Capital Product Partners L.P. (the “Partnership” or “CPLP”)
(NASDAQ: CPLP), an international diversified shipping company today released its financial results for the fourth quarter ended December 31, 2013.
The Partnership’s net income for the quarter ended December 31, 2013, was $2.0 million, including a $7.1 million loss from the sale of the M/T Agamemnon II to unaffiliated third parties and a $0.6 million loss related to the settlement of the Partnership’s claims against Overseas Shipholding Group Inc. (“OSG”) and certain of OSG’s subsidiaries in connection with their voluntary filing for relief under Chapter 11 of the U.S. Bankruptcy Code. After taking into account the preferred interest in net income attributable to the unit holders of the 18,922,221 Class B Convertible Preferred Units outstanding as of December 31, 2013, (the “Class B Units” and the “Class B Unitholders”), the result for the quarter ended December 31, 2013 was $0.02 net loss per limited partnership unit, which is $0.37 lower than the $0.35 income per unit from the previous quarter ended September 30, 2013 and $0.53 higher than the $0.55 net loss per unit in the fourth quarter of 2012.
Operating surplus for the quarter ended December 31, 2013 was $29.2 million, which is $3.4 million
higher than the $25.8 million from the third quarter of 2013 and $6.7 million higher than the $22.5
million of the fourth quarter of 2012. The operating surplus adjusted for the payment of distributions to the Class B Unitholders was $25.2 million for the quarter ended December 31, 2013. 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 the section “Appendix A” at the end of the press release, for a reconciliation of this non-GAAP measure to net income.
Revenues for the fourth quarter of 2013 were $47.0 million, compared to $38.3 million in the fourth
quarter of 2012; the increase is mainly a result of the Partnership’s increased fleet size and improving employment day rates for certain of the Partnership’s vessels.
Total expenses for the fourth quarter of 2013 were $32.7 million (excluding a $7.1 million loss from the sale of the M/T Agamemnon II to unaffiliated third parties) compared to $26.3 million in the fourth quarter of 2012 (excluding a $43.2 million impairment charge), the increase mainly a result of the increased fleet size of the Partnership. The vessel operating expenses for the fourth quarter of 2013 amounted to $15.4 million for the commercial and technical management of our fleet under the terms of our management agreements, compared to $11.2 million in the fourth quarter of 2012. The total expenses for the fourth quarter of 2013 also include $14.3 million in depreciation and amortization, compared to $12.0 million in the fourth quarter of 2012, as a result of our increased fleet size. General and administrative expenses for the fourth quarter of 2013 amounted to $1.4 million compared to $2.3 million in the fourth quarter of 2012, the decrease resulting from the Partnership’s Omnibus Incentive Compensation Plan becoming fully vested in the third quarter of 2013.
Total other expense, net for the fourth quarter of 2013 amounted to $4.7 million compared to $3.8 million for the fourth quarter of 2012, the increase resulting from higher interest cost as a result of the increased indebtedness of the Partnership.
As of December 31, 2013, the Partners’ capital amounted to $781.4 million, which is $207.6 million
higher than the Partners’ capital as of December 31, 2012, which amounted to $573.8 million. This
increase primarily reflects the issuance of 13,685,000 common units in the quarter ended September 30, 2013, which raised gross proceeds of approximately $126.6 million, the issuance of the 9.1 million Class B Units, which raised gross proceeds of approximately $75.1 million, combined with the payment of $88.2 million in distributions since December 31, 2012 and the net income for the twelve months period ended December 31, 2013.
As of December 31, 2013, the Partnership’s total debt has increased by $124.9 million to $583.3 million, compared to total debt of $458.4 million as of December 31, 2012, as a result of the loan advances under the Partnership’s credit facilities during the twelve months period ended December 31, 2013 in connection with the acquisition of five 5,023 TEU Container Vessels acquired in 2013.
The M/T Aias (150,393 dwt, Crude Oil Tanker built 2008 Universal Shipbuilding Corp., Japan) and the M/T Amoureux (149,993 dwt, Crude Oil Tanker built 2008 Universal Shipbuilding Corp., Japan) were chartered to Capital Maritime & Trading Corp. (“Capital Maritime”) for a minimum charter term of one year (+/- 30 days) for $24,000 gross per day plus 50/50 profit share on actual earnings settled every 6 months. The earliest redelivery under the new charters is in November and December 2014, respectively. Both vessels were previously under charter with Capital Maritime at the same rate.
The M/T Amore Mio II (159,982 dwt, Crude Oil Tanker built 2001, Daewoo Shipbuilding & Marine
Engineering Co., Ltd., South Korea) entered into a new charter with Capital Maritime for a minimum charter term of one year (+/- 30 days) for $17,000 gross per day after its charter expiration to BP Shipping Ltd., which was for a gross rate of $17,500 per day. The earliest redelivery under the new charter is in November 2014.
The M/T Arionas (36,725 dwt, IMO II/III Chemical Product Tanker built 2006, Hyundai Mipo Dockyard Company, Ltd., South Korea) extended its employment with Capital Maritime for an additional charter term of a minimum of 12 months for $14,250 gross per day plus 50/50 profit share for breaching Institute Warranty Limits, which is $450 per day higher than its previous employment day rate. The earliest redelivery under the new charter is in October 2014.
All charters were unanimously approved by the Conflicts Committee of the Partnership.
In October 2013, the Partnership entered into two separate agreements with non-affiliated third parties to acquire an eco-Type MR product tanker, the M/T Aristotelis (51,604 dwt IMO II/III Chemical Product Tanker built 2013, Hyundai Mipo Dockyard Ltd., South Korea), and to sell the M/T Agamemnon II (51,238 dwt IMO II/III Chemical Product Tanker built 2008, STX Shipbuilding Co. Ltd., South Korea). The M/T Agamemnon II was delivered to its new owners on November 5, 2013. The Partnership took delivery of the M/T Aristotelis on November 28, 2013, which shortly thereafter commenced its period time charter for $17,000 gross per day for 18–24 months with Capital Maritime. The acquisition of the M/T Aristotelis was funded with proceeds from the sale of M/T Agamemnon II and approximately $6.3 million from the Partnership’s cash balances.
As a result of the above acquisitions and charter extensions, the weighted average remaining charter
duration of our fleet is 8.8 years as of December 31, 2013 compared to 4.0 years at the end of 2012.
Increase of Partnership’s Credit Facility to $225.0 million
In September 2013, the Partnership entered into a new senior secured credit facility of up to $200.0
million led by ING Bank N.V., which was increased to $225.0 million pursuant to an amendment and restatement thereof entered into in December 2013. None of the other material terms of the credit facility were amended. The facility is non-amortizing until March 2016, with a final maturity date in December 2020. The interest margin of this facility is 3.50%, with a commitment fee of 1.00%. The facility will be available for the funding of up to 50% of the charter free value of modern product tankers and post panamax container vessels. In September 2013, the Partnership drew $75.0 million from this senior secured credit facility in connection with the partial financing of the acquisition of three post panamax container vessels. As of January 31, 2014, $150.0 million remain available under this facility.
The products and services herein described in this press release are not endorsed by The Maritime Executive.