Dynagas LNG Partners LP, an owner and operator of liquefied natural gas (“LNG”) carriers, announced its results for the three and nine months ended September 30, 2023.
Nine months Highlights:
- Net Income and Earnings per common unit (basic and diluted) of $25.4 million and $0.45, respectively;
- Adjusted Net Income(1) of $15.5 million and Adjusted Earnings per common unit (1) (basic and diluted) of $0.18;
- Adjusted EBITDA(1) $67.0 million; and
- 97% fleet utilization(2).
Quarter Highlights:
- Net Income of $1.4 million and Loss per common unit (basic and diluted) of $0.04;
- Adjusted Net Income(1) of $3.1 million and Adjusted Earnings(1) per common unit (basic and diluted) of $0.01;
- Adjusted EBITDA(1) $20.4 million;
- 99.8% fleet utilization(2);
- Declared and paid a cash distribution of $0.5625 per unit on its Series A Preferred Units (NYSE: “DLNG PR A”) for the period from May 12, 2023 to August 11, 2023 and $0.546875 per unit on the Series B Preferred Units (NYSE: “DLNG PR B”) for the period from May 22, 2023 to August 21, 2023;
- Completed the scheduled dry-docks of the Yenisei River, Lena River and Arctic Aurora including installation of ballast water treatment equipment in accordance with current regulations;and
- The Arctic Aurora was delivered under its new time charter party agreement with Equinor ASA (“Equinor”) in September, 2023.
Subsequent Events:
- Declared a quarterly cash distribution of $0.5625 on the Partnership’s Series A Preferred Units for the period from August 12, 2023 to November 11, 2023, which was paid on November 13, 2023 to all preferred Series A unit holders of record as of November 6, 2023;
- Declared a quarterly cash distribution of $0.546875 on the Partnership’s Series B Preferred Units for the period from August 22, 2023 to November 21, 2023, which was paid on November 22, 2023 to all preferred Series B unit holders of record as of November 15, 2023; and
- Pursuant to the terms of the Partnership’s Fourth Amended and Restated Agreement of Limited Partnership, from and including November 22, 2023, the applicable distribution rate for the Partnership’s Series B Preferred Units has been converted to a floating rate equal to a successor base rate comparable to the three-month LIBOR rate plus a spread of 5.593% per annum per $25.00 of liquidation preference per unit (the “Series B Distribution Rate”). The Partnership appointed Computershare Trust Company, N.A. to serve as the calculation agent for the Series B Preferred Units with respect to the determination of the applicable Series B Distribution Rate.
CEO Commentary:
We are pleased to report the results for the three and nine months ended September 30, 2023.
For the third quarter of 2023, we reported Net Income of $1.4 million, Adjusted Net Income of $3.1 million and Adjusted EBITDA of $20.4 million.
All six LNG carriers in our fleet are operating under long-term charters with international gas companies with an average remaining contract term of approximately 7.2 years. Barring any unforeseen events, the Partnership will have no contractual vessel availability until 2028. Our estimated contract backlog currently stands at approximately $1.16 billion equating to approximately $193 million per vessel as of December 7, 2023.
The Arctic Aurora was delivered under a new three-year time charter party agreement with Equinor ASA in September, 2023 and we expect her to continue to generate solid cash flow contribution to the Partnership.
We remain committed to our strategy of creating equity value through reducing debt and have since September 2019, repaid $242.4 million in debt, which includes two voluntary loan prepayments of $18.7 million and $31.3 million, effected on October 12, 2022 and March 27, 2023, respectively, in agreement with the lenders of our $675 million credit facility. Since December 31, 2019 we have reduced our net leverage ratio from 6.6 to 4.1, while also increasing our book equity value by 40%, to $441 million. The current debt outstanding under our $675 million credit facility is approximately $432.6 million. One of our main priorities going forward is to refinance the partnerships debt.
We strongly believe in the long term role of natural gas as a vital energy source. Part of its sustained demand stems from its comparatively low emission profile upon combustion and its capacity to generate power swiftly and effectively as and when needed. This is further supported by the existence of a well-developed global infrastructure facilitating its production, transportation, storage, and consumption.