econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 20 July 2016

Hoegh Sweet It Is

by Robert Rapier, Investing Daily

Investing Daily Article of the Week

In this week's monthly web chat for subscribers of The Energy Strategist and MLP Profits, someone asked a question about the master limited partnership Hoegh LNG Partners (NYSE: HMLP). It's been a while since I took a close look at HMLP, so I said I would report back. Here is the question, followed by an overview and update of HMLP.

Q: Do you have HMLP on your radar? I´m residing in a country where I don't have to pay tax on foreign investment income, so the fact that there is no withholding tax for HMLP´s distributions is quite a plus for me (compared to US-based companies). Should this additional benefit of HMLP make me want to own it?

Hoegh LNG Partners (NYSE: HMLP) made its public trading debut in 2014. The Marshall Islands-registered partnership was formed by the Norwegian company Hoegh LNG Holdings, a fully integrated liquefied natural gas (LNG) service provider offering long-term floating production, transportation, regasification and terminal solutions for LNG.

HMLP operates four floating storage and regasification units ("FSRUs"), is one of only three operators of FSRUs in the world, and is the only publicly listed FSRU pure play. In addition to transporting LNG, the regasification vessels function as floating LNG import terminals.

The business opportunity for HMLP is clear. Natural gas is projected to be the fastest growing fossil fuel for the foreseeable future, and LNG production capacity is projected to increase by nearly 40% by the end of 2020. Seaborne LNG exports are projected to grow more than twice as fast as overall natural gas consumption through 2035.

The number of countries importing LNG has more than doubled from 12 in 2000 to 29 in 2014. Because LNG can be shipped to a wide variety of destinations, as long as regional price differences in gas persist more countries will pursue LNG imports. Three of four new markets commencing LNG imports in 2015 chose to employ FSRUs, which are approximately half the cost and construction time of a land-based LNG terminal.

HMLP has grown its distribution by 22% since its IPO. Its current fleet has an average age of 3.4 years, and an average remaining contract term of 14 years plus options. The company has no direct commodity exposure. It also has a pipeline of up to 4 more FSRUs dropdown candidates to drive earnings growth and distribution expansion.

The revenue stream looks secure. For Q1 2016 HMLP generated Adjusted EBITDA of $25.2 million versus $15.9 million for Q1 2015. Distributable cash flow was $11.0 million with coverage of 1.0x. The partnership currently yields 9.2%.

Like many other partnerships with significant foreign or marine operations, Hoegh LNG Partners has chosen to pay taxes as a corporation, which means distributions will treated as qualifying dividends and reported on form 1099. (To better understand why a partnership would elect to be taxed as a corporation, see Marshalling the Marines.)

In contrast with U.S.-based partnerships, Hoegh LNG does not, in fact, deduct backup withholdings from distributions made to foreign owners, eliminating the need to file a U.S. tax return in order to obtain a refund. That's certainly a point in its favor, but the only one for U.S. residents to consider this promising LNG venture.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Investing


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Expected Effects of Petitions to Improve the Monetary System
Energy and Falling Productivity
News Blog
October 2016 Economic Forecast: Outlook Insignificantly Declines But Little Economic Strength Entering 4Q2016
1 Minute. 34 Seconds. In The U.S., That's All It Takes To Register To Vote. A Single Registration Lasts A Lifetime Of Elections. We've Made It Easy For You Here: Http://g.co/elections/134
Durable Goods New Orders Unchanged in August 2016
90% Rally In Sugar Prices Since Late 2015
U.S. Real Wage Growth: Slowing Down With Age - Part 2 Of 2
Infographic Of The Day: Four Tips To Grow Wealth
Early Headlines: Asia Stocks Down, Yen Rises, Oil Soft, Wells CEO Gives Up Bonuses, Trump Didn't Want To Embarass Clinton, US Asset Bubbles, US Crime Rates Falling And More
What is Democracy, Anyway?
Transcript Of Elizabeth Warren Questioning Wells Fargo CEO John Stumpf
Documentary Of The Week: Elizabeth Warren Indictment Of Wells Fargo
Clinton Wins Round One
Why Alzheimer's Research Is Failing To Hit Treatment Targets
Voters Still Distrust Both Presidential Candidates
Investing Blog
Banks Of Absurdity
Investing.com Technical Summary 27 September 2016
Opinion Blog
Trump Stumped In First Debate With Clinton - Will It Cost Him?
Why All Banks Should Be Federally Owned
Precious Metals Blog
War On Cash Turns To $20, $50, And $100 Bills
Live Markets
28Sep2016 Market Update: Wall Street In Indecisive Mode As Investors Try To Follow OPEC's Lead
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved