Capital Product Partners (CPLP) Misses Q1 EPS by 8c

Capital Product Partners (NASDAQ: CPLP) reported Q1 EPS of $0.35, $0.08 worse than the analyst estimate of $0.43. Revenue for the quarter came in at $33.69 million versus the consensus estimate of $33.94 million.

Highlights

• Quarterly Revenues, Expenses and Net Income of $33.7 million, $22.5 million and $6.7 million respectively for the first quarter of 2020.
• Operating Surplus1 and Operating Surplus after the quarterly allocation to the capital reserve of $21.1 million and $10.9 million respectively.
• Completed in January 2020 the acquisition of three 10,000 TEU containers with long term charters to Hapag-Lloyd for a total consideration of $162.6 million.
• Completed exhaust gas cleaning systems (“scrubber”) fleet installation program.
• Announced common unit distribution of $0.35 for the first quarter of 2020.

Management Commentary

Mr. Jerry Kalogiratos, Chief Executive Officer of our General Partner, commented:

“The COVID-19 outbreak 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 including socioeconomic trends, trade patterns and the world economic outlook that are very hard to assess at this point in time. In this environment, we have prioritized 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 with regard to COVID-19.”

“It is clear that the container charter market has been adversely affected by COVID-19, but the extent and duration of the impact is very difficult to predict at this stage. A prolonged recession with a continuation or resumption of hard lockdowns over the coming quarters could lead to a prolonged slump in charter rates and adversely affect our cash flows as well as those of liner companies including our counterparties. However, assuming a gradual roll back of social distancing measures within 2020 and a resumption of a more normalized economic activity by the end of the year, analysts expect the market to rebound strongly next year. As we only have a limited amount of vessels coming off charter in the next twelve months and as they come off their employment in a staggered manner, we should be in a position to capitalize from a gradual recovery going forward. In addition, our low leverage compared to our peers and the expected completion of the ICBC Lease that is expected to generate additional liquidity, should provide us with added flexibility in this environment.”

“Once the uncertainty around the COVID-19 impact abates, we are looking forward to resuming growing the Partnership and the Partnership’s long term distributable cash flow.”

For earnings history and earnings-related data on Capital Product Partners (CPLP) click here.

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