Dynagas LNG Partners LP, an owner and operator of liquefied natural gas (“LNG”) carriers, today announced its results for the three and twelve months ended December 31, 2024.
Twelve months Highlights:
Quarter Highlights:
Subsequent Events:
CEO Commentary:
We are pleased with the financial results for the three months ended December 31, 2024.
For this quarter, our Net Income stood at $14.1 million, with earnings per common unit of $0.29. We achieved an Adjusted EBITDA and an Adjusted Net Income of $28.5 million and $15.0 million respectively. Our financial results reflect our stable, contracts-based operating model.
Currently, all six LNG carriers in our fleet are under long-term charters with international gas companies with an average remaining term of 5.9 years, as of the date of this release. We anticipate, assuming no unforeseen events, no vessel availability until 2028. As of March 6, 2025, our estimated contract backlog stands at approximately $1.0 billion. Following the refinancing of our outstanding debt in June 2024, our financial leverage has improved significantly with two of our vessels now debt-free and a reduced annual debt amortization of $44 million. With no debt maturities until 2029 and contracted cash flows above our cash breakeven point, we continue to focus on strengthening our balance sheet to ensure enduring financial flexibility and sustained enhancement of common unitholder value.
Russian Sanctions Developments
Due to the ongoing Russian conflict with Ukraine, the United States (“U.S.”), European Union (“E.U.”), Canada and other Western countries and organizations have announced and enacted numerous sanctions against Russia to impose severe economic pressure on the Russian economy and government.
As of today’s date:
Current U.S. and E.U. sanctions regimes do not materially affect the business, operations or financial condition of the Partnership and, to the Partnership’s knowledge, its counterparties are currently performing their obligations under their respective time charters in compliance with applicable U.S. and E.U. rules and regulations; and
Sanctions legislation continually changes and the Partnership continues to monitor such changes as applicable to the Partnership and its counterparties.
The full impact of the commercial and economic consequences of the Russian conflict with Ukraine is uncertain at this time. The Partnership cannot provide any assurance that any further development in sanctions, or escalation of the Ukraine conflict more generally, will not have a significant impact on its business, financial condition or results of operations.Please see the section of this press release entitled “Forward Looking Statements.”
Three Months Ended December 31, 2024 and 2023 Financial Results
Net Income for the three months ended December 31, 2024 was $14.1 million as compared to $10.5 million for the corresponding period of 2023, which represents an increase of $3.6 million, or 34.3%. The increase in Net Income for the three months ended December 31, 2024 compared to the corresponding quarter of 2023 was mainly attributable to: (i) the increase in voyage revenues and the decrease in vessel operating expenses, as explained below, (ii) the decrease in interest and finance costs, as explained below and (iii) the decrease in interest rate swap losses. The above increase in Net Income was partially counterbalanced by the decrease in non-recurring other income earned from insurance claims received for damages incurred in prior years, compared to the corresponding quarter of 2023.
Adjusted Net Income (a non-GAAP financial measure) for the three months ended December 31, 2024 was $15.0 million compared to $10.3 million for the corresponding period of 2023, which represents a net increase of $4.7 million, or 45.6%. This increase is mainly attributable to the increase in the cash voyage revenues and the decrease of the vessels’ operating expenses, as well as the decrease of interest and finance costs compared to the corresponding period of 2023.
Voyage revenues for the three months ended December 31, 2024 were $41.7 million as compared to $37.0 million for the corresponding period of 2023, which represents a net increase of $4.7 million, or 12.7%, which is mainly attributable to the increase in the revenues of the Arctic Aurora following its new time charter party agreement with Equinor ASA, which took effect in October 2023, as well as to the value of the EU ETS emissions allowances (“EUAs”) due to the Partnership by the charterers of its vessels, pursuant to the terms of its time charter agreements. The same value of these EUAs, which the Partnership is obliged to surrender to the EU authorities, is included within Voyage expenses.
The Partnership reported average daily hire gross of commissions(1) of approximately $71,460 per day per vessel for the three-month-period ended December 31, 2024, compared to approximately $70,000 per day per vessel for the corresponding period of 2023. The Partnership’s vessels operated at 100% fleet utilization during the three-month period ended December 31, 2024 and 2023.
Vessel operating expenses were $8.1 million, which corresponds to a daily rate per vessel of $14,732 for the three-month period ended December 31, 2024, as compared to $8.4 million, or a daily rate per vessel of $15,172, in the corresponding period of 2023. This decrease is mainly attributable to lower planned technical maintenance on the Partnership’s vessels in the three- month period ending December 31, 2024 compared to the corresponding period in 2023.
Adjusted EBITDA (a non- GAAP financial measure) for the three months ended December 31, 2024 was $28.5 million, as compared to $27.4 million for the corresponding period of 2023. The increase of $1.1 million, or 4.0%, was mainly attributable to the above-mentioned increase in cash voyage revenues of the Arctic Aurora.
Net Interest and finance costs were $5.5 million in the three months ended December 31, 2024 as compared to $9.0 million in the corresponding period of 2023, which represents a decrease of $3.5 million, or 38.9%, mainly due to the reduction in interest-bearing debt in the three months ended December 31, 2024, compared to the corresponding period in 2023, resulting from the refinancing of the Partnership’s indebtedness in June 2024.
For the three months ended December 31, 2024, the Partnership reported basic and diluted Earnings per common unit and Adjusted Earnings per common unit, (a non- GAAP financial measure) of $0.29 and $0.32, respectively, after taking into account the distributions relating to the Series A Preferred Units and the Series B Preferred Units on the Partnership’s Net /Adjusted Net Income. Earnings per common unit and Adjusted Earnings per common unit, basic and diluted, were calculated on the basis of a weighted average number of 36,791,279 common units outstanding during the period and in the case of Adjusted Earnings per common unit after reflecting the impact of certain adjustments presented in Appendix B of this press release.
Adjusted Net Income, Adjusted EBITDA, and Adjusted Earnings per common unit 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.
/ / Cash Flow Coverage
During the three months ended December 31, 2024, the Partnership generated net cash from operating activities of $32.5 million as compared to $20.2 million in the corresponding period of 2023, which represents an increase of $12.3 million, or 60.9% mainly as a result of the increase in the adjusted EBITDA net of working capital changes and the decrease of interest and finance costs.
As of December 31, 2024, the Partnership reported total cash of $68.2 million. The Partnership’s outstanding financial liabilities as of December 31, 2024, under the Sale and Leaseback agreements between the vessel owning companies of the Clean Energy, the OB River, the Amur River and the Arctic Aurora with China Development Bank Financial Leasing Co. Ltd. amounted to $49.3 million, $65.5 million, $67.3 million and $140.8 million, respectively, gross of unamortized deferred loan fees. The financial liability is repayable within approximately four years for the Clean Energy, the OB River and the Amur River and within nine years for the Arctic Aurora.
Vessel Employment
As of December 31, 2024, the Partnership had estimated contracted time charter coverage(1) for 100% of its fleet estimated Available Days (as defined in Appendix B) for each of 2025, 2026, and 2027.
As of the same date, the Partnership’s estimated contracted revenue backlog (2) (3) was $1.0 billion, with an average remaining contract term of 6.1 years.
Source: Dynagas LNG Partners LP
