US-listed LNG shipowner GasLog Partners has sold off one of its tri-fuel diesel-electric LNG carriers and chartered out a second for five years to an energy major as it prepares for planned take-private merger with parent.
Announcing first quarter results on Thursday, GasLog Partners said it completed the sale and lease-back of the 155,000-cbm tri-fuel diesel-electric LNG carrier GasLog Sydney (built 2013) on 30 March.
The vessel was sold to China Development Bank Leasing for $140m and leased back under a bareboat charter deal with no repurchase option or obligation. But GasLog Partners said it lost just over $1m on the sale.
The company also revealed it had chartered out its 174,000-cbm TFDE vessel GasLog Geneva (built 2016) to Shell for five years after the major chose to exercise an extension option.
GasLog Partners nudged up its first quarter profit by 6% to $36.4m from $35m in the same three months of 2022.
First quarter revenue grew 16% to $99.1m from $85.5m in the same period a year ago.
GasLog Partners said the improved revenues were mainly attributable to its vessels operating in the spot and short-term markets in the first quarter of 2023, under time charters that were executed in 2022 offset by the sale of the 145,000-cbm Methane Shirley Elisabeth (built 2007) and the dry-docking of the 155,000-cbm GasLog Shanghai (built 2013).
The company said its available trading days fell to 1,203 compared to 1,305 days in the first quarter of 2022.
Vessel operating costs fell to $15.9m from $18.6m for the same period in 2022 largely due to lower crew costs following the relaxation of Covid protocols, a more favourable EUR/USD exchange rate and a decrease in technical maintenance costs
The company said daily operating costs per vessel dropped to $12,640 per day in the first quarter of 2023 from $14,741 per day in the comparable period a year ago.
But general and administrative expenses were higher for the quarter at $5.6m, up from $4.7m largely due to the planned merger transaction.
Financial costs doubled to $17.4m for the quarter, compared to $8.8m in the same period of 2022. The company said this was mainly due to an increase of $8.9m in interest on loans. The Partnership also logged a $0.2m loss on derivatives during the quarter.
The company repaid $32.1m of debt and lease liabilities during the quarter and as of 31 March had $805.6m of outstanding bank borrowings.
Updating on the merger of the company with Peter Livanos-controlled GasLog, the US-listed entity said the deal — which is worth over $447m — is expected to close by the end of the third quarter of 2023, subject to shareholder approval.
On 6 April GasLog, which owns 30.2% of GasLog Partners, upped its offer for the Partnership stock to $8.65 per share, including a $3.28 per share cash dividend.
GasLog Partnership’s conflicts committee of its board of directors recommended approval of the merger. Acting on this the Partnership’s board of directors unanimously approved the merger.
GasLog Partners chief executive Paolo Enoizi described the planned merger with GasLog as “a transformative transaction”.
Enoizi said the company’s term fixtures have helped it make “meaningful progress” towards its leverage targets and the strengthening of its balance sheet which is improving fleet break-even levels.
“The Partnership has capitalised on the strong LNG market through profitable fixtures, exercised charterers’ options and sale and lease-backs,” he said.
