Dynagas LNG Partners LP

Thank you for standing by, ladies and gentlemen, and welcome to Dynagas LNG Partners conference call on the first quarter of 2024's financial results. We have with us Mr. Tony Luritsen, 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 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. 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 laws. This conference call and slide presentation contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. The statements in today's conference call that are not historical facts, including, 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 future and market charter rate expectations, and in particular, the effects of COVID-19 on financial condition and operations of Dynagas Partners L&D and the L&D industry in general, may be forward-looking statements as 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'll pass the floor to Mr. Lurtson. Please go ahead, sir.

Good morning, everyone, and thank you for joining us in our three-month and the 31st March 2024 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 long-gap measures will be discussed on this call, and 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. Let's start the presentation and move to slide three. We today present results for the three-month period ending on 31st March, 2024. We are pleased to announce that all six energy carriers in our fleet were operating under long-term charters with esteemed international gas companies. For the first quarter of 24, we reported net income of 11.8 million and earnings per common unit of 23 cents. Our adjusted net income stood at 12.4 million, translating into adjusted earnings per common unit of 25 cents. Furthermore, our adjusted EBITDA for the same period reached 29 million. We are also pleased to report that subsequent to the quarter, We concluded a new lease financing agreement with China Development Bank Financial Leasing for four out of our six energy carriers. This financing, totaling $345 million, along with available cash reserves, has enabled us to fully repay our existing debt before the facility's maturity in September 24. After a long period of strategic deleveraging, we now enjoy significantly lower debt levels and a flexible financing package with two of our L&J carriers debt-free. This positions us well for the partnership's next phase. I will now turn the presentation over to Michael, who will provide you with further comments to the financial results. Thank you, Joni.

Moving on to slide four, we are extremely pleased with closing of our $345 million lease financing for four out of our six LNG carriers, which, along with $63.6 million cash on hand, refinanced the remaining balance of $408 million under our initially $675 million senior secured credit facility, at a significantly reduced margin and with an age-adjusted profile of about 23 years. Our three steam turbine LNG carriers, built 2007 and 2008, have been lease financed with a tenor of five years and a purchase obligation at the end of five years of 20% of the initial financing amount. Our 2013-built vessel, Arctic Aurora, has been lease-financed with a tenor of 10 years, with a purchase obligation of 15 percent of the initial finance amount. Following this refinancing, our total debt outstanding stands at $345 million, a reduction of $75 million compared to the prior quarter, while two of our vessels are now debt-free. Following this floating rate refinancing, our total annual debt amortization will amount to $44 million. We expect that this refinancing will provide the partnership with greater flexibility as there are no financial covenants and no prohibition on distribution to our common unit holders. On a steady-state basis, we expect to reduce our financial leverage even further based on our current run rate, EBITDA of $115 million, to approximately three times. Moving to slide five, Following the recent refinancing, we project the free cash flow to common equity after distribution to preferred unit holders to be approximately $8 million per quarter contingent on the current SOFA rates, utilization, and operating expenses. Please note that our interest rate swap expires in September, and therefore from that point on, we will be fully exposed to current SOFA rates. This slide outlines the pro forma cash break-even per vessel per day based on the terms of our new financing. For these calculations, we've utilized actual Q1 data for operating expenses, administrative expenses, and preferred distributions. We have also projected the debt service for the next 12 months using current SOFA rates and the scheduled amortization of the lease financing. As illustrated, the daily cash break-even per day per vessel is $49,600, excluding preferred distributions compared to our actual contracted net rate of $71,380 per vessel per day in Q1. Moving on to slide six, just a couple of words on the first quarter. Adjusted EBITDA and adjusted net income were up by 23 percent and 87.7 percent, respectively, primarily due to the increase in the voyage revenues of the Arctic Aurora following its new Tom Charter Party agreement with Equinor, which commenced in September 2023. As previously mentioned, we are very satisfied with a new lease financing arrangement secured for four of our vessels. These arrangements are structured to be organically repairable and do not restrict distributions to our common unit holders. Our main objective going forward is to focus on the utilization of our free cash flow. That wraps it up for my side. I will pass the presentation over to Tony. Thank you, Michael.