Dynagas LNG Partners LP

Thank you for standing by ladies and gentlemen and welcome to Dynagas LNG partners conference call on first quarter 2021 financial results. We have with us Mr Tony Lauritsen, Chief Executive Officer and Mr Mikael Gregos, Chief Financial Officer of the company. At this time all participants are in a listen only mode. There will be a presentation followed by a question and answer session at which time if you wish to ask a question please press star 1 on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today. At this time I would like to read the Safe Harbour Statement. This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the Safe Harbour provision of the Private Security Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which may affect Dynagas LNG partners' business prospects and results of operations. Such risks are more fully disclosed in Dynagas LNG partners' filings with the Securities and Exchange Commission. And I now pass the floor to Mr. Laretson. Please go ahead, sir.

Morning everyone and thank you for joining us in our three months and the 31st March 2021 earnings conference call. I'm joined today by our CFO Michael Gregos. We have issued a press release announcing our results for the set period. Certain non-GAAP measures will be discussed on this call. We have provided a description of those measures as well as a discussion of why we believe this information to be useful in our press release. Moving on to slide three of the presentation. We are pleased to report the results for the three months ended 31st March 2021. All six LNG carriers in our fleet are operating under their respective long-term charters with international gas producers. Despite the ongoing operational challenges the industry is going through with respect to COVID-19, we are pleased to report 100% utilization for the fleet for the first quarter of 2021. For the first quarter of 2021, we reported net income of 15.9 million, earnings per common unit of 36 cents, adjusted net income of 10.6 million, adjusted earnings per common unit of 21 cents, and adjusted EBDA of 23.9 million. We paid in February 2021 a quarterly cash distribution of 56 cents and a quarter per Series A preferred unit for the period from November 12, 2020 to February 11, 2021, and a quarterly cash distribution of 54 cents and 11 sixteenths for Series B preferred unit for the period from November 22, 2020 to February 21, 2021. Subsequent to the quarter, we paid in May 2021 a quarterly cash distribution of $0.5625 per Series A preferred unit for the period from February 12 to May 11, 2021, and a quarterly cash distribution of $0.54116 per Series B preferred unit for the period from February 22 to May 21, 2021. Also subsequent to the quarter, we issued about $2.15 million worth of common units at an average price per unit of about $2.87 under the amended and restated $30 million ATM sales agreement, which has about $26.5 million of remaining availability. We also entered into a new time charter party agreement with Equinor for the employment of our LNG carrier, Arctic Aurora. Under the new time charter agreement, the Arctic Aurora is expected to be delivered to Equinor in September 2021, immediately upon expiration of the current charter party with Equinor. The new time charter party is about two years and the annual gross revenues from the time charter agreement are expected to be about 21.5 million. Going forward, we intend to continue our strategy of using our cash flow generation to deliver our balance sheet, reinforce our liquidity, and generate cash as to build equity value over time, which will enhance our ability to pursue future growth initiatives. I will now turn the presentation over to Michael, who will provide you with further comments to the financial results.

Thank you, Tony. Moving over to slide four. Our quarter results continue to reflect our stable operating model as our fleet operates with 100% utilization. Adjusted net income for the quarter increased by 49% to $10.6 million compared to the first quarter of 2020, and our adjusted EBITDA was virtually unchanged at $23.9 million compared to the first quarter of 2020. The increase in adjusted net income compared to the same period last year is attributable to a reduction in our weighted average interest rate from 4.89% in the first quarter of 2020 to 3.13% in the first quarter of 2021, and a reduction in our weighted average indebtedness from $662 million to $614 million. Since our debt refinancing in 2019, our profitability has steadily increased and has now stabilized at current levels with adjusted earnings per common unit of 21 cents for the first quarter, reflecting our stable contract-based operating platform and financial profile. Slide five. In line with our strategy of using our contracted cash flow to reduce leverage, for the quarter we utilized 71% of our adjusted EBITDA to service debt and interest payments. For the quarter we generated $22.9 million in operating cash flow, including a positive working capital adjustment of $4 million. Excluding working capital changes, operating cash flow for the quarter was $18.9 million, And after debt service payments and payments to preferred unit holders, we generated $4 million in line with our prior guidance. For the quarter, our cash balance increased by about $9 million to $84 million due to the aforementioned changes and proceeds of $1.3 million from issuance of common units under our ATM program. Slide six, as of end of March, we had 603 million debt outstanding under one credit facility, all of which has been hedged with an interest rate swap for the life of the loan until its maturity in September 2024. We have no scheduled capital expenditures until 2022, which is when three of our LNG carriers will undergo their third special surveys and installment of their ballast water treatment plants. Slide seven, we are continuing to execute our strategy of organically deleveraging our balance sheet with the cash flows from our contracts, which we believe is the only sustainable way of positioning the partnership for future growth. Compared to the same period two years ago, before our refinancing in 2019, our weighted average interest has decreased by 53% and our weighted average indebtedness has decreased by $108 million, which has resulted in a reduction in interest expense of $7 million per quarter. This natural deleveraging process takes time, and we expect that as a result of the $48 million amortization requirement on our sole credit facility, our total projected net leverage will decrease from 5.4 times to less than 3.5 times in 2024 on a steady-state basis. Slide 8. In this slide, we show our fleet-wide cash flow breakeven per day per vessel versus our contracted time charter rates for the quarter. If we look at the breakdown, we have a competitive cash EBITDA breakeven of $17,000 per day per vessel. Cash interest expense represents $8,900 per day per vessel, and repayment of debt is around $22,000 per day. So our contracted fleet time charter equivalent of $60,680 per day per vessel is well above fleet cash break-even levels of $48,000 per day per vessel, excluding preferred distributions. That wraps it up from my side. I will pass over the presentation to Tony.