Dynagas LNG Partners LP · NYSE:DLNG
Dynagas LNG Partners LP — Q1 2018 Earnings Presentation
26 slides from Dynagas LNG Partners LP's earnings presentation, May 17, 2018
Slide 1: Q1 2018 Financial Results Presentation
s Q1 2018 Financial Results Presentation 17 May 2018
Slide 2: Forward Looking Statements and Disclaimer
Forward Looking Statements and Disclaimer This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of applicable federal securities laws. All statements included in this presentation which are not historical or current facts (including ou
Slide 3: Forward Looking Statements and Disclaimer
Forward Looking Statements and Disclaimer In addition, unpredictable or unknown factors herein also could have material adverse effects on forward-looking statements. Please read the Partnership’s filings with the Securities and Exchange Commission for more information regarding these factors and th
Slide 4: Recent Developments
Recent Developments Q1’ 18 Financial Highlights Adjusted EBITDA: $26.6 million Adjusted Net Income: $7.2 million Reported net income of $4.8 million Distributable Cash Flow: $11.3 million Optional Vessels Purchase Clean Ocean and Clean Planet purchase option extended from March 31, 2018 to December
Slide 5: Q1'18 Financial Highlights
Q1’ 18 Financial Highlights USD in thousands (except per unit, average daily hire and other operational data) Q1 2018 Q4 2017 Q1 2017 Revenues 33,904 34,452 39,092 Adjusted Net Income (1) 7,232 7,559 14,905 Adjusted EBITDA (1) 26,590 26,919 31,271 Distributable Cash Flow (1) 11,286 11,793 18,634 Ann
Slide 6: Distributable Cash Flow and Contract Backlog
Distributable Cash Flow and Contract Backlog Backlog Quarterly Adjusted EBITDA Quarterly Distributable Cash Flow Quarterly Distribution Common Units Lena River Drop Reduction in charter income of Yenisei River ($) Billion Yenisei River Down: Distribution Unchanged. and Lena River due to ($) Million
Slide 7: Common Units Distribution Reset: Rationale
Common Units Distribution Reset: Rationale Aligns the Partnership’s distribution level with its capacity to generate cash flow Annual cash savings of $24.5 million support the Partnership’s balance sheet Emphasis on distribution sustainability and stability Improves distribution and cash coverage Su
Slide 8: Distributable Cash Flow and Cash Coverage Ratio
Distributable Cash Flow and Cash Coverage Ratio (USD in thousands) Q1’ 18 Distribution Coverage Q1’ 18 Cash Coverage Net income 4,840 Net income 4,840 Depreciation 7,476 Depreciation 7,476 Amortization of deferred financing fees 811 Amortization of deferred financing fees 811 Net interest and financ
Slide 9: Attractive Long Term Contracts: Existing DLNG and Sponsor Fleet
Attractive Long Term Contracts: Existing DLNG and Sponsor Fleet Potential Growth in Secured Cash Flows –Yamal Charters offer attractive Drop Down Opportunities DLNG Estimated Annual EBITDA Contribution per Drop Estimated Annual Stream of Dividends per Drop Down of 49% Estimated Down Partial Interest
Slide 10: Simplified Capital Structure and Debt Profile
Simplified Capital Structure and Debt Profile ($) millions 1,000 800 Debt to Total Capitalization 64.5% 600 Net Debt to LTM EBITDA 6.5x USD 1 Billion $476 million Market Value $91 million of available liquidity 400 TLB of Vessels $ 75m Preferred Non amortizing 6.25% USD 250 million 200 $ 290m senior
Slide 11: Fleet Profile
Fleet Profile Fleet 6 LNG carriers 914,100 cbm (149,700 cbm for steam turbine LNG fleet, 155,000 cbm for the tri-fuel Total cbm capacity diesel engine LNG fleet (TFDE’s)) Fleet average age ~7.8 years(1) Average remaining charter duration ~10.2 years(1)(2) Gazprom, Statoil, Yamal, Petrochin
Slide 12: Long Term Contracts Provide Stable, Visible Cash Flows
Long Term Contracts Provide Stable, Visible Cash Flows L NG Carrier Year Capacity Name Built (cbm) Charterer 2018 2019 2020 2021 2022 Clean 2007 149,700 2026 Energy Ob River 2007 149,700 (1) 2028 Am ur 2028 2008 149,700 (1) River Arctic 2013 155,000 2023 Aurora Yenis ei 2013 155,000 2033/34 River L
Slide 13: Dropdown Opportunities
Dropdown Opportunities All LNG carriers are chartered on long-term contracts, providing multi-billion dollar contract backlog The Sponsor is a critical partner to Novatek, Total and CNPC The Sponsor and DLNG together account for 11 out of 27 ships contracted to Yamal LNG Year built / Carrier e
Slide 14: Market Share: Leader in Ice Class Trades
Market Share: Leader in Ice Class Trades Dynagas Group (DLNG and Sponsor) has an 75% market share of the vessels with ice class 1A FS or equivalent notations Limited vessel supply creates sublet opportunities for clients (Gazprom Sakhalin) First and only LNG shipping company to carry cargoes
Slide 15: Industry Overview
Industry Overview
Slide 16: Composition of the LNG Fleet & Orderbook
Composition of the LNG Fleet & Orderbook 1. Existing Fleet LNG Vessel Deliveries by Propulsion Type • Number of vessels: 497 # of Vessels % Average Existing Fleet # of Vessels of Fleet Age 185 -266,000 m3 46 14% 9 Yrs 167- 185,000 m3 98 22% 2 Yrs 150- 167,500 m3 122 25% 5 Yrs 130-150,000 m3 185 33%
Slide 17: LNG Trade to increase by over 40% by 2022
LNG Trade to increase by over 40% by 2022 Global LNG Supply / Exports by Region, 2012-2022 • Global LNG trade reached ~292 mt in 2017, up ~11% from 2016 and up ~22% from 2012. +42% • Over the next 5 years LNG supply is projected to rise by 5-Year 124 mt or 42% (new projects and existing projects +22
Slide 18: LNG Trade up 11% in the First Quarter of 2018
LNG Trade up 11% in the First Quarter of 2018 • Total LNG exports reached ~78.6 mt in the first quarter of 2018, up Incremental LNG Exports by Region, Q1 18 vs Q1 17 (mill tons) ~11% from the first quarter of 2017 or 1% up from Q4 2017 • The largest export growth came from Australia, U.S. and Russia
Slide 19: Asia keeps driving LNG Demand Growth
Asia keeps driving LNG Demand Growth Incremental LNG Imports by Region, Q1 18 vs Q1 17 (mill tons) China’s growing appetite for LNG continues into 2018. This quarter China imported a total of ~10.7 mt, only Korea and Japan imported more with ~12.8 mt and ~24.7 respectively -0.7 • All three tradition
Slide 20: The U.S. Vessel Multiplier is Notably Higher Than the Global Average
The U.S. Vessel Multiplier is Notably Higher Than the Global Average Recent trading patterns1 (as of 01-Jan-17 through 31-Dec-17) Importers from Sabine Pass (LNG tonnes) 2017 YTD from Sabine Pass exports indicate 1.76 vessels (160,000 m3) are required on average for each million tonne of LNG exporte
Slide 21: U.S. Export Trading Patterns – Q1 2018
U.S. Export Trading Patterns – Q1 2018 Recent trading patterns1 from Sabine Pass exports that delivered Importers from Sabine Pass (LNG tonnes) – Q1 2018 in Q1 2018 indicate 2.00 vessels (160,000 m3) are required on average for each million tonne of LNG exported • Asian markets have taken a signific
Slide 22: Liquidity in The LNG Charter Market Continues to Grow
Liquidity in The LNG Charter Market Continues to Grow Annual Fixtures by Charter Length Activity in the LNG charter market continues to expand as average the spot market grows. • Medium term chartering activity has been low in recent years as players have been able to rely on a sizable pool of moder
Slide 23: Key Investment Highlights
Key Investment Highlights DLNG is a low risk, pure play LNG marine transportation MLP provides attractive risk-adjusted returns for Unitholders Purified Asset Mix: Pure Play LNG marine transportation MLP Compelling Market Fundamentals: Fixed Rate Contracts Strong Growth in LNG production Simplified
Slide 24: Appendix
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Slide 25: Reconciliation of Net Income to Adjusted Net Income and Adjusted EPS
Reconciliation of net Income to adjusted Net Income and Adjusted Earnings per Common Unit Three Months Ended (In thousands of U.S. Dollars, except for units and per unit data) 31 March 2018 2017 Net income $ 4,840 $ 12,912 Charter hire amortization 138 (14) Class survey costs 467 220 Amortization of
Slide 26: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Three Months Ended 1 Reconciliation to Net Income 31 March (In thousands of U.S dollars) 2018 2017 Net income $ 4,840 $ 12,912 Net interest and finance costs 11,882 8,890 Depreciation 7,476 7,476 Class survey costs 467 220 Amortization of fair value of