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.
The Partnership acquired six 174,000 cubic meter (“CBM”) latest generation X-DF LNG carriers (“LNG/C”) in the second half of 2021 for total consideration of $1.2 billion with long-term time charter employment in place with BP Gas Marketing Limited, Cheniere Marketing International LLP and Engie Energy Marketing Singapore Pte Ltd. The seventh 174,000 CBM latest generation X-DF LNG/C the Partnership acquired was delivered in February 2023 and is on long-term charter to Hartree Partners Power & Gas Company (UK) Limited.
Modern High Specification Fleet
The CPLP fleet currently consists of 22 high specification vessels, including seven latest generation LNG/Cs, 11 Neo-Panamax container vessels, three Panamax container vessels and one Capesize bulk carrier vessel. This excludes one 13,312 Twenty-foot Equivalent Unit (“TEU”) container vessel that CPLP has agreed to acquire and is expected to be delivered to the Partnership in June 2023.
The weighted average age of the CPLP fleet is 6.8 years (as of March 31, 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 13,312 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.
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, including the charter of the 13,312 TEU container vessel that is expected to be delivered to the Partnership in June 2023, have an average revenue weighted remaining term of 6.8 years (as of March 31, 2023), with staggered expirations. The Partnership’s charter coverage for both 2023 and 2024 stands at 96% (as of March 31, 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 first 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 13,312 TEU hybrid scrubber - fitted dual fuel ready eco container sister vessels from Capital Maritime, for total consideration of $0.6 billion.
The LNG/C Asterix I was delivered to the Partnership in February 2023. Asterix I comes with a long-term time charter to Hartree, who already exercised the option to extend the firm employment of Asterix I by two years, resulting in a firm period of seven years. Together with the optional period, the employment with Hartree expires in February 2032.
The first two of the three 13,312 TEU hybrid - eco container sister vessels, the M/V Manzanillo Express and the M/V Itajai Express, were delivered to the Partnership in October 2022 and January 2023, respectively. Upon their delivery to CPLP, both vessels commenced their respective ten-year charter with Hapag-Lloyd.
The last of the three container vessels, to be named “Buenaventura Express”, is currently under construction by Hyundai Samho Heavy Industries Co., Ltd., South Korea, and is scheduled for delivery to the Partnership in June 2023. This newbuilding container vessel has also secured a long-term time charter with a firm period of ten years which, together with the optional periods, expires in June 2039.
In July 2022, the Partnership completed the sale of 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.
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 March 31, 2023, the Partnership has repurchased a total of 901,470 common units since the launching of the first unit repurchase plan on February 19, 2021, at an average cost of $13.47 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 22.9% stake in the Partnership (as of April 30, 2023).
Capital Maritime has an extensive network of relationships with oil majors, traders, liners and other major charterers.
Last updated May 15, 2023.