GasLog Partners LP, an international owner and operator of liquefied natural gas (“LNG”) carriers, reported its financial results for the three-month period ended December 31, 2016.
Post-quarter end, we expect to successfully complete an equity offering and issuance of general partner units on January 27, 2017, raising total net proceeds of $77.06 million.
Successfully completed the acquisition of the GasLog Seattle from GasLog Ltd. (“GasLog”) for $189.0 million, including $1.0 million for positive net working capital, with attached multi-year charter to a subsidiary of Royal Dutch Shell plc (“Shell”).
Increased cash distribution of $0.49 per unit for the fourth quarter of 2016, 3% higher than each of the third quarter of 2016 and the fourth quarter of 2015.
Quarterly Revenue, Profit, Adjusted Profit and EBITDA of $57.91 million, $25.47 million, $21.30 million and $43.15 million, respectively.
Highest-ever quarterly Partnership Performance Results for Revenue, Profit, Adjusted Profit, EBITDA and Distributable cash flow.
Distributable cash flow of $23.54 million, 10% higher than the third quarter of 2016 and 4% higher than the fourth quarter of 2015.
Distribution coverage ratio of 1.20x, or 1.34x prior to the completed equity offering post-quarter end.
Mr. Andrew Orekar, Chief Executive Officer, commented: “Following the successful acquisition of the GasLog Seattle, GasLog Partners delivered our highest-ever quarterly and annual Partnership Performance Results for Revenues, Profit, EBITDA and Distributable cash flow, among other metrics. As a result of this performance, we are increasing our quarterly cash distribution to $0.49 per unit, which represents 11% compound annual growth since our initial public offering. We continue to meet our growth guidance while maintaining conservative distribution coverage.
In the fourth quarter, our general partner sponsor, GasLog, announced several commercial developments that could further enhance the Partnership’s value proposition, including an agreement with a subsidiary of Centrica plc to charter an LNG carrier for seven years and the acquisition of a 20% shareholding in Gastrade S.A., an entity licensed to develop an offshore natural gas system in northern Greece.
Lastly, on January 27, 2017, we expect to successfully complete a follow-on common equity offering, generating $77.06 million of net proceeds and demonstrating GasLog Partners’ continued access to equity capital. We expect 2017 to be another year of growth for GasLog Partners, as our substantial liquidity and dropdown pipeline provide significant visibility for future distribution increases.”
Expected Completion of Equity Offering
On January 27, 2017, we expect that GasLog Partners will complete an equity offering of 3,750,000 common units and will issue 76,531 general partner units to its general partner in order for GasLog to retain its 2.0% general partner interest at a public offering price of $20.50 per unit. The total net proceeds after deducting underwriting discounts and other offering expenses will be $77.06 million.
Acquisition of the GasLog Seattle
On November 1, 2016, GasLog Partners acquired 100% of the shares in the entity that owns and charters the GasLog Seattle from GasLog. The GasLog Seattle is a 155,000 cubic meter tri-fuel diesel electric LNG carrier built in 2013 and operated by GasLog since delivery. The vessel is currently on a multi-year time charter with Shell through December 2020 and Shell has two consecutive 5-year extension options, which if exercised, would extend the charter for a period of either 5 or 10 years.
The aggregate purchase price for the acquisition was $189.0 million, which included $1.0 million for positive net working capital balances transferred with the vessel. GasLog Partners financed the acquisition with cash on hand and the assumption of the GasLog Seattle’s outstanding indebtedness of $122.29 million.
Interest Rate Hedging Agreements
In November 2016, the Partnership entered into three interest rate swap agreements with GasLog at a notional aggregate value of $390.0 million, maturing between 2020 and 2022. As a result of the aforementioned agreements, the Partnership has hedged 47.27% of its floating interest rate exposure on its outstanding debt as of December 31, 2016, at a weighted average interest rate of approximately 1.63% (excluding margin).
Chief Financial Officer Transition
In January 2017, Simon Crowe, GasLog Partners and GasLog’s Chief Financial Officer (“CFO”) informed the board of directors of his intention to step down from the position of CFO in June 2017. As GasLog’s CFO for four years and GasLog Partners’ CFO since its inception, Mr. Crowe has been instrumental in supporting the company’s growth, with a focus on the balance sheet and capital structure. His numerous successful financing activities have put GasLog Partners and GasLog in a strong financial position. A search for Mr. Crowe’s successor is well underway and GasLog Partners and GasLog expect a smooth transition period.
On January 26, 2017, the board of directors of GasLog Partners approved and declared a quarterly cash distribution of $0.49 per unit for the quarter ended December 31, 2016. The cash distribution is payable on February 10, 2017, to all unitholders of record as of February 6, 2017.