Dynagas releases results for 2018
Published by David Rowlands,
Highlights from the quarter include the following:
- Completed a US$55.0 million underwritten public offering of 2.2 million 8.75% fixed to floating cumulative redeemable perpetual preferred units (the ‘Series B preferred units’).
- Lena River completed its scheduled dry-docking and special survey in late October last year, and was successfully delivered into a multi-month charter with a major energy company prior to the commencement of its multi-year charter with Yamal Trade Pte, which is expected to commence in the 3Q19.
- Net loss and loss per common unit for the fourth quarter of US$0.9 million and US$0.10 million, respectively.
- Adjusted net income, adjusted EBITDA and adjusted loss per common unit for 4Q18 of US$1.3 million, US$21.6 million and US$0.04 million, respectively.
- Distributable cash flow for the fourth quarter and year ended 31 December 2018 of US$5.5 million and US$33.0 million, respectively.
- Reported free cash of US$109.9 million and available liquidity of US$139.9 million each as of 31 December 2018.
Subsequent highlights include the following:
- Declared and paid quarterly cash distribution of US$0.0625 per common unit in respect of the 4Q18 and $0.5625 per Series A preferred unit for the period from 12 November 2018 to 11 February 2019.
- Declared and paid per unit cash distribution of US$0.7231 on the Series B preferred units for the period from 23 October 2018 to 22 February 2019.
Recent developments include the following:
- Common unit quarterly cash distribution: on 25 January this year, the partnership reportedly announced a reduction of its quarterly cash distribution to US$0.0625 per common unit in respect of 4Q18, from US$0.25 per common unit in prior quarters, which was paid on 14 February this year to all common unit holders of record as of 7 February 2019.
- Series A preferred units quarterly cash distribution: on 23 January this year, the partnership’s board of directors announced a cash distribution of US$0.5625 per unit on its Series A preferred units for the period from 12 November 2018 to 11 February 2019, which was paid on 12 February 2019 to all Series A preferred unit holders of record as of 5 February 2019.
- Series B preferred units issuance and initial cash distribution: on 23 October 2018, the partnership reportedly completed a public offering of 2 200 000 of its 8.75% Series B preferred units, representing limited partner interests in the partnership, at a liquidation preference of US$25.00 per unit. Distributions will be payable on the Series B preferred units up to 22 November 2023 at a fixed rate equal to 8.75% per annum and from 22 November 2023, if not redeemed, at a floating rate. The partnership received net proceeds of US$53.0 million, after deducting underwriters’ discounts and commissions and offering expenses. On 1 February 2019, the partnership announced its initial cash distribution of US$0.7231 per unit on the Series B preferred units for the period from 23 October 2018 to 22 February 2019. This initial cash distribution was paid on 22 February 2019 to all Series B preferred unit holders of record as of 15 February 2019.
Tony Lauritzen, Chief Executive Officer of the partnership, said: “Our reported earnings for the fourth quarter ended 31 December 2018 were in line with our expectations. Compared to the same period in 2017, our fourth quarter earnings were impacted by the following occurrences: (i) the decrease in revenues as result of the Arctic Aurora and the Ob River commencing employment under extended charter contracts with their respective charterers at lower rates compared with the previous charter contracts; (ii) the cost and off-hire associated with scheduled special survey and dry-docking of the Lena River; and (iii) the increase in US Libor which increased the interest and finance costs of our Term Loan B.
“All of our LNG carriers are or to be employed on long-term contracts with an average contract duration of approximately 10 years, with the first potential vessel availability in the year 2021 (with only one vessel) and thereafter in the year 2026. We believe that our revenue backlog estimate of approximately US$1.4 billion is driven in part by our dominant market share in the ownership and operation of ice class LNG carriers.
“We are pleased that the Yamal LNG project is progressing well. The Lena River is currently employed on a multi-month charter contract with a large US gas producer until the vessel is employed under the 15 year contract with Yamal LNG, which is expected to commence in the third quarter of 2019.
“Currently our main focus is on the refinance of our US$250 million unsecured notes due in October 2019. While we cannot provide any assurance of the outcome, we are currently working on various refinancing options.”
Read the article online at: https://www.lngindustry.com/lng-shipping/22032019/dynagas-releases-results-for-2018/
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