Dynagas LNG Partners (DLNG) Tops Q2 EPS by 7c, Revenues Miss

Dynagas LNG Partners (NYSE: DLNG) reported Q2 EPS of $0.08, $0.07 better than the analyst estimate of $0.01. Revenue for the quarter came in at $30.89 million versus the consensus estimate of $31.87 million.

Highlights:

• Net income of $0.4 million for the three months ended June 30, 2018. Included in the second quarter 2018 results are $2.2 million of scheduled class survey and dry dock costs related to the Arctic Aurora, one of the three tri-fuel diesel engine (TFDE) vessels in our fleet;
• Loss per common unit of $0.04 for the three months ended June 30, 2018;
• Adjusted Net Income(1) of $4.5 million for the three months ended June 30, 2018;
• Adjusted Earnings per common unit(1) (2) of $0.08 for the three months ended June 30, 2018;
• Distributable Cash Flow(1) of $8.7 million during the three months ended June 30, 2018;
• Adjusted EBITDA(1) of $24.4 million for the three months ended June 30, 2018;
• Reported free cash of $57.8 million and available liquidity of $87.8 million as of June 30, 2018;
• Quarterly cash distribution of $0.25 per common unit in respect of the second quarter of 2018 and $0.5625 per preferred unit in respect of the most recent period.

CEO Commentary:

Tony Lauritzen, Chief Executive Officer of the Partnership, commented:

“We are pleased to report our earnings for the three months ended June 30, 2018.

“Our reported earnings for the second quarter of 2018 were in line with our expectations and were above those for the second quarter of 2017, but below those for the first quarter of 2018. Our earnings were impacted by: (i) the temporary employment of the Clean Energy in the short-term market until July 13, 2018, at which time the vessel commenced employment on a time charter with Gazprom for a term of approximately eight years, (ii) the completion of the multiyear charter contract with Gazprom for the Ob River in April 2018 and the subsequent employment of the vessel with the same company at a lower rate of hire reflecting a longer charter term of ten years, and (iii) the scheduled dry-docking of the Arctic Aurora in May 2018.

“We believe the Yamal LNG project is progressing well. On July 1, 2018, Yamal narrowed the delivery windows for both the Yenisei River and the Lena River to the earliest possible allowed under their respective 15 year charter contracts.

“On July 21, 2018, the Yenisei River completed the five year term of its employment contract with Gazprom. Following the redelivery of the vessel to the Partnership, the vessel is undergoing its five year special survey which is expected to be completed in mid-August 2018. After the completion of the special survey, we expect to employ the Yenisei River in the short-term market until the vessel commences its 15 year contract with Yamal.

“Following redelivery from Gazprom in October 2018 and the completion of its special survey, the Lena River is contracted to be employed on a multi-month charter contact with a large gas producer until the vessel commences its 15 year contract with Yamal.

“On July 19, 2018, we paid quarterly cash distribution of $0.25 per common unit with respect to the second quarter of 2018. Since our initial public offering in November 2013, we have paid total cash distributions of $7.29 per common unit. In addition, on August 13, 2018, we expect to pay a cash distribution of $0.5625 per unit on our Series A Preferred Units for the period from May 12, 2018 to August 11, 2018.

“We believe that we have significant cash flow visibility with contracted vessel employment for approximately 85% of 2018, 99% of 2019 and 100% of 2020, and with an estimated Fleet-wide average remaining contract duration of 10.1 years.

“Our intent is to seek additional contract coverage, particularly in 2018, to manage our capital structure and operating expenses, and to continue the safe operation of our Fleet.

“We look forward to working towards meeting our goals, which we believe will continue to benefit our unitholders.”

For earnings history and earnings-related data on Dynagas LNG Partners (DLNG) click here.

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