Capital Product Partners L.P. (Nasdaq: CPLP) is an international shipping company engaged in the seaborne transportation of natural gas, containerized goods and dry cargo. As a publicly traded master limited partnership, CPLP has elected to be treated as a C-Corp. for tax purposes which is most beneficial for U.S. investors (as they receive the standard 1099 form). The Partnership is well-positioned to benefit from the long-term growth dynamics of the global shipping industry and to capitalize on potential acquisition opportunities in the fragmented shipping market.
In the second half of 2021, the Partnership acquired six 174,000 cubic meter (“CBM”) latest generation X-DF LNG Carriers (“LNG/C”) with long-term time charter employment in place with BP Gas Marketing Limited, Cheniere Marketing International LLP and Engie Energy Marketing Singapore Pte Ltd, for total consideration of $1.2 billion. In February 2023, the Partnership took delivery of its seventh 174,000 CBM latest generation X-DF LNG/C which is on long-term charter to Hartree Partners Power & Gas Company (UK) Limited.
Modern High Specification Fleet
The CPLP fleet currently consists of 23 high specification vessels, including seven latest generation LNG/Cs, 12 Neo-Panamax container vessels, three Panamax container vessels and one Capesize bulk carrier vessel, which the Partnership has agreed to sell and expects to deliver to the new owners by October 2023.
The weighted average age of the CPLP fleet is 7.0 years (as of June 30, 2023).
CPLP’s vessels have been designed and equipped to the highest specification.
CPLP’s LNG/Cs are equipped with Hi-Als (Air Lubrication System), Rudder and Propeller Energy Saving devices in order to improve their performance.
CPLP’s LNG/Cs are designed to offer the lowest environmental footprint for transporting LNG.
CPLP's latest 13,000 twenty-foot equivalent (“TEU”) newbuilding container vessels are hybrid scrubber-fitted Tier III and Phase III, dual fuel ready eco vessels, designed to offer the lowest environmental footprint.
The Partnership has completed the installation of a Sulphur oxides (“SOx”) scrubber system to container vessels M/V Athos, M/V Athenian and M/V Aristomenis. All three vessels were retrofitted with a bulbous bow and silyl acrylate self-polishing technology hull coating, which are both expected to improve the energy efficiency of the vessels.
Fleet Employment - Visible & Stable Cash Flows with High Quality Counterparties
CPLP’s modern LNG/C, containership assets and multi-year time charters are highly suitable for the Partnership’s business model.
CPLP’s vessel charters have an average revenue weighted remaining term of 6.7 years (as of June 30, 2023), with staggered expirations. The Partnership’s charter coverage for both 2023 and 2024 stands at 96% (as of June 30, 2023).
CPLP’s vessels are chartered to reputable counterparties worldwide including major operators and liner companies. Over the years, CPLP’s vessels have secured long-term employment among others with BP, Cheniere, CMA CGM, Engie, Hapag-Lloyd, Hartree, HMM, Maersk Lines, MSC, ONE, and ZIM.
Distribution - Growth Strategy & Financial Strength
The Partnership’s common unit distribution for the second quarter of 2023 was $0.15 per common unit.
Our objective is to pursue additional accretive transactions going forward and expand our asset base, with a view to further increasing the long-term distributable cash flow of the Partnership.
Capital Maritime & Trading Corp. (“Capital Maritime”), CPLP’s sponsor, owns significant LNG, tanker (including VLCCs and Chemical/Product tankers) and container tonnage which could potentially be dropped down to the Partnership.
On June 6, 2022 the Partnership agreed to acquire one 174,000 CBM latest generation X-DF LNG/C and three 13,000 TEU hybrid scrubber-fitted Tier III and Phase III, dual fuel ready, eco container sister vessels from Capital Maritime, for total consideration of $0.6 billion. All vessels have now been delivered to the Partnership and commenced their respective long term employment contracts.
The LNG/C Asterix I, delivered to the Partnership in February 2032, is on a long-term charter to Hartree with a firm period of seven years. Together with the optional period, the employment with Hartree expires in February 2032.
The three 13,000 TEU hybrid - eco container sister vessels, namely the M/V Manzanillo Express, the M/V Itajai Express and the M/V Buenaventura Express were delivered to the Partnership in October 2022, January 2023 and June 2023 respectively. They have all commenced their respective 10-year charter with Hapag-Lloyd.
In July 2022, the Partnership completed the sale of the M/V Archimidis (108,892 DWT / 8,266 TEU, container vessel, built 2006, Daewoo Shipbuilding & Marine Engineering Co., Ltd., South Korea) and M/V Agamemnon (108,892 DWT / 8,266 TEU, container vessel, built 2007, Daewoo Shipbuilding & Marine Engineering Co., Ltd., South Korea) to an unaffiliated third party for total consideration of $130.0 million.
In July 2022, the Partnership successfully concluded a €100.0 million Senior Unsecured Bonds issuance, further to the €150.0 million Senior Unsecured euro-denominated Bonds issued in October 2021, on the Athens Exchange.
In June 2023, the Partnership agreed to sell the M/V Cape Agamemnon (179,221 DWT, dry cargo vessel, built 2010, Sungdong Shipbuilding & Marine Engineering Co., Ltd, South Korea) to an unaffiliated party. Delivery of the M/V Cape Agamemnon to the buyer is expected by October 2023.
On January 26, 2023, a new unit repurchase program for up to $30.0 million was approved by the Board of Directors, effective for a period of two years through January 2025. As of June 30, 2023, and since the launching of the first unit repurchase plan on February 19, 2021, the Partnership has repurchased a total of 1,058,030 common units s, at an average cost of $13.44 per unit.
CPLP’s sponsor, Capital Maritime, is a large, financially strong and diversified shipping company with a long, successful track record.
Capital Maritime owns a 24.9% stake in the Partnership (as of July 31, 2023).
Capital Maritime has an extensive network of relationships with oil majors, traders, liners and other major charterers.
Last updated August 04, 2023