Financial Data and Key Metrics Changes - Net income for Q2 2024 was $34.2 million, compared to $7.4 million in Q2 2023, with net income per common unit increasing to $0.62 from $0.36 [10][11] - Total revenue for Q2 2024 was $97.7 million, up from $88.5 million in Q2 2023, primarily due to revenue from newbuilding vessels [10][11] - Total expenses decreased to $48.3 million in Q2 2024 from $50.6 million in Q2 2023, with vessel operating expenses down to $20.2 million from $23.5 million [10][11] Business Line Data and Key Metrics Changes - The fleet consists of 20 vessels, including 12 LNG carriers and 8 legacy container vessels, with a revenue backlog of $2.4 billion from LNG carriers [7][8] - The company announced a strategic investment in 10 new gas carriers for $756 million, with expected deliveries between Q1 2026 and Q3 2027 [8][9] - The legacy container fleet has generated close to $180 million in net profits from sales in less than six months [7] Market Data and Key Metrics Changes - Global LNG imports remain robust, with China’s imports increasing by approximately 24% year-on-year [20] - Spot rates for LNG carriers reached $90,000 per day in early July, with term charter rates for one to three-year periods around $85,000 per day [19] - The LNG fleet expanded by 10 ships in Q2 2024, with newbuilding prices for LNG carriers steady at $260 million per vessel [22] Company Strategy and Development Direction - The company is transitioning to a corporation named Capital Clean Energy Carriers Corp., focusing on LNG and energy transition business [4][5] - The strategic pivot aims to create the largest U.S.-listed LNG and gas platform, enhancing investor appeal and liquidity [6][24] - The company plans to maintain a conservative dividend policy of $0.15 per unit while exploring a floating dividend policy tied to free cash flow or net income in the future [25][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the LNG market fundamentals and the potential for significant cash flow visibility and stability during the growth phase [8][10] - The company anticipates that LNG capacity additions will accelerate from 2025, with the U.S. and Qatar being primary drivers of this growth [21] - Management highlighted the importance of dual-fuel capabilities in their fleet, contributing to a reduced carbon footprint and aligning with energy transition goals [32][34] Other Important Information - The company refinanced the LNG carrier Aristidis I, releasing $54.8 million in additional liquidity [9][15] - The total debt increased to $2.6 billion, primarily due to the acquisition of new LNG carriers [13] - The company is actively engaging in discussions for long-term contracts for low carbon ammonia and liquid CO2 transportation [27][36] Q&A Session Summary Question: Will the company continue its current dividend policy after the corporate conversion? - The company intends to maintain the $0.15 per unit quarterly distribution while exploring ways to increase it before the new vessels deliver [25][30] Question: What is the potential earnings power of the new alternative fuel transport vessels? - There is ongoing interest in long-term contracts for low carbon ammonia, with inquiries expected to mature around 2027-2028 [26][27] Question: How does the company view the clean energy shipping market? - The company sees itself as a significant player in clean energy shipping, focusing on LNG, low carbon ammonia, and liquid CO2 transportation [31][34] Question: What is the inquiry landscape for LNG carriers? - The company is receiving a mix of inquiries for long-term charters from traditional LNG importers and energy companies, indicating a positive outlook [44][46] Question: How does the company plan to leverage its early mover advantage in the liquid CO2 market? - The company aims to engage with various stakeholders in the liquid CO2 supply chain, providing stable shipping solutions while also trading in traditional markets [48][50]
Capital Product Partners L.P.(CPLP) - 2024 Q2 - Earnings Call Transcript