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The NYSE-listed limited partnership formed by shipowner Dynagas posted a net income of $15.1 million for the three months ended September 30, 2024.
This marks a rise of $13.7 million, or 978.6 percent, compared to $1.4 million in the same quarter last year, the LNG shipper said in a statement.
Net income also decreased compared to $10.7 million in the prior quarter.
Dynagas LNG attributed this rise mainly to the increase in voyage revenues and decrease in vessel operating expenses, the decrease in interest and finance costs, the decrease in the vessels’ dry docking and special survey costs, and non-recurring other income earned this quarter from insurance claims received for damages incurred in prior years.
Voyage revenues up
The company said its adjusted net income jumped 367.7 percent to $14.5 million in the third quarter mainly due to the increase in the cash voyage revenues and the decrease of the vessels’ operating expenses.
Voyage revenues for the third quarter were $39.1 million, up $2.1 million or 5.7 percent compared to the same quarter in 2023.
Dynagas LNG said this is mainly due to the increase in voyage revenues of Arctic Aurora following its time charter party agreement with Equinor, which started in September 2023.
The company reported average daily hire gross of commissions of about $72,800 per day per vessel for the three-month period, compared to about $68,800 per day per vessel in the third quarter last year.
The partnership’s vessels operated at 100 percent fleet utilization during the three-month period.
Also, vessel operating expenses were $8.1 million, which corresponds to a daily rate per vessel of $14,656 for the three-month period, as compared to $10.6 million, or a daily rate per vessel of $19,288, in the corresponding quarter last year.
Dynagas LNG said this decrease is mainly attributable to lower planned technical maintenance on its vessels in the three-month period.
Growth beyond LNG
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 about 6.2 years.
“Assuming no unforeseen events, the partnership expects no vessel availability until 2028,” he said.
As of November 22, 2024, the company’s estimated contract backlog stands at about $1.01 billion, equating to an average of about $168 million per vessel.
“We are pleased to announce the reinstatement of a quarterly cash distribution to our common unitholders, which reflects our strong cash flow and improved balance sheet,” he said.
Lauritzen said this is a “significant milestone” for the partnership after a period during which the company was unable to pay distributions to its common unitholders due to previous financing restrictions which no longer exist after the successful completion of refinancing in June 2024 on improved terms.
In addition to the cash distribution, the company’s board authorized a common unit repurchase program to buy back up to an aggregate of $10 million of the partnership’s outstanding common units over the next 12 months.
“Our capital allocation strategy aims not only to return capital to our unitholders but also to strategically position the partnership for growth, with the flexibility to efficiently allocate capital depending on the circumstances,” he said.
“Our objective is to position the partnership to capitalize on future market opportunities across not only our core business of LNG carriers but also in other shipping sectors,” Lauritzen said.