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, 2016.
Highlights
- Post quarter-end, successfully chartered the last newbuilding
on order without a long-term charter contract to Total Gas &
Power Chartering Limited (“Total”) for a period of seven years,
commencing in 2018, at attractive rates.
- Delivery of the GasLog Glasgow on June 30, 2016 and the
commencement of its ten-year charter to a subsidiary of BG Group
plc. (“BG Group”), now owned by Royal Dutch Shell plc
(“Shell”).
- Post quarter-end, executed debt refinancing of $1.05 billion
with a number of international banks, extending the maturity of six
existing credit facilities to 2021.
- Issued NOK 750 million (equivalent to $90.2 million) of new
senior unsecured bonds maturing in May 2021 in the Norwegian bond
market refinancing NOK 588 million of existing bonds maturing in
June 2018.
- Post quarter-end, GasLog Partners LP (“GasLog Partners” or the
“Partnership”) launched a public offering of 2,750,000 common units
raising gross proceeds of $53.6 million.
- Revenues of $114.5 million (Q2 2015: $104.4 million), Profit of
$3.3 million (Q2 2015: $16.7 million) and Loss per share of
$0.13(1) (Q2 2015: Earnings per share of $0.07), for the quarter
ended June 30, 2016.
- Adjusted Profit(2) of $12.9 million (Q2 2015: $10.9 million),
EBITDA(2) of $73.2 million (Q2 2015: $66.5 million), Adjusted
EBITDA(2) of $73.7 million (Q2 2015: $64.5 million) and Adjusted
Loss per share(2) of $0.01(1) (Q2 2015: $0.00) for the quarter
ended June 30, 2016.
- Quarterly dividend of $0.14 per common share payable on August
25, 2016.
(1) EPS and Adjusted EPS are negatively affected by the profit
attributable to the non-controlling interest of $11.2 million and
the dividend on preferred stock of $2.5 million for the quarter
ended June 30, 2016 ($8.5 million and $2.3 million, respectively,
for the quarter ended June 30, 2015).
(2) EBITDA, Adjusted EBITDA, Adjusted Profit and
Adjusted Earnings/Loss per share (“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.
CEO Statement
Paul Wogan, Chief Executive Officer, stated: “At the end of the
quarter, we took delivery of the GasLog Glasgow. This vessel has a
ten-year contract with a subsidiary of Shell and is one of eight
vessels with multi-year contracts being delivered between 2016 and
2019. Post quarter-end, we were very pleased to announce the
fixture of Hull 2801, GasLog’s only remaining open newbuild, to a
subsidiary of Total for a minimum of seven years, which meets our
objective of broadening GasLog’s long-term customer base.
The Total charter rate is consistent with long-term industry
averages, demonstrating the resilience of long-term charter rates
compared to the volatility of the short-term market. Once all eight
newbuilds are operating under their long-term charters, they will
deliver over $180 million of annualized in-built EBITDA(3).
Following the Total fixture, GasLog now has 13 vessels with
long-term charters that are eligible to be dropped down into GasLog
Partners.
Whilst the short-term LNG shipping market remains challenging,
in recent weeks we have seen increased utilization and improved
charter terms such as round-trip economics. With less available
tonnage, charterers at times have had to pay increased rates to
secure vessels.”
(3) EBITDA, which represents earnings before
interest income and expense, gain/loss on interest rate swaps,
taxes, depreciation and amortization, is a non-GAAP financial
measure. Please refer to Exhibit II at the end of this press
release for guidance on the underlying assumptions used to derive
EBITDA.
Dividend Declaration
On May 5, 2016, the board of directors declared a dividend on
the Series A Preference Shares of $0.546875 per share, or $2.5
million in the aggregate, payable on July 1, 2016 to holders of
record as of June 30, 2016. GasLog paid the declared dividend to
the transfer agent on June 28, 2016.
On August 3, 2016, the board of directors declared a quarterly
cash dividend of $0.14 per common share payable on August 25, 2016
to shareholders of record as of August 15, 2016.
Bond Issuance
On June 27, 2016, GasLog completed the issuance of NOK 750
million (equivalent to $90.2 million) of new senior unsecured bonds
in the Norwegian bond market. The bonds will mature in May 2021 and
have a coupon of 6.9% over 3 month NIBOR. The proceeds from the
issuance were used to partly refinance GasLog’s existing bonds
maturing in June 2018. Simultaneously with the aforementioned bond
issuance, GasLog re-purchased and cancelled GasLog’s NOK 588
million of bonds from a total NOK 1 billion of bonds issued in June
27, 2013 and May 2, 2014 at a price of 103% of par value.
In addition, GasLog entered into three cross currency swaps
(“CCSs”) to exchange interest payments and principal on maturity on
the same terms as the NOK 750 million bonds, terminated three of
its existing CCSs and decreased the notional amount of its
remaining three CCSs to mirror the remaining NOK 412 million of
bonds maturing in June 2018.
Delivery of the GasLog
Glasgow
On June 30, 2016, GasLog took delivery of the GasLog Glasgow, an
LNG carrier of 174,000 cubic meters capacity with tri-fuel diesel
electric propulsion constructed by Samsung Heavy Industries Co.
Ltd. (“Samsung”). The vessel is chartered out to Methane Services
Limited (“MSL”), a subsidiary of BG Group, now owned by Shell, from
its delivery until 2026, with an option for the charterer to extend
the terms of the charter at specified rates.
Charter Party Agreement with
Total
On July 11, 2016, GasLog entered a time charter
party agreement with Total to charter Hull No. 2801 for a period of
seven years, commencing in mid-2018 at a date to be finalized ahead
of the commencement of the charter. A further option period of
three years has been granted at the charterer's option. The vessel
is currently under construction at Hyundai Heavy Industries Co.,
Ltd. (“Hyundai”) in South Korea and is due to be delivered in
2018.
Debt Refinancing
On July 19, 2016, GasLog entered into a credit
agreement to refinance the existing indebtedness on eight of its
on-the-water vessels of up to $1.05 billion (the “Legacy Facility
Re-financing”) with a number of international banks. It is
comprised of a five-year facility of up to $950.0 million and a
revolving credit facility of up to $100.0 million. The vessels
covered by the Legacy Facility Re-financing are the GasLog
Savannah, the GasLog Singapore, the GasLog Skagen, the GasLog
Seattle, the Solaris, the GasLog Saratoga, the GasLog Salem and the
GasLog Chelsea. Citibank N.A, Credit Suisse AG and Nordea Bank AB
were mandated lead arrangers to the transaction.
Swap Termination
On July 18, 2016, the Group terminated interest rate swap
agreements with an aggregate notional value of $874.9 million,
associated with the six legacy facilities being re-financed by the
Legacy Facility Re-financing. Concomitantly, GasLog entered into
new interest rate swap agreements with a notional value of $870.0
million in aggregate, maturing between 2020 and 2022.
Retirement of Chief Operating
Officer
In June 2016, Graham Westgarth, GasLog’s Chief Operating Officer
(“COO”) informed the board of directors of his intention to retire
as of May 2017. We anticipate that Mr. Westgarth will be nominated,
following his retirement, to serve on the GasLog Board as part of
the 2017 Annual General Meeting. By the time of his retirement Mr.
Westgarth will have been at GasLog for over four years in his role
as COO and has been instrumental in supporting the growth of the
business over that time, with a prime focus on the continuation of
GasLog’s exceptional safety record and safe effective delivery of
its newbuilds. Mr. Westgarth has worked in the global shipping
industry in various roles for over forty years, and for five of
those years also served as Chairman of INTERTANKO. A search for Mr.
Westgarth’s successor is well underway and the retirement date of
May 2017 ensures a prudent handover period.
GasLog Partners Equity
Offering
On August 1, 2016, GasLog Partners announced that it has priced
its public offering of 2,750,000 common units at a price to the
public of $19.50 per common unit. The Partnership plans to use the
net proceeds from the public offering for general partnership
purposes, which may include future acquisitions, debt repayment,
capital expenditures and additions to working capital. We estimate
that the gross proceeds from this offering will be $53.6 million
(excluding $1.1 million from the sale of the general partner units
to GasLog to maintain its 2.0% interest in the Partnership).
Financial Summary
In millions of U.S. dollars except per share
data |
|
For the three months ended |
|
|
|
June 30, 2015 |
|
|
June 30, 2016 |
|
Revenues |
|
$ |
104.4 |
|
|
$ |
114.5 |
|
Profit |
|
$ |
16.7 |
|
|
$ |
3.3 |
|
Adjusted Profit(1) |
|
$ |
10.9 |
|
|
$ |
12.9 |
|
Profit/(loss)
attributable to the owners of GasLog |
|
$ |
8.2 |
|
|
$ |
(7.9 |
) |
EBITDA(1) |
|
$ |
66.5 |
|
|
$ |
73.2 |
|
Adjusted EBITDA(1) |
|
$ |
64.5 |
|
|
$ |
73.7 |
|
EPS |
|
$ |
0.07 |
|
|
$ |
(0.13 |
) |
Adjusted EPS(1) |
|
$ |
0.00 |
|
|
$ |
(0.01 |
) |
(1) Adjusted Profit, EBITDA, Adjusted EBITDA 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.
There were 1,793 operating days for the quarter ended June 30,
2016, as compared to 1,464 operating days for the quarter ended
June 30, 2015. The increase in operating days resulted mainly from
the deliveries of the GasLog Salem on April 30, 2015, the GasLog
Greece on March 29, 2016 and the GasLog Glasgow on June 30,
2016.
Profit was $3.3 million for the quarter ended June 30, 2016
($16.7 million profit for the quarter ended June 30, 2015). This
decrease in profit is mainly attributable to four factors: the
increased loss on swaps derived from the movement in the fair value
of interest rate swaps carried at fair value through profit or
loss; the recycling of accumulated loss from equity to the
statement of profit or loss related to the CCS agreements that were
terminated or modified in June 2016; the increased financial costs
derived mainly from the write-off of unamortized bond fees; and the
premium as a result of the bond re-purchase. These factors were
partially offset by a net increase in profit from operations
resulting mainly from the increase in operating days mitigated by a
lower daily hire rate affected by the vessels operating in the spot
market.
Adjusted Profit(1) was $12.9 million for the quarter ended June
30, 2016 ($10.9 million for the quarter ended June 30, 2015)
adjusted for the effects of the non-cash gain/loss on swaps, the
write-off and accelerated amortization of unamortized bond fees and
premium, as well as the net foreign exchange losses.
Loss attributable to the owners of GasLog was $7.9 million ($8.2
million profit for the quarter ended June 30, 2015). The decrease
in profit attributable to the owners of GasLog resulted from the
decrease in profit mentioned above and the increase in profit
attributable to the non-controlling interest (GasLog Partners’
third party owners) for the three months ended June 30, 2016
following the dropdown of three vessels to GasLog Partners on July
1, 2015.
EBITDA(1) was $73.2 million for the quarter ended June 30, 2016
($66.5 million for the quarter ended June 30, 2015).
Adjusted EBITDA(1) was $73.7 million for the quarter ended June
30, 2016 ($64.5 million for the quarter ended June 30, 2015).
EPS was a $0.13 loss for the quarter ended June
30, 2016 ($0.07 earnings for the quarter ended June 30, 2015). The
decrease in EPS is mainly attributable to the decrease in profit
and the increase in profit attributable to non-controlling
unitholders of GasLog Partners following the dropdown of three
vessels on July 1, 2015.
Adjusted EPS(1) was a $0.01 loss for the quarter
ended June 30, 2016 ($0.00 for the quarter ended June 30, 2015).
The decrease in Adjusted EPS is attributable to the decrease in
profit and the increase in profit attributable to non-controlling
interest in the quarter ended June 30, 2016.
Revenues were $114.5 million for the quarter ended June 30, 2016
($104.4 million for the quarter ended June 30, 2015). The increase
was mainly driven by the new deliveries in our fleet (GasLog Salem,
GasLog Greece, GasLog Glasgow) and fewer off-hire days due to
drydockings (one drydocking in the second quarter of 2016 as
opposed to four for the same period in 2015).
Vessel operating and supervision costs were $28.0 million for
the quarter ended June 30, 2016 ($26.5 million for the quarter
ended June 30, 2015).
Voyage expenses and commissions were $3.3 million for the
quarter ended June 30, 2016 ($3.4 million for the quarter ended
June 30, 2015).
Depreciation of fixed assets was $29.5 million for the quarter
ended June 30, 2016 ($27.3 million for the quarter ended June 30,
2015).
The increase in revenues, vessel operating and supervision
costs, voyage expenses and commissions and depreciation of fixed
assets was mainly attributable to the increase in operating and
ownership days from our increased fleet as discussed above.
General and administrative expenses were $10.4 million for the
quarter ended June 30, 2016 ($8.3 million for the quarter ended
June 30, 2015). The increase is mainly attributable to a decrease
in net foreign exchange gains, mainly due to the unfavorable
movement of the EUR/USD and GBP/USD exchange rate in the
three-month period ended June 30, 2016 as compared to the
comparative period in 2015, partially offset by a decrease in legal
fees and other professional services.
Financial costs were $31.5 million for the quarter ended June
30, 2016 ($24.2 million for the quarter ended June 30, 2015). An
analysis of financial costs is set forth below.
(All amounts
expressed in thousands of U.S. dollars) |
For the three months ended |
|
|
|
June 30, 2015 |
|
June 30, 2016 |
|
Financial
costs |
|
|
|
|
|
|
|
Amortization and
write-off of deferred loan/bond fees and premium |
|
$ |
3,053 |
|
$ |
5,330 |
|
Interest expense on
loans and realized loss on cash flow hedges |
|
|
18,064 |
|
|
17,977 |
|
Interest expense on
bond and realized loss on cross-currency swaps |
|
|
2,825 |
|
|
2,831 |
|
Finance lease
charge |
|
|
— |
|
|
2,720 |
|
Loss arising on bond
re-purchase at a premium |
|
|
— |
|
|
2,120 |
|
Other financial
costs |
|
|
304 |
|
|
505 |
|
Total |
|
$ |
24,246 |
|
$ |
31,483 |
|
Loss on swaps was $9.0 million for the quarter ended June 30,
2016 ($1.6 million gain for the quarter ended June 30, 2015). An
analysis of (gain)/ loss on swaps is set forth below.
(All amounts
expressed in thousands of U.S. dollars) |
For the three months ended |
|
|
|
June 30, 2015 |
|
June 30, 2016 |
|
(Gain)/loss on
swaps |
|
|
|
|
|
|
|
Realized loss on
interest rate swaps held for trading |
|
$ |
2,158 |
|
$ |
1,740 |
|
Unrealized (gain)/loss
on interest rate swaps held for trading |
|
|
(4,079 |
) |
|
1,372 |
|
Recycled loss of cash
flow hedges reclassified to profit or loss in relation to
derivatives no longer designated as hedges |
|
|
283 |
|
|
5,927 |
|
Total |
|
$ |
(1,638 |
) |
$ |
9,039 |
|
Contracted Charter Revenues
GasLog’s contracted charter revenues are estimated to increase
from $412.5 million for the fiscal year 2015 to $482.9 million for
the fiscal year 2017, based on contracts in effect as of June 30,
2016, without including any extension options. As of June 30, 2016,
giving effect to the recently signed agreement with Total, the
total future firm contracted revenue stood at $3.65 billion (1),
including the eight vessels owned by GasLog Partners but excluding
the vessels operating in the spot market.
(1) 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, 2016, GasLog had $192.6 million of cash and cash
equivalents, of which $56.3 million was held in time deposits and
the remaining balance in current accounts. As of June 30, 2016,
GasLog had $25.1 million in restricted cash in relation to cash
held in blocked accounts mainly in order to comply with the
covenants under two of its credit facilities, $23.5 million of
which was reclassified from restricted cash to cash and cash
equivalents following the completion of the Legacy Facility
Re-financing in July 2016.
As of June 30, 2016, GasLog had an aggregate of $2.4 billion of
indebtedness outstanding under its credit facilities and bond
agreements, of which $179.4 million was repayable within one year,
and a $220.8 million finance lease liability related to the sale
and leaseback of the Methane Julia Louise.
As of June 30, 2016, there was undrawn availability of $1.0
billion under the debt financing agreement entered into on October
16, 2015 with 14 international banks to partially finance the
delivery of our six remaining newbuildings expected to be delivered
in 2016, 2018 and 2019.
On April 5, 2016, $395.4 million and $179.7 million under the
senior and junior tranche, respectively, of the credit agreements
that GasLog and GasLog Partners entered into on February 18, 2016,
were drawn to partially refinance $644.0 million of the outstanding
debt of GAS-eighteen Ltd., GAS-nineteen Ltd., GAS-twenty Ltd.,
GAS-twenty one Ltd. and GAS-twenty seven Ltd. The senior tranche
facility provides for four advances of $72.3 million and a fifth
advance of $106.3 million that shall be repaid in 20 quarterly
equal installments commencing three months after the drawdown date.
The junior tranche facility provides for four advances of $29.9
million and a fifth advance of $59.9 million that shall be repaid
in full 24 months after the drawdown date. Amounts drawn bear
interest at LIBOR plus a margin (variable margin for the junior
tranche).
As of June 30, 2016, GasLog’s current assets totalled $237.0
million while current liabilities totalled $268.9 million,
resulting in a negative working capital position of $31.9 million.
Current liabilities include $35.0 million of time charter hires
received in advance that are classified as liabilities until such
time as the criteria for recognizing the revenue as earned are
met.
As of June 30, 2016, GasLog’s commitments for capital
expenditures are related to the six LNG carriers on order, which
have a gross aggregate contract price of approximately $1.23
billion. As of June 30, 2016, the total remaining balance of the
contract prices of the six newbuildings was $1.1 billion that
GasLog expects to be funded with the $1.0 billion undrawn amount
under the financing agreement entered into on October 16, 2015, as
well as cash balances and cash from operations.
GasLog has hedged 38.9% of its expected floating interest rate
exposure on its outstanding debt (including the finance lease
liability) at a weighted average interest rate of approximately
4.7% (including margin) as of June 30, 2016.
Future Deliveries
GasLog has four newbuildings on order at Samsung and two
newbuildings on order at Hyundai. Our vessels presently under
construction are on schedule and within budget. The expected
delivery dates are as follows:
Hulls |
|
Delivery date |
Hull No. 2102 |
|
Q3 2016 |
Hull No. 2103 |
|
Q4 2016 |
Hull No. 2130 |
|
Q1 2018 |
Hull No. 2800 |
|
Q1 2018 |
Hull No. 2801 |
|
Q1 2018 |
Hull No. 2131 |
|
Q1 2019 |
Our subsidiaries that own the vessels expected to be delivered
in 2016 have signed seven-year time charters with MSL, a subsidiary
of BG Group, now owned by Shell, at attractive rates. Our
subsidiaries that own two of the vessels expected to be delivered
in 2018 and one vessel expected to be delivered in 2019 have
entered into 9.5 year time charters with MSL at similar rates.
Finally, our subsidiary that owns the remaining vessel expected to
be delivered in 2018 entered into a seven-year time charter with
Total, also at attractive rates, in July 2016.
LNG Market Update and Outlook
Our demand outlook for LNG carriers with long-term charters
remains positive. On July 11, 2016, we announced a new seven-year
time charter with Total at a rate that is consistent with GasLog’s
long-term charter rates, demonstrating the resilience of long-term
rates against the volatility of the shorter-term market. We
continue to see a number of tenders for multi-year charters for
vessels, which will be used to transport volumes from new
liquefaction facilities coming online over the coming years.
In the second quarter, there were several announcements
highlighting the ongoing demand for LNG carriers. In May, PETRONAS’
floating liquefied natural gas (“FLNG”) facility was delivered for
operation in Malaysia. The facility is the first of a number of
FLNG projects that are scheduled to come online in the next few
years. In June, Kinder Morgan received Federal Energy Regulatory
Commission (“FERC”) approval for its Elba Island project (“Elba
Island”). The 2.5 million tonnes per annum (“mtpa”) project is
expected to come online in 2018 and is supported by a 20-year
contract with Shell for 100% of the liquefaction capacity. Elba
Island is one of several liquefaction projects that has not taken
final investment decision (“FID”), but continues to make progress
in the current commodity price environment. However, there have
been other liquefaction projects, where timing of FID has been
pushed back, such as Shell’s Lake Charles project.
The expanded Panama Canal also was completed in June 2016 and
has seen a number of vessel transits since completion. The opening
of the expanded canal, which accommodates larger vessels including
LNG carriers, should stimulate increased LNG trading activity
between the Pacific and Atlantic basins due to greater destination
optionality. On July 25, 2016, the first ever LNG carrier transit
went through the expanded canal as the Maran Gas Apollonia, which
is on charter to Shell, entered the locks on the Atlantic side
carrying a cargo from the US Gulf Coast to Asia. Three more LNG
transits have been booked in the next month.
New liquefaction projects representing approximately 140 million
tonnes per annum of capacity have taken FID and are scheduled to
come online between now and 2020. On the demand side, there have
been sizeable year-on-year increases in import volumes from many
new and existing nations looking to take advantage of low cost LNG.
For example, for the six months to June 30, 2016, China and India
have imported 29% and 45% more LNG, respectively, versus the same
period in 2015. New importers such as Jordan, Egypt, Pakistan, and
Lithuania have seen imports rise significantly in 2016 through the
use of floating storage re-gasification units (“FSRUs”), which are
typically quicker to market and offer greater flexibility than
land-based terminals. We expect FSRUs to create additional demand
in both new and existing markets for the new LNG coming online.
In the shorter term market, spot market rates through 2016 have
plateaued around multi-year lows. Whilst it is too early to predict
a sustained increase in the spot market, there has been a marked
uptick in spot charter terms in recent weeks, with slightly
improved freight rates and the ability to achieve round-trip
economics on a more frequent basis.
Conference Call
GasLog will host a conference call to discuss its results for
the second quarter of 2016 at 8:30 a.m. EDT (1:30 p.m. BST) on
Thursday, August 4, 2016. 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:
+ 1 855 537 5839 (USA)+ 44 20 3107 0289 (United Kingdom)+ 33 1
70 80 71 53 (France)+ 852 3011 4522 (Hong Kong)
Passcode for the call is: 51023262
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 2:00 p.m. EDT (7:00 p.m. BST) on
Thursday, August 4, 2016, until 11:59 p.m. EDT (5:59 a.m. BST) on
Thursday, August 11, 2016.
The replay dial-in numbers are as follows:
+1 855 859 2056 (USA)+44 20 3107 0235 (United Kingdom)+33 1 70
80 71 79 (France)+852 3011 4541 (Hong Kong)
Replay passcode: 51023262
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 our operations, cash flows, financial
position, liquidity and cash available for dividends or
distributions, plans, strategies, business prospects and changes
and trends in our business and the markets in which we operate. We
caution that these forward-looking statements represent our
estimates and assumptions only as of the date of this press
release, about factors that are beyond our ability to control or
predict, and are not intended to give any assurance as to future
results. Any of these factors or a combination of these factors
could materially affect future results of operations and the
ultimate accuracy of the forward-looking statements. Accordingly,
you should not unduly rely on any forward-looking statements.
Factors that might cause future results and outcomes to differ
include, but are not limited to the following:
- general 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;
- continued low prices for crude oil and petroleum products;
- 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;
- our future operating performance, financial condition,
liquidity and cash available for dividends and distributions;
- our ability to obtain financing to fund capital expenditures,
acquisitions and other corporate activities, funding by banks of
their financial commitments, and our ability to meet our
restrictive covenants and other obligations under our credit
facilities;
- future, pending or recent acquisitions of or orders for ships
or other assets, business strategy, areas of possible expansion and
expected capital spending or operating expenses;
- 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;
- fluctuations in currencies and interest rates;
- our ability to maintain long-term relationships with major
energy companies;
- 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;
- the expected cost of, and our ability to comply with,
governmental regulations and maritime self-regulatory organization
standards, requirements imposed by classification societies and
standards imposed by our charterers applicable to our
business;
- 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;
- any malfunction or disruption of information technology systems
and networks that our operations rely on or any impact of a
possible cybersecurity breach; and
- other risks and uncertainties described in the Company’s Annual
Report on Form 20-F filed with the SEC on March 14, 2016 and
available at http://www.sec.gov.
We undertake no obligation to update or revise any
forward-looking statements contained in this press release, whether
as a result of new information, future events, a change in our
views or expectations or otherwise, except as required by
applicable law. New factors emerge from time to time, and it is not
possible for us to predict all of these factors. Further, we cannot
assess the impact of each such factor on our business or the extent
to which any factor, or combination of factors, may cause actual
results to be materially different from those contained in any
forward-looking statement.
The declaration and payment of dividends are at all times
subject to the discretion of our board of directors and will depend
on, amongst other things, risks and uncertainties described above,
restrictions in our credit facilities, the provisions of Bermuda
law and such other factors as our board of directors may deem
relevant.
EXHIBIT I -
Unaudited Interim Financial Information |
|
|
|
Unaudited
condensed consolidated statements of financial
position |
|
As of December
31, 2015 and June 30, 2016 |
|
(Amounts
expressed in thousands of U.S. Dollars) |
|
|
|
December 31, 2015 |
|
June 30, 2016 |
|
Assets |
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
Goodwill |
|
9,511 |
|
|
9,511 |
|
Investment in associate
and joint venture |
|
6,274 |
|
|
6,257 |
|
Deferred financing
costs |
|
17,998 |
|
|
20,197 |
|
Other non-current
assets |
|
28,957 |
|
|
8,012 |
|
Derivative financial
instruments |
|
61 |
|
|
— |
|
Tangible fixed
assets |
|
3,400,270 |
|
|
3,541,777 |
|
Vessels under
construction |
|
178,405 |
|
|
135,825 |
|
Vessel held under
finance lease |
|
— |
|
|
225,861 |
|
Total
non-current assets |
|
3,641,476 |
|
|
3,947,440 |
|
Current
assets |
|
|
|
|
|
|
Trade and other
receivables |
|
16,079 |
|
|
8,701 |
|
Dividends receivable
and due from related parties |
|
1,345 |
|
|
1,932 |
|
Inventories |
|
6,496 |
|
|
5,162 |
|
Prepayments and other
current assets |
|
2,519 |
|
|
3,592 |
|
Short-term
investments |
|
6,000 |
|
|
— |
|
Restricted cash |
|
62,718 |
|
|
25,052 |
|
Cash and cash
equivalents |
|
302,988 |
|
|
192,601 |
|
Total current
assets |
|
398,145 |
|
|
237,040 |
|
Total
assets |
|
4,039,621 |
|
|
4,184,480 |
|
Equity and
liabilities |
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Preferred stock |
|
46 |
|
|
46 |
|
Share capital |
|
810 |
|
|
810 |
|
Contributed
surplus |
|
1,020,292 |
|
|
994,560 |
|
Reserves |
|
(8,829 |
) |
|
(11,893 |
) |
Treasury shares |
|
(12,491 |
) |
|
(11,065 |
) |
Retained
earnings/(accumulated deficit) |
|
1,846 |
|
|
(23,762 |
) |
Equity
attributable to owners of the Group |
|
1,001,674 |
|
|
948,696 |
|
Non-controlling
interest |
|
506,246 |
|
|
507,349 |
|
Total
equity |
|
1,507,920 |
|
|
1,456,045 |
|
Current
liabilities |
|
|
|
|
|
|
Trade accounts
payable |
|
12,391 |
|
|
7,090 |
|
Ship management
creditors |
|
3,524 |
|
|
213 |
|
Amounts due to related
parties |
|
163 |
|
|
98 |
|
Derivative financial
instruments |
|
14,243 |
|
|
13,911 |
|
Other payables and
accruals |
|
67,084 |
|
|
74,724 |
|
Borrowings, current
portion |
|
636,987 |
|
|
170,048 |
|
Finance lease
liability, current portion |
|
— |
|
|
2,772 |
|
Total current
liabilities |
|
734,392 |
|
|
268,856 |
|
Non-current
liabilities |
|
|
|
|
|
|
Derivative financial
instruments |
|
58,531 |
|
|
40,879 |
|
Borrowings, non-current
portion |
|
1,737,500 |
|
|
2,199,672 |
|
Finance lease
liability, non-current portion |
|
— |
|
|
218,015 |
|
Other non-current
liabilities |
|
1,278 |
|
|
1,013 |
|
Total
non-current liabilities |
|
1,797,309 |
|
|
2,459,579 |
|
Total equity
and liabilities |
|
4,039,621 |
|
|
4,184,480 |
|
|
|
|
|
|
|
|
Unaudited
condensed consolidated statements of profit or loss |
|
For the three
and six months ended June 30, 2015 and
2016 |
|
(Amounts
expressed in thousands of U.S. Dollars, except per share
data) |
|
|
|
For the three months ended |
|
For the six months ended |
|
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
|
June 30, 2016 |
|
Revenues |
|
104,440 |
|
|
114,474 |
|
|
201,766 |
|
|
218,851 |
|
Vessel operating and
supervision costs |
|
(26,521 |
) |
|
(27,964 |
) |
|
(48,415 |
) |
|
(56,421 |
) |
Voyage expenses and
commissions |
|
(3,426 |
) |
|
(3,256 |
) |
|
(6,155 |
) |
|
(8,519 |
) |
Depreciation of fixed
assets |
|
(27,274 |
) |
|
(29,484 |
) |
|
(49,969 |
) |
|
(57,648 |
) |
General and
administrative expenses |
|
(8,339 |
) |
|
(10,355 |
) |
|
(19,498 |
) |
|
(19,089 |
) |
Profit from
operations |
|
38,880 |
|
|
43,415 |
|
|
77,729 |
|
|
77,174 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial costs |
|
(24,246 |
) |
|
(31,483 |
) |
|
(42,774 |
) |
|
(60,662 |
) |
Financial income |
|
86 |
|
|
124 |
|
|
149 |
|
|
326 |
|
Gain/(loss) on
swaps |
|
1,638 |
|
|
(9,039 |
) |
|
(5,341 |
) |
|
(19,453 |
) |
Share of profit of
associate |
|
343 |
|
|
329 |
|
|
790 |
|
|
663 |
|
Total other
expenses, net |
|
(22,179 |
) |
|
(40,069 |
) |
|
(47,176 |
) |
|
(79,126 |
) |
Profit/(loss)
for the period |
|
16,701 |
|
|
3,346 |
|
|
30,553 |
|
|
(1,952 |
) |
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
Owners of the
Group |
|
8,240 |
|
|
(7,864 |
) |
|
12,582 |
|
|
(23,762 |
) |
Non-controlling
interest |
|
8,461 |
|
|
11,210 |
|
|
17,971 |
|
|
21,810 |
|
|
|
16,701 |
|
|
3,346 |
|
|
30,553 |
|
|
(1,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss)
per share – basic and diluted |
|
0.07 |
|
|
(0.13 |
) |
|
0.13 |
|
|
(0.36 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
condensed consolidated statements of cash flows |
|
For the six
months ended June 30, 2015 and
2016 |
|
(Amounts
expressed in thousands of U.S. Dollars) |
|
|
|
For the six months ended |
|
June 30, 2015 |
|
June 30, 2016 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Profit/(loss) for the
period |
|
30,553 |
|
|
(1,952 |
) |
Adjustments for: |
|
|
|
|
|
|
Depreciation of fixed
assets |
|
49,969 |
|
|
57,648 |
|
Share of profit of
associate |
|
(790 |
) |
|
(663 |
) |
Financial income |
|
(149 |
) |
|
(326 |
) |
Financial costs |
|
42,774 |
|
|
60,662 |
|
Unrealized foreign
exchange (gains)/losses on cash and cash equivalents and short-term
investments |
|
(427 |
) |
|
119 |
|
Unrealized loss on
interest rate swaps held for trading including ineffective portion
of cash flow hedges |
|
419 |
|
|
9,509 |
|
Recycled loss of cash
flow hedges reclassified to profit or loss |
|
567 |
|
|
6,276 |
|
Share-based
compensation |
|
1,274 |
|
|
1,800 |
|
|
|
124,190 |
|
|
133,073 |
|
Movements in working
capital |
|
(10,244 |
) |
|
25,681 |
|
Cash provided
by operations |
|
113,946 |
|
|
158,754 |
|
Interest paid |
|
(35,985 |
) |
|
(39,467 |
) |
Net cash
provided by operating activities |
|
77,961 |
|
|
119,287 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Payments for tangible
fixed assets and vessels under construction |
|
(679,129 |
) |
|
(390,202 |
) |
Dividends received from
associate |
|
1,675 |
|
|
1,038 |
|
Return of contributed
capital from associate |
|
— |
|
|
137 |
|
Purchase of short-term
investments |
|
(18,592 |
) |
|
(1,500 |
) |
Maturity of short-term
investments |
|
44,007 |
|
|
7,500 |
|
Financial income
received |
|
136 |
|
|
330 |
|
Net cash used
in investing activities |
|
(651,903 |
) |
|
(382,697 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
Proceeds from bank
loans and bonds |
|
606,000 |
|
|
991,284 |
|
Proceeds from sale and
finance leaseback |
|
— |
|
|
217,000 |
|
Bank loans and bonds
repayments |
|
(39,824 |
) |
|
(988,562 |
) |
Payment for CCSs’
termination/modification |
|
— |
|
|
(31,986 |
) |
Payment for bond
re-purchase at a premium |
|
— |
|
|
(2,120 |
) |
Payment of loan
issuance costs |
|
(5,166 |
) |
|
(21,186 |
) |
Payment of equity
raising costs |
|
(1,045 |
) |
|
— |
|
(Increase)/decrease in
restricted cash |
|
(23,190 |
) |
|
37,711 |
|
Dividends paid |
|
(37,193 |
) |
|
(48,285 |
) |
Payments for vessel
held under finance lease |
|
— |
|
|
(714 |
) |
Net cash
provided by financing activities |
|
783,835 |
|
|
153,142 |
|
Effects of exchange
rate changes on cash and cash equivalents |
|
115 |
|
|
(119 |
) |
Increase/(decrease) in cash and cash
equivalents |
|
210,008 |
|
|
(110,387 |
) |
Cash and cash
equivalents, beginning of the period |
|
211,974 |
|
|
302,988 |
|
Cash and cash
equivalents, end of the period |
|
421,982 |
|
|
192,601 |
|
|
|
|
|
|
|
|
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 and
accelerated amortization of unamortized loan/bond fees and premium,
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) recycled loss of cash flow hedges reclassified to
profit or loss in relation to derivatives no longer designated as
hedges and (c) 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 and accelerated amortization of
unamortized loan/bond fees and premium, divided by the weighted
average number of 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 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 and accelerated
amortization of unamortized loan/bond fees and premium, 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.
For the eight newbuilds, annualized in-built EBITDA during the
period in which all eight newbuilds are operating under active
charters, following the fixture of Hull 2801 to a subsidiary of
Total Gas & Power Chartering Limited, is based on the following
assumptions:
- all eight newbuilds’ charters have commenced and none have
expired or been terminated;
- timely receipt of charter hire specified in the charter
contracts;
- utilization of 363 days per year and no drydocking;
- vessel operating and supervision costs and charter commissions
per current internal estimates; and
- general and administrative expenses based on management’s
current internal estimates.
We consider the above assumptions to be reasonable as of the
date of this press release, but if these assumptions prove to be
incorrect, actual EBITDA for the entities owning the vessels could
differ materially from our estimates. The prospective financial
information was not prepared with a view toward public disclosure
or with a view toward complying with the guidelines established by
the American Institute of Certified Public Accountants, but, in the
view of the Company's management, was prepared on a reasonable
basis and reflects the best currently available estimates and
judgments. However, this information is not fact and should not be
relied upon as being necessarily indicative of future results, and
readers of this press release are cautioned not to place undue
reliance on the prospective financial information.
Neither our independent auditors nor any other independent
accountants have compiled, examined, or performed any procedures
with respect to the prospective financial information contained
above, 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, such
prospective financial information.
Reconciliation of EBITDA and Adjusted
EBITDA to Profit: |
|
|
(Amounts expressed in thousands
of U.S. Dollars) |
|
|
|
|
|
|
For the three months ended |
|
|
June 30, 2015 |
|
June 30, 2016 |
|
Profit for the
period |
|
16,701 |
|
|
3,346 |
|
Depreciation of fixed
assets |
|
27,274 |
|
|
29,484 |
|
Financial costs |
|
24,246 |
|
|
31,483 |
|
Financial income |
|
(86 |
) |
|
(124 |
) |
(Gain)/loss on
swaps |
|
(1,638 |
) |
|
9,039 |
|
EBITDA |
|
66,497 |
|
|
73,228 |
|
Foreign exchange
(gains)/losses, net |
|
(2,002 |
) |
|
442 |
|
Adjusted
EBITDA |
|
64,495 |
|
|
73,670 |
|
|
|
Reconciliation
of Adjusted Profit to Profit: |
|
|
(Amounts
expressed in thousands of U.S. Dollars) |
|
|
|
|
|
|
For the three months ended |
|
|
June 30, 2015 |
|
June 30, 2016 |
|
Profit for the
period |
|
16,701 |
|
|
3,346 |
|
Non-cash (gain)/loss on
swaps |
|
(3,796 |
) |
|
7,299 |
|
Write-off of
unamortized bond fees and premium |
|
— |
|
|
1,836 |
|
Foreign exchange
(gains)/losses, net |
|
(2,002 |
) |
|
442 |
|
Adjusted
Profit |
|
10,903 |
|
|
12,923 |
|
|
|
|
|
|
|
|
Reconciliation
of Adjusted Earnings/(Loss) Per Share to Earnings/(Loss) Per
Share: |
|
|
(Amounts
expressed in thousands of U.S. Dollars, except shares and per share
data) |
|
|
|
|
|
|
For the three months ended |
|
|
June 30, 2015 |
|
June 30, 2016 |
|
Profit/(loss) for the
period attributable to owners of the Group |
|
8,240 |
|
|
(7,864 |
) |
Less: |
|
|
|
|
|
|
Dividend on preferred
stock |
|
(2,348 |
) |
|
(2,516 |
) |
Profit/(loss) for the
period available to owners of the Group used in EPS
calculation |
|
5,892 |
|
|
(10,380 |
) |
Weighted average number
of shares outstanding, basic |
|
80,496,499 |
|
|
80,535,156 |
|
Earnings/(loss)
per share |
|
0.07 |
|
|
(0.13 |
) |
Profit/(loss) for the
period available to owners of the Group used in EPS
calculation |
|
5,892 |
|
|
(10,380 |
) |
Plus: |
|
|
|
|
|
|
Non-cash (gain)/loss on
swaps |
|
(3,796 |
) |
|
7,299 |
|
Write-off of
unamortized bond fees and premium |
|
— |
|
|
1,836 |
|
Foreign exchange
(gains)/losses, net |
|
(2,002 |
) |
|
442 |
|
Adjusted profit/(loss)
attributable to owners of the Group |
|
94 |
|
|
(803 |
) |
Weighted average number
of shares outstanding, basic |
|
80,496,499 |
|
|
80,535,156 |
|
Adjusted
earnings/(loss) per share |
|
0.00 |
|
|
(0.01 |
) |
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
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