PR Newswire
HAMILTON, Bermuda, Feb. 28, 2017
HAMILTON, Bermuda, Feb. 28, 2017 /PRNewswire/ -- Höegh LNG Partners LP (NYSE: HMLP) (the "Partnership") today reported its preliminary financial results for the quarter ended December 31, 2016.
Highlights
Richard Tyrrell, Chief Executive Officer and Chief Financial Officer stated: "Höegh LNG Partners' fourth quarter financial results reflect strong operational performance and continued robust cash flow generation from our long-term fixed rate contracts.
During the fourth quarter, the Partnership announced and funded the acquisition of a 51% stake in the Höegh Grace entities, which closed on January 3, 2017. Through the acquisition, the Partnership has grown and diversified its asset base. The Höegh Grace operations will contribute to the Partnership's results for the full first quarter of 2017 and management reaffirms its intention to recommend to the Partnership's board an increase in distribution by 4 – 5% for the first quarter 2017 as a result of the acquisition.
Höegh LNG Partners' looks forward to furthering its growth with the acquisition of the remaining 49% stake in the Höegh Grace where it holds a right-of-first-offer with Höegh LNG Holdings Ltd. ("Höegh LNG"). It also looks forward to the opportunity to acquire in, due course, two new twenty-year FSRU contracts announced in the quarter by Höegh LNG. Any such FSRU acquisitions will be subject to completion of the related LNG projects, delivery and acceptance of the FSRU, third party and regulatory approvals and approval of the price and other terms of the acquisition by the Partnership's conflicts committee and the Höegh LNG board."
1 | Segment EBITDA is a non-GAAP financial measure used by investors to measure financial and operating performance. Please see Appendix A for a reconciliation of Segment EBITDA to net income, the most directly comparable GAAP financial measure. Segment EBITDA does not include adjustments for (i) principal payment of direct financing lease of $0.8 million and $0.8 million for the three months ended December 31, 2016 and 2015, respectively, (ii) amortization in revenues for above market contracts of $0.6 million for the three months ended December 31, 2016 and 2015, or (iii) equity in earnings of JVs: amortization for deferred revenue of $(0.5) million for the three months ended December 31, 2016 |
Financial Results Overview
The Partnership reported net income for the three months ended December 31, 2016 of $24.9 million, an increase of $7.8 million from $17.1 million for the three months ended December 31, 2015. The net income for both periods was significantly impacted by unrealized gains on derivative instruments on the Partnership's share of equity in earnings of joint ventures. Excluding all of the unrealized gains on derivative instruments, net income for the three months ended December 31, 2016 was $8.2 million, a decrease of $3.0 million from $11.2 million for the three months December 31, 2015. The decrease was mainly due to lower foreign exchange gains of approximately $1.2 million and a higher income tax expense of approximately $2.4 million for the three months ended December 31, 2016 compared with the three months ended December 31, 2015. The increase in income tax expense principally related to a non-cash provision which will be reimbursable from the charterer in the period in which it will be payable.
Total revenues are comprised of time charter revenues related to the PGN FSRU Lampung and the Höegh Gallant. Time charter revenues for the three months ended December 31, 2016 were $23.3 million, a decrease of $0.1 million from the three months ended December 31, 2015. The time charter revenues decreased $0.1 million due to lower revenues for reimbursed taxes for the PGN FSRU Lampung and one day of partial off-hire for the Höegh Gallant.
With the exception of the one day of partial offhire for the Höegh Gallant, all FSRUs were onhire for the entire fourth quarter of 2016. On December 11, 2016, the Neptune arrived at the Etki Terminal near the port of Aliaga in Izmir province on the west coast of Turkey to serve as an FSRU pursuant to a sub-charter made by its charterer. On January 19, 2017, the GDF Suez Cape Ann left Tianjin, China having completed its sub-charter made by its charterer and returned to the charterer's LNG carrier pool.
Total operating expenses for the three months ended December 31, 2016 were $8.7 million, a decrease of $0.5 million, compared with $9.2 million for the three months ended December 31, 2015. The decrease was mainly due to variations between periods in deliveries of spare parts and certain consumable goods, and was partially offset by higher administrative expenses, mainly due to costs incurred in connection with preparation for the acquisition of the 51% interest in the Höegh Grace entities and the December common unit offering.
Equity in earnings of joint ventures, which own the vessels the Neptune and the GDF Suez Cape Ann, for the three months ended December 31, 2016 was $18.6 million, an increase of $10.6 million from equity in earnings of joint ventures of $8.0 million for the three months ended December 31, 2015. The main reason for the increase was the Partnership's share of unrealized gains on derivative financial instruments of the joint ventures of $16.1 million and $5.4 million for the three months ended December 31, 2016 and 2015, respectively. The joint ventures do not apply hedge accounting for interest rate swaps and all changes in fair value are included in equity in earnings of joint ventures. For the three months ended December 31, 2016, the Partnership's share of operating income in the joint ventures was $6.2 million compared with $6.6 million for the three months ended December 31, 2015.
Operating income for the three months ended December 31, 2016 was $33.2 million, an increase of $11.0 million from $22.2 million for the three months ended December 31, 2015. Excluding the impact of the unrealized gains on derivative instruments on the Partnership's share of equity in earnings of joint ventures, the operating income was $17.1 million, an increase of $0.3 million from $16.8 million for the three months ended December 31, 2015. The main reason for the increase in operating income was lower vessel operating expenses for the PGN FSRU Lampung and the Höegh Gallant for the three months ended December 31, 2016 compared with for the three months ended December 31, 2015.
Segment EBITDA2 was $25.8 million for the three months ended December 31, 2016, an increase of $0.1 million from $25.7 million for the three months ended December 31, 2015.
Total financial expense, net for the three months ended December 31, 2016 was $5.9 million, an increase of $0.8 million from $5.1 million for the three months ended December 31, 2015. The higher total financial expense, net was mainly due to higher expenses for other items, net of $1.2 million due to a net foreign exchange gain for the three months ended December 31, 2015, which was partially offset by lower interest expense of $0.4 million and an increase in gain on derivative instruments of $0.2 million. Interest expense was $6.1 million for the three months ended December 31, 2016, compared with $6.5 million for the three months ended December 31, 2015. The reduction in interest expense was due to lower outstanding debt as a result of the quarterly repayments of the long-term credit facilities that finance the PGN FSRU Lampung (the "Lampung facility") and the Höegh Gallant (the "Gallant facility"). The gain on derivative instruments was $0.7 million for the three months ended December 31, 2016, compared with $0.5 million for the three months ended December 31, 2015. The gains on derivative instruments relate to the ineffective portion of the hedge of the interest rate swaps related to the Lampung facility and the Gallant facility. The interest rate swaps are designated as cash flow hedges of the variable interest payments on the Lampung and Gallant facilities and the effective portion of the changes in fair value of the hedges are recorded in other comprehensive income.
2 | Segment EBITDA is a non-GAAP financial measure used by investors to measure financial and operating performance. Please see Appendix A for a reconciliation of Segment EBITDA to net income, the most directly comparable GAAP financial measure. Segment EBITDA does not include adjustments for (i) principal payment of direct financing lease of $0.8 million and $0.8 million for the three months ended December 31, 2016 and 2015, respectively, (ii) amortization in revenues for above market contracts of $0.6 million for the three months ended December 31, 2016 and 2015, or (iii) equity in earnings of JVs: amortization for deferred revenue of $(0.5) million for the three months ended December 31, 2016 |
Income tax expense was $2.4 million for the three months ended December 31, 2016, an increase of $2.3 million from $0.1 million for the three months ended December 31, 2015 mainly due to higher income tax expense in Indonesia since part of the interest expense was treated as nondeductible for tax purposes. During 2015, the Indonesian Minister of Finance introduced new regulations effective for 2016 that limited the amount of interest expense that was deductible for current income taxes where the taxpayer's debt to equity ratio exceeds 4:1. Certain industries, including the infrastructure industry, were exempted from the debt to equity ratio requirements. Although the "infrastructure industry" was not defined in the new regulations, additional guidance was expected to be provided by the Indonesian tax authorities during 2016. Because no subsequent guidance has been issued, the limitations on the deductibility of interest expense have been applied, increasing taxable income and income tax expense of our Indonesian subsidiary. Due to the uncertainty of realizing the benefit of a 2013 loss carryforward in Indonesia, no income tax benefit was recognized. As a result, a non-current income tax payable of $2.2 million was recognized for the uncertain tax position, as income tax expense for the three months ended December 31, 2016.
Segments
The Partnership has two operating segments. The segment profit measure is Segment EBITDA, which is defined as earnings before interest, taxes, depreciation, amortization and other financial items (gains and losses on derivative instruments and other items, net). The two segments are the "Majority held FSRUs" and the "Joint venture FSRUs." In addition, unallocated corporate costs that are considered to benefit the entire organization, interest income from advances to the Partnership's joint ventures and interest expense related to the seller's credit note and the outstanding balance on the $85 million sponsor credit facility are included in "Other."
For the three months ended December 31, 2016 and 2015, Majority held FSRUs include the direct financing lease for the long-term time charter with PT PGN LNG Indonesia ("PGN LNG"), a subsidiary of PT Perusahaan Gas Negara (Persero) Tbk ("PGN") related to the PGN FSRU Lampung and the operating lease related to the 100% owned Höegh Gallant that operates under a long-term charter with Hoegh LNG Egypt LLC ("EgyptCo"), a subsidiary of Höegh LNG. EgyptCo has a charter with the government-owned Egyptian Natural Gas Holding Company ("EGAS").
For the three months ended December 31, 2016 and 2015, Joint venture FSRUs include two 50% owned FSRUs, the Neptune and the GDF Suez Cape Ann, that operate under long-term charters with one charterer, GDF Suez Global LNG Supply SA, a subsidiary of ENGIE.
The Partnership measures its segment profit based on Segment EBITDA. Please see "Unaudited Segment Information for the Quarter Ended December 31, 2016 and 2015" beginning on page 15. Segment EBITDA is reconciled to operating income and net income for each segment in the tables included on "Unaudited Segment Information for the Quarter Ended December 31, 2016 and 2015."
Segment EBITDA for the Majority held FSRUs for the three months ended December 31, 2016 was $19.3 million, an increase of $0.8 million from $18.5 million for the three months ended December 31, 2015 primarily due to lower vessel operating and administrative expenses.
Segment EBITDA for the Joint venture FSRUs for the three months ended December 31, 2016 was $8.6 million, a decrease of $0.2 million from $8.8 million for the three months ended December 31, 2015. The decrease was primarily due to lower operating expenses for the three months ended December 31, 2015. During the three months ended December 31, 2016, total operating expenses increased primarily due to preparations for the Neptune's subcharter in Turkey which was compensated by the charterer.
For Other, administrative expenses and Segment EBITDA for the three months ended December 31, 2016 were $2.1 million, an increase of $0.5 million from $1.6 million for the three months ended December 31, 2015. The increase in cost mainly related to higher audit and legal fees associated with the common unit offering in December 2016, preparation for the acquisition of the 51% interest in the Höegh Grace entities and the filing of financial statements for the Höegh Grace entities to be acquired.
Financing and Liquidity
As of December 31, 2016, the Partnership had cash and cash equivalents of $18.9 million and $76.4 million of the undrawn portion of the $85 million sponsor credit facility. In November 2016, the Partnership drew $3.2 million on the sponsor credit facility. In December 2016, the Partnership completed the sale of 6,588,389 common units in a public offering raising approximately $111.5 million in net proceeds after directly attributable expenses. The Partnership used $12.6 million of the proceeds to repay part of the seller's credit related to the Höegh Gallant and $6.6 million to settle the working capital adjustment from the acquisition of the Höegh Gallant that closed on October 1, 2015. As of December 31, 2016, the Partnership classified $91.8 million of the proceeds as non-current cash designated for the acquisition of the Höegh Grace entities. Current restricted cash for operating obligations of the PGN FSRU Lampung was $8.1 million and long-term restricted cash required under Lampung facility was $14.2 million as of December 31, 2016. As of December 31, 2016, the Partnership's total current liabilities exceeded total current assets by $7.3 million, which is partly a result of mark-to market valuations of its interest rate swaps (derivative instruments) of $3.5 million. The Partnership does not plan to terminate the interest rate swaps before their maturity. The Partnership believes its current resources, including the undrawn balance under the sponsor credit facility, are sufficient to meet the Partnership's working capital requirements for its current business for the next twelve months.
During the fourth quarter of 2016, the Partnership made quarterly repayments of $4.8 million on the Lampung facility and $3.3 million on the Gallant facility. The Partnership's outstanding principal on long-term debt was $341.1 million and the total long-term debt, net of unamortized debt issuance cost and the unamortized fair value of debt assumed, was $332.6 million as of December 31, 2016.
As of December 31, 2016, the Partnership had outstanding interest rate swap agreements for a total notional amount of $308.3 million to hedge against the interest rate risks of its long-term debt under the Lampung facility and the Gallant facility. The Partnership applies hedge accounting for derivative instruments related to those facilities. The Partnership receives interest based on three month US dollar LIBOR and pays a fixed rate of 2.8% for the Lampung facility. The Partnership receives interest based on three month US dollar LIBOR and pays a fixed rate of approximately 1.9% for the Gallant facility. The carrying value of the liability for derivative financial instruments was $7.0 million as of December 31, 2016.
On January 3, 2017, the Partnership paid $91.8 million to close the acquisition of the 51% interest in the Höegh Grace entities.
On February 14, 2017, the Partnership paid a $0.4125 per unit distribution with respect to the fourth quarter of 2016, equivalent to $1.65 per unit on an annual basis. The distribution totaled $13.7 million.
In February 2017, the Partnership drew $1.6 million on the sponsor credit facility.
In the first quarter of 2017, the Partnership filed and was paid $0.4 million of claims for indemnification from Höegh LNG for the three months ended December 31, 2016 for non-budgeted expenses under the omnibus agreement related to the PGN FSRU Lampung and losses with respect to the commencement of services under the time charter with EgyptCo pursuant to the contribution, purchase and sale agreement for the acquisition of the Höegh Gallant.
Cash Flows
Net cash provided by operating activities was $5.5 million for the three months ended December 31, 2016, a decrease of $7.2 million compared with $12.7 million for the three months ended December 31, 2015. Before changes in working capital, net cash flows were $12.8 million for the three months ended December 31, 2016, an increase of $0.5 million compared with $12.3 million for the three months ended December 31, 2015. Changes in working capital contributed negatively to net cash provided by operating activities by $7.4 million for the three months ended December 31, 2016, mainly due to repayment of $6.6 million to settle the working capital adjustment from the acquisition of the Höegh Gallant, compared with a positive contribution of $0.4 million for the three months ended December 31, 2015.
Net cash used in investing activities was $90.4 million for the three months ended December 31, 2016, a decrease of $100.0 million compared with net cash provided by investing activities of $9.6 million for the three months ended December 31, 2015. The difference between periods was mainly due the classification of $91.8 million of the proceeds of the common unit offering as non-current cash designated for acquisition of the Höegh Grace entities for the three months ended December 31, 2016.
Net cash provided by financing activities for the three months ended December 31, 2016 was $83.0 million, an increase of $97.7 million compared to net cash used in financing activities of $14.7 million for the three months ended December 31, 2015. The increase was largely due to the proceeds of $111.5 million from the common unit offering, the repayment of $12.6 million of the seller's credit, the draw of $3.2 million on the sponsor credit facility and the increase in cash distributions to unitholders of $2.1 million for the three months ended December 31, 2016 compared with the three months ended December 31, 2015.
As a result of the foregoing, cash and cash equivalents decreased by $1.9 million for the three months ended December 31, 2016 and increased by $7.6 million for the three months ended December 31, 2015.
Outlook
As of the date of this report, unscheduled repairs and maintenance during the first quarter of 2017 on the Höegh Gallant have reduced operating income by the equivalent of approximately 5 days of offhire.
The Höegh Grace completed the commissioning phase in Colombia in early December 2016 and immediately commenced commercial operations under the long-term contract with Sociedad Portaria El Cayao S.A.E.S.P ("SPEC"). Accordingly, the Höegh Grace was onhire as of the closing date of the Partnership's acquisition of 51% of the interest in the Höegh Grace entities on January 3, 2017. Pursuant to the contribution, purchase and sale agreement the Partnership entered into with Höegh LNG with respect to the acquisition of 51% of the interests in the Höegh Grace entities, the Partnership has a right of first offer to purchase the remaining 49% interest in such entities. The results of the Höegh Grace will contribute to the Partnership's earnings for the full first quarter of 2017.
As a result of the acquisition of 51% of the interest in the Höegh Grace entities, management intends to recommend that the Partnership's board of directors consider an increase in its quarterly cash distribution of approximately 4% to 5% which would become effective for the distribution with respect to the quarter ending March 31, 2017. Any such increase would be conditioned on approval by the board and the absence of any material adverse developments that would make such an increase inadvisable.
Pursuant to the omnibus agreement the Partnership entered into with Höegh LNG at the time of the initial public offering Höegh LNG is obligated to offer to the Partnership any FSRU or LNG carrier operating under a charter of five or more years.
Accordingly, the Partnership has, or may in the future have, the opportunity to acquire the FSRUs listed below:
Höegh LNG has four additional FSRUs on order including "HHI Hull No. 2552" which is scheduled to be delivered in March 2017 and "HHI Hull No. 2865" which is scheduled to be delivered in 2018.
In December 2016, Höegh LNG announced that it had signed a letter of intent with Samsung Heavy Industries ("SHI") in South Korea for one FSRU ("SHI Hull No.2220") and three optional fixed-price FSRUs. The shipbuilding contract for SHI Hull No.2220 was signed in January 2017 and is scheduled for delivery in May 2019.
On January 18, 2017, Höegh LNG announced that it had signed a shipbuilding contract with Hyundai Heavy Industries ("HHI") in South Korea for an FSRU ("HHI Hull No. 2909") with a scheduled delivery in the fourth quarter of 2018.
Höegh LNG expects to allocate HHI Hull No. 2552 to serve the Quantum Power contract in Ghana, HHI Hull No. 2865 to the Penco LNG contract in Chile and HHI Hull No. 2909 to the GEI contract in Pakistan. At present, SHI Hull No. 2220 remains un-chartered. Depending on the ultimate timing of the start of projects (including Penco LNG), allocations of the hulls to projects is subject to change.
There can be no assurance that the Partnership will acquire the remaining 49% interest in the Höegh Grace entities or any vessels from Höegh LNG or of the terms upon which any such acquisition may be made.
Presentation of Fourth Quarter 2016 Results
A presentation will be held today, Tuesday, February 28, 2017, at 8:30 A.M. (EST) to discuss financial results for the fourth quarter of 2016. The results and presentation material will be available for download at http://www.hoeghlngpartners.com.
The presentation will be immediately followed by a Q&A session. Participants will be able to join this presentation using the following details:
a. Webcast
https://www.webcaster4.com/Webcast/Page/942/19929
b. Teleconference
International call: +1-412-542-4123
US Toll Free call: +1-855-239-1375
Canada Toll Free call: +1-855-669-9657
Participants should ask to be joined into the Höegh LNG Partners LP call.
There will be a Q&A session after the presentation. Information on how to ask questions will be given at the beginning of the Q&A session.
For those unable to participate in the conference call, a replay will be available from one hour after the end of the conference call until March 7, 2017.
The replay dial-in numbers are as follows:
International call: +1-412-317-0088
US Toll Free call: +1-877-344-7529
Canada Toll Free call: +1-855-669-9658
Replay passcode: 10102029
About Höegh LNG Partners LP
Höegh LNG Partners (NYSE: HMLP) is a growth-oriented limited partnership formed by Höegh LNG Holdings Ltd. (Oslo Børs: HLNG), a leading floating LNG service provider. HMLP's strategy is to own, operate and acquire FSRUs and associated LNG infrastructure assets under long-term charters. Its FSRUs have an industry leading average remaining firm contract duration of 12.3 years plus options as of February 28, 2017.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements concerning future events and the Partnership's operations, performance and financial condition. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain the words "believe," "anticipate," "expect," "estimate," "project," "will be," "will continue," "will likely result," "plan," "intend" or words or phrases of similar meanings. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the Partnership's control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to:
All forward-looking statements included in this press release are made only as of the date of this release. New factors emerge from time to time, and it is not possible for the Partnership to predict all of these factors. Further, the Partnership cannot assess the impact of each such factor on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. The Partnership does not intend to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.
HÖEGH LNG PARTNERS LP | |||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(in thousands of U.S. dollars, except per unit amounts) | |||||||||||||||
| |||||||||||||||
| | Three months ended | | | Year ended | ||||||||||
| | December 31, | | | December 31, | ||||||||||
| | 2016 | | | 2015 | | | 2016 | | | 2015 | ||||
REVENUES | | | | | | | | | | | | | | | |
Time charter revenues | | $ | 23,308 | | | | 23,426 | | | | 91,107 | | | $ | 57,465 |
Total revenues | | | 23,308 | | | | 23,426 | | | | 91,107 | | | | 57,465 |
OPERATING EXPENSES Werbung Mehr Nachrichten zur Höegh LNG Partners UTS Aktie kostenlos abonnieren
E-Mail-Adresse
Bitte überprüfe deine die E-Mail-Adresse.
Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News |