Capital Product Partners L.P. Announces Third Quarter 2020 Financial Results and Fleet Employment Update
ATHENS, Greece, Nov. 02, 2020 (GLOBE NEWSWIRE) -- Capital Product Partners L.P. (the “Partnership”, “CPLP” or “we” / “us”) (NASDAQ: CPLP), an international owner of ocean-going vessels, today released its financial results for the third quarter ended September 30, 2020.
Highlights
| Three-month periods ended September 30, 2020 | |||||
| 2020 | 2019 | Increase | |||
| Revenue | |||||
| Expenses | |||||
| Net Income | |||||
| Net Income per common unit | |||||
- Operating Surplus1 and Operating Surplus after the quarterly allocation to the capital reserve for the third quarter of 2020 was
$21.0 million and$11.7 million respectively. - Announced common unit distribution of
$0.10 for the third quarter of 2020.
1 Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please refer to Appendix A at the end of the press release for a reconciliation of this non-GAAP measure with net income.
COVID-19
We continue to monitor the impact of COVID-19 on the Partnership’s financial condition and operations and on the container industry in general (see also Market Commentary below). The actual impact of the COVID-19 pandemic in the longer run, as well as the efficacy of any measures we take in response to the challenges presented, as described in our previous releases, will depend on how the pandemic will continue to develop, the duration and extent of the restrictive measures that are associated with the pandemic and their further impact on global economy and trade.
Management Commentary
Mr. Jerry Kalogiratos, Chief Executive Officer of our General Partner, commented:
“As aforementioned in our previous earnings releases, the COVID-19 pandemic and its adverse impact on human life, economic activity and logistical chains is a unique and unprecedented event with continuously and rapidly changing effects across a number of fronts. In this environment, we continue to prioritize the health and safety of our crews, as well as our onshore employees by designing and implementing together with our managers comprehensive measures and policies.”
“In view of this environment, we are pleased to have delivered on a strong quarterly performance compared to the same period of last year and to see charter rates for neo panamax vessels rebound from the lows experienced in the previous quarter. We have taken advantage of the rising rate environment to secure employment for one of our vessels and to further diversify our customer base.”
“Despite the rising rate environment, we note the increasing uncertainty around the adverse effects of the pandemic over the winter months and as such we remain cautious with regard to the medium to long term economic outlook. We intend to continue to deliver on our business model by securing longer term employment visibility for our vessels that come off charter and stagger charter expirations to mitigate re-chartering risk. As we secure increasing cash flow visibility and charter coverage, we intend to pursue accretive acquisitions on the back of our increasing liquidity position, while our board continues to assess our capital allocation strategy with a view to balancing growth with returning capital to our unitholders.”
Financial Summary
As previously announced, the share-for-share transaction with DSS Holdings L.P. (the “DSS Transaction”), involving an aggregate repayment of debt in a principal amount of
Overview of Third Quarter 2020 Results
Net income from continuing operations for the quarter ended September 30, 2020 was
Total revenue was
Total expenses for the quarter ended September 30, 2020 were
Total other expense, net for the quarter ended September 30, 2020 was
Capitalization of the Partnership
As of September 30, 2020, total cash amounted to
As of September 30, 2020, total partners’ capital amounted to
As of September 30, 2020, the Partnership’s total debt was
Operating Surplus
Operating surplus from continuing operations for the quarter ended September 30, 2020 amounted to
Fleet Employment Update
During the quarter, the Partnership secured employment for the M/V ‘Adonis' (115,600 mt dwt / 9,288 TEU, Eco-Flex, Wide Beam Containership built 2015, Daewoo-Mangalia Heavy Industries S.Α.) with Zim Integrated Shipping Services Ltd. for a period of 12 to 14 months at
As a result, the Partnership’s charter coverage for the remainder of 2020 and for 2021 has increased to
Quarterly Common Unit Cash Distribution
On October 21, 2020, the Board of Directors of the Partnership (the “Board”) declared a cash distribution of
Market Commentary Update
Overall, the container charter market experienced a strong rebound across all sizes during the third quarter of 2020. The operators’ stringent capacity management coupled with lower bunker prices have lifted liner profitability at or close to historical highs. As a result of this and the recovery in consumer demand, available tonnage in the market has been picked up by liner companies at increasing rates with the container idle fleet decreasing from
Analysts now expect demand contraction for the full year of 2020 at -
As the economic outlook, future developments with regard to the COVID-19 pandemic and the overall prospects for global containerized trade continue to remain uncertain, liner companies have to a large extent avoided committing to longer term charters. However, as charter rates increase, we expect to see an increase in the average duration of new charters with the aim of containing the rate of increase of charter rates going forward.
The container orderbook is estimated to be at historical lows and now stands at 303 units of 1.87 million TEU and
Conference Call and Webcast
Today, November 2, 2020, the Partnership will host an interactive conference call at 9:00 am Eastern Time to discuss the financial results.
Conference Call Details
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1(877)-553-9962 (U.S. Toll Free Dial In), 0(808)238-0669 (UK Toll Free Dial In) or +44 (0)2071 928592 (Standard International Dial In). Please quote “Capital Product Partners.”
A replay of the conference call will be available until Monday, November 9, 2020 by dialing 1 866 331 -1332 (U.S. Toll Free Dial In), 0 (808) 238-0667 (UK Toll Free Dial In) or +44 (0) 3333 009785 (Standard International Dial In). Access Code: 69648481#.
Slides and Audio Webcast
There will also be a simultaneous live webcast over the Internet, through the Capital Product Partners website, www.capitalpplp.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
About Capital Product Partners L.P.
Capital Product Partners L.P. (NASDAQ: CPLP), a Marshall Islands master limited partnership, is an international owner of ocean-going vessels. CPLP currently owns 14 vessels, including thirteen Neo-Panamax container vessels and one Capesize bulk carrier.
For more information about the Partnership, please visit: www.capitalpplp.com.
Forward-Looking Statements
The statements in this press release that are not historical facts, including, among other things, the expected financial performance of CPLP’s business, CPLP’s ability to pursue growth opportunities, CPLP’s expectations or objectives regarding future distributions, market and charter rate expectations, and, in particular, the effects of COVID-19 on financial condition and operations of CPLP and the container industry in general, are forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended). These forward-looking statements involve risks and uncertainties that could cause the stated or forecasted results to be materially different from those anticipated. For a discussion of factors that could materially affect the outcome of forward-looking statements and other risks and uncertainties, see “Risk Factors” in CPLP’s annual report filed with the SEC on Form 20-F. Unless required by law, CPLP expressly disclaims any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in its views or expectations, to conform them to actual results or otherwise. CPLP does not assume any responsibility for the accuracy and completeness of the forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements.
CPLP-F
Contact Details:
Capital GP L.L.C.
Jerry Kalogiratos
CEO
Tel. +30 (210) 4584 950
E-mail: j.kalogiratos@capitalpplp.com
Capital GP L.L.C.
Nikos Kalapotharakos
CFO
Tel. +30 (210) 4584 950
E-mail: n.kalapotharakos@capitalmaritime.com
Investor Relations / Media
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. +1-212-661-7566
E-mail: cplp@capitallink.com
Source: Capital Product Partners L.P.
Capital Product Partners L.P.
Unaudited Condensed Consolidated Statements of Comprehensive Income / (Loss)
(In thousands of United States Dollars, except for number of units and earnings per unit)
| For the three - month periods ended September 30, | For the nine - month periods ended September 30, | |||||||
| 2020 | 2019 | 2020 | 2019 | |||||
| Revenues | 35,523 | 26,439 | 105,780 | 80,673 | ||||
| Total revenues | 35,523 | 26,439 | 105,780 | 80,673 | ||||
| Expenses: | ||||||||
| Voyage expenses | 1,919 | 726 | 4,438 | 1,852 | ||||
| Vessel operating expenses | 8,192 | 8,790 | 24,715 | 19,929 | ||||
| Vessel operating expenses - related parties | 1,267 | 994 | 3,708 | 2,922 | ||||
| General and administrative expenses | 1,835 | 1,499 | 5,442 | 3,486 | ||||
| Vessel depreciation and amortization | 10,625 | 7,336 | 30,727 | 21,811 | ||||
| Operating income | 11,685 | 7,094 | 36,750 | 30,673 | ||||
| Other income / (expense), net: | ||||||||
| Interest expense and finance cost | (3,536 | ) | (4,137 | ) | (13,383 | ) | (13,171 | ) |
| Other (expense) / income | (380 | ) | 403 | (268 | ) | 1,123 | ||
| Total other expense, net | (3,916 | ) | (3,734 | ) | (13,651 | ) | (12,048 | ) |
| Partnership’s net income from continuing operations | 7,769 | 3,360 | 23,099 | 18,625 | ||||
| Preferred unit holders’ interest in Partnership’s net income from continuing operations | - | - | - | 2,652 | ||||
| Deemed dividend to preferred unit holders’ | - | - | - | 9,119 | ||||
| General Partner’s interest in Partnership’s net income from continuing operations | 142 | 63 | 424 | 129 | ||||
| Common unit holders’ interest in Partnership’s net income from continuing operations | 7,627 | 3,297 | 22,675 | 6,725 | ||||
| Partnership’s net income / (loss) from discontinued operations | - | 34 | - | (146,704 | ) | |||
| Partnership’s net income / (loss) | 7,769 | 3,394 | 23,099 | (128,079 | ) | |||
| Net income from continuing operations per: | ||||||||
| Common unit, basic and diluted | 0.41 | 0.18 | 1.22 | 0.37 | ||||
| Weighted-average units outstanding: | ||||||||
| Common units, basic and diluted | 18,194,142 | 18,178,100 | 18,194,142 | 18,178,100 | ||||
| Net loss from discontinued operations per: | ||||||||
| Common unit, basic and diluted | - | - | - | (7.92 | ) | |||
| Weighted-average units outstanding: | ||||||||
| Common units, basic and diluted | 18,194,142 | 18,178,100 | 18,194,142 | 18,178,100 | ||||
| Net income / (loss) from operations per: | ||||||||
| Common unit, basic and diluted | 0.41 | 0.18 | 1.22 | (7.55 | ) | |||
| Weighted-average units outstanding: | ||||||||
| Common units, basic and diluted | 18,194,142 | 18,178,100 | 18,194,142 | 18,178,100 | ||||
Capital Product Partners L.P.
Unaudited Condensed Consolidated Balance Sheets
(In thousands of United States Dollars)
| Assets | ||
| Current assets | As of September 30, 2020 | As of December 31, 2019 |
| Cash and cash equivalents | 32,811 | 57,964 |
| Restricted cash | 7,900 | - |
| Trade accounts receivable, net | 3,013 | 2,690 |
| Prepayments and other assets | 3,170 | 2,736 |
| Inventories | 2,854 | 1,471 |
| Claims | 559 | 1,085 |
| Total current assets | 50,307 | 65,946 |
| Fixed assets | ||
| Vessels, net | 720,672 | 576,891 |
| Total fixed assets | 720,672 | 576,891 |
| Other non-current assets | ||
| Above market acquired charters | 36,854 | 46,275 |
| Deferred charges, net | 5,570 | 3,563 |
| Restricted cash | 7,000 | 5,500 |
| Prepayments and other assets | 4,887 | 5,287 |
| Total non-current assets | 774,983 | 637,516 |
| Total assets | 825,290 | 703,462 |
| Liabilities and Partners’ Capital | ||
| Current liabilities | ||
| Current portion of long-term debt, net | 35,786 | 26,997 |
| Trade accounts payable | 9,917 | 12,501 |
| Due to related parties | 4,835 | 5,256 |
| Accrued liabilities | 10,050 | 16,156 |
| Deferred revenue, current | 1,032 | 3,826 |
| Total current liabilities | 61,620 | 64,736 |
| Long-term liabilities | ||
| Long-term debt, net | 347,478 | 231,989 |
| Total long-term liabilities | 347,478 | 231,989 |
| Total liabilities | 409,098 | 296,725 |
| Commitments and contingencies | ||
| Total partners’ capital | 416,192 | 406,737 |
| Total liabilities and partners’ capital | 825,290 | 703,462 |
Capital Product Partners L.P.
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands of United States Dollars)
| For the nine-month periods ended September 30, | ||||||
| 2020 | 2019 | |||||
| Cash flows from operating activities of continuing operations: | ||||||
| Net income from continuing operations | 23,099 | 18,625 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | ||||||
| Vessel depreciation and amortization | 30,727 | 21,811 | ||||
| Amortization and write off of deferred financing costs | 2,680 | 822 | ||||
| Amortization of above market acquired charters | 9,421 | 10,755 | ||||
| Equity compensation expense | 1,534 | 462 | ||||
| Changes in operating assets and liabilities: | - | - | ||||
| Trade accounts receivable, net | (323 | ) | 11,029 | |||
| Prepayments and other assets | 560 | (1,040 | ) | |||
| Claims | 526 | - | ||||
| Inventories | (1,383 | ) | 171 | |||
| Trade accounts payable | 4,591 | (7,385 | ) | |||
| Due to related parties | (421 | ) | (13,786 | ) | ||
| Accrued liabilities | 803 | (7,426 | ) | |||
| Deferred revenue | (2,794 | ) | (5,746 | ) | ||
| Dry-docking costs paid | (4,882 | ) | - | |||
| Net cash provided by operating activities of continuing operations | 64,138 | 28,292 | ||||
| Cash flows from investing activities of continuing operations: | ||||||
| Vessel acquisitions and improvements | (186,575 | ) | (2,543 | ) | ||
| Net cash used in investing activities of continuing operations | (186,575 | ) | (2,543 | ) | ||
| Cash flows from financing activities of continuing operations: | ||||||
| Proceeds from long term debt | 270,850 | - | ||||
| Deferred financing costs paid | (4,718 | ) | (770 | ) | ||
| Payments of long-term debt | (144,270 | ) | (25,030 | ) | ||
| Redemption of Class B unit holders | - | (116,850 | ) | |||
| Dividends paid | (15,178 | ) | (22,935 | ) | ||
| Net cash provided by / (used in) financing activities of continuing operations | 106,684 | (165,585 | ) | |||
| Net decrease in cash, cash equivalents and restricted cash from continuing operations | (15,753 | ) | (139,836 | ) | ||
| Cash flows from discontinued operations | ||||||
| Operating activities | - | 9,081 | ||||
| Investing activities | - | (1,484 | ) | |||
| Financing activities | - | 158,228 | ||||
| Net increase in cash, cash equivalents and restricted cash from discontinued operations | - | 165,825 | ||||
| Net (decrease) / increase in cash, cash equivalents and restricted cash | (15,753 | ) | 25,989 | |||
| Cash, cash equivalents and restricted cash at beginning of period | 63,464 | 38,199 | ||||
| Cash, cash equivalents and restricted cash at end of period | 47,711 | 64,188 | ||||
| Supplemental cash flow information | ||||||
| Cash paid for interest | 12,328 | 16,356 | ||||
| Non-Cash Investing and Financing Activities | ||||||
| Capital expenditures included in liabilities | 1,790 | 3,863 | ||||
| Capitalized dry docking costs included in liabilities | 1,641 | 995 | ||||
| Deferred financing costs included in liabilities | 49 | - | ||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||
| Cash and cash equivalents | 32,811 | 58,688 | ||||
| Restricted cash -current assets | 7,900 | - | ||||
| Restricted cash - non-current assets | 7,000 | 5,500 | ||||
| Total cash, cash equivalents and restricted cash shown in the statements of cash flows | 47,711 | 64,188 | ||||
Appendix A – Reconciliation of Non-GAAP Financial Measure
(In thousands of U.S. dollars)
Description of Non-GAAP Financial Measure – Operating Surplus
Operating Surplus represents net income adjusted for depreciation and amortization expense, amortization of above market acquired charters and straight-line revenue adjustments.
Operating Surplus is a quantitative measure used in the publicly traded partnership investment community to assist in evaluating a partnership’s financial performance and ability to make quarterly cash distributions. Operating Surplus is not required by accounting principles generally accepted in the United States (“GAAP”) and should not be considered a substitute for net income, cash flow from operating activities and other operations or cash flow statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. Our calculation of Operating Surplus may not be comparable to that reported by other companies. The table below reconciles Operating Surplus to net income for the following periods:
| Reconciliation of Non-GAAP Financial Measure – Operating Surplus | For the three-month period ended September 30, 2020 | For the three-month period ended June 30, 2020 | For the three-month period ended September 30, 2019 | |||
| Partnership’s net income from continuing operations | 7,769 | 8,656 | 3,360 | |||
| Adjustments to reconcile net income to operating surplus prior to Capital Reserve | ||||||
| Depreciation and amortization1 | 11,513 | 12,930 | 8,074 | |||
| Amortization of above market acquired charters and straight-line revenue adjustments | 1,755 | 3,919 | 1,270 | |||
| Operating Surplus from continuing operations | 21,037 | 25,505 | 12,704 | |||
| Add: Operating Surplus from discontinued operations | - | - | 34 | |||
| Total Operating Surplus from operations | 21,037 | 25,505 | 12,738 | |||
| Capital reserve | (9,302 | ) | (9,302 | ) | (7,703 | ) |
| Operating Surplus after capital reserve | 11,735 | 16,203 | 5,035 | |||
| (Increase) / decrease in recommended reserves | (9,838 | ) | (14,306 | ) | 801 | |
| Available Cash | 1,897 | 1,897 | 5,836 | |||
1 Depreciation and amortization line item includes the following components:
- Vessel depreciation and amortization; and
- Deferred financing costs and equity compensation plan amortization.
