GasLog Ltd. Reports Financial Results for the Three-Month Period Ended September 30, 2020
GasLog Ltd. (NYSE: GLOG) reported its Q3 2020 financial results, revealing revenues of $156.7 million and a profit of $10.1 million despite a slight year-over-year revenue decrease. The company refocused its financial strategy by refinancing $1.1 billion in debt maturing in 2021, enhancing liquidity by $30.2 million. Notably, contracted charter revenues reached $164.1 million for Q4 2020, indicating 95% charter coverage. A quarterly dividend of $0.05 per share is payable on November 30, 2020. Operationally, GasLog is bolstering its fleet and liquidity against ongoing market volatility.
- Refinanced $1.1 billion in debt, improving balance sheet liquidity by $30.2 million.
- Contracted charter revenues of $164.1 million for Q4 2020, indicating strong future earnings.
- Quarterly dividend of $0.05, reflecting ongoing shareholder returns.
- Quarterly revenues declined by $8.9 million compared to Q3 2019.
- Adjusted EBITDA decreased by $12.9 million year-over-year, showing reduced profitability.
- Continued COVID-19-related uncertainty negatively affecting the LNG and shipping markets.
Piraeus, Greece, Nov. 10, 2020 (GLOBE NEWSWIRE) -- GasLog Ltd. and its subsidiaries (“GasLog”, “Group” or “Company”) (NYSE: GLOG), an international owner, operator and manager of liquefied natural gas (“LNG”) carriers, today reported its financial results for the quarter ended September 30, 2020.
Highlights
| • | Delivery of the GasLog Westminster on July 15, a 180,000 cubic meter (“cbm”) LNG carrier with dual fuel medium speed propulsion (“X-DF”) and commencement of its seven-year time charter agreement with Centrica Plc. (“Centrica”). |
| • | Refinanced all debt to mature in 2021 with four new credit facilities representing a total of approximately |
| • | Post-quarter end, completed the sale-and-leaseback of the GasLog Hong Kong, with CMB Financial Leasing Co. Ltd. (“CMBFL”), one of China’s largest lessors, releasing |
| • | Repaid approximately |
| • | Contracted time charter revenues of approximately |
| • | Quarterly Revenues of |
| • | Quarterly Adjusted EBITDA1 of |
| • | Quarterly dividend of |
Chairman and CEO Statements
Peter G. Livanos, Chairman of GasLog, stated: “GasLog progressed on several strategic initiatives during the third quarter, a testament to the resiliency of our business model. Our fully contracted newbuilding program continues to deliver on time and on budget, operating and overhead expenses have been reduced considerably with an eye toward further improvement and the Group’s liquidity has been further bolstered following a sale-and-leaseback with a leading Chinese lessor.”
Paul Wogan, Chief Executive Officer, stated: “Our fleet continued to deliver high levels of service and reliability to our customers during the third quarter. We markedly increased the change over our crews but given the ongoing COVID-19 restrictions we continue to work with the authorities and through industry bodies to see how we can improve this situation for all seafarers.
During the third quarter, we refinanced all the Group’s debt maturing in 2021 and took delivery of the GasLog Westminster. This progress has continued in the fourth quarter and in October we completed the sale-and-leaseback of the GasLog Hong Kong. This transaction increased our available liquidity, improved the vessel’s average annual free cash flow over the term of the agreement and opened up a new source of capital as this was our first financial transaction with a mainland Chinese counterparty. In addition, we expect to take delivery of the GasLog Georgetown later this month, the first of four vessels to be delivered into multi-year charters with Cheniere Energy Inc. (“Cheniere”).”
Dividend Declarations
On September 16, 2020, the board of directors declared a dividend on the Series A Preference Shares of
On November 9, 2020, the board of directors declared a quarterly cash dividend of
Financial Summary
| Amounts in thousands of U.S. dollars except per share data | For the three months ended | |||||||
| September 30, 2019 | September 30, 2020 | |||||||
| Revenues | $ | 165,586 | $ | 156,729 | ||||
| Profit for the period | $ | 8,889 | $ | 10,116 | ||||
| Adjusted EBITDA1 | $ | 115,034 | $ | 102,111 | ||||
| Adjusted Profit1 | $ | 25,528 | $ | 13,019 | ||||
| Loss attributable to the owners of GasLog | $ | (13,545 | ) | $ | (354 | ) | ||
| EPS, basic | $ | (0.20 | ) | $ | (0.03 | ) | ||
| Adjusted EPS1 | $ | 0.01 | $ | (0.01 | ) | |||
There were 2,528 revenue operating days for the quarter ended September 30, 2020, as compared to 2,296 revenue operating days for the quarter ended September 30, 2019. The increase in revenue operating days was mainly driven by the increased operating days from the deliveries of the GasLog Windsor on April 1, 2020, the GasLog Wales on May 11, 2020, the GasLog Westminster on July 15, 2020 and the full operation of the GasLog Warsaw delivered on July 31, 2019, partially offset by the increased off-hire days for scheduled dry-dockings.
Management allocates vessel revenues to two categories: (a) variable rate charters and (b) fixed rate charters. The variable rate charter category contains vessels operating in the LNG carrier spot and short-term market, defined as those with initial firm periods of twelve months or less, excluding option periods, or those which have a variable rate of hire across the charter period. The vessels in this category during the third quarter of 2020 were the GasLog Savannah, the GasLog Singapore, the GasLog Shanghai, the GasLog Sydney, the GasLog Skagen, the GasLog Saratoga, the GasLog Salem, the GasLog Chelsea, the Methane Rita Andrea and the Methane Alison Victoria.
Revenues were
For the quarter ended September 30, 2020, an analysis of revenue operating days, revenues and voyage expenses and commissions per category of charter is presented below:
| For the three months ended September 30, 2020 | ||||||||
| Amounts in thousands of U.S. dollars | Variable rate charters | Fixed rate charters | ||||||
| Available days (*) | 741 | 1,886 | ||||||
| Revenue operating days(**) | 653 | 1,875 | ||||||
| Revenues | 19,741 | 136,988 | ||||||
| Voyage expenses and commissions | (3,238 | ) | (1,921 | ) | ||||
(*) Available days represent total calendar days in the period after deducting off-hire days where vessels are undergoing dry-dockings and unavailable days, i.e. days before and after a dry-docking where the vessel has limited practical ability for chartering opportunities.
(**) Revenue operating days represent total available days after deducting off-charter days.
Profit for the period was
Adjusted EBITDA1 was
Adjusted Profit1 was
Loss attributable to the owners of GasLog was
As of September 30, 2020, GasLog had
As of September 30, 2020, the total remaining balance of the contract prices of the four LNG carriers on order was
As of September 30, 2020, GasLog’s current assets totaled
Finally, the Partnership announced today that its cost of capital remains elevated and there continues to be a high degree of COVID-19-related uncertainty in the near-term LNG and LNG shipping markets. By the end of 2020, all five of the Partnership’s Steam vessels will have ended their initial multi-year time charters with subsidiaries of Royal Dutch Shell plc (“Shell”), while three additional tri-fuel diesel electric vessel (“TFDE”) vessels will conclude their multi-year charters next year. Although the Partnership has been successful in finding continued employment for certain of its available vessels, term employment to date has been concluded at current market rates which are below those achieved during the initial charters. Given these factors, combined with the Partnership’s capital allocation strategy, which is focused on deleveraging, the Partnership decided to decrease the common unit distribution to
1 Earnings/(loss) per share (“EPS”) and Adjusted EPS are net of the profit attributable to non-controlling interests of
Contracted Charter Revenues
As of September 30, 2020, the total future firm contracted revenue stood at
2 Contracted revenue calculations assume: (a) 365 revenue days per annum, with 30 off-hire days when the ship undergoes scheduled dry-docking; (b) all LNG carriers on order are delivered on schedule; (c) no exercise of any option to extend the terms of charters; and (d) where charters are based on a variable rate of hire within an agreed range during the charter period, the lower end of the range.
Alexandroupolis Project Update
On November 4, 2020, Gastrade S.A. (“Gastrade) announced the signing of the agreement of the acquisition of
LNG Market Update and Outlook
LNG demand was 84 million tonnes (“mt”) in the third quarter of 2020, according to Poten, compared to 88 mt in the third quarter of 2019, or a decrease of approximately
Global LNG supply was approximately 86 mt in the third quarter of 2020, a decrease of over 3 mt, or
In the LNG shipping spot market, TFDE headline rates, as reported by Clarksons, averaged
Clarksons currently assesses headline spot rates for TFDE and Steam LNG carriers at
As of November 4, 2020, Poten estimates that the orderbook totals 118 dedicated LNG carriers (>100,000 cbm), representing
Conference Call
GasLog and GasLog Partners will host a joint conference call to discuss their results for the third quarter of 2020 at 8.30 a.m. EST (3.30 p.m. EET) on Tuesday, November 10, 2020. Senior management of GasLog and GasLog Partners will review the operational and financial performance of the companies. The presentation of each company’s third quarter results will be followed by separate Q&A sessions for each company.
The dial-in numbers for the conference call are as follows:
+1 855 253 8928 (USA)
+44 20 3107 0289 (United Kingdom)
+33 1 70 80 71 53 (France)
+852 5819 4851 (Hong Kong)
+47 2396 4173 (Oslo)
Conference ID: 2961797
A live webcast of the conference call will be available on the Investor Relations page of the GasLog website (http://www.gaslogltd.com/investors).
For those unable to participate in the conference call, a replay of the webcast will be available on the Investor Relations page of the company websites as referenced above.
About GasLog
GasLog is an international owner, operator and manager of LNG carriers providing support to international energy companies as part of their LNG logistics chain. GasLog’s consolidated fleet consists of 35 LNG carriers. Of these vessels, 18 (14 on the water and four on order) are owned by GasLog, two have been sold to a subsidiary of Mitsui & Co. Ltd. and to CMBFL, respectively, and leased back by GasLog under long-term bareboat charters and the remaining 15 LNG carriers are owned by the Company’s subsidiary, GasLog Partners. GasLog’s principal executive offices are at 69 Akti Miaouli, 18537 Piraeus, Greece. Visit GasLog’s website at http://www.gaslogltd.com.
Forward-Looking Statements
All statements in this press release that are not statements of historical fact are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, particularly in relation to our operations, cash flows, financial position, liquidity and cash available for dividends or distributions, plans, strategies, business prospects and changes and trends in our business and the markets in which we operate. We caution that these forward-looking statements represent our estimates and assumptions only as of the date of this press release, about factors that are beyond our ability to control or predict, and are not intended to give any assurance as to future results. Any of these factors or a combination of these factors could materially affect future results of operations and the ultimate accuracy of the forward-looking statements. Accordingly, you should not unduly rely on any forward-looking statements.
Factors that might cause future results and outcomes to differ include, but are not limited to, the following:
- general LNG shipping market conditions and trends, including spot and multi-year charter rates, ship values, factors affecting supply and demand of LNG and LNG shipping, including geopolitical events, technological advancements and opportunities for the profitable operations of LNG carriers;
- fluctuations in charter hire rates, vessel utilization and vessel values;
- increased exposure to the spot market and fluctuations in spot charter rates;
- changes in our operating expenses, including crew wages, maintenance, dry-docking and insurance costs and bunker prices;
- number of off-hire days and dry-docking requirements, including our ability to complete scheduled dry-dockings on time and within budget;
- our ability to maintain long-term relationships and enter into time charters with new and existing customers;
- disruption to the LNG, LNG shipping and financial markets caused by global shutdown as a result of the COVID-19 pandemic;
- fluctuations in prices for crude oil, petroleum products and natural gas;
- changes in the ownership of our charterers;
- our customers’ performance of their obligations under our time charters and other contracts;
- our future operating performance and expenses, financial condition, liquidity and cash available for dividends and distributions;
- our ability to obtain debt and equity financing on acceptable terms to fund capital expenditures, acquisitions and other corporate activities, funding by banks of their financial commitments, and our ability to meet our restrictive covenants and other obligations under our credit facilities;
- future, pending or recent acquisitions of or orders for ships or other assets, business strategy, areas of possible expansion and expected capital spending;
- the time that it may take to construct and deliver newbuildings and the useful lives of our ships;
- fluctuations in currencies and interest rates;
- risks inherent in ship operation, including the discharge of pollutants;
- the impact of environmental liabilities on us and the shipping industry, including climate change;
- our ability to retain key employees and the availability of skilled labour, ship crews and management;
- potential disruption of shipping routes due to accidents, diseases, pandemics, political events, piracy or acts by terrorists;
- potential liability from future litigation;
- any malfunction or disruption of information technology systems and networks that our operations rely on or any impact of a possible cybersecurity event; and
- other risks and uncertainties described in the Company’s Annual Report on Form 20-F filed with the SEC on March 6, 2020 and Quarterly Reports on Form 6-K filed with the SEC on May 7, 2020 and August 5, 2020, and available at http://www.sec.gov.
• our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels which are not under multi-year charters, including the risk that certain of our vessels may no longer have the latest technology at such time which may impact our ability to secure employment for such vessels as well as the rate at which we can charter such vessels;
• planned capital expenditures and availability of capital resources to fund capital expenditures;
• the expected cost of and our ability to comply with environmental and regulatory conditions, including with respect to emissions of air pollutants and greenhouse gases, as well as future changes in such requirements or other actions taken by regulatory authorities, governmental organizations, classification societies and standards imposed by our charterers applicable to our business;
We undertake no obligation to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events, a change in our views or expectations or otherwise, except as required by applicable law. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.
The declaration and payment of dividends are at all times subject to the discretion of our board of directors and will depend on, amongst other things, risks and uncertainties described above, restrictions in our credit and sale-and-leaseback facilities, the provisions of Bermuda law and such other factors as our board of directors may deem relevant.
Contacts:
Joseph Nelson
Head of Investor Relations
Phone: +1 212-223-0643
Email: ir@gaslogltd.com
EXHIBIT I - Unaudited Interim Financial Information
Unaudited condensed consolidated statements of financial position
As of December 31, 2019 and September 30, 2020
(Amounts expressed in thousands of U.S. Dollars)
| December 31, 2019 | September 30, 2020 | |||||||
| Assets | ||||||||
| Non-current assets | ||||||||
| Goodwill | 9,511 | 9,511 | ||||||
| Investment in associates | 21,620 | 21,921 | ||||||
| Deferred financing costs | 11,592 | 9,046 | ||||||
| Other non-current assets | 24,221 | 24,653 | ||||||
| Derivative financial instruments | 3,572 | — | ||||||
| Tangible fixed assets | 4,427,065 | 4,881,775 | ||||||
| Vessels under construction | 203,323 | 140,791 | ||||||
| Right-of-use assets | 206,495 | 205,126 | ||||||
| Total non-current assets | 4,907,399 | 5,292,823 | ||||||
| Current assets | ||||||||
| Trade and other receivables | 24,900 | 21,662 | ||||||
| Dividends receivable and other amounts due from related parties | 573 | 417 | ||||||
| Derivative financial instruments | 429 | 383 | ||||||
| Inventories | 8,172 | 10,408 | ||||||
| Prepayments and other current assets | 13,475 | 35,457 | ||||||
| Short-term investments | 4,500 | — | ||||||
| Cash and cash equivalents | 263,747 | 173,470 | ||||||
| Total current assets | 315,796 | 241,797 | ||||||
| Total assets | 5,223,195 | 5,534,620 | ||||||
| Equity and liabilities | ||||||||
| Equity | ||||||||
| Preference shares | 46 | 46 | ||||||
| Share capital | 810 | 954 | ||||||
| Contributed surplus | 760,671 | 767,100 | ||||||
| Reserves | 16,799 | 17,054 | ||||||
| Treasury shares | (2,159 | ) | (1,379 | ) | ||||
| Accumulated deficit | (87,832 | ) | (161,013 | ) | ||||
| Equity attributable to owners of the Group | 688,335 | 622,762 | ||||||
| Non-controlling interests | 961,518 | 941,952 | ||||||
| Total equity | 1,649,853 | 1,564,714 | ||||||
| Current liabilities | ||||||||
| Trade accounts payable | 27,615 | 27,047 | ||||||
| Ship management creditors | 601 | 346 | ||||||
| Amounts due to related parties | 200 | 180 | ||||||
| Derivative financial instruments | 8,095 | 36,803 | ||||||
| Other payables and accruals | 136,242 | 129,772 | ||||||
| Borrowings, current portion | 255,422 | 221,670 | ||||||
| Lease liability, current portion | 9,363 | 9,732 | ||||||
| Total current liabilities | 437,538 | 425,550 | ||||||
| Non-current liabilities | ||||||||
| Derivative financial instruments | 41,837 | 97,269 | ||||||
| Borrowings, non-current portion | 2,891,973 | 3,250,584 | ||||||
| Lease liability, non-current portion | 195,567 | 188,359 | ||||||
| Other non-current liabilities | 6,427 | 8,144 | ||||||
| Total non-current liabilities | 3,135,804 | 3,544,356 | ||||||
| Total equity and liabilities | 5,223,195 | 5,534,620 | ||||||
Unaudited condensed consolidated statements of profit or loss
For the three and nine months ended September 30, 2019 and 2020
(Amounts expressed in thousands of U.S. Dollars, except per share data)
| For the three months ended | For the nine months ended | |||||||||||||||
| September 30, 2019 | September 30, 2020 | September 30, 2019 | September 30, 2020 | |||||||||||||
| Revenues | 165,586 | 156,729 | 486,384 | 481,487 | ||||||||||||
| Net pool allocation | (184 | ) | — | (4,264 | ) | — | ||||||||||
| Voyage expenses and commissions | (6,656 | ) | (5,159 | ) | (19,440 | ) | (18,074 | ) | ||||||||
| Vessel operating and supervision costs | (33,796 | ) | (39,161 | ) | (100,124 | ) | (106,818 | ) | ||||||||
| Depreciation | (43,237 | ) | (45,106 | ) | (124,186 | ) | (130,250 | ) | ||||||||
| General and administrative expenses | (11,324 | ) | (14,677 | ) | (32,873 | ) | (35,452 | ) | ||||||||
| Loss on disposal of non-current assets | — | — | — | (572 | ) | |||||||||||
| Impairment loss on vessels | — | — | — | (22,454 | ) | |||||||||||
| Profit from operations | 70,389 | 52,626 | 205,497 | 167,867 | ||||||||||||
| Financial costs | (46,461 | ) | (41,103 | ) | (138,865 | ) | (126,101 | ) | ||||||||
| Financial income | 1,189 | 40 | 4,357 | 685 | ||||||||||||
| Loss on derivatives | (16,758 | ) | (2,095 | ) | (67,801 | ) | (86,686 | ) | ||||||||
| Share of profit of associates | 530 | 648 | 1,088 | 1,576 | ||||||||||||
| Total other expenses, net | (61,500 | ) | (42,510 | ) | (201,221 | ) | (210,526 | ) | ||||||||
| Profit/(loss) for the period | 8,889 | 10,116 | 4,276 | (42,659 | ) | |||||||||||
| Attributable to: | ||||||||||||||||
| Owners of the Group | (13,545 | ) | (354 | ) | (50,490 | ) | (73,181 | ) | ||||||||
| Non-controlling interests | 22,434 | 10,470 | 54,766 | 30,522 | ||||||||||||
| 8,889 | 10,116 | 4,276 | (42,659 | ) | ||||||||||||
| Loss per share – basic and diluted | (0.20 | ) | (0.03 | ) | (0.72 | ) | (0.94 | ) | ||||||||
Unaudited condensed consolidated statements of cash flows
For the nine months ended September 30, 2019 and 2020
(Amounts expressed in thousands of U.S. Dollars)
| For the nine months ended | ||||||||||
| September 30, 2019 | September 30, 2020 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Profit/(loss) for the period | 4,276 | (42,659 | ) | |||||||
| Adjustments for: | ||||||||||
| Depreciation | 124,186 | 130,250 | ||||||||
| Impairment loss on vessels | — | 22,454 | ||||||||
| Loss on disposal of non-current assets | — | 572 | ||||||||
| Share of profit of associates | (1,088 | ) | (1,576 | ) | ||||||
| Financial income | (4,357 | ) | (685 | ) | ||||||
| Financial costs | 138,865 | 126,101 | ||||||||
| Unrealized foreign exchange losses on cash and cash equivalents | 373 | — | ||||||||
| Realized foreign exchange losses | 773 | — | ||||||||
| Unrealized loss on derivative financial instruments held for trading including ineffective portion of cash flow hedges | 67,643 | 74,638 | ||||||||
| Share-based compensation | 3,728 | 4,983 | ||||||||
| 334,399 | 314,078 | |||||||||
| Movements in working capital | (41,514 | ) | (13,041 | ) | ||||||
| Cash provided by operations | 292,885 | 301,037 | ||||||||
| Interest paid | (145,066 | ) | (134,712 | ) | ||||||
| Net cash provided by operating activities | 147,819 | 166,325 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Payments for tangible fixed assets and vessels under construction | (446,529 | ) | (540,337 | ) | ||||||
| Proceeds from disposal of tangible fixed assets | — | 2,322 | ||||||||
| Return of capital expenditures | 10,451 | — | ||||||||
| Other investments | (158 | ) | — | |||||||
| Payments for right-of-use assets | (488 | ) | (5,815 | ) | ||||||
| Dividends received from associate | 938 | 1,325 | ||||||||
| Purchase of short-term investments | (78,000 | ) | — | |||||||
| Maturity of short-term investments | 79,000 | 4,500 | ||||||||
| Financial income received | 4,523 | 803 | ||||||||
| Net cash used in investing activities | (430,263 | ) | (537,202 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from bank loans and bonds | 807,180 | 1,678,938 | ||||||||
| Bank loan and bond repayments | (519,379 | ) | (1,318,416 | ) | ||||||
| Payment for bond repurchase at a premium | — | (1,937 | ) | |||||||
| Payment for interest rate swaps termination | — | (26,867 | ) | |||||||
| Proceeds from entering into interest rate swaps | — | 31,622 | ||||||||
| Payment of loan issuance costs | (11,269 | ) | (25,657 | ) | ||||||
| Payment of equity raising costs | (1,584 | ) | (816 | ) | ||||||
| Proceeds from private placement | — | 36,000 | ||||||||
| Dividends paid | (119,993 | ) | (74,857 | ) | ||||||
| Payment for cross currency swaps’ termination | — | (4,051 | ) | |||||||
| Purchase of treasury shares or GasLog Partners’ common units | (23,782 | ) | (2,996 | ) | ||||||
| Payments for lease liability | (7,368 | ) | (8,225 | ) | ||||||
| Net cash provided by financing activities | 123,805 | 282,738 | ||||||||
| Effects of exchange rate changes on cash and cash equivalents | (373 | ) | (2,138 | ) | ||||||
| Decrease in cash and cash equivalents | (159,012 | ) | (90,277 | ) | ||||||
| Cash and cash equivalents, beginning of the period | 342,594 | 263,747 | ||||||||
| Cash and cash equivalents, end of the period | 183,582 | 173,470 | ||||||||
EXHIBIT II
Non-GAAP Financial Measures:
EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS
EBITDA is defined as earnings before depreciation, amortization, financial income and costs, gain/loss on derivatives and taxes. Adjusted EBITDA is defined as EBITDA before foreign exchange gains/losses, impairment loss on vessels, gain/loss on disposal of non-current assets and restructuring costs. Adjusted Profit represents earnings before write-off and accelerated amortization of unamortized loan fees/bond fees and premium, foreign exchange gains/losses, unrealized foreign exchange losses on cash and bond, impairment loss on vessels, gain/loss on disposal of non-current assets, restructuring costs and non-cash gain/loss on derivatives that includes (if any) (a) unrealized gain/loss on derivative financial instruments held for trading, (b) recycled loss of cash flow hedges reclassified to profit or loss and (c) ineffective portion of cash flow hedges. Adjusted EPS represents earnings attributable to owners of the Group before write-off and accelerated amortization of unamortized loan/bond fees and premium, foreign exchange gains/losses, unrealized foreign exchange losses on cash and bond, impairment loss on vessels attributable to the owners of the Group, the swap optimization costs (with respect to cash collateral amendments), gain/loss on disposal of non-current assets, restructuring costs and non-cash gain/loss on derivatives as defined above, divided by the weighted average number of shares outstanding. EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS are non-GAAP financial measures that are used as supplemental financial measures by management and external users of financial statements, such as investors, to assess our financial and operating performance. We believe that these non-GAAP financial measures assist our management and investors by increasing the comparability of our performance from period to period. We believe that including EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS assists our management and investors in (i) understanding and analyzing the results of our operating and business performance, (ii) selecting between investing in us and other investment alternatives and (iii) monitoring our ongoing financial and operational strength in assessing whether to purchase and/or to continue to hold our common shares. This is achieved by excluding the potentially disparate effects between periods of, in the case of EBITDA and Adjusted EBITDA, financial costs, gain/loss on derivatives, taxes, depreciation and amortization; in the case of Adjusted EBITDA, foreign exchange gains/losses, impairment loss on vessels, gain/loss on disposal of non-current assets and restructuring costs; and in the case of Adjusted Profit and Adjusted EPS, write-off and accelerated amortization of unamortized loan/bond fees and premium, foreign exchange gains/losses, unrealized foreign exchange losses on cash and bond, impairment loss on vessels, swap optimization costs (with respect to cash collateral amendments), gain/loss on disposal of non-current assets, restructuring costs and non-cash gain/loss on derivatives, which items are affected by various and possibly changing financing methods, financial market conditions, capital structure and historical cost basis, and which items may significantly affect results of operations between periods. In the current period, impairment loss on vessels, gain/loss on disposal of non-current assets, swap optimization costs (with respect to cash collateral amendments) and restructuring costs in particular are excluded from Adjusted EBITDA, Adjusted Profit and Adjusted EPS because impairment of long-lived assets and gain/loss on disposal of non-current assets, which represent the excess of their carrying amount over the amount that is expected to be recovered from them in the future, and swap optimization costs (with respect to cash collateral amendments) and restructuring costs, which reflect specific actions taken by management to improve the Group’s future liquidity and profitability, are charges and items not considered to be reflective of the ongoing operations of the company, respectively, that we believe reduce the comparability of our operating and business performance across periods. In addition, unrealized foreign exchange losses on cash and bond, are separately adjusted in the current period, while in the past foreign exchange losses on cash were included in foreign exchange gains/losses and unrealized foreign exchange losses on bond did not exist.
EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS have limitations as analytical tools and should not be considered as alternatives to, or as substitutes for, or superior to, profit, profit from operations, earnings per share or any other measure of operating performance presented in accordance with IFRS. Some of these limitations include the fact that they do not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments, (ii) changes in, or cash requirements for, our working capital needs and (iii) the cash requirements necessary to service interest or principal payments on our debt. Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. EBITDA, Adjusted EBITDA, Adjusted Profit and Adjusted EPS are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows and other companies in our industry may calculate these measures differently than we do, limiting their usefulness as a comparative measure.
In evaluating Adjusted EBITDA, Adjusted Profit and Adjusted EPS, you should be aware that in the future we may incur expenses that are the same as, or similar to, some of the adjustments in this presentation. Our presentation of Adjusted EBITDA, Adjusted Profit and Adjusted EPS should not be construed as an inference that our future results will be unaffected by the excluded items. Therefore, the non-GAAP financial measures as presented below may not be comparable to similarly titled measures of other companies in the shipping or other industries.
Reconciliation of Profit/(Loss) to EBITDA and Adjusted EBITDA:
(Amounts expressed in thousands of U.S. Dollars)
| For the three months ended | For the nine months ended | ||||||||||||||||
| September 30, 2019 | September 30, 2020 | September 30, 2019 | September 30, 2020 | ||||||||||||||
| Profit/(loss) for the period | 8,889 | 10,116 | 4,276 | (42,659 | ) | ||||||||||||
| Depreciation | 43,237 | 45,106 | 124,186 | 130,250 | |||||||||||||
| Financial costs | 46,461 | 41,103 | 138,865 | 126,101 | |||||||||||||
| Financial income | (1,189 | ) | (40 | ) | (4,357 | ) | (685 | ) | |||||||||
| Loss on derivatives | 16,758 | 2,095 | 67,801 | 86,686 | |||||||||||||
| EBITDA | 114,156 | 98,380 | 330,771 | 299,693 | |||||||||||||
| Foreign exchange losses, net | 878 | 584 | 1,246 | 354 | |||||||||||||
| Restructuring costs | — | 3,147 | — | 5,107 | |||||||||||||
| Loss on disposal of non-current assets | — | — | — | 572 | |||||||||||||
| Impairment loss on vessels | — | — | — | 22,454 | |||||||||||||
| Adjusted EBITDA | 115,034 | 102,111 | 332,017 | 328,180 | |||||||||||||
Reconciliation of Profit/(loss) to Adjusted Profit:
(Amounts expressed in thousands of U.S. Dollars)
| For the three months ended | For the nine months ended | ||||||||||||||||
| September 30, 2019 | September 30, 2020 | September 30, 2019 | September 30, 2020 | ||||||||||||||
| Profit/(loss) for the period | 8,889 | 10,116 | 4,276 | (42,659 | ) | ||||||||||||
| Non-cash loss/(gains) on derivatives | 15,761 | (5,616 | ) | 67,643 | 74,638 | ||||||||||||
| Write-off and accelerated amortization of unamortized loan/bond fees | — | 4,774 | 988 | 5,090 | |||||||||||||
| Foreign exchange losses, net | 878 | 584 | 1,246 | 354 | |||||||||||||
| Restructuring costs | — | 3,147 | — | 5,107 | |||||||||||||
| Unrealized foreign exchange losses/(gains), net on cash and bonds | — | 14 | — | (4,036 | ) | ||||||||||||
| Swap optimization costs (with respect to cash collateral amendments) | — | — | — | 3,319 | |||||||||||||
| Loss on disposal of non-current assets | — | — | — | 572 | |||||||||||||
| Impairment loss on vessels | — | — | — | 22,454 | |||||||||||||
| Adjusted Profit | 25,528 | 13,019 | 74,153 | 64,839 | |||||||||||||
Reconciliation of Loss Per Share to Adjusted Earnings/(Loss) Per Share:
(Amounts expressed in thousands of U.S. Dollars, except shares and per share data)
| For the three months ended | For the nine months ended | ||||||||||||||||
| September 30, 2019 | September 30, 2020 | September 30, 2019 | September 30, 2020 | ||||||||||||||
| Loss for the period attributable to owners of the Group | (13,545 | ) | (354 | ) | (50,490 | ) | (73,181 | ) | |||||||||
| Plus: | |||||||||||||||||
| Dividend on preference shares | (2,516 | ) | (2,516 | ) | (7,547 | ) | (7,547 | ) | |||||||||
| Loss for the period attributable to owners of the Group used in EPS calculation | (16,061 | ) | (2,870 | ) | (58,037 | ) | (80,728 | ) | |||||||||
| Weighted average number of shares outstanding, basic | 80,861,350 | 95,157,140 | 80,844,836 | 85,605,475 | |||||||||||||
| Loss per share | (0.20 | ) | (0.03 | ) | (0.72 | ) | (0.94 | ) | |||||||||
| Loss for the period attributable to owners of the Group used in EPS calculation | (16,061 | ) | (2,870 | ) | (58,037 | ) | (80,728 | ) | |||||||||
| Plus: | |||||||||||||||||
| Non-cash loss/(gains) on derivatives | 15,761 | (5,616 | ) | 67,643 | 74,638 | ||||||||||||
| Write-off and accelerated amortization of unamortized loan fees/bond fees attributable to the owners of the Group | — | 3,481 | 988 | 3,797 | |||||||||||||
| Impairment loss on vessels attributable to the owners of the Group | — | — | — | 9,688 | |||||||||||||
| Loss on disposal of non-current assets | — | — | — | 572 | |||||||||||||
| Swap optimization costs (with respect to cash collateral amendments) | — | — | — | 3,319 | |||||||||||||
| Foreign exchange losses/(gains), net | 878 | 584 | 1,246 | 354 | |||||||||||||
| Unrealized foreign exchange losses/(gains), net on cash and bonds | — | 14 | — | (4,036 | ) | ||||||||||||
| Restructuring costs | — | 3,147 | — | 5,107 | |||||||||||||
| Adjusted profit/(loss) attributable to owners of the Group | 578 | (1,260 | ) | 11,840 | 12,711 | ||||||||||||
| Weighted average number of shares outstanding, basic | 80,861,350 | 95,157,140 | 80,844,836 | 85,605,475 | |||||||||||||
| Adjusted earnings/(loss) per share | 0.01 | (0.01 | ) | 0.15 | 0.15 | ||||||||||||
FAQ
What were GasLog's Q3 2020 earnings results?
What is the future revenue outlook for GasLog?
What measures has GasLog taken to improve liquidity?
When will GasLog pay its next dividend?
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