Dynagas LNG Partners, the owner of six LNG carriers which operate under long-term charters, reported a drop in its first-quarter net income.
The NYSE-listed limited partnership formed by shipowner Dynagas posted a net income of $9.6 million for the three months ended March 31, 2023.
This marks a decrease of $14.3 million, or 59.8 percent, compared to the same period last year, the LNG shipper said in a statement.
Dynagas LNG attributed this to the decrease in the gain on its interest rate swap transaction and the increase in the interest and finance costs, net.
Net income also dropped compared to the prior quarter of $11.6 million.
Adjusted net income decreased 35 percent to $6.5 million in the first quarter mainly due to the increase in the interest and finance costs, net, compared to the corresponding period in 2022, the firm said.
Voyage revenues for the three-month period reached $37.3 million, up 12 percent compared to the same quarter last year.
Dynagas LNG attributed this to the increase in the deferred revenue amortization relating to the new time charter party agreement with Equinor for the new employment of the 155,000-cbm LNG carrier, Arctic Aurora, which will start in September 2023.
In addition, Dynagas LNG attributed the rise to the higher revenue earning days of its LNG carrier Clean Energy in the three months ended March 31, 2023 compared to the corresponding period of 2022.
The partnership reported gross of commissions of about $62,130 per day per vessel in the three-month period, compared to about $63,130 per day per vessel for the corresponding period of 2022.
During both three-month periods, the partnership’s vessels operated at 100 percent utilization.
Outlook remains “positive”
Chief executive Tony Lauritzen said all six LNG carriers in the company’s fleet are operating under their respective long-term charters with international gas companies with an average remaining contract term of 6.1 years.
As of June 20, 2023, the company’s estimated contracted revenue backlog was $0.96 billion.
“We have remained committed to our strategy of creating equity value through reducing debt and have since September 2019, repaid $218.4 million in debt,” he said, adding that the company’s current debt outstanding is $456.6 million.
“Gas prices in the main pricing hubs are currently significantly lower compared to a year ago when gas prices were driven to new highs as a result of the Russian – Ukraine situation. The spread however between US feed gas prices and LNG prices in Europe and the Far East continues to be healthy,” Lauritzen said.
He said that the company believes this is “positive” for economic sustainability and therefore global growth as well as for gas producers.
“It is being increasingly appreciated that LNG is a necessary ingredient to managing global emissions as well as energy security and, despite cost increases, we expect the continuation of final investment decisions being received by mature LNG production projects, the execution of new long-term LNG sales and purchase agreements and consequently the continued demand for LNG shipping,” he said.
“In light of these developments, we believe that the outlook for LNG shipping and the partnership remains positive,” Lauritzen said.
