for MR product tankers will amount to 2.6% in 2017, below the 2016 growth rate of 4.8%. On the demand side, analysts expect growth of 1.9% in 2017, largely supported by increased intra-
Suezmax spot earnings retreated in the first quarter of 2017 compared to the preceding quarter, as the winter tanker market seasonality gradually waned, while
Overall, the softer spot market had a negative impact on period activity as well as period charter rates.
On the supply side, the Suezmax orderbook represented, at the end of the first quarter of 2017, approximately 14.6% of the current fleet. Contracting activity continued to be subdued, in line with the previous quarters, as no Suezmax tankers were ordered during the period. Analysts estimate that slippage for the first quarter of 2017 amounted to 53% of the expected deliveries. In terms of demand, analysts expect that Suezmax tonne/miles to be supported by growth in Indian crude imports as the country continues to expand its refinery sector and also by firm Chinese crude imports, partially counterbalancing the negative impact from the oil production reduction by
Neo-Panamax Container Market
After several quarters of time charter rates hovering around all-time lows, the second half of the first quarter of 2017 saw increasing charter rates for most container vessel types. The increased vessel demand and higher charter rate environment led to a decrease of the idle container fleet to approximately 4.5% from 7% at the end of the fourth quarter of 2016.
Analysts have revised their demand growth for containerized cargo for full year 2017 to 4.3% from 4.0% forecasted in the previous quarter.
At the same time, the expected net fleet growth for 2017 has been revised downwards from 3.7% at the end of 2016 to 1.7%, on the back of increased newbuilding slippage and high demolition volumes year to date, as more than 200,000 TEU have been removed from the fleet since the beginning of the year. The increased slippage experienced year to date comes as a result of several of the container operators delaying the deliveries of 16,000+ TEU vessels slated for delivery in 2017 and 2018.
At the end of the first quarter of 2017, the container orderbook stood at 15.1% of the current fleet, down from 15.9% in the previous quarter, which remains at the lowest level since 1999.
Management Commentary
Mr.
"We are pleased to see another quarter with strong common unit distribution coverage after the quarterly allocation of
"We continue to remain positive on the medium to long term prospects of the product tanker market, as the better supply fundamentals including the historically low orderbook, decreasing shipyard capacity and limited new ordering combined with solid demand growth should support a more sustained recovery of period rates going forward.
"The Partnership's objective remains to further increase the long term distributable cash flow of the Partnership by pursuing additional accretive transactions going forward and by refinancing our debt."
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 (
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, cash generation, our ability to repay external debt, future earnings, our expectations regarding employment of our vessels, redelivery dates and charter rates, fleet growth, market and charter rate expectations, charterers' performances, our expectations or objectives regarding future distribution amounts, our ability to repay and/or refinance our debt, 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 for number of units and earnings per unit)
For the three month periods ended |
|||||||
2017 | 2016 | ||||||
Revenues | 50,308 | 47,329 | |||||
Revenues - related party | 9,962 | 10,718 | |||||
Total Revenues | 60,270 | 58,047 | |||||
Expenses: | |||||||
Voyage expenses | 2,288 | 1,852 | |||||
Voyage expenses - related party | - | 101 | |||||
Vessel operating expenses | 16,845 | 16,719 | |||||
Vessel operating expenses - related party | 2,783 | 2,616 | |||||
General and administrative expenses | 1,435 | 1,265 | |||||
Vessel depreciation and amortization | 18,526 | 17,453 | |||||
Operating income | 18,393 | 18,041 | |||||
Other income / (expense), net: | |||||||
Interest expense and finance cost | (6,350 | ) | (6,097 | ) | |||
Interest and other income | 210 | 158 | |||||
Total other expense, net | (6,140 | ) | (5,939 | ) | |||
Partnership's net income | 12,253 | 12,102 | |||||
Preferred unit holders' interest in Partnership's net income | 2,775 | 2,775 | |||||
184 | 185 | ||||||
Common unit holders' interest in Partnership's net income | 9,294 | 9,142 | |||||
Net income per: | |||||||
Common unit, basic and diluted | 0.08 | 0.08 | |||||
Weighted-average units outstanding: | |||||||
Common units, basic and diluted | 121,985,686 | 119,559,456 | |||||
Total comprehensive income: | 12,253 | 12,102 | |||||
Unaudited Condensed Consolidated Balance Sheets
(In thousands of United States Dollars)
Assets | ||||
Current assets | As of 2017 |
As of |
||
Cash and cash equivalents | 124,378 | 106,678 | ||
Trade accounts receivable, net | 1,965 | 2,497 | ||
Prepayments and other assets | 3,048 | 3,943 | ||
Inventories | 5,913 | 4,761 | ||
Total current assets | 135,304 | 117,879 | ||
Fixed assets | ||||
Vessels, net | 1,350,719 | 1,367,731 | ||
Total fixed assets | 1,350,719 | 1,367,731 | ||
Other non-current assets | ||||
Above market acquired charters | 86,392 | 90,243 | ||
Deferred charges, net | 3,464 | 4,154 | ||
Restricted cash | 18,000 | 18,000 | ||
Prepayments and other assets | 1,460 | 598 | ||
Total non-current assets | 1,460,035 | 1,480,726 | ||
Total assets | 1,595,339 | 1,598,605 | ||
Liabilities and Partners' Capital | ||||
Current liabilities | ||||
Current portion of long-term debt, net | 74,764 | 39,568 | ||
Trade accounts payable | 9,814 | 8,686 | ||
Due to related parties | 12,420 | 16,095 | ||
Accrued liabilities | 8,404 | 7,861 | ||
Deferred revenue, current | 21,553 | 19,986 | ||
Total current liabilities | 126,955 | 92,196 | ||
Long-term liabilities | ||||
Long-term debt, net | 523,327 | 562,619 | ||
Deferred revenue | 13,541 | 16,033 | ||
Total long-term liabilities | 536,868 | 578,652 | ||
Total liabilities | 663,823 | 670,848 | ||
Commitments and contingencies | ||||
Partners' capital | 931,516 | 927,757 | ||
Total liabilities and partners' capital | 1,595,339 | 1,598,605 | ||
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of United States Dollars)
For the three month periods ended |
|||||
2017 | 2016 | ||||
Cash flows from operating activities: | |||||
Net income | 12,253 | 12,102 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Vessel depreciation and amortization | 18,526 | 17,453 | |||
Amortization and write off of deferred financing costs | 233 | 544 | |||
Amortization of above market acquired charters | 3,851 | 3,475 | |||
Equity compensation expense | 295 | 267 | |||
Changes in operating assets and liabilities: | |||||
Trade accounts receivable | 532 | (721) | |||
Prepayments and other assets | 33 | (883) | |||
Inventories | (1,152) | (248) | |||
Trade accounts payable | 2,299 | 382 | |||
Due to related parties | (3,675) | (2,844) | |||
Accrued liabilities | 805 | (1,466) | |||
Deferred revenue | (915) | (2,461) | |||
Dry-docking costs paid | (1,030) | - | |||
Net cash provided by operating activities | 32,055 | 25,600 | |||
Cash flows from investing activities: | |||||
Vessel acquisitions and improvements including time charter agreements | (1,218) | (73,578) | |||
Increase in restricted cash | - | (500) | |||
Net cash used in investing activities | (1,218) | (74,078) | |||
Cash flows from financing activities: | |||||
Proceeds from issuance of Partnership units | 3,969 | - | |||
Expenses paid for issuance of Partnership units | (9) | - | |||
Proceeds from issuance of long-term debt | - | 35,000 | |||
Deferred financing costs paid | - | (69) | |||
Payments of long-term debt | (4,339) | (4,219) | |||
Dividends paid | (12,758) | (32,153) | |||
Net cash used in financing activities | (13,137) | (1,441) | |||
Net increase / (decrease) in cash and cash equivalents | 17,700 | (49,919) | |||
Cash and cash equivalents at beginning of period | 106,678 | 90,190 | |||
Cash and cash equivalents at end of period | 124,378 | 40,271 | |||
Supplemental cash flow information | |||||
Cash paid for interest | |||||
Non-Cash Investing and Financing Activities | |||||
Offering expenses included in liabilities | $- | ||||
Capital expenditures included in liabilities | |||||
Capitalized dry docking costs included in liabilities | |||||
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 non-cash items, such as depreciation and amortization expense, amortization of above 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 | 12,253 | 12,102 | 13,744 | |||
Adjustments to reconcile net income to operating surplus prior to Capital Reserve and Class B Preferred Units distribution | ||||||
Depreciation and amortization1 | 19,054 | 18,265 | 18,928 | |||
Amortization of above market acquired charters and straight line revenue adjustments | 1,401 | 2,404 | 1,355 | |||
Operating Surplus prior to capital reserve and Class B Preferred Units distribution | 32,708 | 32,771 | 34,027 | |||
Capital reserve | (14,644) | (14,644) | (14,644) | |||
Class B preferred units distribution | (2,775) | (2,775) | (2,775) | |||
Operating Surplus after capital reserve and Class B Preferred Units distribution |
15,289 | 15,352 | 16,608 | |||
Increase in recommended reserves | (5,203) | (6,138) | (6,625) | |||
Available Cash | 10,086 | 9,214 | 9,983 |
1 Depreciation and amortization line item includes the following components:
- Vessel depreciation and amortization; and
- Deferred financing costs and equity compensation plan amortization.
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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