Dynagas LNG Partners LP

Thank you for standing by, ladies and gentlemen, and welcome to the DynaGas LMG Partners conference call on the second quarter 2022 financial results. We have with us Mr. Tony Lauritsen, Chief Executive Officer, and Mr. Michael 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 would like to ask a question, please press star 1 on your telephone keypad and wait for the automated message advising your line is open. I must advise you that this conference call is being recorded today. Please be reminded that the company announced its results with a press release that has been publicly distributed. At this time, I would like to remind everyone that in today's presentation and conference call, Dynagas LNG partners will be making forward-looking statements. These statements are within the meaning of the federal securities law This conference call and slide presentation of the webcast contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Allegation Reform Act of 1995. The statements in today's conference call that are not historical facts include, among other things, the expected financial performance of Dynagas LNG partners' business, Dynagas partners' LNG ability to pursue growth opportunities, Dynagas partners' LNG expectations or objectives regarding feature and market charter rate expectations, and in particular, the effects of COVID-19 on the financial condition and operations of Dyna Gas Partners LNG and the LNG industry in general. May be forward-looking statements such as defined in Section 21E of the Securities Exchange Act of 1934 as amended. Matters discussed may be forward-looking statements which are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to slide two of the webcast presentation, which has the full forward-looking statement, and the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And now, I pass the floor to Mr. Lauridsen. Please go ahead, sir.

Good morning, everyone, and thank you for joining us in our three-month-ended 31st of June 2022 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 of the three months and the 31st of June, 2022. All 67G carriers in our fleet are operating under their respective long-term charters. The fleet's utilization was 100% for the nine consecutive quarter included for this quarter as defined in our press release. For the second quarter of 22, we reported net income of 11.1 million, earnings per comment unit of 22 cents, adjusted net income of 9.1 million, adjusted earnings per comment unit of 17 cents, and adjusted EVVA of 22.9 million. In terms of operational highlights, during the second and third quarters of 2022, we successfully completed the special service and dry dockings of the clean energy on the river and off-river, including balanced water installation in all three vessels in accordance with current regulatory requirements. Our thoughts go out to everyone affected and suffering as a result of the crisis in Ukraine. We continue to closely monitor this ongoing situation, including the implications of economic sanctions, trading restrictions and other considerations that may affect our business. The partnership is currently in compliance with applicable US and EU sanctions. It is our understanding that the current U.S. and EU sanctions regime have broadly exempted energy shipping and do not materially affect the business operations or financial conditions of the partnership. Also, the partnership's counterparties are performing their obligations under their respective town charters in compliance with applicable U.S. and EU rules and regulations. Our vessels named Clean Energy of River and Armour River are uncharted to previous gas from marketing and trading of Singapore. which has been renamed Securing Energy for Europe Marketing and Trading, and which we onwards will refer to as CEFER. CEFER has been placed under control of the German government. The parent of CEFER has received a loan commitment of approximately 9.8 billion euro from the German government. So effectively the clean energy of river and Armour River are trading on routes as directed by CEFR and are no longer sub-chartered by CEFR to Sakhalin Energy. Sanctions legislation is changing rapidly and the partnership is continuously monitoring the ongoing situation. I will now turn the presentation over to Michael, who will provide you with further comments on the financial results.

Thank you, Tony. Turning to slide four, Our quarter results continue to reflect our stable contractually based operating model as our fleet continues to operate with 100% utilization. Net income for the quarter increased by 22% to $11.1 million, primarily due to a $4.8 million gain under our interest rate swap, which was partially offset by the $2.8 million cost and 20 days scheduled off-hire days associated with a special survey and dry books of the Clean Energy and the Amo River. The Clean Energy Class Survey commenced on March 16th and was completed on April 15th, and the Amo Rivers Class Survey commenced on June 25th and was completed on July 29th. The second quarter dry docking and special survey cost of $2.8 million consists of $2.2 million for the clean energy and approximately $600,000 for the Amo River. As of today, we have completed the third Special Survey and Dry Docks of our three steam turbine vessels. Third quarter earnings will reflect the completion of the scheduled Special Survey and Dry Dock of the Amur River and the Ob River. the cost of which for the third quarter is expected to amount to about $8 million in total, $3.6 million for the Amur River and $4.2 million for the Ob River, without taking into account the lost revenue due to 67 off-hire days as a result of these scheduled class survey costs, the impact of which will be about $4 million for the third quarter. including the installation of the ballast water treatment system, which is capitalized, the total cost of the third special survey and dry box of our three steam turbine vessels amounted to $17 million, excluding off-hire time. $2.6 million impacted our Q1 P&L, $2.8 million our second quarter P&L, and as I stated before, $8 million is expected to impact our third quarter PMO, and $3.6 million relates to the installation of the ballast water treatment system, which will be capitalized. Turning to slide five, as of end of June, we had $543 million debt outstanding under one credit facility, all of which has been hedged with an interest rate swap leading to a fixed interest rate of 3.41% for the life of the loan until its maturity in September 2024. We are continuing our comprehensive deleveraging path, which commenced in the first quarter of 2020, having repaid through the quarterly installments on our credit facility $132 million in debt, resulting in a decrease in our net leverage to 4.6 times from 6.6 times and an increase in book value of our equity of 32%. Moving to slide six, In line with our strategy of using our contracted cash flow to reduce leverage for the quarter, we utilized 76% of our unlevered cash flow to service debt and interest payments. Excluding working capital changes, operating cash flow for the quarter was $17.5 million. Our cash balance decreased by about $6.4 million to $100 million, primarily due to working capital changes. Our per vessel quarterly break-even rate, including all operating GMA expenses, debt service payments, and class survey costs, amounted to $53,300, excluding preferred distributions, versus our fleet-contracted time-travel rates for the quarter, which amounted to $62,000 per day per vessel. That wraps it up from my side. I will pass over the presentation to Tony. Thank you, Michael.