Monaco-based LNG shipper GaLog posted higher revenue in the second quarter boosted by more operating days and new LNG tanker additions to its fleet.
Revenue stood at $114.5 million in the second quarter this year as compared to $104.4 million for the year-ago quarter, GasLog said in its results report on Thursday.
This was mainly due to fewer off-hire days due to drydockings. According to GasLog, there was just one drydocking in the second quarter of 2016 as opposed to four for the same period last year.
GasLog’s profit for the period dropped to $3.3 million as compared to $16.7 million in 2015. Adjusted profit was $12.9 million, as compared to $10.9 million in t2015 adjusted for the “effects of the non-cash gain/loss on swaps, the write-off and accelerated amortization of unamortized bond fees and premium, as well as the net foreign exchange losses.”
“At the end of the quarter, we took delivery of the GasLog Glasgow. This vessel has a ten-year contract with a subsidiary of Shell and is one of eight vessels with multi-year contracts being delivered between 2016 and 2019. Post quarter-end, we were very pleased to announce the fixture of Hull 2801, GasLog’s only remaining open newbuild, to a subsidiary of Total for a minimum of seven years, which meets our objective of broadening GasLog’s long-term customer base,” said Paul Wogan, CEO of GasLog.
According to Wogan, the Total charter rate is “consistent with long-term industry averages, demonstrating the resilience of long-term charter rates compared to the volatility of the short-term market.”
Once all eight newbuilds are operating under their long-term charters, they will deliver over $180 million of annualized in-built EBITDA, the CEO said.
Following the Total fixture, GasLog now has 13 vessels with long-term charters that are eligible to be dropped down into GasLog Partners.
GasLog’s contracted charter revenues are estimated to increase from $412.5 million for the fiscal year 2015 to $482.9 million for the fiscal year 2017, based on contracts in effect as of June 30, 2016, without including any extension options, the report said.
As of June 30, 2016, giving effect to the recently signed agreement with Total, the total future firm contracted revenue stood at $3.65 billion, including the eight vessels owned by GasLog Partners but excluding the vessels operating in the spot market, according to the report.
In the shorter term market, spot market rates through 2016 have “plateaued around multi-year lows.”
“Whilst it is too early to predict a sustained increase in the spot market, there has been a marked uptick in spot charter terms in recent weeks, with slightly improved freight rates and the ability to achieve round-trip economics on a more frequent basis,” GasLog said.