Dynagas LNG Partners LP (NYSE:DLNG) Q2 2020 Earnings Conference Call - Final Transcript

Sep 04, 2020 • 10:00 am ET

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Dynagas LNG Partners LP (NYSE:DLNG) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Thank you for standing by, ladies and gentlemen and welcome to the Dynagas LNG Partners' Conference Call on the Second Quarter 2020 Financial Results.

We have with us, Mr. Tony Lauritzen, Chief Executive Officer; and Mr. Michael Gregos, Chief Financial Officer of the Company. [Operator Instructions]

At this time, I would like to read the Safe Harbor statement. This conference call and slide presentation of the webcast contain certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties which may affect Dynagas LNG Partners' business prospects and results of operations. Such risks are fully disclosed in Dynagas LNG Partners' filings with the Securities and Exchange Commission.

And now, I will pass the floor to Mr. Lauritzen. Please go ahead, sir.

Executive
Tony Lauritzen

Good morning, everyone and thank you for joining us in our three and six months ended 30 June, 2020 earnings conference call. I'm joined today by our CFO, Michael Gregos. We have issued a press release announcing our results for the same period. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures as well as a discussion of why we believe this information to be useful in our press release.

Moving on to slide 3. We are pleased to report results for the three months and six months ended 30 June, 2020. Each of our six LNG carriers are operating under their respective term charters. For the second quarter of 2020, we reported net income of $6.4 million and earnings per common unit of $0.10 after accounting for $3.4 million in non-cash mark-to-market interest rate swap losses.

Adjusted net income and adjusted EBITDA were reported at $9.9 million and about $24.1 million, respectively. And adjusted earnings were reported at $0.20 per common unit, excluding non-cash mark-to-market interest rate swap losses. This improved performance is attributable to an increase in voyage revenues and a decrease in interest and finance costs compared to the corresponding period of 2019, coupled with stable vessel operating costs during this period.

Despite the ongoing operational challenges the industry is going through with respect to COVID-19, we are pleased to report 100% utilization for the fleet for the second quarter of 2020. The ongoing impact of COVID-19 has been operationally manageable due to our manager's COVID-19 response plan, which has been implemented with the support of our seafarers, employees and charterers for which we are grateful.

In August 2020, we entered into an at-the-market offering program pursuant to which the Partnership may offer and sell common units having an aggregate offering price up to $30 million of its common units. We expect that the ATM will be utilized selectively. And to-date, the Partnership has issued and sold 122,580 common units, resulting in net proceeds of $0.4 million under this ATM program. Going forward, we intend to continue our strategy of using our cash flow generation to delever our balance