GasLog Ltd. and its subsidiaries, an international owner, operator and manager of liquefied natural gas (“LNG”) carriers, reported its financial results for the quarter ended September 30, 2017.
· Completed the dropdown of the GasLog Geneva to GasLog Partners LP (“GasLog Partners” or the “Partnership”) for $211.0 million on July 3, 2017.
· Announced and, post the quarter end, closed the dropdown of the Solaris to GasLog Partners for $185.9 million.
· Completion by Gastrade S.A. (“Gastrade”) of the Front-End Engineering and Design (“FEED”) study for the Alexandroupolis floating storage regasification unit (“FSRU”) project in Greece. DEPA, the government controlled natural gas company of Greece, has announced that it intends to acquire a shareholding interest in Gastrade.
· Continued success of the GasLog Partners’ At-The-Market Common Equity Offering Programme (“ATM Programme”) with net proceeds of $43.9 million raised during the quarter and total net proceeds of $55.7 million raised since inception of the programme.
· Appointment of Richard Sadler in the position of Chief Operating Officer (“COO”) with effect from September 20, 2017.
· Revenues of $131.2 million (Q3 2016: $120.7 million), Profit of $24.2 million (Q3 2016: $16.4 million loss) and Earnings per share of $0.03(1) (Q3 2016: loss per share of $0.39), for the quarter ended September 30, 2017.
· EBITDA(2) of $89.6 million (Q3 2016: $80.8 million), Adjusted EBITDA(2) of $89.7 million (Q3 2016: $81.1 million), Adjusted Profit(2) of $21.1 million (Q3 2016: $19.5 million) and Adjusted Loss per share(2) of $0.00(1) (Q3 2016: Adjusted Earnings per share of $0.05) for the quarter ended September 30, 2017.
· Quarterly dividend of $0.14 per common share payable on November 22, 2017.
(1) Earnings/Loss per share (“EPS”) and Adjusted EPS are net of the profit attributable to the non-controlling interest of $18.9 million and the dividend on preferred stock of $2.5 million for the quarter ended September 30, 2017 ($12.6 million and $2.5 million, respectively, for the quarter ended September 30, 2016).
(2) EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS are non-GAAP financial measures and should not be used in isolation or as a substitute for GasLog’s financial results presented in accordance with International Financial Reporting Standards (“IFRS”). For definitions and reconciliations of these measures to the most directly comparable financial measures calculated and presented in accordance with IFRS, please refer to Exhibit II at the end of this press release.
Paul Wogan, Chief Executive Officer, stated: “GasLog achieved record revenues and EBITDA in the quarter as a result of high uptime across our chartered fleet and a gradual improvement in the earnings on our spot vessels.
During the quarter, we completed the sale of the GasLog Geneva to GasLog Partners and we announced the dropdown of the Solaris, the third dropdown this year. Post the quarter end, we closed the dropdown of the Solaris. These transactions demonstrate our continued ability to recycle liquidity from the Partnership to GasLog, which we can then use to grow our LNG carrier and FSRU businesses.
We continue to make good progress on the Alexandroupolis LNG Terminal in Greece, where DEPA has signed a Cooperation Agreement for its participation in the project, which is being developed by Gastrade. The Agreement also includes next steps for DEPA to participate in the share capital of Gastrade.
In recent weeks, a number of positive data points suggest that LNG shipping market fundamentals are improving. The increase in LNG supply from both the United States (“U.S.”) and Australia is creating greater shipping activity, as the additional supply is being matched by rising demand, particularly in Asia and Europe. In contrast to recent years, the “shoulder months” of September and October have seen strong LNG demand and increasing prices in Japan, South Korea and China. We expect that the re-emergence of significant gas price differentials between the U.S., Europe and Asia will stimulate more inter-basin trade and will result in longer average voyage distances, which is positive for LNG shipping.
In the short-term LNG shipping market, spot rates have been consistently higher in 2017 than in 2016 as an increasing number of fixtures have led to higher utilisation, a return of round trip economics and an increase in customers looking for multi-month charters. We expect this trend to continue and strengthen as we enter the Northern Hemisphere winter.
With five vessels currently trading in the spot market through The Cool Pool Limited (the “Cool Pool”) and with five newbuild vessels scheduled to be delivered in 2018 and 2019, GasLog has the potential to achieve growth in revenues and EBITDA as a result of organic growth and the improving market environment.”
Completion of Dropdown of the GasLog Geneva
On July 3, 2017, GasLog closed the dropdown to GasLog Partners of 100% of the ownership interest in GAS-thirteen Ltd., the entity that owns the GasLog Geneva, for an aggregate purchase price of $211.0 million, which includes $1.0 million for positive net working capital balances transferred with the vessel.
Announcement and Post-Quarter-End Closing of Dropdown of the Solaris
On September 19, 2017, GasLog entered into a share purchase agreement for the dropdown to GasLog Partners of 100% of the ownership interest in GAS-eight Ltd., the entity that owns the Solaris, for an aggregate purchase price of $185.9 million, which includes $1.0 million for positive net working capital balances transferred with the entity. The acquisition closed on October 20, 2017.
GasLog Partners’ ATM Programme
On May 16, 2017, GasLog Partners commenced an ATM Programme under which the Partnership may, from time to time, raise equity through the issuance and sale of new common units having an aggregate offering price of up to $100.0 million in accordance with the terms of an equity distribution agreement entered into on the same date. Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC have agreed to act as sales agents.
During the third quarter of 2017, GasLog Partners issued and received payment for 1,941,008 common units at a weighted average price of $22.96 per common unit for total gross proceeds of $44.6 million and net proceeds of $43.9 million, after broker commissions of $0.6 million and other expenses of $0.1 million.
Since the commencement of the ATM Programme through September 30, 2017, GasLog Partners has issued and received payment for a total of 2,351,885 common units, with cumulative gross proceeds of $53.9 million at a weighted average price of $22.91 per unit, representing a discount of 0.6% to the volume weighted average trading price of GasLog Partners’ common units on the days on which new common units were issued. Net proceeds for the same period amounted to $52.7 million.
In the period from October 1, 2017 through October 3, 2017, GasLog Partners issued and received payment for an additional 130,220 common units at a weighted average price of $23.26 per unit for gross proceeds of $3.03 million and net proceeds of $2.99 million, after broker commissions of $0.04 million. The issuance of these units fulfilled contractual commitments entered into on or before September 30, 2017.
On July 3, 2017, GasLog repaid $41.6 million of the revolving credit facility of the credit agreement of up to $1.1 billion entered into on July 19, 2016 (the “Legacy Facility Refinancing”).
Chief Operating Officer Appointment
Following Graham Westgarth’s retirement from his position as Chief Operating Officer (“COO”), GasLog and GasLog Partners announced on August 21, 2017, that Richard Sadler was appointed as COO with effect from September 20, 2017.
On September 14, 2017, the board of directors declared a dividend on the Series A Preference Shares of $0.546875 per share, or $2.5 million in aggregate, payable on October 2, 2017 to holders of record as of September 29, 2017. GasLog paid the declared dividend to the transfer agent on September 29, 2017.
On November 1, 2017, the board of directors declared a quarterly cash dividend of $0.14 per common share, or $11.3 million in aggregate, payable on November 22, 2017 to shareholders of record as of November 13, 2017.