Financial

GasLog Partners LP Reports Financial Results for the Three-Month Period Ended September 30, 2015 and Increases Quarterly Cash Distribution by 10%

MONACO–(BUSINESS WIRE)–Oct. 29, 2015– GasLog Partners LP (“GasLog Partners” or the “Partnership”) (NYSE:GLOP), an international owner and operator of liquefied natural gas (“LNG”) carriers, today reported its financial results for the three-month period ended September 30, 2015.

Highlights

  • Record quarterly results attributable to the Partnership for Revenues(1), Profit(1), EBITDA(1), Adjusted EBITDA(1) and Distributable cash flow(1).
  • Increased quarterly cash distribution by 10% to $0.478 per unit for the third quarter of 2015, equivalent to $1.912 per unit on an annual basis.
  • Acquired three LNG carriers from GasLog Ltd. (“GasLog”) for $483.0 million ($480.0 million net of working capital) with attached multi-year charters to a subsidiary of BG Group plc (“BG Group”).
  • EBITDA(1) of $37.25 million and Adjusted EBITDA(1) of $37.31 million.
  • Distributable cash flow(1) of $21.47 million.
  • Distribution coverage ratio of 1.37x(2).
(1) Revenues, Profit, EBITDA, Adjusted EBITDA and Distributable cash flow are non-GAAP financial measures. For definitions and reconciliations of these measurements to the most directly comparable financial measures calculated and presented in accordance with International Financial Reporting Standards (“IFRS”), please refer to Exhibits II and III at the end of this press release.
(2) Distribution coverage ratio represents the ratio of Distributable cash flow over the Cash distribution declared.
 

CEO Statement

Mr. Andrew Orekar, Chief Executive Officer, commented: “GasLog Partners’ operating and financial performance this quarter has been strong. We achieved our highest ever quarterly results following the second successful drop-down acquisition since our initial public offering (“IPO”). As a result, we are increasing our cash distribution by 10%. With this increase, we have grown our distribution by a total of 27.5% since our IPO, or a 21% compound annual growth rate. Furthermore, our conservative coverage ratio of 1.37x for the quarter provides us the opportunity to consider future distribution increases without raising new capital.

This performance highlights the strength of GasLog Partners’ business model – long-term, fixed-rate charters with strong counterparties. We take no commodity price risk, and our fleet is 100% contracted through May 2018, when we expect significantly increased demand for LNG shipping. With the recently announced $1.3 billion credit facility at GasLog, our parent company does not require additional financing for its newbuilding program of 8 vessels, 7 of which have long-term charters and are eligible for drop-down into GasLog Partners. In total, we have a drop-down pipeline of 12 vessels, each with attractive contracts for future acquisition by the Partnership.

Despite energy market volatility, we are pleased with the strong performance of GasLog Partners for the quarter and continued stability of cash flow that supports our cash distribution.”

Cash Distribution

On October 28, 2015, the board of directors of GasLog Partners approved and declared a quarterly cash distribution of $0.478 per unit for the quarter ended September 30, 2015. The cash distribution is payable on November 12, 2015, to all unitholders of record as of November 9, 2015.

Acquisition of the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally and Completion of Equity Offering

On July 1, 2015, GasLog Partners acquired three LNG carriers, the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally from GasLog for $483.0 million, including $3.0 million of positive net working capital. To partially fund the acquisition, GasLog Partners completed an equity offering of 7,500,000 common units and issued 153,061 general partner units to GasLog. The public offering price was $23.90 per common unit. The total net proceeds after deducting underwriting discounts and other offering expenses were $175.52 million. The proceeds were used to partially finance the acquisition, with the balance financed through the assumption of the outstanding indebtedness secured by the acquired vessels.

GasLog originally acquired the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally from Methane Services Limited (“MSL”), a subsidiary of BG Group, on June 4, 2014, June 11, 2014 and June 25, 2014, respectively.

Results Attributable to the Partnership

The results and summary financial data presented below exclude amounts related to GAS-sixteen Ltd. and GAS-seventeen Ltd. (the owners of the Methane Rita Andrea and the Methane Jane Elizabeth, respectively) for the period prior to their transfer to the Partnership on September 29, 2014 and the amounts related to GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. (the owners of the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally, respectively) for the period prior to their transfer to the Partnership on July 1, 2015. While such amounts are reflected in the Partnership’s financial statements because the transfers to the Partnership were accounted for as a reorganization of entities under common control, (i) GAS-sixteen Ltd. and GAS-seventeen Ltd. were not owned by the Partnership prior to their transfer to the Partnership on September 29, 2014 and (ii) GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. were not owned by the Partnership prior to their transfer to the Partnership on July 1, 2015, and accordingly the Partnership was not entitled to the cash or results generated in the period prior to such transfers. The results and summary financial data presented below 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 the financial and operating performance of the Partnership excluding the effect of the common control accounting treatment. For a reconciliation with our unaudited condensed combined and consolidated financial statements, please refer to Exhibits II and III at the end of this press release.

      For the three months ended     % Change from  
(All amounts expressed in thousands of U.S. dollars)     September 30,

2014

  June 30,

2015

  September 30,

2015

    September 30,

2014

 

June 30,

2015

 
Revenues     21,335   32,943   51,453     141%   56%  
Profit     9,575   12,614   19,230     101%   52%  
Adjusted Profit     8,410   12,672   19,293     129%   52%  
EBITDA     15,895   23,531   37,247     134%   58%  
Adjusted EBITDA     15,829   23,588   37,310     136%   58%  
Distributable cash flow     9,426   14,111   21,466     128%   52%  
Cash distributions declared     9,239   14,046   15,712     70%   12%  
                           

The increased results are attributable to the additional operating days in the Partnership’s fleet deriving from the acquisitions of the Methane Rita Andrea and the Methane Jane Elizabeth on September 29, 2014 and the Methane Alison Victoria, the Methane Shirley Elisabeth and the Methane Heather Sally on July 1, 2015.

Fleet

Our fleet currently consists of eight LNG carriers, including three vessels with modern tri-fuel diesel electric propulsion technology and five Steam vessels that operate under long-term charters with MSL.

GasLog has a pipeline of 12 vessels which are eligible for future drop-down into GasLog Partners. This visible pipeline of assets provides multiple years of future potential distribution growth at the Partnership.

We believe that such options and acquisition rights provide us with significant built-in growth opportunities. We may also acquire vessels from shipyards or other third parties.

Liquidity and Financing

As of September 30, 2015, we had $78.20 million of cash and cash equivalents, of which $7.01 million was held in time deposits with original duration of less than three months.

As of September 30, 2015, we had an aggregate of $778.63 million of indebtedness outstanding under our credit facilities, including $30.0 million outstanding under the Partnership’s revolving credit facility with GasLog. An amount of $338.0 million of outstanding debt is repayable within one year. Current debt includes $315.50 million from the outstanding indebtedness of GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd., assumed on their acquisition. We are currently in active discussions with a number of banks for its refinancing. We expect this to be completed in the coming months.

Depending on market conditions, we may use derivative financial instruments to reduce the risks associated with fluctuations in interest rates. We expect over time to economically hedge a material proportion of our exposure to interest rate fluctuations in the future by entering into new interest rate swap contracts.

LNG Market Update and Outlook

There have been a number of positive developments within the LNG sector despite weaker market conditions. The Santos-backed Gladstone facility shipped its first gas cargo earlier this month with Korean Gas taking the first commissioning cargo. BG’s Curtis Train 2 also started up during the period following the successful launch of its first train at the end of 2014, where GasLog took the first cargo. The Australia Pacific project, backed by Origin, ConocoPhillips and Sinopec, is also expected to come online by the end of 2015. Chevron indicated first LNG from its Gorgon project may be delayed to early 2016 due to non-market related issues.

In the US, those projects that have taken final investment decision (“FID”) continue to make positive progress with Sabine Pass, the first US LNG export project, expected to start up by the end of 2015. After the quarter end, there was also news of the new $11 billion “G2” project in Louisiana, which is intending to file for Federal Energy Regulatory Commission (“FERC”) approval, having already received Department of Environment (“DOE”) approval to export gas to countries with free-trade agreements with the US. The project will have a nameplate capacity of 14 million tonnes per annum.

We expect LNG liquefaction projects that are under construction, have firm offtake agreements and committed financing to come online in a lower oil and gas price environment. Projects that have reached FID stage, but are yet to start production, represent over 100 million tonnes per annum of new LNG capacity.

Henry Hub is currently trading below $3 per million British Thermal Units (“mmbtu”), making US natural gas an attractively-priced fuel source for countries and companies looking to diversify away from dirtier fossil fuels such as oil and coal, often to comply with newly introduced carbon emission targets. With the price of LNG declining over the last year, particularly in Asia, we are seeing new demand centers emerging and growing requirements from existing importing nations looking to take advantage of cheaper gas, such as India. The number of importing countries is expected to rise rapidly as the next wave of LNG supply starts to gather momentum.

We remain confident for the long-term supply and demand outlook for LNG and LNG shipping.

Conference Call

GasLog Partners will host a conference call to discuss its results for the third quarter of 2015 at 8:30 a.m. EDT (12:30 p.m. London Time) on Thursday, October 29, 2015. Andrew Orekar, Chief Executive Officer, and Simon Crowe, Chief Financial Officer, will review the Partnership’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:
+1 866 427 2608 (USA)
+44 (0) 20 3107 0289 (United Kingdom)
+33 (0) 1 70 80 71 53 (France)
Passcode: 44965505
 

A live webcast of the conference call will also be available on the investor relations page of the Partnership’s website at:
http://www.gaslogmlp.com/investor-relations

For those unable to participate in the conference call, a replay will also be available from 2:00 p.m. EDT (6:00 p.m. London Time) on Thursday, October 29, 2015 until 11:59 p.m. EDT (4:59 a.m. London Time) on Thursday, November 5, 2015.

The replay dial-in numbers are as follows:
+1 855 859 2056 (USA)
+44 (0) 20 3107 0235 (United Kingdom)
+33 (0)1 70 80 71 79 (France)
Replay passcode: 44965505
 

About GasLog Partners

GasLog Partners is a growth-oriented master limited partnership focused on owning, operating and acquiring LNG carriers under long-term charters. GasLog Partners’ fleet consists of eight LNG carriers with an average carrying capacity of 148,750 cbm, each of which has a multi-year time charter. GasLog Partners’ executive offices are located at Gildo Pastor Center, 7 Rue du Gabian, MC 98000, Monaco. Visit the GasLog Partners website at http://www.gaslogmlp.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 Partnership expects, projects, believes or anticipates will or may occur in the future, particularly in relation to the Partnership’s operations, cash flows, financial position, liquidity and cash available for dividends or distributions, plans, strategies and business prospects and changes and trends in the Partnership’s business and the markets in which it operates. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the Partnership’s expectations and projections. Accordingly, you should not unduly rely on any forward-looking statements. Factors that might cause future results and outcomes to differ include:

  • LNG shipping market conditions and trends, including spot and long-term charter rates, ship values, factors affecting supply and demand of LNG and LNG shipping and technological advancements;
  • our ability to enter into time charters with new and existing customers;
  • changes in the ownership of our charterers;
  • our customers’ performance of their obligations under our time charters;
  • changing economic conditions and the differing pace of economic recovery in different regions of the world;
  • our future financial condition, liquidity and cash available for dividends and distributions;
  • our ability to obtain financing to fund capital expenditures, acquisitions and other corporate activities, the ability of our lenders to meet their funding obligations, and our ability to meet the restrictive covenants and other obligations under our credit facilities;
  • our ability to enter into shipbuilding contracts for newbuildings and our expectations about the availability of existing LNG carriers to purchase, as well as our ability to consummate any such acquisitions;
  • our expectations about the time that it may take to construct and deliver newbuildings and the useful lives of our ships;
  • number of off-hire days, drydocking requirements and insurance costs;
  • our anticipated general and administrative expenses;
  • fluctuations in currencies and interest rates;
  • our ability to maximize the use of our ships, including the re-employment or disposal of ships not under time charter commitments;
  • environmental and regulatory conditions, including changes in laws and regulations or actions taken by regulatory authorities;
  • requirements imposed by classification societies;
  • risks inherent in ship operation, including the discharge of pollutants;
  • availability of skilled labor, ship crews and management;
  • potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists;
  • potential liability from future litigation; and
  • other risks and uncertainties described in the Partnership’s Annual Report on Form 20-F filed with the SEC on February 17, 2015 and in the Prospectus Supplement filed with the SEC on June 22, 2015. Copies of the Annual Report, as well as subsequent filings, are available online at http://www.sec.gov.

The Partnership does not undertake to update any forward-looking statements as a result of new information or future events or developments except as may be required by law.

   
   

EXHIBIT I – Unaudited Interim Financial Information

 
   

Unaudited condensed combined and consolidated statements of financial position

As of December 31, 2014 and September 30, 2015

(All amounts expressed in U.S. Dollars)

 
                 
        December 31, 2014     September 30, 2015  
Assets                
Non-current assets                
Other non-current assets       2,063,026     2,088,174  
Vessels       1,311,857,369     1,285,826,918  
Total non-current assets       1,313,920,395     1,287,915,092  
Current assets                
Trade and other receivables       1,404,423     9,582,141  
Due from related parties       925,398     1,539,265  
Inventories       1,822,818     1,670,263  
Prepayments and other current assets       1,148,951     1,080,047  
Short-term investments       21,700,000      
Cash and cash equivalents       47,241,742     78,202,672  
Total current assets       74,243,332     92,074,388  
Total assets       1,388,163,727     1,379,989,480  
Partners’ equity and liabilities                
Partners’ equity                
Owners’ capital       146,163,067      

Common unitholders (14,322,358 units issued and outstanding as of
  December 31, 2014 and 21,822,358 units issued and outstanding as
  of September 30, 2015)

      324,967,226     505,059,460  

Subordinated unitholders (9,822,358 units issued and outstanding as of
  December 31, 2014 and September 30, 2015)

      77,087,950     58,705,445  

General partner (492,750 units issued and outstanding as of December 31,
  2014 and 645,811 units issued and outstanding as of September 30,
  2015)

      6,085,438     8,748,725  
Incentive distribution rights           1,049,739  
Total partners’ equity       554,303,681     573,563,369  
Current liabilities                
Trade accounts payable       3,300,909     3,078,633  
Due to related parties       10,333,093     1,099,942  
Other payables and accruals       23,635,954     30,753,494  
Borrowings – current portion       20,999,800     335,395,748  
Total current liabilities       58,269,756     370,327,817  
Non-current liabilities                
Borrowings – non-current portion       775,537,142     435,953,330  
Other non-current liabilities       53,148     144,964  
Total non-current liabilities       775,590,290     436,098,294  
Total partners’ equity and liabilities       1,388,163,727     1,379,989,480  
   
   

Unaudited condensed combined and consolidated statements of profit or loss

For the three and nine months ended September 30, 2014 and September 30, 2015

(All amounts expressed in U.S. Dollars)

 
               
      For the three months ended     For the nine months ended  
     

September 30,

2014

   

September 30,

2015

   

September 30,

2014

   

September 30,

2015

 
Revenues     51,121,634       51,452,562       106,720,681       147,735,540    
Vessel operating costs     (10,649,286 )     (10,791,334 )     (21,593,584 )     (34,279,878 )  
Depreciation     (11,175,757 )     (11,098,875 )     (22,547,311 )     (33,097,312 )  
General and administrative expenses     (2,335,343 )     (3,414,873 )     (4,300,432 )     (8,321,836 )  
Profit from operations     26,961,248       26,147,480       58,279,354       72,036,514    
Financial costs     (7,083,677 )     (6,922,543 )     (19,455,166 )     (20,315,817 )  
Financial income     14,757       4,818       25,502       23,998    
Gain/(loss) on interest rate swaps     342,816             (3,273,022 )        
Total other expenses, net     (6,726,104 )     (6,917,725 )     (22,702,686 )     (20,291,819 )  
Profit for the period     20,235,144       19,229,755       35,576,668       51,744,695    
Less:                          
Profit attributable to GasLog’s operations     (10,660,084 )           (22,178,644 )     (7,003,443 )  
Profit attributable to Partnership’s operations     9,575,060       19,229,755       13,398,024       44,741,252    
Partnership’s profit attributable to:                          
Common units     5,566,215       12,250,657       7,590,014       30,394,017    
Subordinated units     3,817,343       5,514,085       5,540,049       12,371,992    
General partner units     191,502       384,595       267,961       894,825    
Incentive distribution rights           1,080,418             1,080,418    
                           
Earnings per unit for the period, basic and diluted:                          
Common unit     0.56       0.56       0.77       1.79    
Subordinated unit     0.39       0.56       0.56       1.26    
General partner unit     0.48       0.60       0.67       1.64    
 
 

Unaudited condensed combined and consolidated statements of cash flows

For the nine months ended September 30, 2014 and September 30, 2015

(All amounts expressed in U.S. Dollars)

               
        For the nine months ended
       

September 30,

2014

   

September 30,

2015

Cash flows from operating activities:              
Profit for the period       35,576,668       51,744,695  
Adjustments for:              
Depreciation       22,547,311       33,097,312  
Financial costs       19,455,166       20,315,817  
Financial income       (25,502 )     (23,998 )
Unrealized gain on interest rate swaps held for trading       (1,029,988 )      
Recycled loss of cash flow hedges reclassified to profit or loss       2,320,723        
Recognition of share-based compensation             136,298  
        78,844,378       105,270,124  
Movements in working capital       16,976,990       (6,150,540 )
Cash provided by operations       95,821,368       99,119,584  
Interest paid       (10,647,865 )     (16,288,804 )
Net cash provided by operating activities       85,173,503       82,830,780  
Cash flows from investing activities:              
Payments for vessels       (787,591,288 )     (5,314,747 )
Financial income received       20,458       28,878  
Purchase of short-term investments       (20,694,481 )     (4,000,000 )
Maturity of short-term investments       4,502,327       25,700,000  
Net cash (used in)/provided by investing activities       (803,762,984 )     16,414,131  
Cash flows from financing activities:              
Borrowings drawdowns       542,500,000        
Borrowings repayments       (98,232,618 )     (26,875,000 )
Payment of loan issuance costs       (6,410,294 )     (916,454 )
Proceeds from public offering and issuance of general partner units, net of underwriters’ discount       322,797,097      

176,533,158

 
Cash distribution to GasLog in exchange for contribution of net assets       (183,897,158 )     (172,626,653 )
Payment of offering costs       (35,186 )     (1,068,297 )
Distributions paid       (4,130,202 )     (35,480,735 )
Dividend due to GasLog before vessels’ drop-down       (9,800,000 )     (7,850,000 )
Decrease of amounts due to shareholders       (13,728,649 )      
Capital contributions received       232,560,000        
Net cash provided by/(used in) financing activities       781,622,990       (68,283,981 )
Increase in cash and cash equivalents       63,033,509       30,960,930  
Cash and cash equivalents, beginning of the period       14,403,785       47,241,742  
Cash and cash equivalents, end of the period       77,437,294       78,202,672  
                   
                   

EXHIBIT II

Non-GAAP Financial Measures:

Comparison of Financial Statements and Results Attributable to the Partnership:

Our results and summary financial data presented below are derived from the unaudited condensed combined and consolidated financial statements of the Partnership. Prior to the closing of our IPO, we did not own any vessels. The presentation in our financial statements assumes that our business was operated as a separate entity prior to its inception. The transfer of the three initial vessels from GasLog to the Partnership at the time of the IPO, the transfer of the two vessels from GasLog to the Partnership in September 2014 and the transfer of an additional three vessels from GasLog to the Partnership in July 2015 was each accounted for as a reorganization of entities under common control. The unaudited condensed combined and consolidated financial statements include the accounts of the Partnership and its subsidiaries assuming that they are consolidated from the date of their incorporation by GasLog as they were under the common control of GasLog.

The results attributable to the Partnership presented below exclude amounts related to GAS-sixteen Ltd. and GAS-seventeen Ltd. for the period prior to their transfer to the Partnership on September 29, 2014 and the amounts related to GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. for the period prior to their transfer to the Partnership on July 1, 2015. While such amounts are reflected in the Partnership’s financial statements because the transfers to the Partnership were accounted for as a reorganization of entities under common control, (i) GAS-sixteen Ltd. and GAS-seventeen Ltd. were not owned by the Partnership prior to their transfer to the Partnership in September 2014 and (ii) GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. were not owned by the Partnership prior to their transfer to the Partnership in July 2015, and accordingly the Partnership was not entitled to the cash or results generated in the period prior to such transfers.

The results attributable to the Partnership 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 the financial and operating performance of the Partnership since our IPO. The results attributable to the Partnership should not be considered as an alternative to the measures of financial performance presented in accordance with IFRS.

         
      For the three months ended September 30, 2014  
(All amounts expressed in U.S. dollars)    

Attributable to

GasLog’s

operations

   

Attributable to

the Partnership

   

 

Total

 
Revenues     29,786,179       21,335,455       51,121,634    
Vessel operating costs     (7,003,340 )     (3,645,946 )     (10,649,286 )  
Depreciation     (7,092,747 )     (4,083,010 )     (11,175,757 )  
General and administrative expenses     (540,440 )     (1,794,903 )     (2,335,343 )  
Profit from operations     15,149,652       11,811,596       26,961,248    
Financial costs     (4,495,760 )     (2,587,917 )     (7,083,677 )  
Financial income     6,192       8,565       14,757    
Gain on interest rate swaps           342,816       342,816    
Total other expenses, net     (4,489,568 )     (2,236,536 )     (6,726,104 )  
Profit for the period     10,660,084       9,575,060       20,235,144    
         
         
      For the three months ended June 30, 2015  
(All amounts expressed in U.S. dollars)    

Attributable to

GasLog’s

operations

   

Attributable to

the Partnership

   

 

Total

 
Revenues     15,105,935       32,942,771       48,048,706    
Vessel operating costs     (4,734,232 )     (7,098,887 )     (11,833,119 )  
Depreciation     (4,037,656 )     (6,895,122 )     (10,932,778 )  
General and administrative expenses     (366,873 )     (2,312,982 )     (2,679,855 )  
Profit from operations     5,967,174       16,635,780       22,602,954    
Financial costs     (2,752,000 )     (4,030,068 )     (6,782,068 )  
Financial income           8,355       8,355    
Total other expenses, net     (2,752,000 )     (4,021,713 )     (6,773,713 )  
Profit for the period     3,215,174       12,614,067       15,829,241    
                     

Amounts reflected in the Partnership’s unaudited condensed combined and consolidated financial statements for the three months ended September 30, 2015 are fully attributable to the Partnership:

      For the three months ended September 30, 2015  
(All amounts expressed in U.S. dollars)    

Attributable to

GasLog’s

operations

   

Attributable to

the Partnership

   

 

Total

 
Revenues         51,452,562       51,452,562    
Vessel operating costs         (10,791,334 )     (10,791,334 )  
Depreciation         (11,098,875 )     (11,098,875 )  
General and administrative expenses         (3,414,873 )     (3,414,873 )  
Profit from operations         26,147,480       26,147,480    
Financial costs         (6,922,543 )     (6,922,543 )  
Financial income         4,818       4,818    
Total other expenses, net           (6,917,725 )     (6,917,725 )  
Profit for the period         19,229,755       19,229,755    
                         

EXHIBIT III

Non-GAAP Financial Measures:

EBITDA, Adjusted EBITDA and Adjusted Profit

EBITDA is defined as earnings before interest income and expense, gain/loss on interest rate swaps, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before foreign exchange gains/losses. Adjusted Profit represents earnings before non-cash gain/loss on interest rate swaps that includes (if any) (a) unrealized gain/loss on interest rate swaps held for trading, (b) loss at inception, (c) recycled loss of cash flow hedges reclassified to profit or loss and (d) ineffective portion of cash flow hedges, foreign exchange gains/losses and write-off of unamortized loan fees, if any. EBITDA, Adjusted EBITDA and Adjusted Profit, which are non-GAAP financial measures, are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and operating performance. The Partnership believes that these non-GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. The Partnership believes that including EBITDA, Adjusted EBITDA and Adjusted Profit 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 units. This increased comparability is achieved by excluding the potentially disparate effects between periods of, in the case of EBITDA and Adjusted EBITDA, interest, gains/losses on interest rate swaps, taxes, depreciation and amortization; in the case of Adjusted EBITDA, foreign exchange gains/losses; and in the case of Adjusted Profit, non-cash gain/loss on interest rate swaps, foreign exchange gains/losses and write-off of unamortized loan fees, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect results of operations between periods.

EBITDA, Adjusted EBITDA and Adjusted Profit 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 unit 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 often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. They are not adjusted for all non-cash income or expense items that are reflected in our statement of cash flows and other companies in our industry may calculate these measures differently than we do, limiting its usefulness as a comparative measure.

Certain numerical figures included in this press release have been rounded. Discrepancies in tables between totals and the sums of the amounts listed may occur due to such rounding.

   

Reconciliation of Adjusted Profit to Profit

(Amounts expressed in U.S. Dollars)

 
      For the three months ended  
      Attributable to the Partnership  
      September 30, 2014 (1)     June 30, 2015 (1)     September 30, 2015 (2)  
Profit for the period     9,575,060     12,614,067     19,229,755  
Depreciation     4,083,010     6,895,122     11,098,875  
Financial costs     2,587,917     4,030,068     6,922,543  
Financial income     (8,565 )   (8,355 )   (4,818 )
Gain on interest rate swaps     (342,816 )        
EBITDA     15,894,606     23,530,902     37,246,355  
Foreign exchange (gains)/losses, net     (65,679 )   57,587     63,290  
Adjusted EBITDA     15,828,927     23,588,489     37,309,645  
         

Reconciliation of Adjusted Profit to Profit

(Amounts expressed in U.S. Dollars)

 
      For the three months ended  
      Attributable to the Partnership  
      September 30, 2014 (1)     June 30, 2015 (1)     September 30, 2015 (2)  
Profit for the period     9,575,060     12,614,067     19,229,755  
Foreign exchange (gains)/losses, net     (65,679 )   57,587     63,290  
Non-cash gain on interest rate swaps     (1,099,577 )        
Adjusted Profit     8,409,804     12,671,654     19,293,045  
                     
(1) Excludes amounts related to GAS-sixteen Ltd. and GAS-seventeen Ltd. for the period prior to their transfer to the Partnership on September 29, 2014 and the amounts related to GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. for the period prior to their transfer to the Partnership on July 1, 2015. While such amounts are reflected in the Partnership’s financial statements because the transfers to the Partnership were accounted for as a reorganization of entities under common control, (i) GAS-sixteen Ltd. and GAS-seventeen Ltd. were not owned by the Partnership prior to their transfer to the Partnership in September 2014 and (ii) GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. were not owned by the Partnership prior to their transfer to the Partnership in July 2015, and accordingly the Partnership was not entitled to the cash or results generated in the period prior to such transfers.
 
(2) Amounts reflected in the Partnership’s unaudited condensed combined and consolidated financial statements for the three months ended September 30, 2015 are fully attributable to the Partnership.
 

Distributable Cash Flow

Distributable cash flow with respect to any quarter means Adjusted EBITDA, as defined above, after considering cash interest expense for the period, including realized loss on interest rate swaps (if any) and excluding amortization of loan fees, estimated drydocking and replacement capital reserves established by the Partnership. Estimated drydocking and replacement capital reserves represent capital expenditures required to renew and maintain over the long-term the operating capacity of, or the revenue generated by our capital assets. Distributable cash flow is a quantitative standard used by investors in publicly-traded partnerships to assess their ability to make quarterly cash distributions. Our calculation of Distributable cash flow may not be comparable to that reported by other companies. Distributable cash flow is a non-GAAP financial measure and should not be considered as an alternative to profit or any other indicator of the Partnership’s performance calculated in accordance with GAAP. The table below reconciles Distributable cash flow to Profit for the period attributable to the Partnership.

   

Reconciliation of Distributable Cash Flow to Profit:

 

(Amounts expressed in U.S. Dollars)

 
         
      For the three months ended  
      September 30, 2014 (1)     June 30, 2015(1)     September 30, 2015 (2)  
Partnership’s profit for the period     9,575,060     12,614,067     19,229,755  
Depreciation     4,083,010     6,895,122     11,098,875  
Financial costs     2,587,917     4,030,068     6,922,543  
Financial income     (8,565 )   (8,355 )   (4,818 )
Gain on interest rate swaps     (342,816 )        
EBITDA     15,894,606     23,530,902     37,246,355  
Foreign exchange (gains)/losses, net     (65,679 )   57,587     63,290  
Adjusted EBITDA     15,828,927     23,588,489     37,309,645  
Cash interest expense excluding amortization of loan fees     (2,982,447 )   (3,637,833 )   (6,159,395 )
Drydocking capital reserve     (727,016 )   (1,499,068 )   (2,669,872 )
Replacement capital reserve     (2,693,884 )   (4,340,466 )   (7,014,530 )
Distributable cash flow     9,425,580     14,111,122     21,465,848  
Other reserves (3)     (186,531 )   (64,838 )   (5,754,183 )
Cash distribution declared     9,239,049     14,046,284     15,711,665  
 
(1) Excludes amounts related to GAS-sixteen Ltd. and GAS-seventeen Ltd. for the period prior to their transfer to the Partnership on September 29, 2014 and the amounts related to GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. for the period prior to their transfer to the Partnership on July 1, 2015. While such amounts are reflected in the Partnership’s financial statements because the transfers to the Partnership were accounted for as a reorganization of entities under common control, (i) GAS-sixteen Ltd. and GAS-seventeen Ltd. were not owned by the Partnership prior to their transfer to the Partnership in September 2014 and (ii) GAS-nineteen Ltd., GAS-twenty Ltd. and GAS-twenty one Ltd. were not owned by the Partnership prior to their transfer to the Partnership in July 2015, and accordingly the Partnership was not entitled to the cash or results generated in the period prior to such transfers.
 
(2) Amounts reflected in the Partnership’s unaudited condensed combined and consolidated financial statements for the three months ended September 30, 2015 are fully attributable to the Partnership.
 
(3) Refers to reserves (other than the drydocking and replacement capital reserves) for the proper conduct of the business of the Partnership and its subsidiaries (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership and its subsidiaries).

 

Source: GasLog Partners LP

GasLog Partners LP
Simon Crowe, +44-203-388-3108
Chief Financial Officer
or
Jamie Buckland, +44-203-388-3116
Head of Investor Relations
ir@gaslogltd.com
or
Samaan Aziz, +1 212-223-0643
Investor Relations Manager
ir@gaslogltd.com

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