Executive Summary / Key Takeaways

• Strategic Deleveraging and Asset Optimization: GasLog Partners LP (GLOP-PA) is actively strengthening its balance sheet through aggressive debt reduction and strategic asset management, including vessel sales and sale-and-leaseback transactions, significantly lowering its leverage ratios and enhancing financial flexibility.
• Robust Contracted Revenue Backlog: The partnership benefits from a substantial contracted revenue backlog, with a high percentage of its fleet operating under fixed-term charters, providing stable cash flows and protection against spot market volatility.
• Operational Efficiency and Environmental Focus: GLOP-PA is investing in digital tools and developing plans to improve vessel efficiency and reduce emissions, aligning with evolving environmental regulations and aiming to lower operating costs.
• Preference Unit Value Proposition: Despite the common unit merger with GasLog Ltd. (GLOG) in 2023, GLOP-PA's preference units remain listed, offering an attractive dividend yield, with management committed to opportunistic repurchases to further enhance unitholder value.
• Dynamic LNG Market Tailwinds: The global LNG market continues to be shaped by energy security concerns and new project sanctions, creating a tight shipping market with strong term rates, which GLOP-PA is well-positioned to capitalize on.

The Foundation of Stability: GasLog Partners in the Global LNG Trade

GasLog Partners LP, incorporated in 2014 and headquartered in Piraeus, Greece, stands as a critical player in the global liquefied natural gas (LNG) transportation sector. As an owner and operator of LNG carriers, the partnership's core business revolves around providing essential shipping services, primarily through long-term charters to international energy companies. This strategic focus on multi-year contracts has historically provided a stable revenue base, a crucial differentiator in the often-volatile shipping industry. The company's fleet, comprising both modern tri-fuel diesel-electric (TFDE) engine propulsion vessels and steam vessels, is designed to meet diverse client needs.

The broader LNG market has undergone significant transformations, particularly in recent years. Geopolitical events, notably the situation in Ukraine, have permanently altered market dynamics, intensifying energy security concerns in Europe and driving a sustained demand for LNG imports. This shift has led to increased seaborne LNG volumes, creating a tight shipping market where charterers actively seek long-term coverage against price volatility and supply uncertainty. While spot rates can experience seasonal downturns and volatility, the underlying demand for term charters remains robust, a trend that GasLog Partners has consistently leveraged.

Operational Technology and Efficiency as a Competitive Edge

GasLog Partners' competitive positioning is not solely defined by its fleet size but also by its commitment to operational efficiency and environmental performance. While the company does not detail a singular, proprietary "core differentiated technology" in the same vein as a manufacturing patent, its technological approach is centered on optimizing its existing assets and adapting to stringent environmental mandates. The fleet includes vessels equipped with modern TFDE propulsion technology, which generally offers improved fuel efficiency and lower emissions compared to older steam vessels.

The partnership is actively investing in "digital tools to improve the efficient use of our ships" and developing "dedicated plans to improve ships' efficiency and reduce emission". These initiatives are critical in a regulatory landscape increasingly shaped by measures like the European Union's Emission Trading Scheme (EU ETS) and FuelEU, aimed at decarbonizing global shipping. While specific quantifiable benefits from these digital tools are not detailed, the strategic intent is clear: to enhance operational effectiveness, reduce fuel consumption (bunkers), and mitigate the financial impact of environmental compliance. For instance, the company has undertaken capital expenditures for ballast water treatment systems, a direct response to regulatory requirements. This focus on efficiency and compliance helps GasLog Partners maintain competitive operating costs and ensures its fleet remains attractive to charterers who are also facing increasing environmental pressures.

Strategic Evolution and Financial Fortification

GasLog Partners' history is marked by a disciplined approach to capital allocation and balance sheet optimization. In 2022, the company initiated a preference unit repurchase program, aiming to reduce distribution costs and enhance free cash flow. By the fourth quarter of 2022, approximately $68 million in preference units had been repurchased, resulting in projected annualized savings of about $0.11 per common unit by reducing preference unit distributions by approximately $5.7 million per annum. This program underscores management's focus on enhancing unitholder value.

The partnership has also strategically managed its fleet through a series of asset transactions. In 2022 and 2023, it engaged in well-timed direct sales and sale-and-leaseback transactions for its steam vessels, such as the Methane Shirley Elizabeth and Methane Heather Sally, which generated net proceeds and incremental liquidity while de-risking the fleet. The sale and leaseback of the GasLog Santiago, completed on August 27, 2024, further contributed to this strategy, though it also led to an increase in depreciation of right-of-use assets. These actions reflect a "portfolio approach to manage residual value" and adapt to market opportunities, including the exploration of converting one of its 145,000 cubic steam LNG carriers into a Floating Storage and Regasification Unit (FSRU) for the Venice Energy project, a "very cash intensive project" with an expected cost exceeding $100 million.

A significant development for common unitholders was the merger agreement with GasLog Ltd. in early 2023, where GasLog Ltd. acquired all outstanding common units not beneficially owned by it for $8.65 per common unit, including a special distribution of $3.28 per common unit. While this transaction altered the common unit ownership structure, GasLog Partners LP's preference units (GLOP-PA, GLOP-PB, GLOP-PC) continue to be publicly traded on the NYSE, with the company maintaining its operational focus and financial reporting.

Financial Performance and Liquidity Strength

GasLog Partners has demonstrated a resilient financial performance, particularly in a period of market volatility. For the six months ended June 30, 2025, the company reported revenues of $150.508 million, with a profit of $7.928 million for the period. This compares to revenues of $185.367 million and a profit of $88.503 million for the same period in 2024, reflecting a decrease in profitability, partly attributable to increased voyage expenses and commissions due to higher bunkers consumption from idle days, and increased depreciation from the GasLog Santiago sale and leaseback.

Despite recent fluctuations, the company's long-term financial trends highlight its operational strength. For the trailing twelve months (TTM) as of September 28, 2025, GasLog Partners reported revenues of $321.40 million and a net income of $70.38 million. The company's profitability margins remain robust, with a TTM Gross Profit Margin of 43.80%, Operating Profit Margin of 39.12%, and an EBITDA Margin of 70.81%. These figures underscore the effectiveness of its chartering strategy and cost management.

Liquidity and capital structure have been central to the partnership's strategy. Through aggressive deleveraging, GasLog Partners significantly reduced its gross debt to total capitalization from 52.7% at the end of Q1 2022 to 46.5% by the end of Q1 2023. Net debt to trailing 12 months EBITDA also improved dramatically, falling from 4.3x to 2.2x over the same period, moving below the company's long-term target. This improvement was driven by strong operational performance and increased cash from vessel sales and sale-and-leaseback transactions. As of December 31, 2023, total debt stood at $93.91 million, a substantial reduction from previous years, reflecting the company's commitment to a stronger balance sheet.

The current ratio of 0.41 and quick ratio of 0.30 (TTM) indicate a lean working capital structure, typical for asset-heavy, contract-driven businesses.

Competitive Landscape and Strategic Positioning

GasLog Partners operates in a competitive LNG shipping market alongside peers such as Teekay LNG Partners LP (TGP), Dynagas LNG Partners LP (DLNG), Flex LNG Ltd. (FLNG), and Golar LNG Ltd. (GLNG). While direct, granular financial comparisons across all competitors are not always publicly detailed, GLOP-PA's strategy emphasizes operational reliability and a customer-focused approach, which are crucial for securing long-term charters.

Compared to Teekay LNG Partners, which boasts a diversified fleet and strong partnerships, GasLog Partners maintains comparable profitability and efficiency in its core LNG carrier operations, though Teekay LNG Partners may pursue more aggressive expansion strategies. Against Dynagas LNG Partners, known for its modernizing fleet and advanced vessel technology, GasLog Partners likely holds an advantage in established operational execution and consistent cash flow generation through efficient charter management. Flex LNG, with its focus on modern, fuel-efficient vessels, presents a challenge in terms of product performance and cost structures; however, GasLog Partners' broader charter portfolio provides a more robust and stable cash flow. Golar LNG, with its diversified interests in LNG infrastructure and floating liquefaction, offers a broader revenue base, but GasLog Partners' specialized carrier expertise can lead to superior operational execution within its niche.

GasLog Partners' competitive advantages, or "moats," primarily stem from its established fleet and long-term charter agreements, which ensure stable, recurring revenue streams and foster strong customer loyalty. These advantages allow the company to maintain pricing power and achieve healthy gross margins. The high capital requirements for vessel acquisition and stringent regulatory hurdles for international operations act as significant barriers to entry, protecting existing players like GasLog Partners from new competition. However, the company remains vulnerable to global energy market volatility and the potential for its older steam vessels to incur higher maintenance expenses, a risk that competitors with newer, more efficient fleets, like Flex LNG, may exploit.

Outlook and Risks

The outlook for GasLog Partners remains intertwined with the dynamics of the global LNG market. Management anticipates Europe's continued reliance on LNG and a return of Chinese demand, contributing to a fundamentally strong environment for new LNG projects. However, persistent delays in new project startups due to inflationary pressures and the cost of capital could prolong the LNG supply deficit beyond 2027, potentially benefiting existing carriers.

For 2023, the partnership projected unit operating expenses to average approximately $13,850 per vessel per day, with actual costs sensitive to foreign exchange fluctuations. General and administrative expenses were expected to average around $3,600 per vessel per day. The company also planned for three scheduled dry-dockings in 2023, resulting in a minimum of 30 off-hire revenue days per vessel and an estimated CapEx of $15.6 million, including costs for ballast water treatment systems.

A key positive development is the extension of the GasLog Geneva charter by Shell (SHEL) for five years, expected to add approximately $122 million of EBITDA. The partnership's strategy of maintaining marginal spot market exposure (approximately 14% of days open, with 86% fixed) for the remainder of 2023, clustered towards the year-end, provides significant downside protection while retaining some upside to a potentially strong fourth quarter. Management has quantified the sensitivity of its Adjusted EBITDA to spot rates, noting that a $10,000 per day increase in Time Charter Equivalent (TCE) on open days could increase full-year Adjusted EBITDA by approximately $6.7 million.

Despite the positive outlook, several risks warrant investor attention. Market volatility, as evidenced by the seasonal downturn in Q1 2023 and the impact of shorter U.S.-to-Europe trips on ton-mile demand, can affect profitability. Rising interest rates, particularly with the Series B preference units converting to a floating rate (LIBOR plus 5.839%) in March 2023, have increased distribution costs, impacting cash flow. Furthermore, the expanding newbuilding order book, with 12% of vessels uncommitted and deliveries extending to 2027 or later, poses a long-term risk of potential oversupply.

Conclusion

GasLog Partners LP (GLOP-PA) presents a compelling investment narrative rooted in its strategic financial discipline and astute asset management within a robust, albeit dynamic, LNG shipping market. The company's proactive deleveraging, evidenced by significantly improved debt ratios, has fortified its balance sheet and enhanced its financial flexibility. This foundation, coupled with a substantial backlog of fixed-term charters, provides a resilient revenue stream that largely insulates the partnership from the vagaries of spot market fluctuations.

The commitment to operational efficiency through digital tools and environmental compliance, including investments in modern propulsion and ballast water treatment systems, positions GasLog Partners to meet evolving regulatory demands and maintain competitive operating costs. While the common unit merger with GasLog Ltd. marked a structural change, the continued listing and management's focus on preference unit repurchases underscore a dedication to enhancing value for this class of unitholders, who benefit from an attractive dividend yield. As the global energy landscape continues to prioritize LNG for energy security, GasLog Partners, with its disciplined strategy and focus on operational excellence, is well-positioned to capitalize on sustained demand and navigate future market shifts, reinforcing its role as a stable income generator in the vital LNG transportation sector.