Capital Product Partners: Αύξηση κερδών κατά 239% στο α΄ τρίμηνο του 2024
Aύξηση των εσόδων για το πρώτο τρίμηνο του 2024, σε ποσοστό 29% με έσοδα $104,5 εκατ. έναντι $81,0 εκατ. την αντίστοιχη περίοδο του 2023, ανακοίνωσε η Capital Product Partners L.P.
Τα καθαρά κέρδη της εταιρίας συμφερόντων του Ευ. Μαρινάκη, διαμορφώθηκαν στα 33,9 εκατ. δολάρια, με άνοδο 239% σε σχέση με την αντίστοιχη περυσινή περίοδο. Επίσης:
Η εταιρεία προχώρησε σε διανομή μερίσματος ύψους 0,15 δολ. ανά μετοχή το πρώτο τρίμηνο του 2024.Στις 2 Ιανουαρίου 2024, η εταιρεία παρέλαβε το LNG/C Axios II. Πρόκειται για την δεύτερη παράδοση που πραγματοποιείται στο πλαίσιο της συμφωνίας της εταιρείας για την απόκτηση 11 πλοίων μεταφοράς υγροποιημένου φυσικού αερίου τελευταίας γενιάς (MEGA).
Ολοκλήρωση της πώλησης εντός του πρώτου τριμήνου, των πλοίων μεταφοράς εμπορευματοκιβωτίων Long Beach Express και Akadimos με κέρδος ύψους 16,4 εκατομμυρίων δολαρίων και σύναψη συμφωνιών για την πώληση ακόμα πέντε των πλοίων μεταφοράς εμπορευματοκιβωτίων.
O κ. Γεράσιμος Καλογηράτος, CEO της Capital Product Partners L.P., δήλωσε: «Με μεγάλη ικανοποίηση βλέπω την εταιρεία να συνεχίζει να υλοποιεί το επιχειρηματικό σχέδιο που καταρτίσαμε τον Νοέμβριο του 2023, με την προσθήκη δύο πλοίων LNG/C τελευταίας γενιάς και την πώληση επτά πλοίων μεταφοράς εμπορευματοκιβωτίων, οι πωλήσεις των οποίων αναμένεται να αποφέρουν καθαρά έσοδα ύψους περίπου 182,5 εκατ. δολαρίων, σύμφωνα με την ανακοινωθείσα πρόθεση σταδιακής αποεπένδυσης από τα πλοία μεταφοράς εμπορευματοκιβωτίων. Καθώς αναμένουμε άλλα τρία ολοκαίνουργια, τελευταίας γενιάς πλοία LNG/C να ενταχθούν στο στόλο μας τους επόμενους μήνες -όλα με μακροπρόθεσμες ναυλώσεις σε ισχύ- εξακολουθούμε να εστιάζουμε στον εταιρικό μετασχηματισμό μας και στον τρόπο με τον οποίο θα ενισχύσουμε περαιτέρω το αποτύπωμά μας στη μεταφορά υγροποιημένου φυσικού αερίου και την ενεργειακή μετάβαση».
Capital Product Partners L.P. Announces the Sale of Three 10,000 TEU Container Vessels
Capital Product Partners L.P. (NASDAQ: CPLP), an international owner of ocean-going vessels, announced that the Partnership entered into a memorandum of agreement for the sale of three 10,000 TEU container vessels, built in 2011 at Samsung Heavy Industries, S. Korea: the M/V Athos, the M/V Aristomenis and the M/V Athenian. Delivery of the vessels to the buyer is expected in April 2024.
On November 13, 2023, as part of the transformative acquisition of 11 newbuild LNG carriers for $3.1 billion, the Partnership announced its focus on LNG carriers and energy transition shipping, and its intention to divest from non-core container vessels. With the recently completed sale of the M/V Akadimos (115,534 DWT / 9,300 TEU, Eco-Flex, Wide Beam container vessel, built 2015, Daewoo-Mangalia Heavy Industries S.Α., Romania), which was delivered to its new owners on March 8, 2024, the Partnership has completed the sale of two container vessels and has agreed to sell two Panamax container vessels and three Neo-Panamax container vessels. Total expected gross cash proceeds from the sale of the seven container vessels are estimated at approximately $272.5 million or $182.5m after repaying outstanding debt.
Capital Product Partners L.P. Expects Softer LNG Shipping Rates in 2024
Capital Product Partners L.P., an international owner of ocean-going vessels, released its financial results for the fourth quarter ended December 31, 2023.
Operating Surplus and Operating Surplus after the quarterly allocation to the capital reserve for the fourth quarter of 2023 were $40.5 million and $1.5 million, respectively.
Announced common unit distribution of $0.15 for the fourth quarter of 2023.
Concluded a $500.0 million rights offering (the “Rights Offering”) and successfully closed a transaction to acquire 11 latest generation two-stroke (MEGA) Liquefied Natural Gas Carriers (“LNG/C”) to be delivered between the fourth quarter of 2023 and the first quarter of 2027 (the “LNG/C Transaction”).
On December 21, 2023 and January 2, 2024, the Partnership took delivery of the LNG/C Amore Mio I and the LNG/C Axios II, respectively, pursuant to the LNG/C Transaction.
Agreed to sell the 5,100 Twenty-foot Equivalent Unit (“TEU”) container vessel the M/V Long Beach Express.
Overview of Fourth Quarter 2023 Results
Net income for the quarter ended December 31, 2023, was $12.7 million, compared with net income of $21.1 million for the fourth quarter of 2022. Taking into account the interest attributable to the general partner and the allocation of net income to unvested units, net income per common unit for the quarter ended December 31, 2023, was $0.48, or $0.61 per common unit, if we exclude impairment of vessels in that quarter, compared to net income per common unit of $1.03 for the fourth quarter of 2022.
Total revenue for the quarter ended December 31, 2023, was $95.5 million, compared to $79.9 million during the fourth quarter of 2022. The increase in revenue was primarily attributable to the revenue contributed by the newbuilding vessels acquired by the Partnership, namely the M/V Manzanillo Express acquired on October 12, 2022, the M/V Itajai Express acquired on January 10, 2023, the LNG/C Asterix I acquired on February 17, 2023, the M/V Buenaventura Express acquired on June 20, 2023 and the LNG/C Amore Mio I acquired on December 21, 2023, partly offset by the sale of the M/V Cape Agamemnon on November 7, 2023.
Total expenses for the quarter ended December 31, 2023, were $55.1 million, compared to $42.1 million in the fourth quarter of 2022. Total vessel operating expenses during the fourth quarter of 2023 amounted to $20.6 million, compared to $17.3 million during the fourth quarter of 2022. The increase in vessel operating expenses was mainly due to the net increase in the average number of vessels in our fleet. Total expenses for the fourth quarter of 2023 also include a non-cash impairment charge of $3.5 million in total that we recognized in connection with the sale of the M/V Cape Agamemnon and the M/V Long Beach Express, and vessel depreciation and amortization of $22.2 million, compared to $17.0 million in the fourth quarter of 2022. The increase in depreciation and amortization during the fourth quarter of 2023 was mainly attributable to the net increase in the average size of our fleet. General and administrative expenses for the fourth quarter of 2023 increased to $5.7 million, compared to $4.0 million in the fourth quarter of 2022, mainly due to the costs incurred in connection with the LNG/C Transaction.
Total other expense, net for the quarter ended December 31, 2023, was $27.7 million compared to $16.6 million for the fourth quarter of 2022. Total other expense, net includes interest expense and finance cost of $27.9 million for the fourth quarter of 2023, compared to $18.4 million for the fourth quarter of 2022. The increase in interest expense and finance cost was mainly attributable to the increase in the Partnership’s average indebtedness and the increase in the weighted average interest rate compared to the fourth quarter of 2022.
Capitalization of the Partnership
As of December 31, 2023, total cash amounted to $204.1 million. Total cash includes restricted cash of $11.7 million, which represents the minimum liquidity requirement under our financing arrangements.
As of December 31, 2023, total partners’ capital amounted to $1,174.9 million, an increase of $536.5 million compared to $638.4 million as of December 31, 2022. The increase reflects net income for the year ended December 31, 2023, other comprehensive income of $3.2 million relating to the net effect of the cross-currency swap agreement we designated as an accounting hedge, the amortization associated with the equity incentive plan of $3.8 million and the net result from the issuance of common units in connection with the Rights Offering of $498.7 million, partly offset by distributions declared and paid during the period in a total amount of $12.2 million and the cost of repurchasing our common units under our Unit Repurchase Program for an aggregate amount of $4.1 million.
As of December 31, 2023, the Partnership’s total debt was $1,787.8 million before financing fees, reflecting an increase of $488.6 million compared to $1,299.2 million as of December 31, 2022. The increase is attributable to the assumption of $196.3 million of indebtedness in connection with the acquisition of the LNG/C Amore Mio I in December 2023, the drawdown of $392.0 million of new debt in relation to the acquisition of the newbuilding vessels acquired by the Partnership during the first half of 2023 and a $10.0 million increase in the U.S. Dollar equivalent of the euro-denominated bonds issued by CPLP Shipping Holdings Plc in July 2022 and October 2021 as of December 31, 2023, partly offset by the scheduled principal payments for the period of $86.4 million and the early repayment in full of the facility we entered into with CMB Financial Leasing Co., Ltd in 2021 to partly finance the acquisition of the three Panamax container vessels the M/V Long Beach Express, the M/V Seattle Express and the M/V Fos Express of a total amount of $23.4 million.
Operating Surplus
Operating surplus for the quarter ended December 31, 2023, amounted to $40.5 million, compared to $41.7 million for the previous quarter ended September 30, 2023, and $37.3 million for the quarter ended December 31, 2022. We allocated $39.0 million to the capital reserve, an increase of $4.5 million compared to the previous quarter due to the net increase in the rate of amortization of our debt. Operating surplus for the quarter ended December 31, 2023, after the quarterly allocation to the capital reserve, was $1.5 million. Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other 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.
LNG/C Transaction
On December 21, 2023, the Partnership announced the closing of the umbrella agreement in respect of the LNG/C Transaction (the “Umbrella Agreement”), entered into on November 13, 2023, with Capital Maritime and Capital GP L.L.C. (the “General Partner”), providing for the acquisition of 11 latest generation two-stroke (MEGA) LNG/Cs (the “Vessels”) for a total acquisition price of $3,130.0 million. Upon the closing of the Umbrella Agreement, the Partnership entered into 11 share purchase agreements to acquire 100% of the equity interests in each vessel-owning company of the Vessels (the “Vessel SPAs”).
Each Vessel will have a capacity of 174,000 Cubic Meters and was built or is under construction at Hyundai Heavy Industries Co., LTD and Hyundai Samho Heavy Industries Co. Ltd., South Korea (collectively, “Hyundai”).
On December 21, 2023, and upon entry into the Vessel SPAs for LNG/Cs Axios II, Assos, Apostolos, Aktoras, Archimidis and Agamemnon (the “Initial Vessels”), we paid to Capital Maritime a deposit of $174.4 million, or 10% of the aggregate acquisition price of the Initial Vessels. We closed the Vessel SPA for the LNG/C Axios II upon delivery of the Vessel on January 2, 2024 and we expect to close the remaining acquisitions of each of the vessel-owning companies of the Initial Vessels upon each Vessel’s delivery from Hyundai. The remaining purchase price with respect to each Initial Vessel will be paid upon delivery of such vessel and closing of the applicable Vessel SPA, with a total of $1,287.0 million remaining due for the Initial Vessels.
On December 21, 2023, and upon entry into the Vessel SPAs for LNG/Cs Alcaios I, Antaios I, Athlos and Archon (the “Remaining Vessels”), the Partnership paid Capital Maritime $138.1 million to acquire 100% of the equity interests in each of the vessel-owning companies of the Remaining Vessels, which are expected to be delivered to the Partnership between the third quarter of 2026 and the first quarter of 2027. We expect to pay an additional amount of $909.9 million to Hyundai in pre-delivery and delivery installments for the Remaining Vessels.
The Umbrella Agreement and the Standby Purchase Agreement permit the Partnership and Capital Maritime to net payments due to each other under the transactions contemplated by the Umbrella Agreement, including the Vessel SPAs and the Standby Purchase Agreement.
Τhe balance of the consideration for the acquisitions of the five Initial Vessels and the four Remaining Vessels under the Umbrella Agreement will be funded by a combination of commercial debt, an unsecured seller’s credit of up to $220.0 million extended by Capital Maritime and maturing on June 30, 2027 (the “Seller’s Credit”), and cash on hand. On January 2, 2024, we deferred $92.6 million of the purchase price for the LNG/C Axios II pursuant to a drawdown under the Seller’s Credit.
Delivery of the LNG/C Amore Mio I and the LNG/C Axios II
On December 21, 2023, the Partnership took delivery of the LNG/C Amore Mio I. The vessel has commenced its three-year employment with Qatar Energy Trading LLC. Upon acquisition, we assumed indebtedness of $196.3 million in the form of a sale and leaseback transaction. The LNG/C Amore Mio I lease has a tenor of 10 years, is repayable in 12 quarterly installments of $5.5 million and 28 subsequent installments of $1.1 million and offers the option to repurchase the vessel at a predetermined price after the first anniversary of the arrangement, together with a purchase obligation of $98.2 million at the expiration of the lease in October 2033.
On January 2, 2024, the Partnership took delivery of the LNG/C Axios II. The vessel commenced an index-linked, one-year time charter, which will be followed by a seven-year bareboat charter with Bonny Gas Transport Limited (“BGT”). BGT maintains an option to extend the charter by an additional three years. The vessel acquisition was financed through netting 10% of the acquisition price against the amount due from CMTC pursuant to the Standby Purchase Agreement, a new senior secured loan facility for an amount of $190.0 million, repayable in 28 equal quarterly installments of $2.5 million and a balloon payment of $120.0 million together with the final quarterly installment in December 2030, and a drawdown of $92.6 million under the Seller’s Credit.
Sale of M/V Long Beach Express
On December 15, 2023, the Partnership agreed to sell the M/V Long Beach Express container vessel (68,618 dwt / 5,100 TEU, container vessel, built 2008, Hanjin Heavy Industries & Construction Co., Ltd., South Korea) to an unaffiliated party. Delivery of the M/V Long Beach Express to the buyer is expected within the first quarter of 2024.
Corporate Conversion
Pursuant to the Umbrella Agreement, CPLP, Capital Maritime and the General Partner have agreed to, in good faith, negotiate and jointly work with tax and other advisors to agree terms for the conversion of the Partnership from a Marshall Islands limited partnership to a corporation with customary corporate governance provisions by June 21, 2024.
Rights of First Refusal
Pursuant to the Umbrella Agreement, Capital Maritime granted the Partnership, beginning on December 21, 2023, rights of first refusal over (i) transfers of LNG/C vessels owned by Capital Maritime to third parties, opportunities to order newbuild LNG/C vessels of which Capital Maritime becomes aware, and employment opportunities for LNG/C vessels of which Capital Maritime becomes aware, in each case, for a period ending on December 21, 2033, (ii) transfers to third parties of two certain liquid CO2 carriers and two certain ammonia carriers recently ordered by Capital Maritime (the “Energy Transition Vessels”) for a period ending when Capital Maritime and its affiliates no longer beneficially own at least 25% of the issued and outstanding common units and (iii) if we acquire an Energy Transition Vessel from Capital Maritime, employment opportunities for such Energy Transition Vessel of which Capital Maritime becomes aware, for a period ending when Capital Maritime and its affiliates no longer beneficially own at least 25% of the issued and outstanding common units.
Management Commentary
Mr. Jerry Kalogiratos, Chief Executive Officer of our General Partner, commented:
“I am very pleased to see that the Partnership has made significant progress on all fronts, as we continue to successfully execute against the business plan we set out in November 2023. Importantly, we have concluded the $500.0 million Rights Offering and with that we closed the agreement to acquire the 11 two stroke, latest generation LNG/Cs, with two LNG/Cs already having joined our fleet in December 2023 and January 2024, respectively. Moreover, we agreed to sell one of our container vessels in line with the announced intention to gradually divest from our container vessels. Over the next few months, we expect to focus on the conversion of the Partnership into a corporation, which should help facilitate the transition of CPLP to an LNG and energy transition focused company with the ambition of being a bellwether of the industry.”
Quarterly Common Unit Cash Distribution
On January 25, 2024, the Board of Directors of the Partnership declared a cash distribution of $0.15 per common unit for the fourth quarter of 2023 payable on February 13, 2024, to common unit holders of record on February 6, 2024.
LNG Market Update
The reduced focus on energy security, along with warm weather and increased gas inventories, resulted in a decline in gas prices in 2023. This, combined with prolonged availability of vessels throughout the year, has kept charter rates lower compared to previous years. As a result, LNG spot rates for a 2-stroke vessel averaged $171,250 for the fourth quarter 2023, while the 1-year time charter rate as of the end of January 2024 stood at around $70,000/day.
The United States have now become the world’s largest exporter of LNG and China has reclaimed its status as the largest importer. Gas storage levels in Europe are at historical highs, with several importers in Asia reaching tank tops. With a steady flow of newbuild deliveries and limited new liquefaction capacity, 2024 is expected to be softer in terms of spot and short-term time charter rates. LNG fleet capacity growth of 10.5% is projected to outpace LNG tonne-mile trade growth of 5.6%. However, charter markets for 2-stroke vessels, which benefit significantly from higher carrying capacity and lower boil-off, are expected to remain generally healthy, as preference for these vessels is increasing even at lower gas prices.
Looking ahead, it is anticipated that the increasing shipping demand from new projects, both in terms of volume and longer distances, will induce further demand for LNG/Cs including newbuild orders with 2027-2028 delivery. Assuming that projects adhere to their timelines, and proposed projects reach Final Investment Decision (FID), demand for newbuild LNG/Cs is likely to surpass current yard capacity by the end of the decade.
Capital Product Partners: Κέρδη $16,3 εκατ. το 4ο τρίμηνο, για την εταιρεία του Ευ. Μαρινάκη
Στα 16,3 εκατ. δολάρια ανήλθαν στο τέταρτο τρίμηνο τα αναπροσαρμοσμένα καθαρά κέρδη της Capital Product Partners, συμφερόντων Ευάγγελου Μαρινάκη, σημειώνοντας πτώση 23% σε ετήσια βάση.
Τα έσοδα της εταιρείας ανήλθαν στα 95,5 εκατ. δολάρια, καταγράφοντας άνοδο 20% σε ετήσια βάση, με τις δαπάνες να διαμορφώνονται στα 55,1 εκατ. δολάρια, με αύξηση 31%.
Η εταιρεία ανακοίνωσε και τη διανομή μερίσματος 0,15 δολ. ανά μετοχή για το τέταρτο τρίμηνο. Στις 31 Δεκεμβρίου τα ταμειακά διαθέσιμα του ομίλου ανέρχονταν σε 204,1 εκατ. δολάρια.
Επίσης, στο τέταρτο τρίμηνο:
– Ολοκληρώθηκε η προσφορά δικαιωμάτων ύψους $500,0 εκατ. (“Προσφορά Δικαιωμάτων”) και πραγματοποιήθηκε επιτυχώς η συναλλαγή απόκτησης 11 πλοίων μεταφοράς υγροποιημένου φυσικού αερίου τελευταίας γενιάς (MEGA) (“LNG/C”), με χρόνους παράδοσης μεταξύ του τέταρτου τριμήνου του 2023 και του πρώτου τριμήνου του 2027 (“Συμφωνία LNG/C”).
– Στις 21 Δεκεμβρίου 2023 και στις 2 Ιανουαρίου 2024, η εταιρεία παρέλαβε το LNG/C Amore Mio I και το LNG/C Axios II, αντίστοιχα, βάσει της Συμφωνίας LNG/C.Συμφωνήθηκε η πώληση του πλοίου μεταφοράς εμπορευματοκιβωτίων M/V Long Beach Express των 5.100 με ισοδύναμη μονάδα είκοσι ποδιών (“TEU”).
Σχολιάζοντας τα αποτελέσματα, o κ. Γεράσιμος Καλογηράτος, Διευθύνων Σύμβουλος της Capital GP L.L.C., τόνισε: «Είμαι πολύ ικανοποιημένος για τη σημαντική πρόοδο σε όλους τους τομείς, καθώς συνεχίζουμε να εκτελούμε επιτυχώς το business plan που ανακοινώσαμε τον Νοέμβριο. Εχουμε ολοκληρώσει την έκδοση δικαιωμάτων ύψους 500 εκατ. δολαρίων και με αυτά ολοκληρώσαμε τη συμφωνία εξαγοράς έντεκα πλοίων LNG τελευταίας γενιάς, έχοντας ήδη παραλάβει δύο από αυτά τον Δεκέμβριο και τον Ιανουάριο. Επιπροσθέτως, συμφωνήσαμε να πουλήσουμε ένα πλοίο μεταφοράς κοντέινερ, στο πλαίσιο της ανακοινωθείσας πρόθεσης να αποεπενδύσουμε από τον κλάδο των κοντέινερ. Κατά τη διάρκεια των επόμενων μηνών θα εστιάσουμε στο μετασχηματισμό της εταιρείας σε μια εταιρεία που θα εστιάζει στο LNG και την ενεργειακή μετάβαση, με τη φιλοδοξία να αποτελέσει πρωτοπόρο του κλάδου».
Συμφωνία 160 εκατ. δολαρίων για την Capital Product Partners του Βαγγέλη Μαρινάκη
Η Capital Maritime πούλησε 10 εκατ. μετοχές της εταιρείας στην Yoda PLC από την Κύπρο, όπως γνωστοποίησε με ανακοίνωσή του ο Έλληνας εφοπλιστής, Βαγγέλης Μαρινάκης. Οι μετοχές αυτές αντιπροσωπεύουν το 18% της Capital Product Partners, το οποίο θα ανήκει πλέον στην Yoda PLC καθιστώντας την ως τον δεύτερο μεγαλύτερο μέτοχο της ναυτιλιακής.
Το συνολικό deal ανήλθε σε 160 εκατ. δολάρια με την τιμή μετοχής να φτάνει στα 16 δολάρια.
Όπως τονίζουν κύκλοι μέσα από την κυπριακή εταιρεία, η οποία έχει πραγματοποιήσει επενδύσεις στον τουρισμό και στο real estate, η συμφωνία αυτή θα της δώσει την δυνατότητα να επεκτείνει τις επενδύσεις και τις δραστηριότητες της στον τομέα της ναυτιλίας και στην θαλάσσια μεταφορά LNG.
Άλλωστε η CPLP, έχει ήδη 8 πλοία μεταφοράς υγροποιημένου φυσικού αερίου που είναι σε λειτουργία και άλλα 10 που αναμένονται να παραδοθούν μέσα στην επόμενη τριετία
Capital Product Partners L.P. Announces the Appointment of Director by Capital GP L.L.C.
Capital Product Partners L.P. announced that Capital GP L.L.C., its general partner (the “General Partner”), has appointed Mr. Atsunori Kozuki to act as a member of the Board of Directors of the Partnership appointed by the General Partner in accordance with the provisions of the agreement of limited partnership of the Partnership, effective October 2, 2023.
Brief Biography of Mr. Kozuki
Mr. Kozuki served as Principal Project Developer and previously as General Manager for INPEX Corporation, in charge of LNG business development and marketing. Mr. Kozuki has more than 34 years of experience in LNG business development, including shipping. He started his career as Project Developer and then Project Manager for Nissho Iwai Corporation, where he developed new LNG projects between 1982 and 2002. From 1987 to 1990, he was part of the team that established an LNG Joint Venture with Pertamina. Before joining INPEX Corporation, Mr. Kozuki served from 2002 to 2003 as Executive Director and Officer of Nippon Colin Corporation and from 2003 to 2009 as a Director at Johnson & Johnson K.K., in charge of new business development and R&D in the medical sector. Mr. Kozuki holds an MSIA and an MBA from the Carnegie Mellon University School of Business and a B.A. degree in Economics from Keio University.
Capital Product Partners L.P. Announces the Re-Appointment of Directors by Capital GP L.L.C.
Capital Product Partners L.P. (NASDAQ: CPLP) (the “Partnership”) announced that Capital GP L.L.C., its general partner (the “General Partner”), has re-appointed each of Messrs.
Gerasimos (Jerry) Kalogiratos and Gurpal Grewal to act as members of the Board of Directors of the Partnership appointed by the General Partner in accordance with the provisions of the agreement of limited partnership of the Partnership (each such director, an “Appointed Director”), for an additional three year term commencing on the date of the Partnership’s 2023 annual general meeting.
Capital Product Partners L.P. Continues Fleet Renewal Strategy During the First Quarter of 2023
Capital Product Partners L.P., an international owner of ocean-going vessels, released its financial results for the first quarter ended March 31, 2023.
Overview of First Quarter 2023 Results
Net income for the quarter ended March 31, 2023, was $10.0 million, compared with net income of $25.1 million for the first quarter of 2022. Taking into account the interest attributable to the general partner and the allocation of net income to unvested units, net income per common unit for the quarter ended March 31, 2023, was $0.49, compared to net income per common unit of $1.26 for the first quarter of 2022. The decrease in net income was primarily attributable to the increase in total other expense resulting from the increase in the Partnership’s total average indebtedness and the increase in the weighted average interest rate compared to the first quarter of 2022.
Total revenue for the quarter ended March 31, 2023 was $81.0 million, compared to $73.4 million during the first quarter of 2022. The increase in revenue was primarily attributable to the revenue contributed by the newbuilding vessels acquired by the Partnership, namely the M/V Manzanillo Express and the M/V Itajai Express, which were delivered to the Partnership in the fourth quarter of 2022 and the first quarter of 2023, respectively, and the LNG/C Asterix I, which was delivered to the Partnership in February 2023, and the previously announced increase in the daily rate earned by the LNG/Cs Aristarchos and Asklipios, which has been effective since September 1, 2022, partly offset by the sale of the M/V Archimidis and the M/V Agamemnon in July 2022.
Total expenses for the quarter ended March 31, 2023 were $45.1 million, compared to $40.2 million in the first quarter of 2022. Voyage expenses for the quarter ended March 31, 2023, increased to $3.8 million, compared to $3.6 million in the first quarter of 2022, due to the net increase in the average size of our fleet. Total vessel operating expenses during the first quarter of 2023 amounted to $19.3 million, compared to $16.7 million during the first quarter of 2022. The increase in vessel operating expenses was mainly due to the net increase in the average number of vessels in our fleet and the increase in the operating expenses of certain of our vessels in view of scheduled maintenance and one-off repairs. Total expenses for the first quarter of 2023 also include vessel depreciation and amortization of $19.2 million, compared to $18.4 million in the first quarter of 2022. The increase in depreciation and amortization during the first quarter of 2023 was mainly attributable to the net increase in the average size of our fleet, partly offset by lower amortization of deferred dry-docking costs. General and administrative expenses for the first quarter of 2023 amounted to $2.8 million, compared to $1.5 million in the first quarter of 2022. The increase in general and administrative expenses was mainly attributable to the increase in the amortization associated with our equity incentive plan.
Total other expense, net for the quarter ended March 31, 2023, was $25.8 million compared to $8.0 million for the first quarter of 2022. Total other expense, net includes interest expense and finance costs of $23.7 million for the first quarter of 2023, compared to $10.3 million for the first quarter of 2022. The increase in interest expense and finance costs was mainly attributable to the increase in the Partnership’s total average indebtedness and the increase in the weighted average interest rate compared to the first quarter of 2022. Total other expense, net also includes an unrealized net loss of $2.3 million resulting from the increase in the U.S. Dollar equivalent of our euro-denominated bonds issued in October 2021, partly offset by the change in the fair value of the relevant cross-currency swap agreements not designated as an accounting hedge.
Capitalization of the Partnership
As of March 31, 2023, total cash amounted to $99.8 million. Total cash includes restricted cash of $11.2 million, which represents the minimum liquidity requirement under our financing arrangements.
As of March 31, 2023, total partners’ capital amounted to $642.9 million, an increase of $4.5 million compared to $638.4 million as of December 31, 2022. The increase reflects net income for the quarter ended March 31, 2023 and the amortization associated with the equity incentive plan, partly offset by distributions declared and paid during the period in a total amount of $3.1 million, the repurchase of common units for an aggregate amount of $1.8 million and other comprehensive loss of $1.7 million resulting from the increase in the U.S. Dollar equivalent of our euro-denominated bonds issued in July 2022, partly offset by the change in the fair value of the relevant cross-currency swap agreement we designated as an accounting hedge.
As of March 31, 2023, the Partnership’s total debt was $1,553.9 million, before financing fees, reflecting an increase of $254.7 million compared to $1,299.2 million as of December 31, 2022. The increase is attributable to a $5.9 million increase in the U.S. Dollar equivalent of our euro-denominated bonds as of March 31, 2023, the drawdown of $108.0 million of a new financing arrangement to partly finance the acquisition of the M/V Itajai Express in January 2023, and the drawdown of $184.0 million under a sale and leaseback transaction to partly finance the acquisition of the LNG/C Asterix I in February 2023, partly offset by the scheduled principal payments for the period of $19.8 million and the early repayment in full of the CMBFL Facility for a total amount of $23.4 million. Following the repayment in full of the CMBFL Facility, ten vessels in our fleet are unencumbered.
Operating Surplus
Operating surplus for the quarter ended March 31, 2023, amounted to $36.3 million, compared to $37.3 million for the previous quarter ended December 31, 2022, and $44.6 million for the quarter ended March 31, 2022. We allocated $33.4 million to the capital reserve, an increase of $2.4 million compared to the previous quarter due to the increased debt amortization resulting from the drawdown of the M/V Itajai Express and the LNG/C Asterix I facilities, partly offset by the repayment in full of the CMBFL Facility. Operating surplus for the quarter ended March 31, 2023, after the quarterly allocation to the capital reserve, was $3.0 million.
Delivery of the M/V Itajai Express and the LNG/C Asterix I
On January 10, 2023, the Partnership took delivery of the M/V Itajai Express, the second of three 13,312 twenty-foot equivalent (“TEU”) container vessels we have previously agreed to acquire together with the LNG/C Asterix I. The vessel commenced its ten-year employment with Hapag Lloyd Aktiengesellschaft (“Hapag Lloyd”) and Hapag Lloyd maintains three two-year options to extend the charter. The acquisition of the M/V Itajai Express was funded through a combination of (a) a cash deposit of $6.0 million advanced in 2022 to Capital Maritime & Trading Corp. (the “Seller”), (b) $108.0 million of a Japanese operating lease with a call option (“JOLCO”) and (c) $8.5 million of cash at hand. The JOLCO amount consists of 70% debt and 30% tax equity, with escalating amortization, an eight-year term and a balloon payment of $84.5 million due in January 2031.
On February 17, 2023, the Partnership took delivery of the LNG/C Asterix I. The vessel commenced its seven-year employment with Hartree Partners Power & Gas Company (UK) Limited, which maintains an option to extend the charter by an additional two years. The vessel acquisition was financed through a combination of (a) a cash deposit of $12.0 million advanced in 2022 to the Seller, (b) $184.0 million of debt drawn under a sale and leaseback transaction with CMB Financial Leasing (the “2023 CMBFL Lease”) and (c) $34.0 million of cash at hand. The 2023 CMBFL Lease has quarterly principal repayments of $2.2 million, a tenor of ten years and the option to repurchase the vessel at a predetermined price after the first anniversary of the arrangement, together with a purchase option of $96.5 million at the expiration of the lease in February 2033.
Russia-Ukraine Conflict
Due to the ongoing conflict in Ukraine, the United States (“U.S.”), European Union (“E.U.”), Canada and other Western countries and organizations have announced and enacted numerous sanctions against Russia, and certain other countries or regions, to impose severe economic pressure on the Russian economy and government.
Current U.S. and E.U. sanctions regimes do not materially affect the business, operations or financial condition of the Partnership and, to the Partnership’s knowledge, the Partnership’s counterparties are currently performing their obligations under their respective time charters in compliance with applicable U.S. and E.U. rules and regulations.
Sanctions legislation has been changing and the Partnership continues to monitor such changes as applicable to the Partnership and its counterparties. The full impact of the commercial and economic consequences of the Russian conflict with Ukraine is uncertain at this time. Currently, the LNG market is benefiting from the energy security concerns amid the Russia-Ukraine conflict (see also Market Commentary Update below).
Management Commentary
Mr. Jerry Kalogiratos, Chief Executive Officer of our General Partner, commented:
“We have continued during the first quarter of 2023 to execute on our fleet renewal strategy, taking delivery of two newbuilding vessels: one 13,312 TEU eco container vessel with a ten-year charter attached, and one latest generation LNG/C with a seven-year charter attached. Furthermore, we have continued our debt optimization strategy, repaying early in full one more facility, and introducing a JOLCO into our debt sources. Finally, we have successfully secured a medium-term charter for the M/V Akadimos at an attractive rate. With this fixture, our next period charter expiration does not come before the first quarter of 2025.”
“Following the above, we currently have ten ships unencumbered and a fleet with a weighted average age of 6.8 years, while our remaining charter duration is also 6.8 years with a contracted revenue backlog of approximately $1.9 billion.”
Unit Repurchase Program
On January 25, 2021, the Board of Directors of the Partnership (the “Board”) approved a unit repurchase program, providing the Partnership with authorization to repurchase up to $30.0 million of the Partnership’s common units, effective for a period of two years through January 2023.
On January 26, 2023, the Board approved a new unit repurchase program, providing the Partnership with authorization to repurchase up to $30.0 million of the Partnership’s common units, effective for a period of two years through January 2025. During the quarter ended March 31, 2023 and since the launching of the new unit repurchase plan, the Partnership repurchased 129,258 common units at an average cost of $13.57 per unit.
The Partnership has repurchased a total of 901,470 common units since the launching of the first unit repurchase plan on February 19, 2021, at an average cost of $13.47 per unit.
Quarterly Common Unit Cash Distribution
On April 25, 2023, the Board declared a cash distribution of $0.15 per common unit for the first quarter of 2023 payable on May 12, 2023 to common unit holders of record on May 8, 2023.
Market Commentary Update
Container market
While the container charter markets saw a soft start to the year following the continuing weakness of the last months of 2022, charter rates have seen a modest rebound from mid-February 2023 onwards. At the same time freight rates have continued to soften amid faltering demand caused by economic headwinds, excess retail inventories in key regions and reduced port congestion. The Clarkson’s charter rate index stood at 112.3 points at the end of April 2023, 2.0 times the 2019 average, but down 73.8% compared to the same period last year. Container spot freight rates have softened on most trade lanes, with the Shanghai Containerized Freight Index (SCFI) at 999.7 points at the end of April, down 76.1% from a year ago, but up 23.3% from the 2019 average.
The container trade is projected to contract by 1.1% in 2023 and then increase by 3.3% in 2024. Fleet growth of 6.9% and 5.8% is expected in 2023 and 2024 respectively, but compliance with upcoming environmental regulations and delays in shipyards could weigh on available container ship supply. Contracting has slowed in the first quarter of 2023 and the orderbook stands at 916 units of 7,500,000 TEU, equivalent to 28.9% of total fleet capacity. Year-to-date, 26 container vessels with approximate capacity of 50,480 TEU have been scrapped, compared to 11 vessels in 2022 with approximate capacity of 15,890 TEU.
LNG market
Global LNG demand, which expanded significantly in 2022, continues its steady growth into 2023. Despite some short-term seasonal pressure in the LNG spot charter market in the first quarter of 2023, charter rates are higher compared to the same quarter of last year. Term charter rates stand at firm levels, with the 1-year term charter rate for a 174,000 cubic meter LNG carrier quoted at $175,000 per day at the end of April, evidence of structural market tightness.
Looking ahead, the outlook for the LNG carrier sector appears to be positive throughout 2023, with tonnage availability expected to tighten in the coming months. The tonne-mile trade is projected to grow by 4.5%, while the LNG carrier fleet capacity is expected to grow by 5% in 2023.
CPLP: Αύξηση εσόδων 10% στο τρίμηνο – Μέρισμα $0,15 ανά μετοχή
Αύξηση τζίρου, ανανέωση στόλου, πρόωρη αποπληρωμή χρεών, διανομή μερίσματος και επαναγορά μετοχών περιελάμβανε το πρώτο τρίμηνο της Capital Product Partners και ειδικότερα:
– Αύξηση των εσόδων σε ποσοστό 10% με έσοδα $81 εκατ. έναντι $73,4 εκατ. την αντίστοιχη περίοδο του 2022
– Η εταιρεία προχωρεί σε διανομή μερίσματος ύψους 0,15 δολ. ανά μετοχή για το 1ο Τρίμηνο 2023.
– Μέσα στο 1ο τρίμηνο του 2023, παραδόθηκε το M/V Itajai Express, πλοίο μεταφοράς εμπορευματοκιβωτίων και το πλοίο μεταφοράς υγροποιημένου φυσικού αερίου (LNG/C) Asterix I, και τα δύο με μακροχρόνια ναύλωση.
– Η εταιρεία εξασφάλισε νέα ναύλωση για το M/V Akadimos για περίπου 24 μήνες.
– Αποπλήρωσε πρόωρα χρέος συνολικού ποσού $23,4 εκατ.
– Επαναγοράστηκαν κατά το πρώτο τρίμηνο του 2023, 129.258 ίδιες μετοχές με μέσο κόστος $13,57 ανά μετοχή
O κ. Γεράσιμος Καλογηράτος, CEO της CPLP, δήλωσε σχετικά:
«Κατά το πρώτο τρίμηνο του 2023, συνεχίσαμε να εφαρμόζουμε τη στρατηγική ανανέωσης του στόλου μας, παραλαμβάνοντας δύο νεότευκτα πλοία: ένα μοντέρνο, πράσινης τεχνολογίας πλοίο μεταφοράς εμπορευματοκιβωτίων 13.312 TEU με δεκαετή ναύλωση και ένα LNG/C τελευταίας γενιάς με επταετή ναύλωση. Επιπλέον, παραμείναμε προσηλωμένοι στη στρατηγική βελτιστοποίησης του χρέους, αποπληρώνοντας πρόωρα μέρος του χρέους μας, και εισάγοντας νέες φθηνότερες δομές χρηματοδότησης. Τέλος, εξασφαλίσαμε επιτυχώς μεσοπρόθεσμη ναύλωση για το M/V Akadimos με υψηλό ημερήσιο ναύλο. Ως αποτέλεσμα της ναύλωσης του M/V Akadimos , η πρώτη λήξη ναύλωσης πλοίου του στόλου δεν αναμένεται πριν από το πρώτο τρίμηνο του 2025. Με βάση τα παραπάνω, αυτή τη στιγμή έχουμε δέκα πλοία ελεύθερα βαρών και έναν στόλο με σταθμισμένη μέση ηλικία 6,8 ετών, ενώ η εναπομένουσα διάρκεια ναύλωσης είναι επίσης 6,8 χρόνια που αντιστοιχούν σε συμβασιοποιημένα έσοδα περίπου 1,9 δισεκατομμυρίων δολαρίων».
Capital Product Partners L.P. Announces New Time Charter for the M/V Akadimos
Capital Product Partners L.P., an international owner of ocean going vessels, today announced that it has agreed a new time charter for the M/V Akadimos (115,534 dwt/9,288 TEU, container carrier built 2015, Daewoo-Mangalia Heavy Industries S.A., Romania) with a major liner company. The charter for the M/V Akadimos is expected to commence in the second quarter of 2023 in direct continuation of her present charter with a duration of approximately 24 months. The Partnership estimates that this charter may generate $34.4 million of gross revenue.
As a result of the above employment update, the Partnership’s charter coverage for the remainder of 2023 and 2024 has increased to 96%.