GasLog Partners posts very strong Q4 results

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GasLog Partners LP (“GasLog Partners” or the “Partnership”) (NYSE: GLOP), an international owner and operator of liquefied natural gas (“LNG”) carriers, today reported its financial results for the three-month period ended December 31, 2015.

Partnership Performance(1) Highlights

  • Highest-ever quarterly performance for Revenues, Profit, EBITDA, Adjusted EBITDA and Distributable cash flow.
  • Declared cash distribution of $0.478 per unit for the fourth quarter of 2015, 10% higher than the fourth quarter of 2014 and unchanged from the third quarter of 2015.
  • Reduced total debt by $30.63 million during the fourth quarter of 2015 using cash balances and excess cash flow.
  • EBITDA and Adjusted EBITDA of $38.34 million, 58% and 59% higher, respectively, than the fourth quarter of 2014.
  • Distributable cash flow of $22.55 million, 73% higher than the fourth quarter of 2014.
  • Distribution coverage ratio of 1.43x(2).

(1) “Partnership Performance” represents the results attributable to GasLog Partners which are non-GAAP financial measures. See Note 1 to the Partnership Performance Results table below.
(2) Distribution coverage ratio represents the ratio of distributable cash flow over the cash distribution declared.

CEO Statement

Mr. Andrew Orekar, Chief Executive Officer, commented: “I am delighted by GasLog Partners’ highest-ever quarterly financial results for Revenues(1), Adjusted EBITDA(1)  and Distributable cash flow(1), among other metrics.  This performance highlights the limited impact of lower commodity prices on the Partnership’s stable cash flows, which are generated from multi-year charters with fixed-fee revenues.

For the fourth quarter, GasLog Partners has declared a cash distribution of $0.478 per unit, which is unchanged from the third quarter of 2015 and represents an 18% compound annual growth rate since the Partnership’s initial public offering (“IPO”). This distribution does not come at the expense of coverage; in fact, our coverage ratio of 1.43x for the fourth quarter of 2015 is our strongest quarterly distribution coverage since GasLog Partners’ IPO. 

The Partnership’s fleet of eight LNG carriers is fully financed and generating distributable cash flow well in excess of our distribution. In the fourth quarter, we have reduced debt using our excess cash flow, as doing so is accretive to GasLog Partners’ distributable cash flow on a per unit basis. Our total debt repayment for the quarter was $30.63 million, including $15.0 million of borrowings under our revolving facility with GasLog Ltd. (“GasLog”) that represents our highest cost debt and can be redrawn at any time.  As a reminder, GasLog Partners does not have any future capital commitments for vessel newbuildings or other commercial projects.

We are pleased with the strong performance of GasLog Partners and the continued stability of the Partnership’s cash flows and distributions.”


(1) Represent the results attributable to GasLog Partners which are non-GAAP financial measures. See Note 1 to the Partnership Performance Results table below.

Financial Summary

  Partnership Performance Results(1)  
 

For the three months ended

 

 

For the year ended

 

 
(All amounts expressed in thousands of U.S. dollars)   December 31,
2014
  December 31,
2015
 
% change
  December 31,
2014
  December 31,
2015
 
% change
 
Revenues 33,302 51,953 56% 65,931 168,927 156%
Profit 1,146 20,299 1,671% 14,544 65,040 347%
Adjusted Profit 11,252 20,304 80% 23,842 65,096 173%
EBITDA 24,288 38,339 58% 48,297 122,786 154%
Adjusted EBITDA 24,191 38,344 59% 48,156 122,842 155%
Distributable cash flow 13,028 22,546 73% 27,118 72,310 167%
Cash distributions declared 10,717 15,712 47% 24,086 56,187 133%
(1) “Partnership Performance Results” represent the results attributable to GasLog Partners. Such results are non-GAAP measures and exclude amounts related to vessels currently owned by the Partnership for the periods prior to their respective transfer to GasLog Partners from GasLog, as the Partnership is not entitled to the cash or results generated in the periods prior to such transfers. Such results are included in the GasLog Partners’ results in accordance with International Financial Reporting Standards (“IFRS”) because the transfer of the vessel owning entities by GasLog to the Partnership represented a reorganization of entities under common control. GasLog Partners believes that these non-GAAP financial measures provide meaningful supplemental information to both management and investors regarding the financial and operating performance of the Partnership because such presentation is consistent with the calculation of the quarterly distribution and the earnings per unit, which similarly excludes the results of vessels prior to their transfer to the Partnership. These non-GAAP financial measures should not be viewed in isolation or as substitutes to the equivalent GAAP measures presented in accordance with IFRS, but should be used in conjunction with the most directly comparable IFRS Common Control Reported Results. For definitions and reconciliations of these measurements to the most directly comparable financial measures presented in accordance with IFRS, please refer to Exhibits II and III at the end of this press release.

The year-on-year increases in the Partnership Performance Results in the fourth quarter are attributable to the additional vessel operating days in our fleet resulting from the acquisitions of the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally on July 1, 2015 from GasLog.

  IFRS Common Control Reported Results(1)  
 

For the three months ended

 

 

For the year ended

 

 
(All amounts expressed in thousands of U.S. dollars)   December 31,
2014
  December 31,
2015
 
% change
  December 31,
2014
  December 31,
2015
 
% change
 
Revenues 51,449 51,953 1% 158,170 199,689 26%
Profit 8,069 20,299 152% 43,646 72,044 65%
Adjusted Profit(2) 18,072 20,304 12% 58,268 72,094 24%
EBITDA(2) 38,181 38,339 0% 119,008 143,473 21%
Adjusted EBITDA(2) 37,982 38,344 1% 118,875 143,523 21%
(1) “IFRS Common Control Reported Results” represent the results of GasLog Partners in accordance with IFRS. Such results include amounts related to vessels currently owned by the Partnership for the periods prior to their respective transfer to GasLog Partners from GasLog, as the transfer of such vessels was accounted for as a reorganization of entities under common control for IFRS accounting purposes. The unaudited condensed combined and consolidated financial statements of the Partnership accompanying this press release are prepared under IFRS on this basis.
(2) Adjusted Profit, EBITDA and Adjusted EBITDA are non-GAAP financial measures. For definitions and reconciliations of these measurements to the most directly comparable financial measures presented in accordance with IFRS, please refer to Exhibit III at the end of this press release.

The year-on-year IFRS Common Control Reported Results for the fourth quarter do not present material fluctuations, with the exception of profit which has significantly increased. The increase in profit derives mainly from the adverse impact on our fourth quarter 2014 results of the $4.81 million loss on interest rate swaps and the $5.76 million of write-off of unamortized loan fees in connection with debt refinancing.

Cash Distribution

On January 27, 2016, the board of directors of GasLog Partners approved and declared a quarterly cash distribution of $0.478 per unit for the quarter ended December 31, 2015. The cash distribution is payable on February 12, 2016, to all unitholders of record as of February 8, 2016.

Liquidity and Financing

As of December 31, 2015, we had $60.40 million of cash and cash equivalents.

As of December 31, 2015, we had an aggregate of $748.0 million of indebtedness outstanding under our credit facilities, including $15.0 million outstanding under the Partnership’s revolving credit facility with GasLog. An amount of $328.0 million of outstanding debt is repayable within one year.

As of December 31, 2015, our current assets totaled $70.36 million while current liabilities totaled $353.09 million, resulting in a negative working capital position of $282.73 million. Current liabilities include $328.0 million of loans due within one year, $305.50 million of which we are currently discussing to refinance, with the balance of $22.50 million representing scheduled amortization of other indebtedness. We have entered into an underwritten agreement with certain financial institutions to refinance our current debt and syndication is progressing. We expect to execute definitive documentation well in advance of the maturity of all associated existing indebtedness.

Other than the refinancing requirements noted above, and taking into account generally expected market conditions, we anticipate that cash flow generated from operations will be sufficient to fund our operations, including our working capital requirements, and to make the required principal and interest payments on our indebtedness during the next 12 months.

Depending on market conditions, we may use derivative financial instruments to reduce the risks associated with fluctuations in interest rates. We expect over time to economically hedge a material proportion of our exposure to interest rate fluctuations by entering into new interest rate swap contracts. As of December 31, 2015, the Partnership had no interest rate swaps.

LNG Market Update and Outlook

In 2016, we expect projects coming onstream that will have approximately 40 million tonnes of new liquefaction capacity in both Australia and the US. In Australia, Australia Pacific Train 1 (4.5 million tonnes per annum (“mtpa”)) and Gladstone LNG (7.7 mtpa) have shipped their first cargoes in recent weeks and are expected to ramp up production through 2016. Other Australian projects due to start up in 2016 include Gorgon (15.6 mtpa), Australia Pacific Train 2 (4.5 mtpa), Prelude (3.6 mtpa) and Wheatstone (8.9 mtpa). The infrastructure for these projects has now largely been built and the majority of the volumes for these projects have already been sold.

Sabine Pass, one of five US projects under construction, is expected to export its first cargo later in the first quarter of 2016. When construction is completed, Sabine Pass will have a total export capacity of 22.5 mtpa and will be the first US project to export LNG into the global market. The US becoming an exporter of LNG is a welcome development for the LNG shipping sector as it creates new suppliers, new customers and new trade routes. The majority of US volumes have already been contracted with most expected to go into the Asian and European markets. This development will be positive for tonne mile demand as the US Gulf Coast to Asia voyage is approximately 9,000 nautical miles through the Panama Canal (which is not yet open to large LNG carriers). The same voyage around Cape Horn is approximately 13,000 nautical miles. From the US Gulf Coast to northwest Europe, the distance is approximately 5,000 nautical miles. In 2014 and 2015, the average global LNG voyage was approximately 4,000 nautical miles, and thus any voyage in excess of this distance will increase the global average distance and the need for LNG carriers.

Angola LNG (5.2 mtpa), which has been shut down for over a year for refurbishment and enhancements, is also due to restart in early 2016. Certain vessels that were chartered to Angola LNG have been operating in the spot market while the plant has been closed, and are expected to be put back into service for the project in 2016.

With the expected projects coming onstream, we are seeing encouraging levels of tendering activity for vessels to transport increased LNG volumes. We continue to see a future shortfall of vessels that will be required for the Australian and US projects that have taken final investment decision and are currently under construction.

 

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