GasLog Partners has chartered out one of its steam turbine LNG carriers to Chinese trader Jovo on a two-year deal as the spot exposure for its fleet increases.
The 145,000-cbm Methane Shirley Elisabeth (built 2007) is fixed through into 2022.
Speaking on a second-quarter results call, outgoing chief executive Andy Orekar, who is leaving the company in September, said the company saw a significant increase in its spot exposure compared to the corresponding quarter of 2019.
Orekar said the company’s fleet has 86% charter coverage for the rest of this year with that figure at 59% for 2021.
He said the partnership will continue to seek ways to maximise vessel utilisation.
Deleveraging
After refinancing, Orekar said the average debt on the partnership’s steam vessels is $45m to reflect their average six-month charter duration.
The corresponding figure is $111m for the tri-fuel diesel-electric vessels which have an average charter term of one year.
“We believe it is prudent for ships of greater spot exposure to carry lower debt balances and the partnership expect to continue this deleveraging trend over time,” the CEO said.
Orekar said the partnership delivered a “solid” operational and financial performance despite the Covid-19 challenges.
He said the focus remains on maximising fleet utilisation while bringing down costs and reducing debt balances to improve the competitiveness of its fleet.
The company has prioritised debt repayment during 2020. It completed a refinancing in July which has pushed its nearest debt maturity out to 2024.
GasLog Partners second-quarter profit more than halved to $8.2m, down from $19.1m in the same period last year. Revenue fell to $84m, from $92m in second quarter 2019.
Immensely rewarding
Thanking his colleagues on his last results call, Orekar said that leading the partnership since its initial public offering had been an “extraordinary honour and an immensely rewarding personal and professional experience”.
GasLog chief executive Paul Wogan thanked Orekar for all he has done for the company and said he will miss his “wise counsel”.
During a question and answer session, Wogan was repeatedly asked about the possibility of consolidating GasLog and GasLog Partners which held a joint results call.
Wogan said the partnership’s strategy had been about strengthening its balance sheet while bringing down break-even costs on its fleet.
He said GasLog will continue to look at all opportunities for the partnership. But during the current Covid-19 crisis the focus would remain on continuing to operate the business in the best way.
Wogan said the company is spending “every waking hour” working on aspects such as crew changes and maintenance and will come back to strategic questions when the Covid-19 uncertainties have lifted.
