UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES
EXCHANGE ACT OF 1934
For the month of August 2015.
Commission File Number 001-35466
GasLog Ltd.
(Translation of registrant’s name
into English)
c/o GasLog Monaco S.A.M.
Gildo Pastor Center
7 Rue du Gabian
MC 98000, Monaco
(Address of principal executive office)
Indicate by check mark whether the registrant files or will
file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F þ Form
40-F o
Indicate by check mark if the registrant is submitting the
Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): |
o |
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Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): |
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The press release issued by GasLog Ltd.
on August 6, 2015 relating to its results for the second quarter of 2015 and the related financial report are attached hereto
as Exhibits 99.1 and 99.2, respectively.
INCORPORATION BY REFERENCE
Exhibit 99.2 to this Report on Form 6-K
shall be incorporated by reference into our registration statements on Form F-3 (File Nos. 333-188817 and 333-194894), initially
filed with the Securities and Exchange Commission (the “SEC”) on May 24, 2013 and March 28, 2014, respectively, as
amended, and the registration statement on Form S-8 (File No. 333-187020), filed with the SEC on March 4, 2013, in each case to
the extent not superseded by information subsequently filed or furnished (to the extent we expressly state that we incorporate
such furnished information by reference) by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, in each
case as amended.
EXHIBIT LIST
Exhibit |
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Description |
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99.1 |
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Press Release dated August 6, 2015 |
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99.2 |
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Financial Report for the Three and Six Months Ended June 30, 2015 |
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Management’s Discussion and Analysis of Financial Condition and
Results of Operation |
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Unaudited Condensed Consolidated Financial Statements |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date August 6, 2015 |
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GASLOG LTD., |
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by |
/s/ Paul Wogan |
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Name: Paul Wogan |
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Title: Chief Executive Officer |
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Exhibit 99.1
Press Release
GasLog Ltd. Reports Financial Results
for the Quarter Ended June 30, 2015
Monaco, August 6, 2015, GasLog Ltd.
and its subsidiaries (“GasLog” or “Group” or “Company”) (NYSE: GLOG), an international
owner, operator and manager of liquefied natural gas (“LNG”) carriers, today reported its financial results for the
quarter ended June 30, 2015.
Highlights
· |
Agreement with BG Group plc (“BG Group”) to charter three newbuildings for approximately 10-year charters at attractive rates with an option to charter an additional six newbuildings. |
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Announced the completion of the dropdown of three vessels to GasLog Partners LP (“GasLog Partners”) for $483.0 million – the recommended increase by GasLog Partners’ management in the Partnership’s distribution exceeds the 25% incentive distribution rights (“IDR”) threshold. |
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Completed public offering of 8.75% Series A Preference Shares including full exercise of underwriters “greenshoe” option, raising net proceeds of $110.7 million. |
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Further increased customer portfolio through short-term charters. |
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Quarterly dividend of $0.14 per common share payable on August 20, 2015. |
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Earnings per share (“EPS”) of $0.07 (Q2 2014: $0.02), EBITDA(1) of $66.5 million (Q2 2014: $46.5 million) and Profit of $16.7 million (Q2 2014: $3.5 million) for the quarter ended June 30, 2015. |
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Adjusted EPS(1) of $0.00(2) (Q2 2014: $0.15), Adjusted EBITDA(1) of $64.5 million (Q2 2014: $46.6 million) and Adjusted Profit(1) of $10.9 million (Q2 2014: $13.6 million) for the quarter ended June 30, 2015. |
(1) EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS are non-GAAP financial measures, and should
not be used in isolation or as a substitute for GasLog’s financial results presented in accordance with International Financial
Reporting Standards (“IFRS”). For definition and reconciliation of these measures to the most directly comparable financial
measures calculated and presented in accordance with IFRS, please refer to Exhibit II at the end of this press release.
(2) For the calculation of Adjusted EPS,
the Profit for the period of $16.7 million was offset by the Profit attributable to the non-controlling interest of $8.5
million, the dividend on preferred stock of $2.3 million and the adjustments of $5.8 million related to non-cash gain on
swaps and foreign exchange gains.
CEO Statement
Paul Wogan, Chief Executive Officer,
commented “GasLog continued to execute on its long-term business strategy in the second quarter. We added $845.0
million of long-term contracted revenue from the transaction we announced with a subsidiary of BG Group in April 2015. This
agreement places three of our four open newbuildings on approximately ten-year charters at attractive rates. We also dropped
down three vessels into GasLog Partners for an aggregate price of $483.0 million. At the recommended distribution increase by
GasLog Partners management, the distribution will move into the 25% IDR split less than 18 months after GasLog
Partners’ initial public offering (“IPO”). This results in greater incremental cashflow for the GP holding,
enhancing GasLog’s sum of the parts valuation.
Despite a challenging short-term market, we have been active
during the quarter and have placed our vessels on a number of short-term fixtures adding a number of excellent new customers. We
believe that GasLog remains well positioned to continue growing into attractive future markets for LNG shipping and with seven
of its eight undelivered vessels on long-term contracts of between seven and ten years, we have a solid financial and operational
platform on which we can continue to build.”
Dividend Declaration
On August 5, 2015, the board of directors declared a quarterly
cash dividend of $0.14 per common share payable on August 20, 2015 to shareholders of record as of August 17, 2015.
Agreement with BG Group
On April 21, 2015, GasLog and GasLog Partners announced the
agreement to charter to Methane Services Limited (“MSL”), a subsidiary of BG Group, three newbuildings and an option
for MSL to elect, within 2015 to charter an additional six newbuildings. The details of that transaction are set out in the Press
Release dated April 21, 2015, which was attached as an exhibit to our report on Form 6-K/A furnished to the SEC on April 24, 2015.
Completion of GasLog Partners Dropdown
Transaction
On July 1, 2015, GasLog completed the sale of three LNG carriers,
the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally to GasLog Partners
for $483.0 million including $3.0 million of positive net working capital. To partially fund the acquisition, GasLog Partners launched
and completed an equity offering of 7,500,000 common units and issued 153,061 general partner units to GasLog. The proceeds were
used to partially finance the acquisition from GasLog of 100% of the ownership interests in GAS-nineteen Ltd., GAS-twenty Ltd.
and GAS-twenty one Ltd., the entities that each own one of the three 145,000 cbm LNG carriers mentioned above.
As part of the transaction, GasLog Partners will recommend to
its Board an increase in distribution of approximately 10%. This takes the distribution through the 25% incentive distribution
right (“IDR”) threshold, resulting in GasLog receiving a greater amount of future incremental cashflows at GasLog Partners.
Issuance of 4.6 million Series A
Cumulative Redeemable Perpetual Preference Shares (the “Series A Preference Shares”)
On April 7, 2015, GasLog completed a public offering of 4.6
million shares of 8.75% Series A Preference Shares (including 600,000 shares issued upon the exercise in full by the underwriters
of their option to purchase additional Series A Preference Shares), par value $0.01 per share, liquidation preference
$25.00 per
share, which was priced at $25.00 per share. The net proceeds from the offering
after deducting underwriting discounts, commissions and other offering expenses were $110.7 million. The Series A Preference Shares
are listed on the New York Stock Exchange under the symbol “GLOG PR A”.
On June 19, 2015, the board of directors
declared the initial dividend on the Series A Preference Shares of $0.510417 per share or $2.35 million in the aggregate
payable on July 1, 2015 to holders of record as of June 30, 2015. GasLog paid the declared dividend to the transfer agent in June
2015.
Delivery of GasLog Salem
On April 30, 2015, GasLog took delivery of the GasLog Salem,
an LNG carrier of 155,000 cubic meters capacity with tri-fuel diesel electric propulsion constructed by Samsung Heavy Industries
Co. Ltd. (“Samsung”). The GasLog Salem is currently operating in the spot market and has been active since delivery
with a number of different charterers.
Financial Summary
In millions of U.S. dollars except per share data | |
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For the three months ended | |
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June 30, 2014 | | |
June 30, 2015 | |
Revenues | |
$ | 73.2 | | |
$ | 104.4 | |
Profit | |
$ | 3.5 | | |
$ | 16.7 | |
Adjusted Profit(1) | |
$ | 13.6 | | |
$ | 10.9 | |
EBITDA(1) | |
$ | 46.5 | | |
$ | 66.5 | |
Adjusted EBITDA(1) | |
$ | 46.6 | | |
$ | 64.5 | |
EPS | |
$ | 0.02 | | |
$ | 0.07 | |
Adjusted EPS(1) | |
$ | 0.15 | | |
$ | 0.00 | |
There were 1,464 operating days for the quarter ended June 30,
2015, as compared to 976 operating days for the quarter ended June 30, 2014. The increase in operating days resulted from the new
vessel deliveries and on-the-water vessel acquisitions during the period. Specifically, the Solaris was delivered on June
30, 2014, the Methane Rita Andrea, the Methane Jane Elizabeth, the Methane Lydon Volney, the Methane Shirley
Elisabeth, the Methane Heather Sally, and the Methane Alison Victoria were acquired in April and June 2014, the
GasLog Saratoga was delivered on December 16, 2014, the Methane Becki Anne and the Methane Julia Louise were
acquired on March 31, 2015 and the GasLog Salem was delivered on April 30, 2015.
Profit was $16.7 million for the quarter ended June 30,
2015 ($3.5 million for the quarter ended June 30, 2014). This increase is mainly attributable to the increase in operating
days and the increase in gain on swaps, partially offset by the increase in financial costs due to the increase in average
outstanding debt related to vessel deliveries and acquisitions.
Adjusted Profit(1) was $10.9 million for the quarter
ended June 30, 2015 ($13.6 million for the quarter ended June 30, 2014) adjusted for the effects of the write-off of unamortized
loan fees, the non-cash gain/loss on swaps and the foreign exchange gains/losses.
EBITDA(1) was $66.5 million
for the quarter ended June 30, 2015 ($46.5 million for the quarter ended June 30, 2014). The increase in EBITDA is attributable
to the increase in revenues from the increased fleet, partially offset by the associated increase in vessel operating and supervision
costs.
Adjusted EBITDA(1) was $64.5 million for the quarter
ended June 30, 2015 ($46.6 million for the quarter ended June 30, 2014).
EPS was $0.07 for the quarter ended
June 30, 2015 ($0.02 for the quarter ended June 30, 2014). The increase in EPS is attributable to the increase in Profit
partially offset by the increase in Profit attributable to non-controlling interest and the dividend on preferred stock.
Adjusted EPS(1) was $0.00
for the quarter ended June 30, 2015 ($0.15 for the quarter ended June 30, 2014). The decrease in Adjusted EPS is attributable
to the decrease in Adjusted Profit, the increase in Profit attributable to non-controlling interest and the dividend on
preferred stock.
Revenues were $104.4 million for the quarter ended June 30,
2015 ($73.2 million for the quarter ended June 30, 2014).
Vessel operating and supervision costs were $29.9 million for
the quarter ended June 30, 2015 ($19.1 million for the quarter ended June 30, 2014).
Depreciation of fixed assets was $27.3 million for the quarter
ended June 30, 2015 ($15.9 million for the quarter ended June 30, 2014).
The increase in revenues, vessels operating and supervision
costs and depreciation of fixed assets was mainly attributable to the increase in operating days from our increased fleet discussed
above.
General and administrative expenses were $8.3 million for the
quarter ended June 30, 2015 ($8.0 million for the quarter ended June 30, 2014). The increase derives mainly from the increase in
legal fees and other professional services related to increased audit and other professional services including the Partnership’s
requirements of being a public company, and the increase in personnel related expenses related to the growth of the Group, partially
offset by the increase in net foreign exchange gains.
Financial costs were $24.2 million for the quarter ended June
30, 2015 ($17.7 million for the quarter ended June 30, 2014). The increase is mainly attributable to an increase of $7.7 million
in interest expense deriving from higher weighted average outstanding debt and realized loss on cash flow hedges. An analysis of
financial costs is set forth below.
(All amounts expressed in thousands of U.S. dollars) | |
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For the three months ended | |
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June 30, 2014 | | |
June 30, 2015 | |
Financial costs | |
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Amortization of deferred loan issuance costs and premium including the write-off of the unamortized loan fees | |
$ | 4,615 | | |
$ | 3,053 | |
Interest expense on loans and realized loss on cash flow hedges | |
| 10,328 | | |
| 18,064 | |
Interest expense on bond and realized loss on cross-currency swaps | |
| 2,279 | | |
| 2,825 | |
Other financial costs, net | |
| 447 | | |
| 304 | |
Total | |
$ | 17,669 | | |
$ | 24,246 | |
Gain on swaps was $1.6 million for the quarter ended June 30,
2015 ($9.6 million loss for the quarter ended June 30, 2014). An analysis of gain/loss on swaps is set forth below.
(All amounts expressed in thousands of U.S. dollars) | |
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For the three months ended | |
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June 30, 2014 | | |
June 30, 2015 | |
Loss/(gain) on swaps | |
| | | |
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Realized loss on interest rate swaps held for trading | |
$ | 2,760 | | |
$ | 2,158 | |
Unrealized loss/(gain) on interest rate swaps held for trading | |
| 4,703 | | |
| (4,079 | ) |
Recycled loss of cash flow hedges reclassified to profit or loss in relation to derivatives no longer designated as hedges | |
| 1,912 | | |
| 283 | |
Ineffective portion on cash flow hedges | |
| 207 | | |
| — | |
Total | |
$ | 9,582 | | |
$ | (1,638 | ) |
(1) EBITDA, Adjusted EBITDA, Adjusted Profit and
Adjusted EPS are non-GAAP financial measures, and should not be used in isolation or as a substitute for GasLog’s financial
results presented in accordance with IFRS. For definitions and reconciliations of these measurements to the most directly comparable
financial measures calculated and presented in accordance with IFRS, please refer to Exhibit II at the end of this press release.
Contracted Charter Revenues
GasLog’s contracted charter revenues are estimated to
increase from $321.0 million for the fiscal year 2014 to $483.8 million for the fiscal year 2017, based on contracts in effect
as of June 30, 2015 (including the seven LNG carriers on order for which we have secured time charters), but without including
any extension options. The total future firm contracted revenue stands at $3.9 billion (2) on June 30, 2015, including
the eight vessels owned by GasLog Partners.
(2) Contracted revenue calculations assume: (a) 365
revenue days per annum, with 30 off-hire days when the ship undergoes scheduled drydocking; (b) all LNG carriers on order are delivered
on schedule; and (c) no exercise of any option to extend the terms of charters.
Liquidity and Capital Resources
As of June 30, 2015, GasLog had $422.0 million of cash and cash
equivalents, of which $101.1 million was held in time deposits and the remaining balance in current accounts. Moreover, as of June
30, 2015, GasLog had $3.0 million held in time deposits with an initial duration of more than three months but less than a year
that have been classified as short-term investments. As of June 30, 2015, GasLog had $46.0 million in restricted cash in relation
to cash held in blocked accounts in order to comply with the covenants under two of its credit facilities.
As of June 30, 2015, GasLog had an aggregate of $2.4 billion
of indebtedness outstanding under eleven credit facilities, of which $597.7 million is repayable within one year, including $42.2
million under the revolving credit facility. As of June 30, 2015, GasLog had $126.9 million outstanding under the NOK bond agreement
that is payable in June 2018.
As of June 30, 2015, there was an undrawn amount of $7.8 million
under the revolving facility of GAS-two Ltd. which is available to be drawn under certain conditions.
As of June 30, 2015, GasLog’s commitments for capital
expenditures are related to the eight LNG carriers on order, which have a gross aggregate contract price of approximately $1.6
billion. As of June 30, 2015, the total remaining balance of the contract prices of the eight newbuildings was $1.5 billion. We will be required to procure additional financing in order
to fund the remaining installment payments for our eight newbuildings, expected to be delivered to us in 2016, 2018 and 2019, to
the extent such installment payments are not funded with cash generated by our operations or equity offering proceeds. Accordingly,
we are currently in discussions to arrange financing for the acquisition of such newbuildings, for seven of which we have already
secured long-term time charters with MSL.
GasLog has hedged 43.8% of its expected floating interest rate
exposure at a weighted average interest rate of approximately 4.6% (including margin) as of June 30, 2015.
Future Deliveries
GasLog has six newbuildings on order at Samsung, and two newbuildings
on order at Hyundai Heavy Industries Co., Ltd. Our vessels presently under construction are on schedule and within budget. The
expected delivery dates are as follows:
Hulls |
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Delivery date |
Hull No. 2072 |
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Q1 2016 |
Hull No. 2073 |
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Q2 2016 |
Hull No. 2102 |
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Q3 2016 |
Hull No. 2103 |
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Q4 2016 |
Hull No. 2130 |
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Q1 2018 |
Hull No. 2800 |
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Q1 2018 |
Hull No. 2801 |
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Q1 2018 |
Hull No. 2131 |
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Q1 2019 |
Our subsidiaries that own the vessels expected to be delivered
in 2016 have signed seven to ten year time charters with MSL at attractive rates. Our subsidiaries that own the three vessels expected
to be delivered in 2018 have entered into 9.5 year time charters with MSL at similar rates. GasLog currently has one newbuilding
on order that is not fixed on a long-term contract.
GasLog Partners has options and other certain acquisition rights
under which it may acquire additional LNG carriers from us.
LNG Market Update and Outlook
There have been a number of positive developments
that should support long-term growth in the LNG sector despite a current weakness in the LNG spot market. The 13.5 million
tonnes per annum (“mtpa”) Cheniere-led Corpus Christi project received US Department of Energy approval in May
and final investment decision (“FID”) was taken shortly thereafter. Corpus Christi is the fifth U.S. project to
enter the construction phase and will contribute to a significant ramp up in LNG supply through the remainder of this decade.
The Cheniere-led Sabine Pass project announced that it had taken FID on a fifth train (4.5 mtpa) after the quarter end,
adding to the 18 million tonnes currently under construction at the site. Also during the quarter, Shell placed a multi-billion
dollar order for three floating LNG vessels from Samsung, which we believe further supports our positive outlook for future
LNG supply and demand dynamics. Post quarter end, Kinder Morgan said it would buy the 49 percent stake that it does not
already own in the Elba Liquefaction Co from Shell. Kinder Morgan says it expects to spend an additional $630 million on the
Elba terminals bringing the total investment in the project to $2.1 billion.
While the short-term market for LNG shipping remains challenging
due to the current oversupply of vessels, we expect that the increase in liquefaction in the second half of the year will lead
to increasing fleet utilization which in turn will start to improve spot vessel earnings. The second 4 mtpa train at BG’s
Curtis project has just started production and a number of other major Australian projects, such as Gorgon, Australia Pacific and
Gladstone are scheduled to start production. We also anticipate the Angola project, which was shut down for refurbishment, to be
operational in the coming months. Sabine Pass, the first of the US projects expected online is also due to export LNG by the end
of the year marking the start of a major wave in U.S. exports.
Conference Call
GasLog will host a conference call to discuss its results for
the second quarter of 2015 at 8:30 a.m. ET (1:30 p.m. London Time) on Thursday, August 6, 2015. Paul Wogan, Chief Executive Officer
and Simon Crowe, Chief Financial Officer, will review the Company’s operational and financial performance for the period.
Management’s presentation will be followed by a Q&A session.
The dial-in numbers for the conference call are as follows:
+1 646 254 3360 (New York, NY)
+44 (0) 20 3364 5721 (London, UK)
+33 (0) 1 76 77 22 27 (Paris, France)
+852 3071 3094 (Hong Kong, Hong Kong)
Passcode for the call is 9033722
A live webcast of the conference
call will also be available on the investor relations page of the Company’s website at http://www.gaslogltd.com/investor-relations.
For those unable to participate in the conference call, a replay
will also be available from 12:30 p.m. EDT (5:30 p.m. London Time) on Thursday, August 6, 2015 until 6:59 p.m. EDT (11:59 p.m.
London Time) on Wednesday, August 13, 2015.
The replay dial-in numbers are as follows:
+1 347 366 9565 (New York, NY)
+44 (0) 20 3427 0598 (London, UK)
+33 (0) 1 74 20 28 00 (Paris, France)
+852 3011 4669 (Hong Kong, Hong Kong)
Replay passcode is 9033722
Forward-Looking Statements
All statements in this press release that are not statements
of historical fact are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Forward-looking statements include statements that address activities, events or developments that the Company expects,
projects, believes or anticipates will or may occur in the future, particularly in relation to the Company’s operations,
cash flows, financial position, liquidity and cash available for dividends or distributions, plans, strategies and business prospects,
and changes and trends in the Company’s business and the markets in which it operates. These statements are based on current
expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual
results could vary materially from the Company’s expectations and projections. Accordingly, you should not unduly rely on
any forward-looking statements. Factors that might cause future results and outcomes to differ include:
| · | continued low prices for crude oil and petroleum products |
| · | LNG shipping market conditions and trends, including spot and long-term charter rates, ship values, factors affecting supply
and demand of LNG and LNG shipping and technological advancements; |
| · | our ability to enter into time charters with new and existing customers; |
| · | changes in the ownership of our charterers; |
| · | our customers’ performance of their obligations under our time charters; |
| · | changing economic conditions and the differing pace of economic recovery in different regions of the world; |
| · | our future financial condition, liquidity and cash available for dividends and distributions; |
| · | our ability to obtain financing to fund capital expenditures, acquisitions and other corporate activities, the ability of our
lenders to meet their funding obligations, and our ability to meet the restrictive covenants and other obligations under our credit
facilities; |
| · | our ability to enter into shipbuilding contracts for newbuildings and our expectations about the availability of existing LNG
carriers to purchase, as well as our ability to consummate any such acquisitions; |
| · | our expectations about the time that it may take to construct and deliver newbuildings and the useful lives of our ships; |
| · | number of off-hire days, drydocking requirements and insurance costs; |
| · | our anticipated general and administrative expenses; |
| · | fluctuations in currencies and interest rates; |
| · | our ability to maximize the use of our ships, including the re-employment or disposal of ships not under time charter commitments; |
| · | environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities; |
| · | requirements imposed by classification societies; |
| · | risks inherent in ship operation, including the discharge of pollutants; |
| · | availability of skilled labor, ship crews and management; |
| · | potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists; |
| · | potential liability from future litigation; and |
| · | other risks and uncertainties described in the Company’s Annual Report on Form 20-F filed with the SEC on March 26, 2015.
Copies of the Annual Report, as well as subsequent filings, are available online at http://www.sec.gov. |
The Company does not undertake to update any forward-looking
statements as a result of new information or future events or developments except as may be required by law.
Contacts:
Simon Crowe
Chief Financial Officer
Phone: +44-203-388-3108
Jamie Buckland
Head of Investor Relations
Phone: +44-203-388-3116
Email: ir@gaslogltd.com
EXHIBIT I - Unaudited Interim Financial Information
Unaudited condensed consolidated statements of financial position
As of December 31, 2014 and June 30, 2015
(Amounts expressed in thousands of U.S. Dollars)
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December 31, 2014 | | |
June 30, 2015 | |
Assets | |
| | | |
| | |
Non-current assets | |
| | | |
| | |
Goodwill | |
| 9,511 | | |
| 9,511 | |
Investment in associate | |
| 6,603 | | |
| 6,718 | |
Deferred financing costs | |
| 6,120 | | |
| — | |
Other non-current assets | |
| 5,785 | | |
| 15,516 | |
Derivative financial instruments | |
| 1,174 | | |
| 471 | |
Tangible fixed assets | |
| 2,809,517 | | |
| 3,442,912 | |
Vessels under construction | |
| 142,776 | | |
| 144,902 | |
Total non-current assets | |
| 2,981,486 | | |
| 3,620,030 | |
Current assets | |
| | | |
| | |
Trade and other receivables | |
| 14,317 | | |
| 16,972 | |
Dividends receivable and amounts due from related parties | |
| 1,869 | | |
| 810 | |
Inventories | |
| 4,953 | | |
| 8,069 | |
Prepayments and other current assets | |
| 4,443 | | |
| 3,631 | |
Restricted cash | |
| 22,826 | | |
| 46,016 | |
Short-term investments | |
| 28,103 | | |
| 3,000 | |
Cash and cash equivalents | |
| 211,974 | | |
| 421,982 | |
Total current assets | |
| 288,485 | | |
| 500,480 | |
Total assets | |
| 3,269,971 | | |
| 4,120,510 | |
Equity and liabilities | |
| | | |
| | |
Equity | |
| | | |
| | |
Preferred stock | |
| — | | |
| 46 | |
Share capital | |
| 810 | | |
| 810 | |
Contributed surplus | |
| 923,470 | | |
| 1,034,080 | |
Reserves | |
| (12,002 | ) | |
| (10,617 | ) |
Treasury shares | |
| (12,576 | ) | |
| (12,491 | ) |
Retained earnings | |
| 29,689 | | |
| 17,384 | |
Equity attributable to owners of the Group | |
| 929,391 | | |
| 1,029,212 | |
Non-controlling interest | |
| 323,646 | | |
| 501,151 | |
Total equity | |
| 1,253,037 | | |
| 1,530,363 | |
Current liabilities | |
| | | |
| | |
Trade accounts payable | |
| 9,668 | | |
| 14,961 | |
Ship management creditors | |
| 1,285 | | |
| 1,168 | |
Amounts due to related parties | |
| 181 | | |
| 159 | |
Derivative financial instruments | |
| 16,149 | | |
| 15,880 | |
Other payables and accruals | |
| 57,647 | | |
| 67,686 | |
Borrowings—current portion | |
| 116,431 | | |
| 588,154 | |
Total current liabilities | |
| 201,361 | | |
| 688,008 | |
Non-current liabilities | |
| | | |
| | |
Derivative financial instruments | |
| 35,751 | | |
| 43,929 | |
Borrowings—non-current portion | |
| 1,778,845 | | |
| 1,857,106 | |
Other non-current liabilities | |
| 977 | | |
| 1,104 | |
Total non-current liabilities | |
| 1,815,573 | | |
| 1,902,139 | |
Total equity and liabilities | |
| 3,269,971 | | |
| 4,120,510 | |
Unaudited condensed consolidated statements of profit or loss
For the three and six months ended June 30, 2014 and June
30, 2015
(Amounts expressed in thousands of U.S. Dollars, except per
share data)
| |
For the three months ended | | |
For the six months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | | |
June 30, 2014 | | |
June 30, 2015 | |
Revenues | |
| 73,236 | | |
| 104,440 | | |
| 130,307 | | |
| 201,766 | |
Vessel operating and supervision costs | |
| (19,116 | ) | |
| (29,947 | ) | |
| (36,061 | ) | |
| (54,570 | ) |
Depreciation of fixed assets | |
| (15,873 | ) | |
| (27,274 | ) | |
| (27,063 | ) | |
| (49,969 | ) |
General and administrative expenses | |
| (7,992 | ) | |
| (8,339 | ) | |
| (14,255 | ) | |
| (19,498 | ) |
Profit from operations | |
| 30,255 | | |
| 38,880 | | |
| 52,928 | | |
| 77,729 | |
| |
| | | |
| | | |
| | | |
| | |
Financial costs | |
| (17,669 | ) | |
| (24,246 | ) | |
| (29,357 | ) | |
| (42,774 | ) |
Financial income | |
| 69 | | |
| 86 | | |
| 151 | | |
| 149 | |
(Loss)/gain on swaps | |
| (9,582 | ) | |
| 1,638 | | |
| (14,697 | ) | |
| (5,341 | ) |
Share of profit of associate | |
| 393 | | |
| 343 | | |
| 790 | | |
| 790 | |
Total other expenses, net | |
| (26,789 | ) | |
| (22,179 | ) | |
| (43,113 | ) | |
| (47,176 | ) |
Profit for the period | |
| 3,466 | | |
| 16,701 | | |
| 9,815 | | |
| 30,553 | |
Attributable to: | |
| | | |
| | | |
| | | |
| | |
Owners of the Group | |
| 1,476 | | |
| 8,240 | | |
| 7,825 | | |
| 12,582 | |
Non-controlling interest | |
| 1,990 | | |
| 8,461 | | |
| 1,990 | | |
| 17,971 | |
| |
| 3,466 | | |
| 16,701 | | |
| 9,815 | | |
| 30,553 | |
Earnings per share – basic and diluted | |
| 0.02 | | |
| 0.07 | | |
| 0.10 | | |
| 0.13 | |
Unaudited condensed consolidated statements of cash flows
For the six months ended June 30, 2014 and June 30, 2015
(Amounts expressed in thousands of U.S. Dollars)
| |
For the six months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | |
Cash flows from operating activities: | |
| | | |
| | |
Profit for the period | |
| 9,815 | | |
| 30,553 | |
Adjustments for: | |
| | | |
| | |
Depreciation of fixed assets | |
| 27,063 | | |
| 49,969 | |
Share of profit of associate | |
| (790 | ) | |
| (790 | ) |
Financial income | |
| (151 | ) | |
| (149 | ) |
Financial costs | |
| 29,357 | | |
| 42,774 | |
Unrealized loss on swaps and ineffective portion of cash flow hedges | |
| 7,677 | | |
| 419 | |
Recycled loss of cash flow hedges reclassified to profit or loss in relation to derivatives no longer designated as hedges | |
| 2,325 | | |
| 567 | |
Unrealized foreign exchange losses/(gains) on cash and cash equivalents and short-term investments | |
| 127 | | |
| (427 | ) |
Expense recognized in respect of equity-settled share-based payments | |
| 724 | | |
| 1,274 | |
| |
| 76,147 | | |
| 124,190 | |
Movements in working capital | |
| 13,655 | | |
| (10,244 | ) |
Cash provided by operations | |
| 89,802 | | |
| 113,946 | |
Interest paid | |
| (28,058 | ) | |
| (35,985 | ) |
Net cash provided by operating activities | |
| 61,744 | | |
| 77,961 | |
Cash flows from investing activities: | |
| | | |
| | |
Payments for tangible fixed assets and vessels under construction | |
| (1,156,797 | ) | |
| (679,129 | ) |
Dividends received from associate | |
| 970 | | |
| 1,675 | |
Purchase of short-term investments | |
| (8,907 | ) | |
| (18,592 | ) |
Maturity of short-term investments | |
| 5,150 | | |
| 44,007 | |
Financial income received | |
| 149 | | |
| 136 | |
Net cash used in investing activities | |
| (1,159,435 | ) | |
| (651,903 | ) |
Cash flows from financing activities: | |
| | | |
| | |
Proceeds from bank loans and bonds | |
| 884,473 | | |
| 606,000 | |
Bank loan repayments | |
| (113,991 | ) | |
| (39,824 | ) |
Payment of loan issuance costs | |
| (10,662 | ) | |
| (5,166 | ) |
Proceeds from public offering and private placement (net of underwriting discounts and commissions) | |
| 310,240 | | |
| — | |
Proceeds from GasLog Partners’ public offering (net of underwriting discounts and commissions) | |
| 189,129 | | |
| 172,875 | |
Proceeds from issuance of preferred stock (net of underwriting discounts and commissions) | |
| — | | |
| 111,378 | |
Payment of equity raising costs | |
| (4,287 | ) | |
| (1,045 | ) |
Purchase of treasury shares | |
| (474 | ) | |
| — | |
Movement in restricted cash | |
| — | | |
| (23,190 | ) |
Dividends paid | |
| (18,852 | ) | |
| (37,193 | ) |
Net cash provided by financing activities | |
| 1,235,576 | | |
| 783,835 | |
Effects of exchange rate changes on cash and cash equivalents | |
| (127 | ) | |
| 115 | |
Increase in cash and cash equivalents | |
| 137,758 | | |
| 210,008 | |
Cash and cash equivalents, beginning of the period | |
| 103,798 | | |
| 211,974 | |
Cash and cash equivalents, end of the period | |
| 241,556 | | |
| 421,982 | |
EXHIBIT II
Non-GAAP Financial Measures:
EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS
EBITDA is defined as earnings before depreciation, amortization,
interest income and expense, gain/loss on swaps and taxes. Adjusted EBITDA is defined as EBITDA before foreign exchange gains/losses.
Adjusted Profit represents earnings before write-off of unamortized loan fees, foreign exchange gains/losses and non-cash gain/loss
on swaps that includes (if any) (a) unrealized gain/loss on swaps held for trading, (b) loss at inception, (c) recycled loss of
cash flow hedges reclassified to profit or loss in relation to derivatives no longer designated as hedges and (d) ineffective portion
of cash flow hedges. Adjusted EPS represents earnings attributable to owners of the Group before non-cash gain/loss on swaps as
defined above, foreign exchange gains/losses and write-off of unamortized loan fees, divided by the weighted average shares outstanding.
EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS are non-GAAP financial measures that are used as supplemental financial
measures by management and external users of financial statements, such as investors, to assess our financial and operating performance.
We believe that these non-GAAP financial measures assist our management and investors by increasing the comparability of our performance
from period to period. We believe that including EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS assists our management
and investors in (i) understanding and analyzing the results of our operating and business performance, (ii) selecting between
investing in us and other investment alternatives and (iii) monitoring our ongoing financial and operational strength in assessing
whether to continue to hold our common shares. This increased comparability is achieved by excluding the potentially disparate
effects between periods of, in the case of EBITDA and Adjusted EBITDA, interest, gain/loss on swaps, taxes, depreciation and amortization,
in the case of Adjusted EBITDA, foreign exchange gains/losses and in the case of Adjusted Profit and Adjusted EPS, non-cash gain/loss
on swaps, foreign exchange gains/losses and write-off of unamortized loan fees, which items are affected by various and possibly
changing financing methods, capital structure and historical cost basis and which items may significantly affect results of operations
between periods.
EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS have
limitations as analytical tools and should not be considered as alternatives to, or as substitutes for, or superior to profit,
profit from operations, earnings per share or any other measure of financial performance presented in accordance with IFRS. Some
of these limitations include the fact that they do not reflect (i) our cash expenditures or future requirements for capital expenditures
or contractual commitments, (ii) changes in, or cash requirements for our working capital needs and (iii) the significant interest
expense, or the cash requirements necessary to service interest or principal payments, on our debt. Although depreciation and amortization
are non-cash charges, the assets being depreciated and amortized will have to be replaced in the future, and EBITDA and Adjusted
EBITDA do not reflect any cash requirements for such replacements. EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS are
not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows and other companies in
our industry may calculate these measures differently than we do, limiting their usefulness as a comparative measure.
In evaluating Adjusted EBITDA, Adjusted Profit and Adjusted EPS,
you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this
presentation. Our presentation of Adjusted EBITDA, Adjusted Profit and Adjusted EPS should not be construed as an inference that
our future results will be unaffected by the excluded items. Therefore, the non-GAAP financial measures as presented below may
not be comparable to similarly titled measures of other companies in the shipping or other industries.
Reconciliation of EBITDA and Adjusted EBITDA to Profit:
(Amounts expressed in thousands of U.S. Dollars)
| |
For the three months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | |
Profit for the period | |
| 3,466 | | |
| 16,701 | |
Depreciation of fixed assets | |
| 15,873 | | |
| 27,274 | |
Financial costs | |
| 17,669 | | |
| 24,246 | |
Financial income | |
| (69 | ) | |
| (86 | ) |
Loss/(gain) on swaps | |
| 9,582 | | |
| (1,638 | ) |
EBITDA | |
| 46,521 | | |
| 66,497 | |
Foreign exchange losses/(gains), net | |
| 81 | | |
| (2,002 | ) |
Adjusted EBITDA | |
| 46,602 | | |
| 64,495 | |
Reconciliation of Adjusted Profit to Profit:
(Amounts expressed in thousands of U.S. Dollars)
| |
For the three months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | |
Profit for the period | |
| 3,466 | | |
| 16,701 | |
Write-off of unamortized loan fees | |
| 3,262 | | |
| — | |
Non-cash loss/(gain) on swaps | |
| 6,821 | | |
| (3,796 | ) |
Foreign exchange losses/(gains), net | |
| 81 | | |
| (2,002 | ) |
Adjusted Profit | |
| 13,630 | | |
| 10,903 | |
Reconciliation of Adjusted Earnings Per Share to Earnings
Per Share:
(Amounts expressed in thousands of U.S. Dollars, except shares
and per share data)
| |
For the three months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | |
Profit for the period attributable to owners of the Group | |
| 1,476 | | |
| 8,240 | |
Less: | |
| | | |
| | |
Dividend on preferred stock | |
| — | | |
| (2,348 | ) |
Profit for the period available to owners of the Group used in EPS calculation | |
| 1,476 | | |
| 5,892 | |
Weighted average number of shares outstanding, basic | |
| 80,133,785 | | |
| 80,496,499 | |
EPS | |
| 0.02 | | |
| 0.07 | |
Profit for the period available to owners of the Group used in EPS calculation | |
| 1,476 | | |
| 5,892 | |
Plus: | |
| | | |
| | |
Write-off of unamortized loan fees | |
| 3,262 | | |
| — | |
Non-cash loss/(gain) on swaps | |
| 6,821 | | |
| (3,796 | ) |
Foreign exchange losses/(gains), net | |
| 81 | | |
| (2,002 | ) |
Adjusted Profit attributable to owners of the Group | |
| 11,640 | | |
| 94 | |
Weighted average number of shares outstanding, basic | |
| 80,133,785 | | |
| 80,496,499 | |
Adjusted EPS | |
| 0.15 | | |
| 0.00 | |
Exhibit 99.2
Financial Report for the Three Months and
Six Months Ended June 30, 2015
Management’s Discussion and Analysis
of Financial Condition and Results of Operation
The following is a discussion of our financial
condition and results of operations for the three and six-month periods ended June 30, 2015 and 2014. Unless otherwise specified
herein, references to “GasLog”, the “Company”, the “Group”, “we”, “our”
or “us” shall include GasLog Ltd. and its subsidiaries. You should read this section in conjunction with our unaudited
condensed consolidated financial statements and related notes included elsewhere in this report. For additional information relating
to our management’s discussion and analysis of financial condition and results of operation, please see our Annual Report
on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 26, 2015. This discussion includes
forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties
which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by
such forward-looking statements. See also discussion in the section entitled “Forward-Looking Statements” below.
Forward-Looking Statements
All statements in this report that are not
statements of historical fact are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation
Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that the Company
expects, projects, believes or anticipates will or may occur in the future, particularly in relation to the Company’s operations,
cash flows, financial position, liquidity and cash available for dividends or distributions, plans, strategies and business prospects,
and changes and trends in the Company’s business and the markets in which it operates. These statements are based on current
expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual
results could vary materially from the Company’s expectations and projections. Accordingly, you should not unduly rely on
any forward-looking statements. Factors that might cause future results and outcomes to differ include:
| · | continued low prices for crude oil and petroleum products; |
| · | Liquefied natural gas (“LNG”) shipping market conditions and trends, including spot and long-term charter rates,
ship values, factors affecting supply and demand of LNG and LNG shipping and technological advancements; |
| · | our ability to enter into time charters with new and existing customers; |
| · | changes in the ownership of our charterers; |
| · | our customers’ performance of their obligations under our time charters; |
| · | changing economic conditions and the differing pace of economic recovery in different regions of the world; |
| · | our future financial condition, liquidity and cash available for dividends and distributions; |
| · | our ability to obtain financing to fund capital expenditures, acquisitions and other corporate activities, the ability of our
lenders to meet their funding obligations, and our ability to meet the restrictive covenants and other obligations under our credit
facilities; |
| · | our ability to enter into shipbuilding contracts for newbuildings and our expectations about the availability of existing LNG
carriers to purchase, as well as our ability to consummate any such acquisitions; |
| · | our expectations about the time that it may take to construct and deliver newbuildings and the useful lives of our ships; |
| · | number of off-hire days, drydocking requirements and insurance costs; |
| · | our anticipated general and administrative expenses; |
| · | fluctuations in currencies and interest rates; |
| · | our ability to maximize the use of our ships, including the re-employment or disposal of ships not under time charter commitments; |
| · | environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities; |
| · | requirements imposed by classification societies; |
| · | risks inherent in ship operation, including the discharge of pollutants; |
| · | availability of skilled labor, ship crews and management; |
| · | potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists; |
| · | potential liability from future litigation; and |
| · | other risks and uncertainties described in the Company’s Annual Report on Form 20-F filed with the SEC on March 26, 2015.
Copies of the Annual Report, as well as subsequent filings, are available online at http://www.sec.gov. |
The Company does not undertake to update any
forward-looking statements as a result of new information or future events or developments except as may be required by law.
Overview
We are an international owner, operator
and manager of LNG carriers. After giving effect to the dropdown transaction completed on July 1, 2015 (refer to
“Recent Developments” below), our wholly owned fleet consists of 19 LNG carriers, including 11 ships in
operation, six LNG carriers on order at Samsung Heavy Industries Co., Ltd. (“Samsung”) and two LNG carriers on
order at Hyundai Heavy Industries Co., Ltd. (“Hyundai”). GasLog is also the general and controlling partner in
GasLog Partners LP (“GasLog Partners” or the “Partnership”), a publicly traded master limited
partnership, which owns eight LNG carriers. We currently manage and operate 22 LNG carriers including 10 of our wholly owned
ships in operation (one is managed by a subsidiary of Royal Dutch Shell plc (“Shell”)), the eight ships
contributed or sold to the Partnership, three ships owned by Methane Services Limited (“MSL”), a subsidiary of BG
Group plc (“BG Group”) and one additional LNG carrier in which we have a 25% interest. We are also
supervising the construction of our newbuildings. We have secured multi-year and seasonal time charter contracts for eight of
the operating ships, the eight ships owned by the Partnership and seven of our eight newbuildings on order, while three of our
ships are operating in the spot/short-term market. From June 30, 2015, these contracts are expected to provide total
contracted revenue of approximately $3.9 billion during their initial terms, which expire between 2015 and 2029, after giving
effect to the agreement with BG Group signed on April 21, 2015 and described below. Contracted revenue calculations assume:
(a) 365 revenue days per annum, with 30 off-hire days when the ship undergoes scheduled drydocking, (b) all LNG carriers on
order are delivered on schedule, and (c) no exercise of any option to extend the term of charters.
In addition to our committed order book,
we also secured additional fixed priced options from Samsung on up to six further 174,000 cbm newbuildings with delivery
dates in 2018 and 2019 that expire in March 2016. We also have a 25% interest in an additional ship, the Methane Nile
Eagle, a 2007-built LNG carrier owned by Egypt LNG Shipping Ltd. (“Egypt LNG”) and technically managed by us.
It is currently operating under a 20-year time charter to a subsidiary of BG Group. The information about our owned fleet
presented in this report does not include our ownership interest in the Methane Nile Eagle.
We generate revenues by chartering our ships
to customers on multi-year charters, seasonal time charters and spot/short-term charters and by providing technical ship management
services, including crewing, training, maintenance, regulatory and classification compliance and health, safety, security and environmental
(“HSSE”) management and reporting through our wholly owned subsidiary GasLog LNG Services Ltd.
Recent Developments
Dividend Declaration
On August 5, 2015, the board of directors
declared a quarterly cash dividend of $0.14 per common share payable on August 20, 2015 to shareholders of record as of
August 17, 2015. The declaration and payment of dividends is at all times subject to the discretion of the board and will
depend on, among other things, our earnings, financial condition, cash requirements and availability, restrictions in our
credit facilities, the provisions of Bermuda law and such other factors as the board may deem relevant.
Agreement with BG Group
On April 21, 2015, GasLog and GasLog Partners
announced the agreement to charter to MSL, a subsidiary of BG Group, three newbuildings and an option for MSL to elect, within
2015 to charter an additional six newbuildings. The details of that transaction are set out in the Press Release dated April 21,
2015, which was attached as an exhibit to our report on Form 6-K/A furnished to the SEC on April 24, 2015.
Issuance of 4.6 million Series A Cumulative
Redeemable Perpetual Preference Shares (the “Series A Preference Shares”)
On April 7, 2015, GasLog completed a public
offering of 4,600,000 shares of 8.75% Series A Preference Shares (including 600,000 shares issued upon the exercise in full by
the underwriters of their option to purchase additional Series A Preference Shares), par value $0.01 per share, liquidation preference
$25.00 per share which priced at $25.00 per share. The net proceeds from the offering after deducting underwriting discounts, commissions
and other offering expenses were $110.66 million. The Series A Preference Shares are listed on the New York Stock Exchange under
the symbol “GLOG PR A”.
On June 19, 2015, the board of directors declared the initial dividend
on the Series A Preference Shares of $0.510417 per share or $2.35 million in the aggregate payable on July 1, 2015 to holders of
record as of June 30, 2015. GasLog paid the declared dividend to the transfer agent in June 2015.
Completion of GasLog Partners Dropdown
Transaction
On July 1, 2015, GasLog announced the
completion of the sale of three LNG carriers, the Methane Alison Victoria, the Methane Shirley Elisabeth and
the Methane Heather Sally to GasLog Partners for $483.0 million including $3.0 million of positive net working
capital. To partially fund the acquisition, GasLog Partners launched and completed an equity offering of 7,500,000 common
units and issued 153,061 general partner units to GasLog. The proceeds were used to partially finance the acquisition from
GasLog of 100% of the ownership interests in GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd., the entities that
each own one of the three 145,000 cbm LNG carriers mentioned above.
Delivery of GasLog Salem
On April 30, 2015, GasLog took delivery of
the GasLog Salem, an LNG carrier of 155,000 cubic meters capacity with tri-fuel diesel electric propulsion constructed by
Samsung.
Operations in Greece
GasLog LNG Services Ltd., our vessels’
management company, and a substantial number of its staff are located in Greece. The current economic instability in Greece could
disrupt our operations and have an adverse effect on our business. We have sought to minimize this risk and preserve operational
stability by carefully developing staff deployment plans, an information technology recovery site, an alternative ship to shore
communications plan and funding mechanisms. While we believe these plans, combined with the international nature of our operations,
will mitigate the impact of any disruption of operations in Greece, we cannot assure you that these plans will be effective in
all circumstances.
Fleet Update
After giving effect to the dropdown completed
on July 1, 2015, our wholly owned fleet consists of the following vessels:
Vessel Name | |
Year Built | |
Cargo Capacity (cbm) | |
Charterer(1) | |
Propulsion | |
Charter Expiration(2) | |
Optional Period(3) |
1 | |
GasLog Savannah | |
2010 | |
155,000 | |
BG Group | |
TFDE | |
September 2015 | |
2018-2023 |
2 | |
GasLog Singapore | |
2010 | |
155,000 | |
BG Group | |
TFDE | |
September 2016 | |
2019-2024 |
3 | |
GasLog Skagen | |
2013 | |
155,000 | |
BG Group | |
TFDE | |
April 2021(4) | |
2026-2031 |
4 | |
GasLog Chelsea | |
2010 | |
153,600 | |
Spot Market(5) | |
TFDE | |
N/A | |
N/A |
5 | |
GasLog Seattle | |
2013 | |
155,000 | |
Shell | |
TFDE | |
December 2020 | |
2025-2030 |
6 | |
Solaris | |
2014 | |
155,000 | |
Shell | |
TFDE | |
June 2021 | |
2026-2031 |
7 | |
GasLog Saratoga | |
2014 | |
155,000 | |
Spot Market(5) | |
TFDE | |
N/A | |
N/A |
8 | |
Methane Lydon Volney | |
2006 | |
145,000 | |
BG Group | |
Steam | |
October 2020 | |
2023-2025 |
9 | |
Methane Becki Anne | |
2010 | |
170,000 | |
BG Group | |
TFDE | |
March 2024 | |
2027-2029 |
10 | |
Methane Julia Louise | |
2010 | |
170,000 | |
BG Group | |
TFDE | |
March 2026 | |
2029-2031 |
11 | |
GasLog Salem | |
2015 | |
155,000 | |
Spot Market(5) | |
TFDE | |
N/A | |
N/A |
The Partnership’s fleet consists of the
following vessels:
Vessel Name |
|
Year Built | |
Cargo Capacity (cbm) |
|
Charterer(1) | |
Propulsion | |
Charter Expiration(2) | |
Optional Period(3) |
1 | |
GasLog Shanghai | |
2013 | |
155,000 | |
BG Group | |
TFDE | |
May 2018(6) | |
2021-2026 |
2 | |
GasLog Santiago | |
2013 | |
155,000 | |
BG Group | |
TFDE | |
July 2018(6) | |
2021-2026 |
3 | |
GasLog Sydney | |
2013 | |
155,000 | |
BG Group | |
TFDE | |
September 2018(6) | |
2021-2026 |
4 | |
Methane Rita Andrea | |
2006 | |
145,000 | |
BG Group | |
Steam | |
April 2020 | |
2023-2025 |
5 | |
Methane Jane Elizabeth | |
2006 | |
145,000 | |
BG Group | |
Steam | |
October 2019 | |
2022-2024 |
6 | |
Methane Shirley Elisabeth | |
2007 | |
145,000 | |
BG Group | |
Steam | |
June 2020 | |
2023-2025 |
7 | |
Methane Alison Victoria | |
2007 | |
145,000 | |
BG Group | |
Steam | |
December 2019 | |
2022-2024 |
8 | |
Methane Heather Sally | |
2007 | |
145,000 | |
BG Group | |
Steam | |
December 2020 | |
2023-2025 |
| (1) | Vessels are chartered to a subsidiary of BG Group or a subsidiary of Shell, as applicable. |
| (2) | Indicates the expiration of the initial term. |
| (3) | The period shown reflects the expiration of the minimum optional period and the maximum optional period. The charterer of the
GasLog Savannah and the GasLog Singapore has unilateral options to extend the term of the time charters for periods
ranging from 30 months to 90 months. The charterer of the GasLog Skagen has unilateral options to extend the term of the
charter for up to ten years, on a seasonal charter basis. The charterer of the GasLog Seattle and the Solaris has
unilateral options to extend the term of the time charters for periods ranging from 5 to 10 years, provided that the charterer
provides us with advance notice of declaration of any option in accordance with the terms of the applicable charter. The charterer
of the Methane Lydon Volney has a unilateral option to extend the term for a period of either three or five years at its
election. In addition, the charterer of the Methane Shirley Elisabeth, the Methane Heather Sally and the Methane
Alison Victoria has a unilateral option to extend the term of two of the related time charters for a period of either three
or five years at its election. The charterer of the GasLog Shanghai, GasLog Santiago and GasLog Sydney may
be extended for up to two extension periods of three or four years at the charterer’s option, and each charter requires that
the charterer provide us with 90 days’ notice before the charter expiration of its exercise of any extension option. The
charterer of the Methane Rita Andrea and the Methane Jane Elizabeth may extend either or both of these charters for
one extension period of three or five years, and each charter requires that the charterer provide us with advance notice of its
exercise of any extension option. The charterer of the Methane Becki Anne and the Methane Julia Louise has a unilateral
option to extend the term of the time charters for a period of either three or five years at its election. |
| (4) | Time charter provides for full employment for three years and a subsequent five year seasonal charter under which the ship
is employed for seven months and available to accept other charters for five months. |
| (5) | Vessels operating in the spot market become subject to and released from charters on a short-term basis. The GasLog Chelsea
and the GasLog Saratoga are currently unemployed and we are actively seeking to secure time charter contracts. |
| (6) | Charter expiration was amended based on the agreement signed with BG Group on April 21, 2015. With respect to the GasLog
Sydney, whose charter was shortened by 8 months under such agreement, if MSL does not exercise the charter extension options
referenced above, and GasLog Partners does not enter into a third-party charter for the GasLog Sydney, GasLog and GasLog
Partners intend to enter into a bareboat or time charter arrangement that is designed to guarantee the total cash distribution
from the vessel for any period of charter shortening. If MSL exercises the options to charter six additional vessels, the three
charters of the GasLog Shanghai, GasLog Santiago and GasLog Sydney would be further adjusted by a potential
shortening of a maximum 31 months in total. If MSL does not exercise the charter extension options referenced above for these three
vessels, and GasLog Partners does not enter into a third-party charter for the GasLog Shanghai, GasLog Santiago or
GasLog Sydney, GasLog and GasLog Partners intend to enter into a bareboat arrangement. However, if they are unable to agree
on such bareboat arrangement, GasLog will enter into a time charter with GasLog Partners on equivalent terms to the existing MSL
time charters for any period of charter shortening. |
GasLog Partners has options and other
acquisition rights under which it may acquire additional LNG carriers from us. This includes options to purchase up to 9 LNG carriers
from us within 36 months after each such vessel’s acceptance by its charterer (or, in the case of certain vessels, 36 months
after the closing of the GasLog Partners initial public offering or the completion of our acquisition of such vessel), in each
case at fair market value as determined pursuant to the omnibus agreement.
GasLog Partners also has a right of
first offer from us to purchase any other LNG carriers with cargo capacities greater than 75,000 cbm engaged in ongoing LNG transportation
under charters of five full years or more that we own or acquire (the “Five Year Vessels”) either at their acquisition
cost plus certain break up costs (in the case of a newly acquired Five Year Vessel) or at their fair market value (in the case
of a previously owned vessel that becomes a Five Year Vessel). The three newbuildings to be chartered under the agreement signed
with a subsidiary of BG Group on April 21, 2015, as well as the additional six newbuildings which may be chartered at BG Group’s
election, will each qualify as a Five Year Vessel upon commencement of its charter, and we will be required to offer to GasLog
Partners an opportunity to purchase each vessel at fair market value within 30 days of the commencement of its charter. Generally,
GasLog Partners must exercise this right of first offer within 30 days following the notice from us that the vessel has been acquired
or has become a Five Year Vessel.
Results of Operations
Three-month period ended June 30, 2015 compared to the three-month
period ended June 30, 2014
| |
For the three months ended | |
Amounts are in thousands of U.S. Dollars | |
June 30, 2014 | | |
June 30, 2015 | |
Revenues | |
| 73,236 | | |
| 104,440 | |
Vessel operating and supervision costs | |
| (19,116 | ) | |
| (29,947 | ) |
Depreciation of fixed assets | |
| (15,873 | ) | |
| (27,274 | ) |
General and administrative expenses | |
| (7,992 | ) | |
| (8,339 | ) |
Profit from operations | |
| 30,255 | | |
| 38,880 | |
Financial costs | |
| (17,669 | ) | |
| (24,246 | ) |
Financial income | |
| 69 | | |
| 86 | |
(Loss)/gain on swaps | |
| (9,582 | ) | |
| 1,638 | |
Share of profit of associate | |
| 393 | | |
| 343 | |
Total other expenses, net | |
| (26,789 | ) | |
| (22,179 | ) |
Profit for the period | |
| 3,466 | | |
| 16,701 | |
Non-controlling interest | |
| (1,990 | ) | |
| (8,461 | ) |
Profit attributable to owners of the Group | |
| 1,476 | | |
| 8,240 | |
During the three-month period ended June
30, 2015, we had an average of 18.7 ships operating in our owned fleet (including ships owned by the Partnership), having
1,464 operating days and an average of 21.7 ships operating under our technical management (including our 17.7 owned ships).
During the three-month period ended June 30, 2014, we had an average of 11.3 ships operating in our owned fleet, having 976
operating days and an average of 20.0 ships operating under our technical management (including our 11.3 owned ships).
Revenues:
Revenues increased by 42.60%, or
$31.20 million, from $73.24 million during the three-month period ended June 30, 2014, to $104.44 million during the
three-month period ended June 30, 2015. The increase is mainly attributable to an increase in revenues by $39.24 million due
to the full operation of the Methane Rita Andrea, the Methane Jane Elizabeth, the Methane Lydon Volney, the
Methane Shirley Elisabeth, the Methane Heather Sally and the Methane Alison Victoria, which were acquired
from BG Group in April 2014 and June 2014, the acquisition of the Methane Becki Anne and the Methane Julia
Louise, which were both acquired from BG Group on March 31, 2015 and the deliveries of the Solaris, the GasLog
Saratoga, and the GasLog Salem on June 30, 2014, December 16, 2014 and April 30, 2015 respectively. These
acquisitions and deliveries resulted in an increase in operating days. The increase in revenues was partially offset by a net
decrease of $1.59 million in revenues from all other vessels related mainly to a decrease in a vessel operating in the spot
market and $4.87 million caused mainly by the off-hire days due to the drydockings of four of our vessels. There was also a
decrease of $1.58 million in revenues from technical management services mainly due to the decrease in the number of the
managed vessels owned by third parties following the acquisition of the 8 vessels from BG Group and the termination of a
project with another customer.
Vessel Operating and Supervision Costs:
Vessel operating and supervision costs
increased by 56.64%, or $10.83 million, from $19.12 million during the three-month period ended June 30, 2014 to $29.95
million during the three-month period ended June 30, 2015. The increase is primarily attributable to the increase in our
fleet in the three-month period ended June 30, 2015, compared to the same period of 2014, as described above.
Depreciation:
Depreciation increased by 71.83%, or $11.40
million, from $15.87 million during the three-month period ended June 30, 2014 to $27.27 million during the three-month period
ended June 30, 2015. The increase in depreciation resulted from the increase in the average number of vessels in our fleet in the
three-month period ended June 30, 2015, compared to the same period of 2014.
General and Administrative Expenses:
General and administrative expenses
increased by 4.38% or $0.35 million, from $7.99 million during the three-month period ended June 30, 2014, to $8.34 million
during the three-month period ended June 30, 2015. The increase is mainly attributable to a $1.14 million increase in legal
fees and other professional services including the Partnership’s requirements of being a public company, an increase in
personnel related expenses of $0.75 million related to the growth of the Group, an increase in equity-settled compensation
expense of $0.23 million and an increase in board of directors’ fees of $0.15 million. These were partially offset by
the increase of $1.82 million in net foreign exchange gains and a decrease of all other expenses by $0.10 million.
Financial Costs:
Financial costs increased by 37.24%,
or $6.58 million, from $17.67 million during the three-month period ended June 30, 2014, to $24.25 million during the
three-month period ended June 30, 2015. The increase is mainly attributable to an increase of $8.28 million in interest
expense on loans, bond and cash flow hedges. During the three-month period ended June 30, 2015, we had an average of
$2,497.23 million of outstanding indebtedness including our NOK bond agreement, having an aggregate weighted average interest
rate of 3.34%, and during the three-month period ended June 30, 2014, we had an average of $1,527.17 million of outstanding
indebtedness with a weighted average interest rate of 3.27%. These weighted average interest rates include interest expense
on loans and cash flow hedges and interest expense on bond and cross-currency swaps (“CCS”).
(Loss)/gain on Swaps:
Gain on swaps increased by $11.22
million, from $9.58 million loss during the three-month period ended June 30, 2014, to $1.64 million gain during the
three-month period ended June 30, 2015. The increase is mainly attributable to an increase of $8.78 million in gain from
mark-to-market valuation of our interest rate swaps carried at fair value through profit or loss, which reflected a gain of
$4.08 million for the three-month period ended June 30, 2015 as compared to a loss of $4.70 million for the three-month
period ended June 30, 2014, a decrease of $0.60 million in realized loss from interest rate swaps held for trading, a
decrease of $1.63 million in loss that was reclassified from equity to the statement of profit or loss related to the
interest rate swaps for which hedge accounting was discontinued and a decrease of $0.21 million in the ineffective portion of
cash flow hedges. In the three-month period ended June 30, 2015, the gain from mark-to-market valuation derived from the fact
that the LIBOR yield curve, which was used to calculate the present value of the estimated future cash flows, moved up as
compared to the first quarter of 2015.
Profit for the Period:
Profit increased by 381.27%, or $13.23
million, from $3.47 million for the three-month period ended June 30, 2014, to $16.70 million for the
three-month period ended June 30, 2015, as a result of the aforementioned factors.
Six-month period ended June 30, 2015 compared to the six-month
period ended June 30, 2014
| |
For the six months ended | |
Amounts are in thousands of U.S. Dollars | |
June 30, 2014 | | |
June 30, 2015 | |
Revenues | |
| 130,307 | | |
| 201,766 | |
Vessel operating and supervision costs | |
| (36,061 | ) | |
| (54,570 | ) |
Depreciation of fixed assets | |
| (27,063 | ) | |
| (49,969 | ) |
General and administrative expenses | |
| (14,255 | ) | |
| (19,498 | ) |
Profit from operations | |
| 52,928 | | |
| 77,729 | |
Financial costs | |
| (29,357 | ) | |
| (42,774 | ) |
Financial income | |
| 151 | | |
| 149 | |
Loss on swaps | |
| (14,697 | ) | |
| (5,341 | ) |
Share of profit of associate | |
| 790 | | |
| 790 | |
Total other expenses, net | |
| (43,113 | ) | |
| (47,176 | ) |
Profit for the period | |
| 9,815 | | |
| 30,553 | |
Non-controlling interest | |
| (1,990 | ) | |
| (17,971 | ) |
Profit attributable to owners of the Group | |
| 7,825 | | |
| 12,582 | |
During the six-month period ended June
30, 2015, we had an average of 17.3 ships operating in our owned fleet (including ships owned by the Partnership), having
2,818 operating days and an average of 21.3 ships operating under our technical management (including our 16.3 owned ships).
During the six-month period ended June 30, 2014, we had an average of 9.6 ships operating in our owned fleet, having 1,664
operating days and an average of 20.0 ships operating under our technical management (including our 9.6 owned ships).
Revenues:
Revenues increased by 54.84%, or
$71.46 million, from $130.31 million during the six-month period ended June 30, 2014, to $201.77 million during the six-month
period ended June 30, 2015. The increase is mainly attributable to an increase in revenues by $84.22 million due to the
full operation of the Methane Rita Andrea, the Methane Jane Elizabeth, the Methane Lydon Volney, the
Methane Shirley Elisabeth, the Methane Heather Sally and the Methane Alison Victoria which were acquired
from BG Group in April 2014 and June 2014, the acquisition of the Methane Becki Anne and the Methane Julia Louise which
were both acquired from BG Group on March 31, 2015 and the deliveries of the Solaris, the GasLog Saratoga, and
the GasLog Salem on June 30, 2014, December 16, 2014 and April 30, 2015 respectively. These acquisitions and
deliveries resulted in an increase in operating days. The increase in revenues was partially offset by a net decrease of
$1.12 million in revenues from the vessels with variable rates and $8.59 million caused mainly by the off-hire days due to
the drydockings of six of our vessels. There was also a decrease of $3.06 million in revenues from technical management
services mainly due to the decrease in the average number of the managed vessels owned by third parties following the
acquisition of the eight vessels from BG Group and the termination of a project with another customer.
Vessel Operating and Supervision Costs:
Vessel operating and supervision
costs increased by 51.33%, or $18.51 million, from $36.06 million during the six-month period ended June 30, 2014, to $54.57
million during the six-month period ended June 30, 2015. The increase is primarily attributable to increase in our fleet in
the six-month period ended June 30, 2015, compared to the same period of 2014, as described above.
Depreciation:
Depreciation increased by 84.66%, or $22.91
million, from $27.06 million during the six-month period ended June 30, 2014, to $49.97 million during the six-month period ended
June 30, 2015. The increase in depreciation resulted from the increase in the average number of vessels in our fleet in the six-month
period ended June 30, 2015, compared to the same period of 2014.
General and Administrative Expenses:
General and administrative expenses
increased by 36.75%, or $5.24 million, from $14.26 million during the six-month period ended June 30, 2014, to $19.50 million
during the six-month period ended June 30, 2015. The increase is mainly attributable to a $2.58 million increase in legal
fees and other professional services including those related to year one Sarbanes-Oxley Act compliance and the
Partnership’s listing requirements, an increase in personnel related expenses of $1.40 million related to the growth of
the Group, an increase in equity-settled compensation expense of $0.55 million, an increase in board of directors’ fees
of $0.40 million, an increase of $0.35 million in rent and utilities related to the new offices in London, New York and
Singapore, an increase in directors’ and officers’ insurance of $0.29 million mostly related to the additional
cost derived from the Partnership’s requirements and an increase in various other expenses of $0.09 million. The above
increases were partially offset by the increase of $0.42 million in net foreign exchange gains.
Financial Costs:
Financial costs increased by 45.67%, or
$13.41 million, from $29.36 million during the six-month period ended June 30, 2014 to $42.77 million during the six-month
period ended June 30, 2015. The increase is mainly attributable to an increase of $14.98 million in interest expense on
loans, bond and cash flow hedges. During the six-month period ended June 30, 2015, we had an average of $2,227.04 million of
outstanding indebtedness including our NOK bond agreement, having an aggregate weighted average interest rate of 3.33%, and
during the six-month period ended June 30, 2014, we had an average of $1,332.21 million of outstanding indebtedness with a
weighted average interest rate of 3.32%. These weighted average interest rates include interest expense on loans and cash
flow hedges and interest expense on bond CCSs.
Gain/(loss) on Swaps:
Loss on swaps decreased by $9.36 million,
from $14.70 million loss during the six-month period ended June 30, 2014, to $5.34 million loss during the six-month period
ended June 30, 2015. The decrease in loss is mainly attributable to a decrease of $7.05 million in loss from mark-to-market
valuation of our interest rate swaps carried at fair value through profit or loss, which reflected a loss of $0.43 million
for the six-month period ended June 30, 2015 as compared to a loss of $7.48 million for the six-month period ended June 30,
2014, a decrease of $0.34 million in realized loss from interest rate swaps held for trading, a decrease of $1.76 million in
loss that was reclassified from equity to the statement of profit or loss related to the interest rate swaps for which hedge
accounting was discontinued and a decrease of $0.21 million in the ineffective portion of cash flow hedges. In 2015, the loss
derived from the fact that the LIBOR yield curve, which was used to calculate the present value of the estimated future cash
flows, was lower than the agreed fixed interest rates resulting in an increase in derivative liabilities from interest rate
swaps held for trading as compared to December 31, 2014.
Profit for the Period:
Profit increased by 211.10%,
or $20.73 million, from $9.82 million for the six-month period ended June 30, 2014, to $30.55 million for the
six-month period ended June 30, 2015, as a result of the aforementioned factors.
Customers
For the six-month period ended June 30, 2015,
we received 79.8% of our revenues from MSL, a subsidiary of BG Group, 0.2% of our revenues from Egypt LNG, an entity in which we
have a 25% ownership interest, 12.2% of our revenues from Shell and 7.8% of our revenues from various charterers in the spot/short-term
market. For the six-month period ended June 30, 2014, we received 80.7% of our revenues from MSL, 0.3% of our revenues from Egypt
LNG, 10.6% of our revenues from Shell, 8.0% of our revenues from various charterers in the spot/short-term market and 0.4% from
another customer.
Seasonality
Since our owned ships are mainly employed under
multi-year, fixed-rate charter arrangements, seasonal trends do not materially impact the revenues earned by our vessels during
the year. In the future, seasonality may impact the revenues of our ships operating under spot/short-term or seasonal charter arrangements.
Seasonality also does not have a significant impact on revenues earned by our management services, as we provide technical ship
management and ship construction supervision services under fixed-rate agreements.
Additionally, our business is not subject to
seasonal borrowing requirements.
Liquidity and Capital Resources
Our primary liquidity needs are to fund our
ship-operating expenses, finance the purchase and construction of our newbuildings, purchase second-hand vessels, service our existing
debt and pay dividends. In monitoring our working capital needs, we project our charter hire income and ships’ maintenance
and running expenses, as well as debt service obligations, and seek to maintain adequate cash reserves in order to address any
budget overruns.
We anticipate that our primary sources of funds
will be available cash, cash from operations, borrowings under existing and new debt agreements and additional common or other
forms of equity. We believe that these sources of funds will be sufficient to meet our liquidity needs, although there can be no
assurance that we will be able to obtain future debt and equity financing on terms acceptable to us.
Our funding and treasury activities are intended
to balance investment returns in order to maintain appropriate liquidity. Cash and cash equivalents are held primarily in U.S.
dollars. In June 2013 and April 2014, we entered into six CCSs to exchange interest payments and principal on maturity on the same
terms as the NOK denominated bonds and designated the CCSs as hedges of the variability of the USD functional currency equivalent
cash flows on the bond. Refer to Note 11 of our unaudited condensed consolidated financial statements for details on our swap arrangements.
As of June 30, 2015, we had $421.98 million
of cash and cash equivalents, of which $101.10 million was held in time deposits and the remaining balance in current accounts.
Moreover, as of June 30, 2015, GasLog had $3.0 million held in time deposits with an initial duration of more than three months
but less than a year that have been classified as short-term investments. As of June 30, 2015, GasLog had $46.02 million in restricted
cash in relation to cash held in blocked accounts in order to comply with the covenants under two of its credit facilities.
As of June 30, 2015, GasLog had an aggregate
of $2.36 billion of indebtedness outstanding under 11 credit facilities, of which $597.69 million is repayable within one year,
including $42.17 million under the revolving credit facility. As of June 30, 2015, GasLog had $126.92 million outstanding under
the NOK bond agreement that is payable in June 2018.
As of June 30, 2015, there was an undrawn amount
of $7.83 million from the revolving facility of GAS-two Ltd. which was available to be drawn under certain conditions.
On May 8, 2015, GasLog Partners entered
into a supplemental deed relating to its Citibank loan facility, in which the Partnership’s lenders unanimously
approved such changes to the facility agreement as are required to reflect the changes to the three charters agreed with MSL
that were announced by the Partnership on April 21, 2015.
On June 5, 2015, pursuant to a supplemental
deed entered into by the GasLog subsidiaries GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. relating to their Citibank
loan facility, and effective from July 1, 2015, the Partnership was added as a corporate guarantor for the respective loan facility.
As of June 30, 2015, GasLog’s commitments
for capital expenditures were related to the eight LNG carriers on order, which had a gross aggregate contract price of approximately
$1.62 billion. As of June 30, 2015, the total remaining balance of the contract prices of the eight newbuildings was $1.48 billion.
We will be required to procure additional financing in order
to fund the remaining installment payments for our eight newbuildings, expected to be delivered to us in 2016, 2018 and 2019, to
the extent such installment payments are not funded with cash generated by our operations or equity offering proceeds. Accordingly,
we are currently in discussions to arrange financing for the acquisition of such newbuildings, for seven of which we have already
secured long-term time charters with MSL.
GasLog has hedged 43.8% of its expected floating
interest rate exposure at a weighted average interest rate of approximately 4.6% (including margin) as of June 30, 2015.
As of June 30, 2015, we were in compliance
with the financial covenants under our credit facilities and our bond agreement.
Our credit facilities are described in Note
12 of our annual audited consolidated financial statements included in our Annual Report on Form 20-F filed with the SEC on March
26, 2015 and Note 5 of our unaudited condensed consolidated financial statements included elsewhere in this report.
Working Capital Position
As of June 30, 2015, our current assets totaled
$500.48 million while current liabilities totaled $688.01 million, resulting in a negative working capital position of $187.53
million. Current liabilities include an amount of $467.75 million being the current portion of three credit facilities that we
are currently in discussions for refinancing with one or more term loans.
Other than the refinancing requirements noted
above, and taking into account generally expected market conditions, we anticipate that cash flow generated from operations will
be sufficient to fund our operations, including our working capital requirements, to make the scheduled payments as per the shipbuilding
contracts and to make all other required principal and interest payments on our indebtedness during the next 12 months.
Cash Flows
Six-month period ended June 30, 2014 compared to the six-month
period ended June 30, 2015
The following table summarizes our net cash
flows from operating, investing and financing activities for the periods indicated:
| |
For the six months ended | |
Amounts are in thousands of U.S. Dollars | |
June 30,
2014 | | |
June 30,
2015 | |
Net cash provided by operating activities | |
| 61,744 | | |
| 77,961 | |
Net cash used in investing activities | |
| (1,159,435 | ) | |
| (651,903 | ) |
Net cash provided by financing activities | |
| 1,235,576 | | |
| 783,835 | |
Net Cash Provided by Operating Activities
Net cash provided by operating
activities increased by $16.22 million, from $61.74 million during the six-month period ended June 30, 2014 to $77.96 million
in the six-month period ended June 30, 2015. The increase was due to an increase of $46.02 million in revenue collections,
a decrease of $0.34 million in realized losses on interest rate swaps held for trading and a decrease in cash from
ship management creditors amounting to $7.21 million, partially offset by an increase of $19.53 million in payments for
general and administrative expenses, operating expenses and inventories, an increase of $7.93 million in cash paid for
interest and an increase of $9.90 million in cash collaterals.
Net Cash Used in Investing Activities
Net cash used in investing activities
decreased by $507.54 million, from $1,159.44 million in the six-month period ended June 30, 2014 to $651.90 million in the
six-month period ended June 30, 2015. The decrease is mainly attributable to a $478.17 million decrease in payments for the
construction costs of newbuildings and the acquisition of second-hand vessels, a net increase in short-term investments of
$29.17 million, a $0.71 million increase in dividends received from Egypt LNG Services Ltd., partially offset by a $0.50
million increase in the acquisition of other tangible assets related mainly to depot spares.
Net Cash Provided by
Financing Activities
Net cash provided by financing activities
decreased by $451.74 million, from $1,235.58 million in the six-month period ended June 30, 2014 to $783.84 million in the
six-month period ended June 30, 2015. The decrease is mainly attributable to a decrease of $278.47 million in proceeds from
our borrowings, a decrease of $210.82 million in proceeds from equity offerings (in 2014, we received $309.05 million being
the net proceeds from the public offerings and private placement completed in January and April 2014 and $186.03 million net
proceeds from GasLog Partners’ initial public offering; in 2015, we received $111.38 million net proceeds from the
preferred stock issuance and $172.87 million, net proceeds from GasLog Partners’ public offering and issuance of
general partner units), an increase in restricted cash of $23.19 million, an increase of $18.34 million in dividend payments
and an increase of $1.05 million in payments of equity raising costs, partially offset by a decrease in bank loan repayments
of $74.17 million, a decrease in payment of loan issuance costs of $5.50 million and a $0.47 million decrease in payments of
treasury shares.
Contracted Charter Revenues and Days
from Time Charters
The following table summarizes
GasLog’s (including the vessels contributed or sold to GasLog Partners) contracted charter revenues and vessel utilization as of
June 30, 2015.
| |
Contracted Charter Revenues and Days from Time Charters | |
| |
On and after July 1, | | |
For the years ending December 31, | |
| |
2015 | | |
2016 | | |
2017 | | |
2018 | | |
2019 | | |
2020-2029 | | |
Total | |
| |
(in millions of U.S. dollars, except days and percentages) | |
Contracted time charter revenues(1) | |
$ | 203.69 | | |
$ | 441.89 | | |
$ | 483.83 | | |
$ | 455.58 | | |
$ | 457.71 | | |
$ | 1,829.92 | | |
$ | 3,872.62 | |
Total contracted days(1) | |
| 2,865 | | |
| 5,955 | | |
| 6,417 | | |
| 6,015 | | |
| 5,977 | | |
| 22,248 | | |
| 49,477 | |
Total available days(2) | |
| 3,463 | | |
| 7,511 | | |
| 8,580 | | |
| 9,641 | | |
| 9,765 | | |
| 97,011 | | |
| 135,971 | |
Total unfixed days(3) | |
| 598 | | |
| 1,556 | | |
| 2,163 | | |
| 3,626 | | |
| 3,788 | | |
| 74,763 | | |
| 86,494 | |
Percentage of total contracted days/total available days(1) | |
| 82.73 | % | |
| 79.28 | % | |
| 74.79 | % | |
| 62.39 | % | |
| 61.21 | % | |
| 22.93 | % | |
| 36.39 | % |
| (1) | Reflects time charter revenues and contracted days for the ten LNG carriers delivered to us in 2010, 2013, 2014 and 2015, the
eight LNG carriers acquired from a subsidiary of BG Group in April 2014, June 2014 and March 2015, the second-hand vessel acquired
in 2013 and the seven LNG carriers on order for which we have secured time charters. Does not include charter revenues for the
Methane Nile Eagle, in which we hold a 25% minority interest and a short-term charter party for the GasLog Saratoga
signed subsequent to June 30, 2015 that will contribute additional revenue of approximately $3.45 million without giving effect
to the optional periods. Contracted revenue calculations assume: (a) 365 revenue days per annum, with 30 off-hire days when the
ship undergoes scheduled drydocking (every five years); (b) all LNG carriers on order are delivered on schedule; and (c) no exercise
of any option to extend the terms of charters. For time charters that include a fixed operating cost component subject to annual
escalation, revenue calculations include that fixed annual escalation. For time charters that give the charterer the option to
set the charter hire rate at prevailing market rates during an initial portion of the time charter’s term, revenue calculations
assume that the charterer does not elect such option. Revenue calculations for such charters include an estimate of the amount
of the operating cost component and the management fee component. |
| (2) | Available days represent total calendar days after deducting 30 off-hire days when the ship undergoes scheduled drydocking. |
| (3) | Represents available days for (i) the one newbuilding and the GasLog Chelsea, which are not currently subject to
time charter agreements and (ii) the GasLog Saratoga and the GasLog Salem, which are subject to short-term
charters, plus available days for other ships after the expiration of existing charters (assuming charterers do not exercise
any option to extend the terms of charters). |
The table provides additional information about
our contracted charter revenues based on contracts in effect as of June 30, 2015 for (a) the eleven ships in our wholly owned fleet
and the five ships in the GasLog Partners’ fleet for which we have secured time charters, (b) seven of our newbuildings on
order and (c) the short-term charter party agreements of the GasLog Saratoga and the GasLog Salem. The table reflects
only our contracted charter revenues for the ships in our owned fleet for which we have secured time charters, and it does not
reflect the costs or expenses we will incur in fulfilling our obligations under the charters, nor does it include other revenues
we may earn, such as revenues for technical management of customer-owned ships. In particular, the table does not reflect any time
charter revenues for the GasLog Chelsea and one LNG carrier on order for which we have not yet secured time charter contracts,
revenues from the GasLog Saratoga and the GasLog Salem after the estimated completion of their short-term
charter party agreements signed before June 30, 2015, any additional ships we may acquire in the future, nor does it reflect the options under our time charters
that permit our charterers to extend the time charter terms for successive multi-year periods. The entry into time charter contracts
for the remaining newbuilding on order and the GasLog Chelsea which have no time charters in place, the GasLog Saratoga,
the GasLog Salem and any additional ships we may acquire or the exercise of options extending the terms of our existing
charters, would result in an increase in the number of contracted days and the contracted revenue for our fleet in the future.
Although the contracted charter revenues are based on contracted charter hire rate provisions, they reflect certain assumptions,
including assumptions relating to future ship operating costs. We consider the assumptions to be reasonable as of the date of this
report, but if these assumptions prove to be incorrect, our actual time charter revenues could differ from those reflected in the
table. Furthermore, any contract is subject to various risks, including performance by the counterparties or an early termination
of the contract pursuant to its terms. If the charterers are unable or unwilling to make charter payments to us, or if we agree
to renegotiate charter terms at the request of a charterer or if contracts are prematurely terminated for any reason, we would
be exposed to prevailing market conditions at the time, and our results of operations and financial condition may be materially
adversely affected. Please see the disclosure under the heading “Risk Factors” in our Annual Report on Form 20-F filed
with the SEC on March 26, 2015. For these reasons, the contracted charter revenue information presented above is not fact and should
not be relied upon as being necessarily indicative of future results, and readers are cautioned not to place undue reliance on
this information. Neither the Company’s independent auditors, nor any other independent accountants, have compiled, examined
or performed any procedures with respect to the information presented in the table, nor have they expressed any opinion or any
other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association
with, the information in the table.
Significant Accounting Policies
For a description of all of our significant
accounting policies, see Note 2 of our annual audited consolidated financial statements included in our Annual Report on Form 20-F
filed on March 26, 2015 and Note 2 of our unaudited condensed consolidated financial statements included elsewhere in this report.
GASLOG LTD.
INDEX TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
GasLog Ltd. and its Subsidiaries
Unaudited condensed consolidated statements of financial
position
As of December 31, 2014 and June 30, 2015
(Amounts expressed in thousands of U.S. Dollars)
|
|
Note |
|
December
31, 2014 |
|
June
30, 2015 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
9,511 |
|
|
9,511 |
|
Investment in associate |
|
|
|
|
|
6,603 |
|
|
6,718 |
|
Deferred financing costs |
|
|
|
|
|
6,120 |
|
|
— |
|
Other non-current assets |
|
|
|
|
|
5,785 |
|
|
15,516 |
|
Derivative financial instruments |
|
|
11 |
|
|
1,174 |
|
|
471 |
|
Tangible fixed assets |
|
|
4 |
|
|
2,809,517 |
|
|
3,442,912 |
|
Vessels under construction |
|
|
4 |
|
|
142,776 |
|
|
144,902 |
|
Total non-current assets |
|
|
|
|
|
2,981,486 |
|
|
3,620,030 |
|
Current assets |
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
|
|
|
|
|
14,317 |
|
|
16,972 |
|
Dividends receivable and amounts due from
related parties |
|
|
6 |
|
|
1,869 |
|
|
810 |
|
Inventories |
|
|
|
|
|
4,953 |
|
|
8,069 |
|
Prepayments and other current assets |
|
|
|
|
|
4,443 |
|
|
3,631 |
|
Restricted cash |
|
|
|
|
|
22,826 |
|
|
46,016 |
|
Short-term investments |
|
|
|
|
|
28,103 |
|
|
3,000 |
|
Cash and cash equivalents |
|
|
|
|
|
211,974 |
|
|
421,982 |
|
Total current assets |
|
|
|
|
|
288,485 |
|
|
500,480 |
|
Total assets |
|
|
|
|
|
3,269,971 |
|
|
4,120,510 |
|
Equity and liabilities |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
|
|
|
|
— |
|
|
46 |
|
Share capital |
|
|
|
|
|
810 |
|
|
810 |
|
Contributed surplus |
|
|
|
|
|
923,470 |
|
|
1,034,080 |
|
Reserves |
|
|
|
|
|
(12,002 |
) |
|
(10,617 |
) |
Treasury shares |
|
|
|
|
|
(12,576 |
) |
|
(12,491 |
) |
Retained earnings |
|
|
|
|
|
29,689 |
|
|
17,384 |
|
Equity attributable to owners of the Group |
|
|
|
|
|
929,391 |
|
|
1,029,212 |
|
Non-controlling interest |
|
|
3 |
|
|
323,646 |
|
|
501,151 |
|
Total equity |
|
|
|
|
|
1,253,037 |
|
|
1,530,363 |
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
Trade accounts payable |
|
|
|
|
|
9,668 |
|
|
14,961 |
|
Ship management creditors |
|
|
|
|
|
1,285 |
|
|
1,168 |
|
Amounts due to related parties |
|
|
6 |
|
|
181 |
|
|
159 |
|
Derivative financial instruments |
|
|
11 |
|
|
16,149 |
|
|
15,880 |
|
Other payables and accruals |
|
|
8 |
|
|
57,647 |
|
|
67,686 |
|
Borrowings—current portion |
|
|
5 |
|
|
116,431 |
|
|
588,154 |
|
Total current liabilities |
|
|
|
|
|
201,361 |
|
|
688,008 |
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
|
|
11 |
|
|
35,751 |
|
|
43,929 |
|
Borrowings—non-current portion |
|
|
5 |
|
|
1,778,845 |
|
|
1,857,106 |
|
Other non-current liabilities |
|
|
|
|
|
977 |
|
|
1,104 |
|
Total non-current liabilities |
|
|
|
|
|
1,815,573 |
|
|
1,902,139 |
|
Total equity and liabilities |
|
|
|
|
|
3,269,971 |
|
|
4,120,510 |
|
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
GasLog Ltd. and its Subsidiaries
Unaudited condensed consolidated statements of profit or loss
For the three and six months ended June 30, 2014 and 2015
(Amounts expressed in thousands of U.S. Dollars, except per
share data)
|
|
|
|
For the three months ended |
|
For the six months ended |
|
|
|
Note |
|
June 30, 2014 |
|
June 30, 2015 |
|
June 30, 2014 |
|
June 30, 2015 |
|
Revenues |
|
|
|
|
|
73,236 |
|
|
104,440 |
|
|
130,307 |
|
|
201,766 |
|
Vessel operating and supervision costs |
|
|
|
|
|
(19,116 |
) |
|
(29,947 |
) |
|
(36,061 |
) |
|
(54,570 |
) |
Depreciation of fixed assets |
|
|
4 |
|
|
(15,873 |
) |
|
(27,274 |
) |
|
(27,063 |
) |
|
(49,969 |
) |
General and administrative expenses |
|
|
7 |
|
|
(7,992 |
) |
|
(8,339 |
) |
|
(14,255 |
) |
|
(19,498 |
) |
Profit from operations |
|
|
|
|
|
30,255 |
|
|
38,880 |
|
|
52,928 |
|
|
77,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial costs |
|
|
12 |
|
|
(17,669 |
) |
|
(24,246 |
) |
|
(29,357 |
) |
|
(42,774 |
) |
Financial income |
|
|
|
|
|
69 |
|
|
86 |
|
|
151 |
|
|
149 |
|
(Loss)/gain on swaps |
|
|
12 |
|
|
(9,582 |
) |
|
1,638 |
|
|
(14,697 |
) |
|
(5,341 |
) |
Share of profit of associate |
|
|
|
|
|
393 |
|
|
343 |
|
|
790 |
|
|
790 |
|
Total other expenses, net |
|
|
|
|
|
(26,789 |
) |
|
(22,179 |
) |
|
(43,113 |
) |
|
(47,176 |
) |
Profit for the period |
|
|
|
|
|
3,466 |
|
|
16,701 |
|
|
9,815 |
|
|
30,553 |
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the Group |
|
|
|
|
|
1,476 |
|
|
8,240 |
|
|
7,825 |
|
|
12,582 |
|
Non-controlling interest |
|
|
|
|
|
1,990 |
|
|
8,461 |
|
|
1,990 |
|
|
17,971 |
|
|
|
|
|
|
|
3,466 |
|
|
16,701 |
|
|
9,815 |
|
|
30,553 |
|
Earnings per share – basic and diluted |
|
|
15 |
|
|
0.02 |
|
|
0.07 |
|
|
0.10 |
|
|
0.13 |
|
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
GasLog Ltd. and its Subsidiaries
Unaudited condensed consolidated statements of comprehensive
income
For the three and six months ended June 30, 2014 and 2015
(Amounts expressed in thousands of U.S. Dollars)
| |
| |
For the three months ended | | |
For the six months ended |
| |
Note | |
June 30, 2014 | | |
June 30, 2015 | | |
June 30, 2014 | | |
June 30, 2015 | |
Profit for the period | |
| |
| 3,466 | | |
| 16,701 | | |
| 9,815 | | |
| 30,553 | |
Other comprehensive (loss)/income: | |
| |
| | | |
| | | |
| | | |
| | |
Items that may be reclassified subsequently to profit or loss: | |
| |
| | | |
| | | |
| | | |
| | |
Effective portion of changes in fair value of cash flow hedges, net of amounts recycled to profit or loss | |
11 | |
| (7,642 | ) | |
| 4,614 | | |
| (7,337 | ) | |
| (371 | ) |
Recycled loss of cash flow hedges reclassified to profit or loss in relation to derivatives no longer designated as hedges | |
11 | |
| 1,912 | | |
| 283 | | |
| 2,325 | | |
| 567 | |
Other comprehensive (loss)/income for the period | |
| |
| (5,730 | ) | |
| 4,897 | | |
| (5,012 | ) | |
| 196 | |
Total
comprehensive (loss)/income for the period | |
| |
| (2,264 | ) | |
| 21,598 | | |
| 4,803 | | |
| 30,749 | |
Attributable to: | |
| |
| | | |
| | | |
| | | |
| | |
Owners of the Group | |
| |
| (4,254 | ) | |
| 13,137 | | |
| 2,813 | | |
| 12,778 | |
Non-controlling interest | |
| |
| 1,990 | | |
| 8,461 | | |
| 1,990 | | |
| 17,971 | |
| |
| |
| (2,264 | ) | |
| 21,598 | | |
| 4,803 | | |
| 30,749 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
GasLog Ltd. and its Subsidiaries
Unaudited condensed consolidated statements of changes in
equity
For the six months ended June 30, 2014 and 2015
(Amounts expressed in thousands of U.S. Dollars, except per share data)
| |
Share capital | | |
Preferred
stock | | |
Contributed
surplus | | |
Equity-settled
employee benefits reserve | | |
Other reserves | | |
Treasury shares | | |
Retained earnings | | |
Attributable
to owners of the Group | | |
Non - controlling
interest | | |
Total | |
Balance at January 1, 2014 | |
| 629 | | |
| — | | |
| 614,964 | | |
| 11,232 | | |
| (14,660 | ) | |
| — | | |
| 27,368 | | |
| 639,533 | | |
| — | | |
| 639,533 | |
Net proceeds from public offerings and private placement | |
| 181 | | |
| — | | |
| 308,516 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 308,697 | | |
| — | | |
| 308,697 | |
Net proceeds from GasLog Partners’ initial public offering (“IPO”) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 186,029 | | |
| 186,029 | |
Dividend declared ($0.24 per share) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (18,852 | ) | |
| (18,852 | ) | |
| — | | |
| (18,852 | ) |
Expense recognized in respect of equity-settled employee benefits | |
| — | | |
| — | | |
| — | | |
| 724 | | |
| — | | |
| — | | |
| — | | |
| 724 | | |
| — | | |
| 724 | |
Treasury shares | |
| — | | |
| — | | |
| — | | |
| — | | |
| (646 | ) | |
| — | | |
| — | | |
| (646 | ) | |
| — | | |
| (646 | ) |
Profit for the period | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 7,825 | | |
| 7,825 | | |
| 1,990 | | |
| 9,815 | |
Other comprehensive loss for the period | |
| — | | |
| — | | |
| — | | |
| — | | |
| (5,012 | ) | |
| — | | |
| — | | |
| (5,012 | ) | |
| — | | |
| (5,012 | ) |
Total comprehensive (loss)/ income for
the period | |
| — | | |
| — | | |
| — | | |
| — | | |
| (5,012 | ) | |
| — | | |
| 7,825 | | |
| 2,813 | | |
| 1,990 | | |
| 4,803 | |
Balance at June 30, 2014 | |
| 810 | | |
| — | | |
| 923,480 | | |
| 11,956 | | |
| (20,318 | ) | |
| — | | |
| 16,341 | | |
| 932,269 | | |
| 188,019 | | |
| 1,120,288 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance at January 1, 2015 | |
| 810 | | |
| — | | |
| 923,470 | | |
| 12,716 | | |
| (24,718 | ) | |
| (12,576 | ) | |
| 29,689 | | |
| 929,391 | | |
| 323,646 | | |
| 1,253,037 | |
Net proceeds from issuance of preferred stock | |
| — | | |
| 46 | | |
| 110,610 | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 110,656 | | |
| — | | |
| 110,656 | |
Net proceeds from GasLog Partners’ public offering | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 171,840 | | |
| 171,840 | |
Dividend paid (common and preferred shares) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (24,887 | ) | |
| (24,887 | ) | |
| (12,306 | ) | |
| (37,193 | ) |
Expense recognized in respect of equity-settled employee benefits | |
| — | | |
| — | | |
| — | | |
| 1,274 | | |
| — | | |
| — | | |
| — | | |
| 1,274 | | |
| — | | |
| 1,274 | |
Settlement of share-based payments | |
| — | | |
| — | | |
| — | | |
| (85 | ) | |
| — | | |
| 85 | | |
| — | | |
| — | | |
| — | | |
| — | |
Profit for the period | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 12,582 | | |
| 12,582 | | |
| 17,971 | | |
| 30,553 | |
Other comprehensive income for the period | |
| — | | |
| — | | |
| — | | |
| — | | |
| 196 | | |
| — | | |
| — | | |
| 196 | | |
| — | | |
| 196 | |
Total comprehensive income for the period | |
| — | | |
| — | | |
| — | | |
| — | | |
| 196 | | |
| — | | |
| 12,582 | | |
| 12,778 | | |
| 17,971 | | |
| 30,749 | |
Balance at June 30, 2015 | |
| 810 | | |
| 46 | | |
| 1,034,080 | | |
| 13,905 | | |
| (24,522 | ) | |
| (12,491 | ) | |
| 17,384 | | |
| 1,029,212 | | |
| 501,151 | | |
| 1,530,363 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
GasLog Ltd. and its Subsidiaries
Unaudited condensed consolidated statements of cash flows
For the six months ended June 30, 2014 and 2015
(Amounts expressed in thousands of U.S. Dollars)
| |
|
For the six months ended | |
| Note |
|
June 30, 2014 | | |
June 30, 2015 | |
Cash flows from operating activities: | |
|
| | | |
| | |
Profit for the period | |
|
| 9,815 | | |
| 30,553 | |
Adjustments for: | |
|
| | | |
| | |
Depreciation of fixed assets | |
|
| 27,063 | | |
| 49,969 | |
Share of profit of associate | |
|
| (790 | ) | |
| (790 | ) |
Financial income | |
|
| (151 | ) | |
| (149 | ) |
Financial costs | |
|
| 29,357 | | |
| 42,774 | |
Unrealized loss on swaps and ineffective portion of cash flow hedges | |
|
| 7,677 | | |
| 419 | |
Recycled loss of cash flow hedges reclassified to profit or loss in relation to derivatives no longer designated as hedges | |
|
| 2,325 | | |
| 567 | |
Unrealized foreign exchange losses/(gains) on cash and cash equivalents and short-term investments | |
|
| 127 | | |
| (427 | ) |
Expense recognized in respect of equity-settled share-based payments | |
|
| 724 | | |
| 1,274 | |
| |
|
| 76,147 | | |
| 124,190 | |
Movements in working capital | |
|
| 13,655 | | |
| (10,244 | ) |
Cash provided by operations | |
|
| 89,802 | | |
| 113,946 | |
Interest paid | |
|
| (28,058 | ) | |
| (35,985 | ) |
Net cash provided by operating activities | |
|
| 61,744 | | |
| 77,961 | |
Cash flows from investing activities: | |
|
| | | |
| | |
Payments for tangible fixed assets and vessels under construction | |
|
| (1,156,797 | ) | |
| (679,129 | ) |
Dividends received from associate | |
|
| 970 | | |
| 1,675 | |
Purchase of short-term investments | |
|
| (8,907 | ) | |
| (18,592 | ) |
Maturity of short-term investments | |
|
| 5,150 | | |
| 44,007 | |
Financial income received | |
|
| 149 | | |
| 136 | |
Net cash used in investing activities | |
|
| (1,159,435 | ) | |
| (651,903 | ) |
Cash flows from financing activities: | |
|
| | | |
| | |
Proceeds from bank loans and bonds | |
|
| 884,473 | | |
| 606,000 | |
Bank loan repayments | |
|
| (113,991 | ) | |
| (39,824 | ) |
Payment of loan issuance costs | |
|
| (10,662 | ) | |
| (5,166 | ) |
Proceeds from public offering and private placement (net of underwriting discounts and commissions) | |
|
| 310,240 | | |
| — | |
Proceeds from GasLog Partners’ public offering (net of underwriting discounts and commissions) | |
|
| 189,129 | | |
| 172,875 | |
Proceeds from issuance of preferred stock (net of underwriting discounts and commissions) | |
|
| — | | |
| 111,378 | |
Payment of equity raising costs | |
|
| (4,287 | ) | |
| (1,045 | ) |
Purchase of treasury shares | |
|
| (474 | ) | |
| — | |
Movement in restricted cash | |
|
| — | | |
| (23,190 | ) |
Dividends paid | |
|
| (18,852 | ) | |
| (37,193 | ) |
Net cash provided by financing activities | |
|
| 1,235,576 | | |
| 783,835 | |
Effects of exchange rate changes on cash and cash equivalents | |
|
| (127 | ) | |
| 115 | |
Increase in cash and cash equivalents | |
|
| 137,758 | | |
| 210,008 | |
Cash and cash equivalents, beginning of the period | |
|
| 103,798 | | |
| 211,974 | |
Cash and cash equivalents, end of the period | |
|
| 241,556 | | |
| 421,982 | |
| |
|
| | | |
| | |
Non-cash investing and financing activities | 13 |
|
| | | |
| | |
Capital expenditures included in liabilities at the end of the period | |
|
| 4,030 | | |
| 14,360 | |
Equity raising costs included in liabilities at the end of the period | |
|
| 39 | | |
| 841 | |
Loan issuance costs included in liabilities at the end of the period | |
|
| 929 | | |
| 2,985 | |
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
GasLog Ltd. and its Subsidiaries
Notes to the unaudited condensed consolidated financial statements
For the six months ended June 30, 2014 and 2015
(Amounts expressed in thousands of U.S. Dollars, except share and per share data)
1. Organization and Operations
GasLog Ltd (“GasLog”) was incorporated
in Bermuda on July 16, 2003. GasLog and its subsidiaries (the “Group”) are primarily engaged in the ownership, operation
and management of vessels in the liquefied natural gas (“LNG”) market, providing maritime services for the transportation
of LNG on a worldwide basis and LNG vessel management services. The Group conducts its operations through its vessel-owning subsidiaries
and through its vessel management services subsidiary. The Group’s operations are carried out from offices in Piraeus, London,
New York, Singapore and Monaco. The registered office of GasLog is Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. GasLog’s
chairman, Peter G. Livanos, is GasLog’s largest shareholder through his ownership of Ceres Shipping Ltd., which controls
Blenheim Holdings Ltd. As of June 30, 2015, entities controlled by members of the Livanos family, including GasLog’s chairman,
are deemed to beneficially own approximately 39.7% of GasLog’s issued and outstanding common shares. As a result of his ownership
of GasLog’s common shares, Mr. Livanos can effectively control the outcome of most matters on which GasLog’s shareholders
are entitled to vote.
As of June 30, 2015, GasLog holds a 32.9%
interest in GasLog Partners LP (“GasLog Partners” or the “Partnership”) and, as a result of its ownership
of the general partner, and the fact that the general partner elects the majority of the Partnership’s directors in accordance
with the Partnership Agreement, GasLog has the ability to control the Partnership’s affairs and policies. Consequently, GasLog
Partners is consolidated in the Group’s financial statements.
The accompanying unaudited condensed consolidated
financial statements include the financial statements of GasLog and its subsidiaries. Unless indicated otherwise, the subsidiaries
listed below were 100% held (either directly or indirectly) by GasLog. The Group structure as of June 30, 2015 was as follows:
Name |
|
Place of
Incorporation |
|
Date of
incorporation |
|
Principal activities |
|
Cargo
capacity
(cbm) |
|
Vessel |
|
Delivery date |
Subsidiaries: |
|
|
|
|
|
|
|
|
|
|
|
|
GasLog Investments Ltd. |
|
BVI |
|
July 2003 |
|
Holding company |
|
— |
|
— |
|
— |
GasLog Carriers Ltd. |
|
Bermuda |
|
February 2008 |
|
Holding company |
|
— |
|
— |
|
— |
GasLog Shipping Company Ltd. |
|
Bermuda |
|
January 2006 |
|
Holding company |
|
— |
|
— |
|
— |
GasLog Partners GP LLC |
|
Marshall Islands |
|
January 2014 |
|
Holding company |
|
— |
|
— |
|
— |
GasLog Services UK Ltd. |
|
England and Wales |
|
May 2014 |
|
Service Company |
|
— |
|
— |
|
— |
GasLog Services US Inc. |
|
Delaware |
|
May 2014 |
|
Service Company |
|
— |
|
— |
|
— |
GasLog Asia Pte. Ltd. |
|
Singapore |
|
May 2015 |
|
Service Company |
|
— |
|
— |
|
— |
GasLog LNG Services Ltd. |
|
Bermuda |
|
August 2004 |
|
Vessel management services |
|
— |
|
— |
|
— |
GasLog Monaco S.A.M. |
|
Monaco |
|
February 2010 |
|
Service company |
|
— |
|
— |
|
— |
GAS-one Ltd. |
|
Bermuda |
|
February 2008 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Savannah |
|
May 2010 |
GAS-two Ltd. |
|
Bermuda |
|
February 2008 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Singapore |
|
July 2010 |
GAS-six Ltd. |
|
Bermuda |
|
February 2011 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Skagen |
|
July 2013 |
GAS-seven Ltd. |
|
Bermuda |
|
March 2011 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Seattle |
|
December 2013 |
GAS-eight Ltd. |
|
Bermuda |
|
March 2011 |
|
Vessel-owning company |
|
155,000 |
|
Solaris |
|
June 2014 |
GAS-nine Ltd. |
|
Bermuda |
|
June 2011 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Saratoga |
|
December 2014 |
GAS-ten Ltd. |
|
Bermuda |
|
June 2011 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Salem |
|
April 2015 |
GAS-eleven Ltd. |
|
Bermuda |
|
December 2012 |
|
Vessel-owning company |
|
174,000 |
|
Hull No. 2072 |
|
Q1 2016(1) |
GAS-twelve Ltd. |
|
Bermuda |
|
December 2012 |
|
Vessel-owning company |
|
174,000 |
|
Hull No. 2073 |
|
Q2 2016(1) |
GAS-thirteen Ltd. |
|
Bermuda |
|
July 2013 |
|
Vessel-owning company |
|
174,000 |
|
Hull No. 2102 |
|
Q3 2016(1) |
GAS-fourteen Ltd. |
|
Bermuda |
|
July 2013 |
|
Vessel-owning company |
|
174,000 |
|
Hull No. 2103 |
|
Q4 2016(1) |
GAS-fifteen Ltd. |
|
Bermuda |
|
August 2013 |
|
Vessel-owning company |
|
153,600 |
|
GasLog Chelsea |
|
October 2013 |
GAS-eighteen Ltd. |
|
Bermuda |
|
January 2014 |
|
Vessel-owning company |
|
145,000 |
|
Methane Lydon Volney |
|
April 2014 |
GAS-nineteen Ltd. |
|
Bermuda |
|
April 2014 |
|
Vessel-owning company |
|
145,000 |
|
Methane Alison Victoria |
|
June 2014 |
GAS-twenty Ltd. |
|
Bermuda |
|
April 2014 |
|
Vessel-owning company |
|
145,000 |
|
Methane Shirley Elisabeth |
|
June 2014 |
GAS-twenty one Ltd. |
|
Bermuda |
|
April 2014 |
|
Vessel-owning company |
|
145,000 |
|
Methane Heather Sally |
|
June 2014 |
GAS-twenty two Ltd. |
|
Bermuda |
|
May 2014 |
|
Vessel-owning company |
|
174,000 |
|
Hull No. 2130 |
|
Q3 2017(1) |
GAS-twenty three Ltd. |
|
Bermuda |
|
May 2014 |
|
Vessel-owning company |
|
174,000 |
|
Hull No. 2131 |
|
Q4 2017(1) |
GAS-twenty four Ltd. |
|
Bermuda |
|
June 2014 |
|
Vessel-owning company |
|
174,000 |
|
Hull No. 2800 |
|
Q1 2018(1) |
GAS-twenty five Ltd. |
|
Bermuda |
|
June 2014 |
|
Vessel-owning company |
|
174,000 |
|
Hull No. 2801 |
|
Q1 2018(1) |
GAS-twenty six Ltd. |
|
Bermuda |
|
January 2015 |
|
Vessel-owning company |
|
170,000 |
|
Methane Julia Louise |
|
March 2015 |
GAS-twenty seven Ltd. |
|
Bermuda |
|
January 2015 |
|
Vessel-owning company |
|
170,000 |
|
Methane Becki Anne |
|
March 2015 |
GasLog LNG Employee Incentive Scheme Ltd. |
|
Bermuda |
|
June 2008 |
|
Dormant |
|
— |
|
— |
|
— |
GasLog Shipping Limited |
|
BVI |
|
July 2003 |
|
Dormant |
|
— |
|
— |
|
— |
32.9% interest subsidiaries: |
|
|
|
|
|
|
|
|
|
|
|
|
GasLog Partners LP |
|
Marshall Islands |
|
January 2014 |
|
Holding company |
|
— |
|
— |
|
— |
GasLog Partners Holdings LLC. |
|
Marshall Islands |
|
April 2014 |
|
Holding company |
|
— |
|
— |
|
— |
GAS-three Ltd. |
|
Bermuda |
|
April 2010 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Shanghai |
|
January 2013 |
GAS-four Ltd. |
|
Bermuda |
|
April 2010 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Santiago |
|
March 2013 |
GAS-five Ltd. |
|
Bermuda |
|
February 2011 |
|
Vessel-owning company |
|
155,000 |
|
GasLog Sydney |
|
May 2013 |
GAS-sixteen Ltd. |
|
Bermuda |
|
January 2014 |
|
Vessel-owning company |
|
145,000 |
|
Methane Rita Andrea |
|
April 2014 |
GAS-seventeen Ltd. |
|
Bermuda |
|
January 2014 |
|
Vessel-owning company |
|
145,000 |
|
Methane Jane Elizabeth |
|
April 2014 |
25% interest associates: |
|
|
|
|
|
|
|
|
|
|
|
|
Egypt LNG Shipping Ltd. |
|
Bermuda |
|
May 2010 |
|
Vessel-owning company |
|
145,000 |
|
Methane Nile Eagle |
|
December 2007 |
(1) |
For newbuildings, expected delivery dates as of June 30, 2015 are presented. |
On July 1, 2015, GasLog completed the sale
of GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. to GasLog Partners (Note 16).
2. Basis of Presentation
These unaudited condensed
consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34
Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). Certain information
and footnote disclosures required by International Financial Reporting Standards (“IFRS”) for a complete set of annual
financial statements have been omitted, and therefore, these unaudited condensed consolidated financial statements should be read
in conjunction with the Group’s annual consolidated financial statements as of and for the year ended December 31, 2014 filed
with the SEC on March 26, 2015. On August 5, 2015 GasLog’s board of directors authorized the unaudited condensed consolidated
financial statements for issuance.
The unaudited condensed consolidated financial
statements are expressed in U.S. dollars (“USD”), which is the functional currency of all of the subsidiaries in the
Group because their vessels operate in international shipping markets in which revenues and expenses are primarily settled in USD,
and the Group’s most significant assets and liabilities are paid for and settled in USD.
The financial statements are prepared on
the historical cost basis, except for the revaluation of derivative financial instruments. The same accounting policies and methods
of computation have been followed in these unaudited condensed consolidated financial statements as were applied in the preparation
of the Group’s financial statements for the year ended December 31, 2014.
In considering going concern management has
reviewed the Group’s future cash requirements, covenant compliance and earnings projections. As of June 30, 2015, our current
assets totaled $500,480 while current liabilities totaled $688,008, resulting in a negative working capital position of $187,528.
Current liabilities include $ 597,694 of loans due within one year, $467,750 of which we are currently seeking to refinance.
Management anticipates that the Group’s
primary sources of funds will be available cash, cash from operations and borrowings under existing and new loan agreements. The
Group may also seek to raise additional equity. Management believes that these sources of funds will be sufficient for the Group
to meet its liquidity needs and comply with its banking covenants for at least twelve months from the end of the reporting period
and therefore it is appropriate to prepare the financial statements on a going concern basis, although there can be no assurance
that we will be able to obtain future debt and equity financing on terms acceptable to us.
Adoption of new and revised IFRS
Standards and amendments in issue not yet adopted
At the date of authorization of these
unaudited condensed consolidated financial statements, the following standards and amendments relevant to the Group were in issue
but not yet effective:
In October 2010, the IASB reissued IFRS
9 Financial Instruments. IFRS 9 specifies how an entity should classify and measure financial assets and financial liabilities.
The new standard requires all financial assets to be subsequently measured at amortized cost or fair value depending on the business
model of the legal entity in relation to the management of the financial assets and the contractual cash flows of the financial
assets. The standard also requires a financial liability to be classified as either at fair value through profit or loss or at
amortized cost. In addition a new hedge accounting model was introduced, that is designed to be more closely aligned with how entities
undertake risk management activities when hedging financial and non-financial risk exposures. In July 2014, the complete version
of IFRS 9 was issued. The standard is effective for accounting periods beginning on or after January 1, 2018 but early adoption
is permitted. Management is currently evaluating the impact of this standard on the Group’s consolidated financial statements.
In May 2014, the IASB issued IFRS 15 Revenue
from Contracts with Customers, which applies to all contracts with customers: the main exceptions are leases, financial instruments
and insurance contracts. IFRS 15 specifies how and when an IFRS reporter will recognize revenue as well as requiring such entities
to provide users of financial statements with more informative, relevant disclosures. The standard supersedes IAS 18 Revenue,
IAS 11 Construction Contracts and a number of revenue-related interpretations. The standard is effective for annual periods
beginning on or after January 1, 2018 but early adoption is permitted. Management is currently evaluating the impact of this standard
on the Group’s consolidated financial statements.
In September 2014, the IASB published Sale
or Contribution of Assets between an Investor and its Associate or Joint Venture as amendments to IFRS 10 Consolidated Financial
Statements and IAS 28 Investment in Associate and Joint Ventures. The amendments address a conflict between the requirements
of IFRS 10 and IAS 28 and clarify that in a transaction involving an associate or joint venture the extent of gain or loss recognition
depends on whether the assets sold or contributed constitute a business. They are effective for annual periods beginning on or
after January 1, 2016, with earlier application being permitted. Management is currently evaluating the impact of this standard.
The impact of all other IFRS standards
and amendments issued but not yet adopted is not expected to have a material effect on the Group’s unaudited condensed consolidated
financial statements.
3. Equity transactions
On April 7, 2015, GasLog completed a public
offering of 4.60 million shares of 8.75% Series A Preference Shares (including 600,000 shares issued upon the exercise in full
by the underwriters of their option to purchase additional Series A Preference Shares), par value $0.01 per share, liquidation
preference $25.00 per share, which priced at $25.00 per share. The net proceeds from the offering after deducting underwriting
discounts, commissions and other offering expenses were $110,656. The Series A Preference Shares are listed on the New York Stock
Exchange under the symbol “GLOG PR A”.
On June 26, 2015, GasLog Partners completed
a public offering of 7,500,000 common units at a public offering price of $23.90 per unit. The net
proceeds from this offering
after deducting underwriting discounts and other offering expenses, were $171,840. In connection with the offering, the Partnership
issued 153,061 general partner units to its general partner in order for GasLog to retain its 2.0%.
The balance of non-controlling interest
as of June 30, 2015 was as follows:
Non-controlling interest | |
| | |
At January 1, 2015 | |
| 323,646 | |
Net proceeds from the Partnership’s equity offering | |
| 171,840 | |
Dividend declared and paid | |
| (12,306 | ) |
Profit allocated to non-controlling interest | |
| 17,971 | |
At June 30, 2015 | |
| 501,151 | |
4. Tangible Fixed Assets and Vessels under Construction
The movements in tangible fixed assets
and vessels under construction are reported in the following table:
| |
Vessels | | |
Office property and other tangible assets | | |
Total tangible fixed assets | | |
Vessels under construction | |
Cost | |
| | | |
| | | |
| | | |
| | |
At January 1, 2015 | |
| 2,937,114 | | |
| 5,199 | | |
| 2,942,313 | | |
| 142,776 | |
Additions | |
| 478,098 | | |
| 1,016 | | |
| 479,114 | | |
| 206,376 | |
Transfer from vessels under construction | |
|
204,250 |
|
|
|
— |
|
|
|
204,250 |
|
|
|
(204,250 |
) |
Write-off of fully amortized drydocking component |
|
|
(7,922 |
) |
|
|
— |
|
|
|
(7,922 |
) |
|
|
— |
|
At June 30, 2015 | |
|
3,611,540 | | |
| 6,215 | | |
| 3,617,755 | | |
| 144,902 | |
| |
| | | |
| | | |
| | | |
| | |
Accumulated depreciation | |
| | | |
| | | |
| | | |
| | |
At January 1, 2015 | |
| 130,597 | | |
| 2,199 | | |
| 132,796 | | |
| — | |
Depreciation expense | |
| 49,689 | | |
| 280 | | |
| 49,969 | | |
| — | |
Write-off of fully amortized drydocking component |
|
|
(7,922 |
) |
|
|
— |
|
|
|
(7,922 |
) |
|
|
— |
|
At June 30, 2015 | |
| 172,364 | | |
| 2,479 | | |
| 174,843 | | |
| — | |
| |
| | | |
| | | |
| | | |
| | |
Net book value | |
| | | |
| | | |
| | | |
| | |
At December 31, 2014 | |
| 2,806,517 | | |
| 3,000 | | |
| 2,809,517 | | |
| 142,776 | |
At June 30, 2015 | |
| 3,439,176 | | |
| 3,736 | | |
| 3,442,912 | | |
| 144,902 | |
Vessels with an aggregate carrying amount
of $3,439,176 as of June 30, 2015 (December 31, 2014: $2,806,517) have been pledged as collateral under the terms of the Group’s
loan agreements.
On March 31, 2015, GasLog acquired two
170,000 cbm tri-fuel diesel electric LNG carriers from a subsidiary of BG Group plc (“BG Group”) for an aggregate cost
of $460,000 and chartered those vessels back to Methane Services Limited (“MSL”) for periods of 9 and 11 years respectively,
with further options by the charterer to extend the term of the time charter for each vessel by either three or five years. The
vessels acquired are the 2010-built Methane Becki Anne and Methane Julia Louise. GasLog supervised their construction
and has technically managed both ships since their delivery to BG Group in 2010. They have tri-fuel diesel electric propulsion
and on-board reliquefaction plants, which enable reduced consumption of natural gas at lower speeds.
The acquisition of the aforementioned vessels
was treated as an asset acquisition based on the absence of processes attached to the inputs. In addition, management considered
the charter party agreements entered into and has concluded that the contracted daily charter rate approximates the fair value
on the transaction completion dates, taking into account management’s understanding of the market. Consequently, all of the
purchase price was allocated to vessel cost.
Vessels under construction
In 2011, GAS-eight
Ltd., GAS-nine Ltd. and GAS-ten Ltd. entered into shipbuilding contracts with Samsung Heavy Industries Co. Ltd. (“Samsung”)
for the construction of three LNG carriers (155,000 cubic meters each) that are scheduled to be delivered on various dates in 2014
and 2015. The first vessel, the Solaris was delivered on June 30, 2014 and the second vessel, the GasLog Saratoga
was delivered on December 16, 2014. The last vessel, the GasLog Salem was delivered on April 30, 2015.
Vessels under construction represent scheduled
advance payments to the shipyards as well as certain capitalized expenditures. As of June 30, 2015, the Group has paid to the shipyard
$140,898 for the vessels that are under construction and expects to pay the remaining installments as they come due based on the
shipbuilding contracts (Note 10).
The vessels under construction costs as
of December 31, 2014 and June 30, 2015 were as follows:
| |
December 31, 2014 | | |
June 30, 2015 | |
Progress shipyard installment payments | |
| 140,824 | | |
| 140,898 | |
Onsite supervision costs | |
| 1,796 | | |
| 2,375 | |
Shipyard commission | |
| (197 | ) | |
| — | |
Spare parts, equipment and other vessel delivery expenses | |
| 353 | | |
| 1,629 | |
Total | |
| 142,776 | | |
| 144,902 | |
5. Borrowings
| |
December 31, 2014 | | |
June 30, 2015 | |
Amounts due within one year | |
| 121,824 | | |
| 597,694 | |
Less: unamortized deferred loan issuance costs | |
| (5,393 | ) | |
| (9,540 | ) |
Borrowings – current portion | |
| 116,431 | | |
| 588,154 | |
Amounts due after one year | |
| 1,804,658 | | |
| 1,887,140 | |
Plus: unamortized premium(1) | |
| 3,504 | | |
| 3,050 | |
Less: unamortized deferred loan issuance costs | |
| (29,317 | ) | |
| (33,084 | ) |
Borrowings – non-current portion | |
| 1,778,845 | | |
| 1,857,106 | |
Total | |
| 1,895,276 | | |
| 2,445,260 | |
| (1) | Refer to “Senior Unsecured Notes” disclosed below for the premium. |
Bank Loans
The main terms of the Group’s loan
facilities in existence as of December 31, 2014 have been disclosed in the annual audited consolidated financial statements for
the year ended December 31, 2014. Refer to Note 12 “Borrowings”. During the six months ended June 30, 2015, repayments
related to the loan facilities of $39,824 (six months ended June 30, 2014: $113,991) were made in accordance with repayment terms
and the following new agreements were concluded:
| · | On March 25, 2015, GAS-twenty six Ltd. and GAS-twenty seven Ltd., entered into a senior secured term loan facility of up to
$325,000 with ABN Amro Bank N.V., Commonwealth Bank of Australia, Credit Agricole Corporate and Investment Bank, Deutsche Bank
AG Filiale Deutschlandgeschäft, DNB Bank ASA, London Branch and ING Bank N.V., London Branch, and a subordinated term loan
facility of up to $135,000 with ABN Amro Bank N.V., Credit Agricole Corporate and Investment Bank, Deutsche Bank AG Filiale Deutschlandgeschäft
and DNB Bank ASA, London Branch for the purpose of financing the acquisition of the Methane Becki Anne and the Methane
Julia Louise (Note 4). The senior secured term loan facility will be repaid in one bullet installment on the final maturity
date (March 2017) and the subordinated term loan facility will be repaid in four consecutive quarterly installments of $33,750,
beginning 15 months after the signing date. The available amounts were fully drawn on March 31, 2015. Both facilities bear interest
at LIBOR plus a margin. The obligations under the senior secured term loan facility and the bridge facility are secured by a first
and second priority mortgage respectively, over each of the relevant vessels and are guaranteed by GasLog and GasLog Carriers Ltd. |
| · | On May 8, 2015, the Partnership entered into a supplemental deed relating to its Citibank N.A. loan facility, in which the
Company’s lenders unanimously approved such changes to the facility agreement as are required to reflect the changes to the
charters of three vessels agreed with BG Group on April 21, 2015. As the aforementioned deed did not result in substantially different
terms to the original loan agreement, the amendments were considered a modification of the existing terms. Consequently, the additional
fees incurred during the six-month period ended June 30, 2015 have been accounted for as deferred financing fees and will be amortized
over the remaining term of the loan facility. |
| · | Pursuant to a supplemental deed entered into on June 5, 2015 by GAS-nineteen Ltd., GAS-twenty
Ltd. and GAS-twenty one Ltd. relating to their Citibank N.A. loan facility, and effective from July 1, 2015, GasLog Partners was
added as a corporate guarantor for the respective loan facility, replacing the previous guarantor, GasLog Carriers Ltd. |
The Group was in compliance with the covenants
under its credit facilities as of June 30, 2015.
The carrying amount of the Group’s
bank debt recognized in the unaudited condensed consolidated financial statements approximates its fair value after adjusting for
the unamortized loan issuance costs.
Senior Unsecured Notes
The main terms of the Group’s senior
unsecured bonds have been disclosed in the annual audited consolidated financial statements for the year ended December 31, 2014.
Refer to Note 12 “Borrowings”. The carrying amount of the bonds, net of unamortized financing costs and unamortized
premium, as of June 30, 2015 was $125,102 while its fair value was $131,468 based on a USD/ NOK exchange rate of 0.1269 as of June
30, 2015.
The Group was in compliance with
the covenants under the NOK bond agreement as of June 30, 2015.
6. Related Party Transactions
The Group had the following balances with
related parties which have been included in the unaudited condensed consolidated statements of financial position:
Dividends receivable and due from related parties
| |
December 31, 2014 | | |
June 30, 2015 | |
Dividends receivable from associate | |
| 1,000 | | |
| — | |
Commission for newbuildings | |
| 789 | | |
| 789 | |
Other receivables | |
| 80 | | |
| 21 | |
Total | |
| 1,869 | | |
| 810 | |
Current Liabilities
| |
December 31, 2014 | | |
June 30, 2015 | |
Ship management creditors | |
| 97 | | |
| 53 | |
Amounts due to related parties | |
| 181 | | |
| 159 | |
Ship management creditors’ liability
comprises cash collected from Egypt LNG Shipping Ltd. to cover the obligations of its vessel under the Group’s management.
Amounts due to related parties of $159
as of June 30, 2015 (December 31, 2014: $181) represent expenses paid by a related party on behalf of the Group and payables to
other related parties for the office lease and other operating expenses.
7. General and Administrative Expenses
An analysis of general and administrative
expenses is as follows:
| |
For the three months ended | | |
For the six months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | | |
June 30, 2014 | | |
June 30, 2015 | |
Employee costs | |
| 3,662 | | |
| 4,415 | | |
| 7,319 | | |
| 8,721 | |
Board of directors’ fees | |
| 464 | | |
| 612 | | |
| 854 | | |
| 1,255 | |
Recognition of share-based payments | |
| 544 | | |
| 776 | | |
| 724 | | |
| 1,274 | |
Rent and utilities | |
| 364 | | |
| 506 | | |
| 713 | | |
| 1,061 | |
Travel and accommodation | |
| 615 | | |
| 528 | | |
| 1,012 | | |
| 1,036 | |
Legal and professional fees | |
| 1,541 | | |
| 2,682 | | |
| 2,337 | | |
| 4,921 | |
Foreign exchange differences, net | |
| 75 | | |
| (1,740 | ) | |
| 164 | | |
| (260 | ) |
Managers’ liability insurance | |
| 244 | | |
| 335 | | |
| 357 | | |
| 652 | |
Other expenses | |
| 483 | | |
| 225 | | |
| 775 | | |
| 838 | |
Total | |
| 7,992 | | |
| 8,339 | | |
| 14,255 | | |
| 19,498 | |
8. Other Payables and Accruals
An analysis of other payables and accruals
is as follows:
| |
December 31, 2014 | | |
June 30, 2015 | |
Social contributions | |
| 1,297 | | |
| 904 | |
Unearned revenue | |
| 24,180 | | |
| 13,542 | |
Accrued legal and professional fees | |
| 1,511 | | |
| 2,061 | |
Accrued board of directors’ fees | |
| 585 | | |
| 612 | |
Accrued employee costs | |
| 4,141 | | |
| 4,010 | |
Accrued off-hire | |
| 10,913 | | |
| 15,457 | |
Accrued crew costs | |
| 3,030 | | |
| 4,081 | |
Accrued purchases | |
| 4,523 | | |
| 11,471 | |
Accrued financing cost | |
| 476 | | |
| 2,782 | |
Accrued interest | |
| 6,087 | | |
| 7,829 | |
Other accruals | |
| 904 | | |
| 4,937 | |
Total | |
| 57,647 | | |
| 67,686 | |
9. Share Capital and Preferred
Stock
GasLog’s authorized share capital consists
of 500,000,000 shares with a par value of $0.01 per share.
As of June 30, 2015, the share capital consisted
of 80,496,499 issued and outstanding common shares, par value $0.01 per share, 496,627 treasury shares and 4,600,000 preference
shares. The movements in the number of shares, the share capital, the preferred stock, the contributed surplus and the treasury
shares are reported in the following table:
| |
Number of Shares | | |
Amounts | |
| |
Number of common shares | | |
Number of treasury shares | | |
Number of preference shares | | |
Total | | |
Share capital | | |
Preferred stock | | |
Contributed surplus | | |
Treasury shares | |
Outstanding as of January 1, 2015 | |
| 80,493,126 | | |
| 500,000 | | |
| — | | |
| 80,993,126 | | |
| 810 | | |
| — | | |
| 923,470 | | |
| (12,576 | ) |
Issuance of preference shares | |
| — | | |
| — | | |
| 4,600,000 | | |
| 4,600,000 | | |
| — | | |
| 46 | | |
| 110,610 | | |
| — | |
Shares issued for stock options exercise | |
| 3,373 | | |
| (3,373 | ) | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 85 | |
Outstanding as of June 30, 2015 | |
| 80,496,499 | | |
| 496,627 | | |
| 4,600,000 | | |
| 85,593,126 | | |
| 810 | | |
| 46 | | |
| 1,034,080 | | |
| (12,491 | ) |
The treasury shares were acquired by GasLog
in 2014 in relation to the share-based payments (Note 14).
On April 7, 2015, GasLog completed a public
offering of 4,600,000 shares of 8.75% Series A Preference Shares (including 600,000 shares issued upon the exercise in full by
the underwriters of their option to purchase additional Series A Preference Shares), par value $0.01 per share, liquidation preference
$25.00 per share, which was priced at $25.00 per share. The net proceeds from the offering after deducting underwriting discounts,
commissions and other offering expenses were $110,656. The Series A Preference Shares are listed in the New York Stock Exchange
under the symbol “GLOG PR A”.
Dividend distribution
On May 5, 2015, the
board of directors declared a quarterly cash dividend of $0.14 per common share payable on May 21, 2015 to shareholders of record
as of May 18, 2015 for a total amount of $11,270.
On June 19, 2015, the board
of directors declared the initial dividend on the Series A Preference Shares of $0.510417 per share or $2,348 in
the aggregate payable on July 1, 2015 to holders of record as of June 30, 2015. GasLog paid the declared dividend to the transfer
agent in June 2015.
10. Commitments and Contingencies
(a) |
On June 30, 2015 the Group had the following commitments relating to buildings under operating leases: |
| |
June 30, 2015 | |
Operating leases | |
| | |
Not later than one year | |
| 1,330 | |
Later than one year and not later than three years | |
| 2,242 | |
Later than three years and not later than five years | |
| 727 | |
More than five years | |
| 991 | |
Total operating lease commitment | |
| 5,290 | |
(b) |
Commitments relating to the vessels under construction (Note 4) at June 30, 2015 were as follows: |
| |
June 30, 2015 | |
Vessels under construction | |
| | |
Not later than one year | |
| 423,012 | |
Later than one year and not later than three years | |
| 1,054,334 | |
Total vessels under construction commitment | |
| 1,477,346 | |
(c) | Future gross minimum revenues receivable upon collection of hire under non-cancellable time charter agreements for vessels
in operation as of June 30, 2015 are as follows (30 off-hire days are assumed when each vessel will undergo scheduled drydocking;
in addition early delivery of the vessels by the charterers or any exercise of the charterers’ options to extend the terms
of the charters are not accounted for): |
| |
June 30, 2015 | |
Revenues | |
| | |
Not later than one year | |
| 398,023 | |
Later than one year and not later than three years | |
| 732,738 | |
Later than three years and not later than five years | |
| 519,063 | |
More than five years | |
| 359,751 | |
Total future gross minimum charter hire | |
| 2,009,575 | |
Future gross minimum revenues disclosed
in the above table exclude the revenues of the vessels that are under construction.
Related to the acquisition of six vessels
from a subsidiary of BG Group in 2014 and another two vessels in 2015, the Group is committed to purchase depot spares from BG
Group with an aggregate value of $8,000 of which depot spares with value $660 have been purchased as of June 30, 2015 and are included
in Tangible fixed assets (Note 4). The remaining spares should be acquired before the end of the initial term of the charter party
agreements.
Various claims, suits and complaints, including
those involving government regulations, arise in the ordinary course of the shipping business. In addition, losses may arise from
disputes with charterers, environmental claims, agents and insurers and from claims with suppliers relating to the operations of
the Group’s vessels. Currently, management is not aware of any such claims or contingent liabilities requiring disclosure
in the unaudited condensed consolidated financial statements.
11. Derivative Financial Instruments
The fair value of the derivative assets
is as follows:
| |
December 31, 2014 | | |
June 30, 2015 | |
Derivative assets designated and effective as hedging instruments carried at fair value | |
| | | |
| | |
Interest rate swaps | |
| 87 | | |
| — | |
Derivative assets carried at fair value through profit or loss (FVTPL) | |
| | | |
| | |
Interest rate swaps | |
| 1,087 | | |
| 471 | |
Total | |
| 1,174 | | |
| 471 | |
Derivative financial instruments, non-current asset | |
| 1,174 | | |
| 471 | |
Total | |
| 1,174 | | |
| 471 | |
The fair value of the derivative liabilities
is as follows:
| |
December 31, 2014 | | |
June 30, 2015 | |
Derivative liabilities designated and effective as hedging instruments carried at fair value | |
| | | |
| | |
Interest rate swaps | |
| 8,327 | | |
| 9,922 | |
Cross currency swaps | |
| 35,282 | | |
| 41,783 | |
Derivative liabilities carried at fair value through profit or loss (FVTPL) | |
| | | |
| | |
Interest rate swaps | |
| 8,291 | | |
| 8,104 | |
Total | |
| 51,900 | | |
| 59,809 | |
Derivative financial instruments, current liability | |
| 16,149 | | |
| 15,880 | |
Derivative financial instruments, non-current liability | |
| 35,751 | | |
| 43,929 | |
Total | |
| 51,900 | | |
| 59,809 | |
Interest rate swap agreements
The Group enters into fixed interest rate
swap agreements which convert the floating interest rate exposure into a fixed interest rate in order to hedge a portion of the
Group’s exposure to fluctuations in prevailing market interest rates. Under the interest rate swaps, the bank counterparty
effects quarterly floating-rate payments to the Group for the notional amount based on the three-month U.S. dollar LIBOR, and the
Group effects quarterly payments to the bank on the notional amount at the respective fixed rates.
Interest rate swaps designated as cash flow hedging instruments
The principal terms of the interest rate
swaps designated as cash flow hedging instruments were as follows:
| |
| |
| |
| |
| |
Fixed | | |
Notional Amount | |
Subsidiary | |
Counterparty | |
Trade Date | |
Effective Date | |
Termination Date | |
Interest
Rate | | |
December 31, 2014 | | |
June 30, 2015 | |
GAS-two Ltd. | |
DNB Bank ASA | |
Sep 2013 | |
Feb 2014 | |
Apr 2018 | |
| 1.69 | % | |
| 31,667 | | |
| 30,000 | |
GAS-two Ltd. | |
SEB(1) | |
Sep 2013 | |
Feb 2014 | |
Apr 2018 | |
| 1.66 | % | |
| 31,667 | | |
| 30,000 | |
GAS-six Ltd. | |
Nordea Bank Finland | |
Nov 2011 | |
Jul 2013 | |
July 2018 | |
| 2.04 | % | |
| 69,485 | | |
| 67,279 | |
GAS-nine Ltd. | |
CBA(2) | |
Apr 2014 | |
Dec 2014 | |
Dec 2019 | |
| 2.23 | % | |
| 62,500 | | |
| 60,762 | |
GAS-nine Ltd. | |
DNB Bank ASA | |
Apr 2014 | |
Dec 2014 | |
Dec 2019 | |
| 2.24 | % | |
| 62,500 | | |
| 60,762 | |
GAS-ten Ltd. | |
SEB(1) | |
Apr 2014 | |
Feb 2015 | |
Feb 2020 | |
| 2.25 | % | |
| 62,500 | | |
| 61,631 | |
GAS-ten Ltd. | |
ING | |
May 2014 | |
Feb 2015 | |
Feb 2020 | |
| 2.23 | % | |
| 62,500 | | |
| 61,631 | |
GAS-fifteen Ltd.(3) | |
Citibank | |
Jul 2014 | |
Sep 2014 | |
Sep 2018 | |
| 0.66%/2.89 | % | |
| 93,330 | | |
| 89,995 | |
| |
| |
| |
| |
| |
| | | |
| 476,149 | | |
| 462,060 | |
(1) Skandinavinska Enskilda
Banken AB (publ)
(2) Commonwealth Bank of Australia
(3) The fixed interest
rate is agreed at 0.66% until September 2016 and at 2.89% from September 2016 to September 2018.
For the three and six months ended June
30, 2015, the effective portion of changes in the fair value of derivatives designated as cash flow hedging instruments amounting
to a gain of $681 and a loss of $4,939, respectively, has been recognized in Other comprehensive income (for the three and six
months ended June 30, 2014 a loss of $5,455 and $6,439, respectively). For the three and six months ended June 30, 2015, a loss
of $1,805 and $3,245, respectively, was recycled to profit or loss representing the realized loss on interest rate swaps in relation
to the interest expenses component of the hedge (for the three and six months ended June 30, 2014 a loss of: $833 and $1,864, respectively).
Interest rate swaps held for trading
The principal terms
of the interest rate swaps held for trading were as follows:
| |
| |
| |
| |
| |
Fixed | | |
Notional Amount | |
Subsidiary | |
Counterparty | |
Trade Date | |
Effective Date | |
Termination Date | |
Interest
Rate | | |
December 31, 2014 | | |
June 30, 2015 | |
GAS-eight Ltd. | |
SEB | |
Feb 2012 | |
Mar 2014 | |
Mar 2021 | |
| 2.26 | % | |
| 41,684 | | |
| 40,473 | |
GAS-eight Ltd. | |
ING Bank N.V. | |
Feb 2012 | |
Mar 2014 | |
Mar 2021 | |
| 2.26 | % | |
| 41,684 | | |
| 40,473 | |
GAS-eight Ltd. | |
SEB | |
May 2012 | |
Mar 2014 | |
Mar 2021 | |
| 2.05 | % | |
| 13,416 | | |
| 13,026 | |
GAS-eight Ltd. | |
ING Bank N.V. | |
May 2012 | |
Mar 2014 | |
Mar 2021 | |
| 2.05 | % | |
| 13,416 | | |
| 13,026 | |
GAS-eight Ltd. | |
DNB Bank ASA | |
May 2012 | |
Mar 2014 | |
Mar 2021 | |
| 2.05 | % | |
| 13,416 | | |
| 13,026 | |
GAS-eight Ltd. | |
CBA | |
May 2012 | |
Mar 2014 | |
Mar 2021 | |
| 2.06 | % | |
| 13,416 | | |
| 13,026 | |
GAS-one Ltd. (1) | |
Danish Ship Finance | |
Oct 2011 | |
Nov 2011 | |
May 2020 | |
| 2.10 | % | |
| 68,516 | | |
| 66,305 | |
GAS-one Ltd. (1) | |
Danish Ship Finance | |
Jun 2013 | |
Aug 2013 | |
May 2020 | |
| 2.03 | % | |
| 59,385 | | |
| 57,469 | |
GAS-six Ltd. (1) | |
ABN-AMRO Bank | |
May 2012 | |
Jul 2013 | |
Jul 2019 | |
| 1.72 | % | |
| 58,831 | | |
| 56,963 | |
GAS-seven Ltd (1) | |
Credit Suisse AG | |
Mar 2012 | |
Nov 2013 | |
Nov 2020 | |
| 2.23 | % | |
| 102,000 | | |
| 99,000 | |
GAS-seven Ltd. (1) | |
Credit Suisse AG | |
Apr 2014 | |
May 2014 | |
May 2019 | |
| 1.77 | % | |
| 34,000 | | |
| 33,000 | |
GAS-two Ltd. (1) | |
CBA | |
Sep 2013 | |
Feb 2014 | |
Apr 2018 | |
| 1.69 | % | |
| 31,667 | | |
| 30,000 | |
| |
| |
| |
| |
| |
| | | |
| 491,431 | | |
| 475,787 | |
(1) During the three and
six-month period ended June 30, 2015, the amount of the cumulative loss from the period that these hedges were effective that
was recycled to profit or loss was $283 and $567 (for the three-month period ended June 30, 2014: $1,912, including the
effect from the interest rate swaps of GAS-three Ltd. and GAS-four Ltd. terminated in November 2014, for the six-month period
ended June 30, 2014: $2,325).
The derivative instruments listed above
were not designated as cash flow hedging instruments as of June 30, 2015. The change in the fair value of these contracts for
the three and six months ended June 30, 2015 amounted to a gain of $4,079 and a loss of $430, respectively (for the three and
six months ended June 30, 2014 amounted to a net loss of $4,703 and a $7,475, respectively), which was recognized against earnings
in the period incurred and is included in Loss/gain on swaps. During the three-month period ended June 30, 2015, the net gain
of $4,079 derived mainly from the fact that the LIBOR yield curve, which was used to calculate the present value of the estimated
future cash flows, was higher than the agreed fixed interest rates resulting in a decrease in derivative liabilities from interest
rate swaps held for trading as compared to the first quarter of 2015.
Cross currency swap agreements (“CCS”)
The Group enters into CCSs which convert
the floating interest rate exposure and the variability of the USD functional currency equivalent cash flows into a fixed interest
rate and principal on maturity in order to hedge the Group’s exposure to fluctuations deriving from its senior unsecured
notes which are denominated in NOK.
The principal terms of the CCSs designated
as cash flow hedging instruments were as follows:
| |
| |
| |
| |
| |
Fixed | | |
Notional Amount | |
Company | |
Counterparty | |
Trade Date | |
Effective Date | |
Termination Date | |
Interest Rate | | |
December 31, 2014 | | |
June 30, 2015 | |
GasLog Ltd. | |
DNB Bank ASA | |
Jun 2013 | |
Jun 2013 | |
Jun 2018 | |
| 7.40 | % | |
| 27,732 | | |
| 27,732 | |
GasLog Ltd. | |
SEB | |
Jun 2013 | |
Jun 2013 | |
Jun 2018 | |
| 7.41 | % | |
| 27,731 | | |
| 27,731 | |
GasLog Ltd. | |
Nordea Bank Finland | |
Jun 2013 | |
Jun 2013 | |
Jun 2018 | |
| 7.43 | % | |
| 27,743 | | |
| 27,743 | |
GasLog Ltd. | |
DNB Bank ASA | |
Apr 2014 | |
May 2014 | |
Jun 2018 | |
| 5.99 | % | |
| 27,871 | | |
| 27,871 | |
GasLog Ltd. | |
SEB | |
Apr 2014 | |
May 2014 | |
Jun 2018 | |
| 5.99 | % | |
| 27,871 | | |
| 27,871 | |
GasLog Ltd. | |
Nordea Bank Finland | |
Apr 2014 | |
May 2014 | |
Jun 2018 | |
| 5.99 | % | |
| 27,871 | | |
| 27,871 | |
| |
| |
| |
| |
| |
| | | |
| 166,819 | | |
| 166,819 | |
For the three
and six months ended June 30, 2015, the effective portion of changes in the fair value of CCSs amounting to a gain of $4,227
and a loss of $7,582, respectively, has been recognized in Other comprehensive income (for the three and six months ended
June 30, 2014 amounted to a loss of $6,548 and $5,357 respectively). For the three and six months ended June 30, 2015, a loss
$544 and $1,081, respectively, was recycled to profit or loss representing the realized loss on CCSs in relation to the
interest expenses component of the hedge (for the three and six months ended June 30, 2014 amounted to a gain of $227 and
$151, respectively). Additionally, for the three and six months ended June 30, 2015, a loss of $2,643 and a gain of $7,824,
respectively, was recognized in other comprehensive income in relation to the retranslation of the bonds in U.S. dollars as
of June 30, 2015 (for the three and six months ended June 30, 2014 a gain of $3,755 and $2,746, respectively).
12. Financial Costs and Loss/gain on Swaps
An analysis of financial costs and gain/loss
on swaps is as follows:
| |
Three months ended | | |
Six months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | | |
June 30, 2014 | | |
June 30, 2015 | |
Amortization of deferred loan issuance costs | |
| 4,615 | | |
| 3,053 | | |
| 5,839 | | |
| 4,999 | |
Interest expense on loans and realized loss on cash flow hedges | |
| 10,328 | | |
| 18,064 | | |
| 18,444 | | |
| 31,622 | |
Interest expense on bond and realized loss on CCSs | |
| 2,279 | | |
| 2,825 | | |
| 3,821 | | |
| 5,619 | |
Other financial costs including bank commissions | |
| 447 | | |
| 304 | | |
| 1,253 | | |
| 534 | |
Total financial costs | |
| 17,669 | | |
| 24,246 | | |
| 29,357 | | |
| 42,774 | |
| |
| | | |
| | | |
| | | |
| | |
Realized loss on interest rate swaps held for trading | |
| 2,760 | | |
| 2,158 | | |
| 4,695 | | |
| 4,355 | |
Unrealized loss/(gain) on interest rate swaps held for trading (Note 11) | |
| 4,703 | | |
| (4,079 | ) | |
| 7,475 | | |
| 430 | |
Recycled loss of cash flow hedges reclassified to profit or loss (Note 11) | |
| 1,912 | | |
| 283 | | |
| 2,325 | | |
| 567 | |
Ineffective portion on cash flow hedges | |
| 207 | | |
| — | | |
| 202 | | |
| (11 | ) |
Total loss/(gain) on swaps | |
| 9,582 | | |
| (1,638 | ) | |
| 14,697 | | |
| 5,341 | |
13. Non-cash Items on Statements of Cash Flows
As of June 30, 2015, there were
capital expenditures of $14,360 that have not been paid during the six months ended June 30, 2015 and were included in current
liabilities (December 31, 2014: $7,999). Also, as of June 30, 2014, there were capital expenditures of $4,030 that had
not been paid during the six months ended June 30, 2014 and were included in current liabilities (December 31, 2013: $691, net
receivable).
As of June 30, 2015, there were equity
raising costs of $841 that have not been paid during the six months ended June 30, 2015 and were included in current liabilities
(December 31, 2014: $174). Also, as of June 30, 2014, there were equity raising costs of $39 that had not been paid during the
six months ended June 30, 2014 and were included in current liabilities (December 31, 2013: nil).
As of June 30, 2015, there were loan
issuance costs of $2,985 that have not been paid during the six months ended June 30, 2015 and were included in current
liabilities (December 31, 2014: $903). Also, as of June 30, 2014, there were loan issuance costs of $929 that had not been
paid during the six months ended June 30, 2014 and were included in current liabilities (December 31, 2013: $2,494).
14. Share-Based Payments
The terms of the 2013 Omnibus Incentive
Compensation Plan (the “Plan”) and the assumptions for the valuation of Restricted Stock Units (“RSUs”)
and Stock Appreciation Rights (“SARs”) have been disclosed in Note 19 “Share-Based Payments” in the annual
audited consolidated financial statements for the year ended December 31, 2014.
On April 1, 2015, GasLog granted to executives,
managers and certain employees of the Group, 88,492 RSUs and 305,859 SARs in accordance with its 2013 Plan. The RSUs will vest
on March 31, 2018 while the SARs will vest incrementally with one-third of the SARs vesting on each of March 31, 2016, 2017 and
2018. The compensation cost for the SARs is recognized on an accelerated basis as though each separately vesting portion of the
SARs is a separate award. Prior to the exercise date the holders will not have any voting rights and will not be entitled to dividends
or other distributions.
Awards | |
Number | | |
Grant date | |
Expiry date | |
Exercise price | | |
Fair value at grant date | |
RSUs | |
| 88,492 | | |
April 1, 2015 | |
n/a | |
| n/a | | |
| 19.48 | |
SARs | |
| 305,859 | | |
April 1, 2015 | |
March 31, 2025 | |
| 19.48 | | |
| 5.6352 | |
In accordance with the terms
of the Plan, there are only service condition requirements. The awards will be settled in cash or in shares at the sole discretion
of the compensation committee of the board of directors. These awards have been treated as equity settled because the Group has
no present obligation to settle in cash. The amount to be settled for each SAR exercised is computed in each case, as the excess,
if any, of the fair market value (the closing price of shares) on the exercise date over the exercise price of the SAR.
The fair value of the SARs has been calculated
based on the Modified Black-Scholes-Merton method. Expected volatility was based on historical share price volatility for the
period since the IPO. The expected dividend is based on management’s expectations of future payments on the grant date.
The significant assumptions used to estimate the fair value of the SARs are set out below:
Inputs into the model | |
| |
Grant date share closing price | |
$ | 19.48 | |
Exercise price | |
$ | 19.48 | |
Expected volatility | |
| 39.3 | % |
Expected term | |
| 6 years | |
Risk-free interest rate for the period similar to the expected term | |
| 1.48 | % |
The fair value of the RSUs was determined
by using the grant date closing price of $19.48 per common unit and was not further adjusted since the holders are entitled to
dividends.
Movement in RSUs and SARs during the period
The summary of RSUs and SARs is presented
below:
| |
Number of awards | | |
Weighted average exercise price per share | | |
Weighted average share price at the date of exercise | | |
Weighted average contractual life | | |
Aggregate fair value | |
RSUs | |
| | | |
| | | |
| | | |
| | | |
| | |
Outstanding as of December 31, 2014 | |
| 139,669 | | |
| — | | |
| — | | |
| 1.82 | | |
| 2,465 | |
Granted during the period | |
| 88,492 | | |
| — | | |
| — | | |
| — | | |
| 1,724 | |
Vested during the period | |
| (3,373 | ) | |
| — | | |
| — | | |
| — | | |
| (54 | ) |
Forfeited during the period | |
| (4,494 | ) | |
| — | | |
| — | | |
| — | | |
| (80 | ) |
Outstanding as of June 30, 2015 | |
| 220,294 | | |
| — | | |
| — | | |
| 1.89 | | |
| 4,055 | |
SARs | |
| | | |
| | | |
| | | |
| | | |
| | |
Outstanding as of December 31, 2014 | |
| 590,353 | | |
| 18.45 | | |
| — | | |
| 8.78 | | |
| 2,437 | |
Granted during the period | |
| 305,859 | | |
| 19.48 | | |
| — | | |
| — | | |
| 1,724 | |
Expired during the period | |
| (6,788 | ) | |
| 15.44 | | |
| — | | |
| — | | |
| (21 | ) |
Forfeited during the period | |
| (11,269 | ) | |
| 19.46 | | |
| — | | |
| — | | |
| (56 | ) |
Outstanding as of June 30, 2015 | |
| 878,155 | | |
| 18.82 | | |
| — | | |
| 8.79 | | |
| 4,084 | |
As of June 30, 2015, 292,135 SARs have been
vested but not exercised.
On April 1, 2015, GasLog Partners granted
to its executives, Restricted Common Units (“RCUs”) and Performance Common Units (“PCUs”) in accordance
with its 2015 Long-Term Incentive Plan (the “GasLog Partners’ Plan”). The RCUs and PCUs will vest on March 31,
2018. The holders are entitled to cash distributions that will be accrued and settled on vesting.
Awards | |
Number | |
Grant date | |
Expiry date | |
Fair value at grant date |
RCUs | |
16,999 | |
April 1, 2015 | |
n/a | |
24.12 |
PCUs | |
16,999 | |
April 1, 2015 | |
n/a | |
24.12 |
In accordance with the terms of the GasLog
Partners’ Plan, the awards will be settled in cash or in GasLog Partners’ common units at the sole discretion of the
compensation committee of the board of directors. These have been treated as equity settled because the Partnership has no present
obligation to settle in cash.
Fair value
The fair value of the RCUs and PCUs in accordance
with the GasLog Partners’ Plan was determined by using the grant date closing price of $24.12 per common unit and was not
further adjusted since the holders are entitled to cash distribution.
Movement in RCUs and PCUs during the period
The summary of RCUs and PCUs is presented
below:
| |
Number of awards | | |
Weighted average contractual life | | |
Aggregate fair value | |
RCUs | |
| | | |
| | | |
| | |
Outstanding as of January 1, 2015 | |
| — | | |
| — | | |
| — | |
Granted during the period | |
| 16,999 | | |
| — | | |
| 410,016 | |
Outstanding as of June 30, 2015 | |
| 16,999 | | |
| 2.75 | | |
| 410,016 | |
PCUs | |
| | | |
| | | |
| | |
Outstanding as of January 1, 2015 | |
| — | | |
| — | | |
| — | |
Granted during the period | |
| 16,999 | | |
| — | | |
| 410,016 | |
Outstanding as of June 30, 2015 | |
| 16,999 | | |
| 2.75 | | |
| 410,016 | |
The total expense recognized in respect
of equity-settled employee benefits for the three and six months ended June 30, 2015 was $776 and $1,274, respectively (for the
three and six months ended June 30, 2014 $544 and $724, respectively).
15. Earnings per Share (“EPS”)
Basic earnings per share was calculated
by dividing the net profit for the period attributable to the owners of the common shares by the weighted average number of common
shares issued and outstanding during the period.
Diluted earnings per share is calculated
by dividing the profit for the period attributable to the owners of the Group by the weighted average number of all potential
ordinary shares assumed to have been converted into common shares, unless such potential ordinary shares have an antidilutive
effect.
The following reflects the earnings and
share data used in the basic and diluted earnings per share computations:
| |
Three months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | |
Basic earnings per share | |
| | | |
| | |
Profit for the period attributable to owners of the Group | |
| 1,476 | | |
| 8,240 | |
Less: | |
| | | |
| | |
Dividend on preferred stock | |
| — | | |
| (2,348 | ) |
Profit for the period available to owners of the Group | |
| 1,476 | | |
| 5,892 | |
Weighted average number of shares outstanding, basic | |
| 80,133,785 | | |
| 80,496,499 | |
Basic earnings per share | |
| 0.02 | | |
| 0.07 | |
Diluted earnings per share | |
| | | |
| | |
Profit for the period available to owners of the Group used in the calculation of diluted earnings per share | |
| 1,476 | | |
| 5,892 | |
Weighted average number of shares outstanding, basic | |
| 80,133,785 | | |
| 80,496,499 | |
Dilutive potential ordinary shares | |
| 206,362 | | |
| 196,935 | |
Weighted average number of shares used in the calculation of diluted earnings per share | |
| 80,340,147 | | |
| 80,693,434 | |
Diluted earnings per share | |
| 0.02 | | |
| 0.07 | |
The Group excluded the dilutive effect
of 580,941 SARs in calculating diluted EPS for the three months ended June 30, 2015, as they were anti-dilutive (June 30, 2014:
286,746 SARs).
| |
Six months ended | |
| |
June 30, 2014 | | |
June 30, 2015 | |
Basic earnings per share | |
| | | |
| | |
Profit for the period attributable to owners of the Group | |
| 7,825 | | |
| 12,582 | |
Less: | |
| | | |
| | |
Dividend on preferred stock | |
| — | | |
| (2,348 | ) |
Profit for the period available to owners of the Group | |
| 7,825 | | |
| 10,234 | |
Weighted average number of shares outstanding, basic | |
| 76,521,252 | | |
| 80,496,126 | |
Basic earnings per share | |
| 0.10 | | |
| 0.13 | |
Diluted earnings per share | |
| | | |
| | |
Profit for the period available to owners of the Group used in the calculation of diluted earnings per share | |
| 7,825 | | |
| 10,234 | |
Weighted average number of shares outstanding, basic | |
| 76,521,252 | | |
| 80,496,126 | |
Dilutive potential ordinary shares | |
| 175,338 | | |
| 166,537 | |
Weighted average number of shares used in the calculation of diluted earnings per share | |
| 76,696,590 | | |
| 80,662,663 | |
Diluted earnings per share | |
| 0.10 | | |
| 0.13 | |
The Group excluded the dilutive
effect of 580,941 SARs and 87,077 RSUs in calculating diluted EPS for the six months ended June 30, 2015, as they were anti-dilutive (June 30, 2014: 286,746 SARs).
16. Subsequent Events
On July 1, 2015, GasLog completed the
sale of three LNG carriers, the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather
Sally to GasLog Partners for $483,000 including $3,000 of positive net working capital. To partially fund the acquisition,
GasLog Partners launched and completed an equity offering of 7,500,000 common units and issued 153,061 general partner units to
GasLog.
On August 5, 2015, the board of directors
declared a quarterly cash dividend of $0.14 per common share payable on August 20, 2015 to shareholders of record as of August
17, 2015.
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