Dynagas LNG Partners, the operator of six LNG carriers which work under long-term charters, reported a rise in its net income for the January-March period.
The NYSE-listed limited partnership formed by shipowner Dynagas posted a net income of $11.7 million for the three months ended March 31, 2024.
This marks a rise of $2.2 million, or 22.9 percent, compared to $9.6 million in the same period last year, the LNG shipper said in a statement.
Net income also rose compared to $10.46 million in the prior quarter.
Dynagas LNG attributed this rise in net income mainly due to the increase in the gain on its interest rate swap transaction and to the decrease interest and finance costs.
The company said that its adjusted net income jumped 90.8 percent to $12.4 million in the first quarter mainly due to the increase in the cash voyage revenues of LNG carrier Arctic Aurora.
Voyage revenues for the three-month period reached $38.1 million, up by 2.1 percent compared to the same quarter last year.
Dynagas LNG said voyage revenues rose due to the increase in voyage revenues of Arctic Aurora following its time charter party agreement with Equinor, which started in September 2023.
The partnership reported average daily hire gross of commissions of about $72,770 per day per vessel in the three-month period, compared to about $62,130 per day per vessel for the corresponding period of 2023.
The partnership’s vessels operated at 100 percent fleet utilization during the three-month period.
Also, vessel operating expenses were $7.7 million, which corresponds to a daily rate per vessel of $14,103 in the three-month period ended March 31, 2024, as compared to $7.3 million, or a daily rate per vessel of $13,511 in the corresponding period of 2023.
This increase is mainly attributable to the increased planned technical maintenance on the partnership’s vessels in the three months ended March 31, 2024, Dynagas LNG said.
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 6.6 years.
“Barring any unforeseen events, the partnership will have no contractual vessel availability until 2028,” he said.
Lauritzen said the company’s estimated contract backlog currently stands at about $1.07 billion equating to some $178 million per vessel as of June 27, 2024.
Dynagas LNG recently signed a sale and leaseback deal with China Development Bank Financial Leasing (CDB Leasing) for its four LNG carriers.
The four LNG carriers in question are the 2007-built 149,700-cbm, Clean Energy and Ob River, the 2008-built 149,700-cbm, Amur River, and the 2013-built 155,000-cbm, Arctic Aurora.
CDB Leasing has purchased the vessels for an amount not exceeding $477.5 million, and it has agreed to lease the ships for a period between 60 months and 120 months.
The total amount of lease interest for the lease period is about $130 million.
Upon expiration of the lease period, Dynagas LNG Partners may purchase back the vessels from CDB Leasing at a consideration of not exceeding $95.5 million in nominal value.
“This financing, totaling $345 million, along with our available cash reserves, has enabled us to fully prepay our existing outstanding debt in the amount of $408 million before its maturity in September 2024,” Lauritzen said.
“After a protracted period of strategic deleveraging, we now enjoy significantly lower debt levels and a flexible financing package with two of our LNG carriers debt free. This positions us well in the next phase of the partnership’s development,” Lauritzen added.
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