Capital Clean Energy Carriers Corp. Q3 FY2023 earnings call

• Announced strategic transaction: changing name to Capital New Energy Carriers L.P. (CNEC) by year-end with new ticker. - Acquiring 11 latest generation two-stroke LNG carriers in $3.1 billion deal, delivery from late 2023 to March 2027; first five vessels have medium-long term charters. - Plan to divest container vessels, secure rights on ammonia and CO2 carriers. - Funding via $500 million rights offering and $220 million seller's credit. - Post-acquisition, LNG fleet to be largest U.S. listed two-stroke LNG carrier operator; pro forma contracted revenues and EBITDA to increase significantly. - Intend to convert to corporation, move to floating distribution policy based on income/cash flow.

Net income for the third quarter of 2023 was $17 million. Total revenue for Q3 2023 was $95.5 million, compared to $71.9 million in Q3 2022. Total expenses in Q3 2023 were $51 million vs $40.4 million in Q3 2022. Vessel operating expenses in Q3 2023 were $22.3 million vs $17 million in Q3 2022. Depreciation and amortization in Q3 2023 was $21.9 million vs $16.2 million in Q3 2022. Interest expense and finance costs in Q3 2023 were $27.8 million vs $14.9 million in Q3 2022. Operating surplus for the quarter was approximately $41.7 million, capital reserve was $34.4 million, adjusted operating surplus was $7.2 million. Capital amounted to $664.5 million as of end of Q3, debt increased to $1.6 billion, cash was $108.5 million including restricted cash.

• Common unit distribution guidance remains $0.15 per quarter. - Expect to move to floating distribution/dividend policy based on income/cash flow, balancing growth in LNG/energy transition, debt repayment.

• Uncertainties in charter markets. - Challenges in financing/refinancing. - Timing of container vessel sales and market dynamics affecting asset values.

Q: Ben Nolan asked about valuation of assets and cash flow timing.

A: Valuation based on charters, cash flow visibility; ongoing discussions with charters, focusing on LNG market aligning with new projects.

Q: Omar Nokta asked about container sale M&A and LNG term market liquidity.

A: Open to M&A, liquidity expected to increase with replacement demand.

Q: Liam Burke asked about converting from MLP to corporate structure.

A: No significant hurdles, will negotiate terms, no expected debt triggers from conversion