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 June 30, 2017.
· Completed the dropdown of the GasLog Greece to GasLog Partners LP (“GasLog Partners” or the “Partnership”) for $219.0 million on May 3, 2017.
· Announced and, post the quarter end, closed the dropdown of the GasLog Geneva to GasLog Partners for $211.0 million. In May 2017, GasLog Partners successfully completed an equity offering of 5,750,000 preference units raising net proceeds of $138.8 million, which were partially used to fund the dropdown of the GasLog Geneva.
· Successfully completed the repurchase of the outstanding NOK bonds maturing in April 2018 at a price of 103.0% of par value for total consideration of NOK 424.4 million ($70.8 million at the swapped rate under the associated cross currency swaps (“CCS”)).
· Prepaid $150.0 million of the junior tranche of the credit agreement entered into in February 18, 2016 (the “Five Vessel Refinancing”), originally due in April 2018.
· The Front-End Engineering and Design (“FEED”) study for the Alexandroupolis floating storage regasification unit (“FSRU”) project in Greece is underway and is expected to be completed in the third quarter.
· Revenues of $129.9 million (Q2 2016: $114.5 million), Profit of $6.9 million (Q2 2016: $3.3 million) and Loss per share of $0.12(1) (Q2 2016: loss per share of $0.13), for the quarter ended June 30, 2017.
· Adjusted Profit(2) of $14.4 million (Q2 2016: $12.9 million), EBITDA(2) of $87.4 million (Q2 2016: $73.2 million), Adjusted EBITDA(2) of $87.4 million (Q2 2016: $73.7 million) and Adjusted Loss per share(2) of $0.03(1) (Q2 2016: Adjusted Loss per share of $0.01) for the quarter ended June 30, 2017.
· Quarterly dividend of $0.14 per common share payable on August 24, 2017.
(1) Earnings/Loss per share (“EPS”) and Adjusted EPS are net of the profit attributable to the non-controlling interest of $14.4 million and the dividend on preferred stock of $2.5 million for the quarter ended June 30, 2017 ($11.2 million and $2.5 million, respectively, for the quarter ended June 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 definition and reconciliation 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 had a stronger quarter with record revenues as a result of high uptime across our chartered fleet and improving earnings on our spot vessels.
Since the end of the first quarter, we have completed the dropdown of the GasLog Greece and announced and completed the dropdown of the GasLog Geneva to GasLog Partners. These two transactions show our continued ability to recycle liquidity from the Partnership to GasLog, which we can then use to repay debt and grow our business.
Towards the end of the quarter, we repurchased the outstanding 2018 Norwegian bond meaning that GasLog now has no material debt maturities until 2019. With the increased dropdown activity, improving spot rates, a growing fleet and largely amortising debt, we expect the Company’s leverage to continue to fallthrough 2017 and beyond.
We continue to make progress with our FSRU strategy where we are actively involved in a number of projects. In particular, the FEED study for the Alexandroupolis project in Greece, should be completed later in the third quarter. As a shareholder of Gastrade S.A. (“Gastrade”), we are advancing discussions with potential off-takers, with both the Greek and Bulgarian national energy companies expected to play a major role. We expect Gastrade to take a final investment decision in early 2018.
In the short-term market, spot rates continue to be low. However, we are seeing a return to a more seasonal market pattern as well as round-trip economics on many spot charters, both of which suggest a tightening shipping market. With five vessels currently trading in the spot market through The Cool Pool Limited (the “Cool Pool”), we continue to have significant upside to an improvement in this market. We expect that increased LNG supply and demand, coupled with historically low new vessel orders, should lead to an upturn in the LNG shipping market, from which GasLog is very well positioned to benefit.”
Amendment of the GasLog Skagen Seasonal Charter Party Agreement
On April 28, 2017, the Group signed an amendment to the GasLog Skagen seasonal time charter agreement, pursuant to which the seasonal charter of the vessel was replaced by a continuous time charter for a duration of 2.4 years ending in August 2019. The amended continuous charter will cover the same total number of fixed days as the previous seasonal charter and will eliminate redelivery risk at the beginning and end of each seasonal period. In addition, the amended charter will provide assurance of fixed revenues through August 2019.
Completion of GasLog Partners’ Preference Units Equity Offering and Dropdown of the GasLog Geneva
On May 15, 2017, GasLog Partners completed a public offering of 5,750,000 8.625% Series A Cumulative Redeemable Perpetual Fixed to Floating Rate Preference Units (the “Partnership’s Series A Preference Units”) (including 750,000 units issued upon the exercise in full by the underwriters of their option to purchase additional Partnership’s Series A Preference Units), liquidation preference $25.00 per unit, at a price to the public of $25.00 per preference unit. The gross proceeds of the offering were $143.8 million and the net proceeds after deducting underwriting discounts, commissions and other offering expenses were $138.8 million. The Series A Preference Units are listed on the New York Stock Exchange under the symbol “GLOP PR A”. The initial distribution on the Series A Preference Units will be payable on September 15, 2017. A portion of the proceeds from the public offering were used to partially finance the acquisition from GasLog 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. The acquisition closed on July 3, 2017.
Commencement of GasLog Partners’ “At-The-Market” Common Equity Offering Programme (“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. From establishment of the ATM Programme through June 30, 2017, GasLog Partners issued and received payment for 410,877 common units at a weighted average price of $22.68 per common unit for total net proceeds of $8.8 million, after broker commissions of $0.2 million and other expenses of $0.3 million. In the period from July 1, 2017 through July 6, 2017, GasLog Partners issued and received payment for an additional 94,367 common units at a weighted average price of $22.91 per unit for net proceeds of $2.1 million, after broker commissions of $0.03 million. The issuance of these units fulfilled contractual commitments entered into on or before June 30, 2017.
On April 5, 2017, GasLog used $150.0 million of the proceeds from the offering of the 8.875% senior unsecured notes due in 2022 (the “8.875% Senior Notes”) issued in March 2017 to prepay partially borrowings outstanding under the junior tranche of the Five Vessel Refinancing, originally due in April 2018.
On June 27, 2017, GasLog completed the repurchase of the outstanding NOK bonds maturing in April 2018, at a price of 103.0% of par value for total consideration of NOK 424.4 million ($70.8 million at the swapped rate under the associated CCS).
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”).
End of GasLog Partners’ Subordination Period
On May 16, 2017, the subordination period of the GasLog Partners’ subordinated units held by GasLog expired and consequently all 9,822,358 subordinated units of GasLog Partners converted into common units of GasLog Partners on a one-for-one basis and now participate pro rata with all other outstanding common units in distributions of available cash.
On May 4, 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 July 3, 2017 to holders of record as of June 30, 2017. GasLog paid the declared dividend to the transfer agent on July 3, 2017.
On August 2, 2017, the board of directors declared a quarterly cash dividend of $0.14 per common share, or $11.3 million in aggregate, payable on August 24, 2017 to shareholders of record as of August 14, 2017.