GasLog Partners’ second-quarter profit drops

GasLog Partners, the New York-listed spinoff of LNG shipper GasLog saw its profits impacted by dry-dockings and expiration of one vessel’s time charter deal. 

According to the company’s monthly report, the IFRS net profit for the second quarter on slipped 18 percent from $29.2 million in the second quarter of 2017 to $23.8 million.

There were two dry-dockings in the period, with additional off-hire days required for the installation of a reliquefaction module on each vessel, that impacted the profit figures. The GasLog Shanghai LNG carrier ended its time charter and entered the spot market in May.

Compared to the previous quarter, the profit dropped 31 percent.

Commenting on the results, partnership’s CEO Andrew Orekar, said that GasLog Partners continued on the execution of its strategy with the acquisition of the GasLog Gibraltar and agreeing to a firm 18-month time charter plus two six-month options with Cheniere for the GasLog Sydney.

“The outlook for LNG demand remains robust, underpinning a requirement for additional investment in liquefaction, regasification and shipping capacity. With current liquidity available to fund our next drop-down acquisition and the GasLog Shanghai exposed to the anticipated strength in spot LNG shipping rates, we are reiterating our year-on-year distribution growth guidance of 5 percent to 7 percent in 2018,” Orekar said.

The partnership believes that the LNG shipping market could be short of vessels as soon as 2019 based on current supply and demand projections. The earliest a newbuilding can now be delivered is 2021, which points towards a tighter market in 2019 and 2020, again underpinning the outlook for shipping rates.

Based on our analysis and excluding the current orderbook, 28-56 additional vessels may be needed by 2022 to satisfy projected market growth, with this range increasing to 105-137 additional vessels by 2025.