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HomeFinance & EconomyDynagas Partners reports $9.6 million Net Income in Q1


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Dynagas Partners reports $9.6 million Net Income in Q1

Dynagas LNG Partners LP announced its results for the three months ended March 31, 2023.

Quarter Highlights:

  • Net Income and Earnings per common unit (basic and diluted) of $9.6 million and $0.18, respectively;
  • Adjusted Net Income(1) of $6.5 million and Adjusted Earnings(1) per common unit (basic and diluted) of $0.10;
  • Adjusted EBITDA(1)   $23.6 million;
  • 100% fleet utilization(2);
  • Declared and paid cash distribution of $0.5625 per unit on its Series A Preferred Units (NYSE: “DLNG PR A”) for the period from November 12, 2022 to February 11, 2023 and $0.546875 per unit on the Series B Preferred Units (NYSE: “DLNG PR B”) for the period from November 22, 2022 to February 21, 2023; and 
  • On March 27, 2023, the Partnership, in agreement with all lenders of its $675 million credit facility, made a voluntary loan prepayment of $31.3 million. An amount equal to the above- mentioned prepayment was released from the cash collateral account in order to make the prepayment.

Subsequent Events:

  • Declared a quarterly cash distribution of $0.5625 on the Partnership’s Series A Preferred Units for the period from February 12, 2023 to May 11, 2023, which was paid on May 12, 2023 to all preferred Series A unit holders of record as of May 5, 2023; and
  • Declared a quarterly cash distribution of $0.546875 on the Partnership’s Series B Preferred Units for the period from February 22, 2023 to May 21, 2023, which was paid on May 22, 2023 to all preferred Series B unit holders of record as of May 15, 2023.

(1) Adjusted Net Income, Adjusted Earnings per common unit and Adjusted EBITDA are not recognized measures under U.S. GAAP. Please refer to Appendix B of this press release for the definitions and reconciliation of these measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP and other related information.

(2) Please refer to Appendix B for additional information on how we calculate fleet utilization.

CEO Commentary:

We are pleased to report the results for the three months ended March 31, 2023.

For the first quarter of 2023, we reported Net Income of $9.6 million, Earnings per common unit of $0.18, Adjusted Net Income of $6.5 million and Adjusted EBITDA of $23.6 million.

All six LNG carriers in our fleet are operating under their respective long-term charters with international gas companies with an average remaining contract term of 6.1 years. As of June 20, 2023, our estimated contracted revenue backlog was $0.96 billion.

We have remained committed to our strategy of creating equity value through reducing debt and have since September 2019, repaid $218.4 million in debt, which includes two voluntary loan prepayments of $18.7 million and $31.3 million, which were effected on October 12, 2022 and on March 27, 2023, respectively, in agreement with the lenders of our $675 million credit facility. The current debt outstanding is $456.6 million.

Since December 31, 2019 we have reduced our net leverage ratio from 6.6 to 4.5, while also increasing our book equity value by 37% to, $430.6 million.

Gas prices in the main pricing hubs are currently significantly lower compared to a year ago when gas prices were driven to new highs as a result of the Russian – Ukraine situation. The spread however between US feed gas prices and LNG prices in Europe and the Far East continues to be healthy. We believe this is positive for economic sustainability and therefore global growth as well as for gas producers. It is being increasingly appreciated that LNG is a necessary ingredient to managing global emissions as well as energy security and, despite cost increases, we expect the continuation of Final Investment Decisions being received by mature LNG production projects, the execution of new long-term LNG sales and purchase agreements and consequently the continued demand for LNG Shipping.

In light of these developments, we believe that the outlook for LNG shipping and the Partnership remains positive.

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