GasLog Ltd. Reports Financial Results for the Three-Month Period Ended June 30, 2020
GasLog Ltd. (NYSE: GLOG) reported Q2 2020 financial results, highlighting revenues of $158.9 million and a loss of $13.3 million, with an adjusted EBITDA of $111.7 million. The company refinanced $1.1 billion in debt, enhancing liquidity by $30.2 million. Notably, the company delivered three LNG carriers, achieving high charter rates with Centrica and JERA. Despite COVID-19 challenges, charter coverage for 2020 remains at 82%. The firm recognized a non-cash impairment loss of $22.5 million, primarily due to the pandemic's impact on LNG demand. A quarterly dividend of $0.05 per share is set for August 27, 2020.
- Refinanced $1.1 billion in debt, strengthening balance sheet and enhancing liquidity by $30.2 million.
- Achieved $294.9 million in contracted time charter revenues for remainder of 2020, representing 82.2% charter coverage.
- Delivered three LNG carriers on time and on budget, commencing multi-year charters.
- Quarterly adjusted profit of $24.6 million and adjusted EBITDA of $111.7 million.
- Reported a loss of $13.3 million and a loss per share of $0.30.
- Non-cash impairment loss of $22.5 million on steam vessels due to uncertain LNG demand.
- Downward pressure on spot rates and earnings due to COVID-19 impacts on economic activity.
Piraeus, Greece, Aug. 05, 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 June 30, 2020.
Highlights
| • | Post quarter-end, refinanced in full the Group’s debt maturities due in 2021 with four new credit facilities representing a total of approximately |
| • | Completed the sale of 14,400,000 shares of common equity through a private placement, including 6,500,000 million shares purchased by Blenheim Holdings Ltd., wholly-owned by the Livanos family, and 4,000,000 shares purchased by a wholly-owned affiliate of the Onassis Foundation, for total gross proceeds of |
| • | Delivery of the GasLog Windsor on April 1, 2020, a 180,000 cubic meters (“cbm”) LNG carrier with dual fuel medium speed propulsion (“X-DF”) and commencement of its seven-year time charter agreement with a wholly-owned subsidiary of Centrica plc. (“Centrica”). |
| • | Delivery of the GasLog Wales on May 11, 2020, a 180,000 cbm LNG carrier with X-DF propulsion and commencement of its 12-year time charter agreement with the principal LNG shipping entity of Japan’s JERA Co., Inc. (“JERA”). |
| • | Post quarter-end delivery of the GasLog Westminster on July 15, 2020, a 180,000 cbm LNG carrier with X-DF propulsion and commencement of its seven-year time charter agreement with Centrica. |
| • | Published the inaugural Sustainability Report for 2019 on June 11, 2020. |
| • | Materially concluded the previously announced organizational changes in relation to our London and Monaco offices. On further review have decided to expand this plan to GasLog Partners and our Stamford office, aiming to achieve further operational efficiencies and to reduce overheads. |
| • | As of June 30, 2020, recognized a non-cash impairment loss of |
| • | Contracted time charter revenues of approximately |
| • | Quarterly Revenues of |
| • | Quarterly Adjusted EBITDA(2) of |
| • | Quarterly dividend of |
(1) Earnings/(loss) per share (“EPS”) and Adjusted EPS are net of the profit attributable to non-controlling interests of
(2) Adjusted EBITDA, Adjusted Profit and Adjusted EPS are non-GAAP financial measures and should not be used in isolation or as a substitute for GasLog’s financial results presented in accordance with International Financial Reporting Standards (“IFRS”). For the definitions and reconciliations of these measures to the most directly comparable financial measures calculated and presented in accordance with IFRS, please refer to Exhibit II at the end of this press release.
Chairman and CEO Statements
Peter G. Livanos, Chairman of GasLog, stated: “The second quarter again demonstrated the resiliency of GasLog’s platform despite the ongoing difficulties created by the COVID-19 pandemic. Our in-built and fully financed growth is delivering as planned, we have made great progress in reducing our operating and overhead expenses as well as our debt service costs following the recent refinancings and we have significantly enhanced our liquidity.”
Paul Wogan, Chief Executive Officer, stated: “Despite the current challenges in our operating and commercial environment we achieved stable year on year performance in the second quarter of 2020 and delivered close to
Our strategic execution continued in the third quarter where, together with GasLog Partners, we refinanced all of the Group’s 2021 debt maturities with four new credit facilities, improving the Group’s liquidity by
I continue to be impressed with the dedication and professionalism of our employees during these uncertain times, particularly our seafarers, many of whom have been away from their families for an extended period. Although we have made progress in crew changes since the COVID-19 outbreak began, progress is slower than we hoped as many countries remain reluctant to allow crews to embark and disembark through their ports. As our seafarers are delivering vitally needed energy to the world I believe they should be recognised as key workers with their health and wellbeing acknowledged and respected by all maritime nations and with their passage from and to their vessels recognised as a priority.”
COVID-19 Update
Given the current uncertainty in relation to COVID-19, we have disclosed certain risks and uncertainties in our Form 6-K for the three months ended June 30, 2020 (refer to Exhibit 99.2), which also updates the risk factors described in our Annual Report on Form 20-F filed with the SEC on March 6, 2020 and in our Quarterly Report on Form 6-K filed with the SEC on May 7, 2020.
Operational update
GasLog’s focus continues to be on ensuring the health and safety of our employees while providing safe and reliable operations for our customers.
- Beginning on June 1, 2020, employees at our Piraeus, Greece location returned to the office on a rotational basis at a capacity of approximately
50.0% . Piraeus office personnel have been provided with the appropriate personal protective equipment and modifications were made to the office’s floor plan to ensure social distancing; plexiglass dividers were installed and enhanced cleaning procedures have been enacted. All other onshore locations continue under a “work from home” policy in accordance with local guidelines and regulations; - Crew changes continue to be planned at every opportunity and to date GasLog has been able to rotate approximately
80.0% of the officers and a smaller percentage of the other ranks. The majority of the crew rotation difficulties we face, are due to continued lockdowns in Singapore and the Philippines; - The GasLog Savannah is expected to complete her scheduled dry-docking by the end of August 2020. The vessel began its dry-docking in Singapore on April 9, 2020; however, COVID-19 related lockdown measures were enacted soon thereafter and extended through early July, preventing its scheduled completion and, as a result, the GasLog Savannah was off-charter for a total of 90 days and approximately 60 days during the second and third quarters of 2020, respectively; and
- As a result of these measures and the dedication of our employees onshore and aboard our vessels, excluding the GasLog Savannah approximately
100% of our fleet continues to be available for commercial use.
Commercial update
COVID-19 placed downward pressure on economic activity and energy demand during the second quarter and there remains significant uncertainty regarding near-term LNG demand and, therefore, LNG shipping requirements.
- The Group’s charter coverage for the remainder of 2020 is
82% ; - The combined impact of COVID-19 and normal seasonality has led to greater volatility in spot rates;
- The utilization and earnings of our vessels trading in the spot market may be materially lower than their earnings under their initial multi-year charters; and
- On September 4, 2019, GasLog announced a new 10-year time charter with Sinolam LNG Terminal, S.A. for the GasLog Singapore for use as a floating storage unit (“FSU”) in support of a LNG gas-fired power plant currently being developed near Colon, Panama, by Sinolam Smarter Energy LNG Power Company, a subsidiary of private Chinese investment group Shanghai Gorgeous Development Company. The completion of the power plant was initially scheduled for the second quarter of 2020 but has since been delayed by 6 months, the result of COVID-19 related impacts to the construction schedule. GasLog has received approval to defer conversion of the GasLog Singapore until the first quarter of 2021 to align more closely with the project’s new expected start date. All other terms of the charter party agreement remain in effect.
Financial update
COVID-19 has had a sustained impact on global capital and bank credit markets, affecting access, timing and cost of capital.
- Notwithstanding COVID-19, we have refinanced the Group’s debt maturities due in 2021 with four new credit facilities representing a total of approximately
$1.1 billion , strengthening the balance sheet and delivering$30.2 million of incremental liquidity to the Group; - Following recent amendments with several counterparties to our interest rate swap agreements as well as a strengthening of the Norwegian Kroner versus the U.S Dollar since late March, our cash collateral with respect to our interest rate and cross-currency swaps agreements was
$44.8 million as of July 31, 2020, down from$71.1 million as of June 30, 2020 and$81.2 million as of March 31, 2020; and - As of June 30, 2020, we recognized a non-cash impairment loss of
$22.5 million in aggregate on certain of our Steam vessels due to the uncertainty regarding the effects of COVID-19 in the short-term spot market, as discussed in the Commercial update above.
LNG Market Update and Outlook
LNG demand was 86 million tonnes (“mt”) in the second quarter of 2020, according to Poten, compared to 87 mt in the second quarter of 2019, or a decrease of approximately
Global LNG supply was approximately 89 mt in the first quarter of 2020, an increase of 2 mt over the second quarter of 2019, or
In the LNG shipping spot market, tri-fuel diesel electric vessel (“TFDE”) headline rates, as reported by Clarksons, averaged
Although many economies around the world have begun to reopen in various stages, the COVID-19 outbreak continues to create high levels of uncertainty for LNG demand and therefore, LNG shipping, at least through the near-term. In addition, global gas prices and gas price differentials between the Atlantic and Pacific basins remain near their historic lows, limiting the opportunities for inter-basin trading, as evidenced by the reported cancellation of over 100 cargoes out of the U.S. during the third quarter of 2020. These factors, when combined with scheduled deliveries to the global fleet and usual seasonal trading patterns, have the potential to keep downward pressure on rates in the spot and short-term shipping markets over the near-term. Further ahead, futures curves for global natural gas prices indicate the potential for higher LNG demand and the resumption of inter-basin trading during the Northern Hemisphere winter, which if realized, would be expected to translate into higher utilization for the global LNG carrier fleet.
As of July 31, 2020, the orderbook totals 109 dedicated LNG carriers (>100,000 cbm), according to estimates from Poten, representing
Debt Refinancing
On July 16, 2020, GasLog Partners entered into a credit agreement of
Also, on July 16, 2020, GasLog Partners entered into a credit agreement of
GasLog has concurrently refinanced the existing indebtedness due in 2021 for the GasLog Savannah, the GasLog Singapore, the GasLog Skagen, the GasLog Saratoga, the GasLog Salem, and the Methane Lydon Volney by entering into a credit agreement of
On July 30, 2020, GasLog entered into a credit agreement with National Bank of Greece S.A. for the refinancing of GAS-fifteen Ltd., the entity owning the GasLog Chelsea. Funded on July 31, 2020, the facility provides
The signing and closing of the four credit facilities described above was completed during a time of unprecedented uncertainty in credit and bank markets and saw participation from new and existing lenders, which underscores the strength and scale of our platform to attract new capital providers, refinancing in full our debt maturities due in 2021, strengthen the balance sheet and create additional liquidity.
Delivery of the GasLog Windsor
On April 1, 2020, GasLog took delivery of the GasLog Windsor, a 180,000 cbm LNG carrier with X-DF propulsion constructed by Samsung Heavy Industries Co., Ltd. (“Samsung”). Despite the disruption in South Korea caused by the COVID-19 outbreak, the vessel was delivered on time and on budget. Upon delivery, the vessel immediately commenced its seven-year charter with Centrica.
Delivery of the GasLog Wales
On May 11, 2020, GasLog took delivery of the GasLog Wales, a 180,000 cbm LNG carrier with X-DF propulsion constructed by Samsung. Despite the disruption in South Korea caused by the COVID-19 outbreak, the vessel was delivered on time and on budget. Upon delivery, the vessel immediately commenced its 12-year charter with JERA.
Private Placement of Common Shares
On June 29, 2020, GasLog completed the sale of 14,400,000 common shares at a price of
Delivery of the GasLog Westminster
Post quarter-end, on July 15, 2020, GasLog took delivery of the GasLog Westminster, a 180,000 cbm LNG carrier with X-DF propulsion constructed by Samsung. Despite the disruption in South Korea caused by the COVID-19 outbreak, the vessel was delivered on time and on budget. Upon delivery, the vessel immediately commenced its seven-year charter with Centrica.
Dividend Declarations
On May 14, 2020, the board of directors declared a dividend on the Series A Preference Shares of
On August 4, 2020, the board of directors declared a quarterly cash dividend of
Impairment Loss on Vessels
As of June 30, 2020, the Group recognized a non-cash impairment loss of
Inaugural Sustainability Report
On June 11, 2020 GasLog issued its inaugural 2019 Sustainability Report. The report presents GasLog’ s strategy and commitment toward environmental, social and governance (“ESG”) practices. In addition, the report is transparent in its presentation of operational data, detailing vessel-by-vessel CO2 emissions, fleetwide methane emission and efficiency indices and presents the numerous Key Performance Indicators underscoring our ESG commitment. A copy of the report can be found on our website at https://www.gaslogltd.com/investors/sustainability.
Organizational Update
In November 2019, GasLog announced plans to relocate more of its employees, including several members of senior management, to our main operating office in Piraeus, Greece, to enhance business efficiency, operational excellence and to reduce overheads. By the end of 2020, we will have concluded these organizational changes, having closed the Monaco office and reduced the number of employees in our London office. These measures will result in annualized general and administrative (“G&A”) savings of
As the next phase in our strategy to enhance efficiency and reduce costs, we have now decided to include GasLog Partners and our Stamford office in this initiative. Andrew Orekar, CEO of GasLog Partners, has informed the Company that, as a result of the relocation of his role to Piraeus, Greece, he will step down from his position on September 15, 2020. Paul Wogan, currently CEO of GasLog, will assume the responsibilities of CEO of GasLog Partners on September 16, 2020. Please see today’s separate press release on this matter. In addition, we will reduce the size of the Partnership’s board of directors from seven to five members and will close our Stamford, Connecticut office. This plan is expected to generate annualized G&A savings of
When taken together with the organizational changes already announced, we expect to reduce our G&A expenses by
Financial Summary
| Amounts in thousands of U.S. dollars except per share data | For the three months ended | |||||||
| June 30, 2019 | June 30, 2020 | |||||||
| Revenues | $ | 154,251 | $ | 158,861 | ||||
| Loss for the period | $ | (10,512 | ) | $ | (13,338 | ) | ||
| Adjusted Profit(1) | $ | 20,485 | $ | 24,596 | ||||
| Adjusted EBITDA(1) | $ | 107,043 | $ | 111,665 | ||||
| Loss attributable to the owners of GasLog | $ | (25,998 | ) | $ | (21,348 | ) | ||
| EPS, basic | $ | (0.35 | ) | $ | (0.30 | ) | ||
| Adjusted EPS(1) | $ | 0.03 | $ | 0.02 | ||||
(1) Adjusted EBITDA, Adjusted Profit and Adjusted EPS are non-GAAP financial measures and should not be used in isolation or as a substitute for GasLog’s financial results presented in accordance with IFRS. For definitions and reconciliations of these measurements to the most directly comparable financial measures calculated and presented in accordance with IFRS, please refer to Exhibit II at the end of this press release.
There were 2,458 revenue operating days for the quarter ended June 30, 2020, as compared to 2,409 revenue operating days (including 513 days in the LNG carrier pooling agreement (the “Cool Pool”) for the quarter ended June 30, 2019). The increase in revenue operating days was mainly driven by the increased operating days from the deliveries of the GasLog Warsaw on July 31, 2019, the GasLog Windsor on April 1, 2020 and the GasLog Wales on May 11, 2020, partially offset by unchartered days from the vessels operating in the spot market (for the vessels whose time charters expired), as well as the increased days for dry-dockings.
Management allocates vessel revenues to two categories: (a) variable rate charters (“VR Revenues”) and (b) fixed rate charters (“FR Revenues”). The variable rate charter category contains vessels operating in the LNG carrier spot and short-term market or those which have a variable rate of hire across the charter period. The vessels in this category during the second 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, the Methane Alison Victoria and the Methane Shirley Elisabeth.
Revenues were
For the quarter ended June 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 June 30, 2020 | ||||||||
| Amounts in thousands of U.S. dollars | Variable rate charters | Fixed rate charters | ||||||
| Available days (*) | 797 | 1,794 | ||||||
| Revenue operating days(**) | 665 | 1,793 | ||||||
| Revenues | 19,671 | 139,190 | ||||||
| Voyage expenses and commissions | (3,293 | ) | (2,149 | ) | ||||
(*) 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 unchartered days.
In addition, GasLog recognized gross revenues and gross voyage expenses and commissions of
Voyage expenses and commissions were
Vessel operating and supervision costs were
General and administrative expenses remained
Depreciation was
Financial costs were
| (All amounts expressed in thousands of U.S. dollars) | For the three months ended | ||||||||||
| June 30, 2019 | June 30, 2020 | ||||||||||
| Financial costs | |||||||||||
| Amortization and write-off of deferred loan/bond issuance costs/premium | $ | (3,224 | ) | $ | (3,697 | ) | |||||
| Interest expense on loans | (32,383 | ) | (25,147 | ) | |||||||
| Interest expense on bonds and realized loss on cross-currency swaps (“CCS”) | (8,256 | ) | (8,856 | ) | |||||||
| Lease charge | (2,635 | ) | (2,526 | ) | |||||||
| Other financial costs, net | (399 | ) | (3,331 | ) | |||||||
| Total | $ | (46,897 | ) | $ | (43,557 | ) | |||||
Loss on derivatives was
| (All amounts expressed in thousands of U.S. dollars) | For the three months ended | |||||||||||
| June 30, 2019 | June 30, 2020 | |||||||||||
| Loss on derivatives | ||||||||||||
| Realized gain/(loss) on derivatives held for trading | $ | 1,226 | $ | (2,731 | ) | |||||||
| Realized loss on forward foreign exchange contracts held for trading | (1,246 | ) | (531 | ) | ||||||||
| Unrealized loss on derivative financial instruments held for trading | (30,781 | ) | (9,140 | ) | ||||||||
| Ineffective portion of cash flow hedges | 2 | (1,065 | ) | |||||||||
| Total | $ | (30,799 | ) | $ | (13,467 | ) | ||||||
Loss for the period was
Adjusted Profit(1) was
Loss attributable to the owners of GasLog was
Adjusted EBITDA(1) was
EPS was a loss of
Adjusted EPS(1) was a gain of
(1) Adjusted Profit, Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures and should not be used in isolation or as a substitute for GasLog’s financial results presented in accordance with IFRS. For definitions and reconciliations of these measurements to the most directly comparable financial measures calculated and presented in accordance with IFRS, please refer to Exhibit II at the end of this press release.
Contracted Charter Revenues
As of June 30, 2020, the total future firm contracted revenue stood at
(1) 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.
Liquidity and Capital Resources
As of June 30, 2020, GasLog had
On January 13, 2020, GasLog completed the partial exchange of
On February 13, 2020, on March 13, 2020 and on March 18, 2020, GasLog drew down
On June 29, 2020, GasLog closed the sale of 14,400,000 common shares at a price of
As of June 30, 2020, the total remaining balance of the contract prices of the five LNG carriers on order was
As of June 30, 2020, GasLog had an aggregate of
On July 21, 2020 and July 31, 2020, the respective subsidiaries of GasLog drew down a total of
GasLog has hedged
Diversifying the list of hedging providers, GasLog has entered into novation agreements with Nordea Bank Finland (“Nordea”) and Standard Chartered Bank. Subsequently, two interest rate swaps originally held with Nordea and due to mature in 2022, have now been transferred to Standard Chartered Bank. The aggregate notional of the trades is
As of June 30, 2020, GasLog’s current assets totaled
Future Deliveries
As of August 5, 2020, GasLog has four newbuildings on order at Samsung which are on schedule and within budget:
LNG Carrier | Year Built(1) | Shipyard | Cargo Capacity (cbm) | Charterer | Propulsion | Estimated Charter Expiration(2) | ||||||||||||||
| Hull No. 2300 | Q4 2020 | Samsung | 174,000 | Cheniere(3) | X-DF | 2027 | ||||||||||||||
| Hull No. 2301 | Q1 2021 | Samsung | 174,000 | Cheniere(3) | X-DF | 2028 | ||||||||||||||
| Hull No. 2311 | Q2 2021 | Samsung | 180,000 | Cheniere(3) | X-DF | 2028 | ||||||||||||||
| Hull No. 2312 | Q3 2021 | Samsung | 180,000 | Cheniere(3) | X-DF | 2028 | ||||||||||||||
____________
(1) Expected delivery quarters are presented.
(2) Charter expiration to be determined based upon actual date of delivery.
(3) The vessel is chartered to a wholly-owned subsidiary of Cheniere Energy, Inc. (“Cheniere”).
Conference Call
GasLog and GasLog Partners will host a joint conference call to discuss their results for the second quarter of 2020 at 8.30 a.m. EDT (3.30 p.m. EEST) on Wednesday, August 5, 2020. Senior management of GasLog and GasLog Partners will review the operational and financial performance of both companies. The presentation will be followed by a Q&A session.
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: 1796557
A live webcast of the conference call will also be available on the Investor Relations page of both the GasLog (http://www.gaslogltd.com/investors) and GasLog Partners (http://www.gaslogmlp.com/investors) websites.
For those unable to participate in the conference call, a replay of the webcast will be available on the Investor Relations pages of the companies 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, 19 (15 on the water and four on order) are owned by GasLog, one has been sold to a subsidiary of Mitsui & Co. Ltd. and leased back by GasLog under a long-term bareboat charter 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 Report on Form 6-K filed with the SEC on May 7, 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 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 June 30, 2020
(Amounts expressed in thousands of U.S. Dollars)
| December 31, 2019 | June 30, 2020 | |||||||
| Assets | ||||||||
| Non-current assets | ||||||||
| Goodwill | 9,511 | 9,511 | ||||||
| Investment in associates | 21,620 | 21,273 | ||||||
| Deferred financing costs | 11,592 | 10,217 | ||||||
| Other non-current assets | 24,221 | 42,442 | ||||||
| Derivative financial instruments | 3,572 | — | ||||||
| Tangible fixed assets | 4,427,065 | 4,725,035 | ||||||
| Vessels under construction | 203,323 | 175,969 | ||||||
| Right-of-use assets | 206,495 | 207,753 | ||||||
| Total non-current assets | 4,907,399 | 5,192,200 | ||||||
| Current assets | ||||||||
| Trade and other receivables | 24,900 | 26,702 | ||||||
| Dividends receivable and other amounts due from related parties | 573 | 3,342 | ||||||
| Derivative financial instruments | 429 | — | ||||||
| Inventories | 8,172 | 8,821 | ||||||
| Prepayments and other current assets | 13,475 | 37,982 | ||||||
| Short-term investments | 4,500 | — | ||||||
| Cash and cash equivalents | 263,747 | 172,914 | ||||||
| Total current assets | 315,796 | 249,761 | ||||||
| Total assets | 5,223,195 | 5,441,961 | ||||||
| Equity and liabilities | ||||||||
| Equity | ||||||||
| Preference shares | 46 | 46 | ||||||
| Share capital | 810 | 954 | ||||||
| Contributed surplus | 760,671 | 774,378 | ||||||
| Reserves | 16,799 | 14,839 | ||||||
| Treasury shares | (2,159 | ) | (1,718 | ) | ||||
| Accumulated deficit | (87,832 | ) | (160,659 | ) | ||||
| Equity attributable to owners of the Group | 688,335 | 627,840 | ||||||
| Non-controlling interests | 961,518 | 943,138 | ||||||
| Total equity | 1,649,853 | 1,570,978 | ||||||
| Current liabilities | ||||||||
| Trade accounts payable | 27,615 | 37,303 | ||||||
| Ship management creditors | 601 | 784 | ||||||
| Amounts due to related parties | 200 | 78 | ||||||
| Derivative financial instruments | 8,095 | 34,616 | ||||||
| Other payables and accruals | 136,242 | 114,785 | ||||||
| Borrowings, current portion | 255,422 | 465,200 | ||||||
| Lease liability, current portion | 9,363 | 9,769 | ||||||
| Total current liabilities | 437,538 | 662,535 | ||||||
| Non-current liabilities | ||||||||
| Derivative financial instruments | 41,837 | 102,855 | ||||||
| Borrowings, non-current portion | 2,891,973 | 2,907,842 | ||||||
| Lease liability, non-current portion | 195,567 | 190,924 | ||||||
| Other non-current liabilities | 6,427 | 6,827 | ||||||
| Total non-current liabilities | 3,135,804 | 3,208,448 | ||||||
| Total equity and liabilities | 5,223,195 | 5,441,961 | ||||||
Unaudited condensed consolidated statements of profit or loss
For the three and six months ended June 30, 2019 and 2020
(Amounts expressed in thousands of U.S. Dollars, except per share data)
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, 2019 | June 30, 2020 | June 30, 2019 | June 30, 2020 | |||||||||||||
| Revenues | 154,251 | 158,861 | 320,798 | 324,758 | ||||||||||||
| Net pool allocation | 2,658 | — | (4,080 | ) | — | |||||||||||
| Voyage expenses and commissions | (5,867 | ) | (5,442 | ) | (12,784 | ) | (12,915 | ) | ||||||||
| Vessel operating and supervision costs | (33,358 | ) | (32,605 | ) | (66,328 | ) | (67,657 | ) | ||||||||
| Depreciation | (41,350 | ) | (43,647 | ) | (80,949 | ) | (85,144 | ) | ||||||||
| Loss on disposal of non-current assets | — | (572 | ) | — | (572 | ) | ||||||||||
| Impairment loss on vessels | — | (22,454 | ) | — | (22,454 | ) | ||||||||||
| General and administrative expenses | (11,172 | ) | (11,154 | ) | (21,549 | ) | (20,775 | ) | ||||||||
| Profit from operations | 65,162 | 42,987 | 135,108 | 115,241 | ||||||||||||
| Financial costs | (46,897 | ) | (43,557 | ) | (92,404 | ) | (84,998 | ) | ||||||||
| Financial income | 1,709 | 177 | 3,168 | 645 | ||||||||||||
| Loss on derivatives | (30,799 | ) | (13,467 | ) | (51,043 | ) | (84,591 | ) | ||||||||
| Share of profit of associates | 313 | 522 | 558 | 928 | ||||||||||||
| Total other expenses, net | (75,674 | ) | (56,325 | ) | (139,721 | ) | (168,016 | ) | ||||||||
| Loss for the period | (10,512 | ) | (13,338 | ) | (4,613 | ) | (52,775 | ) | ||||||||
| Attributable to: | ||||||||||||||||
| Owners of the Group | (25,998 | ) | (21,348 | ) | (36,945 | ) | (72,827 | ) | ||||||||
| Non-controlling interests | 15,486 | 8,010 | 32,332 | 20,052 | ||||||||||||
| (10,512 | ) | (13,338 | ) | (4,613 | ) | (52,775 | ) | |||||||||
| Loss per share – basic and diluted | (0.35 | ) | (0.30 | ) | (0.52 | ) | (0.96 | ) | ||||||||
Unaudited condensed consolidated statements of cash flows
For the six months ended June 30, 2019 and 2020
(Amounts expressed in thousands of U.S. Dollars)
| For the six months ended | ||||||||||
| June 30, 2019 | June 30, 2020 | |||||||||
| Cash flows from operating activities: | ||||||||||
| Loss for the period | (4,613 | ) | (52,775 | ) | ||||||
| Adjustments for: | ||||||||||
| Depreciation | 80,949 | 85,144 | ||||||||
| Impairment loss on vessels | — | 22,454 | ||||||||
| Loss on disposal of non-current assets | — | 572 | ||||||||
| Share of profit of associates | (558 | ) | (928 | ) | ||||||
| Financial income | (3,168 | ) | (645 | ) | ||||||
| Financial costs | 92,404 | 84,998 | ||||||||
| Unrealized foreign exchange (gains)/losses on cash and cash equivalents | (122 | ) | — | |||||||
| Unrealized loss on derivative financial instruments held for trading including ineffective portion of cash flow hedges | 51,882 | 80,254 | ||||||||
| Share-based compensation | 2,587 | 2,992 | ||||||||
| 219,361 | 222,066 | |||||||||
| Movements in working capital | (37,897 | ) | (64,220 | ) | ||||||
| Cash provided by operations | 181,464 | 157,846 | ||||||||
| Interest paid | (82,691 | ) | (84,998 | ) | ||||||
| Net cash provided by operating activities | 98,773 | 72,848 | ||||||||
| Cash flows from investing activities: | ||||||||||
| Payments for tangible fixed assets and vessels under construction | (256,888 | ) | (374,605 | ) | ||||||
| Return of capital expenditures | 5,629 | — | ||||||||
| Other investments | (158 | ) | — | |||||||
| Payments for right-of-use assets | (232 | ) | (2,738 | ) | ||||||
| Dividends received from associate | 538 | 900 | ||||||||
| Purchase of short-term investments | (54,000 | ) | — | |||||||
| Maturity of short-term investments | 35,000 | 4,500 | ||||||||
| Financial income received | 2,960 | 764 | ||||||||
| Net cash used in investing activities | (267,151 | ) | (371,179 | ) | ||||||
| Cash flows from financing activities: | ||||||||||
| Proceeds from bank loans | 677,680 | 401,911 | ||||||||
| Bank loan and bond repayments | (445,604 | ) | (150,508 | ) | ||||||
| Payment for bond repurchase at a premium | — | (1,937 | ) | |||||||
| Payment for interest rate swaps termination | — | (10,811 | ) | |||||||
| Proceeds from entering into interest rate swaps | — | 10,770 | ||||||||
| Payment of loan issuance costs | (9,175 | ) | (7,605 | ) | ||||||
| Payment of equity raising costs | (894 | ) | (15 | ) | ||||||
| Proceeds from private placement | — | 36,000 | ||||||||
| Dividends paid | (82,111 | ) | (55,955 | ) | ||||||
| Payment for CCS termination | — | (4,051 | ) | |||||||
| Purchase of treasury shares | (13,673 | ) | (2,996 | ) | ||||||
| Payments for lease liability | (4,770 | ) | (5,182 | ) | ||||||
| Net cash provided by financing activities | 121,453 | 209,621 | ||||||||
| Effects of exchange rate changes on cash and cash equivalents | 122 | (2,123 | ) | |||||||
| Decrease in cash and cash equivalents | (46,803 | ) | (90,833 | ) | ||||||
| Cash and cash equivalents, beginning of the period | 342,594 | 263,747 | ||||||||
| Cash and cash equivalents, end of the period | 295,791 | 172,914 | ||||||||
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 amendment costs (with respect to cash collateral requirements), 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 amendment costs (with respect to cash collateral requirements), 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 amendment costs (with respect to cash collateral requirements) and restructuring costs in particular are excluded from Adjusted EBITDA, Adjusted Profit and Adjusted EPS because impairments 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 amendment costs (with respect to cash collateral requirements) and restructuring costs, which reflect specific actions taken by management to improve the Group’s future liquidity and profitability, are non-cash 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 Loss to EBITDA and Adjusted EBITDA:
(Amounts expressed in thousands of U.S. Dollars)
| For the three months ended | For the six months ended | ||||||||||||||||
| June 30, 2019 | June 30, 2020 | June 30, 2019 | June 30, 2020 | ||||||||||||||
| Loss for the period | (10,512 | ) | (13,338 | ) | (4,613 | ) | (52,775 | ) | |||||||||
| Depreciation | 41,350 | 43,647 | 80,949 | 85,144 | |||||||||||||
| Financial costs | 46,897 | 43,557 | 92,404 | 84,998 | |||||||||||||
| Financial income | (1,709 | ) | (177 | ) | (3,168 | ) | (645 | ) | |||||||||
| Loss on derivatives | 30,799 | 13,467 | 51,043 | 84,591 | |||||||||||||
| EBITDA | 106,825 | 87,156 | 216,615 | 201,313 | |||||||||||||
| Foreign exchange losses/(gains), net | 218 | 402 | 368 | (230 | ) | ||||||||||||
| Restructuring costs | — | 1,081 | — | 1,526 | |||||||||||||
| Loss on disposal of non-current assets | — | 572 | — | 572 | |||||||||||||
| Impairment loss on vessels | — | 22,454 | — | 22,454 | |||||||||||||
| Adjusted EBITDA | 107,043 | 111,665 | 216,983 | 225,635 | |||||||||||||
Reconciliation of Loss to Adjusted Profit:
(Amounts expressed in thousands of U.S. Dollars)
| For the three months ended | For the six months ended | ||||||||||||||||
| June 30, 2019 | June 30, 2020 | June 30, 2019 | June 30, 2020 | ||||||||||||||
| Loss for the period | (10,512 | ) | (13,338 | ) | (4,613 | ) | (52,775 | ) | |||||||||
| Non-cash loss on derivatives | 30,779 | 10,205 | 51,882 | 80,254 | |||||||||||||
| Write-off and accelerated amortization of unamortized loan/bond fees | — | — | 988 | 316 | |||||||||||||
| Foreign exchange losses/(gains), net | 218 | 402 | 368 | (230 | ) | ||||||||||||
| Restructuring costs | — | 1,081 | — | 1,526 | |||||||||||||
| Unrealized foreign exchange gains, net on cash and bonds | — | (99 | ) | — | (4,050 | ) | |||||||||||
| Swap amendment costs (with respect to cash collateral requirements) | — | 3,319 | — | 3,319 | |||||||||||||
| Loss on disposal of non-current assets | — | 572 | — | 572 | |||||||||||||
| Impairment loss on vessels | — | 22,454 | — | 22,454 | |||||||||||||
| Adjusted Profit | 20,485 | 24,596 | 48,625 | 51,386 | |||||||||||||
Reconciliation of Loss Per Share to Adjusted Earnings Per Share:
(Amounts expressed in thousands of U.S. Dollars, except shares and per share data)
| For the three months ended | For the six months ended | ||||||||||||||||
| June 30, 2019 | June 30, 2020 | June 30, 2019 | June 30, 2020 | ||||||||||||||
| Loss for the period attributable to owners of the Group | (25,998 | ) | (21,348 | ) | (36,945 | ) | (72,827 | ) | |||||||||
| Plus: | |||||||||||||||||
| Dividend on preference shares | (2,516 | ) | (2,516 | ) | (5,031 | ) | (5,032 | ) | |||||||||
| Loss for the period attributable to owners of the Group used in EPS calculation | (28,514 | ) | (23,864 | ) | (41,976 | ) | (77,859 | ) | |||||||||
| Weighted average number of shares outstanding, basic | 80,847,127 | 80,848,314 | 80,836,442 | 80,777,161 | |||||||||||||
| Loss per share | (0.35 | ) | (0.30 | ) | (0.52 | ) | (0.96 | ) | |||||||||
| Loss for the period attributable to owners of the Group used in EPS calculation | (28,514 | ) | (23,864 | ) | (41,976 | ) | (77,859 | ) | |||||||||
| Plus: | |||||||||||||||||
| Non-cash loss on derivatives | 30,779 | 10,205 | 51,882 | 80,254 | |||||||||||||
| Write-off and accelerated amortization of unamortized loan fees/bond fees | — | — | 988 | 316 | |||||||||||||
| Impairment loss on vessels attributable to the owners of the Group | — | 9,688 | — | 9,688 | |||||||||||||
| Loss on disposal of non-current assets | — | 572 | — | 572 | |||||||||||||
| Swap amendment costs (with respect to cash collateral requirements) | — | 3,319 | — | 3,319 | |||||||||||||
| Foreign exchange losses/(gains), net | 218 | 402 | 368 | (230 | ) | ||||||||||||
| Unrealized foreign exchange gains, net on cash and bonds | — | (99 | ) | — | (4,050 | ) | |||||||||||
| Restructuring costs | — | 1,081 | — | 1,526 | |||||||||||||
| Adjusted profit attributable to owners of the Group | 2,483 | 1,304 | 11,262 | 13,536 | |||||||||||||
| Weighted average number of shares outstanding, basic | 80,847,127 | 80,848,314 | 80,836,442 | 80,777,161 | |||||||||||||
| Adjusted earnings per share | 0.03 | 0.02 | 0.14 | 0.17 | |||||||||||||
FAQ
What were GasLog's earnings for Q2 2020?
What is GasLog's stock symbol?
How much liquidity did GasLog enhance through debt refinancing?
What is the expected dividend payout for GasLog in August 2020?
What is GasLog's charter coverage for the remainder of 2020?
