Dynagas LNG Partners LP (NYSE: “DLNG”) (“Dynagas Partners” or the
“Partnership”), an owner and operator of liquefied natural gas
(“LNG”) carriers, today announced its results for the three and six
months ended June 30, 2021.
Second Quarter Highlights:
- Net income and
earnings per common unit of $9.1 million and $0.17,
respectively;
- Adjusted Net
Income(1)of $10.4 million and Adjusted Earnings per common unit of
$0.20;
- Adjusted
EBITDA(1) $23.6 million;
- 100% fleet
utilization(2);
- Declared and
paid cash distribution of $0.5625 per unit on its Series A
Preferred Units (NYSE: “DLNG PR A”) for the period from February
12, 2021 to May 11, 2021 and $0.546875 per unit on the Series B
Preferred Units (NYSE: “DLNG PR B”) for the period from February
22, 2021 to May 21, 2021;
- Sold $2.15
million of common units at an average price per unit of $2.8769
pursuant to the Partnership’s Amended & Restated Sales
Agreement, which had $26.5 million of remaining availability as of
June 30, 2021; and
- Entered into a
new time charter party agreement with Equinor ASA ("Equinor") for
the employment of our LNG carrier Arctic Aurora. Under the new time
charter agreement, the Arctic Aurora is expected to be delivered to
Equinor in September 2021 in direct continuation of the current
charter party with Equinor, meaning there will be no lapse of time
between the current and the new time charter. The term ‘in direct
continuation’ does not refer to the contracted income.
Subsequent Events:
- Declared a
quarterly cash distribution of $0.5625 on the Series A Preferred
Units for the period from May 12, 2021 to August 11, 2021, which
was paid on August 12, 2021 to all preferred Series A unit holders
of record as of August 5, 2021;
- Declared a
quarterly cash distribution of $0.546875 on the Series B Preferred
Units for the period from May 22, 2021 to August 21, 2021, which
was paid on August 23, 2021 to all preferred Series B unit holders
of record as of August 16, 2021.
(1) Adjusted EBITDA, Adjusted
Net Income, and Adjusted Earnings per common unit are not
recognized measures under U.S. GAAP. Please refer to Appendix B of
this press release for the definitions and reconciliation of these
measures to the most directly comparable financial measures
calculated and presented in accordance with U.S. GAAP and other
related information.(2) Please refer to Appendix
B.
CEO Commentary:
We are pleased to report the results for the
three months period ended June 30, 2021.
All six LNG carriers in our fleet are operating
under their respective long-term charters with international gas
producers with an average remaining contract term of 7.4 years.
As of September 7, 2021, our estimated
contracted revenue backlog is approximately $1.09 billion. We were
pleased to announce on April 21, 2021 a new two-year charter for
the Arctic Aurora with Equinor, which has had the ice classed 1A
and winterized vessel on continuous charter since her delivery from
builders in 2013. After securing the charter for the Arctic Aurora
with Equinor, and barring any unforeseen events, the earliest
contracted re-delivery date for any of our six LNG carriers is in
the third quarter of 2023 (the Arctic Aurora), with the next
carrier (the Clean Energy) becoming available for re-chartering in
the first quarter of 2026.
For the second quarter of 2021, we reported Net
Income of $9.1 million, earnings per common unit of $0.17, Adjusted
Net Income of $10.4 million, Adjusted Earnings per common unit of
$0.20 and Adjusted EBITDA of $23.6 million.
The COVID19 outbreak is still causing
operational and logistical challenges for the industry. Despite
these challenges, we are pleased to report 100% utilization for our
fleet for the second quarter of 2021.
Going forward, we intend to continue our
strategy of using our cash flow generation to deleverage our
balance sheet and reinforce our liquidity so as to build equity
value over time. This, we believe, will enhance our ability to
pursue future growth initiatives.
Financial Results Overview:
|
Three Months Ended |
|
Six Months Ended |
(U.S. dollars in thousands, except per unit
data) |
|
June 30, 2021 (unaudited) |
|
June 30, 2020 (unaudited) |
|
|
June 30, 2021 (unaudited) |
|
June 30, 2020 (unaudited) |
Voyage revenues |
$ |
33,929 |
$ |
33,913 |
|
$ |
67,377 |
$ |
68,384 |
Net Income |
$ |
9,115 |
$ |
6,427 |
|
$ |
24,980 |
$ |
13,394 |
Adjusted Net Income (1) |
$ |
10,375 |
$ |
9,885 |
|
$ |
20,939 |
$ |
16,958 |
Operating income |
$ |
15,316 |
$ |
16,157 |
|
$ |
31,079 |
$ |
31,869 |
Adjusted EBITDA(1) |
$ |
23,635 |
$ |
24,131 |
|
$ |
47,495 |
$ |
47,870 |
Earnings per common unit |
$ |
0.17 |
$ |
0.10 |
|
$ |
0.53 |
$ |
0.21 |
Adjusted Earnings per common
unit (1) |
$ |
0.20 |
$ |
0.20 |
|
$ |
0.42 |
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
(1) Adjusted Net Income, Adjusted EBITDA, and
Adjusted Earnings per common unit are not recognized measures under
U.S. GAAP. Please refer to Appendix B of this press release for the
definitions and reconciliation of these measures to the most
directly comparable financial measures calculated and presented in
accordance with U.S. GAAP.
Three Months Ended June 30, 2021 and
2020 Financial Results
Net Income for the three months ended June 30,
2021 was $9.1 million as compared to a Net Income of $6.4 million
in the corresponding period in 2020, which represents an increase
of $2.7 million, or 42.2%. This increase was mainly attributable to
the decrease in finance costs as well as to the decrease in loss on
our interest rate swap transaction entered into in May 2020, which
were slightly offset by the increase in operating and general and
administrative expenses as compared to the corresponding period in
2020.
Adjusted Net Income for the three months ended
June 30, 2021 was $10.4 million compared to $9.9 million in the
corresponding period in 2020, representing a net increase of $0.5
million or 5.1%, mainly due to the net effect of the decrease in
finance costs and the increase in operating and general and
administrative expenses as compared to the corresponding period in
2020.
Voyage revenues for both the three months ended
June 30, 2021 and the three months ended June 30, 2020 were $33.9
million.
The Partnership reported average daily hire
gross of commissions(1) of approximately $62,440 per day per vessel
in the three-month period ended June 30, 2021, compared to
approximately $62,200 per day per vessel in the corresponding
period in 2020. During both three-month periods ended June 30, 2021
and 2020, the Partnership’s vessels operated at 100%
utilization.
Vessel operating expenses were $7.6 million,
which corresponds to daily operating expenses per vessel of $13,945
in the three-month period ended June 30, 2021, as compared to $6.9
million, or daily operating expenses per vessel of $12,630 in the
corresponding period in 2020. This increase is mainly attributable
to higher crewing and supply costs in the three-month period ended
June 30, 2021 as compared to the corresponding period in 2020, due
to the effects of the outbreak of the Covid-19 pandemic.
Adjusted EBITDA for the three months ended June
30, 2021 was $23.6 million, as compared to $24.1 million for the
corresponding period in 2020. The decrease of $0.5 million, or
2.1%, was mainly due to the increase in operating and general and
administrative expenses as explained above.
Interest and finance costs, net, were $5.4
million in the three months ended June 30, 2021 as compared to $6.3
million in the corresponding period in 2020, which represents a
decrease of $0.9 million, or 14.3% due to the lower weighted
average interest and the reduction in the average interest bearing
debt as compared to the corresponding period in 2020.
For the three months ended June 30, 2021, the
Partnership reported Earnings per common unit and Adjusted Earnings
per common unit, basic and diluted, of $0.17 and $0.20
respectively, after taking into account the distributions relating
to the Series A Preferred Units and the Series B Preferred Units on
the Partnership’s Net income/Adjusted Net Income. Earnings per
common unit and Adjusted Earnings per common unit, basic and
diluted, are calculated on the basis of a weighted average number
of 36,661,237 common units outstanding during the period and in the
case of Adjusted Earnings per common unit after reflecting the
impact of the non-cash items presented in Appendix B of this press
release.
Adjusted Net Income, Adjusted EBITDA and
Adjusted Earnings per common unit are not recognized measures under
U.S. GAAP. Please refer to Appendix B of this press release for the
definitions and reconciliation of these measures to the most
directly comparable financial measures calculated and presented in
accordance with U.S. GAAP.
Amounts relating to variations in
period–on–period comparisons shown in this section are derived from
the condensed financials presented below.
(1) Average daily hire gross of commissions
represents voyage revenue excluding the non-cash time charter
deferred revenue amortization, divided by the Available Days in the
Partnership’s fleet as described in Appendix B.
Liquidity/ Financing/ Cash Flow
Coverage
During the three months ended June 30, 2021, the
Partnership generated net cash from operating activities of $15.8
million as compared to $8.1 million in the corresponding period in
2020, which represents an increase of $7.7 million, or 95.1%.
As of June 30, 2021, the Partnership reported
total cash of $86.8 million (including $50.0 million of restricted
cash). The Partnership’s outstanding indebtedness as of June 30,
2021 under the $675.0 Million Credit Facility amounted to $591.0
million, gross of unamortized deferred loan fees and including
$48.0 million, which were repayable within one year.
During the three months ended June 30, 2021, the
Partnership sold $2.15 million of common units at an average price
per unit of $2.8769 pursuant to the amended and restated ATM Sales
Agreement entered into in August 2020, for the offer and sale of
common units representing limited partnership interests, having an
aggregate offering amount of up to $30.0 million (the “Current ATM
Program”). Following these sales, the Current ATM Program had $26.5
million of remaining availability and the Partnership has
36,802,247 units issued and outstanding, as of June 30, 2021.
As of June 30, 2021, the Partnership had unused
availability of $30.0 million under its interest free $30.0 million
revolving credit facility with its Sponsor, or the $30.0 Million
Revolving Credit Facility, which was extended on November 14, 2018,
and is available to the Partnership at any time until November
2023.
Vessel Employment
As of September 7, 2021, the Partnership had
estimated contracted time charter coverage(1) for 100% of its fleet
estimated Available Days (as defined in Appendix B) for 2021, 100%
of its fleet estimated Available Days for 2022 and 95% of its fleet
estimated Available Days for 2023.
As of the same date, the Partnership’s estimated
contracted revenue backlog (2) (3) was $1.09 billion, with an
average remaining contract term of 7.4
years.
(1) Estimated Time charter coverage for the
Partnership’s fleet is calculated by dividing the fleet contracted
days on the basis of the earliest estimated delivery and redelivery
dates prescribed in the Partnership’s current time charter
contracts, net of scheduled class survey repairs by the number of
expected Available Days during that period. Actual time charter
coverage may vary.
(2) The Partnership calculates its estimated
contracted revenue backlog by multiplying the contractual daily
hire rate by the expected number of days committed under the
contracts (assuming earliest delivery and redelivery and excluding
options to extend), assuming full utilization. The actual amount of
revenues earned and the actual periods during which revenues are
earned may differ from the amounts and periods disclosed due to,
for example, dry-docking and/or special survey downtime,
maintenance projects, off-hire downtime and other factors that
result in lower revenues than the Partnership’s average contract
backlog per day.
(3) $0.15 billion of the revenue backlog
estimate relates to the estimated portion of the hire contained in
certain time charter contracts with Yamal which represents the
operating expenses of the respective vessels and is subject to
yearly adjustments on the basis of the actual operating costs
incurred within each year. The actual amount of revenues earned in
respect of such variable hire rate may therefore differ from the
amounts included in the revenue backlog estimate due to the yearly
variations in the respective vessels’ operating costs.
Conference Call and Webcast:
As announced, the Partnership’s management team
will host a conference call on September 8, 2021 at 10:00 a.m.
Eastern Time to discuss the Partnership’s financial results.
Conference Call details:
Participants should dial into the call 10
minutes before the scheduled time using the following numbers: 1
(877) 553-9962 (US Toll Free Dial In), 0(808) 238-0669 (UK Toll
Free Dial In) or +44 (0) 2071 928592 (Standard International Dial
In). Please quote "Dynagas."
To listen to the archived audio file, visit our
website http://www.dynagaspartners.com and click on Webcasts under
our Investor Relations page. The audio replay of the conference
call will remain available until Tuesday, September 14, 2021.
Audio Webcast - Slides
Presentation:
There will be a live and then archived audio
webcast of the conference call, via the internet through the
Dynagas LNG Partners website www.dynagaspartners.com.Participants
to the live webcast should register on the website approximately 10
minutes prior to the start of the webcast.
The slide presentation on the second quarter
ended June 30, 2021 financial results will be available in PDF
format 10 minutes prior to the conference call and webcast,
accessible on the company's website www.dynagaspartners.com on the
webcast page. Participants to the webcast can download the PDF
presentation. None of the information contained in or that forms a
part of the Partnership’s conference calls, website or audio
webcasts is part of this release.
About
Dynagas
LNG
Partners
LP
Dynagas LNG Partners LP. (NYSE: DLNG) is a
master limited partnership which owns and operates liquefied
natural gas (LNG) carriers employed on multi-year charters. The
Partnership’s current fleet consists of six LNG carriers, with
aggregate carrying capacity of approximately 914,000 cubic
meters.
Visit the Partnership’s website at
www.dynagaspartners.com
Contact Information:Dynagas LNG
Partners LP Attention: Michael Gregos Tel. +30 210 8917960 Email:
management@dynagaspartners.com
Investor Relations / Financial Media: Nicolas
Bornozis Markella KaraCapital Link, Inc. 230 Park Avenue, Suite
1536 New York, NY 10169 Tel. (212) 661-7566 E-mail:
dynagas@capitallink.com
Forward-Looking Statements
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,” “project”, “will”, “may,” “should,” “expect,”
“expected,” “pending” and similar expressions identify
forward-looking statements. These forward-looking are not intended
to give any assurance as to future results and should not be relied
upon.
The forward-looking statements in this press
release are based upon various assumptions and estimates, 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, expressed
or implied, in the forward-looking statements include, but are not
limited to, the strength of world economies and currency
fluctuations, general market conditions, including fluctuations in
charter rates, ownership days, and vessel values, changes in supply
and 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 laws, rules and regulations or actions
taken by regulatory authorities, economic, regulatory, political
and governmental conditions that affect the shipping and the LNG
industry, potential liability from pending or future litigation,
and potential costs due to environmental damage and vessel
collisions, general domestic and international political
conditions, potential disruption of shipping routes due to
accidents or political events, vessel breakdowns, instances of
off-hires, the length and severity of the COVID-19 outbreak, the
impact of public health threats and outbreaks of other highly
communicable diseases, the impact of the expected discontinuance of
the London Interbank Offered Rate, or, LIBOR, after 2021 on
interest rates of our debt that reference LIBOR, the amount of cash
available for distribution, 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.
APPENDIX A
DYNAGAS LNG PARTNERS
LPCondensed Consolidated Statements of
Income
(In thousands of U.S. dollars
except units and per unit data) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021(unaudited) |
|
2020(unaudited) |
|
2021(unaudited) |
|
2020(unaudited) |
REVENUES |
|
|
|
|
|
|
|
|
Voyage revenues |
$ |
33,929 |
|
$ |
33,913 |
|
$ |
67,377 |
|
$ |
68,384 |
|
EXPENSES |
|
|
|
|
|
|
|
|
Voyage expenses (including
related party) |
|
(689 |
) |
|
(709 |
) |
|
(1,370 |
) |
|
(1,610 |
) |
Vessel operating expenses |
|
(7,614 |
) |
|
(6,896 |
) |
|
(14,493 |
) |
|
(14,470 |
) |
General and administrative
expenses (including related party) |
|
(902 |
) |
|
(566 |
) |
|
(1,723 |
) |
|
(1,265 |
) |
Management fees -related
party |
|
(1,502 |
) |
|
(1,679 |
) |
|
(2,987 |
) |
|
(3,358 |
) |
Depreciation |
|
(7,906 |
) |
|
(7,906 |
) |
|
(15,725 |
) |
|
(15,812 |
) |
Operating
income |
|
15,316 |
|
|
16,157 |
|
|
31,079 |
|
|
31,869 |
|
Interest and finance costs,
net |
|
(5,354 |
) |
|
(6,340 |
) |
|
(10,831 |
) |
|
(15,100 |
) |
Gain/ (Loss) on derivative
instruments |
|
(800 |
) |
|
(3,352 |
) |
|
4,763 |
|
|
(3,352 |
) |
Other, net |
|
(47 |
) |
|
(38 |
) |
|
(31 |
) |
|
(23 |
) |
|
|
|
|
|
|
|
|
|
Net
income |
$ |
9,115 |
|
$ |
6,427 |
|
$ |
24,980 |
|
$ |
13,394 |
|
Earnings per common
unit (basic and diluted) |
$ |
0.17 |
|
$ |
0.10 |
|
$ |
0.53 |
|
$ |
0.21 |
|
Weighted average
number of units outstanding, basic and diluted: |
|
|
|
|
|
|
|
|
Common units |
|
36,661,237 |
|
|
35,490,000 |
|
|
36,201,051 |
|
|
35,490,000 |
|
DYNAGAS LNG PARTNERS LP
Consolidated Condensed Balance
Sheets(Expressed in thousands of U.S.
Dollars—except for unit data)
|
|
June 30,2021 (unaudited) |
|
December 31,2020(audited) |
ASSETS: |
|
|
|
|
Cash and cash equivalents and restricted cash (current and
non-current) |
$ |
86,781 |
$ |
74,979 |
|
Derivative financial
instrument (current and non-current) |
|
4,008 |
|
— |
|
Due from related party
(current and non-current) |
|
1,350 |
|
1,350 |
|
Other current assets |
|
6,650 |
|
2,141 |
|
Vessels, net |
|
869,175 |
|
884,900 |
|
Other non-current assets |
|
1,668 |
|
2,467 |
|
Total
assets |
$ |
969,632 |
$ |
965,837 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Total long-term debt, net of
deferred financing costs |
$ |
584,843 |
$ |
607,681 |
|
Total other current
liabilities |
|
20,641 |
|
14,092 |
|
Derivative financial
instrument (current and non-current) |
|
1,332 |
|
2,666 |
|
Due to related party (current
and non-current) |
|
618 |
|
1,706 |
|
Total other non-current
liabilities |
|
3,212 |
|
3,199 |
|
Total
liabilities |
$ |
610,646 |
$ |
629,344 |
|
|
|
|
|
|
PARTNERS’
EQUITY |
|
|
|
|
General partner (35,526 units
issued and outstanding as at June 30, 2021 and December 31,
2020) |
|
14 |
|
(5 |
) |
Common unitholders (36,802,247
and 35,612,580 units issued and outstanding as at June 30, 2021 and
December 31, 2020) |
|
232,258 |
|
209,784 |
|
Series A Preferred
unitholders: (3,000,000 units issued and outstanding as at June 30,
2021 and December 31, 2020) |
|
73,216 |
|
73,216 |
|
Series B Preferred
unitholders: (2,200,000 units issued and outstanding as at June 30,
2021 and December 31, 2020) |
|
53,498 |
|
53,498 |
|
Total partners’
equity |
$ |
358,986 |
$ |
336,493 |
|
|
|
|
|
|
Total liabilities and
partners’ equity |
$ |
969,632 |
$ |
965,837 |
|
DYNAGAS LNG PARTNERS LP
Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. Dollars)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Cash flows from Operating Activities: |
|
|
|
|
|
|
|
|
Net income: |
$ |
9,115 |
|
$ |
6,427 |
|
$ |
24,980 |
|
$ |
13,394 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
7,906 |
|
|
7,906 |
|
|
15,725 |
|
|
15,812 |
|
Amortization and write-off of deferred financing fees |
|
577 |
|
|
636 |
|
|
1,162 |
|
|
1,287 |
|
Deferred revenue amortization |
|
166 |
|
|
52 |
|
|
330 |
|
|
104 |
|
Amortization and write-off of deferred charges |
|
294 |
|
|
54 |
|
|
392 |
|
|
108 |
|
(Gain)/ Loss on derivative financial instrument |
|
800 |
|
|
3,352 |
|
|
(4,763 |
) |
|
3,352 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable |
|
51 |
|
|
352 |
|
|
338 |
|
|
(577 |
) |
Prepayments and other assets |
|
(96 |
) |
|
269 |
|
|
(317 |
) |
|
(481 |
) |
Inventories |
|
26 |
|
|
(15 |
) |
|
(30 |
) |
|
(67 |
) |
Due from/ to related parties |
|
(726 |
) |
|
(4,979 |
) |
|
(1,088 |
) |
|
(3,730 |
) |
Deferred charges |
|
(9 |
) |
|
(181 |
) |
|
(9 |
) |
|
(181 |
) |
Trade accounts payable |
|
(515 |
) |
|
(1,461 |
) |
|
712 |
|
|
(934 |
) |
Accrued liabilities |
|
151 |
|
|
(178 |
) |
|
40 |
|
|
(311 |
) |
Unearned revenue |
|
(1,914 |
) |
|
(4,132 |
) |
|
1,296 |
|
|
(940 |
) |
Net cash from Operating Activities |
|
15,826 |
|
|
8,102 |
|
|
38,768 |
|
|
26,836 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
Investing Activities |
|
|
|
|
|
|
|
|
Vessel acquisitions and other
additions to vessels’ cost |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Net cash used in
Investing Activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common units, net
of issuance costs |
|
2,114 |
|
|
— |
|
|
3,407 |
|
|
|
|
Payment of securities
registration and other filing costs |
|
(13 |
) |
|
— |
|
|
(13 |
) |
|
— |
|
Distributions declared and paid |
|
(2,890 |
) |
|
(2,891 |
) |
|
(5,781 |
) |
|
(5,781 |
) |
Repayment of long-term debt |
|
(12,000 |
) |
|
(12,000 |
) |
|
(24,000 |
) |
|
(24,000 |
) |
Payment of derivative instruments |
|
(334 |
) |
|
— |
|
|
(579 |
) |
|
|
|
Net cash used in Financing Activities |
|
(13,123 |
) |
|
(14,891 |
) |
|
(26,966 |
) |
|
(29,781 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) /
increase in cash and cash equivalents and restricted
cash |
|
2,703 |
|
|
(6,789 |
) |
|
11,802 |
|
|
(2,945 |
) |
Cash and cash equivalents and
restricted cash at beginning of the period |
|
84,078 |
|
|
70,050 |
|
|
74,979 |
|
|
66,206 |
|
Cash and cash
equivalents and restricted cash at end of the period |
$ |
86,781 |
|
$ |
63,261 |
|
$ |
86,781 |
|
$ |
63,261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPENDIX B
Fleet statistics
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(expressed in United states dollars except for operational
data) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Number of vessels at the end
of period |
|
6 |
|
|
6 |
|
|
6 |
|
|
6 |
|
Average number of vessels in
the period (1) |
|
6 |
|
|
6 |
|
|
6 |
|
|
6 |
|
Calendar Days (2) |
|
546.0 |
|
|
546.0 |
|
|
1086.0 |
|
|
1,092.0 |
|
Available Days (3) |
|
546.0 |
|
|
546.0 |
|
|
1086.0 |
|
|
1,092.0 |
|
Revenue earning days (4) |
|
546.0 |
|
|
546.0 |
|
|
1086.0 |
|
|
1,086.7 |
|
Time Charter Equivalent
(5) |
$ |
60,879 |
|
$ |
60,813 |
|
$ |
60,780 |
|
$ |
61,148 |
|
Fleet Utilization (4) |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
99.5 |
% |
Vessel daily operating
expenses (6) |
$ |
13,945 |
|
$ |
12,630 |
|
$ |
13,345 |
|
$ |
13,251 |
|
(1) Represents the number of vessels that
constituted the Partnership’s fleet for the relevant period, as
measured by the sum of the number of days that each vessel was a
part of the Partnership’s fleet during the period divided by the
number of Calendar Days (defined below) in the period.
(2) “Calendar Days” are the total days that the
Partnership possessed the vessels in its fleet for the relevant
period.
(3) “Available Days” are the total number of
Calendar Days that the Partnership’s vessels were in its possession
during a period, less the total number of scheduled off-hire days
during the period associated with major repairs, or
dry-dockings.
(4) The Partnership calculates fleet utilization
by dividing the number of its Revenue earning days, which are the
total number of Available Days of the Partnership’s vessels net of
unscheduled off-hire days (which do not include positioning/
repositioning days for which compensation has been received) during
a period by the number of Available Days. The shipping industry
uses fleet utilization to measure a company’s efficiency in finding
employment for its vessels and minimizing the amount of days that
its vessels are off-hire for reasons such as unscheduled repairs
but excluding scheduled off-hires for vessel upgrades, dry-dockings
or special or intermediate surveys.
(5) Time charter equivalent rate (“TCE rate”),
is a measure of the average daily revenue performance of a vessel.
For time charters, this is calculated by dividing total voyage
revenues, less any voyage expenses, by the number of Available Days
during that period. Under a time charter, the charterer pays
substantially all vessel voyage related expenses. However, the
Partnership may incur voyage related expenses when positioning or
repositioning vessels before or after the period of a time charter,
during periods of commercial waiting time or while off-hire during
dry-docking or due to other unforeseen circumstances. The TCE rate
is not a measure of financial performance under U.S. GAAP (non-GAAP
measure), and should not be considered as an alternative to voyage
revenues, the most directly comparable GAAP measure, or any other
measure of financial performance presented in accordance with U.S.
GAAP. However, the TCE rate is a standard shipping industry
performance measure used primarily to compare period-to-period
changes in a company’s performance and to assist the Partnership’s
management in making decisions regarding the deployment and use of
the Partnership’s vessels and in evaluating their financial
performance. The Partnership’s calculation of TCE rates may not be
comparable to that reported by other companies. The following table
reflects the calculation of the Partnership’s TCE rates for the
three and six months ended June 30, 2021 and 2020 (amounts in
thousands of U.S. dollars, except for TCE rates, which are
expressed in U.S. dollars, and Available Days).
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
(In thousands of U.S. dollars,
except for Available Days and TCE rate) |
|
|
|
|
|
|
|
|
Voyage revenues |
$ |
33,929 |
|
$ |
33,913 |
|
$ |
67,377 |
|
$ |
68,384 |
|
Voyage Expenses * |
|
(689 |
) |
|
(709 |
) |
|
(1,370 |
) |
|
(1,610 |
) |
Time Charter
equivalent revenues |
$ |
33,240 |
|
$ |
33,204 |
|
$ |
66,007 |
|
$ |
66,774 |
|
Available Days |
|
546.0 |
|
|
546.0 |
|
|
1,086.0 |
|
|
1,092.0 |
|
Time charter
equivalent (TCE) rate |
$ |
60,879 |
|
$ |
60,813 |
|
$ |
60,780 |
|
$ |
61,148 |
|
*Voyage expenses include commissions of 1.25%
paid to Dynagas Ltd., the Partnership’s Manager, and third party
ship brokers, when defined in the charter parties, bunkers, port
expenses and other minor voyage expenses.
(6) Daily vessel operating expenses, which
include crew costs, provisions, deck and engine stores, lubricating
oil, insurance, spares and repairs and flag taxes, are calculated
by dividing vessel operating expenses by fleet Calendar Days for
the relevant time period.
Reconciliation of U.S. GAAP Financial Information to
Non-GAAP Financial Information
Reconciliation of Net Income to Adjusted
EBITDA
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In thousands of U.S. dollars) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
|
2020 |
Net income |
$ |
9,115 |
|
$ |
6,427 |
|
$ |
24,980 |
|
|
$ |
13,394 |
Net interest and finance costs
(1) |
|
5,354 |
|
|
6,340 |
|
|
10,831 |
|
|
|
15,100 |
Depreciation |
|
7,906 |
|
|
7,906 |
|
|
15,725 |
|
|
|
15,812 |
(Gain)/ Loss on derivative
financial instrument |
|
800 |
|
|
3,352 |
|
|
(4,763 |
) |
|
|
3,352 |
Amortization of deferred
revenue |
|
166 |
|
|
52 |
|
|
330 |
|
|
|
104 |
Amortization and write-off of
deferred charges |
|
294 |
|
|
54 |
|
|
392 |
|
|
|
108 |
Adjusted
EBITDA |
$ |
23,635 |
|
$ |
24,131 |
|
$ |
47,495 |
|
|
$ |
47,870 |
(1) Includes interest and finance costs and interest income, if
any.
The Partnership defines Adjusted EBITDA as
earnings before interest and finance costs, net of interest income
(if any), unrealised gains/losses on derivative financial
instruments, taxes (when incurred), depreciation and amortization
(when incurred), class survey costs and significant non-recurring
items (if any). Adjusted EBITDA is used as a supplemental financial
measure by management and external users of financial statements,
such as investors, to assess the Partnership’s operating
performance.
The Partnership believes that Adjusted EBITDA
assists its management and investors by providing useful
information that increases the ability to compare the Partnership’s
operating performance from period to period and against that of
other companies in its industry that provide Adjusted EBITDA
information. This increased comparability is achieved by excluding
the potentially disparate effects between periods or against
companies of interest, other financial items, depreciation and
amortization and taxes, which items are affected by various and
possible changes in financing methods, capital structure and
historical cost basis and which items may significantly affect net
income between periods. The Partnership believes that including
Adjusted EBITDA as a measure of operating performance benefits
investors in (a) selecting between investing in the Partnership and
other investment alternatives and (b) monitoring the Partnership’s
ongoing financial and operational strength.
Adjusted EBITDA is not intended to and does not
purport to represent cash flows for the period, nor is it presented
as an alternative to operating income. Further, Adjusted EBITDA is
not a measure of financial performance under U.S. GAAP and does not
represent and should not be considered as an alternative to net
income, operating income, cash flow from operating activities or
any other measure of financial performance presented in accordance
with U.S. GAAP. Adjusted EBITDA excludes some, but not all, items
that affect net income and these measures may vary among other
companies. Therefore, Adjusted EBITDA, as presented above, may not
be comparable to similarly titled measures of other businesses
because they may be defined differently by those other businesses.
It should not be considered in isolation or as a substitute for a
measure of performance prepared in accordance with GAAP. Any
Non-GAAP measures should be viewed as supplemental to, and should
not be considered as alternatives to, GAAP measures including, but
not limited to net earnings (loss), operating profit (loss), cash
flow from operating, investing and financing activities, or any
other measure of financial performance or liquidity presented in
accordance with GAAP.
Reconciliation of Net Income to Adjusted Net Income
available to common unitholders and Adjusted Earnings per common
unit
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In thousands of U.S. dollars
except for units and per unit data) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net Income |
$ |
9,115 |
|
|
$ |
6,427 |
|
|
$ |
24,980 |
|
|
$ |
13,394 |
|
Amortization of deferred
revenue |
|
166 |
|
|
|
52 |
|
|
|
330 |
|
|
|
104 |
|
Amortization and write- off of
deferred charges |
|
294 |
|
|
|
54 |
|
|
|
392 |
|
|
|
108 |
|
(Gain)/ Loss on derivative
financial instrument |
|
800 |
|
|
|
3,352 |
|
|
|
(4,763 |
) |
|
|
3,352 |
|
Adjusted Net
Income |
$ |
10,375 |
|
|
$ |
9,885 |
|
|
$ |
20,939 |
|
|
$ |
16,958 |
|
Less: Adjusted Net Income
attributable to preferred unitholders and general partner |
|
(2,898 |
) |
|
|
(2,898 |
) |
|
|
(5,796 |
) |
|
|
(5,792 |
) |
Common unitholders’
interest in Adjusted Net Income |
$ |
7,477 |
|
|
$ |
6,987 |
|
|
$ |
15,143 |
|
|
$ |
11,166 |
|
Weighted average number of
common units outstanding, basic and diluted: |
|
36,661,237 |
|
|
|
35,490,000 |
|
|
|
36,201,051 |
|
|
|
35,490,000 |
|
Adjusted Earnings per
common unit, basic and diluted |
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.42 |
|
|
$ |
0.31 |
|
Adjusted Net Income represents net income before
non-recurring expenses (if any), charter hire amortization related
to time charters with escalating time charter rates, amortization
of fair value of acquired time charters and changes in the fair
value of derivative financial instruments, all of which are
significant non-cash items. Adjusted Net Income available to common
unitholders represents the common unitholders interest in Adjusted
Net Income for each period presented. Adjusted Earnings per common
unit represents Adjusted Net Income attributable to common
unitholders divided by the weighted average common units
outstanding during each period presented.
Adjusted Net Income, Adjusted Net Income per
common unit and Adjusted Earnings per common unit, basic and
diluted, are not recognized measures under U.S. GAAP and should not
be regarded as substitutes for net income and earnings per unit,
basic and diluted. The Partnership’s definitions of Adjusted Net
Income, Adjusted Net Income per common unit and Adjusted Earnings
per common unit, basic and diluted, may not be the same at those
reported by other companies in the shipping industry or other
industries. The Partnership believes that the presentation of
Adjusted Net Income and Adjusted Earnings per unit available to
common unitholders are useful to investors because these measures
facilitate the comparability and the evaluation of companies in the
Partnership’s industry. In addition, the Partnership believes that
Adjusted Net Income is useful in evaluating its operating
performance compared to that of other companies in the
Partnership’s industry because the calculation of Adjusted Net
Income generally eliminates the accounting effects of items which
may vary for different companies for reasons unrelated to overall
operating performance. The Partnership’s presentation of Adjusted
Net Income available to common unitholders and Adjusted Earnings
per common unit does not imply, and should not be construed as an
inference, that its future results will be unaffected by unusual or
non-recurring items and should not be considered in isolation or as
a substitute for a measure of performance prepared in accordance
with GAAP.
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