Capital Product Partners, a container ship player transforming itself into a pure-play gas carrier firm renamed Capital Clean Energy, says the recent boxship revival is playing into its hands as it seeks to divest its legacy fleet.
The company has already sold seven of the 15 container ships it owned last year, with proceeds from these deals driving first-half net income to its highest level in at least 11 years.
Given the hotter market caused by the Red Sea disruption, Capital Product said in an earnings release on Friday that it intends to “evaluate closely trends and developments in this market, in order to maximise returns”.
The company noted that the value of 10-year-old, 5,100-teu vessels similar to those it still owns has increased by approximately 60% this year.
“The strong container markets provide CPLP [Capital Product Partners] with optionality regarding future divestment plans given its five 5,000-teu vessels on contract into 2025 and three 13,000-teu units on duration well into 2030,” the company said.
Asked by analysts in a conference call to elaborate, chief executive Jerry Kalogiratos said the company was “not dogmatic” about how to monetise its remaining boxships.
Any offer by potential buyers will always be weighed against the cash flow the vessels stand to generate from charters in this booming market.
“The idea is to rather divest from these assets but we don’t have to take forced exits,” he said, adding that any sales will be “selective and opportunistic”.
Best first half in more than a decade
Net income for the second quarter increased nearly fivefold year on year to $34.2m.
This is the highest level in seven quarters and beats the first-quarter performance of $33.9m, which was up 239% year on year.
Capital Product’s first-half net income of $68.1m is its best performance for that period since at least 2013, according to TradeWinds data.
Boxship divestments contributed greatly to these results. The second-quarter net was boosted by a $15.2m gain from the concluded sale of five boxships, which has been previously reported by TradeWinds.
The company has already announced keeping its payout steady for the 11th consecutive quarter at $0.15 per common unit.
Capital Product also owns 12 LNG carriers on the water.
The size of that fleet will more than double with the delivery of 16 LNG and gas carrier newbuildings over the coming years.
The ships have been passed from the company’s general partner Capital Maritime, which is controlled by Evangelos Marinakis.
