Dynagas LNG Partners LP, an owner and operator of liquefied natural gas (“LNG”) carriers, today announced its results for the three months ended March 31, 2025.

Quarter Highlights:

• Net Income and Earnings per common unit (basic and diluted) of $13.6 million and $0.28, respectively;
• Adjusted Net Income(1) of $14.3 million and Adjusted Earnings per common unit(1) (basic and diluted) of $0.30;
• Adjusted EBITDA(1) of $27.1 million;
• 100% fleet utilization(2);
• Declared and paid a cash distribution of $0.5625 per unit on the Partnership’s Series A Preferred Units (NYSE: DLNG PR A) for the period from to November 12, 2024 to February 11, 2025 and $0.677286319 per unit on the Series B Preferred Units (NYSE: DLNG PR B) for the period from November 22, 2024 to February 23, 2025;
• Declared a quarterly cash distribution of $0.049 per common unit for the quarter ended December 31, 2024, which was paid on February 27, 2025; and
• During the first quarter of 2025 and through the date of this press release, repurchased 216,185 common units under the Common Unit Repurchase Program, which authorizes the repurchase of up to an aggregate of $10 million of the Partnership’s outstanding common units over the 12-month period beginning November 21, 2024 (the “Repurchase Program”), for a total amount of $0.8 million, at an average gross price of $3.62 per common unit. As of the date of this release, we have 36,530,944 common units outstanding and $9.0 million of remaining capacity under the Repurchase Program.

Recent Events:

• Declared a quarterly cash distribution of $0.5625 on the Partnership’s Series A Preferred Units for the period from February 12, 2025 to May 11, 2025, which was paid on May 12, 2025 to all Series A Preferred unitholders of record as of May 5, 2025;
• Declared a quarterly cash distribution of $0.614808 on the Partnership’s Series B Preferred Units for the period from February 24, 2025 to May 21, 2025, which was paid on May 22, 2025 to all Series B Preferred unitholders of record as of May 15, 2025;
• Declared a quarterly cash distribution of $0.049 per common unit for the quarter ended March 31, 2025, which was paid on May 23, 2025 to all common unitholders of record as of May 19, 2025; and
• On May 27, 2025, the Partnership elected to exercise its option to redeem, in full, 2,200,000 Series B Preferred Units, representing all of the Series B Preferred Units that are issued and outstanding. Please see “Full Redemption of Series B Preferred Units” below.

Full Redemption of Series B Preferred Units

On or about May 27, 2025, the Partnership issued, or will issue, a notice of full redemption to the holders of its 8.75% Series B Fixed to Floating Rate Cumulative Redeemable Perpetual Preferred Units (NYSE: DLNG PR B) (CUSIP No. Y2188B124) (the “Series B Preferred Units”), notifying such holders that the Partnership has elected to exercise its option to redeem all of the issued and outstanding Series B Preferred Units on July 25, 2025 (the “Redemption Date” and such redemption, the “Redemption”). After the Redemption, there will be no Series B Preferred Units outstanding and all rights of the holders of Series B Preferred Units will terminate, except the right of such holders to receive the Redemption Price (as defined below). Furthermore, because all of the issued and outstanding Series B Preferred Units are being redeemed, trading of the Series B Preferred Units on the New York Stock Exchange will cease prior to market open on the Redemption Date.

The redemption price will be equal to $25.00 per redeemed Series B Preferred Unit, plus an amount equal to all accumulated and unpaid distributions thereon to the Redemption Date, whether or not declared (the “Redemption Price”), which will be payable in cash on the Redemption Date.

The Partnership has designated Computershare Trust Company, N.A. as the paying agent for the Series B Preferred Units (the “Paying Agent”). The address of the Paying Agent is: 150 Royall Street, Suite 101, Canton MA 02021, Attn: Corporate Actions.

All Series B Preferred Units are represented by a single certificate issued to The Depository Trust Company and registered in the name of its nominee, Cede & Co., and will be surrendered automatically to the Paying Agent in accordance with the applicable procedures of The Depository Trust Company or such nominee.

The information in this press release regarding the Redemption does not constitute a notice of redemption of the Series B Preferred Units, and is neither an offer to purchase nor a solicitation of an offer to sell any Series B Preferred Units.

CEO Commentary:

We are pleased with our financial performance for the quarter.

Net Income for the period was $13.6 million, or $0.28 per common unit, while utilization was 100%. We reported Adjusted EBITDA of $27.1 million and Adjusted Net Income of $14.3 million. These results underscore the strength of our contracts-based business model, which continues to shield us from the prevailing weakness in the short-term LNG shipping market.

All six LNG carriers in our fleet are employed under long-term charters with leading international gas companies, with an average remaining contract duration of 5.7 years as of the date of this release. Barring any unforeseen events, we do not expect any vessel availability before 2028. Our estimated contract backlog stands at approximately $0.9 billion as of May 27, 2025.

In line with our commitment to delivering unitholder value, we paid a quarterly cash distribution of $0.049 per common unit on May 23, 2025. We also continued to execute on our Repurchase Program, having repurchased 271,303 common units to date at an average price of $3.79 per unit, well below our estimated net asset value per unit. As of today, $9.0 million remains available under the Repurchase Program.

Following the successful refinancing of our debt in June 2024, our balance sheet has strengthened meaningfully. Two of our vessels are now debt-free, and our annual debt amortization of $44 million represents 14% of our total outstanding debt of $312 million. We face no debt maturities until mid- 2029.

With contracted revenues exceeding our cash breakeven, we continue to generate cash each quarter, further improving our liquidity. As of March 31, 2025, our cash balance stood at $70 million. We intend to use this balance to fully redeem the outstanding $55 million Series B Preferred Units on July 25, 2025. Based on the latest distribution, the Series B units carried an annualized yield of 10.17% on their $25 liquidation preference. We expect annual cash savings of approximately $5.7 million as a result of the Redemption.

While we remain insulated from short-term volatility in the LNG market, our strategy remains focused on disciplined capital allocation-prioritizing deleveraging, returning capital to common unitholders through cash distributions and common unit repurchases, and reducing cash outflows through initiatives such as the Series B Preferred Redemption.

Russian Sanctions Developments

Due to the ongoing Russian conflict with Ukraine, the United States (“U.S.”), European Union (“E.U.”), Canada and other Western countries and organizations have announced and enacted numerous sanctions against Russia to impose severe economic pressure on the Russian economy and government.

As of today’s date:

• Current U.S. and E.U. sanctions regimes do not materially affect the business, operations or financial condition of the Partnership and, to the Partnership’s knowledge, its counterparties are currently performing their obligations under their respective time charters in compliance with applicable U.S. and E.U. rules and regulations; and
• Sanctions legislation continually changes and the Partnership continues to monitor such changes as applicable to the Partnership and its counterparties.

The full impact of the commercial and economic consequences of the Russian conflict with Ukraine is uncertain at this time. The Partnership cannot provide any assurance that any further development in sanctions, or escalation of the Ukraine conflict more generally, will not have a significant impact on its business, financial condition or results of operations. Please see the section of this press release entitled “Forward Looking Statements.”

Three Months Ended March 31, 2025 and 2024 Financial Results

Net Income for the three months ended March 31, 2025 was $13.6 million as compared to $11.8 million for the corresponding period of 2024, which represents an increase of $1.8 million, or 15.3%. The increase in Net Income for the three months ended March 31, 2025 compared to the corresponding quarter of 2024 was mainly attributable to the decrease in interest and finance costs and the increase in voyage revenues due to certain non-cash items, as explained below. The above increase in Net Income compared to the corresponding quarter of 2024 was partially offset by the increase in voyage expenses and vessels’ operating expenses, as well as by the decrease in gain on the interest rate swap transaction which expired in September 2024.

Adjusted Net Income (a non-GAAP financial measure) for the three months ended March 31, 2025, was $14.3 million compared to $12.4 million for the corresponding period of 2024, which represents a net increase of $1.9 million, or 15.3%. This increase is mainly attributable to the decrease in interest and finance costs, which was partially offset by the increase of the voyage expenses and the vessel operating expenses, compared to the corresponding period of 2024.

Voyage revenues for the three months ended March 31, 2025, were $39.1 million as compared to $38.1 million for the corresponding period of 2024, which represents a net increase of $1.0 million, or 2.6%. This increase is mainly attributable to: (i) the non-cash effect of the amortization of deferred revenues, (ii) the value of the EU ETS emissions allowances (“EUAs”) due to the Partnership by the charterers of its vessels, pursuant to the terms of its time charter agreements (the corresponding value of the abovementioned EUAs, which the Partnership is obliged to surrender to the EU authorities, is included within Voyage expenses) and (iii) the increase in variable hire revenues earned on one of the Partnership’s vessels under an OPEX pass-through time charter compared to the corresponding period in 2024 as discussed below. The above increase in voyage revenues was partially offset by the lower revenues earned due to fewer Calendar Days in the three months ended March 31, 2025, compared to the corresponding period in 2024.

The Partnership reported average daily hire gross of commissions(3) of approximately $72,190 per day per vessel for the three-month-period ended March 31, 2025, compared to approximately $72,770 per day per vessel for the corresponding period of 2024. The Partnership’s vessels operated at 100% fleet utilization during the three-month periods ended March 31, 2025 and 2024.

Vessel operating expenses were $8.7 million, which corresponds to a daily rate per vessel of $16,169 for the three-month period ended March 31, 2025, as compared to $7.7 million, or a daily rate per vessel of $14,103, in the corresponding period of 2024. This increase is mainly attributable to increased planned technical maintenance on one of the Partnership’s vessels in the three-month period ended March 31, 2025.

Adjusted EBITDA (a non-GAAP financial measure) for the three months ended March 31, 2025, was $27.1 million, as compared to $29.0 million for the corresponding period of 2024. The decrease of $1.9 million, or 6.6%, was mainly attributable to the above-mentioned increase in voyage expenses and the vessel operating expenses.

Net Interest and finance costs were $4.9 million in the three months ended March 31, 2025 as compared to $8.7 million in the corresponding period of 2024, which represents a decrease of $3.8 million, or 43.7%, due to (i) the reduction in interest-bearing debt, resulting from the refinancing of the Partnership’s indebtedness in June 2024 and (ii) the decrease in the weighted average interest rate from 8.44% in the three months ended March 31, 2024 to 6.52% in the three months ended March 31, 2025.

For the three months ended March 31, 2025, the Partnership reported basic and diluted Earnings per common unit and Adjusted Earnings per common unit (a non- GAAP financial measure), of $0.28 and $0.30, respectively, after taking into account the distributions relating to the Series A Preferred Units and the Series B Preferred Units on the Partnership’s Net Income/Adjusted Net Income. Earnings per common unit and Adjusted Earnings per common unit, basic and diluted, were calculated on the basis of a weighted average number of 36,737,635 common units outstanding during the period and in the case of Adjusted Earnings per common unit after reflecting the impact of certain adjustments presented in Appendix B of this press release.

Adjusted Net Income, Adjusted EBITDA, and Adjusted Earnings per common unit are not recognized measures under U.S. GAAP. Please refer to Appendix B of this press release for the definitions and reconciliation of these measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

Liquidity/ Financing/ Cash Flow Coverage

During the three months ended March 31, 2025, the Partnership generated net cash from operating activities of $18.1 million as compared to $11.6 million in the corresponding period of 2024, which represents an increase of $6.5 million, or 56.0% mainly as a result of working capital changes and the increase in net income for the reasons discussed above.

As of March 31, 2025, the Partnership reported total cash of $70.0 million. The Partnership’s outstanding financial liabilities as of March 31, 2025, under the Sale and Leaseback agreements between the vessel owning companies of the Clean Energy, the OB River, the Amur River and the Arctic Aurora with China Development Bank Financial Leasing Co. Ltd. amounted to $47.2 million, $62.6 million, $64.4 million and $137.7 million, respectively, gross of unamortized deferred loan fees. The financial liabilities under the Sale and Leaseback agreements are repayable within approximately four years for the Clean Energy, the OB River and the Amur River and within nine years for the Arctic Aurora.

The Partnership has elected to exercise its option to redeem all of the issued and outstanding Series B Preferred Units. The number of Series B Preferred Units to be redeemed is 2,200,000. Following completion of the Redemption, no Series B Preferred Units will remain outstanding. The aggregate redemption payment will consist of the amount of $55 million (representing $25.00 per Series B Preferred Unit) plus an amount equal to all accumulated and unpaid distributions thereon to the Redemption Date, whether or not declared. The Redemption will be funded by internal cash reserves and will not involve raising additional debt. For additional information, please see “Full Redemption of Series B Preferred Units” above.

Vessel Employment

As of March 31, 2025, the Partnership had estimated contracted time charter coverage(4) for 100% of its fleet estimated Available Days (as defined in Appendix B) for each of 2025, 2026 and 2027.

As of the same date, the Partnership’s estimated contracted revenue backlog (5) (6) was $0.9 billion, with an average remaining contract term of 5.7 years.
Source: Dynagas LNG Partners LP