GasLog Partners LP — FY2023 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2023; this is an annual report, not a standalone fourth-quarter filing. Financial statements are prepared under IFRS as issued by the IASB and audited by Deloitte, which issued an unqualified opinion.
Business context
GasLog Partners owns and operates LNG carriers and is controlled by GasLog. GasLog acquired the common units it did not already own on July 13, 2023. Unaffiliated common unitholders received total consideration of $8.65 per unit: a $3.28 partnership special distribution and $5.37 in merger consideration. The common units were subsequently delisted; Series A, B and C preference units remain NYSE-listed.
At February 29, 2024, the fleet comprised 14 LNG carriers: 10 TFDE and four Steam vessels. Six were on long-term time charters and eight traded on short-term or spot contracts. The Partnership reported one operating segment.
Financial performance and position
| Metric | FY2022 | FY2023 | Change |
|---|---|---|---|
| Revenue | $371.0 million | $397.8 million | +7.2% |
| Profit from operations | $154.6 million | $196.6 million | +$42.0 million |
| Profit for the year | $119.0 million | $138.7 million | +16.6% |
| Net cash from operating activities | $277.7 million | $262.4 million | -$15.3 million |
| Net cash from investing activities | $76.4 million | $149.4 million | +$73.0 million |
| Net cash used in financing activities | $302.3 million | $598.4 million | -$296.1 million |
FY2023 operating margin was approximately 49.4% and net profit margin approximately 34.9%, calculated from reported operating profit and profit for the year divided by revenue. Average daily hire rose to $80,927 from $69,756. Spot-charter revenue increased to $233.6 million from $187.8 million, while long-term charter revenue fell to $164.3 million from $183.2 million.
Vessel operating costs declined 6.4% to $67.8 million. Depreciation rose to $98.5 million from $87.5 million. General and administrative expenses increased 30.3% to $22.8 million, including transaction-related legal and professional costs. Financial costs rose 41.0% to $67.1 million, mainly due to higher interest rates and loan-fee write-offs; financial income increased to $7.6 million. Derivative gains declined to $1.5 million from $9.6 million.
Cash and cash equivalents were $11.9 million at year-end, down from $198.1 million; current assets were $60.2 million and current liabilities $80.3 million, producing negative working capital of $20.1 million. That current-liability total included $28.5 million of advance vessel hire, to be recognized as revenue as services are provided. Management said expected cash, operating cash flow and future vessel sales or sale-and-leasebacks should meet liquidity needs for at least 12 months from the report date.
The Partnership had no outstanding borrowings at December 31, 2023, but had $93.9 million of lease liabilities, including $28.8 million current. It guarantees GasLog’s revolving facility, secured by vessels and other collateral; GasLog’s facility had $2.1 billion outstanding at year-end, with a stated facility size of $2.8 billion. Contracted revenues as of year-end were $333.8 million for 2024 and $681.8 million thereafter, subject to charterer performance.
Material changes, outlook and risks
- Revenue and profit increased, largely reflecting stronger spot and short-term charter markets and a higher average daily hire rate. Operating cash flow declined, principally due to working-capital movements, including increases in receivables and related-party balances.
- The 2023 sale-and-leaseback of GasLog Sydney generated $137.2 million net proceeds and a $0.1 million impairment loss. The Partnership repaid its remaining loan facilities in November as part of GasLog’s refinancing; unamortized loan costs were written off. Interest-rate swaps were terminated in August, with $3.5 million received.
- No vessel impairment indicators were identified at December 31, 2023. In 2022, the Partnership recorded $32.5 million of vessel impairment losses, mainly related to Steam vessels. Management noted that the three Steam vessels’ broker market values were collectively $23.0 million below carrying value at year-end 2023, although no new impairment trigger was identified.
- Management described LNG shipping as exposed to volatile charter rates and growing vessel supply. Eight vessels were in the short-term spot market, and the Partnership reported 580 open vessel days during 2024. Steam vessels’ lower efficiency and higher emissions may make future employment more difficult. One vessel dry-docking was expected in 2024, four in 2025 and five in 2026.
- Industry commentary cited high utilization expectations over the next one to two years, but this is not company earnings guidance. LNG carrier deliveries, charter availability and rates remain uncertain. Management reported no specific revenue or profit forecast.
- Shell subsidiaries generated 39% of 2023 revenue; LNG majors and traders together generated a further 39%. Customer concentration, spot-market exposure, charter expirations, vessel values, fuel and crew costs, and counterparty performance are significant risks.
- Other material risks include environmental rules and emissions costs (including EU ETS and IMO measures), geopolitical disruption and rerouting, operational incidents, cyber risk, and reliance on GasLog for management and commercial services. GasLog controls Partnership governance; preference unitholders generally have limited voting rights.
- Preference distributions remained outstanding and were paid quarterly in 2023. The Series B rate moved to a SOFR-based floating rate in September 2023; Series C was expected to move to a SOFR-based floating rate from March 15, 2024. The board declared March 2024 distributions of $0.5390625 per Series A unit, $0.7253680 per Series B unit and $0.53125 per Series C unit.
Key facts for investors to verify
- How the eight short-term/spot vessels are employed as charters expire, and whether rates and utilization support cash generation and preference distributions.
- GasLog’s capacity to service its facility and maintain the 120% collateral-value covenant, given the Partnership’s guarantees and vessel security.
- Cash requirements, lease-liability repayments and working-capital movements following year-end, including related-party receivables.
- Future distribution declarations and the applicable SOFR-based rates for Series B and C, as well as the Series A rate-setting provisions ahead of its 2027 floating-rate transition.
- Steam-vessel market values, impairment assumptions, dry-docking costs and compliance-related capital or operating expenses.
- Reliance on GasLog-affiliated service providers and the fees charged; 2023 fees and expenses were $9.0 million for administrative services, $6.3 million for ship management and $4.9 million for commercial management.