GasLog Partners posts higher profit
GasLog Partners, the New York-listed spinoff of LNG shipper GasLog reported a rise in profit for the first quarter of this year.
According to the company’s latest quarterly report, the net profit in the three months ended March 31, reached US$21 million, representing a 30 percent increase over the corresponding period in 2016.
However, the company’s profit, in comparison to the fourth quarter of 2016 dropped 15 percent.
The increase in profit in the first quarter of 2017 as compared to the same period in 2016 is mainly attributable to the increase in the profit from operations, mainly attributable to the scheduled dry-dockings and planned repairs performed in the first quarter of 2016, as well as an unrealized gain on interest rate swaps in the first quarter of 2017 as compared to an unrealized loss for the same period in 2016, the report reads.
Speaking of the LNG market, GasLog Partners noted that there has been continued momentum in the start-up of new LNG liquefaction capacity during the quarter.
The third trains at both Gorgon and Sabine Pass started production, while the world’s first floating liquefaction terminal, the Petronas-owned PFLNG Satu, loaded its first cargo in Malaysia.
Later this year, Ichthys, Wheatstone, Cove Point and Sabine Pass Train 4 are all expected to start production. Wood Mackenzie estimates that there will be projects with approximately 34 million tons per annum (mtpa) of nameplate capacity coming online in 2017.
Some offtakers of these projects are yet to secure all of their shipping requirements, GasLog Partners said, adding that except newbuilds, a number of vessels for these projects will be sourced from vessels currently operating in the short-term market, which should be positive for the overall shipping supply and demand balance.
In the shipping market, short-term charter rates declined in February and March largely due to seasonally lower LNG demand following the Northern Hemisphere winter. A high number of “re-lets” during the quarter also weighed on the market. The partnership expects this trend to reverse during the summer cooling season in the Middle East, Europe and Asia and the Southern Hemisphere winter.
While the recovery in charter rates and utilization in the LNG shipping market is taking longer than anticipated, there are some initial signs of increased short-term and long-term activity, GasLog Partners said adding that the longer-term fundamentals point to a strengthening market in 2017 and beyond.