GasLog Ltd. and its subsidiaries (“GasLog” or “Group” or “Company”), an international owner, operator and manager of liquefied natural gas (“LNG”) carriers, today reported its unaudited financial results for the quarter and the year ended December 31, 2016.
|·||GasLog was awarded a seven-year charter by a subsidiary of Centrica plc(1), commencing in 2019 and entered into a contract with Samsung Heavy Industries Co. Ltd. (“Samsung”) for the purchase of one 180,000 cubic meters capacity (“cbm”) newbuilding from the shipyard for delivery in the second quarter of 2019.|
|·||Delivery of the GasLog Gibraltar on October 31, 2016, on time and on budget. The vessel has commenced its seven-year charter to a subsidiary of Royal Dutch Shell plc (“Shell”).|
|·||In December 2016, GasLog entered into a sale and purchase agreement (“SPA”) to acquire a twenty percent (20%) shareholding in Gastrade S.A. (“Gastrade”), a private limited company licensed to develop an independent natural gas system offshore Alexandroupolis in Northern Greece utilizing a floating storage and regasification unit (“FSRU”) along with other fixed infrastructure. The acquisition closed on February 9, 2017.|
|·||Keppel Shipyard Limited (“Keppel”) has begun ordering long lead items (“LLIs”) required for the conversion of a GasLog or GasLog Partners LP (“GasLog Partners” or the “Partnership”) LNG carrier to a FSRU.|
|·||Completed the dropdown of the GasLog Seattle to GasLog Partners for $189.0 million.|
|·||Post quarter end, GasLog Partners successfully completed an equity offering of 3,750,000 common units raising net proceeds of $75.5 million.|
|·||Revenues of $126.5 million (Q4 2015: $107.5 million), Profit of $46.4 million (Q4 2015: $18.2 million) and Earnings per share(2) of $0.36 (Q4 2015: $0.04), for the quarter ended December 31, 2016.|
|·||Adjusted Profit(3) of $18.9 million (Q4 2015: $14.0 million), EBITDA(3) of $84.8 million (Q4 2015: $68.0 million), Adjusted EBITDA(3) of $85.4 million (Q4 2015: $69.2 million) and Adjusted Earnings per share(2)(3) of $0.02 (Q4 2015: Adjusted Loss per share of $0.02) for the quarter ended December 31, 2016.|
|·||Quarterly dividend of $0.14 per common share payable on March 16, 2017.|
(1) Pioneer Shipping Limited, a wholly owned subsidiary of Centrica plc (“Centrica”).
(2) Earnings/Loss per share (“EPS”) and Adjusted EPS are negatively affected by the profit attributable to the non-controlling interest of $15.1 million and the dividend on preferred stock of $2.5 million for the quarter ended December 31, 2016 ($12.7 million and $2.5 million, respectively, for the quarter ended December 31, 2015).
(3)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 strong final quarter of the year and despite the market volatility in 2016, continued to execute on its strategy throughout the year.
We signed a seven-year charter with Centrica, a leading European energy company and a new customer for GasLog. We made encouraging progress on our FSRU strategy both through signing a SPA to acquire a 20% interest in Gastrade, a company that is developing a FSRU project in Northern Greece, and securing long-lead items for a FSRU vessel conversion. We took delivery of the GasLog Gibraltar on time and on budget and it immediately commenced a seven-year charter to Shell. Finally, we announced and completed the dropdown of the GasLog Seattle to GasLog Partners, demonstrating the effectiveness of our master limited partnership (“MLP”) as a cost-efficient funding vehicle for GasLog.
Looking forward, we expect to drop down another vessel into GasLog Partners in the first half of 2017, providing GasLog with additional capital. This, along with all the achievements of 2016, places the Company in a strong position to take advantage of opportunities we expect to arise as the LNG shipping market supply and demand balance continues to tighten. We remain confident that 2017 will be a productive year for GasLog and its shareholders.”
Charter Party Agreement with Centrica and Newbuilding Order
In October 2016, GasLog entered into a time charter party agreement with a subsidiary of Centrica for a period of seven years, commencing in 2019. In conjunction with this new charter award, GAS-twenty eight Ltd. entered into a shipbuilding contract with Samsung for the construction of one LNG carrier (180,000 cbm). The vessel is expected to be delivered in the second quarter of 2019.
Delivery of the GasLog Gibraltar
On October 31, 2016, GasLog took delivery of the GasLog Gibraltar, a LNG carrier of 174,000 cbm with tri-fuel diesel electric (“TFDE”) propulsion constructed by Samsung. The vessel is chartered out to Methane Services Limited (“MSL”), a subsidiary of Shell, from delivery until 2023.
Agreement for a FSRU Project with Gastrade
In December 2016, GasLog entered into a SPA to acquire a twenty percent (20%) shareholding in Gastrade, a private limited company licensed to develop an independent natural gas system offshore Alexandroupolis in Northern Greece utilizing a FSRU along with other fixed infrastructure. GasLog, as well as being a shareholder, will provide operations and maintenance (“O&M”) services for the FSRU through an O&M agreement. Gastrade is currently in discussions with a number of additional potential investors, including DEPA, the Greek state owned gas company, Bulgarian Energy Holding (“BEH”), the holding company of the Bulgarian Ministry of Energy and major gas suppliers and targets to take final investment decision (“FID”) by the end of 2017 with the FSRU scheduled to be operational by the end of 2019. The acquisition closed on February 9, 2017.
Order of FSRU LLIs for LNG Carrier Conversion
Keppel, the world’s leading shipyard for FSRU conversions, has begun ordering LLIs required for the FSRU conversion of a GasLog or GasLog Partners LNG carrier. The LLIs will take approximately 12 months to deliver at a total cost of around $16 million. Ordering the LLIs reduces the time necessary to convert an LNG carrier from between 18-20 months to 6-8 months once the LLIs are delivered.
Dropdown of the GasLog Seattle
On November 1, 2016, GasLog Partners acquired from GasLog 100% of the ownership interest in GAS-seven Ltd., the entity that owns the GasLog Seattle, for an aggregate purchase price of $189.0 million, including $1.0 million of positive net working capital. The acquisition was partially financed with proceeds from the public offering completed by GasLog Partners in August 2016.
GasLog Partners Equity Offering
On January 27, 2017, GasLog Partners completed an equity offering of 3,750,000 common units at a price to the public of $20.50 per common unit. The Partnership plans to use the net proceeds from the public offering for general partnership purposes, which may include future acquisitions, debt repayment, capital expenditures and additions to working capital. We estimate that the net proceeds from this offering will be $75.5 million (excluding $1.6 million from the sale of general partner units to GasLog to maintain its 2.0% interest in the Partnership).
Chief Financial Officer Transition
In January 2017, Simon Crowe, GasLog and GasLog Partners’ Chief Financial Officer (“CFO”) informed the board of directors of his intention to step down from the position of CFO in March 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 and GasLog Partners in a strong financial position.
On February 1, 2017, GasLog and GasLog Partners announced that the board of directors had appointed Alastair Maxwell as CFO with an expected effective date in early March 2017.
On November 17, 2016, the board of directors declared a dividend on the Series A Preference Shares of $0.546875 per share, or $2.5 million in the aggregate, payable on January 3, 2017 to holders of record as of December 30, 2016. GasLog paid the declared dividend to the transfer agent on December 30, 2016.
On February 16, 2017, the board of directors declared a quarterly cash dividend of $0.14 per common share payable on March 16, 2017 to shareholders of record as of March 6, 2017.