Höegh LNG Partners LP : HMLP 2Q21 Quarterly Report

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

Commission File Number 001-36588

Höegh LNG Partners LP

(Translation of registrant's name into English)

Canon's Court

22 Victoria Street

Hamilton, HM 12 Bermuda

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F⌧ Form 40-F◻

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).

Yes ◻ No ⌧

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).

Yes ◻	No ⌧

Table of Contents
HÖEGH LNG PARTNERS LP
REPORT ON FORM 6-K FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021
Table of Contents
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	Page
3
FORWARD LOOKING STATEMENTS	29
RISK FACTORS	31
INDEX TO FINANCIAL STATEMENTS	F-1
Unaudited Condensed Interim Consolidated Statements of Income for the Three and Six Months Ended June 30, 2021 and
2020	F-2
Unaudited Condensed Interim Consolidated Statements of Comprehensive Income for the Three and Six Months Ended
June 30, 2021 and 2020	F-3
Unaudited Condensed Interim Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	F-4
Unaudited Condensed Interim Consolidated Statements of Changes in Partners' Capital for the Six Months Ended June 30,
2021 and the Year Ended December 31, 2020	F-6
Unaudited Condensed Interim Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2021
and 2020	F-7
Notes to Unaudited Condensed Interim Consolidated Financial Statements	F-9
EXHIBITS	32
SIGNATURE	33
2

Table of Contents

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our financial condition and results of operations for the three and six months ended June 30, 2021 and 2020. References in this report to "Höegh LNG Partners," "we," "our," "us" and "the Partnership" refer to Höegh LNG Partners LP or any one or more of its subsidiaries, or to all such entities unless the context otherwise indicates. References in this report to "our operating company" refer to Höegh LNG Partners Operating LLC, a wholly owned subsidiary of the Partnership. References in this report to "Höegh Lampung" refer to Hoegh LNG Lampung Pte Ltd., a wholly owned subsidiary of our operating company. References in this report to "Höegh Cyprus" refer to Hoegh LNG Cyprus Limited including its wholly owned branch, Hoegh LNG Cyprus Limited Egypt Branch ("Egypt Branch"), a wholly owned subsidiary of our operating company and the owner of the Höegh Gallant. References in this report to "PT Höegh" refer to PT Hoegh LNG Lampung, the owner of the PGN FSRU Lampung. References in this report to "Höegh Colombia Holding" refer to Höegh LNG Colombia Holding Ltd., a wholly owned subsidiary of our operating company. References in this report to "Höegh FSRU IV" refers to Höegh LNG FSRU IV Ltd., a wholly owned subsidiary of Höegh Colombia Holding and the owner of the Höegh Grace. References in this report to "Höegh Colombia" refer to Höegh LNG Colombia S.A.S., a wholly owned subsidiary of Höegh Colombia Holding. References in this report to our or the "joint ventures" refer to SRV Joint Gas Ltd. and/or SRV Joint Gas Two Ltd., the joint ventures that own two of the vessels in our fleet, the Neptune and the Cape Ann, respectively. References in this Annual Report to "Global LNG Supply" refer to Global LNG Supply S.A. and references to "Total Gas & Power" refer to Total Gas & Power Ltd, subsidiaries of Total S.A. ("Total"). References in this Report to "PGN LNG" refer to PT PGN LNG Indonesia, a subsidiary of PT Perusahaan Gas Negara (Persero) Tbk ("PGN"), a subsidiary of PT Pertamina. References in this report to "SPEC" refer to Sociedad Portuaria El Cayao S.A. E.S.P. References in this report to "Höegh LNG" refer, depending on the context, to Höegh LNG Holdings Ltd. and to any one or more of its direct and indirect subsidiaries, other than us.

You should read this section in conjunction with the unaudited condensed interim consolidated financial statements as of June 30, 2021 and for the periods ended June 30, 2021 and 2020 and the related notes thereto included elsewhere in this report, as well as our historical consolidated financial statements and related notes included in our report on Form 20-F filed with the Securities and Exchange Commission ("SEC") on April 9, 2021 (our "2020 Form 20-F"). This discussion includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements. See also the discussion in the section entitled "Forward-Looking Statements" below.

Highlights

• Continued measures to mitigate the risks from the COVID-19 pandemic and ensure health and safety of crews and staff, whose wellbeing is our highest priority
• No reported cases of COVID-19; 100% availability of FSRUs for the second quarter of 2021
• Reported total time charter revenues of $34.7 million for the second quarter of 2021 compared to $34.4 million of time charter revenues for the second quarter of 2020
• Generated operating income of $24.1 million, net income of $2.6 million and limited partners' interest in net loss of $1.2 million for the second quarter of 2021 compared to operating income of $27.7 million, net income of $19.7 million and limited partners' interest in net income of $16.0 million for the second quarter of 2020
• Operating income, net income and limited partners' interest in net income were impacted by unrealized gains on derivative instruments for the second quarter of 2021 and 2020, mainly on the Partnership's share of equity in earnings of joint ventures in the second quarter of 2021 and 2020
• On August 13 and 25, 2021, paid a cash distribution of $0.01 per common unit with respect to the second quarter of 2021, down from a distribution of $0.44 per common unit in the first quarter of 2021
• On August 16, 2021, paid a cash distribution of $0.546875 per 8.75% Series A cumulative redeemable preferred unit ("Series A preferred unit"), for the period commencing on May 15, 2021 to August 14, 2021

3

Table of Contents

• A tax provision of $10.9 million was recorded for a tax uncertainty for the potentially disallowed interest deduction following the conclusion by the Indonesian tax authority's 2019 tax audit. $2.7 million of the amount became payable in July 2021. We disagree with the conclusion of the tax audit and intend to contest the tax authority's position.
• The charterer under the lease and maintenance agreement for the PGN FSRU Lampung ("LOM") served a notice of arbitration ("NOA") on August 2, 2021 to declare the LOM null and void, and/or to terminate the LOM, and/or seek damages. PT Höegh LNG Lampung (PT HLNG) has served a reply refuting the claims as baseless and without legal merit and has also served a counterclaim against the charterer for multiple breaches of the LOM. PT HLNG will take all necessary steps and will vigorously defend against the charterer's claims in the legal process. Notwithstanding the NOA, both parties are continuing to perform their respective obligations under the LOM.

The Amalgamation

On March 8, 2021, Höegh LNG announced a recommended offer by Leif Höegh & Co. Ltd. ("LHC") and funds managed by Morgan Stanley Infrastructure Partners ("MSIP") through a 50/50 joint venture, Larus Holding Limited ("JVCo"), to acquire the remaining issued and outstanding shares of Höegh LNG not currently owned by LHC or its affiliates (the "Amalgamation"). The Amalgamation was approved by Höegh LNG's shareholders and bondholders and closed on May 4, 2021. Höegh LNG is now wholly owned by JVCo, and the common shares of Höegh LNG were delisted from the Oslo Stock Exchange. Following the consummation of the Amalgamation, some provisions of the omnibus agreement entered into in connection with the IPO (the "omnibus agreement") terminated by their terms, including (i) the prohibition on Höegh LNG from acquiring, owning, operating or chartering any Five-Year Vessels (as defined in the omnibus agreement), (ii) the prohibition on us from acquiring, owning, operating or chartering any Non-Five-Year Vessels (as defined in the omnibus agreement), and (iii) the rights of first offer associated with those rights. As a consequence, following the consummation of the Amalgamation, Höegh LNG is not required to offer us Five-Year Vessels and is permitted to compete with us.

4

Table of Contents
Our results of operations
					Three months ended			Six months ended
(in thousands of U.S. dollars, except per unit amounts)			June 30,			June 30,
		2021			2020			2021			2020
	Statement of Income Data:
	Time charter revenues	$	34,696			34,436			69,472	$	71,122
	Total revenues			34,696			34,436			69,472			71,122
	Vessel operating expenses			(6,114)			(5,776)			(12,286)			(11,283)
	Administrative expenses			(2,779)			(2,155)			(5,514)			(4,583)
	Depreciation and amortization			(5,012)			(5,234)			(10,223)			(10,516)
	Total operating expenses			(13,905)			(13,165)			(28,023)			(26,382)
	Equity in earnings (losses) of joint ventures			3,267			6,475			14,341			(3,572)
	Operating income (loss)			24,058			27,746			55,790			41,168
	Interest income			98			163			231			335
	Interest expense			(9,635)			(6,322)			(15,293)			(12,833)
	Other items, net			(658)			(487)			(1,311)			(1,134)
	Income (loss) before tax			13,863			21,100			39,417			27,536
	Income tax expense			(11,225)			(1,419)			(12,939)			(2,381)
	Net income (loss)		$	2,638			19,681			26,478		$	25,155
Preferred unitholders' interest in net income
		3,877			3,668			7,754			7,337
	Limited partners' interest in net income (loss)		$	(1,239)			16,013			18,724		$	17,818
Earnings per unit
	Common unit public (basic and diluted)	$	(0.04)	$	0.47	$	0.55	$	0.51
	Common unit Höegh LNG (basic and diluted)	$	(0.04)	$	0.50	$	0.58	$	0.56
	Cash Flow Data:
	Net cash provided by (used in) operating activities	$	21,066	$	23,325	$	37,218	$	37,336
	Net cash provided by (used in) investing activities			-			(8)			-			(8)
	Net cash provided by (used in) financing activities	$	(24,121)	$	(25,380)	$	(45,106)	$	(53,133)
	Other Financial Data:
	Segment EBITDA(1)	$	34,284	$	35,984	$	68,741	$	72,110

1. Segment EBITDA is a non-GAAP financial measure. Please read "Non-GAAP Financial Measure" for a definition of Segment EBITDA and a reconciliation of Segment EBITDA to net income, the comparable U.S. GAAP financial measure.

5