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l pany .(CLCO) - 2024 Q2 - Earnings Call Transcript
CLCOl pany .(CLCO)2024-08-29 18:18
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Financial Data and Key Metrics Changes - Average Time Charter Equivalent (TCE) rate increased to 78,400perdayfrom78,400 per day from 77,200 in the previous quarter, expected to rise further in Q3 due to full chartering of the existing fleet [3][18] - Total operating revenues for Q2 2024 were reported at 83.4million,aligningwithguidanceandslightlyaboveconsensusestimates[18]−AdjustedEBITDAforQ22024was83.4 million, aligning with guidance and slightly above consensus estimates [18] - Adjusted EBITDA for Q2 2024 was 55.7 million, down from 58.5millioninQ12024,primarilyduetolowerTCErevenues[19][22]−Netincomedecreasedto58.5 million in Q1 2024, primarily due to lower TCE revenues [19][22] - Net income decreased to 26.1 million in Q2 from 36.6millioninQ1,largelyduetoreducedunrealizedgainsoninterestrateswaps[22]BusinessLineDataandKeyMetricsChanges−TCErevenuesforthequarterwere36.6 million in Q1, largely due to reduced unrealized gains on interest rate swaps [22] Business Line Data and Key Metrics Changes - TCE revenues for the quarter were 76.4 million, a slight decrease from 78.7millioninthepreviousquarter,impactedbyonevesselindrydockandlowerfloatingrates[18][19]−TheKoolBlizzardvesseltransitionedtoanew12−monthcharter,expectedtogenerateapproximately78.7 million in the previous quarter, impacted by one vessel in dry dock and lower floating rates [18][19] - The Kool Blizzard vessel transitioned to a new 12-month charter, expected to generate approximately 10,000 more per day compared to its previous earnings [6] Market Data and Key Metrics Changes - The LNG market has been quiet during the summer, but expectations for increased activity in the winter season due to new supply and tender activity are anticipated [4][8] - The Asia Pacific region shows strong appetite for LNG, which is beneficial for shipping due to increased shipping distances [10] Company Strategy and Development Direction - The company maintains a strong backlog of 1.8billion,equivalenttoapproximately62yearsofbacklog,withanaverageTCErateof1.8 billion, equivalent to approximately 62 years of backlog, with an average TCE rate of 79,000 per day per vessel [23] - The company is focused on securing long-term charters while balancing the optionality of higher rates in the future [32] Management's Comments on Operating Environment and Future Outlook - Management noted that the LNG market sentiment is split between long-term and short-term charterers, with optimism for securing long-term deals [28] - The company expects a moderate increase in TCE rates and charter revenues in Q3 compared to Q2, despite ongoing dry dock activities [20][21] Other Important Information - The company has maintained a dividend of 0.41pershare,withapayoutratioofapproximately700.41 per share, with a payout ratio of approximately 70% of net income [22][24] - Cash and cash equivalents totaled approximately 84 million, down from 106 million in the previous quarter, primarily due to debt amortization [24] Q&A Session Summary Question: Current market sentiment for the uncommitted newbuild - Management indicated a split market with some looking for long-term contracts while others are hesitant due to short-term market conditions [27][28] Question: Impact of upgraded TFDEs on vessel desirability - Management highlighted potential for increased day rates and attractiveness compared to older vessels, with expectations of sharing upside with charterers [29][30] Question: Outlook for the spot market - Management suggested two favorable scenarios for shipping: a cold winter increasing demand or volumes heading to emerging markets [35][36] Question: Long-term charter rates for Kool Tiger - Management expressed confidence in achieving competitive long-term rates similar to previous deals, with expectations of around 95,000 for shorter-term charters [38][39] Question: Impact of the Suez Canal on shipping routes - Management noted that while the Suez Canal's closure could affect arbitrage opportunities, it would not significantly impact overall shipping demand [37]