GasLog Partners LP, an international owner and operator of liquefied natural gas (“LNG”) carriers, reported its financial results for the three-month period ended June 30, 2021.
Highlights
Announced three new time charter agreements: a one-year charter for the GasLog Sydney with a subsidiary of TotalEnergies SE (“TotalEnergies”), an eight-month charter for the Solaris with a subsidiary of Royal Dutch Shell plc (“Shell”) and a charter with a minimum duration of one year (and a maximum of three years) for the Methane Heather Sally with a wholly owned subsidiary of Cheniere Energy, Inc. (“Cheniere”).
Post quarter-end signed a new one-year time charter agreement for the GasLog Seattle with TotalEnergies.
Repaid $18.8 million of debt during the second quarter of 2021, or $54.8 million of debt in the first six months of 2021.
Published the Partnership’s Sustainability Report for 2020 on July 20, 2021.
Announced the appointment of Paolo Enoizi, currently Chief Operating Officer of GasLog Ltd. (“GasLog”), as a director of the Partnership and as Chief Executive Officer of the Partnership, effective August 1, 2021.
Executed scheduled dry-dockings for three of our vessels, the Methane Rita Andrea, the GasLog Greece and the GasLog Glasgow, resulting in a total of 82 scheduled off-hire days during the quarter (compared to nil in the second quarter in 2020).
Quarterly Revenues, Profit, Adjusted Profit(1) and Adjusted EBITDA(1) of $70.4 million, $14.7 million, $12.7 million and $45.0 million, respectively.
Quarterly Earnings per unit (“EPU”) of $0.14 and Adjusted EPU(1) of $0.10.
Declared cash distribution of $0.01 per common unit for the second quarter of 2021.
CEO Statement
Paul Wogan, Chief Executive Officer, commented: “The Partnership’s fleet performed strongly in the second quarter of 2021, with uptime of close to 100%, allowing us to safely deliver nearly one million tonnes (“mt”) of LNG to customers around the world. We also repaid $18.8 million of debt, bringing the total amount of debt retired in 2021 to $54.8 million. In addition, within the last month we took advantage of a strong LNG shipping market and booked four new multi-month charters with leading customers at attractive rates, that also allowed us to lock in 100.0% charter coverage for the remainder of 2021 and 69.2% for 2022. This fixed charter coverage along with the cash flows generated during the first half of 2021 more than covers all the Partnership’s operating, overhead, dry-docking and debt service requirements for 2021 and 2022.
Our capital allocation for 2021 will continue to prioritize debt repayment to reduce further our breakeven costs over time. We also expect continued reductions to our operating and overhead expenses. With these ongoing improvements to our cost base and continued high levels of service and reliability, we believe that the Partnership continues to position itself to be a leader in the short-term market for LNG shipping.”
New Charter Agreements
During the second quarter of 2021, GasLog Partners entered into a one-year time charter agreement with TotalEnergies for the GasLog Sydney, a 155,000 cubic meter (“cbm”) tri-fuel diesel electric (“TFDE”) LNG carrier, built in 2013. In addition, following the conclusion of the Solaris’ initial multi-year time charter with Shell in late July 2021, its contract was extended for approximately eight months, through the end of the first quarter of 2022. The Solaris is a 155,000 cbm TFDE LNG carrier built in 2014. Finally, a new time charter agreement was signed with Cheniere for the Methane Heather Sally, a 145,000 cbm steam turbine propulsion (“Steam”) LNG carrier built in 2007. The charter has a minimum duration of one year, with Cheniere having the option, until late August, to extend the charter for an additional one or two years at varying rates.
Post quarter-end, in July 2021, GasLog Partners rechartered an additional vessel with TotalEnergies, the 155,000 cbm TFDE vessel GasLog Seattle, built in 2013, again for a period of approximately twelve months.
There were 1,283 available days for the three months ended June 30, 2021, as compared to 1,365 available days for the three months ended June 30, 2020. The year-over-year decrease in available days is attributable to 82 off-hire days due to the scheduled dry-dockings of three vessels in the second quarter of 2021 (compared to nil in the second quarter of 2020).
Management classifies the Partnership’s vessels from a commercial point of view into two categories: (a) spot fleet and (b) long-term fleet. The spot fleet includes all vessels under charter party agreements with an initial duration of less than (or equal to) five years (excluding optional periods), while the long-term fleet comprises all vessels with charter party agreements of an initial duration of more than five years (excluding optional periods).
Revenues decreased by $14.0 million, from $84.4 million for the quarter ended June 30, 2020, to $70.4 million for the same period in 2021. The decrease is mainly attributable to the expirations of the initial multi-year time charters of three of our Steam vessels with Shell in 2020 and early 2021 (which were at higher rates compared to their current re-contracted rates) and a decrease in revenues resulting from the 82 off-hire days due to the scheduled dry-dockings of three of our vessels in the second quarter of 2021 (compared to none in the same period in 2020).
Vessel operating costs increased by $3.1 million, from $16.9 million for the quarter ended June 30, 2020, to $20.0 million for the same period in 2021. The increase in vessel operating costs is mainly attributable to an increase of $1.7 million in technical maintenance expenses primarily in connection with the dry-dockings of three of our vessels in the second quarter of 2021 (compared to none in the same period in 2020) and an increase of $0.9 million in crew costs, mainly as a result of COVID-19 restrictions (increased costs for travelling and quarantines) and the unfavorable movement of the EUR/USD exchange rate compared to the same period in 2020. Daily operating costs per vessel (after excluding calendar days for the Solaris, the operating costs of which are covered by the charterers) increased from $13,261 per day for the three-month period ended June 30, 2020 to $15,734 per day for the three-month period ended June 30, 2021, which includes dry-docking related costs of $1,109 per day in the three-month period ended June 30, 2021.
General and administrative expenses decreased by $0.9 million, from $4.4 million for the three-month period ended June 30, 2020, to $3.5 million for the same period in 2021. The decrease in general and administrative expenses is mainly attributable to a decrease of $0.8 million in administrative services fees, in connection with the decrease of the annual fee payable to GasLog in 2021 by approximately $0.2 million per vessel per year. The decrease in the annual fee was driven by organizational changes and corporate savings at GasLog. As a result, daily general and administrative expenses decreased from $3,238 per vessel ownership day for the quarter ended June 30, 2020, to $2,554 per vessel ownership day for the quarter ended June 30, 2021.
The decrease in Adjusted EBITDA(1) of $15.4 million, from $60.4 million in the second quarter of 2020 as compared to $45.0 million in the same period in 2021, is attributable to the decrease in revenues of $14.0 million and increased operating expenses of $3.1 million described above, partially offset by an aggregate decrease of $1.8 million in voyage and general and administrative expenses.
Financial costs decreased by $4.0 million, from $13.1 million for the quarter ended June 30, 2020, to $9.1 million for the same period in 2021. The decrease in financial costs is mainly attributable to a decrease of $3.8 million in interest expense on loans, due to the lower London Interbank Offered Rate (“LIBOR”) rates in the three months ended June 30, 2020, as compared to the same period in 2021, as well as the reduced debt balances year-over-year. During the three-month period ended June 30, 2020, we had an average of $1,346.2 million of outstanding indebtedness with a weighted average interest rate of 3.4%, compared to an average of $1,261.1 million of outstanding indebtedness with a weighted average interest rate of 2.4% during the three-month period ended June 30, 2021.
Gain on derivatives decreased by $0.8 million, from a gain of $0.4 million for the three-month period ended June 30, 2020 to a loss of $0.4 million for the same period in 2021. The decrease is attributable to a net increase of $1.3 million in realized loss on derivatives held for trading (in 2021, interest rate swaps only), partially offset by a net increase of $0.5 million in unrealized gain from the mark-to-market valuation of derivatives held for trading which were carried at fair value through profit or loss.
The increase in profit of $6.5 million from $8.2 million in the second quarter of 2020 to $14.7 million in the second quarter of 2021 is mainly attributable to an impairment loss of $18.8 million recorded in the three months ended June 30, 2020 and the aforementioned decrease of $4.0 million in financial costs, partially offset by the decrease in Adjusted EBITDA(1) described above.
The decrease in Adjusted Profit(1) of $12.9 million, from $25.6 million in the second quarter of 2020 to $12.7 million in the second quarter of 2021, is attributable to the decrease in Adjusted EBITDA(1) described above, partially offset by the aforementioned decrease of $4.0 million in financial costs.
As of June 30, 2021, we had $119.8 million of cash and cash equivalents, out of which $62.9 million was held in current accounts and $56.9 million was held in time deposits with an original duration of less than three months. An additional amount of $2.5 million of time deposits with an original duration greater than three months was classified under short-term investments.
As of June 30, 2021, we had an aggregate of $1,233.1 million of borrowings outstanding under our credit facilities, of which $105.1 million was repayable within one year.
As of June 30, 2021, our current assets totaled $141.6 million and current liabilities totaled $183.2 million, resulting in a negative working capital position of $41.6 million. Current liabilities include $25.3 million of unearned revenue in relation to hires received in advance (which represents a non-cash liability that will be recognized as revenues in July 2021 as the services are rendered). Management monitors the Partnership’s liquidity position throughout the year to ensure that it has access to sufficient funds to meet its forecast cash requirements, including debt service commitments, and to monitor compliance with the financial covenants within its loan facilities. We anticipate that our primary sources of funds for at least twelve months from the date of this report will be available cash, cash from operations and existing debt facilities. We believe that these anticipated sources of funds, as well as our ability to access the capital markets if needed, will be sufficient to meet our liquidity needs and comply with our banking covenants for at least twelve months from the date of this report.
Source: GasLog Partners LP