Capital Product Partners L.P. Announces Second Quarter 2023 Financial Results
Highlights
Three-month periods ended |
||||||
2023 | 2022 | Increase/(Decrease) | ||||
Revenues | 20% | |||||
Expenses (excl. impairment of vessel) | 24% | |||||
Net Income before impairment of vessel | (25%) | |||||
Less: Impairment of vessel | - | - | ||||
Net Income | (64%) | |||||
Net Income per common unit | (64%) | |||||
Average number of vessels1 | 22.1 | 21.0 | 5% |
- Operating Surplus2 and Operating Surplus after the quarterly allocation to the capital reserve for the second quarter of 2023 were
$38.2 million and$3.2 million , respectively. - Announced common unit distribution of
$0.15 for the second quarter of 2023. - Took delivery of the M/V Buenaventura Express with long term employment in place.
- Agreed to sell the 179,221 DWT dry cargo vessel M/V Cape Agamemnon.
- Repurchased during the second quarter of 2023 156,560 common units at an average cost of
$13.30 per unit.
1 Average number of vessels is measured by aggregating the number of days each vessel was part of our fleet during the period and dividing such aggregate number by the number of calendar days in the period.
2 Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please refer to Appendix A at the end of the press release for a reconciliation of this non-GAAP measure with net income.
Overview of Second Quarter 2023 Results
Net income for the quarter ended
Total revenue for the quarter ended
Total expenses for the quarter ended
Total other expense, net for the quarter ended
Capitalization of the Partnership
As of
As of
As of
Operating Surplus
Operating surplus for the quarter ended
Delivery of the M/V Buenaventura Express
On
Fleet Upgrade
In the second quarter of 2023, the Partnership completed the scheduled drydock of M/V Athos and M/V Athenian and the installation of a Sulphur oxides (“SOx”) scrubber system. In addition, both vessels were retrofitted with a bulbous bow and silyl acrylate self-polishing technology hull coating, which are both expected to improve the energy efficiency of the vessels. The M/V Aristomenis completed its scheduled drydock and was retrofitted with the same upgrades in
Sale of Dry
On
Russia-Ukraine Conflict
Due to the ongoing conflict in
Current
Management Commentary
Mr.
“In the second quarter of 2023, we successfully completed our latest acquisition cycle, which included three newbuilding 13,000 TEU eco container vessels, each with a ten-year charter attached, and one latest generation LNG/C with a seven-year charter attached. Furthermore, we have completed significant energy efficiency upgrades to the M/V Athos, the M/V Athenian and the M/V Aristomenis, improving the overall efficiency and carbon footprint of our fleet. Finally, we have agreed to sell the dry cargo M/V Cape Agamemnon, a non-core asset for the Partnership, continuing to execute on the strategic renewal of our fleet..”
Unit Repurchase Program
On
On
The Partnership has repurchased a total of 1,058,030 common units since the launching of the first unit repurchase plan on
Quarterly Common Unit Cash Distribution
On
Market Commentary Update
LNG market
Despite the seasonal softening of spot and term rates from the highs of the fourth quarter of 2022, demand for LNG/Cs remains strong. As of
Trade patterns remain consistent, with the bulk of
Container market
Container market conditions in the first half of 2023 were relatively soft due to weaker trade volumes and reduced port congestion. Freight rates have been fluctuating in recent months but have generally returned to levels closer to historical averages, while vessel charter rates exhibited divergent trends during this period. Rates for larger-sized vessels experienced an increase in the past two months, while rates for feeder vessels followed a more downward trajectory.
The Clarkson's charter rate index stood at 103 points in the first week of
The container vessel orderbook stands at approximately 27.7%, while by
Conference Call and Webcast
Today,
Conference Call Details
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: +1 877 405 1226 (US Toll-Free Dial In) or +1 201 689 7823 (US and Standard International Dial In). Please quote “Capital Product Partners” to the operator and/or conference ID 13740260. Click here for additional participant International Toll-Free access numbers.
Alternatively, participants can register for the call using the “call me” option for a faster connection to join the conference call. You can enter your phone number and let the system call you right away. Click here for the “call me” option.
Slides and Audio Webcast
There will also be a live, and then archived, webcast of the conference call and accompanying slides, available through the Partnership’s website. To listen to the archived audio file, visit our website http://ir.capitalpplp.com/ and click on Webcasts & Presentations under our Investor Relations page. Participants in the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
About
For more information about the Partnership, please visit: www.capitalpplp.com.
Forward-Looking Statements
The statements in this press release that are not historical facts, including, among other things, the expected financial performance of CPLP’s business, CPLP’s ability to pursue growth opportunities, CPLP’s expectations or objectives regarding future distributions, unit repurchases, market, vessel deliveries and charter rate expectations, and, in particular, the expected effects of recent vessel acquisitions and the
CPLP-F
Contact Details:
CEO
Tel. +30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Nikos Kalapotharakos
CFO
Tel. +30 (210) 4584 950
E-mail: n.kalapotharakos@capitalmaritime.com
Investor Relations / Media
Capital Link, Inc. (
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source:
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 | For the six-month | |||||||
periods ended |
periods ended |
|||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenues | 88,535 | 73,960 | 169,551 | 147,316 | ||||
Expenses: | ||||||||
Voyage expenses | 3,940 | 4,467 | 7,782 | 8,031 | ||||
Vessel operating expenses | 20,774 | 14,112 | 37,594 | 28,555 | ||||
Vessel operating expenses - related parties | 2,690 | 2,312 | 5,212 | 4,571 | ||||
General and administrative expenses | 2,332 | 2,345 | 5,115 | 3,894 | ||||
Vessel depreciation and amortization | 20,875 | 17,661 | 40,053 | 36,032 | ||||
Impairment of vessel | 7,956 | - | 7,956 | - | ||||
Operating income, net | 29,968 | 33,063 | 65,839 | 66,233 | ||||
Other income / (expense), net: | ||||||||
Interest expense and finance cost | (25,508 | ) | (11,714 | ) | (49,190 | ) | (22,052 | ) |
Other income / (expense), net | 2,952 | (931 | ) | 791 | 1,386 | |||
Total other expense, net | (22,556 | ) | (12,645 | ) | (48,399 | ) | (20,666 | ) |
Partnership’s net income | 7,412 | 20,418 | 17,440 | 45,567 | ||||
General Partner’s interest in Partnership’s net income | 127 | 348 | 297 | 789 | ||||
Partnership’s net income allocable to unvested units | 181 | 747 | 423 | 1,043 | ||||
Common unit holders’ interest in Partnership’s net income | 7,104 | 19,323 | 16,720 | 43,735 | ||||
Net income per: | ||||||||
Common units, basic and diluted | 0.36 | 1.00 | 0.85 | 2.26 | ||||
Weighted-average units outstanding: | ||||||||
Common units, basic and diluted | 19,550,988 | 19,258,982 | 19,639,212 | 19,316,608 |
Unaudited Condensed Consolidated Balance Sheets
(In thousands of United States Dollars)
As of June 30, 2023 |
As of December 31, 2022 | |||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | $ | 92,936 | $ | 144,635 |
Trade accounts receivable, net | 3,535 | 2,102 | ||
Prepayments and other assets | 5,138 | 7,534 | ||
Due from related party | - | 3,636 | ||
Inventories | 5,289 | 6,817 | ||
Claims | 914 | 1,599 | ||
Assets held for sale | 22,294 | - | ||
Total current assets | 130,106 | 166,323 | ||
Fixed assets | ||||
Advances for vessels under construction – related party | - | 24,000 | ||
Vessels, net | 2,275,594 | 1,757,897 | ||
Total fixed assets | 2,275,594 | 1,781,897 | ||
Other non-current assets | ||||
Above market acquired charters | 24,244 | 32,320 | ||
Deferred charges, net | 4,944 | 289 | ||
Restricted cash | 11,717 | 10,213 | ||
Derivative asset | 2,983 | - | ||
Prepayments and other assets | 3,025 | 5,722 | ||
Total non-current assets | 2,322,507 | 1,830,441 | ||
Total assets | $ | 2,452,613 | $ | 1,996,764 |
Liabilities and Partners’ Capital | ||||
Current liabilities | ||||
Current portion of long-term debt, net | $ | 85,228 | $ | 73,213 |
Trade accounts payable | 11,206 | 8,322 | ||
Due to related parties | 5,575 | 1,016 | ||
Accrued liabilities | 39,131 | 17,476 | ||
Deferred revenue | 11,569 | 18,553 | ||
Total current liabilities | 152,709 | 118,580 | ||
Long-term liabilities | ||||
Long-term debt, net (including |
1,534,194 | 1,215,865 | ||
Derivative liabilities | 9,496 | 13,525 | ||
Below market acquired charters | 98,701 | 10,368 | ||
Deferred revenue | 8,130 | - | ||
Total long-term liabilities | 1,650,521 | 1,239,758 | ||
Total liabilities | 1,803,230 | 1,358,338 | ||
Commitments and contingencies | - | - | ||
Total partners’ capital | 649,383 | 638,426 | ||
Total liabilities and partners’ capital | $ | 2,452,613 | $ | 1,996,764 |
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of United States Dollars)
For the six-month periods ended |
||||||
2023 | 2022 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 17,440 | $ | 45,567 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Vessel depreciation and amortization | 40,053 | 36,032 | ||||
Impairment of vessel | 7,956 | - | ||||
Amortization and write-off of deferred financing costs | 1,483 | 1,053 | ||||
Amortization / accretion of above / below market acquired charters | 1,520 | 5,956 | ||||
Amortization of ineffective portion of derivatives | (156 | ) | - | |||
Equity compensation expense | 1,864 | 1,162 | ||||
Change in fair value of derivatives | (3,213 | ) | 12,252 | |||
Unrealized bonds exchange differences | 2,989 | (14,138 | ) | |||
Changes in operating assets and liabilities: | ||||||
Trade accounts receivable, net | (1,433 | ) | 2,337 | |||
Prepayments and other assets | 3,763 | (1,099 | ) | |||
Due from related party | 3,636 | - | ||||
Inventories | 574 | (823 | ) | |||
Claims | 685 | 322 | ||||
Trade accounts payable | 2,271 | 1,309 | ||||
Due to related parties | 4,559 | 1,847 | ||||
Accrued liabilities | 6,387 | 413 | ||||
Deferred revenue | 1,146 | (1,498 | ) | |||
Net cash provided by operating activities | 91,524 | 90,692 | ||||
Cash flows from investing activities: | ||||||
Vessel acquisitions, including time charters attached, and improvements | (455,791 | ) | (1,108 | ) | ||
Advances for vessels under construction – related party | - | (30,000 | ) | |||
Expenses related to the sale of vessels paid | - | (1,984 | ) | |||
Net cash used in investing activities | (455,791 | ) | (33,092 | ) | ||
Cash flows from financing activities: | ||||||
Proceeds from long-term debt | 392,000 | - | ||||
Deferred financing costs paid | (3,444 | ) | (121 | ) | ||
Payments of long-term debt | (64,487 | ) | (44,997 | ) | ||
Repurchase of common units | (3,846 | ) | (2,935 | ) | ||
Dividends paid | (6,151 | ) | (6,061 | ) | ||
Net cash provided by / (used in) financing activities | 314,072 | (54,114 | ) | |||
Net (decrease) / increase in cash, cash equivalents and restricted cash | (50,195 | ) | 3,486 | |||
Cash, cash equivalents and restricted cash at beginning of period | 154,848 | 30,987 | ||||
Cash, cash equivalents and restricted cash at end of period | $ | 104,653 | $ | 34,473 | ||
Supplemental cash flow information | ||||||
Cash paid for interest | 45,140 | 20,585 | ||||
Non-Cash Investing and Financing Activities | ||||||
Capital expenditures included in liabilities | 12,207 | 692 | ||||
Capitalized dry-docking costs included in liabilities | 5,176 | 29 | ||||
Deferred financing costs included in liabilities | 410 | - | ||||
Reconciliation of cash, cash equivalents and restricted cash | ||||||
Cash and cash equivalents | 92,936 | 23,869 | ||||
Restricted cash - non-current assets | 11,717 | 10,604 | ||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | $ | 104,653 | $ | 34,473 |
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 depreciation and amortization expense, exchange differences on bonds, change in fair value of derivatives, impairment, amortization / accretion of above / below 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 | 7,412 | 10,028 | 20,418 | |||
Adjustments to reconcile net income to operating surplus prior to Capital | ||||||
Depreciation, amortization, unrealized bonds exchange differences and change in fair value of derivatives1 | 19,783 | 23,235 | 20,050 | |||
Impairment of vessel | 7,956 | - | - | |||
Amortization / accretion of above / below market acquired charters and straight-line revenue adjustments | 3,043 | 3,055 | 3,388 | |||
Operating Surplus prior to capital reserve | 38,194 | 36,318 | 43,856 | |||
Capital reserve | (34,960 | ) | (33,350 | ) | (31,109 | ) |
Operating Surplus after capital reserve | 3,234 | 2,968 | 12,747 | |||
(Increase) / decrease in recommended reserves | (186 | ) | 103 | (9,657 | ) | |
Available Cash | 3,048 | 3,071 | 3,090 |
1 Depreciation, amortization, unrealized bonds exchange differences and change in fair value of derivatives line item includes the following components:
- Vessel depreciation and amortization;
- Deferred financing costs and equity compensation plan amortization;
- Unrealized bonds exchange differences; and
- Change in fair value of derivatives.
Source: Capital Product Partners, L.P.