Greek shipowner Dynagas LNG Partners has kept its six LNG carriers rolling throughout the second quarter at 100% utilisation, despite the Covid-19 challenges.
Dynagas Partners, posted improved net income of $6.4m in the second quarter, up from $900,000 a year earlier. That brings the six-month figure to $13.4m, compared with $2.8m in the first half of last year.
Voyage revenues grew to $33.9m in the quarter, up from $30.8m year on year.
Dynagas Partners said the improved performance is attributable to an increase in voyage revenues and a decrease in interest and finance costs, coupled with stable vessel operating expenses during the second quarter.
The company, a New York-listed spin-off of George Procopiou’s Dynagas, said its fleet utilisation was 100% for the April to end-June period, against 94% in 2019.
The partnership reported average daily hire of about $62,200 per day per vessel in the quarter compared with about $55,100 per day per vessel in the same period last year.
Covid-19 plan
Dynagas Partners said the impact of the pandemic has been “operationally manageable” due to the implementation of its manager’s Covid-19 response plan and thanked its seafarers, charterers and employees for their support.
The company said it made use of the historically low interest-rate environment and entered into a floating fixed interest rate swap transaction from June 29 until the existing $675.0m credit facility expires in 2024.
“This was a key development in the execution of our strategic plan as it de-risks our exposure to interest rate volatility while securing a low cost of debt until 2024,” the company said.
Last month, the master limited partnership also entered an “at the market” offer programme under which it may offer and sell shares worth up to $30m.
“We intend to continue our strategy of using our cash flow generation to deleverage our balance sheet, reinforce our liquidity and generate cash so as to build equity over time,” the company said. “This, we believe, will enhance our ability to pursue future growth initiatives.”
Dynagas Partners owns six LNG carriers that are all fixed on long-term charters.
The company said the vessels have an average remaining contract term of 8.1 years.
The earliest re-delivery date is the 155,000-cbm Arctic Aurora (built 2013) in the third quarter of 2021 with the 149,700-cbm Clean Energy (built 2007) next up in early 2026.
Speaking on an earnings call Dynagas chief executive Tony Lauritzen was asked about when charterer Equinor has to declare its option to extend its hire on Arctic Aurora.
Lauritzen was reluctant to give the exact detail but said the company would likely start thinking about how to employ the ship from the end of this year or early in next.
Priority
He said employing the company’s strategy of employing its ships on time-charter had seen them outperform on income and utilisation what they would have earned on the spot market.
Lauritzen said the company will continue to pursue term charters as its first priority.
On the call he was pressed about whether parent company Dynacom was committed to growing its gas fleet and dropping down assets into the partnership.
The CEO said the company had made a conscious decision to reduce debt and build equity value.
He said Dynagas does not have the means at present to acquire a vessel, or a fraction of one, from its parent at present.
Lauritzen said that for Dynacom there is still an interest to grow in the LNG sector, flagging up the company’s apparently speculatively order for two LNG newbuildings at Hyundai Heavy Industries.
He added that at the some point the partnership also has to expand. “The aspiration is to grow over time,” he added.
