Capital Product Partners L.P. announces Q2 2014 financial results and charter renewal for M/T 'Axios'
Capital Product Partners L.P., an international diversified shipping company, today released its financial results for the second quarter ended June 30, 2014the company announced in its press release.
The Partnership's net income for the quarter ended June 30, 2014, was $7.8 million. After taking into account the preferred interest in net income attributable to the unit holders of the 18,572,221 Class B Convertible Preferred Units outstanding as of June 30, 2014, the result for the quarter ended June 30, 2014 was $0.04 net income per limited partnership unit, which is $0.04 lower than the $0.08 net income per unit from the previous quarter ended March 31, 2014 and $0.44 lower than the $0.48 net income per unit in the second quarter of 2013. The Partnership's reported net income for the second quarter of 2013 included a $32.0 million gain related to the sale to a third party of the Partnership's claims against Overseas Shipholding Group Inc. ("OSG") and certain of OSG's subsidiaries.
Operating surplus for the quarter ended June 30, 2014 was $26.9 million, which is $4.3 million lower than the $31.2 million from the first quarter of 2014 and $29.7 million lower than the $56.6 million of the second quarter of 2013. The operating surplus adjusted for the payment of distributions to the Class B unitholders was $22.9 million for the quarter ended June 30, 2014. Operating surplus is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please refer to the section "Appendix A" at the end of the press release, for a reconciliation of this non-GAAP measure to net income.
Revenues for the second quarter of 2014 were $47.4 million, compared to $41.8 million in the second quarter of 2013; the increase is mainly a result of the Partnership's increased fleet size and improving employment day rates for certain of the Partnership's vessels.
Total expenses for the second quarter of 2014 were $35.5 million compared to $30.8 million in the second quarter of 2013, the increase being mainly a result of the increased fleet size of the Partnership and the expenses related to the repairs to M/T Assos and M/T Atrotos following their redelivery from the previous charterers. The vessel operating expenses for the second quarter of 2014 amounted to $16.8 million for the commercial and technical management of our fleet under the terms of our management agreements, compared to $13.4 million in the second quarter of 2013. The total expenses for the second quarter of 2014 also include $14.4 million in depreciation and amortization, compared to $12.8 million in the second quarter of 2013, as a result of our increased fleet size. General and administrative expenses for the second quarter of 2014 amounted to $1.6 million compared to $3.4 million in the second quarter of 2013, the decrease resulting from the Partnership's Omnibus Incentive Compensation Plan becoming fully vested in the third quarter of 2013.
Total other expense, net for the second quarter of 2014 amounted to $4.2 million compared to $3.6 million for the second quarter of 2013, excluding the gain of $32.0 million related to the sale to a third party of the Partnership's claims against OSG and certain of OSG's subsidiaries. The increase was due to higher interest cost as a result of the increased indebtedness of the Partnership compared to the second quarter of 2013.
As of June 30, 2014, the Partners' capital amounted to $750.5 million, which is $30.9 million lower than the Partners' capital as of December 31, 2013, which amounted to $781.4 million. This decrease primarily reflects the payment of $50.0 million in distributions since December 31, 2013.
As of June 30, 2014, the Partnership's total debt had decreased by $2.7 million to $580.6 million, compared to total debt of $583.3 million as of December 31, 2013, as a result of the loan amortization in one of our credit facilities.
Fleet Developments
The M/T Axios (47,782 dwt, IMO II/III Chemical Product Tanker built 2007, Hyundai Mipo Dockyard Company, Ltd., South Korea) extended its employment with Capital Maritime & Trading Corp. ("Capital Maritime") for an additional charter term of a minimum of 12 months at the same day rate of $14,750 gross per day plus 50/50 profit share for breaching Institute Warranty Limits. The earliest redelivery under the new charter is in June 2015.