Dynagas LNG Partners LP reported a 29.7% year-over-year increase in net income to $14.4 million for the second quarter, which it attributed to lower operating costs and higher amortization of deferred revenue.
“The increase in net income for the three months ended June 30, 2023 was primarily attributable to a decrease in dry dock and special survey costs, attributable to the scheduled dry docks of Net Energy and the Amur River. [vessels]which were completed in April 2022 and July 2022, respectively, as well as the increase in the amortization of deferred revenue as a result of the increase in the time rental rate that is related to the new time charter agreement with Equinor ASA for the occupation of Aurora Artica. , which will begin in September 2023,” the LNG carrier fleet operator said in a recent press release.
Athens-based Dynagas announced on Dec. 30 an agreement with Equinor to charter the 2013-built ice-class Arctic Aurora for three years with an arrears revenue contribution of about $116.5 million. The indicated date of delivery of the carrier to Equinor is September 2023.
Net income for the April-June period translates into earnings per common share of $0.31. Net income adjusted for extraordinary or non-recurring items was $5.8 million, or $0.08 per common unit. The adjustments resulted in a weaker quarter compared to April-June 2022, when Dynagas posted $9.1 million in adjusted net earnings. “This decrease is primarily due to higher interest and finance costs compared to the corresponding period in 2022,” he said in a recent press release.
Adjusted earnings before interest, taxes, depreciation and amortization for the second quarter of 2023 were $23.015 million. Operating activities generated $8.8 million in net cash, up 7.3% year over year “primarily as a result of working capital changes,” the company said.
Dynagas collected $37.653 million in travel revenue in the second quarter, an increase both year-over-year and quarter-over-quarter. In addition to the Equinor contract, more operating days for the Amur River and Net Energy vessels led to a year-on-year increase, according to Dynagas.
“As of June 30, 2023, the partnership had estimated time charter coverage for 100 percent of its estimated days available fleet” through 2027, with total revenue of $1.2 billion, he said. Backlog revenue may differ from actual revenue due to “dry dock and/or special survey downtime, maintenance projects, off-hire downtime and other factors,” Dynagas noted .
Dynagas announced on July 13 the signing of time lease agreements with the subsidiary of NextDecade Corp. Rio Grande LNG LLC, which add about $270 million to portfolio revenue. The deals use Arctic Aurora and Clean Energy for NextDecade’s Brownsville, Texas export facility.
Dynagas entered the second half of the year with $52.9 million in cash, while its outstanding debt stood at $444.6 million.
It said its operations are currently unaffected by European Union and US sanctions against Russia over the war in Ukraine. But Dynagas noted: “The full impact of the commercial and economic consequences of the Russian conflict with Ukraine is uncertain at this time.”
Looking ahead, CEO Tony Lauritzen said the outlook for the gas transportation sector remains positive due to “growing market sentiment that LNG is a necessary fuel to manage global emissions, as well as to ensure energy security”.
Dynagas currently operates six LNG tankers, which have a combined capacity of 32.28 million cubic feet (914,000 cubic meters), according to the company.
To contact the author, please email jov.onsat@rigzone.com
