GasLog Post 4Q 2014 Results
GasLog Ltd. and its subsidiaries an international owner, operator and manager of liquefied natural gas carriers, today reported its unaudited financial results for the quarter ended December 31, 2014.
• Agreement to acquire two additional LNG carriers from a subsidiary of BG Group plc (“BG Group”) for $460.0 million that will be chartered back to the same subsidiary of BG Group with average charters of 10 years, adding $590 million to our contracted revenue. (1)
• 16% increase in quarterly distribution from GasLog Partners LP (“GasLog Partners”) which exceeds the first Incentive Distribution Right (“IDR”) threshold, resulting in higher quarterly distributions to GasLog by $0.6 million.
• Earnings per share (“EPS”) of $0.11 (Q4 2013: $0.34), EBITDA(2) of $68.1 million (Q4 2013: $39.9 million) and Profit of $9.9 million (Q4 2013: $21.4 million) for the quarter ended December 31, 2014.
• Adjusted EPS(2) of $0.28 (Q4 2013: $0.28), Adjusted EBITDA(2) of $67.5 million (Q4 2013: $39.7 million) and Adjusted Profit(2) of $24.0 million (Q4 2013: $17.4 million) for the quarter ended December 31, 2014.
• Launched ‘GasLog 40:17’ Vision(3) at our Capital Markets Day on December 2, 2014.
• Quarterly dividend of $0.14 per common share payable on March 13, 2015.
(1) Contracted revenue calculations assume: (a) 365 revenue days per annum, with 30 off-hire days when the ship undergoes scheduled drydocking; (b) the two LNG carriers agreed to be acquired are delivered on schedule; and (c) no charterers’ exercise of any option to extend the terms of charters.
(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 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 of this press release.
(3) Future acquisitions of vessels are subject to various risks and uncertainties that include, but are not limited to, general LNG and LNG shipping market conditions and trends; 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 future financial condition and liquidity; our ability to obtain financing to fund acquisitions, banks’ ability to fund their financial commitments; and our ability to meet our obligations under our credit facilities.
Paul Wogan, Chief Executive Officer, stated “We continued to execute well on our business plan in what proved to be an active fourth quarter for GasLog. We launched the ‘GasLog 40:17’ Vision at our Capital Markets Day in December, which sets out our ambition to increase the consolidated fleet to 40 vessels by the end of 2017. Through adding vessels with attractive, long-term contracts with strong counterparties, our aim is to continue to add to our $3.2 billion(1) of contracted revenue.
The fourth quarter saw a fall in the oil price which negatively impacted the global energy sector. However, even against this volatile backdrop, we immediately made progress in realizing this ‘GasLog 40:17” Vision by contracting to acquire two 170,000 cbm tri-fuel diesel electric (“TFDE”) vessels from a subsidiary of BG Group with average charters of 10 years. This transaction, announced on December 22, 2014, is expected to close by the end of March 2015 and will increase the consolidated fleet to 27.25 vessels. We look forward to continuing this progress in 2015.
2014 was a transformational year for GasLog that saw the Company executing significant fleet growth through a combination of newbuilding orders and acquisitions. We also broadened our access to the capital markets through two GasLog equity raises, the GasLog Partners initial public offering (“IPO”) and a further NOK bond issue. We expect that even in the prevailing lower oil-price environment, 2015 will see significant new LNG liquefaction projects coming online and GasLog will continue to use its operational and financial platform to take advantage of further attractive opportunities in the market.”
(1)Includes the two vessel acquisition announced on December 22, 2014, which is expected to close by the end of March 2015.
On February 26, 2015, the board of directors declared a quarterly cash dividend of $0.14 per common share payable on March 13, 2015 to shareholders of record as of March 10, 2015.
Pending Vessels Acquisition
On December 22, 2014, GasLog entered into an agreement with a subsidiary of BG Group to acquire two LNG carriers, the Methane Becki Anne and the Methane Julia Louise, for a purchase price of $460.0 million (the “Pending Vessels Acquisition”). The vessels will be chartered back to the same subsidiary of BG Group for periods of nine and eleven years with further options for the charterer to extend the term of the time charter for each vessel by either three or five years. GasLog supervised the construction of the vessels and has technically managed both vessels since their delivery to a subsidiary of BG Group in 2010.
They have TFDE propulsion and on-board reliquefaction plants, which enable the vessels to operate on gas at a wider range of speeds more efficiently. The closing of the transaction is subject to the satisfaction of certain conditions, including the completion of definitive documentation. GasLog expects the transaction to close in the end of March 2015. Under the omnibus agreement with GasLog Partners, we will be required, within 30 days following the closing of the Pending Vessels Acquisition, to offer GasLog Partners the opportunity to purchase the vessels at the acquisition cost plus certain administrative costs.
Under that provision, GasLog Partners would be required to accept or reject our offer within an additional 30 days. We and GasLog Partners are discussing possible alternative arrangements under which GasLog Partners may have a significantly longer period to elect to acquire the vessels at fair market value. There can be no assurance that we and GasLog Partners will agree to any such alternative arrangements or that GasLog Partners will ultimately acquire the vessels.
Increase in GasLog Partners’ Distribution
On January 28, 2015, the Board of Directors of GasLog Partners approved a quarterly distribution of $0.4345, an increase of approximately 16% above the existing minimum quarterly distribution. This increase in distribution exceeds the first IDR threshold, resulting in higher quarterly distributions to GasLog by $0.6 million.
Delivery of GasLog Saratoga
On December 16, 2014, GasLog took delivery of the GasLog Saratoga, an LNG carrier of 155,000 cubic meters capacity with TFDE propulsion constructed by Samsung Heavy Industries Co. Ltd. The vessel was immediately put on a short-term contract with a subsidiary of BG Group.