Business context and reporting period
GasLog Partners LP filed this Form 20-F for the fiscal year ended December 31, 2020; it is an annual report, not a standalone Q4 filing. The Marshall Islands limited partnership owns and operates LNG carriers and reports under IFRS as issued by the IASB. Its fleet comprised 15 vessels: 10 TFDE and five steam-powered carriers. Seven vessels were on long-term charters and eight were operating in the short-term market.
Key financial metrics
Amounts are U.S. dollars; figures below are in millions except per-unit data and percentages.
| Metric | 2020 | 2019 | Change / context |
|---|---|---|---|
| Revenue | $333.7 | $378.7 | Down 11.9% |
| Operating profit | $122.5 | $48.1 | Up $74.3; 2020 includes $23.9 impairment versus $138.8 in 2019 |
| Profit/(loss) for year | $56.9 | ($34.8) | Improved $91.6 |
| Basic earnings per common unit | $0.55 | ($1.43) | Adjusted EPU was $1.29 versus $1.82 |
| Adjusted EBITDA | $230.6 | $276.3 | Down 16.5% |
| Distributable cash flow | $91.2 | $123.1 | Down 25.9% |
| Operating cash flow | $166.6 | $239.1 | Down $72.4 |
| Investing cash flow | ($23.3) | $5.5 | Primarily higher vessel and dry-docking/BWTS spending |
| Financing cash flow | ($136.5) | ($281.0) | Lower distributions and other financing outflows, partly offset by debt repayments |
| Cash and cash equivalents, year-end | $103.7 | $96.9 | Up $6.9 |
| Borrowings, net of issuance costs | $1,285.5 | $1,346.0 | $104.9 current; $1,180.6 non-current |
| Current assets / liabilities | $125.7 / $185.2 | $109.4 / $186.7 | Negative working capital of $59.5 |
| Total indebtedness / total assets | 56.0% | 56.6% | Per the filing’s covenant calculation |
Revenue decline reflected lower hire rates after several prior charters expired, more spot-market exposure, and increased dry-docking off-hire. Average daily hire fell to $64,339 from $70,161. Vessel operating costs declined 2.5% to $74.8 million; financial costs declined to $51.0 million, mainly as lower LIBOR reduced interest expense. Losses on derivatives increased to $14.9 million from $12.8 million. The reported profit recovery was principally due to the smaller impairment charge and lower financial costs, not revenue growth.
Material changes versus the prior comparable period
- Common-unit quarterly distributions were cut from $0.561 for Q4 2019 to $0.125 for Q1 2020, then to $0.01 beginning Q3 2020. The Q4 2020 distribution of $0.01 per unit was paid in February 2021. Preference-unit distributions continued at their stated rates; $30.3 million was declared and paid in 2020.
- Operating cash flow decreased by about 30%, while distributable cash flow fell by about 26%. Management attributed the cash-flow decline to reduced revenue and pool allocation, working-capital movements, and higher realized derivative losses, partly offset by lower cash interest paid.
- The Partnership recognized a $23.9 million non-cash impairment on four steam vessels in 2020, following $138.8 million of impairment on five steam vessels in 2019. Vessel values and future re-chartering assumptions remain sensitive to LNG shipping-market conditions.
- In July 2020, the Partnership refinanced debt maturities due in 2021 through two facilities of $260.3 million and $193.7 million, with amortization beginning in January 2021 and balloon maturities in July 2025.
- At year-end, the Partnership had $30 million available under its revolving Sponsor Credit Facility, maturing in March 2022. It reported no material debt payment default or preference distribution arrears.
Outlook, commentary, risks and unusual items
- Management priorities: Focus capital allocation on debt repayment, preserving liquidity, lowering cash break-even levels and securing new employment for vessels as charters expire. Management said expected cash, operating cash flow and existing facilities should meet liquidity needs and covenant requirements for at least 12 months from the report date; longer-term debt service and covenant compliance depend in part on a sustained LNG charter-market recovery.
- Charter coverage: Year-end contracted charter revenues were estimated at $237.3 million for 2021 and $189.3 million for 2022, with 76.6% and 56.8% of available days contracted, respectively. After charters signed through March 1, 2021, 2021 contracted-day coverage rose to 80.7%. These are management estimates, exclude expenses, assume no charter extensions and are not assured future results.
- Market and fleet risks: Eight ships were exposed to short-term charters, and multiple charters were due to expire in 2021–22. Spot-rate volatility, vessel oversupply, aging steam vessels, charterer performance, COVID-19 effects and the concentration of 72.9% of 2020 revenue with Shell subsidiaries could materially affect earnings and liquidity. Five vessels were scheduled for dry-docking in 2021; one was expected to require a longer, more costly dry-docking to install a ballast-water treatment system.
- Liquidity and debt risks: Current liabilities exceeded current assets by $59.5 million. Debt facilities impose minimum liquidity, asset-value and other covenants and restrict distributions in specified circumstances. The Partnership also warned that lower vessel values could affect collateral tests and that refinancing or additional financing may not be available on acceptable terms. About 36.3% of floating-rate debt exposure was hedged for 2021; year-end interest-rate swaps had a net fair-value liability of $20.3 million.
- Other unusual matters: A $1.2 million restructuring cost was excluded from Adjusted EBITDA; derivative losses were $14.9 million. In February 2021, parent GasLog agreed to a proposed acquisition by GEPIF at $5.80 per GasLog common share, subject to conditions. GasLog remains the Partnership’s controlling general partner; the filing says the transaction could create uncertainty about future direction.
- Assurance: Deloitte issued an unqualified audit opinion on the IFRS financial statements and an unqualified opinion on internal control over financial reporting. Vessel impairment estimates were identified as a critical audit matter.
Most important facts an investor should verify
- Whether expiring charters are renewed, at what rates and durations, and how the eight short-term/spot-market vessels perform.
- Whether operating cash flow and available liquidity cover scheduled debt amortization, dry-docking costs and covenant requirements; confirm the relevant covenant definitions and headroom.
- Whether the vessel impairment assumptions—especially future charter rates and discount rates—remain supportable, and whether further impairment or covenant pressure arises.
- Whether the $0.01 common-unit distribution is maintained, changed or eliminated, and whether preference distributions remain payable under liquidity and financing constraints.
- How Shell revenue concentration, the proposed GasLog transaction, related-party arrangements, and potential future Class B unit conversions affect governance, dilution and cash available to common unitholders.