In its second quarter results presentation, mixed fleet owner with major LNGC interests, Capital Product Partners (CPP), took a look at the LNG market’s future. Despite the seasonal softening of spot and term rates from the highs of the fourth quarter of 2022, demand for LNGCs remained strong, CPP said.
As of July 2023, the 174,000 cu m 12-month timecharter rate stood at $140,000 per day.
Overall, analysts expected the term market to tighten as the winter period approaches, particularly for modern vessels, due to increased commodity demand.
Trade patterns were consistent, with the bulk of US LNG heading to Europe, thus maintaining last year’s import levels.
Expected LNG trade growth is 4.4% for 2023, and 4.2% for 2024, reaching 432.9 mill tonnes per annum.
Corresponding tonne/mile trade growth is estimated at 4.5% for 2023 and 5.1% for 2024.
For the second quarter of this year, CPP reported a net income of $7.4 mill, or $15.4 mill before an impairment charge was taken into account from the agreed sale of a large bulk carrier.
Net income for 2Q22 was $20.4 mill.
Including the interest attributable to the general partner and the allocation of net income to unvested units, net income per common unit for 2Q23 was $0.36 or $0.75 before the impairment charge, compared to net income per common unit of $1 in 2Q22.
This decrease was primarily attributable to increased interest expense and finance costs, resulting from the rise in the Partnership’s total average debt and the increase in the weighted average interest rate, compared to the same period of 2022; the rise in operating expenses, as a result of the net increase in the average size of the fleet and costs incurred during scheduled maintenance of some of the vessels.
Total revenue for the quarter was $88.5 mill, compared to $74 mill during 2Q22.
This increase was primarily down to the revenue contributed by newbuilding vessels acquired by the Partnership, including the LNGC ‘Asterix I’, as well as a rise in the daily rate earned by two of the Partnership’s LNGCs, which came into effect on 1st September, 2022.
CPP’s contracted revenue backlog stood at $1.8 bill, with over 63% of the revenue coming from LNGCs with seven charters.
