Capital Clean Energy Carriers Corp.(CCEC) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net income from operations for Q1 2025 was just under $81 million, including a gain of $46.2 million from the sale of two container vessels [5] - Total cash position increased to $420 million, supported by the completion of two container sales [8] - The firm charter backlog increased to $3.1 billion, reflecting positive fundamentals in the energy shipping market [6][10] Business Line Data and Key Metrics Changes - The company has raised a total of $472.2 million in net proceeds from the sale of 12 container vessels since December 2023, reallocating capital towards gas transportation assets [5] - The average charter duration across the fleet is now 7.3 years, with a charter backlog of $2.8 billion in contract revenue for the LNG fleet [9][10] Market Data and Key Metrics Changes - The LNG carrier, Infosys two, commenced a seven-year charter, contributing to the increased charter backlog [6] - The long-term time charter market has remained stable, with ten-year rates in the high eighties to low nineties range [20] Company Strategy and Development Direction - The company aims to solidify its existing charter book and secure long-term employment for remaining LNG carriers, capitalizing on the growing LNG industry [27] - The focus is on maintaining a dense fleet with the lowest unit rate cost and environmental footprint, aligning with emerging regulatory requirements [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market volatility and highlighted the importance of maintaining a strong balance sheet [8][12] - The company is closely monitoring the impact of U.S. trade policies and tariffs on LNG exports, indicating a low probability of adverse effects on its business model [14][15] Other Important Information - The company has a strong framework for building its gas transportation portfolio, with no single counterparty representing more than 20% of the contract revenue backlog [11] - The new building CapEx program is valued at $2.3 billion, with $467 million already paid in advances [12] Q&A Session Summary Question: CapEx schedule adjustments - Management confirmed that adjustments to the CapEx schedule were made in collaboration with partners and shipbuilders, allowing for flexibility in chartering opportunities [33] Question: Discussions on gas carriers - Ongoing discussions focus on liquid CO2 and other gas volumes, with interest from large companies for three to five-year charters [35][36] Question: Supply-demand dynamics - Management acknowledged that charters are recognizing the supply-demand fundamentals and are willing to pay rates reflecting future market conditions [41] Question: Regasification capacity - There are no expected issues with regasification capacity covering liquefaction capacity in key markets like China, Japan, and Europe [47] Question: Floating storage opportunities - Currently, there are no indications of demand for floating storage due to the costs associated with LNG boil-off [49] Question: U.S. built LNG carriers - The cost of U.S. built LNG carriers is expected to be significantly higher than those built in Korea or China, with compliance responsibilities likely falling on liquefaction operators [60][62]