GASLOG PARTNERS LP GasLog Partners LP (“GasLog Partners” or the “Partnership”) (NYSE:GLOP), an international owner and operator of liquefied natural gas (“LNG”) carriers, today reported its financial results for the three month period and the year ended December 31, 2014.
Highlights
- Increased quarterly cash distribution by 16% to $0.4345 per unit, equivalent to $1.738 per unit on annual basis.
- EBITDA(1) of $24.3 million and Adjusted EBITDA(1) of $24.2 million, an increase of 53% compared to EBITDA and Adjusted EBITDA attributable to the Partnership for the third quarter of 2014.
- Distributable cash flow(1) of $13.0 million, an increase of 38% from the third quarter of 2014.
- Refinanced the Partnership’s outstanding debt with a $450 million credit facility at attractive terms.
(1) EBITDA, Adjusted EBITDA and Distributable cash flow are non-GAAP financial measures. For definitions and reconciliations of these measurements to the most directly comparable financial measures calculated and presented in accordance with International Financial Reporting Standards (“IFRS”), please refer to Exhibit II at the end of this press release.
CEO Statement
Mr. Andrew Orekar, Chief Executive Officer, stated: “It has been another strong quarter for GasLog Partners, with significant growth in EBITDA and Distributable cash flow from the full financial impact of the two vessels we acquired from GasLog Ltd. (“GasLog”) at the end of the third quarter. The growth in cash flow from this acquisition has enabled us to increase our quarterly distribution by 16% to $0.4345 per unit, above the midpoint of the $0.43125 to $0.4375 per unit range we first provided on August 14, 2014. Our ability to deliver this significant distribution growth consistent with the guidance we provided 5 months ago underscores the strength of GasLog Partners' business model: highly predictable and durable cash flows generated by LNG carriers operating exclusively under long-term contract.
Operationally, our performance over the quarter has been excellent with 100% utilization across our enlarged fleet. In December, we were extremely proud to have GasLog Partners’ Methane Rita Andrea serve as the vessel for the first LNG cargo loaded from BG Group’s Queensland Curtis LNG project in Australia.
At the end of the quarter, GasLog agreed to acquire two vessels from BG Group with an average charter party length of ten years. Once the transaction closes, as discussed in fleet section below, there will be 12 vessels owned by GasLog with charters of 5 years or more that are highly attractive dropdown candidates for the Partnership. With our multi-year pipeline of identifiable dropdown assets, we remain confident in our ability to deliver 10 to 15% compound annual growth in LP distribution per unit from initial public offering (“IPO”) forecast for the next several years.”
Cash Distribution
On January 28, 2015, the board of directors of GasLog Partners approved and declared an increased quarterly cash distribution, with respect to the quarter ended December 31, 2014, of $0.4345 per unit, representing a 16% increase. The cash distribution is payable on February 12, 2015, to all unitholders of record as of February 9, 2015.
Financing Update
On November 12, 2014, the Partnership entered into a loan agreement with Citibank N.A. London Branch for a credit facility for up to $450.0 million (the “Credit Facility”) for the purpose of refinancing in full the Partnership’s existing debt facilities. The Credit Facility bears interest at LIBOR plus a margin of 2.60% and is repayable in 20 equal quarterly installments of $5.63 million each and a final balloon payment of $337.5 million together with the last quarterly installment in 2019. All borrowings under the previously existing debt facilities were fully repaid during the fourth quarter of 2014. The refinancing simplifies GasLog Partners’ funding arrangements with a single facility and extends the maturity to 2019 and the amortization period of the debt to better match the useful life of our assets.
In November 2014, the Partnership drew the $30.0 million revolving credit facility entered into with GasLog (the “Sponsor Credit Facility”) on May 12, 2014, which is repayable within a period of 6 months after the drawdown date with the unconditional right of immediate renewal if no repayment is made. The Sponsor Credit Facility is unsecured and provides for an availability period of 36 months with interest at a rate of 5.0% per annum and no commitment fee for the first year. After the first year, the interest will increase to a rate of 6.0% per annum, with an annual 2.4% commitment fee on the undrawn balance.
In November 2014, in connection with the aforementioned refinancing, the Partnership terminated its existing swap agreements having a notional amount of $214.66 million by paying their fair value on that date of $2.62 million plus accrued interest of $0.35 million.
Financial Summary
The results and the selected financial data presented herein derive from the unaudited combined and consolidated financial statements of the Partnership that for the periods prior to the formation of the Partnership include the combined accounts of GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd., as they were under the common control of GasLog, and retrospectively adjusted to reflect the accounts of GAS-sixteen Ltd. and GAS-seventeen Ltd. since their incorporation by GasLog in January 2014.
Three of our LNG carriers, the GasLog Shanghai, the GasLog Santiago and the GasLog Sydney, were delivered and immediately commenced their time charters with a subsidiary of BG Group in January, March and May 2013, respectively. In addition, the Methane Rita Andrea and the Methane Jane Elizabeth commenced their time charters with a subsidiary of BG Group upon their acquisition by GasLog on April 10, 2014. During the three month period ended December 31, 2014, our vessels had 460 operating days compared to 276 operating days during the three month period ended December 31, 2013.
| For the three months ended | For the year ended | |||||||||||
| (All amounts expressed in thousands of U.S. dollars) | December 31, 2013 | December 31, 2014 | December 31, 2014 | |||||||||
| Results attributable to the Partnership(3) | ||||||||||||
| Revenue | $ | 21,204 | $ | 33,302 | $ | 65,931 | ||||||
| EBITDA(1) | $ | 16,783 | $ | 24,288 | $ | 48,297 | ||||||
| Adjusted EBITDA(1) | $ | 16,786 | $ | 24,191 | $ | 48,156 | ||||||
| Profit | $ | 8,498 | $ | 1,146 | $ | 14,544 | ||||||
| Adjusted Profit(1) | $ | 8,197 | $ | 11,252 | $ | 23,842 | ||||||
| Distributable cash flow(1) | n/a | $ | 13,028 | $ | 27,118 | |||||||
| Cash distributions declared(2) | n/a | $ | 10,717 | $ | 24,086 | |||||||
(1) EBITDA, Adjusted EBITDA, Adjusted Profit and Distributable cash flow are non-GAAP financial measures. For definitions and reconciliations of these measurements 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.
(2) For the reconciliation of Cash distributions declared to Distributable cash flows, please refer to Exhibit II at the end of this press release.
(3) Excludes amounts related to GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. earned prior to their transfer to the Partnership at the closing of the Partnership’s IPO on May 12, 2014 and the profits of GAS-sixteen Ltd. and GAS-seventeen Ltd. for the period prior to their transfer to the Partnership on September 29, 2014. Whilst these amounts are reflected in the Partnership’s financial statements because the transfers to the Partnership reflect a reorganization of entities under common control, such amounts are not attributable to the Partnership’s operations.
Three month period ended December 31, 2013 and 2014
Revenues for the quarter ended December 31, 2014 were $33.30 million ($21.20 million for the quarter ended December 31, 2013).
Vessel operating costs for the quarter ended December 31, 2014 were $7.10 million ($3.99 million for the quarter ended December 31, 2013).
Depreciation of vessels for the quarter ended December 31, 2014 was $7.11 million ($4.05 million for the quarter ended December 31, 2013).
The increase in revenues, vessel operating costs and depreciation over the comparable 2013 quarter is attributable to the increase in operating days resulting from the acquisition of the two LNG carriers as mentioned above.
General and administrative expenses were $1.91 million for the quarter ended December 31, 2014 ($0.43 million for the quarter ended December 31, 2013). The increase of $1.48 million over the comparable 2013 quarter resulted mainly from the administrative services agreements with GasLog that are effective since the initial public offering completion date on May 12, 2014, board of directors fees, and the increase in legal and professional expenses related to the requirements of being a public company.
Financial costs were $11.24 million for the quarter ended December 31, 2014 ($3.97 million for the quarter ended December 31, 2013). The increase of $7.27 million over the comparable 2013 quarter was mainly attributable to the $5.76 million write-off of the unamortized loan fees in connection with the repayment of the previously existing debt facilities and the respective termination fees of $1.23 million. In addition, there was a $0.20 million increase in interest expense deriving from higher weighted average outstanding debt. An analysis of financial costs is as follows:
| For the three months ended | |||||||||
| (All amounts expressed in thousands of U.S. dollars) | December 31, 2013 | December 31, 2014 | |||||||
| Financial costs | |||||||||
| Amortization of deferred loan issuance costs | $ | 545 | $ | 6,271 | |||||
| Interest expense on loans | 2,806 | 3,606 | |||||||
| Realized loss on cash flow hedges | 599 | — | |||||||
| Other financial costs | 22 | 1,359 | |||||||
| Total financial costs | $ | 3,972 | $ | 11,236 | |||||
Loss on interest rate swaps was $4.81 million for the quarter ended December 31, 2014 ($0.27 million loss for the quarter ended December 31, 2013). The increase of $4.54 million in loss in the fourth quarter of 2014 compared to the same quarter of 2013 was mainly attributable to a $1.80 million increase in loss from mark-to-market valuation of our interest rate swaps for the period that were carried at fair value through profit or loss, partially offset by decrease of $0.21 million in realized loss on interest rate swaps held for trading, and an increase of $2.95 million in recycled loss of cash flow hedges reclassified to profit or loss resulting mainly from the termination of the relevant swap contracts in connection with the refinancing. An analysis of loss on interest rate swaps is as follows:
| For the three months ended | |||||||||
| (All amounts expressed in thousands of U.S. dollars) | December 31, 2013 | December 31, 2014 | |||||||
| Loss on interest rate swaps | |||||||||
| Realized loss on interest rate swaps held for trading | 573 | 359 | |||||||
| Unrealized gain/(loss) on interest rate swaps held for trading | (500 | ) | 1,296 | ||||||
| Recycled loss of cash flow hedges reclassified to profit or loss | 196 | 3,151 | |||||||
| Loss on interest rate swaps | $ | 269 | $ | 4,806 | |||||
Profit for the period was $1.15 million for the quarter ended December 31, 2014 ($8.50 million for the quarter ended December 31, 2013). The decrease in Profit was affected by the write-off of the unamortized loan fees of $5.76 million in connection with the repayment of the previously existing debt facilities and an increase of non-cash loss on interest rate swaps by $4.75 million.
Adjusted Profit for the period was $11.25 million for the quarter ended December 31, 2014 ($8.20 million for the quarter ended December 31, 2013).
EBITDA was $24.29 million for the quarter ended December 31, 2014 ($16.78 million for the quarter ended December 31, 2013).
Adjusted EBITDA was $24.19 million for the quarter ended December 31, 2014 ($16.79 million for the quarter ended December 31, 2013).
Fleet
The Partnership’s fleet consists of the following vessels:
| LNG Carrier | Year Built | Cargo Capacity (cbm) | Charterer(1) | Charter Expiration | Optional Period | |||||
| GasLog Shanghai | 2013 | 155,000 | BG Group | January 2018 | 2021–2026 (2) | |||||
| GasLog Santiago | 2013 | 155,000 | BG Group | March 2018 | 2021–2026 (2) | |||||
| GasLog Sydney | 2013 | 155,000 | BG Group | May 2019 | 2022–2027 (2) | |||||
| Methane Rita Andrea | 2006 | 145,000 | BG Group | April 2020 | 2023–2025 (3) | |||||
| Methane Jane Elizabeth | 2006 | 145,000 | BG Group | October 2019 | 2022–2024 (3) |
(1) Vessels are chartered to a subsidiary of BG Group.
(2) The charters may be extended for up to two extension periods of three or four years at the option of the charterer, and each charter requires that the charterer provides us with 90 days’ notice before the charter expiration of its exercise of any extension option. The period shown reflects the expiration of the minimum optional period and the maximum optional period.
(3) Charterer may extend either or both of these charters for one extension period of three or five years, and each charter requires that the charterer provide us with advance notice of its exercise of any extension option. The period shown reflects the expiration of the minimum optional period and the maximum optional period.
At the end of the quarter, GasLog agreed to acquire two vessels from BG Group with an average charter party length of ten years. Once the transaction closes (expected in the first quarter of 2015), our pipeline of assets for future dropdowns will increase from ten vessels (for which we have existing options under our omnibus agreement with GasLog) to twelve as both of these vessels will be offered within 30 days of acquisition by GasLog to the Partnership for purchase at the acquisition price paid by GasLog plus certain administrative costs, pursuant to our omnibus agreement. It is currently uncertain whether we would accept the offer from GasLog within the 30 days allowed for our response under the omnibus agreement, and we and GasLog are evaluating possible alternative arrangements under which we may have a significantly longer period to elect to acquire the vessels at fair market value.
Liquidity and Financing
As of December 31, 2014, we had $27.19 million of cash and cash equivalents, of which $4.75 million was held in time deposits. In addition, as of December 31, 2014, we had $17.70 million of cash held in time deposits with an initial duration of more than three months, but less than a year, that have been classified as short-term investments.
As of December 31, 2014, we had an aggregate of $480.0 million of indebtedness outstanding under the credit facilities, including $30.0 million outstanding under the Partnership’s revolving credit facility with GasLog Ltd.
We believe our current resources are sufficient to meet our working capital requirements for our current business.
Depending on market condition, we may use derivative financial instruments to reduce the risks associated with fluctuations in interest rates. In connection with the refinancing of our existing indebtedness, we terminated all of our derivative financial instruments and expect to economically hedge a majority of our exposure to interest rate fluctuations in the future by entering into new interest rate swap contracts.
Conference Call
GasLog Partners will host a conference call to discuss its results for the fourth quarter 2014 at 8:30 a.m. EST (1:30 p.m. London Time) on Thursday, January 29, 2015. Andrew Orekar, Chief Executive Officer, and Simon Crowe, Chief Financial Officer, will review the Partnership’s operational and financial performance for the period. Management's presentation will be followed by a Q&A session.
The dial-in numbers for the conference call are as follows:
Participants:
Confirmation Code: 9012787
United
Kingdom: +44(0)20 3427 0503
United States of America: +1 212 444
0896
France: +33(0)1 76 77 22 28
Telephone Replay for 7 days:
Replay Passcode: 9012787
United
Kingdom: +44 (0)20 3427 0598
United States of America: +1 347 366
9565
France: +33 (0)1 74 20 28 00
About GasLog Partners LP
GasLog Partners LP is a growth-oriented master limited partnership focused on owning, operating and acquiring liquefied natural gas (“LNG”) carriers under long-term charters. GasLog Partners LP’s fleet consists of five LNG carriers with an average carrying capacity of 151,000 cbm, each of which has a multi-year charter. Visit the GasLog Partners LP website at http://www.gaslogmlp.com.
Forward looking statements
This press release contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The reader is cautioned not to rely on these forward-looking statements. All statements, other than statements of historical facts, that address activities, events or developments that the Partnership expects, projects, believes or anticipates will or may occur in the future, including, without limitation, future operating or financial results and future revenues and expenses, future, pending or recent acquisitions, general market conditions and shipping industry trends, the financial condition and liquidity, distributable cash flow, future capital expenditures and drydocking costs and newbuild vessels and expected delivery dates, are forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. Risks and uncertainties include, but are not limited to, general LNG and LNG shipping market conditions and trends, including charter rates, ship values, factors affecting supply and demand of LNG and LNG shipping, technological advancements and opportunities for the profitable operation of LNG carriers; our ability to enter into time charters with our existing customers as well as new customers; our contracted charter revenue; our customers’ performance of their obligations under our time charters and other contracts; the effect of volatile economic conditions and the differing pace of economic recovery in different regions of the world; future operating or financial results and future revenues and expenses; our future financial condition and liquidity; our ability to obtain financing to fund capital expenditures, acquisitions and other corporate activities, funding by banks of their financial commitments, and our ability to meet our obligations under our credit facilities; future, pending or recent acquisitions of ships or other assets, business strategy, areas of possible expansion and expected capital spending or operating expenses; our expectations relating to distributions of available cash and our ability to make such distributions; our ability to enter into shipbuilding contracts for newbuildings and our expectations about the availability of existing LNG carriers to purchase, as well as our ability to consummate any such acquisitions; our expectations about the time that it may take to construct and deliver newbuildings and the useful lives of our ships; number of off-hire days, drydocking requirements and insurance costs; our anticipated general and administrative expenses; fluctuations in currencies and interest rates; our ability to maintain long-term relationships with major energy companies; expiration dates and extensions of our time charters; our ability to maximize the use of our ships, including the re-employment or disposal of ships no longer under time charter commitments; environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities; our continued compliance with requirements imposed by classification societies; risks inherent in ship operation, including the discharge of pollutants; availability of skilled labor, ship crews and management; potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists; and potential liability from future litigation.
For a discussion of some of the risks and important factors that could affect future results, see the discussion in GasLog Partners’ registration statement on Form F-1 (File No. 333-198133) under the caption “Risk Factors”. We do not undertake to update any forward-looking statements as a result of new information or future events or developments except as may be required by law.
EXHIBIT 1 – Unaudited Interim Financial Information
Unaudited condensed combined and consolidated statements of
financial position
As of December 31, 2013 and 2014
(All
amounts expressed in U.S. Dollars)
| December 31, 2013 | December 31, 2014 | ||||||||||||
| Assets | |||||||||||||
| Non-current assets | |||||||||||||
| Derivative financial instruments | 799,926 | — | |||||||||||
| Other non-current assets | 1,242,720 | 2,063,026 | |||||||||||
| Vessels | 562,530,808 | 851,285,729 | |||||||||||
| Total non-current assets | 564,573,454 | 853,348,755 | |||||||||||
| Current assets | |||||||||||||
| Trade and other receivables | 153,967 | 1,079,325 | |||||||||||
| Inventories | 730,209 | 1,089,997 | |||||||||||
| Due from related parties | 18,151 | — | |||||||||||
| Prepayments and other current assets | 390,526 | 813,792 | |||||||||||
| Short-term investments | 1,500,000 | 17,700,000 | |||||||||||
| Cash and cash equivalents | 14,403,785 | 27,188,095 | |||||||||||
| Total current assets | 17,196,638 | 47,871,209 | |||||||||||
| Total assets | 581,770,092 | 901,219,964 | |||||||||||
| Owners/partners’ equity and liabilities | |||||||||||||
| Owners/partners’ equity | |||||||||||||
| Owners’ capital | 156,168,950 | — | |||||||||||
| Common unitholders (14,322,358 units issued and outstanding as at December 31, 2014) | — | 324,967,226 | |||||||||||
| Subordinated unitholders (9,822,358 units issued and outstanding as at December 31, 2014) | — | 77,087,950 | |||||||||||
| General partner (492,750 units issued and outstanding as at December 31, 2014) | — | 6,085,438 | |||||||||||
| Total owners/partners’ equity | 156,168,950 | 408,140,614 | |||||||||||
| Current liabilities | |||||||||||||
| Trade accounts payable | 704,793 | 1,671,942 | |||||||||||
| Amounts due to related parties | 24,674,117 | 2,350,812 | |||||||||||
| Derivative financial instruments | 4,233,398 | — | |||||||||||
| Other payables and accruals | 9,371,625 | 15,927,374 | |||||||||||
| Loans – current portion | 22,074,786 | 20,999,800 | |||||||||||
| Total current liabilities | 61,058,719 | 40,949,928 | |||||||||||
| Non-current liabilities | |||||||||||||
| Derivative financial instruments | 625,425 | — | |||||||||||
| Loans – non-current portion | 363,916,998 | 452,076,274 | |||||||||||
| Other non-current liabilities | 53,148 | ||||||||||||
| Total non-current liabilities | 364,542,423 | 452,129,422 | |||||||||||
| Total owners/partners’ equity and liabilities | 581,770,092 | 901,219,964 | |||||||||||
Unaudited condensed combined and consolidated statements of
profit or loss
For the three month periods and the years
ended December 31, 2013 and 2014
(All amounts expressed in
U.S. Dollars except unit data)
| For the three months ended | For the year ended | |||||||||||||
| December 31, 2013 | December 31, 2014 | December 31, 2013 | December 31, 2014 | |||||||||||
| Revenues | 21,204,015 | 33,302,010 | 64,142,588 | 119,040,364 | ||||||||||
| Vessel operating costs | (3,993,416 | ) | (7,104,420 | ) | (13,096,716 | ) | (23,937,598 | ) | ||||||
| Depreciation | (4,049,186 | ) | (7,111,771 | ) | (12,237,735 | ) | (24,638,752 | ) | ||||||
| General and administrative expenses | (427,398 | ) | (1,909,750 | ) | (1,524,625 | ) | (5,763,788 | ) | ||||||
| Profit from operations | 12,734,015 | 17,176,069 | 37,283,512 | 64,700,226 | ||||||||||
| Financial costs | (3,972,899 | ) | (11,235,837 | ) | (12,133,143 | ) | (27,486,292 | ) | ||||||
| Financial income | 5,704 | 11,091 | 31,686 | 33,004 | ||||||||||
| (Loss)/gain on interest rate swaps | (268,562 | ) | (4,805,218 | ) | 1,036,187 | (8,078,240 | ) | |||||||
| Total other expenses, net | (4,235,757 | ) | (16,029,964 | ) | (11,065,270 | ) | (35,531,528 | ) | ||||||
| Profit for the period | 8,498,258 | 1,146,105 | 26,218,242 | 29,168,698 | ||||||||||
| Less: | ||||||||||||||
| Profit attributable to GasLog’s operations | (8,498,258 | ) | — | (26,218,242) | (14,624,569 | ) | ||||||||
| Profit attributable to Partnership’s operations | — | 1,146,105 | — | 14,544,129 | ||||||||||
| Partnership’s profit attributable to: | ||||||||||||||
| Common unit | — | 1,123,183 | — | 8,713,197 | ||||||||||
| Subordinated unit | — | — | — | 5,540,049 | ||||||||||
| General partner unit | — | 22,922 | — | 290,883 | ||||||||||
| Earnings per unit for the period, basic and diluted: | ||||||||||||||
| Common unit | — | 0.08 | — | 0.75 | ||||||||||
| Subordinated unit | — | — | — | 0.56 | ||||||||||
| General partner unit | — | 0.05 | — | 0.66 | ||||||||||
Unaudited condensed combined and consolidated statements of cash flows
For
the years ended December 31, 2013 and 2014
(All amounts
expressed in U.S. Dollars)
| 2013 | 2014 | ||||||||
| Cash flows from operating activities: | |||||||||
| Profit for the year | 26,218,242 | 29,168,698 | |||||||
| Adjustments for: | |||||||||
| Depreciation | 12,237,735 | 24,638,752 | |||||||
| Financial costs | 12,133,143 | 27,486,292 | |||||||
| Financial income | (31,686 | ) | (33,004 | ) | |||||
| Unrealized (gain)/loss on interest rate swaps held for trading including ineffective portion of cash flow hedges | (3,592,103 | ) | 265,822 | ||||||
| Recycled loss of cash flow hedges reclassified to profit or loss | 654,964 | 5,471,275 | |||||||
| Non-cash contributed services | 627,000 | — | |||||||
| 48,247,295 | 86,997,835 | ||||||||
| Movements in working capital | (6,865,604 | ) | 11,741,038 | ||||||
| Cash provided by operations | 41,381,691 | 98,738,873 | |||||||
| Interest paid | (9,222,665 | ) | (20,463,196 | ) | |||||
| Net cash from operating activities | 32,159,026 | 78,275,677 | |||||||
| Cash flows from investing activities: | |||||||||
| Payments for vessels | (452,791,594 | ) | (317,950,977 | ) | |||||
| Financial income received | 28,370 | 30,350 | |||||||
| Purchase of short-term investments | (1,500,000 | ) | (26,824,481 | ) | |||||
| Maturity of short-term investments | — | 10,624,481 | |||||||
| Net cash used in investing activities | (454,263,224 | ) | (334,120,627 | ) | |||||
| Cash flows from financing activities: | |||||||||
| Borrowings drawdown | 411,000,000 | 697,000,000 | |||||||
| Borrowings repayments | (16,104,809 | ) | (611,895,191 | ) | |||||
| Payment of loan issuance costs | (181,101 | ) | (10,673,950 | ) | |||||
| Cash remittance to GasLog in exchange for contribution of net assets | — | (183,897,158 | ) | ||||||
| Net proceeds from public offering and issuance of general partner units | — | 321,969,459 | |||||||
| Dividends paid | — | (13,369,251 | ) | ||||||
| Payment of pre-IPO dividend due | — | (9,800,000 | ) | ||||||
| Increase/(decrease) in amounts due to shareholders | 13,728,649 | (13,728,649 | ) | ||||||
| Capital contributions received | 28,062,945 | 93,024,000 | |||||||
| Net cash from financing activities | 436,505,684 | 268,629,260 | |||||||
| Increase in cash and cash equivalents | 14,401,486 | 12,784,310 | |||||||
| Cash and cash equivalents, beginning of the year | 2,299 | 14,403,785 | |||||||
| Cash and cash equivalents, end of the year | 14,403,785 | 27,188,095 |
EXHIBIT II
Non-GAAP Financial Measures:
EBITDA, Adjusted EBITDA and Adjusted Profit
EBITDA is defined as earnings before interest income and expense, gain/loss on interest rate swaps, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before foreign exchange losses/gains. Adjusted Profit represents earnings before non-cash gain/loss on swaps that includes (a) unrealized gain/loss on swaps held for trading, (b) loss at inception, (c) recycled loss of cash flow hedges reclassified to profit or loss and (d) ineffective portion of cash flow hedges, foreign exchange gains/losses and write-off of unamortized loan fees. EBITDA, Adjusted EBITDA and Adjusted Profit which are non-GAAP financial measures, are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and operating performance. The Partnership believes that these non-GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. The Partnership believes that including EBITDA, Adjusted EBITDA and Adjusted Profit assist our management and investors in (i) understanding and analyzing the results of our operating and business performance, (ii) selecting between investing in us and other investment alternatives and (iii) monitoring our ongoing financial and operational strength in assessing whether to continue to hold our common units. This increased comparability is achieved by excluding the potentially disparate effects between periods of, in the case of EBITDA and Adjusted EBITDA, interest, gains/losses on interest rate swaps, taxes, depreciation and amortization; in the case of Adjusted EBITDA, foreign exchange losses/gains; and in the case of Adjusted Profit, non-cash gain/loss on swaps, foreign exchange gains/losses and write-off of unamortized loan fees, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect results of operations between periods due to one-off events.
EBITDA, Adjusted EBITDA and Adjusted Profit have limitations as analytical tools and should not be considered as alternatives to, or as substitutes for, or superior to profit, profit from operations, earnings per unit or any other measure of financial performance presented in accordance with IFRS. Some of these limitations include the fact that they do not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments, (ii) changes in, or cash requirements for our working capital needs and (iii) the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. They are not adjusted for all non-cash income or expense items that are reflected in our statement of cash flows and other companies in our industry may calculate these measures differently than we do, limiting its usefulness as a comparative measure.
Reconciliation of EBITDA and Adjusted EBITDA to Profit:
(Amounts
expressed in U.S. Dollars)
| For the three months ended, | For the year ended | |||||||||||
| December 31, 2013 | December 31, 2014 | December 31, 2014 | ||||||||||
| Attributable to the Partnership* | ||||||||||||
| Profit for the period | 8,498,258 | 1,146,105 | 14,544,129 | |||||||||
| Depreciation | 4,049,186 | 7,111,771 | 13,351,472 | |||||||||
| Financial costs | 3,972,899 | 11,235,837 | 15,205,424 | |||||||||
| Financial income | (5,704 | ) | (11,091 | ) | (22,898) | |||||||
| Loss on interest rate swaps | 268,562 | 4,805,218 | 5,218,374 | |||||||||
| EBITDA | 16,783,201 | 24,287,840 | 48,296,501 | |||||||||
| Foreign exchange losses/(gains) | 3,086 | (96,749 | ) | (140,712) | ||||||||
| Adjusted EBITDA | 16,786,287 | 24,191,091 | 48,155,789 | |||||||||
Reconciliation of Adjusted Profit to Profit
(Amounts
expressed in U.S. Dollars)
| For the three months ended, | For the year ended | |||||||||||
| December 31, 2013 | December 31, 2014 | December 31, 2014 | ||||||||||
| Results attributable to the Partnership * | ||||||||||||
| Profit for the period | 8,498,258 | 1,146,105 | 14,544,129 | |||||||||
| Foreign exchange losses/(gains) | 3,086 | (96,749 | ) | (140,712) | ||||||||
| Non-cash (gain)/loss on swaps | (304,219 | ) | 4,446,362 | 3,682,199 | ||||||||
| Write-off of unamortized loan fees | — | 5,756,738 | 5,756,738 | |||||||||
| Adjusted Profit | 8,197,125 | 11,252,456 | 23,842,354 | |||||||||
* Excludes amounts related to GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. earned prior to their transfer to the Partnership at the closing of the Partnership’s IPO on May 12, 2014 and the profits of GAS-sixteen Ltd. and GAS-seventeen Ltd. for the period prior to their transfer to the Partnership on September 29, 2014. Whilst these amounts are reflected in the Partnership’s financial statements because the transfers to the Partnership reflect a reorganization of entities under common control, such amounts are not attributable to the Partnership’s operations.
DISTRIBUTABLE CASH FLOW
Distributable cash flow with respect to any quarter means Adjusted EBITDA, as defined above, after considering cash interest expense for the period, including realized loss on interest rate swaps and excluding amortization of loan fees, estimated drydocking and replacement capital reserves established by the Partnership. Estimated drydocking and replacement capital reserves represent capital expenditures required to renew and maintain over the long-term the operating capacity of, or the revenue generated by our capital assets. Distributable cash flow is a quantitative standard used by investors in publicly-traded partnerships to assess their ability to make quarterly cash distributions. Our calculation of Distributable cash flow may not be comparable to that reported by other companies. Distributable cash flow is a non-GAAP financial measure and should not be considered as an alternative to profit or any other indicator of the Partnership’s performance calculated in accordance with GAAP. The table below reconciles Distributable cash flow to Profit for the period attributable to the Partnership.
Reconciliation of Distributable cash flow to Profit:
(Amounts
expressed in U.S. Dollars)
| For the three months ended December 31, 2014 | For the year ended December 31, 2014 Attributable to the Partnership * | |||||
| Partnership’s profit for the period | 1,146,105 | 14,544,129 | ||||
| Depreciation of fixed assets | 7,111,771 | 13,351,472 | ||||
| Financial costs | 11,235,837 | 15,205,424 | ||||
| Financial income | (11,091 | ) | (22,898) | |||
| Loss on interest rate swaps | 4,805,218 | 5,218,374 | ||||
| EBITDA | 24,287,840 | 48,296,501 | ||||
| Foreign exchange gains | (96,749 | ) | (140,712) | |||
| Adjusted EBITDA | 24,191,091 | 48,155,789 | ||||
| Cash interest expense including realized loss on swaps and excluding amortization of loan fees | (5,323,785 | ) | (9,912,293) | |||
| Drydocking capital reserve | (1,499,068 | ) | (2,620,882) | |||
| Replacement capital reserve | (4,340,466 | ) | (8,504,564) | |||
| Distributable cash flow | 13,027,772 | 27,118,050 | ||||
| Other reserves** | (2,310,547 | ) | (3,031,574) | |||
| Cash distributions declared | 10,717,225 | 24,086,476 | ||||
* Excludes amounts related to GAS-three Ltd., GAS-four Ltd. and GAS-five Ltd. earned prior to their transfer to the Partnership at the closing of the Partnership’s IPO on May 12, 2014 and the profits of GAS-sixteen Ltd. and GAS-seventeen Ltd. for the period prior to their transfer to the Partnership on September 29, 2014. Whilst these amounts are reflected in the Partnership’s financial statements because the transfers to the Partnership reflect a reorganization of entities under common control, such amounts are not attributable to the Partnership’s operations.
** Refers to reserves (other than the drydocking and replacement capital reserves) which have been established for the proper conduct of the business of the Partnership and its subsidiaries (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership and its subsidiaries).
