Höegh LNG Companions LP Stories Monetary Outcomes for the Quarter Ended March 31, 2022

HAMILTON, Bermuda, Might 25, 2022 /PRNewswire/ — Höegh LNG Companions LP (NYSE: HMLP) (the “Partnership”) right now reported its monetary outcomes for the quarter ended March 31, 2022.

Highlights

• 100% availability of FSRUs for the primary quarter of 2022
• Reported whole time constitution revenues of $35.3 million for the primary quarter of 2022, in comparison with $34.8 million of time constitution revenues for the primary quarter of 2021
• Generated working revenue of $28.5 million, internet revenue of $20.2 million and restricted companions’ curiosity in internet revenue of $16.3 million for the primary quarter of 2022, in comparison with working revenue of $31.7 million, internet revenue of $23.8 million and restricted companions’ curiosity in internet revenue of $20.0 million for the primary quarter of 2021
• Working revenue, internet revenue and restricted companions’ curiosity in internet revenue have been impacted by unrealized positive aspects on spinoff devices for the primary quarter of 2022 and 2021, primarily on the Partnership’s share of fairness in earnings of joint ventures
• On Might 13, 2022, paid a money distribution of $0.01 per widespread unit with respect to the primary quarter of 2022
• On Might 16, 2022, paid a money distribution of $0.546875 per 8.75% Collection A cumulative redeemable most popular unit (“Collection A most popular unit”), for the interval commencing on February 15, 2022 to Might 15, 2022
• On March 20, 2022, the Höegh Gallant commenced FSRU operations underneath agreements with subsidiaries of New Fortress Vitality Inc. (“New Fortress”) to constitution the Höegh Gallant for a interval of ten years (the “NFE Constitution”). The constitution charge underneath the NFE Constitution is decrease than underneath the prior constitution for the Höegh Gallant (the Suspended Gallant Constitution”) with a subsidiary of Höegh LNG Holdings Ltd. (“Höegh LNG”). The Partnership has entered into an settlement to droop the Suspended Gallant Constitution, with impact from the graduation of the NFE Constitution, and a make-whole settlement (collectively, the “Suspension and Make-Entire Agreements”), pursuant to which Höegh LNG’s subsidiary will compensate the Partnership month-to-month for the distinction between the constitution charge earned underneath the NFE Constitution and the constitution charge earned underneath the Suspended Gallant Constitution, with the addition of a modest enhance till July 31, 2025, the unique expiration date of the Suspended Gallant Constitution. Afterwards, the Partnership will proceed to obtain the constitution charge agreed with New Fortress for the remaining time period of the NFE Constitution. As well as, pursuant to the Suspension and Make-Entire Agreements, sure capital expenditures incurred to prepared and relocate the Höegh Gallant for efficiency underneath the NFE Constitution will likely be shared 50/50 between Höegh LNG and the Partnership, topic to a most obligation of the Partnership. As of Might 25, 2022, Höegh LNG has paid an mixture of $2.6 million to the Partnership pursuant to the Suspension and Make-Entire Agreements associated to such capital expenditures.
• On Might 25, 2022, the Partnership entered right into a definitive merger settlement with Höegh LNG pursuant to which Höegh LNG will purchase, for money, all the excellent publicly held widespread items of the Partnership, at a worth of $9.25 per widespread unit for a complete buy worth of roughly $167.6 million. The revised worth represents a rise of $5.00 when in comparison with the supply of $4.25 per widespread unit made by Höegh LNG on December 3, 2021, a premium of 35.0% to the closing worth of the Partnership’s widespread items of $6.85 per unit on Might 24, 2022 and a premium of 39.2% to the amount weighted common worth of the Partnership’s widespread items for the 30-trading day interval ended Might 24, 2022. In reference to the transaction, the Partnership’s incentive distribution rights will likely be cancelled. The Collection A most popular items will stay excellent. In reference to the transaction, the board of administrators of the Partnership (the “Board of Administrators”) directed the conflicts committee of the Board of Administrators, comprised solely of administrators unaffiliated with Höegh LNG (the “Conflicts Committee”), to think about Höegh LNG’s supply. Following a interval of dialogue with Höegh LNG and its advisors, the Conflicts Committee authorized the merger settlement and decided that the merger settlement and the transactions contemplated thereby are in the perfect pursuits of the Partnership and the holders of the Partnership’s widespread items unaffiliated with Höegh LNG. Based mostly on the advice of the Conflicts Committee, the Board of Administrators unanimously authorized the merger settlement and advisable that the Partnership’s widespread unitholders approve the merger. The merger is predicted to shut within the second half of 2022, and is topic to approval of the merger settlement and the transactions contemplated thereby by a majority of the excellent widespread items of the Partnership and sure regulatory filings and customary closing circumstances. Höegh LNG owns 45.7% of the widespread items and has entered right into a assist settlement with the Partnership committing to vote its widespread items in favor of the merger.

Monetary Outcomes Overview

For the three months ended March 31, 2022, every of the Partnership’s FSRUs have had 100% availability. The Partnership has mitigated the chance of an outbreak of COVID‑19 on board its vessels by extending time between crew rotations on the vessels and growing mitigating actions for crew rotations. Administration and administrative staffs have largely transitioned to working remotely from house to handle the precise COVID‑19 state of affairs within the relevant geographic location. The Partnership has fulfilled its obligations underneath its time constitution contracts, and didn’t expertise any off-hire for its FSRUs for the three months ended March 31, 2022.

The Partnership reported internet revenue of $20.2 million for the three months ended March 31, 2022, a lower of $3.6 million from internet revenue of $23.8 million for the three months ended March 31, 2021. Web revenue was impacted by unrealized positive aspects on spinoff devices for the primary quarter of 2022 and 2021, primarily included within the Partnership’s share of fairness in earnings of joint ventures.

Excluding all the unrealized positive aspects on spinoff devices, internet revenue for the three months ended March 31, 2022 would have been $15.4 million, a lower of $0.8 million from $16.2 million for the three months ended March 31, 2021. Excluding the affect of the unrealized positive aspects on derivatives, the lower is primarily attributable to larger administrative bills.

Most well-liked unitholders’ curiosity in internet revenue was $3.9 million for the three months ended March 31, 2022 and 2021. Restricted companions’ curiosity in internet revenue for the three months ended March 31, 2022 was $16.3 million, a lower of $3.7 million from restricted companions’ curiosity in internet revenue of $20.0 million for the three months ended March 31, 2021. Excluding all the unrealized positive aspects on spinoff devices, restricted companions’ curiosity in internet revenue for the three months ended March 31, 2022 would have been $11.5 million, a lower of $0.8 million from restricted companions’ curiosity in internet revenue of $12.3 million for the three months ended March 31, 2021.

Fairness in earnings of joint ventures for the three months ended March 31, 2022 was $8.6 million, a lower of $2.4 million from fairness in earnings of joint ventures of $11.0 million for the three months ended March 31, 2021. The joint ventures personal the Neptune and the Cape Ann. Unrealized positive aspects on spinoff devices within the Partnership’s joint ventures impacted the fairness in earnings of joint ventures for the three months ended March 31, 2022 and 2021. The joint ventures have beforehand not utilized hedge accounting for rate of interest swaps, and all adjustments in truthful worth have been included in fairness in earnings (losses) of joint ventures. After the refinancing of the New Neptune Facility on November 30, 2021, hedge accounting is utilized for the Neptune. Excluding the unrealized positive aspects on spinoff devices for the three months ended March 31, 2022 and 2021, the fairness in earnings of joint ventures would have been $3.8 million for the three months ended March 31, 2022, a rise of $0.4 million from $3.4 million for the three months ended March 31, 2021. Excluding the unrealized positive aspects on spinoff devices for the three months ended March 31, 2022 and 2021, the enhance was primarily attributable to larger time constitution income partially offset by larger working bills and monetary bills for the three months ended March 31, 2022, in comparison with these for the three months ended March 31, 2021. The Partnership’s share of its joint ventures’ working revenue was $5.9 million for the three months ended March 31, 2022 in comparison with $6.1 million for the three months ended March 31, 2021.

Working revenue for the three months ended March 31, 2022 was $28.5 million, a lower of $3.2 million from working revenue of $31.7 million for the three months ended March 31, 2021. Excluding the affect of the unrealized positive aspects on derivatives impacting the fairness in earnings of joint ventures for the three months ended March 31, 2022 and 2021, working revenue for the three months ended March 31, 2022 would have been $23.6 million, a lower of $0.5 million from $24.1 million for the three months ended March 31, 2021.

Section EBITDA¹ for the three months ended March 31, 2022 was $33.4 million, a lower of $1.1 million from $34.5 million for the three months ended March 31, 2021.

Complete working bills for the three months ended March 31, 2022 have been $15.5 million, a rise of $1.4 million from $14.1 million for the three months ended March 31, 2021. The rise is principally attributable to larger administrative bills for the three months ended March 31, 2022, in contrast with the three months ended March 31, 2021.

The rise in administrative bills is principally associated to extra value from exterior consultancy charges and audit charges.

Complete monetary expense, internet for the three months ended March 31, 2022 was $5.5 million, a lower of $0.7 million from $6.2 million for the three months ended March 31, 2021. Curiosity expense decreased by $0.5 million for the three months ended March 31, 2022 in contrast with the three months ended March 31, 2021. Curiosity expense consists of the curiosity incurred, amortization and acquire (loss) on money move hedges, dedication charges and amortization of debt issuance prices for the interval. The lower of $0.5 million in curiosity expense within the first quarter of 2022 in comparison with the primary quarter of 2021 was principally attributable to reimbursement of excellent mortgage balances for the ability financing the PGN FSRU Lampung (“Lampung facility”) and the industrial and export tranche of the $385 million facility financing the Höegh Gallant and the Höegh Grace (the “$385 million facility”). Different gadgets decreased by $0.1 million for the three months ended March 31, 2022 in comparison with the three months ended March 31, 2021, attributable to overseas change acquire/losses.

Section Info

The Partnership has two working segments. The phase revenue measure is Section EBITDA, which is outlined as earnings earlier than curiosity, taxes, depreciation, amortization, impairment, and different monetary gadgets (acquire (loss) on debt extinguishment, acquire (loss) on spinoff devices and different gadgets, internet). The 2 segments are “Majority held FSRUs” and “Three way partnership FSRUs.” As well as, unallocated company prices, curiosity revenue from advances to joint ventures, and curiosity expense associated to the excellent balances on the $85 million revolving credit score facility and the $385 million facility are included in “Different”. For added info on the segments, together with a reconciliation of Section EBITDA to working revenue and internet revenue for every phase, check with the outline and the tables included in “Unaudited Section Info for the Quarters Ended March 31, 2022 and 2021″ beneath.  

Section EBITDA for Majority held FSRUs for the three months ended March 31, 2022 was $28.1 million, a rise of $0.3 million from $27.8 million for the three months ended March 31, 2021. The rise is principally attributable to elevated income from time charters offset by a rise in administrative bills.

Section EBITDA for the Three way partnership FSRUs for the three months ended March 31, 2022 was $8.4 million, a lower of $0.2 million from $8.6 million for the three months ended March 31, 2021.

For Different, Section EBITDA consists of administrative bills. Administrative bills for the three months ended March 31, 2022 have been $3.2 million, a rise of $1.3 million from $1.9 million for the three months ended March 31, 2021. That is pushed by elevated exterior consultancy charges and audit charges.

Financing and Liquidity

As of March 31, 2022, the Partnership had money and money equivalents of $39.7 million. Present restricted money for working obligations of the PGN FSRU Lampung was $5.6 million, and long-term restricted money required underneath the long-term debt facility for the Lampung facility was $11.0 million as of March 31, 2022. As of Might 25, 2022, the Partnership has absolutely drawn on the $63 million revolving credit score tranche of the $385 million facility and has an undrawn steadiness of $60.5 million on the $85 million revolving credit score facility from Höegh LNG. Nonetheless, the Partnership has acquired discover from Höegh LNG that it’ll not lengthen the $85 million revolving credit score facility when it matures on January 1, 2023, and that it’ll have very restricted capability to increase any extra advances to the Partnership thereunder past what’s at the moment drawn underneath such facility. As of March 31, 2022, the excellent steadiness of $24.5 million on the $85 million revolving credit score facility from Höegh LNG is assessed as a present legal responsibility. Additional drawdowns on the $85 million revolving credit score facility could also be topic to Höegh LNG’s consent due to the discover of arbitration acquired from the charterer of the PGN FSRU Lampung, as described beneath.

As of March 31, 2022, the Partnership has no materials commitments for capital expenditures. Nonetheless, a scheduled drydocking for the Neptune is predicted to be accomplished in August 2022. As of March 31, 2022, expenditures of roughly $1.1 million have been included inside pay as you go bills and different receivables for the joint ventures in reference to purchases of lengthy lead gadgets for the drydocking. The joint ventures have acquired roughly $2.4 million from their homeowners to finance sure expenditures which aren’t reimbursable by the charterer, of which the Partnership has paid roughly $1.2 million as principal on advances to joint ventures.

Through the first quarter of 2022, the Partnership made quarterly repayments of $7.9 million on the Lampung facility and $6.4 million on the $385 million facility. The reimbursement $7.9 million on the Lampung facility consists of peculiar installments of $4.5 million and extra installments of $3.4 million because of the money sweep mechanism within the Lampung facility. Till the pending arbitration with the charterer of PGN FSRU Lampung has been terminated, cancelled or favorably resolved, no shareholder loans could also be serviced and no dividends could also be paid to the Partnership by the subsidiary borrowing underneath the Lampung facility, PT Hoegh LNG Lampung (“PT HLNG”). Moreover, every quarter, 50% of the PGN FSRU Lampung’s generated money move after debt service have to be utilized to pre-pay excellent mortgage quantities underneath the Lampung facility, utilized professional rata throughout the industrial and export credit score tranches. The remaining 50% will likely be retained by PT HLNG and pledged in favour of the lenders till the pending arbitration with the charterer of the PGN FSRU Lampung has been terminated, cancelled or favorably resolved. As a consequence, no money move from the PGN FSRU Lampung will likely be accessible for the Partnership till the pending arbitration has been terminated, cancelled or favorably resolved. This limitation doesn’t prohibit the Partnership from paying distributions to most popular and customary unitholders.

The Partnership’s guide worth and excellent principal of whole long-term debt have been $396.8 million and $402.0 million respectively, as of March 31, 2022, together with the Lampung facility, the $385 million facility and the $85 million revolving credit score facility.

On July 27, 2021, the Partnership’s board of administrators introduced a discount within the quarterly money distribution on its widespread items to $0.01 per widespread unit, down from a distribution of $0.44 per widespread unit within the first quarter of 2021, commencing with the distribution for the second quarter of 2021 and persevering with within the third and first quarters of 2021 and the primary quarter of 2022. The Partnership intends to make use of its internally generated money move to scale back debt ranges and strengthen its steadiness sheet.

As of March 31, 2022, the Partnership’s whole present liabilities exceeded whole present property by $22.8 million. That is partly a consequence of the present portion of long-term debt of $43.7 million being labeled as present whereas restricted money of $11.0 million related to the Lampung facility is assessed as long-term. The present portion of long-term debt displays principal funds for the subsequent twelve months. Moreover, as a result of the $85 million revolving credit score facility from Höegh LNG matures on January 1, 2023, the excellent steadiness thereunder of $24.5 million is assessed as a present legal responsibility.

The present liabilities are anticipated to be funded, for essentially the most half, by future money flows from operations. The Partnership doesn’t intend to keep up a money steadiness to fund the subsequent twelve months’ internet liabilities. The Partnership believes its money flows from operations, together with distributions to it from Höegh LNG Cyprus Restricted, and Höegh LNG FSRU IV Ltd as cost of intercompany curiosity and/or intercompany debt or dividends and funds underneath the Suspension and Make-Entire Agreements, will likely be ample to satisfy its debt amortization and dealing capital wants and keep money reserves in opposition to fluctuations in working money flows and pay distributions to its unitholders at its present stage of distributions, for the subsequent twelve months assuming the closing of the refinancing of the Cape Ann facility on a well timed foundation and persevering with compliance with covenants underneath its credit score services and assuming that the Partnership’s vessels stay absolutely operational and that revenues are generated as per present contractual phrases.

On December 15, 2021, SRV Joint Gasoline Two Ltd, the proprietor of the Cape Ann, signed a brand new mortgage settlement to refinance the prevailing Cape Ann debt facility that matures on June 1, 2022. The brand new mortgage facility is for an quantity of $154.1 million. Topic to customary closing circumstances, the closing and the drawdown underneath the brand new facility is predicted to happen on or in regards to the maturity date of the prevailing facility. The phrases and circumstances for the brand new Cape Ann Facility are largely similar to the Neptune facility that was refinanced on November 30, 2021.

As of March 31, 2022, the Partnership had excellent rate of interest swap agreements for a complete notional quantity of $264.4 million to hedge in opposition to the floating rate of interest dangers of its long-term debt underneath the Lampung facility and the $385 million facility. The Partnership applies hedge accounting for spinoff devices associated to those services. The Partnership receives curiosity primarily based on three-month US greenback LIBOR and pays a hard and fast charge of two.8% for the Lampung facility. The Partnership receives curiosity primarily based on the three-month US greenback LIBOR and pays a hard and fast charge starting from 2.650% to 2.941% for the $385 million facility.

The Partnership’s share of the joint ventures is accounted for utilizing the fairness methodology. In consequence, the Partnership’s share of the joint ventures’ money, restricted money, excellent debt, rate of interest swaps and different steadiness sheet gadgets are mirrored internet on the strains “gathered earnings in joint ventures” and “gathered losses in joint ventures” on the consolidated steadiness sheet and are usually not included within the steadiness sheet figures disclosed above.

In February 2022, the Partnership paid a money distribution of $0.3 million, or $0.01 per widespread unit, with respect to the fourth quarter of 2021.

In February 2022, the Partnership paid a money distribution of $3.9 million, or $0.546875 per Collection A most popular unit, for the interval commencing on November 15, 2021 to February 14, 2022.

On Might 13, 2022, the Partnership paid a money distribution of $0.3 million, or $0.01 per widespread unit, with respect to the primary quarter of 2022.

On Might 16, 2022, the Partnership paid a money distribution of $3.9 million, or $0.546875 per Collection A most popular unit, for the interval commencing on February 15, 2022 to Might 15, 2022.

For the interval from January 1, 2022 to Might 25, 2022, no Collection A most popular items or widespread items have been offered underneath the Partnership’s ATM program.

Outlook

The Partnership believes its main threat and publicity associated to uncertainty of money flows from its long-term time constitution contracts is because of the credit score threat and counterparty threat related to the person charterers. Funds are due underneath time constitution contracts whatever the demand for the charterer’s fuel output or the utilization of the FSRU. It’s subsequently attainable that charterers might not make funds for time constitution companies in instances of lowered demand. Whereas there’s a pending arbitration as additional mentioned beneath, as of Might 25, 2022, the Partnership has not skilled any lowered or non-payments for obligations underneath the Partnership’s time constitution contracts. As well as, the Partnership has not offered concessions or made adjustments to the phrases of cost for its prospects.

Höegh LNG has indemnified the Partnership for the joint ventures’ boil-off settlement, entered into the Suspension and Make-Entire Agreements and offered the Partnership the $85 million revolving credit score facility. Nonetheless, in July 2021, the Partnership acquired discover from Höegh LNG that the revolving credit score line of $85 million won’t be prolonged when it matures on January 1, 2023, and that Höegh LNG can have very restricted capability to increase any extra advances to the Partnership past what’s at the moment drawn underneath such facility. Additionally, additional drawdowns on the $85 million revolving credit score facility could also be topic to Höegh LNG’s consent due to the NOA acquired from the charterer of PGN FSRU Lampung. With these adjustments, the Partnership’s liquidity and monetary flexibility has been lowered. If Höegh LNG is unable to satisfy its obligations to us underneath the Suspension and Make-Entire Agreements or meet funding requests or indemnification obligations, our monetary situation, outcomes of operations and skill to make money distributions to unitholders may very well be materially adversely affected.

Höegh LNG’s skill to make funds to the Partnership underneath the Suspension and Make-Entire Agreements and any funding requests underneath the $85 million revolving credit score facility and any claims for indemnification could also be affected by occasions past the management of Höegh LNG or the Partnership, together with prevailing financial, monetary and trade circumstances. If market or different financial circumstances deteriorate, Höegh LNG’s skill to satisfy its obligations to the Partnership could also be impaired.

If monetary establishments offering the Partnership’s rate of interest swaps are unable to satisfy their obligations, the Partnership might expertise the next curiosity expense or be unable to acquire funding. Moreover, if the Partnership’s charterers or lenders are unable to satisfy their obligations underneath their respective contracts or if the Partnership is unable to meet its obligations underneath time charters, its monetary situation, outcomes of operations and skill to make money distributions to unitholders may very well be materially adversely affected.

As beforehand reported, by letter dated July 13, 2021, the charterer underneath the lease and upkeep settlement for the PGN FSRU Lampung (“LOM”) raised sure points with PT HLNG in relation to the operations of the PGN FSRU Lampung and the LOM and by additional letter dated July 27, 2021, said that it will start arbitration in opposition to PT HLNG. On August 2, 2021 the charterer served a discover of arbitration (“NOA”) to declare the LOM null and void, and/or to terminate the LOM, and/or search damages. PT HLNG has served a reply refuting the claims as baseless and with out authorized benefit and has additionally served a counterclaim in opposition to the charterer for a number of breaches of the LOM and a declare in opposition to the mum or dad firm of the charterer for the fulfilment of the charterer’s obligations underneath the LOM as said in a assure offered by the mum or dad firm, with a declare for damages. PT HLNG will take all mandatory steps and can vigorously defend in opposition to the charterer’s claims within the authorized course of.

No assurance will be given at the moment as to the result of the dispute with the charterer of the PGN FSRU Lampung. However the NOA, each events have continued to carry out their respective obligations underneath the LOM. Within the occasion the result of the dispute is unfavorable to the Partnership, it might have a fabric hostile affect on its enterprise, monetary situation, outcomes of operations and skill to make distributions to unitholders.

On September 23, 2021, the Partnership entered into the NFE Constitution with subsidiaries of New Fortress to constitution the Höegh Gallant primarily for FSRU operations for a interval of ten years. From November 26, 2021 till FSRU operations commenced on March 20, 2022, New Fortress chartered the vessel for LNG provider operations. The Partnership has additionally entered into the Suspension and Make-Entire Agreements to droop the prior constitution for the Höegh Gallant with a subsidiary of Höegh LNG, with impact from the graduation of the NFE Constitution. The constitution charge underneath the NFE Constitution is decrease than underneath the Suspended Gallant Constitution.  Nonetheless, underneath the Suspension and Make-Entire Agreements, Höegh LNG’s subsidiary will compensate the Partnership month-to-month for the distinction between the constitution charge earned underneath the NFE Constitution and the constitution charge earned underneath the Suspended Gallant Constitution with the addition of a modest enhance till July 31, 2025, the unique expiration date of the Suspended Gallant Constitution. Afterwards, the Partnership will proceed to obtain the constitution charge agreed with New Fortress for the remaining time period of the NFE Constitution. As well as, pursuant to the Suspension and Make-Entire Agreements, sure capital expenditures incurred to prepared and relocate the Höegh Gallant for efficiency underneath the NFE Constitution will likely be shared 50/50 between Höegh LNG and the Partnership, topic to a most obligation of the Partnership. As of Might 25, 2022, Höegh LNG has paid an mixture of $2.6 million  to the Partnership pursuant to the Suspension and Make-Entire Agreements associated to such capital expenditures.

From the graduation of the prior ATM program in January 2018 by Might 25, 2022, the Partnership has offered 2,489,325 Collection A most popular items and 358,869 widespread items underneath its ATM packages and acquired internet proceeds of $63.2 million and $6.4 million, respectively. The compensation paid to the Agent for such gross sales was $1.3 million.  In present market circumstances with decrease unit costs, gross sales underneath the brand new ATM program are a much less viable and dearer choice for accessing liquidity.

The outbreak of COVID‑19 has negatively affected financial circumstances in lots of elements of the world which can affect the Partnership’s operations and the operations of its prospects and suppliers. Though the Partnership’s operations haven’t been materially affected by the COVID-19 outbreak to this point, the final word size and severity of the COVID‑19 outbreak and its potential affect on the Partnership’s operations and monetary situation is unsure at the moment. Moreover, ought to there be an outbreak of COVID‑19 on board one of many Partnership’s FSRUs or an lack of ability to switch important provides or substitute elements attributable to disruptions to third-party suppliers, satisfactory crewing or provides will not be accessible to meet the Partnership’s obligations underneath its time constitution contracts. This might end in off-hire or guarantee funds underneath efficiency ensures which would scale back revenues for the impacted interval. Thus far, the Partnership has prolonged the time between crew rotations on the vessels and developed different mitigating actions to scale back the chance of a COVID-19 outbreak. In consequence, the Partnership expects that it’ll incur considerably larger crewing bills. Thus far, the Partnership has not had materials service interruptions on the Partnership’s vessels. Administration and administrative staffs have largely transitioned to working remotely from house to handle the precise COVID‑19 state of affairs within the relevant geographic location. The Partnership has supported staffs by supplying wanted web boosters and workplace gear to facilitate an efficient work surroundings.

In February 2022, the Russian assault on Ukraine began. It might result in additional regional and worldwide conflicts or armed motion. It’s attainable that such battle might disrupt provide chains and trigger instability within the international financial system. Moreover, the continuing battle might consequence within the imposition of additional financial sanctions by america and the European Union in opposition to Russia. Whereas a lot uncertainty stays concerning the worldwide affect of the invasion, it’s attainable that such tensions might adversely have an effect on the Partnership’s enterprise, monetary situation, outcomes of operation and money flows. Moreover, it’s attainable that third events with whom the Partnership has constitution contracts could also be impacted by occasions in Russia and Ukraine, which might adversely have an effect on its operations. The invasion has amongst different issues, led to a considerably elevated consideration to safety of power provide in Europe. A number of European international locations want to cut back their reliance on pipeline fuel from Russia, and are planning to extend the import capability for LNG by the applying of FSRUs and/or landbased import services together with elevated use of renewable power sources within the power combine. Over time, this might speed up the power transition to renewable power.

On April 1, 2022, the Partnership’s Colombian subsidiary acquired a notification from the Tax Administration of Cartagena assessing a penalty of roughly $1.8 million for failure to file the 2016 to 2018 Municipal Trade and Commerce Tax (“ICT”) returns. ICT is imposed on gross receipts on buyer invoices and is just like a gross sales tax. The municipal tax authorities have alleged that the shopper invoices are for industrial actions carried out inside the municipal jurisdiction. Nonetheless, all the Colombian subsidiary’s actions happen offshore which is outdoors of the Municipality’s borders. In keeping with Colombian legislation, municipalities don’t have jurisdiction over maritime waters or low-tide areas. Administration intends to disclaim the allegations and file an attraction to vigorously defend the Colombian subsidiary’s place. Accruals for loss contingencies are recorded when it’s possible {that a} legal responsibility has been incurred and the quantity of loss will be moderately estimated. Administration, with recommendation of its outdoors authorized advisors, has assessed the standing of this matter and has concluded that an hostile judgment after concluding an appeals course of isn’t possible. In consequence, no provision has been made within the consolidated monetary statements. Administration estimates the vary of attainable loss for 2016-2021, together with accrued curiosity, to be roughly $1.3 million to $2.9 million as of March 31, 2022 plus extra accrued curiosity thereon till ultimate disposition of the ICT allegation.

On October 27, 2021, a federal securities class motion lawsuit was filed in opposition to the Partnership and sure of its present and former officers in america District Courtroom for the District of New Jersey. The identify of the case is In re Höegh LNG Companions LP Securities Litigation, Case No. 2:21-cv-19374-KM-JBC. The grievance alleges that the Partnership made materially false and deceptive statements about its enterprise and operations, and seeks unspecified damages, attorneys’ charges and another aid the court docket deems correct. On March 11, 2022, the Courtroom appointed lead plaintiffs and lead counsel for the category, and the Courtroom has issued a schedule for the submitting of a consolidated amended grievance and briefing on defendants’ anticipated movement to dismiss. On Might 16, 2022, the court-appointed lead plaintiffs filed a discover of voluntary dismissal, and the Courtroom ordered the dismissal on Might 17, 2022. The Partnership believes the allegations on this go well with have been with out benefit.

Presentation of First Quarter 2022 Outcomes

A presentation will likely be held right now, Wednesday, Might 25, 2022, at 8:30 A.M. (EST) to debate monetary outcomes for the primary quarter of 2021. The outcomes and presentation materials will likely be accessible for obtain at http://www.hoeghlngpartners.com.

The presentation will likely be instantly adopted by a Q&A session. Contributors will be capable to be a part of this presentation utilizing the next particulars:

a.        Webcast

https://app.webinar.internet/zP3nb3lewNr

b.       Teleconference

Contributors ought to ask to be joined into the Höegh LNG Companions LP name.

There will likely be a Q&A session after the presentation. Info on the best way to ask questions will likely be given at first of the Q&A session.

For these unable to take part within the convention name, a replay will likely be accessible from one hour after the tip of the convention name till June 1, 2022.

The replay dial-in numbers are as follows:

FORWARD-LOOKING STATEMENTS

This press launch accommodates sure forward-looking statements regarding future occasions and the Partnership’s operations, efficiency and monetary situation. Ahead-looking statements embody, with out limitation, any assertion which will predict, forecast, point out or suggest future outcomes, efficiency or achievements, and will comprise the phrases “imagine,” “anticipate,” “anticipate,” “estimate,” “future,” “challenge,” “will likely be,” “will proceed,” “will probably consequence,” “plan,” “intend” or phrases or phrases of comparable meanings. These statements contain recognized and unknown dangers and are primarily based upon a variety of assumptions and estimates which might be inherently topic to vital uncertainties and contingencies, a lot of that are past the Partnership’s management. Precise outcomes might differ materially from these expressed or implied by such forward-looking statements. Essential components that might trigger precise outcomes to vary materially embody, however are usually not restricted to:

• the consequences of outbreaks of pandemic or contagious ailments, together with the size and severity of the current worldwide outbreak of COVID‑19, together with its affect on the Partnership’s enterprise liquidity, money flows and operations in addition to operations of our prospects, suppliers and lenders;
• market circumstances and traits for floating storage and regasification items (“FSRUs”) and liquefied pure fuel (“LNG”) carriers, together with rent charges, vessel valuations, technological developments, market preferences and components affecting provide and demand of LNG, LNG carriers, and FSRUs;
• the Partnership’s distribution coverage and skill to make money distributions on its items or any adjustments within the quarterly distributions on its widespread items;
• restrictions within the Partnership’s debt agreements and pursuant to native legal guidelines on the Partnership’s joint ventures’ and subsidiaries’ skill to make distributions;
• the power of Höegh LNG to satisfy its monetary obligations to the Partnership pursuant to the Suspension and Make-Entire Agreements, the Suspended Gallant Constitution, any funding requests underneath the $85 million revolving credit score facility and its assure and indemnification obligations;
• the change within the skill of Höegh LNG to compete with the Partnership on account of its completion of the Amalgamation;
• the Partnership’s skill to compete efficiently for future chartering and newbuilding alternatives;
• the consummation of the proposed merger transaction with Höegh LNG and the belief of any advantages therefrom;
• demand within the FSRU sector or the LNG transport sector, together with demand for the Partnership’s vessels;
• the Partnership’s skill to buy extra vessels from Höegh LNG sooner or later;
• the Partnership’s skill to combine and understand the anticipated advantages from acquisitions;
• the Partnership’s anticipated progress methods, together with the acquisition of vessels;
• the Partnership’s anticipated receipt of dividends and reimbursement of indebtedness from subsidiaries and joint ventures;
• results of volatility in international costs for crude oil and pure fuel;
• the impact of the worldwide financial surroundings;
• turmoil within the international monetary markets;
• fluctuations in currencies and rates of interest;
• basic market circumstances, together with fluctuations in rent charges and vessel values;
• adjustments within the Partnership’s working bills, together with drydocking, on-water class surveys, insurance coverage prices and bunker prices;
• the Partnership’s skill to adjust to financing agreements and the anticipated impact of restrictions and covenants in such agreements;
• the monetary situation, liquidity and creditworthiness of the Partnership’s present or future prospects and their skill to fulfill their obligations underneath the Partnership’s contracts;
• the Partnership’s skill to switch present borrowings, make extra borrowings and to entry public fairness and debt capital markets;
• the power of the Partnership’s three way partnership to shut the brand new Cape Ann facility;
• deliberate capital expenditures and availability of capital assets to fund capital expenditures;
• the train of buy choices by the Partnership’s prospects;
• the Partnership’s skill to carry out underneath its contracts and keep long-term relationships with its prospects;
• the Partnership’s skill to leverage Höegh LNG’s relationships and fame within the transport trade;
• the Partnership’s continued skill to enter into long-term, fixed-rate charters and the rent charge thereof;
• the working efficiency of the Partnership’s vessels and any associated claims by TotalEnergies SE, PGN LNG or different prospects;
• the Partnership’s skill to maximise using its vessels, together with the redeployment or disposition of vessels not underneath long-term charters;
• the outcomes of the arbitration with the charterer of PGN FSRU Lampung;
• well timed acceptance of the Partnership’s vessels by their charterers;
• termination dates and extensions of charters;
• the affect of the Russian invasion of Ukraine;
• the Partnership’s skill to efficiently remediate the fabric weak point in our inside management over monetary reporting and our disclosure controls and procedures;
• the price of, and the Partnership’s skill to adjust to, governmental laws and maritime self-regulatory group requirements, in addition to customary laws imposed by its charterers relevant to its enterprise;
• financial substance legal guidelines and laws adopted or thought of by numerous jurisdictions of formation or incorporation of the Partnership and sure of its subsidiaries;
• availability and price of expert labor, vessel crews and administration, together with attainable disruptions, together with however not restricted to the provision chain of spare elements and repair engineers, brought on by the COVID‑19 outbreak;
• the variety of offhire days and drydocking necessities, together with the Partnership’s skill to finish scheduled drydocking on time and inside price range;
• the Partnership’s basic and administrative bills as a publicly traded restricted partnership and charges and bills payable underneath the Partnership’s ship administration agreements, the technical info and companies settlement and the executive companies settlement;
• the anticipated taxation of the Partnership, its subsidiaries and associates and distributions to unitholders;
• estimated future upkeep and substitute capital expenditures;
• the Partnership’s skill to rent or retain key workers;
• prospects’ rising emphasis on environmental and security considerations;
• potential legal responsibility from any pending or future litigation;
• dangers inherent within the operation of the Partnership’s vessels together with potential disruption attributable to accidents, political occasions, piracy or acts by terrorists;
• future gross sales of the Partnership’s widespread items, Collection A most popular items and different securities within the public market;
• the Partnership’s enterprise technique and different plans and goals for future operations;
• the Partnership’s skill to keep up efficient inside management over monetary reporting and efficient disclosure controls and procedures; and
• different components listed occasionally within the studies and different paperwork that the Partnership information with the SEC, together with the Partnership’s Annual Report on Type 20‑F for the yr ended December 31, 2021 and subsequent quarterly studies on Type 6‑Okay.

All forward-looking statements included on this press launch are made solely as of the date of this launch. New components emerge occasionally, and it isn’t attainable for the Partnership to foretell all of those components. Additional, the Partnership can’t assess the affect of every such issue on its enterprise or the extent to which any issue, or mixture of things, might trigger precise outcomes to be materially completely different from these contained in any forward-looking assertion. The Partnership doesn’t intend to launch publicly any updates or revisions to any forward-looking statements contained herein to mirror any change in its expectations with respect thereto or any change in occasions, circumstances or circumstances on which any such assertion relies.

HÖEGH LNG PARTNERS LP
UNAUDITED SEGMENT INFORMATION FOR THE QUARTERS ENDED MARCH 31, 2022 AND 2021
(in hundreds of U.S. {dollars})

Section info

There are two working segments. The phase revenue measure is Section EBITDA, which is outlined as earnings earlier than curiosity, taxes, depreciation, amortization, impairment and different monetary gadgets (acquire (loss) on debt extinguishment, acquire (loss) on spinoff devices and different gadgets, internet). Section EBITDA is reconciled to working revenue and internet revenue within the phase presentation beneath. The 2 segments are “Majority held FSRUs” and “Three way partnership FSRUs.” As well as, unallocated company prices, curiosity revenue from advances to joint ventures and curiosity expense associated to the excellent balances on the $85 million revolving credit score facility and the $385 million facility are included in “Different.”

For the three months ended March 31, 2022 and 2021, Majority held FSRUs consists of the financing lease associated to the PGN FSRU Lampung and the working leases associated to the Höegh Gallant and the Höegh Grace.

For the three months ended March 31, 2022 and 2021, Joint Enterprise FSRUs embody two 50% owned FSRUs, the Neptune and the Cape Ann, that function underneath long-term time charters with one charterer.

The accounting insurance policies utilized to the segments are the identical as these utilized within the consolidated monetary statements, besides that i) Three way partnership FSRUs is offered underneath the proportional consolidation methodology for the phase observe to the Partnership’s monetary statements and within the tables beneath, and underneath fairness accounting for the consolidated monetary statements and ii) inside curiosity revenue and curiosity expense between the Partnership’s subsidiaries that eradicate in consolidation are usually not included within the phase columns for the opposite monetary revenue (expense), internet line. Underneath the proportional consolidation methodology, 50% of the Three way partnership FSRUs’ revenues, bills and property are mirrored within the phase observe. Administration displays the outcomes of operations of joint ventures underneath the proportional consolidation methodology and never the fairness methodology of accounting.

Appendix A: Section EBITDA

Non-GAAP Monetary Measures

Section EBITDA. EBITDA is outlined as earnings earlier than curiosity, taxes, depreciation and amortization. Section EBITDA is outlined as earnings earlier than curiosity, taxes depreciation, amortization, impairment and different monetary gadgets. Different monetary gadgets encompass acquire (loss) on debt extinguishment, acquire (loss) on spinoff devices and different gadgets, internet (together with overseas change positive aspects and losses and withholding tax on curiosity bills). Section EBITDA is used as a supplemental monetary measure by administration and exterior customers of monetary statements, such because the Partnership’s lenders, to evaluate its monetary and working efficiency. The Partnership believes that Section EBITDA assists its administration and buyers by rising the comparability of its efficiency from interval to interval and in opposition to the efficiency of different corporations within the trade that present Section EBITDA info. This elevated comparability is achieved by excluding the possibly disparate results between durations or corporations of curiosity, depreciation, amortization, impairment, taxes, and different monetary gadgets, which gadgets are affected by numerous and probably altering financing strategies, capital construction and historic value foundation and which gadgets might considerably have an effect on internet revenue between durations. The Partnership believes that together with Section EBITDA as a monetary and working measure advantages buyers in (a) choosing between investing in it and different funding alternate options and (b) monitoring its ongoing monetary and operational power in assessing whether or not to proceed to carry widespread items or most popular items. Section EBITDA is a non-GAAP monetary measure and shouldn’t be thought of a substitute for internet revenue, working revenue or another measure of monetary efficiency offered in accordance with U.S. GAAP. Section EBITDA excludes some, however not all, gadgets that have an effect on internet revenue, and these measures might differ amongst different corporations. Due to this fact, Section EBITDA as offered beneath will not be similar to equally titled measures of different corporations. The next tables reconcile Section EBITDA for every of the segments and the Partnership as a complete to internet revenue (loss), the comparable U.S. GAAP monetary measure, for the durations offered:

Media contact:
The IGB Group, Bryan Degnan, +1 (646) 673‑9701 / Leon Berman, +1 (212) 477‑8438
www.hoeghlngpartners.com

SOURCE Hoegh LNG Companions LP