GasLog's CEO Discusses Q2 2012 Results - Earnings Call Transcript

GasLog (GLOG)

Q2 2012 Earnings Conference Call

August 21, 2012 08:30 AM ET

Executives

Peter G. Livanos – Chief Executive Officer and Chairman of the board

Philip Radziwill - Vice Chairman

Henrik Bjerregaard - Chief Financial Officer

Thor Knappe – Senior Vice President

Paul Wogan - Chief Strategy Officer

Analysts

Seth Lowery - Citi

Jonathan Chappell - Evercore Partners

Chris Combe - JP Morgan

Herman Hildan - Platou Markets

Martin Korsvold - Pareto Securities

Presentation

Operator

Good morning. My name is Eva and I will be your conference operator today. At this time I would like to welcome everyone to GasLog’s Second Quarter 2012 Results Conference call. (Operator Instructions) After the speaker’s remarks, there will be a question and answer session. As a reminder this conference call is being recorded. Today’s speakers are Peter G. Livanos, Chairman of the board and Chief Executive Officer; Henrik Bjerregaard, Chief Financial Officer and to commence the call Thor Knappe, Senior Vice President of GasLog. Mr. Knappe, you may begin your conference.

Thor Knappe

Thank you operator. Good afternoon and good morning to those of you in the Americas. Thank you for joining us for our second quarter 2012 results conference call. In addition to Peter G. Livanos, GasLog’s Chairman of the Board and Chief Executive Officer and Henrik Bjerregaard, GasLog’s Chief Financial Officer also joining us this afternoon, is Philip Radziwill, GasLog’s Vice Chairman and Paul Wogan, Chief Strategy Officer. As a reminder, this conference call webcast and the presentation we are using this afternoon are available on the Investor Relations section of our website gaslogltd.com. A replay of this call will be available until August 29 at 5:30 p.m. London time or 12:30 p.m. U.S. evening time.

As shown on page 2 of the presentation, many of our remarks this afternoon contains forward-looking statements. Let me refer you to our second quarter 2012 results press release and our reports filed with the SEC where you will find factors that could cause actual results to differ materially from these forward looking statements. In addition, some of our remarks this afternoon contain non-GAAP financial measures as defined by the SEC. A reconciliation of the non-GAAP financial measures to the most comparable GAAP measures is attached as an annex to this presentation.

Today’s call is set to end at 2:30 p.m. London time, 9:30 a.m. Eastern time. In order to maximize participation opportunities on the call please limit your questions to one with one follow-up question.

If we now turn to Slide 3, the agenda for the presentation and I will turn the call over to Peter Livanos, GasLog’s Chairman of the board and Chief Executive Officer.

Peter Livanos

Thank you Thor. On today’s call, I’ll provide you with an overview of our second quarter 2012 highlights and performance. Henrik will then review the second quarter 2012 financial results and provide a summary of our committed charter revenue picture. I will then present a short review of our fleets and charter information followed by an update on the LNG market and we’ll conclude with prepared comments with a strategic update on our business and it’s position within the industry prior to the Q&A.

Please turn to Slide 4 of the presentation for the highlights. We’re pleased with the performance of our business this quarter. Our operating result is in line with our expectation and the LNG shipping industry outlook remains positive, the strong fundamentals for the foreseeable future presenting exciting opportunities for GasLog. We’re reporting an adjusted EBITDA of $8.4 million for the quarter which was better than expected and reflects the continued full deployment of the delivered fleet.

Adjusted profit for the quarter was $2.6 million. On an unadjusted basis we incurred a loss of $3.6 million for the quarter. Adjusted earnings per share was $0.04 for the quarter and the loss per share was $-0.06. Our bottom-line results for the quarter were impacted by non-cash items namely a non-cash loss from interest rates loss and unrealized foreign exchange differences. Henrik will go into more details of our second quarter results shortly. In particular, the adjustments for the period included a $5.3 million non-cash loss on interest rates loss and an $800,000 foreign exchange difference that are mainly unrealized. These economic hedging transactions were done at levels better than our long term budget forecast.

The non-cash items are a consequence of our continued actions to eliminate risk from our business model are all -- fixed interest expense remained significantly below our long term budget, 62% of the floating interest rate exposure has been hedged at a weighted average interest of approximately 4.3% including margin as of June 30, 2012.

GasLog is on track to pay a dividend of $0.11 per share in the fourth quarter of this year. Our two ships in the water currently on multi-year charters to a subsidiary of BG Group performed without any off hire during this quarter ending on June 30, 2012, thereby achieving full utilization for the period. Our 8 ships under construction at Samsung Heavy Industries are on-time and within budget, of these 8 ships, 2 were launched during the second quarter of 2012 and are on schedule for delivery during the first quarter of 2013. In total, 5 of the 8 ships have now commenced construction by the ship yard.

I’ll turn the call over to Henrik Bjerregaard, our CFO who would take you through second quarter finances in more detail.

Read the rest of this transcript for free on seekingalpha.com

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