Capital Product Partners posted its highest profit in six quarters on Tuesday, boosted by the divestment of container ships to transform itself into a pure-play gas carrier company.
Net income at the US-listed firm owned by Evangelos Marinakis climbed to $33.9m in the first quarter, more than three times higher than in the same period of 2023.
The result includes a $16.4m gain from the sales of two of its boxships, the 9,300-teu Akadimos (renamed CMA CGM Amazon, built 2015) and 5,100-teu Long Beach Express (built 2008).
Capital Product, which announced late last year that it was planning to sell all its 15 container ships, is now nearly halfway there. Apart from the two boxships it divested, the company has lined up the sale of five more such ships, as TradeWinds has reported.
Cash proceeds from the seven boxship divestments agreed so far amounted to $273m in total, or $183m after paying off debt.
Upon completion of the five further sales the company has already announced, Capital Product will be left with eight container ships slated to be offloaded as well.
“I am pleased to see the partnership’s continued progress in executing the business plan outlined in November 2023,” chief executive Jerry Kalogiratos said in the earnings release on 30 April.
The company instead will focus on its modern LNG carrier fleet, which has grown to nine ships this year, after delivery of the 174,000-cbm Axios II (built 2024).
Three more newbuildings
Capital Product has already agreed to double this fleet by acquiring nine newbuildings from Marinakis on long-term charters that will be delivered between the second quarter of 2024 and the first quarter of 2027.
Capital Product will also have a right of first refusal to acquire two ammonia carriers and two liquid CO2 carriers that private Marinakis company Capital Maritime ordered last year, as well as any other two-stroke LNG vessels in the future.
Capital Product is investing more than $3bn in this transformation, boosting long-term debt to $1.78bn at the end of March from less than $400m in 2020.
The debt funding of its fleet has increased the company’s finance costs, which rose to a record $34.4m in the first quarter, up 44% year on year.
However, revenue rose to a record $104.5m as well — up 29% year on year — after three new LNG carriers joined the fleet.
Capital Product has already announced it is keeping its dividend steady for the 10th consecutive quarter at $0.15 per unit.
The company’s shares closed trading at $15.78 on 29 April, giving it a market value of $869m. This is far below its net fleet value of $2.72bn as of the end of March.
The Marinakis family is the largest shareholder of the company, owning about 54%.
The second-biggest with almost 26% is Yoda PLC — an investment fund owned by Greek real estate businessman Ioannis Papalekas.
