Dynagas Posts $14.4MM Quarterly Net Profit

Dynagas LNG Partners LP has reported a 29.7 percent year-on-year rise in net income to $14.4 million for the second quarter, which it attributed to lower operational costs and higher deferred revenue amortization.

"The increase in Net Income for the three months ended June 30, 2023 was mainly attributable to the decrease in dry-docking and special survey costs, attributable to the scheduled drydocks of the Clean Energy and the Amur River [vessels], which were completed in April 2022 and July 2022, respectively, as well as to the increase in the deferred revenue amortization resulting from the escalating time charter rate which relates to the new time charter party agreement with Equinor ASA for the employment of the Arctic Aurora, which will commence in September 2023", the LNG shipping fleet operator said in a recent press release.

Athens-based Dynagas announced December 30 a deal with Equinor contracting the former's 2013-built ice-class Arctic Aurora for three years with a backlog revenue contribution of about $116.5 million. The stated date of delivery for the carrier to Equinor is September 2023.

Net profit for the April-June period translates to earnings per common share of $0.31. Net income adjusted for extraordinary or non-recurring items stood at $5.8 million, or $0.08 per common unit. The adjustments resulted in a weaker quarter compared to the April-June 2022 period, when Dynagas logged $9.1 million in adjusted net earnings. "This decrease is mainly attributable to the increase of interest and finance costs compared to the corresponding period of 2022", it said in a recent press release.

Before interest, tax, depreciation and amortization, adjusted profit for the second quarter of 2023 stood at $23.015 million. Operating activities generated $8.8 million in net cash, up 7.3 percent year on year "mainly as a result of working capital changes", the company said.

Dynagas collected $37.653 million in voyage revenues for the second quarter, up by both year-ago and prior-quarter comparisons. Besides the Equinor contract, more operating days for the Amur River and Clean Energy vessels resulted in the year-over-year increase, according to Dynagas.

"As of June 30, 2023, the Partnership had estimated contracted time charter coverage for 100 percent of its fleet estimated Available Days" through to 2027 with a total backlog revenue of $1.2 billion, it said. Backlog revenue may differ from actual collection due to "dry-docking and/or special survey downtime, maintenance projects, off-hire downtime and other factors", Dynagas noted.

Dynagas announced July 13 the signing of time charter agreements with NextDecade Corp. subsidiary Rio Grande LNG LLC, which add around $270 million to backlog revenue. The deals employ Arctic Aurora and Clean Energy for NextDecade's Brownsville, Texas export facility.

Dynagas entered the second half of the year with $52.9 million in cash, while its outstanding indebtedness stood at $444.6 million.

It said its operations are currently not affected by European Union and USA sanctions against Russia over the war in Ukraine. But Dynagas noted, "The full impact of the commercial and economic consequences of the Russian conflict with Ukraine is uncertain at this time".

Looking ahead, chief executive Tony Lauritzen said the outlook for the gas transport sector remains positive due to "increasing market sentiment that LNG is a necessary fuel for managing global emissions, as well as, ensuring energy security".

Dynagas currently operates six LNG carriers, which have a combined capacity of 32.28 million cubic feet (914,000 cubic meters), according to the company.

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