Navigating the Evolving Energy Landscape: Capital Clean Energy Carriers Corp. Expands Its Gas Carriage Solutions

Capital Product Partners L.P., a leading international owner of ocean-going vessels, has announced its financial results for the second quarter of 2024, showcasing a remarkable performance and a strategic shift towards becoming a global leader in gas carriage solutions. The partnership, now renamed "Capital Clean Energy Carriers Corp." (Ticker Nasdaq: CCEC), has undergone a significant transformation, positioning itself at the forefront of the energy transition.

Powering the Future: Capital Clean Energy Carriers Corp.'s Strategic Expansion

Robust Financial Performance and Operational Highlights

Capital Clean Energy Carriers Corp. (CCEC) reported a strong financial performance in the second quarter of 2024, with a 10% increase in revenues compared to the same period in 2023. The partnership's net income surged by an impressive 362%, reaching .2 million, while net income per common unit grew by 72% to {{royaItemContent}}.62. This remarkable growth can be attributed to the revenue contributions from the partnership's newbuilding vessels and strategic vessel acquisitions, as well as the successful divestment of certain container vessels.The partnership's operating surplus for the quarter stood at .3 million, with .6 million allocated after the quarterly capital reserve. CCEC's total cash position as of June 30, 2024, amounted to 1.2 million, including .9 million in restricted cash, reflecting the partnership's strong liquidity position.

Expanding the Gas Carriage Solutions Portfolio

A key highlight of the quarter was CCEC's strategic investment in the Gas Fleet, a 6 million acquisition of 10 specialized gas carriers, including six dual-fuel medium gas carriers (MGCs) and four liquid CO2 handy multi-gas carriers (LCO2s). This transaction, with expected deliveries between the first quarter of 2026 and the third quarter of 2027, represents a significant step in the partnership's pivot towards becoming a leading platform for gas carriage solutions.The Gas Fleet acquisition complements CCEC's existing LNG carrier fleet, which now stands at 12 vessels, with an additional six LNG carriers to be delivered between the first quarter of 2026 and the first quarter of 2027. This expanded gas carrier portfolio, combined with the partnership's core LNG expertise, positions CCEC as a comprehensive provider of gas carriage solutions, catering to the growing demand for energy transition-focused transportation.

Strengthening the Balance Sheet and Optimizing Financing

During the quarter, CCEC took several actions to strengthen its balance sheet and optimize its financing structure. The partnership refinanced the LNG carrier Aristidis I, releasing .8 million in additional liquidity, and amended the financing terms for the LNG carriers Aristos I and Aristarchos. Additionally, CCEC concluded the sale of five container vessels, recognizing a gain of .2 million, further enhancing its financial flexibility.The partnership's total debt increased to ,596.5 million as of June 30, 2024, primarily due to the financing of the LNG carrier acquisitions. However, CCEC has actively managed its debt profile, with the weighted average margin on its floating-rate debt decreasing from 2.36% in the second quarter of 2023 to 1.94% over SOFR as of June 30, 2024.

Delivering on the LNG/C Transaction

CCEC continued to make progress on the LNG/C Transaction, which was announced in December 2023. During the quarter, the partnership took delivery of three additional LNG carriers – the Assos, Aktoras, and Apostolos – all of which commenced long-term charters with reputable counterparties. With these latest deliveries, CCEC now has 12 LNG carriers in its fleet, with a remaining revenue-weighted charter duration of 7.2 years and .3 billion in contracted revenue.The remaining capital expenditure commitment for the LNG/C Transaction stands at ,294.9 million as of June 30, 2024, with the final six LNG carriers scheduled for delivery between the first quarter of 2026 and the first quarter of 2027.

Navigating the LNG and Container Markets

The LNG market remained relatively steady during the second quarter of 2024, with spot rates for two-stroke vessels reaching ,000 per day in the first week of July. Global LNG imports continued to be robust, with China maintaining near-record levels and European imports remaining high, albeit with some downward pressure due to lower-than-expected gas demand and high inventory levels.In the container market, CCEC's five 5,000 TEU vessels on contract into 2025 and three 13,000 TEU units on duration well into 2030 have benefited from the remarkable gains in container freight rates, which reached the highest levels since the COVID-19 period. This strong container market provides CCEC with optionality regarding future divestment plans, as the partnership continues to evaluate trends and developments to maximize returns.

Strengthening Governance and Investor Relations

In addition to the strategic and operational achievements, CCEC has also taken steps to enhance its corporate governance and investor relations. The partnership's name change to "Capital Clean Energy Carriers Corp." and its conversion into a Marshall Islands corporation with high standards of corporate governance are important steps in its strategic evolution.Furthermore, the appointment of Brian Gallagher as Executive Vice President for Investor Relations underscores CCEC's commitment to strengthening its communication with the investment community and providing greater transparency.