Capital Clean Energy Carriers Corp. Q2 FY2024 earnings call

• The company changed its name to Capital Clean Energy Carriers Corp., reflecting a strategic pivot to LNG and energy transition. - The fleet includes 20 vessels in the water, with 12 latest generation LNG carriers and 8 legacy container vessels under medium- to long-term charters. - In Q2 2024, the company invested $756 million in 10 new gas carriers, took delivery of LNG carriers Assos, Apostolos, and Aktoras, sold 5 container vessels recognizing a $15.2 million gain. - Debt optimization efforts were made, including refinancing and extending maturities for LNG carriers, improving the debt maturity profile. - The container fleet has optionality, with remaining vessels having potential for rechartering or sale based on market conditions.

The company has two main product segments: LNG carriers and container vessels. For LNG carriers, the 12 on-water vessels have a revenue backlog totaling $2.4 billion, backed by diverse blue chip energy providers. The container fleet: 5 vessels were sold in Q2 2024, raising close to $180 million in net profits. There are 8 remaining container vessels with a gross charter attached value estimated at approximately $630 million to $650 million, implying a net asset value of around $330 million to $350 million. Revenue from LNG carriers contributes significantly, with a $2.4 billion backlog, and container vessels contributed through sales but also have optionality for rechartering.

• Intention to continue the $0.15 per unit quarterly distribution. - Expect increased earnings power and cash flow visibility once the new ships deliver, providing financial flexibility. - Plan to move to a floating dividend policy tied to free cash flow or net income once the growth vessels start delivering from 2026-2027 onwards.

• Forward-looking statements involve risks such as actual results differing from anticipated due to market fundamentals, employment of vessels, etc. - Geopolitical events could affect the container market, impacting the optionality and potential sale of container vessels. - Delays in vessel deliveries or changes in charter agreements could impact revenue and cash flow projections.

Q: On the corporate conversion, will the MLP continue its current dividend policy?

A: Correct, the intention is to continue with the $0.15 per unit quarterly distribution while in growth mode with newbuilds on order. Expect earnings power and cash flow to increase once ships deliver, providing financial flexibility.

Q: Can you describe the clean energy shipping scope and container vessel optionality?

A: Clean energy shipping includes LNG carriers (dual-fuel, reduced carbon footprint), MGCs (transporting low carbon ammonia, LPG), and liquid CO2 carriers. For container vessels, they are opportunistically evaluated for sale or rechartering based on market conditions, with remaining vessels having potential for charter or sale depending on NPV of cash flows and residual value.

Q: About corporate conversion control premium and LCO2 market?

A: The conversion involved forfeiting control rights, done after exhaustive negotiation with a fairness opinion. In the LCO2 market, engaging with various parties (energy companies, storage providers) with the unique ability to toggle between markets gives a stable reference point, and inquiries involve project development angles as well as simple vessel charters