CAPITAL Clean Energy Carriers has said that it is well-protected against today’s deteriorating market for LNG carriers, as it posted an increased profit in its first financial results since adopting a new name and corporate structure.

Formerly Capital Product Partners, the owner rebranded in August to reflect a strategic pivot towards transporting various forms of gas and an ‘energy transition’ fleet.

Since the strategy was laid out a year ago, CCEC has agreed to acquire 11 LNG carrier newbuildings from shipowner-backer Evangelos Marinakis and has invested in another 10 gas carrier orders, including four liquid CO2 carriers and six LPG-ammonia carriers.

As part of the new focus, it has also sold or agreed to sell 12 out of its previous fleet of 15 containerships, for aggregate proceeds of $472m.

While Red Sea disruption and US-Asia volumes have strongly increased tonne-miles in the LNG trade so far this year, market conditions remained “subdued” amid fleet growth and delayed project start-ups, according to CCEC.

Average spot market rates for two-stroke LNG carriers in the third quarter plummeted to $73,404 per day, from $160,308 last year in the same period, and they have weakened further in the fourth quarter.

However, the on-the-water fleet of 12 LNG carriers was “largely shielded” from spot market conditions, the company said in its earnings statement.

Its six newbuilding LNG carriers are open for employment, but the first is not due for delivery until January 2026, while the earliest charter expiry among the existing vessels is not before November 2026.

CCEC is earning an average daily rate of $88,537 from the charters on its LNG carriers already in service, amounting to a revenue backlog of $2.4bn that could increase if charterers’ options are exercised.

Revenue from continuing operations — comprising the 12 on-the-water LNG carriers and three containerships the company intends keeping — increased to $106m, compared with $63.9m in the third quarter of 2023.

The increase was attributable to five LNG carrier deliveries that expanded the fleet in the interim.

Net income from continuing operations tripled to $15.8m.

Third-quarter net income from operations including profits from containerships that are being sold increased to $23.3m, from $17m last year.

However, the result for common shareholders became a $23m loss after adjusting for a ‘deemed dividend’ of $46m to the general partner under the firm’s previous structure.

This resulted from a value gap when the partnership converted to a corporation and the general partner received common shares in exchange for its units and incentive distribution rights. 

“The recent name change and our conversion to a corporation with enhanced standards of corporate governance is an important step in reinforcing our platform further and expanding the company to a broader investor base,” said chief executive Jerry Kalogiratos.

“CCEC is well placed to grow over the next two years, as we bring an additional 16 state-of-the-art new vessels in operation,” he added.

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