Financial Data and Key Metrics Changes - The Partnership's net income for Q4 2020 was $7.3 million, an increase from $5.8 million in Q4 2019 [6] - Revenues for the quarter were $31.5 million, up from $27.7 million in Q4 2019, primarily due to fleet size increase [7] - Total expenses for Q4 2020 were $24.6 million, compared to $18.2 million in Q4 2019 [8] - Operating surplus for Q4 was $20.7 million, translating to a common unit coverage of 6x [6][9] - Total debt increased to $379.7 million from $262.4 million at the end of 2019 [10] Business Line Data and Key Metrics Changes - The increase in revenue was partly offset by a decrease in average daily charter rates and off-hire periods due to maintenance and COVID-19 incidents [7] - Total vessel operating expenses rose to $10.3 million from $7.7 million in Q4 2019, attributed to fleet size increase [8] Market Data and Key Metrics Changes - The container market saw a strong rebound in charter rates during Q4 2020, with Neo-Panamax rates more than doubling compared to early Q3 2020 [17] - The base case forecast for container trade in 2021 is projected at 5.7%, with supply growth estimated at 3.8% [18][19] Company Strategy and Development Direction - The company plans to grow and diversify its asset base, with the acquisition of three 5,100 TEU sister container vessels for $40.5 million [11][15] - The charter coverage for 2021 and 2022 stands at 90% and 81%, respectively, with a remaining charter duration of 4.2 years [16] - The company aims to balance growth with returning capital to unitholders through distributions and a unit buyback program [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market prospects and rechartering risks compared to previous quarters, citing a tight container market [36][37] - The company is optimistic about the returns from the recent vessel acquisition, estimating an EBITDA of about $32 million over the next five years [15] Other Important Information - The company has authorized a common unit repurchase program of up to $30 million, expected to commence in February 2021 [6] - The acquisition of the three vessels will be partly funded through a sale and leaseback transaction, minimizing cash outlay [13][14] Q&A Session Summary Question: What happened to the CMA CGM Magdalena's charter duration? - Management clarified that the charter period remained unchanged, but market conditions led to a longer expected duration for redelivery [24][25] Question: Why did the company acquire vessels at a higher price shortly after they were purchased by Capital Maritime? - Management explained that the vessels were acquired with cash flow visibility and included significant upgrades, making the transaction favorable despite the higher price [32][34] Question: How does the unit repurchase program align with distributions? - Management stated that the priority is to grow the fleet while returning capital to unitholders, and the buyback program is seen as a strategic move to enhance value [35][37] Question: What is the company's NAV estimate? - Management indicated that NAV estimates are nearly double the current unit prices, highlighting a significant discount [48]
Capital Product Partners L.P.(CPLP) - 2020 Q4 - Earnings Call Transcript