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The NYSE-listed limited partnership formed by shipowner Dynagas posted a net income of $13.6 million for the first quarter of this year.
This represents a 15.3 percent increase compared to $11.7 million in the same quarter last year.
Net income dropped compared to $14.1 million in the fourth quarter.
Dynagas LNG attributed the year-on-year rise in net income to the decrease in interest and finance costs and the increase in voyage revenues due to certain non-cash items.
Also, the rise in net income was partially offset by the increase in voyage expenses and vessels’ operating expenses, as well as by the decrease in gain on the interest rate swap transaction which expired in September 2024.
Voyage revenues up
The company reported that its adjusted net income increased 15.3 percent to $14.3 million in the first quarter compared to the same period last year, primarily due to a decrease in interest and finance costs.
Voyage revenues for the first quarter were $39.1 million, up $2.6 percent compared to the same quarter in 2024.
Dynagas LNG attributed the increase to the non-cash effect of the amortization of deferred revenues, the value of the EU ETS emissions allowances (EUAs) due to the partnership by the charterers of its vessels, and the increase in variable hire revenues earned on one of the partnership’s vessels under an OPEX pass-through time charter.
The company reported average daily hire gross of commissions of about $72,190 per day per vessel for the three-month period, compared to about $72,770 per day per vessel for the corresponding period of 2024.
Dynagas LNG said its vessels operated at 100 percent fleet utilization during the three-month periods ended March 31, 2025, and 2024.
Repurchase program
Chief executive Tony Lauritzen said these results “underscore the strength of our contracts-based business model, which continues to shield us from the prevailing weakness in the short-term LNG shipping market.”
All six Dynagas LNG carriers are employed under long-term charters with international gas companies, with an average remaining contract duration of 5.7 years.
“Barring any unforeseen events, we do not expect any vessel availability before 2028,” he said.
Moreover, the company’s estimated contract backlog stands at about $0.9 billion as of May 27, 2025.
“In line with our commitment to delivering unitholder value, we paid a quarterly cash distribution of $0.049 per common unit on May 23, 2025,” Lauritzen said.
He noted that Dynagas LNG also continued to execute on its repurchase program, having repurchased 271,303 common units to date at an average price of $3.79 per unit, “well below our estimated net asset value per unit.”
As of today, $9.0 million remains available under the repurchase program.
“Following the successful refinancing of our debt in June 2024, our balance sheet has strengthened meaningfully. Two of our vessels are now debt-free, and our annual debt amortization of $44 million represents 14 percent of our total outstanding debt of $312 million. We face no debt maturities until mid-2029,” he said.
“With contracted revenues exceeding our cash breakeven, we continue to generate cash each quarter, further improving our liquidity. As of March 31, 2025, our cash balance stood at $70 million,” Lauritzen said.
Dynagas LNG intends to use this balance to fully redeem the outstanding $55 million Series B preferred units on July 25, 2025.
“Based on the latest distribution, the Series B units carried an annualized yield of 10.17 percent on their $25 liquidation preference. We expect annual cash savings of approximately $5.7 million as a result of the redemption,” he said.
“While we remain insulated from short-term volatility in the LNG market, our strategy remains focused on disciplined capital allocation-prioritizing deleveraging, returning capital to common unitholders through cash distributions and common unit repurchases, and reducing cash outflows through initiatives such as the Series B preferred redemption,” Lauritzen said.