Dynagas LNG Partners LP Announces Reduction in Quarterly Distribution to $0.25 Per Common Unit
April 18 2018 - 8:30AM
Dynagas LNG Partners LP (NYSE:DLNG) (the “Partnership”)
announced today that, following a strategic review of its financial
profile and distribution policy, the Board of Directors of the
Partnership has approved a plan to reduce the quarterly
distribution on the Partnership's common units to $0.25
per common unit from $0.4225 per common unit, or from $1.69
per common unit to $1.00 per common unit on an annualized
basis. The reduction will take effect on May 3, 2018, upon the
payment of the common unit distribution with respect to the first
quarter of 2018 to common unitholders of record as of the
close of business on April 26, 2018.
Tony Lauritzen, Chief Executive Officer of the
Partnership, commented: “This decision by our Board of Directors
to reduce the level of the Partnership's quarterly common
unit distribution is necessary to align the Partnership's
distribution level with its capacity to generate cash flow in the
long term. Despite the material increase in the Partnership’s
estimated revenue contract backlog over the last two years, we have
experienced a decrease in operating cash flow and a weakened
distribution coverage ratio (which is our distributable cash flow
available for distribution in proportion to actual cash
distributed) following our shift to longer term charters for the
employment of our liquefied natural gas (LNG) carriers, which
provide us with greater cash flow visibility albeit at lower
charter rates that provide attractive returns of capital. As the
Partnership’s shorter duration time charter contracts at peak
charter rates have expired or are approaching expiration, we have
capitalized on our Manager’s operational track record and the
versatility of the ice class LNG carriers in our fleet to secure
long term employment contracts. During the last two years, the
Partnership has been successful in securing a ten year contract for
the employment of our 2007 built LNG carrier, Ob River, two fifteen
year contracts for the employment of our 2013 built LNG carriers,
Yenisei River and Lena River, an eight year contract for the
employment of our 2007 built LNG carrier, Clean Energy and a three
year contract for the employment of our 2013 built LNG carrier,
Arctic Aurora. Today our average remaining contract term is 10
years and our estimated contracted revenue backlog is approximately
$1.5 billion, which highlights our ability to secure long-term
contracts in periods when the LNG shipping market has been highly
competitive.”
Mr. Lauritzen added: “The Partnership’s Board of
Directors believes that the new distribution level is in the best
interest of the Partnership’s common unitholders as it aligns the
Partnership’s cash flows with our cash payment obligations. The new
distribution level is expected to provide the Partnership with
approximately $24.5 million in annual cash savings in order to
enhance our liquidity, strengthen our balance sheet and
improve our distribution coverage ratio. Although our pro-forma
2018 distribution coverage ratio is expected to be below 1x, we
believe the new distribution level is viable on an actual cash
basis since it reduces the Partnership’s current need to utilize
existing cash reserves to fund distributions to unitholders.
Strengthening the Partnership's financial position will also enable
us to focus on growth projects, including the acquisition
of LNG carriers from our Sponsor or from third parties which,
if consummated, would be expected to improve our
distribution coverage ratio to above 1x. Since our
initial public offering in November 2013, the Partnership has paid
total cash distributions on our common units of $6.79 per common
unit. We will remain focused on delivering value to
our unitholders.”
About Dynagas LNG Partners
LP
Dynagas LNG Partners LP (NYSE: DLNG) is a
growth-oriented partnership formed by Dynagas Holding Ltd., its
sponsor, to own and operate liquefied natural gas (“LNG”) carriers
employed on multi-year charters. The Partnership’s current fleet
consists of six LNG carriers, with an aggregate carrying capacity
of approximately 914,000 cubic meters.
Visit the Partnership’s website at
www.dynagaspartners.comContact Information:Dynagas
LNG Partners LP 23, Rue Basse, 98000 Monaco Attention: Michael
Gregos Tel. +377 99996445 Email: management@dynagaspartners.com
Investor Relations / Financial Media: Nicolas
Bornozis President Capital Link, Inc. 230 Park Avenue, Suite 1536
New York, NY 10169 Tel. (212) 661-7566 E-mail:
dynagas@capitallink.com
Forward-Looking Statement
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts.
The Partnership desires to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in
connection with this safe harbor legislation. The words “believe,”
“anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,”
“potential,” “may,” “should,” “expect,” “expected,” “pending,”
“will” and similar expressions identify forward-looking
statements.
The forward-looking statements in this press
release are based upon various assumptions, many of which are
based, in turn, upon further assumptions, including without
limitation, examination by the Partnership’s management of
historical operating trends, data contained in its records and
other data available from third parties. Although the Partnership
believes that these assumptions were reasonable when made, because
these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible
to predict and are beyond the Partnership’s control, the
Partnership cannot assure you that it will achieve or accomplish
these expectations, beliefs or projections.
In addition to these important factors, other
important factors that, in the Partnership’s view, could cause
actual results to differ materially from those discussed in the
forward-looking statements include the strength of world economies
and currencies, general market conditions, including fluctuations
in charter rates and vessel values, changes in demand for Liquefied
Natural Gas (LNG) shipping capacity, changes in the Partnership’s
operating expenses, including bunker prices, drydocking and
insurance costs, the market for the Partnership’s vessels,
availability of financing and refinancing, changes in governmental
rules and regulations or actions taken by regulatory authorities,
potential liability from pending or future litigation, general
domestic and international political conditions, potential
disruption of shipping routes due to accidents or political events,
vessel breakdowns and instances of off-hires and other factors.
Please see the Partnership’s filings with the Securities and
Exchange Commission for a more complete discussion of these and
other risks and uncertainties. The information set forth herein
speaks only as of the date hereof, and the Partnership disclaims
any intention or obligation to update any forward-looking
statements as a result of developments occurring after the date of
this communication.
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