GasLog Partners LP (GLOP) CEO Andrew Orekar on Q2 2019 Results - Earnings Call Transcript

Jul. 25, 2019 12:03 PM ETGasLog Partners LP (GLOP)
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GasLog Partners LP (NYSE:GLOP) Q2 2019 Results Earnings Conference Call July 25, 2019 8:30 AM ET

Company Participants

Joseph Nelson - Deputy Head, IR

Andrew Orekar - CEO

Alastair Maxwell - CFO

Conference Call Participants

Chris Wetherbee - Citi

Chris Snyder - Deutsche Bank

Chris Robertson - Jefferies

Liam Burke - B. Riley FBR


Good morning, my name is Dorinda, and I will be your conference operator today. At this time, I would like to welcome everyone to the GasLog Partners Second Quarter 2019 Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

Today's speakers will be Andy Orekar, Chief Executive Officer; Alastair Maxwell, Chief Financial Officer; and to commence the call, Joseph Nelson, Deputy Head of Investor Relations.

Mr. Nelson, you may begin your conference.

Joseph Nelson

Good morning, and thank you for joining GasLog Partners second quarter 2019 earnings conference call. For your convenience, this call, webcast and presentation are available on the Investor Relation's section of our website,, where a replay will also be available.

Please now turn to Slide 2 of the presentation. Many of our remarks contain forward-looking statements. For factors that could cause actual results to differ materially from these forward-looking statements, please refer to our second quarter earnings press release. In addition, some of our remarks contain non-GAAP financial measures as defined by the SEC. A reconciliation of these is included in the appendix of this presentation.

I will now hand over to Andy Orekar, CEO of GasLog Partners.

Andrew Orekar

Thank you, Joe. Good morning and thanks to everyone, for joining GasLog Partners second quarter earnings call.

I'll begin today's call with our highlights for the quarter. Our CFO, Alastair Maxwell will follow with the review of our financial performance and dropdown pipeline, after which I'll conclude with an update on the LNG and LNG shipping markets, as well as our distribution growth outlook. Following our presentation, we'd be very happy to take any questions you may have.

Turning to Slide 3, you can see our highlights for the second quarter. After another strong quarter of operational and financial performance, today we reported our highest ever partnership performance results for revenues and EBITDA with the year-over- year increases of 23% and 27% respectively. During the second quarter, we closed the accretive dropdown acquisition of the GasLog Glasgow with its attached charter to Shell and rechartered the GasLog Shanghai for 3.5 years, and eliminated our General Partners incentive distribution rights.

In addition, we repurchased approximately $10 million of our common units and declared a distribution of $0.55 per unit or $2.20 on an annualized basis, unchanged from the first quarter, an increase of nearly 4% over the second quarter of 2018. And lastly, today we are reiterating our guidance of 2% to 4 % distribution growth for 2019.

Turning to Slide 4, as you can tell from our busy second quarter, we continue to take strategic actions to enhance the investment proposition for GasLog Partners unitholders. And today we will feel it is important to remind the market of what distinguishes us from our peers.

First, we are one of the few MLPs that check the box for corporate tax reporting and as a result holders of our unit receive a Form 1099 with respect to the distribution, we pay not a burdensome K-1. Second, we are one of only a handful of MLPs that offer pure play exposure to the large and growing market for LNG infrastructure.

Third, we delivered superior EBITDA growth since our IPO as well as continued distribution growth despite broader MLP market volatility. And most recently, we became the first of our peers to fully eliminate our general partner’s incentive distribution rights.

Turning to Slide 5, this consistent performance of our business has been underpinned by our expanding customer relationships and track record of rechartering our vessels. Last month, our commercial success continued as we chartered the GasLog Shanghai for three and a half years to Gunvor one of the world leading commodity traders with a large and growing presence in LNG. The agreement marks our fourth new term charter in the last 15 months it further expands our customer base it also includes Shell, Cheniere and Trafigura.

The new charter Gunvor has a variable rate of hire based upon agreed range and the GasLog Shanghai will be 100% utilized during the charter period. We're excited to be working with Gunvor and look forward to being able to demonstrate our platform for another new and high-quality counterparty.

Turning to Slide 6, this slide reviews how our new charter for the GasLog Shanghai and recent acquisition of the GasLog Glasgow have helped derisk our future financial performance. On the left panel, you can see that our contracted backlog at the end of Q2 has increased 9% to over 1.1 billion as a result of our two acquisitions since the second quarter of 2018 and the rechartering of the GasLog Santiago, Sydney, Shanghai and one of our steam ships. On the right hand chart, you can see that our pro forma charter coverage for the second half of 2019 has increased to 99% from 91% while our coverage for 2020 has now risen to 81% from 68%.

Turning now to Slide 7, I’ll discuss the elimination of our general partner's incentive distribution rights and how it positions the partnership for continued growth. As consideration for removing the IDRs, the partnership issued to GasLog approximately 2.5 million new common units and 2.49 million Class B units which represented a cash flow neutral transaction with respect to the IDR payment GasLog received in Q1, 2019.

The newly issued Class B units have no voting rights and are not entitled to receive cash distributions until they convert into common units at a rate of 415,000 units beginning on July 1st of 2020 and continuing each July 1st until 2025.

The transaction is immediately accretive to distributable cash flow per unit, reduces our expected cost of capital, increases potential accretion from future acquisitions and strengths our alignment with our parent who continues to be by far the largest unitholders of GasLog Partners with now a 35% ownership interest. With our 13 vessel dropdown pipeline and no future IDR obligations GasLog Partners remains well-positioned for continued success.

With that as introduction, I'll now turn it over to Alastair.

Alastair Maxwell

Thanks, Andy, and good morning to everyone. I'm delighted to report another strong quarter in terms of the operational and financial performance of the partnership.

Please turn to Slide 8 for our financial and operational highlights. In the second quarter of 2019, we achieved record quarterly partnership performance results for revenues and EBITDA, which showed robust year-over-year increases of 23% and 27% respectively, while our distributable cash flow increased by 28%. Our strong financial performance was due to our two vessel acquisitions in 2018 and one in 2019.

Operationally our fleet continues to perform exceptionally well with uptime of 100% during the quarter and unit OpEx of $14,559 per vessel per day, which was approximately in line with the same quarter last year. Year-to-date, our unit OpEx has fallen to $14,672 from $15,128 in the first half of 2018. While we are benefiting partially from a stronger U.S. dollar euro exchange rate, we're also making good progress with our Investor Day cost reduction targets.

As you can see in the bottom row of the table, our reported distribution coverage for the second quarter was 1.1 times. This increase is to 1.16 times when adjusting for the dry-docking of the Solaris which was completed ahead of schedule and under budget. Looking forward, we have one scheduled dry-docking in the fourth quarter, which we anticipate will take 30 days to complete.

Turning to Slide 9, discussion of our balance sheet and how our leverage naturally [ph] declines over time. On the top panel, we've set out to demonstrate how our amortizing debt builds, balance sheet capacity and equity value in our fleet using the recent acquisition of the GasLog Glasgow as an example. As the table on the top left shows we assumed $134 million of existing debt upon acquisition, along with our multi-year charter to Shell, which generates approximately $23.5 million dollars in EBTDA on an annual basis.

Our debt amortizes at roughly twice the rate our ships depreciate and as the chart on the top right displays our loan to book value ratio on the Glasgow declines by over 14% by the end of 2021, while our debt-to-EBTDA declines by over a turn and a half to approximately four times. By the time the charter expires in June of 2026, the vessel will depreciated by approximately 30% while we will have amortized approximately 70% of the vessel's debt and the loan to book value ratio will be approximately 30%.

For the partnership as a whole, during 2019 and 2020, we expect to amortize approximately $110 million per annum in debt equivalent to almost one time’s EBTDA and 9% of total cap over the period. A good example of how we're able to take advantage of this feature is our recent refinancing of the $450 million facility, which delivered an incremental $90 million of liquidity over and above the amount due on the loan.

Please turn to Slide 10, where I'll discuss our recent fleet developments. The chart on this slide shows the 15 vessels comprising the partnership's fleet. With the GasLog Shanghai now on charter to Gunvor, the partnership's nearest upcoming charter renewal is for either of the Methane Alison Victoria or the Methane Jane Elizabeth in the fourth quarter of this year, as Andy will discuss later. We expect a strengthening LNG shipping market later this year and into 2020 to create opportunities to recharter our open ships.

Following the acquisition of the GasLog Glasgow, the partnership expects to meet its distribution growth guidance for the year without the need for additional dropdowns. However, we expect to continue to acquire assets from our parent at our historical pace of some two vessels per year.

Please turn to Slide 11, where I’ll discuss our future growth opportunities. The chart shows the 13 vessels with multi-year charts owned by our parent. Together, the chart period extends from 2025 to 2032 and represent approximately $2.8 billion in contracted backlog and some $280 million in total annual EBITDA with an average charter duration of approximately eight years.

These vessels provide visible future growth opportunities for GasLog Partners and will contribute positively to the average charter length of our fleet as well as to our distributable cash flows. Taken in combination with our strong balance sheet and access to diverse sources of both public and private debt and equity capital, GasLog Partners remains poised for continued growth.

With that, I'll turn it back to Andy to discuss the outlook for the LNG commodity and LNG shipping markets.

Andrew Orekar

Thank you, Alastair.

Turn to Slide 12 and trends in LNG demand. This slide shows the increase in LNG imports by country on a trailing 12-month basis. LNG demand grew by 38 million tonnes year-over-year, an increase of 13%. China posted the largest increase in absolute volumes, importing over 13 million tonnes more LNG or an increase of approximately 31% year- on-year as the country continues to increase natural gas as a percentage of its overall energy mix.

While Chinese demand continues to be strong, LNG growth has been broad-based, particularly in Europe, with demand in the region grew by 26 million tonnes over the period an increase of 68% year-over-year. European demand has been bolstered by a combination of declining indigenous gas production and continued coal to gas switching for power generation.

Turning to Slide 15 and the future outlook for LNG demand by geographic region. In total, Wood Mackenzie expects net LNG demand to grow by nearly 150 million tonnes between 2018 and 2025. Although China's imports have been significant in recent years, it is important to note that other countries in Asia, led by Bangladesh, Thailand, Malaysia and Pakistan plus Europe together, account for nearly two-thirds of the projected LNG demand growth through 2025.

Turning to Slide 14, which shows the new LNG supply coming online. This year over 21 million tonnes of new LNG capacities planned in the end production, mostly from projects in the U.S., which are expected to have a significant impact on tonne-miles. In particular, initial trend at Cameron, Freeport and Elba Island have begun production over their commissioning phase and are anticipated to ramp up through the end of the year.

Further ahead, there’s approximately 107 million tonnes of new capacities schedule to start production in 2019 through 2024, including Sabine Pass Train 6 and Mozambique LNG, both of which took FID in the second quarter of 2019.

The LNG supply picture continues to be dynamic and growing between now and the end of this year alone, Wood Mackenzie expect an incremental 45 million tonnes of LNG capacity to reach FID.

On Slide 15, we discussed how the U.S. LNG exports are positively impacted shipping demands. According to Poten, 116 cargoes were exported from the U.S. in the second quarter, 28% of these cargoes delivered into North Asia, a destination that require more than two ships for each million tonnes of LNG exported per annum.

Compared to historical global average of 1.3 ships needed for each million tonnes. Since exports out of the U.S. began in 2016, an average of 1.8 ships have been required for each million tonnes per annum, a positive development for shipping demand, particularly considering the significant amount of liquefaction capacity, expected to be online in the States for the end of 2020, approximately half of which has been sold on a multiyear basis to Asian buyers.

On Slide 16, we discuss how the demand for LNG impacts the supply and demand balance for LNG carriers. This slide illustrates our view of shipping, supply and demand through the end of 2020, based on Wood Mackenzie and Poten data.

As we can see, the market is expected to be structurally tighter through at least the end of 2020 based on Wood Mackenzie's latest quarterly LNG demand growth estimates and the on the water shipping fleet plus scheduled vessel deliveries.

On Slide 17, we discussed the seasonality in the LNG shipping market. Left panel shows the monthly average headline spot rates for TFDE carriers during 2018 and 2019 year-to-date. While the right panel shows the monthly average from the period beginning in 2011 through 2018.

While the absolute values may differ from the historical monthly averages, the trend in 2018 and 2019 has closely followed previously observed seasonal patterns, with headline spot rates generally bottoming in early spring and peaking in the fourth quarter.

There have been a number of factors that exacerbated the usual seasonality so far this year, including high inventory levels of LNG in Asia, the result of a warmer than average winter and cooler than average summer so far, unplanned downtime at several LNG export terminals and startup delays at several new products and new vessel deliveries.

However, as the historical data on this chart suggests, we expect the market to return to higher LNG shipping activity levels and stronger spot rates as we move into the heating season in the Northern Hemisphere, a new large LNG projects in our production, many of which are in the U.S., as I detailed earlier.

As a reminder, the partnership suite is 99% contracted through the end of this year and our nearest exposure the spot market is not expected until the final months of 2019, when we expect shipping demand to be strong.

Turning to Slide 18, and a discussion of recent developments in the multi-year chartering market. As the chart on this slide shows periods of strength and weakness in the spot market have historically influenced activity from multi-year charters. Last year was no exception, as a record number of charters greater than six months were reported. While spot rates for LNG carriers set all-time highs.

More recently, 13 charters between six months and three years in duration were reported in the second quarter of 2019. Despite, the subdued spot rates, I discussed on the previous slide. In addition, you'll know brokers currently assess the one-year time charter rate at approximately $85,000 per day in contrast of the current headline spot rates of $64,000 per day and potentially indicating a tighter market over the coming quarters.

Over the last 18 months, we've utilized the periods of strength in the spot market, to build on our customer relationships and fix three of our TFDE for multiple years. As well as, one of our steamships for one year. We anticipate similar opportunities to reach out our ships as the LNG carrier market improves during the remainder of 2019 and through 2020.

Turning to Slide 19, recap of our growth history and distribution guidance. As the far left panel shows, our buyback program diversifies our means of returning capital to investors and underscores our focus on total unitholder returns, which have now grown by 14% per unit on a trailing 12 month basis.

Today, we are declaring a second quarter distribution of $0.55 per unit or $2.20 annualized, which represents a nearly 4% increase on a year-on-year basis. As shown on the far right panel of the slide, we are reiterating our guidance of 2% to 4 % year-on-year distribution growth for 2019. This guidance is supported by a recently completed accretive acquisitions and positive outlook for the LNG shipping market, while also reflecting our dry-docking schedule for the year and one vessel coming off charter in the fourth quarter.

Now turning to Slide 20. In summary in the second quarter, the partnership continued to execute its strategy. Closing our 12 acquisition since IPO, rechartering the GasLog Shanghai for 3.5 years and becoming the first of our peers to eliminate our IDRs. Our access to multiple sources of debt and equity capital remains strong and our 13 vessel dropdown pipeline represents highly visible future growth for the partnership.

With the GasLog Glasgow acquisition now closed, we reiterate our target to deliver 2% to 4% distribution growth for 2019, while maintaining prudent coverage, opportunistically repurchasing our common units.

Finally looking longer term, steady progress of new liquefaction and increasing LNG demand should result in strong fundamentals for LNG shipping and create additional opportunities to reach out our vessels.

With that, I'd like to now open it up for Q&A Dorinda, could you please open the call for any questions?

Question-and-Answer Session


[Operator Instructions] First question comes from Chris Wetherbee from Citi. Your line is open.

Chris Wetherbee

I wanted to just touch base first on sort of the IDR relationship relative to the distribution growth rate. So, I think you are confident in the ability to hit the numbers even without the potential drop down, another potential drop down later on this year. And when you think out beyond 2019 without the IDRs, is it reasonable to assume that you might get comfortable with sort of the higher end of the range kind of going forward? Or is there a new way to sort of think about what distribution growth profile might look beyond 2019?

Andrew Orekar

Sure. I think, Chris, you've heard us say before and unfortunate continues to be true, that it doesn't appear we're getting full credit in our valuation for the growth that we've been delivering. And it does appear that perhaps incremental distribution coverage is being guide at a premium to incremental growth.

So, I think at this time, of course, we only give guidance for the year ahead in 2019 of 2% to 4 % that we're still very confident in. Looking beyond that, I think I'd only say that it feels like a low single-digit distribution growth with proven coverage and a strong balance sheet is a pretty compelling combination of MLP investment characteristics at the moment. And so, I think that's generally where we're oriented. Of course, we'll be given that some thought as we move closer to 2020 and beyond.

Chris Wetherbee

That's helpful and certainly understood, I guess, in that context, when you think about capital return to shareholders, obviously you guys have been more diverse than just through your distribution with the repurchase of some units. Is it fair to assume that, you know, relative to where valuations stand today, does that continues to be an option that you might explore?

Andrew Orekar

Yes, I think we're -- thanks for -- thanks for pointing that out with something that we're excited about continuing to execute because it does at these levels continue to be accretive and it is improving our distribution coverage as we go. So, I think it's something we'll continue to do opportunistically.

Of course, as an MLP, the vast majority of our return will be through the common distribution. But I would expect unit repurchases to remain an option for us. And we're pleased with the progress we've had so far to date.

Chris Wetherbee

Just one more, just when you think about sort of the chartering market, obviously the deal on the Shanghai has some variability to it, which is interesting and sort of brings a different twist to the portfolio. When you think about, you know, opportunities for incremental charter and you have some, I guess the next ships up for the steam vessels. Is that a potential probability for chartering for those ships or how do you think about that in the construct of the portfolio balancing, you know, how much exposure do you want to have toward that variable rate environment, even if you can keep the utilization 100%?

Andrew Orekar

Yes, I think we'd very much consider this contract structure for future vessels, again, as you mentioned, utilization really is king and has a significant impact on the earnings you're realizing from the vessels, which is what was so attractive to us about this agreement.

We also like this because as we said in our remarks, we think there will be an extremely strong period in the market here later in 2019 and in through 2020. And so, we can retain some of that upside for what we hope is above the cycle earnings and so the structural has a nice benefit at this time of the market as well.


The next comes from [indiscernible] from Wells Fargo. Your line is open.

Unidentified Analyst

So obviously the demand from Northeast Asia has been weak during the first quarter of first half of the year. And I guess stockpiling should begin maybe like September, October. Do you envision that to be different this year, just given the tariffs on China or anything to be different this quarter or this year versus last year? In terms of preparation for the peak season.

Alastair Maxwell

Sure. Well, I think generally LNG inventory levels have been higher in Asia year-to-date than they were in 2018. But as you correctly note, we are now reaching that time of the year where importers are beginning to think seriously about volumes, they need for the winter heating season. In fact, I think we're beginning to see that with South Korea beginning to arrange more cargoes for delivery.

So, I think the general seasonal pattern where Asia demand increases around this time of year should hold, you know, the magnitude of that compared to last year hard for us to comment on right now, but the overall trend should be the same.

Unidentified Analyst

Okay. And then we're hearing that, you know, the storage in Europe is getting, you know, pretty saturated. Are you seeing diversion of cargos from Europe anywhere to somewhere else, to other parts of the world maybe other than North East Asia? And do you expect that to really impact the shipping rates in the future, in the near future?

Andrew Orekar

No, I wouldn’t say we are seeing cargos diverted from Europe, I do think there are some potentially interesting trading opportunities that are arising from how strong demand has been in Europe, which I guess is currently experiencing sort of second major heat wave above the summer. And so, there’s been some pretty consistent demand with even spikes in NRE elevated level and maybe there's some opportunities to deliver cargoes more profitably in Europe then there might be in the next few months in Asia. But not seeing anything that is causing cargoes to be diverted from Europe, because storage is full just yet.


[Operator Instructions] Your next question comes from Chris Snyder from Deutsche Bank. The line is open.

Chris Snyder

So, I see from the filings that the Shanghai generated TCE revenue of about 1.9 million. I know it left the fleet I think you said June 23, so maybe around 80 days. But the TCE rate on that only comes in 20,000 per day range was there something going on specifically with the Shanghai or is this indicative of broader Q2 Cool Pool performance?

Alastair Maxwell

No, I think this is just indicative of broad spot market performance in Q2 and there was the Shanghai, as you rightly say traded in the Cool Pool for the vast majority of the second quarter. It was only the last six or seven days that she was outside the Cool Pool.

So, it’s just indicative really a market conditions in Q2 in terms of - the combination as we talked about in the past headline rates utilization and the other factors which drive TCE. I would say sorry; we definitely see an improving trend in Q2.

So, if you look at where the market was and where the utilization levels in TCs were in April and you compare that to what June was, the June was significantly higher levels and significantly higher levels and the average for the quarter. So certainly, I think there’s Andy was saying in his remarks, we see an improving trends and we see that continuing into the second half of the year.

Chris Snyder

And then maybe just kind of touching on the index link contract, I think obviously makes a lot of sense takes out the utilization headwinds but from the charterer's perspective why would they pick the structure over just taking vessels into out of the Cool Pool because obviously in the Cool Pool they can pick and choose when they want the vessel it effectively paying less over any sort of the demand requirement.

Andrew Orekar

You know I think there's different structures for different customers, I think, in this case of a gun or we developed a relationship with them originally through a series of smart charters and they had a history of reliable delivery with the strength of the Gaslight operating platform using Gas from Shanghai so this specific ship, they had familiarity with it and we're happy with.

So, I think it was as much as wanting to continue a very productive operational and commercial relationship around this vessel. As you say that, they might use a variety of spot ships or spot charters for their other needs. But I do think it's a good reminder that, you know, 85 % of the shipping fleet today continues to operate under term charters.

And that's because roughly the same amount of LNG is bought under term arrangements rather than spot on. So, term shipping is a very key feature even for commodity traders who are very dynamic and are open to all sorts of creativity around their shipping needs.

Chris Snyder

And then just lastly, you obviously got strong term on that contract like 3.5 years. It's a similar term opportunities available should you have looked at a fixed rate or are charters only really willing to go out that far on an index link contract? And then just how does the three year term market, if it's even, you know, available, how does that look to what we see kind of as the one year published time charter rates? And that does it for me. Thanks, guys.

Andrew Orekar

Sure, let’s answer your first question. No, I wouldn't say it was the market link. 3.5 years was only available because of the market link structure, I think no, but we continue to be opportunities for more and less term under both fixed rate and some sort of variable rate. So, I think this is an interesting structure and I expect we'll probably do more of these, but I also expect we'll do more fixed rate deals.

As you can see from our remarks, though, the rates being quoted for one year charters are quite a bit stronger than the current spot rates. I would say there's just probably more liquidity in that part of the market than three to five year deals for on the water ships. But there are also many customers looking for that type of multi-year exposure, particularly among the U.S. off takers, many of whom have not fully arranged their shipping for projects. That, of course, have delayed it, but are now finally coming online and producing. So, I'd say there's more liquidity for a one year deal than a three to five year deal. But there's three to five year deals that we're evaluating as well.


Our next question comes from Randy Giveans from Jefferies. Your line is open.

Chris Robertson

This is Chris Robertson on for Randy. Thanks for taking our call and congrats on the busy and successful quarter. So, it looks like there's quite a wide variety in terms of the dropdown pipeline, in terms of contract expiration dates. I guess given the preference, how long would you expect the next dropdown contract duration, be it when you're kind of ranking those possibilities, are you -- how would you rank kind of looking at contract expiration date versus the counterparty that the charters with versus kind of the age and size that vessel?

Andrew Orekar

Sure. So, I think we're in a sense, we're spoilt for choice. With the extensive dropdown pipeline, we have, all of which have contracts greater than five years, some -- going out as far as nearly 10 years. And the counterparties are all outstanding quality of Shell's hotel, Cheniere Jarrah, and that's in the coming years.

And so, they're really all very-- high quality options. I think our -- my only comment would really, we will continue to drop assets down with at least five years or more. And more recent drop downs have had quite a bit more than five years. And we have several to choose from - we have the good fortune of assuming the debt on the vessels that Alastair has done a great job arranging, all of which is very low cost. Some vessels have a little bit more or less debt than others, which we evaluate as we think about our next dropdown candidates. And so, it's really - the economics of each dropdown are different, but the characteristics of the vessels in terms of their quality counter parties are quite similar.

But I would generally say that we have a history of dropping down vessels. Our parent builds a new build and operates it for some number of years and on balance we tend to drop it down and acquire it when it's two to four years old. There's a few exceptions to that, but as a general rule, that's probably where we'll focus first.

Chris Robertson

With regards to the Shanghai, san you give us any detail or kind of update on kind of earnings to date in the current quarter?

Andrew Orekar

Yes, we certainly can't give a dollar figure on that, given that it's only July 25. But I can share that we as an industry and as a spot market, we clearly ended the second quarter in a much stronger place than where it began. And I think so far in July that trend has continued. So, wouldn't want to give you guidance on other than to say it is a market blinked a rate that's done on a voyage basis so there is a bit of a lag from what you're seeing in your weekly broker reports.

But as I said, generally the trajectory has been more positive through the second quarter and then that's continued so far here in July.


[Operator Instructions] Our next question comes from Liam Burke from B. Riley FBR. Your line is open.

Liam Burke

Andy, you're older, steam vessels are the ones that are coming off charter. First, the pipeline of the dropdown pipeline are all newer TFDE vessels. So, any thought to addressing the portfolio and the best thing, the older steam vessels in terms of refreshing the assets rather than just re-upping the steam at lower charter rates?

Andrew Orekar

You know, I think we would certainly never say never. I think there's been a disappointing lack of liquidity in the sale and purpose market for LNG carriers. And we do think that will have - as an industry improve over time, you know, again, I'd point out that we have very little on a relative basis on these steamed mussels and so they can be competitive at quite attractive rates.

And we do expect the market to improve when, as you point out, when there are current charters in which is really kind of over the next quarter - next year and quarter year and a half, really. So, I think I certainly wouldn't rule out an asset sale but today there just has not been a great opportunity to do that for not just for GasLog, but for anyone in the industry.

But these are vessels that are well positioned for being competitive in the market that they're going to be exposed in.


I'm showing no further questions at this time. I would like to turn the call back over to Andrew Orekar for closing remarks.

Andrew Orekar

Thanks, Dorinda. Thank you to everyone today for listening and your continued interest in GasLog Partners. We certainly appreciate it and look forward to speaking with you all next quarter. Thank you very much.


Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may disconnect and have a wonderful day.

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