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 March 31, 2019.
Highlights
• |
Signed a 12-year time
charter with the principal LNG shipping entity of JERA Co., Inc
(“JERA”) for Hull No. 2274, a newbuild 180,000 cubic meters (“cbm”)
LNG carrier with low pressure dual-fuel two-stroke engine (“XD-F”)
propulsion scheduled for delivery in the second quarter of
2020. |
• |
Signed an eight-year time
charter commencing May 2021 with a wholly owned subsidiary of
Endesa, S.A. (“Endesa”) for the GasLog Warsaw, a newbuild 180,000
cbm LNG carrier with X-DF propulsion, scheduled for delivery in the
third quarter of 2019. |
• |
Announced and, post
quarter-end, completed the sale of the GasLog Glasgow to GasLog
Partners LP (“GasLog Partners” or the “Partnership”) for $214.0
million, with attached multi-year charter to a subsidiary of Royal
Dutch Shell plc (“Shell”). |
• |
Entered into a new
five-year amortizing revolving credit facility on February 20, 2019
(the “2019 Partnership Facility”), which successfully refinanced
$354.4 million of current debt due in November 2019 and provided
$90.0 million of incremental available liquidity. |
• |
Delivery of the GasLog
Gladstone on March 15, 2019, a 174,000 cbm LNG carrier with X-DF
propulsion and commencement of its time charter agreement with
Shell. |
• |
Post quarter-end,
appointment of Paolo Enoizi as Chief Operating Officer (“COO”)
Designate with effect from August, 2019. |
• |
Quarterly Revenues of
$166.5 million, Profit of $5.9 million and Loss per share of
$0.17(1) for the quarter ended March 31, 2019. |
• |
Quarterly EBITDA(2) of
$109.8 million and Adjusted EBITDA(2) of $109.9 million. Adjusted
Profit(2) of $28.1 million and Adjusted Earnings per share(2) of
$0.11(1) for the quarter ended March 31, 2019. |
• |
Quarterly dividend of
$0.15 per common share payable on May 23, 2019. |
|
|
(1) Earnings/(loss) per share (“EPS”) and Adjusted EPS are net
of the profit attributable to non-controlling interests of $16.8
million and the dividend on preferred stock of $2.5 million for the
quarter ended March 31, 2019 ($23.2 million and $2.5 million,
respectively, for the quarter ended March 31, 2018).
(2) 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 the definitions and
reconciliations 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: “GasLog continued
to deliver on our strategy in the first quarter of 2019 as we
contracted two of our newbuildings to JERA and Endesa for 12 and
eight years respectively. We are honoured to have JERA and Endesa,
with the former being one of the world’s largest LNG buyers, as new
customers. We have now ordered and fixed seven newbuild vessels on
long-term contracts with four high quality counterparties since our
April 2018 investor day and have made excellent progress toward our
target of more than doubling consolidated run-rate EBITDA over the
2017 to 2022 period.
We continued to drop vessels down to GasLog Partners with the
sale to the Partnership of the GasLog Glasgow earlier this year.
The JERA and Endesa charters have increased the drop-down pipeline
to 13 vessels, reinforcing the Partnership’s growth potential. The
successful debt refinancing during the quarter is further evidence
of the Group’s ability to source attractively priced finance to
fund GasLog’s newbuilding programme.
The first quarter saw spot LNG carrier rates fall from the
historic highs of the fourth quarter of 2018 as unseasonal weather
conditions led to low LNG prices and disincentivized long-haul LNG
trade. Nonetheless, spot vessel earnings were roughly in line with
those seen in the first quarter of 2018. We are confident that the
fundamentals of the LNG shipping market are tighter than the
evidence that the first quarter implies, and we believe that rates
will improve in the second half of the year and through 2020. As a
result, we continue to see the potential to deliver enhanced
returns to our shareholders.”
LNG Market Update and Outlook
Despite LNG demand in the first quarter of 2019 being negatively
impacted by warmer than usual weather in the Northern Hemisphere
winter, global LNG imports during the period totalled 88 million
tonnes (“mt"), compared to 79 mt in the first quarter of 2018, or
an increase of 11%, according to Poten. In particular, China’s LNG
imports totalled 15.3 mt, 24% higher than the first quarter of
2018. Europe’s LNG imports in the first quarter more than doubled
to 22 mt, compared to 10 mt in the first quarter of 2018, as lower
LNG prices made gas fired power generation more competitive than
coal, indigenous gas production declined and LNG gained market
share from pipeline imports. This more than offset import declines
from major North East Asian consumers in Japan, South Korea and
Taiwan (10%, 22% and 6% declines year-on-year, respectively),
demonstrating the increasingly diverse and broad-based nature of
LNG demand growth.
The longer-term outlook for natural gas demand continued to
strengthen in the first quarter of 2019. Natural gas is
increasingly seen as complementary to renewable energy in the
transition away from fuels which emit high levels of carbon dioxide
and other harmful emissions. LNG is expected to be the fastest
growing hydrocarbon supply source. In its recent LNG Outlook 2019,
Shell, one of the largest players in the global LNG market,
forecasts that natural gas would satisfy 41% of global energy
demand growth over the 2018-2035 period, with renewables satisfying
30%. Over this period, Shell forecasts that LNG will be the fastest
growing gas supply source, with demand potentially reaching
approximately 700 mt in 2035, compared to delivered volumes of 319
mt in 2018.
According to Wood Mackenzie, global LNG supply totalled 88 mt in
the first quarter of 2019, an increase of 10% on the first quarter
of 2018, principally driven by new supply additions in the U.S.,
Australia and Russia. For 2019, as a whole, supply is estimated by
Wood Mackenzie to be 365 mt, or 38 mt (12%) higher than 2018,
driven by the continued ramp-up of 2018 supply additions and new
project start-ups in the U.S. (Cameron, Freeport, Elba Island and
Corpus Christi Train 2) and Australia (Prelude). After a brief lull
following the elevated levels of new offtake agreements seen in the
second half of 2018, activity has recently picked up again with
nine new long-term supply agreements agreed or signed for over 10
mt per annum (“mtpa”), according to Wood Mackenzie. Similarly, the
approval process for major new liquefaction projects continues to
build momentum, with Wood Mackenzie estimating that, in addition to
the Golden Pass project which reached Final Investment Decision
(“FID”) in February 2019, 50 mtpa of new capacity should be
sanctioned in 2019, encompassing Arctic LNG-2 (Russia), Mozambique
Area 1, Calcasieu Pass, Sabine Pass Train 6 (both U.S.) and
Woodfibre LNG (Canada). A further 90 mtpa of capacity could also
reach FID in 2019 or 2020, including the Qatar Megatrain expansion,
Driftwood LNG and Freeport Train 4 (both U.S.), Rovuma LNG
(Mozambique), Costa Azul (Mexico) and the expansion of the PNG LNG
facilities in Papua New Guinea.
In contrast to these positive longer-term trends, the first
quarter saw relatively weak LNG commodity and shipping markets. A
combination of high inventory levels in key North East Asian gas
markets ahead of the 2018-2019 winter and relatively mild
temperatures during the winter period have led to reduced gas
consumption and Asian LNG prices reaching their lowest levels since
April 2016. Low LNG prices, particularly in North Asia, have
reduced the incentive in recent months to ship LNG cargoes from the
Atlantic Basin to the Pacific Basin, reducing tonne miles - a key
driver of demand for LNG spot shipping. Furthermore, front-end
weighting of 2019 LNG carrier newbuilding deliveries and
unscheduled downtime at facilities in Australia and Malaysia all
added to prompt shipping availability. Poten estimates that the
number of monthly LNG cargo imports declined by 19% between
December 2018 and February 2019, compared to an 11% decline between
December 2017 and February 2018. There were 57 spot fixtures in the
first quarter of 2019, a 19% decrease on the 70 spot fixtures in
the same period in 2018. Independent shipowners accounted for 47%
of spot fixtures in the first quarter, down from 51% in the same
period in 2018, while the average duration of a spot fixture in the
first quarter was broadly unchanged year-on-year at 28 days (29
days in the first quarter of 2018).
As a result of these trends in the first quarter, there was
ample prompt vessel availability against a backdrop of weaker than
expected demand due to warmer than normal winter temperatures. This
in turn impacted headline spot LNG shipping rates, fleet
utilization, positioning fees and ballast bonuses leading to a
marked decline in spot vessel earnings in the first quarter of 2019
relative to the fourth quarter of 2018. TFDE headline rates, as
reported by Clarksons, averaged $60,000 per day in the first
quarter of 2019, compared to $68,000 per day in the first quarter
of 2018 and $150,000 per day in the fourth quarter of 2018.
Headline TFDE spot rates are currently assessed at $34,000 per day,
with rates having stabilized in recent weeks as charterers look to
capitalize on the recent fall in rates to lock in shipping capacity
for the remainder of 2019 and into 2020. We expect that prompt
vessel availability will decline throughout 2019 and 2020 given the
significant forecast LNG supply additions outlined above. As a
result, we expect spot shipping rates to rise from current levels,
with the magnitude and duration of that recovery dependent on
several factors, particularly the pace and location of demand
growth and cooling and heating demand during the Northern
Hemisphere summer and winter respectively.
According to Poten, as of April 17, 2019, the LNG fleet and
orderbook (excluding floating storage and regasification units
(“FSRUs”) and vessels with capacity below 100,000 cbm) stood at 491
and 110 vessels respectively. Of the LNG carriers in the orderbook,
67, or 61%, are chartered on long-term contracts. 14 vessels were
ordered in the first quarter of 2019, compared to 17 and 20 vessels
in the first quarter of 2018 and the fourth quarter of 2018,
respectively. These figures provide early indications that newbuild
ordering may be slowing somewhat compared to newbuild ordering in
2018. This is a positive development which we believe is necessary
to avoid an overbuilt market in 2021 and 2022, a period when LNG
supply additions are forecast to slow before increasing again in
2023 and 2024.
New Charter Agreements
GasLog entered into a 12-year time charter
agreement with JERA for GasLog’s existing newbuild vessel, Hull No.
2274. The vessel, a 180,000 cbm Mark III Flex Plus carrier with
X-DF propulsion, previously referred to as LP-2S, is expected to
deliver from Samsung Heavy Industries Co. Ltd. (“Samsung”) in April
2020, at which point it will commence its 12-year time charter.
GasLog also entered into an eight-year time
charter agreement with a wholly owned subsidiary of Endesa for
GasLog’s existing newbuild vessel, the GasLog Warsaw. The vessel, a
180,000 cbm Mark III Flex Plus carrier with X-DF propulsion, is
expected to deliver from Samsung in the third quarter of 2019 and
to commence its charter to Endesa in May 2021.
Sale of the GasLog Glasgow
On March 13, 2019, GasLog entered into an agreement with GasLog
Partners to sell 100% of the ownership interest in GAS-twelve Ltd.,
the entity that owns the GasLog Glasgow. The vessel is currently on
time charter with a subsidiary of Shell through June 2026, and
Shell has a unilateral option to extend the term of the time
charter for a period of five years.
The aggregate sale price was $214.0 million, which included $1.0
million of positive net working capital balances transferred with
the entity. The sale closed on April 1, 2019.
Debt RefinancingOn
February 20, 2019, GasLog Partners entered into a credit
agreement with Credit Suisse AG, Nordea Bank Abp, filial i
Norge (“Nordea”) and Iyo Bank, Ltd., Singapore Branch, each an
original lender and Nordea acting as security agent and trustee for
and on behalf of the other finance parties mentioned above, of up
to $450.0 million, in order to refinance the existing indebtedness
due in November 2019 on five of its vessels. Subsequently, on the
same date, the Development Bank of Japan, Inc., entered the
facility as lender via a transfer certificate. The agreement
provides for an amortizing revolving credit facility which can be
repaid and redrawn at any time for a period of five years. The
total available facility amount will be reduced on a quarterly
basis, with a final balloon amount payable concurrently with the
last quarterly installment, if any, in February 2024. The vessels
covered by the 2019 Partnership Facility are the GasLog Shanghai,
the GasLog Santiago, the GasLog Sydney, the Methane Rita Andrea and
the Methane Jane Elizabeth. Interest on the 2019 Partnership
Facility is payable at a rate of U.S. dollar (“USD”) London
Interbank Offered Rate (“LIBOR”) plus 2.0%-2.2%, which represents a
reduced margin above LIBOR compared to the previous facility.
On March 6, 2019, the Partnership drew down $360.0 million under
the 2019 Partnership Facility, out of which $354.4 million was used
to refinance the outstanding debt of GAS-three Ltd., GAS-four Ltd.,
GAS-five Ltd., GAS-sixteen Ltd. and GAS-seventeen Ltd., the
respective entities owning the GasLog Shanghai, the GasLog
Santiago, the GasLog Sydney, the Methane Rita Andrea and the
Methane Jane Elizabeth.
Delivery of the GasLog
GladstoneOn March 15, 2019, GasLog took delivery of the
GasLog Gladstone, a 174,000 cbm LNG carrier with X-DF propulsion
constructed by Samsung. Upon delivery, the vessel commenced a
10-year charter with Shell.
Appointment of COO
Designate
On April 23, 2019, GasLog and GasLog Partners announced that
Paolo Enoizi has been appointed as COO Designate with effect from
August 2019. Mr Enoizi was most recently Managing Director of Stolt
Tankers BV Rotterdam, a subsidiary of Stolt Nielsen Limited, where
he was responsible for the operation of over 100
chemical tankers, 200 people ashore and over 4,000
seafarers. His previous roles also included Director of
Technical & Innovation and General Manager of Newbuilding &
Technical. Mr Enoizi will be based in Piraeus, Greece and
will initially work alongside our current COO Richard Sadler to
ensure a smooth transition of responsibilities.
Alexandroupolis Project
Update
During the first quarter, there was continued progress on the
Alexandroupolis FSRU project workstreams. Preparation for the
binding phase of the European-regulated capacity commitment process
(the “Market Test”) continued during the period. Expressions of
interest (“EOI”) for the procurement of the FSRU and the
construction of the pipeline and offshore installation have been
received and several EOIs have been shortlisted. Tenders for the
two separate infrastructure elements of the terminal project are
expected to be launched in May. DEPA, the Greek state natural gas
utility, and Bulgartransgaz, the Bulgarian national gas
transmission system operator, are both in the process of
formalizing their respective shareholdings in Gastrade. The timing
of an FID, which Gastrade had previously guided to mid-2019, is
subject to successful conclusions of the workstreams described
above, as well as successful completion of financing and state aid
discussions, and decisions by various regulatory bodies. GasLog
will provide further updates on project progress and timing of FID
as appropriate.
Share/Unit Repurchase
Programme
On November 28, 2018, the Company announced that its board
of directors had approved a share repurchase programme of up to
$50.0 million of the Company’s common shares, covering the
period from January 1, 2019 to December 31, 2021. Under
the terms of the repurchase programme, the Company may repurchase
common shares from time to time, at the Company’s discretion, on
the open market or in privately negotiated transactions. Any
repurchases are subject to market conditions, applicable legal
requirements and other considerations. The Company is not obligated
under the repurchase programme to repurchase any specific dollar
amount or number of common shares, and the repurchase programme may
be modified, suspended or discontinued at any time or never
utilized. Any common shares repurchased by the Company under the
programme will be held in treasury. As of March 31, 2019, 212,111
shares have been acquired at a total cost of $3.8 million and are
included in treasury shares. The average cost of the repurchase was
$17.69 per share inclusive of all fees and commissions.
On January 29, 2019, the board of directors of GasLog Partners
authorized a unit repurchase programme of up to $25.0 million
covering the period from January 31, 2019 to December 31, 2021.
Under the terms of the repurchase programme, the Partnership may
repurchase common units from time to time, at its discretion, on
the open market or in privately negotiated transactions. Any
repurchases are subject to market conditions, applicable legal
requirements and other considerations. The Partnership is not
obligated under the repurchase programme to repurchase any specific
dollar amount or number of common units, and the repurchase
programme may be modified, suspended or discontinued at any time or
never utilized. As of May 3, 2019, 50,000 units have been
repurchased at a total cost of $1.0 million. The average cost of
the repurchase was $20.89 per unit inclusive of all fees and
commissions.
Dividend Declaration
On March 7, 2019, 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 April 1, 2019 to holders of
record as of March 29, 2019. GasLog paid the declared dividend to
the transfer agent on March 29, 2019.
On May 2, 2019, the board of directors declared a quarterly cash
dividend of $0.15 per common share, or $12.1 million in the
aggregate, payable on May 23, 2019 to shareholders of record as of
May 14, 2019.
Financial Summary
In thousands of U.S. dollars except per share
data |
|
For the three months ended |
|
|
|
March 31, 2018 |
|
|
March 31, 2019 |
|
Revenues |
|
$ |
138,478 |
|
|
$ |
166,547 |
|
EBITDA(1) |
|
$ |
95,880 |
|
|
$ |
109,790 |
|
Adjusted EBITDA(1) |
|
$ |
95,526 |
|
|
$ |
109,940 |
|
Profit for the
period |
|
$ |
42,541 |
|
|
$ |
5,899 |
|
Adjusted Profit(1) |
|
$ |
25,289 |
|
|
$ |
28,140 |
|
Profit/(loss)
attributable to the owners of GasLog |
|
$ |
19,304 |
|
|
$ |
(10,947 |
) |
EPS, basic |
|
$ |
0.21 |
|
|
$ |
(0.17 |
) |
Adjusted EPS(1) |
|
$ |
(0.01 |
) |
|
$ |
0.11 |
|
(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.
There were 2,350 operating days for the quarter ended March 31,
2019, as compared to 2,162 operating days for the quarter ended
March 31, 2018. The increase in operating days resulted mainly from
the full operation of the GasLog Houston, the GasLog Hong Kong and
the GasLog Genoa, delivered on January 8, 2018, March 20, 2018 and
March 29, 2018, respectively, and delivery of the GasLog Gladstone
on March 15, 2019.
Revenues were $166.5 million for the quarter ended March 31,
2019 ($138.5 million for the quarter ended March 31, 2018). The
increase was mainly driven by the full operation of the vessels
delivered in 2018 (the GasLog Houston, the GasLog Hong Kong and the
GasLog Genoa) and the new vessel delivered to our fleet during the
quarter ended March 31, 2019 (the GasLog Gladstone) and the
increased revenues from vessels operating in the spot market due to
their increased number and utilization and the increase in the
daily rates achieved by the GasLog vessels. The above increases
were partially offset by the expiration of the initial time
charters of the GasLog Shanghai, the GasLog Santiago and the GasLog
Sydney.
GasLog recognized gross revenues and gross voyage expenses and
commissions of $32.1 million and $4.7 million, respectively, from
the operation of its vessels in the LNG carrier pooling arrangement
(the “Cool Pool”) during the quarter ended March 31, 2019 ($13.4
million and $3.5 million for the quarter ended March 31, 2018,
respectively). Net pool allocation was a negative $6.7 million for
the quarter ended March 31, 2019 (positive $8.7 million for the
quarter ended March 31, 2018). The variances were attributable to
the movement in the adjustment of the net pool results generated by
the GasLog vessels in accordance with the pool distribution formula
for the total fleet of the pool. The increase in GasLog’s total net
pool performance during the quarter ended March 31, 2019 compared
to the quarter ended March 31, 2018 was driven by the increase in
the number of GasLog vessels operating in the Cool Pool, partially
offset by the lower spot rates. GasLog’s total net pool performance
is presented below:
|
|
|
|
For the three months ended |
|
|
|
|
|
March 31, 2018 |
|
|
March 31, 2019 |
|
Amounts in
thousands of U.S. Dollars |
|
|
|
|
|
|
|
|
Pool gross revenues
(included in Revenues) |
|
|
|
13,405 |
|
|
32,142 |
|
Pool gross voyage
expenses and commissions (included in Voyage expenses and
commissions) |
|
|
|
(3,538 |
) |
|
(4,677 |
) |
GasLog’s adjustment for
net pool allocation (included in Net pool allocation) |
|
|
|
8,653 |
|
|
(6,738 |
) |
GasLog’s total
net pool performance |
|
|
|
18,520 |
|
|
20,727 |
|
Voyage expenses and commissions were $6.9 million for the
quarter ended March 31, 2019 ($5.3 million for the quarter ended
March 31, 2018). The increase resulted from the increased bunkers
consumption of the vessels operating in the spot market.
Vessel operating and supervision costs were $33.0 million for
the quarter ended March 31, 2019 ($34.3 million for the quarter
ended March 31, 2018). The decrease was mainly attributable to the
decrease in employee costs, crew wages and technical maintenance
expenses, mainly due to the favorable movement of the Euro
(“EUR”)/USD exchange rate, and a decrease in vessel taxes. As a
result, daily operating costs per vessel decreased from $16,512 per
day for the three-month period ended March 31, 2018 to $14,550 per
day for the three-month period ended March 31, 2019.
General and administrative expenses were $10.4 million for the
quarter ended March 31, 2019 ($12.0 million for the quarter ended
March 31, 2018). The decrease is mainly attributable to a decrease
in employee costs, which were mainly affected by the favorable
movement of the USD against the EUR and the British pound (“GBP”).
GasLog has entered into forward foreign exchange contracts to
economically hedge part of this exposure and the associated
realized gains/losses are recorded in Gain/(loss) on derivatives,
which is discussed below.
Following the implementation of IFRS 16 Leases on January 1,
2019, the Group’s leases on vessel equipment, office equipment and
properties are recognized as a right-of-use asset and a
corresponding liability on the date when the leased assets are
available for use by the Group. Each lease payment is allocated
between the liability and finance cost. The finance cost is charged
to profit or loss over the lease period to produce a constant
periodic rate of interest on the remaining balance of the liability
for each period. The right-of-use asset is depreciated over the
shorter of the asset's useful life and the lease term on a
straight-line basis. Historically, the respective expenses were
included in Vessel operating and supervision costs ($0.3 million
for the three months ended March 31, 2018) and General and
administrative expenses ($0.2 million for the three months ended
March 31, 2018).
Depreciation was $39.6 million for the quarter ended March 31,
2019 ($35.5 million for the quarter ended March 31, 2018). The
increase resulted from the deliveries of the GasLog Houston, the
GasLog Hong Kong, the GasLog Genoa and the GasLog Gladstone on
January 8, 2018, March 20, 2018, March 29, 2018 and March 15, 2019,
respectively.
Financial costs were $45.5 million for the quarter ended March
31, 2019 ($36.6 million for the quarter ended March 31, 2018). The
increase was mainly attributable to the increased weighted average
interest rate deriving from the upward movement of the LIBOR and to
the increased weighted average outstanding indebtedness. An
analysis of the financial costs is presented below:
(All amounts
expressed in thousands of U.S. dollars) |
|
|
|
For the three months ended |
|
|
|
|
|
|
|
March 31, 2018 |
|
March 31, 2019 |
|
|
Financial
costs |
|
|
|
|
|
|
|
|
|
|
|
Amortization and write-off of deferred loan/bond issuance
costs |
|
|
$ |
(2,912 |
) |
$ |
(4,161 |
) |
|
Interest
expense on loans |
|
|
|
(23,197 |
) |
|
(30,591 |
) |
|
Interest
expense on bonds and realized loss on cross-currency swaps |
|
|
|
(7,473 |
) |
|
(7,483 |
) |
|
Lease
charge |
|
|
|
(2,628 |
) |
|
(2,629 |
) |
|
Other
financial costs |
|
|
|
(387 |
) |
|
(643 |
) |
|
Total |
|
|
|
|
$ |
(36,597 |
) |
$ |
(45,507 |
) |
|
Loss on derivatives was $20.2 million for the quarter ended
March 31, 2019 ($17.8 million gain for the quarter ended March 31,
2018). The decrease in gain on derivatives in the first quarter of
2019, as compared to the first quarter of 2018, is mainly
attributable to a decrease of $38.3 million in gain from
mark-to-market valuation of our derivative financial instruments
carried at fair value through profit or loss, derived mainly from
changes in the LIBOR curve. An analysis of gain/(loss) on
derivatives is presented below:
(All amounts
expressed in thousands of U.S. dollars) |
|
|
|
For the three months ended |
|
|
|
|
|
|
|
March 31, 2018 |
|
March 31, 2019 |
|
|
Gain/(loss) on
derivatives |
|
|
|
|
|
|
|
|
|
|
|
Realized
(loss)/gain on derivatives held for trading |
|
|
$ |
(613 |
) |
$ |
1,735 |
|
|
Realized
gain/(loss) on forward foreign exchange contracts held for
trading |
|
|
|
1,486 |
|
|
(876 |
) |
|
Unrealized
gain/(loss) on derivative financial instruments held for
trading |
|
|
|
17,161 |
|
|
(21,150 |
) |
|
Ineffective
portion of cash flow hedges |
|
|
|
(263 |
) |
|
47 |
|
|
Total |
|
|
|
|
$ |
17,771 |
|
$ |
(20,244 |
) |
|
Profit was $5.9 million for the quarter ended March 31, 2019
($42.5 million for the quarter ended March 31, 2018). This decrease
in profit is mainly attributable to the unfavorable movement in
mark-to-market valuations of our derivative financial instruments
in the first quarter of 2019 and the increase in finance costs,
partially offset by the increased profit from operations, due to
the factors mentioned above.
Adjusted Profit(1) was $28.1 million for the quarter ended March
31, 2019 ($25.3 million for the quarter ended March 31, 2018)
adjusted for the effects of the non-cash loss/gain on derivatives,
the write-off and accelerated amortization of unamortized loan fees
as a result of the debt refinancing mentioned above and the net
foreign exchange losses/gains.
Loss attributable to the owners of GasLog was $10.9 million for
the quarter ended March 31, 2019 ($19.3 million profit for the
quarter ended March 31, 2018). The decrease in profit attributable
to the owners of GasLog resulted mainly from the respective
movements in profit mentioned above, partially offset by the
decreased amount allocated to third parties following the decreased
Partnership’s profit.
EBITDA(1) was $109.8 million for the quarter ended March 31,
2019 ($95.9 million for the quarter ended March 31, 2018). The
increase in EBITDA was driven by the increase in revenues, the
decrease in general and administrative expenses and the decrease in
vessels operating and supervision costs, partially offset by the
decrease in the net pool allocation and the increase in voyage
expenses and commissions as discussed above.
Adjusted EBITDA(1) was $109.9 million for the quarter ended
March 31, 2019 ($95.5 million for the quarter ended March 31,
2018).
EPS was a loss of $0.17 for the quarter ended
March 31, 2019 ($0.21 earnings for the quarter ended March 31,
2018). The decrease in earnings per share is mainly attributable to
the respective movements in profit attributable to the owners of
GasLog discussed above.
Adjusted EPS(1) was $0.11 for the quarter ended
March 31, 2019 (loss of $0.01 for the quarter ended March 31,
2018), adjusted for the effects of the non-cash loss/gain on
derivatives, the write-off and accelerated amortization of
unamortized loan fees and the net foreign exchange
losses/gains.
(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.
Contracted Charter Revenues
As of March 31, 2019, the total future firm contracted revenue
stood at $4.0 billion(1), including the 15 vessels currently 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
dry-docking; (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 March 31, 2019, GasLog had $230.8 million of cash and cash
equivalents, of which $127.5 million was held in time deposits and
the remaining balance in current accounts. In addition, as of March
31, 2019, GasLog had $10.0 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.
On March 6, 2019, the respective subsidiaries of GasLog Partners
drew down $360.0 million under the 2019 Partnership Facility and
prepaid in full their aggregate outstanding debt of $354.5 million,
which would have been due in November 2019.
As of March 31, 2019, GasLog had an aggregate of $2.9 billion of
indebtedness outstanding under its credit facilities and bond
agreements, of which $172.7 million was repayable within one year,
and $212.1 million of lease liabilities, of which $9.0 million was
payable within one year.
As of March 31, 2019, there was undrawn available capacity of
$100.0 million under the revolving credit facility of the credit
agreement of up to $1.1 billion entered into on July 19, 2016 (the
“Legacy Facility Refinancing”). In addition, there was unused
availability of $90.0 million under the 2019 Partnership
Facility.
As of March 31, 2019, the total remaining balance of the
contract prices of the eight LNG carriers on order was $1,343.6
million, which GasLog expects to be funded with cash balances, cash
from operations and borrowings under new debt agreements.
As of March 31, 2019, GasLog’s current assets totaled $287.1
million, while current liabilities totaled $268.2 million,
resulting in a positive working capital position of $18.9 million.
GasLog has hedged 46.2% of its expected floating interest rate
exposure on its outstanding debt (excluding the lease liability) as
of March 31, 2019.
Future Deliveries
GasLog has eight newbuildings on order at Samsung which are on
schedule and within budget:
LNG Carrier |
|
Year Built(1) |
|
Shipyard |
|
Cargo Capacity (cbm) |
|
Charterer |
|
Propulsion |
|
Estimated Charter Expiration(2) |
|
|
GasLog Warsaw |
|
Q3
2019 |
|
Samsung |
|
180,000 |
|
Endesa |
|
X-DF |
|
2029(3) |
Hull No. 2213 |
|
Q2
2020 |
|
Samsung |
|
180,000 |
|
Centrica(4) |
|
X-DF |
|
2027 |
Hull No. 2274 |
|
Q2
2020 |
|
Samsung |
|
180,000 |
|
JERA |
|
X-DF |
|
2032 |
Hull No. 2262 |
|
Q3
2020 |
|
Samsung |
|
180,000 |
|
Centrica(4) |
|
X-DF |
|
2027 |
Hull No. 2300 |
|
Q4
2020 |
|
Samsung |
|
174,000 |
|
Cheniere(5) |
|
X-DF |
|
2027 |
Hull No. 2301 |
|
Q4
2020 |
|
Samsung |
|
174,000 |
|
Cheniere(5) |
|
X-DF |
|
2027 |
Hull No. 2311 |
|
Q2
2021 |
|
Samsung |
|
180,000 |
|
Cheniere(5) |
|
X-DF |
|
2028 |
Hull No. 2312 |
|
Q3
2021 |
|
Samsung |
|
180,000 |
|
Cheniere(5) |
|
X-DF |
|
2028 |
____________(1)
Expected delivery quarters are presented.
(2) Charter expiration to be
determined based upon actual date of delivery.
(3) The charter is expected to
commence in May 2021. (4) The vessel
is chartered to Pioneer Shipping Limited, a wholly owned subsidiary
of Centrica plc (“Centrica”). (5) The
vessel is chartered to a wholly owned subsidiary of Cheniere
Energy, Inc. (“Cheniere”).
Conference Call
GasLog will host a conference call to discuss its results for
the first quarter of 2019 at 8:30 a.m. EDT (1:30 p.m. BST) on
Friday, May 3, 2019. Paul Wogan, Chief Executive Officer, and
Alastair Maxwell, 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:
+1 855 253 8928 (USA) +44 20 3107 0289 (United Kingdom) +33 1 70
80 71 53 (France)+852 3011 4522 (Hong Kong)
Conference ID: 2072487
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
of the webcast will be available on the Investor Relations page of
the Company’s website at
http://www.gaslogltd.com/investor-relations.
About GasLog
GasLog is an international owner, operator and manager of LNG
carriers providing support to international energy companies as
part of their LNG logistics chain. GasLog’s consolidated owned
fleet consists of 34 LNG carriers (26 ships on the water and eight
on order). GasLog also has an additional LNG carrier which was sold
to a subsidiary of Mitsui & Co., Ltd. and leased back under a
long-term bareboat charter. GasLog’s consolidated fleet currently
includes 15 LNG carriers in operation owned by GasLog Partners.
GasLog’s principal executive offices are at Gildo Pastor Center, 7
Rue du Gabian, MC 98000, Monaco. Visit GasLog’s website at
http://www.gaslogltd.com.
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 multi-year charter rates, ship values, factors
affecting supply and demand of LNG and LNG shipping, technological
advancements and opportunities for the profitable operations of LNG
carriers; • fluctuations in spot and multi-year charter
hire rates and vessel values;• increased exposure to
the spot market and fluctuations in spot charter rates;
• our ability to maximize the use of our vessels,
including the re-deployment or disposition of vessels which are not
under multi-year charters, including the risk that certain of our
vessels may no longer have the latest technology at such time which
may impact the rate at which we can charter such
vessels;• changes in our operating expenses, including
crew wages, maintenance, dry-docking and insurance costs and bunker
prices;• number of off-hire days and dry-docking
requirements including our ability to complete scheduled
dry-dockings on time and within budget;• planned
capital expenditures and availability of capital resources to fund
capital expenditures;• our ability to maintain
long-term relationships and enter into time charters with new and
existing customers;• fluctuations in prices for crude
oil, petroleum products and natural gas, including LNG;
• changes in the ownership of our charterers;
• our customers’ performance of their obligations under
our time charters and other contracts; • our future
operating performance and expenses, 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; • the
time that it may take to construct and deliver newbuildings and the
useful lives of our ships; • fluctuations in currencies
and interest rates;• the expected cost of and our
ability to comply with environmental and regulatory conditions,
including changes in laws and regulations or actions taken by
regulatory authorities, governmental organizations, classification
societies and standards imposed by our charterers applicable to our
business;• risks inherent in ship operation, including
the discharge of pollutants; • our ability to retain
key employees and the availability of skilled labour, 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 event; and
• other risks and uncertainties described in the
Company’s Annual Report on Form 20-F filed with the SEC on March 5,
2019 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.
Contacts:
Alastair MaxwellChief Financial OfficerPhone:
+44-203-388-3100
Phil CorbettHead of Investor Relations
Phone: +44-203-388-3116
Joseph NelsonDeputy Head of Investor RelationsPhone:
+1-212-223-0643
Email: ir@gaslogltd.com EXHIBIT I - Unaudited Interim
Financial Information
Unaudited condensed consolidated statements of financial
positionAs of December 31, 2018 and March 31,
2019(Amounts expressed in thousands of U.S.
Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 |
|
March 31, 2019 |
|
Assets |
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
9,511 |
|
|
9,511 |
|
Investment in
associates |
|
|
|
20,713 |
|
|
20,958 |
|
Deferred financing
costs |
|
|
|
4,576 |
|
|
— |
|
Other non-current
assets |
|
|
|
2,543 |
|
|
4,791 |
|
Derivative financial
instruments |
|
|
|
8,966 |
|
|
2,958 |
|
Tangible fixed
assets |
|
|
|
4,323,582 |
|
|
4,500,415 |
|
Vessels under
construction |
|
|
|
159,275 |
|
|
155,841 |
|
Right-of-use
assets |
|
|
|
206,753 |
|
|
212,918 |
|
Total
non-current assets |
|
|
|
4,735,919 |
|
|
4,907,392 |
|
Current
assets |
|
|
|
|
|
|
|
|
Trade and other
receivables |
|
|
|
20,244 |
|
|
19,368 |
|
Dividends receivable
and other amounts due from related parties |
|
|
|
33,395 |
|
|
5,330 |
|
Derivative financial
instruments |
|
|
|
6,222 |
|
|
4,236 |
|
Inventories |
|
|
|
7,753 |
|
|
11,932 |
|
Prepayments and other
current assets |
|
|
|
3,680 |
|
|
5,462 |
|
Short-term
investments |
|
|
|
25,000 |
|
|
10,000 |
|
Cash and cash
equivalents |
|
|
|
342,594 |
|
|
230,750 |
|
Total current
assets |
|
|
|
438,888 |
|
|
287,078 |
|
Total
assets |
|
|
|
5,174,807 |
|
|
5,194,470 |
|
Equity and
liabilities |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
Preference shares |
|
|
|
46 |
|
|
46 |
|
Share capital |
|
|
|
810 |
|
|
810 |
|
Contributed
surplus |
|
|
|
850,576 |
|
|
835,931 |
|
Reserves |
|
|
|
18,962 |
|
|
18,889 |
|
Treasury shares |
|
|
|
(3,266 |
) |
|
(7,018 |
) |
Retained earnings |
|
|
|
12,614 |
|
|
1,882 |
|
Equity
attributable to owners of the Group |
|
|
|
879,742 |
|
|
850,540 |
|
Non-controlling
interests |
|
|
|
1,103,380 |
|
|
1,093,729 |
|
Total
equity |
|
|
|
1,983,122 |
|
|
1,944,269 |
|
Current
liabilities |
|
|
|
|
|
|
|
|
Trade accounts
payable |
|
|
|
11,890 |
|
|
19,986 |
|
Ship management
creditors |
|
|
|
580 |
|
|
751 |
|
Amounts due to related
parties |
|
|
|
169 |
|
|
81 |
|
Derivative financial
instruments |
|
|
|
2,091 |
|
|
2,785 |
|
Other payables and
accruals |
|
|
|
127,450 |
|
|
62,957 |
|
Borrowings, current
portion |
|
|
|
520,550 |
|
|
172,686 |
|
Lease liability,
current portion |
|
|
|
6,675 |
|
|
8,959 |
|
Total current
liabilities |
|
|
|
669,405 |
|
|
268,205 |
|
Non-current
liabilities |
|
|
|
|
|
|
|
|
Derivative financial
instruments |
|
|
|
10,001 |
|
|
22,952 |
|
Borrowings, non-current
portion |
|
|
|
2,307,909 |
|
|
2,748,035 |
|
Lease liability,
non-current portion |
|
|
|
199,424 |
|
|
203,100 |
|
Other non-current
liabilities |
|
|
|
4,946 |
|
|
7,909 |
|
Total
non-current liabilities |
|
|
|
2,522,280 |
|
|
2,981,996 |
|
Total equity
and liabilities |
|
|
|
5,174,807 |
|
|
5,194,470 |
|
Unaudited condensed consolidated statements of profit or
lossFor the three months ended March
31, 2018 and 2019(Amounts
expressed in thousands of U.S. Dollars, except per share
data)
|
|
|
|
|
For the three months ended |
|
|
|
|
|
|
March 31, 2018 |
|
March 31, 2019 |
|
Revenues |
|
|
|
|
|
|
138,478 |
|
|
166,547 |
|
Net pool
allocation |
|
|
|
|
|
|
8,653 |
|
|
(6,738 |
) |
Voyage expenses and
commissions |
|
|
|
|
|
|
(5,281 |
) |
|
(6,917 |
) |
Vessel operating and
supervision costs |
|
|
|
|
|
|
(34,313 |
) |
|
(32,970 |
) |
Depreciation |
|
|
|
|
|
|
(35,529 |
) |
|
(39,599 |
) |
General and
administrative expenses |
|
|
|
|
|
|
(12,013 |
) |
|
(10,377 |
) |
Profit from
operations |
|
|
|
|
|
|
59,995 |
|
|
69,946 |
|
Financial costs |
|
|
|
|
|
|
(36,597 |
) |
|
(45,507 |
) |
Financial income |
|
|
|
|
|
|
1,016 |
|
|
1,459 |
|
Gain/(loss) on
derivatives |
|
|
|
|
|
|
17,771 |
|
|
(20,244 |
) |
Share of profit of
associates |
|
|
|
|
|
|
356 |
|
|
245 |
|
Total other
expenses, net |
|
|
|
|
|
|
(17,454 |
) |
|
(64,047 |
) |
Profit for the
period |
|
|
|
|
|
|
42,541 |
|
|
5,899 |
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
Owners of the
Group |
|
|
|
|
|
|
19,304 |
|
|
(10,947 |
) |
Non-controlling
interests |
|
|
|
|
|
|
23,237 |
|
|
16,846 |
|
|
|
|
|
|
|
|
42,541 |
|
|
5,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss)
per share – basic and diluted |
|
|
|
|
|
|
0.21 |
|
|
(0.17 |
) |
Unaudited condensed consolidated statements of cash
flowsFor the three months ended March
31, 2018 and
2019(Amounts expressed in thousands of U.S.
Dollars)
|
|
|
|
For the three months ended |
|
|
|
|
March 31, 2018 |
|
March 31, 2019 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
Profit for the
period |
|
|
|
|
|
42,541 |
|
|
5,899 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
35,529 |
|
|
39,599 |
|
Share of profit of
associates |
|
|
|
|
|
(356 |
) |
|
(245 |
) |
Financial income |
|
|
|
|
|
(1,016 |
) |
|
(1,459 |
) |
Financial costs |
|
|
|
|
|
36,597 |
|
|
45,507 |
|
Unrealized foreign
exchange (gains)/losses on cash and cash equivalents |
|
|
|
|
|
(459 |
) |
|
131 |
|
Unrealized (gain)/loss
on derivative financial instruments held for trading including
ineffective portion of cash flow hedges |
|
|
|
|
|
(16,898 |
) |
|
21,103 |
|
Share-based
compensation |
|
|
|
|
|
1,186 |
|
|
1,322 |
|
|
|
|
|
|
|
97,124 |
|
|
111,857 |
|
Movements in working
capital |
|
|
|
|
|
(13,692 |
) |
|
(11,676 |
) |
Cash provided
by operations |
|
|
|
|
|
83,432 |
|
|
100,181 |
|
Interest paid |
|
|
|
|
|
(40,154 |
) |
|
(57,467 |
) |
Net cash
provided by operating activities |
|
|
|
|
|
43,278 |
|
|
42,714 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
Payments for tangible
fixed assets and vessels under construction |
|
|
|
|
|
(547,021 |
) |
|
(220,549 |
) |
Return of capital
expenditures |
|
|
|
|
|
— |
|
|
5,629 |
|
Dividends received from
associate |
|
|
|
|
|
125 |
|
|
538 |
|
Purchase of short-term
investments |
|
|
|
|
|
(10,000 |
) |
|
(10,000 |
) |
Maturity of short-term
investments |
|
|
|
|
|
— |
|
|
25,000 |
|
Restricted cash |
|
|
|
|
|
(4,915 |
) |
|
— |
|
Financial income
received |
|
|
|
|
|
874 |
|
|
1,363 |
|
Net cash used
in investing activities |
|
|
|
|
|
(560,937 |
) |
|
(198,019 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
Proceeds from bank
loans and bonds |
|
|
|
|
|
498,225 |
|
|
525,805 |
|
Bank loan
repayments |
|
|
|
|
|
(83,938 |
) |
|
(426,208 |
) |
Payment of loan
issuance costs |
|
|
|
|
|
(6,753 |
) |
|
(7,780 |
) |
Proceeds from GasLog
Partners’ public offerings (net of underwriting discounts and
commissions) |
|
|
|
|
|
111,544 |
|
|
— |
|
Payment of equity
raising costs |
|
|
|
|
|
(315 |
) |
|
(668 |
) |
Dividends paid |
|
|
|
|
|
(34,673 |
) |
|
(41,418 |
) |
Purchase of treasury
shares |
|
|
|
|
|
(62 |
) |
|
(3,751 |
) |
Payments for lease
liability |
|
|
|
|
|
(1,773 |
) |
|
(2,388 |
) |
Net cash
provided by financing activities |
|
|
|
|
|
482,255 |
|
|
43,592 |
|
Effects of exchange
rate changes on cash and cash equivalents |
|
|
|
|
|
459 |
|
|
(131 |
) |
Decrease in
cash and cash equivalents |
|
|
|
|
|
(34,945 |
) |
|
(111,844 |
) |
Cash and cash
equivalents, beginning of the period |
|
|
|
|
|
384,092 |
|
|
342,594 |
|
Cash and cash
equivalents, end of the period |
|
|
|
|
|
349,147 |
|
|
230,750 |
|
EXHIBIT II
Non-GAAP Financial Measures:
EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted
EPS
EBITDA is defined as earnings before depreciation, amortization,
financial income and costs, gain/loss on derivatives 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 fees/bond fees and
premium, foreign exchange gains/losses and non-cash gain/loss on
derivatives that includes (if any) (a) unrealized gain/loss on
derivative financial instruments held for trading, (b) recycled
loss of cash flow hedges reclassified to profit or loss and (c)
ineffective portion of cash flow hedges. Adjusted EPS represents
earnings attributable to owners of the Group adjusted for non-cash
gain/loss on derivatives as defined above, foreign exchange
gains/losses and write-off and accelerated amortization of
unamortized loan/bond fees and premium, all adjustments calculated
at Group level without deduction for non-controlling interests,
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 purchase and/or 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, financial costs, gain/loss on derivatives, 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 derivatives, foreign
exchange gains/losses and write-off and accelerated amortization of
unamortized loan fees, which items are affected by various and
possibly changing financing methods, financial market conditions,
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
operating 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 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 Profit to EBITDA and
Adjusted EBITDA:(Amounts expressed in
thousands of U.S. Dollars)
|
|
|
|
For the three months ended |
|
|
|
|
|
March 31, 2018 |
|
March 31, 2019 |
|
Profit for the
period |
|
|
|
|
|
42,541 |
|
|
5,899 |
|
Depreciation |
|
|
|
|
|
35,529 |
|
|
39,599 |
|
Financial costs |
|
|
|
|
|
36,597 |
|
|
45,507 |
|
Financial income |
|
|
|
|
|
(1,016 |
) |
|
(1,459 |
) |
(Gain)/loss on
derivatives |
|
|
|
|
|
(17,771 |
) |
|
20,244 |
|
EBITDA |
|
|
|
|
|
95,880 |
|
|
109,790 |
|
Foreign exchange
(gains)/losses, net |
|
|
|
|
|
(354 |
) |
|
150 |
|
Adjusted
EBITDA |
|
|
|
|
|
95,526 |
|
|
109,940 |
|
Reconciliation of Profit to Adjusted
Profit:(Amounts expressed in thousands of U.S.
Dollars)
|
|
|
|
For the three months ended |
|
|
|
|
|
March 31, 2018 |
|
March 31, 2019 |
|
Profit for the
period |
|
|
|
|
|
42,541 |
|
|
5,899 |
|
Non-cash (gain)/loss on
derivatives |
|
|
|
|
|
(16,898 |
) |
|
21,103 |
|
Write-off and
accelerated amortization of unamortized loan fees |
|
|
|
|
|
— |
|
|
988 |
|
Foreign exchange
(gains)/losses, net |
|
|
|
|
|
(354 |
) |
|
150 |
|
Adjusted
Profit |
|
|
|
|
|
25,289 |
|
|
28,140 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Earnings/(Loss) Per Share to Adjusted
(Loss)/Earnings Per Share:(Amounts expressed in
thousands of U.S. Dollars, except shares and per share
data)
|
|
|
|
For the three months ended |
|
|
|
|
|
March 31, 2018 |
|
March 31, 2019 |
|
Profit/(loss) for the
period attributable to owners of the Group |
|
|
|
|
|
19,304 |
|
|
(10,947 |
) |
Less: |
|
|
|
|
|
|
|
|
|
|
Dividend on preference
shares |
|
|
|
|
|
(2,516 |
) |
|
(2,516 |
) |
Profit/(loss) for the
period available to owners of the Group used in EPS
calculation |
|
|
|
|
|
16,788 |
|
|
(13,463 |
) |
Weighted average number
of shares outstanding, basic |
|
|
|
|
|
80,715,130 |
|
|
80,825,637 |
|
Earnings/(loss)
per share |
|
|
|
|
|
0.21 |
|
|
(0.17 |
) |
Profit/(loss) for the
period available to owners of the Group used in EPS
calculation |
|
|
|
|
|
16,788 |
|
|
(13,463 |
) |
Less: |
|
|
|
|
|
|
|
|
|
|
Non-cash (gain)/loss on
derivatives |
|
|
|
|
|
(16,898 |
) |
|
21,103 |
|
Write-off and
accelerated amortization of unamortized loan fees |
|
|
|
|
|
— |
|
|
988 |
|
Foreign exchange
(gains)/losses, net |
|
|
|
|
|
(354 |
) |
|
150 |
|
Adjusted (loss)/profit
attributable to owners of the Group |
|
|
|
|
|
(464 |
) |
|
8,778 |
|
Weighted average number
of shares outstanding, basic |
|
|
|
|
|
80,715,130 |
|
|
80,825,637 |
|
Adjusted
(loss)/earnings per share |
|
|
|
|
|
(0.01 |
) |
|
0.11 |
|
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