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Dynagas LNG reports profit in 1Q20 results

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LNG Industry,


Dynagas LNG Partners LP has announced its results for the three months ended 31 March 2020.

Quarter highlights:

  • Net income and earnings per common unit of US$7.0 million and US$0.11, respectively.
  • Adjusted net income and adjusted EBITDA of US$7.1 million and US$23.7 million, respectively.
  • 99.0% fleet utilisation.
  • Cash distribution of US$0.5625 per unit on its Series A Preferred Units for the period from 12 November 2019 to 11 February 2020 and US$0.546875 per unit on the Series B Preferred Units for the period from 22 November 2019 to 21 February 2020.

Subsequent events:

  • Declared a quarterly cash distribution of US$0.5625 on the Series A Preferred Units for the period from 12 February 2020 to 11 May 2020, which was paid on 12 May 2020.
  • Declared a quarterly cash distribution of US$0.546875 on the Series B Preferred Units for the period from 22 February 2020 to 21 May 2020, which was paid on 22 May 2020.
  • Entered into a floating to fixed interest rate swap transaction effective from 29 June 2020, which provides a fixed 3 month LIBOR rate of 0.41%, resulting in a fixed effective interest rate cost of 3.41% (including margin) based on notional values that reflect the amortisation schedule of 100% of the partnership’s debt outstanding under its US$675.0 million senior secured term loan, until the US$675.0 million credit facility matures in September 2024.

CEO commentary:

“We are pleased to report the results for the three months ended 31 March 2020. Each of our six LNG carriers are operating under their respective term charters with international gas producers with an average remaining contract term of 8.3 years. The earliest contracted re-delivery date for our six LNG carriers is in 3Q21 (the Arctic Aurora), with the next carrier (the Clean Energy) becoming available for re-chartering at the earliest in 1Q26.

“For 1Q20, we reported net income of US$7.0 million and adjusted EBITDA of about US$23.7 million, which is in line with our previous estimates.

“Despite the operational challenges the industry is facing with respect to the COVID-19 outbreak, we are pleased to report revenues in line with 4Q19 and net income increasing by 26% primarily as a result of lower interest expense. The current impact of the COVID-19 outbreak has been operationally manageable due to our manager’s effective COVID-19 response plan which has been successfully implemented with the support of our seafarers, charterers, and employees which we are grateful for.

“Pursuant to our general objective to manage the cost of debt and reduce debt over time, we have made use of the current historically low interest rate environment and entered into a floating to fixed interest rate swap transaction effective from 29 June 2020 until the existing US$675.0 million credit facility expires in 2024. The swap provides for a fixed 3-month LIBOR rate of 0.41% and an effective interest rate cost of 3.41% (including margin) applicable for notional amounts matching the full amount and period of our outstanding debt.

“This is a key development in the execution of our strategic plan as it de-risks our exposure to interest rate volatility while securing a low cost of debt until 2024.

“Going forward, we intend to continue to deleverage our balance sheet and generate cash so as to build equity over time. This will enhance our position for future growth initiatives.”

Read the article online at: https://www.lngindustry.com/lng-shipping/05062020/dynagas-lng-reports-profit-in-1q20-results/

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