Preliminary Fourth Quarter and Financial Year 2014 Results
(Thomson Reuters ONE) -
Highlights
* Golar LNG Partners LP reports net income attributable to unit holders of
$36.7 million and operating income of $63.2 million for the fourth quarter
of 2014.
* Generated distributable cash flow of $48.3 million for the fourth quarter
with a coverage ratio of 1.29.
* Strong operational performance with 100% utilization for the fleet.
* Entered into an agreement to acquire the FSRU Golar Eskimo for $390 million
from Golar LNG Limited. Purchase was subsequently completed on January
20, 2015.
* Declared a 3% increase in distribution to $0.5625 per unit for the fourth
quarter.
Financial Results Overview
Golar LNG Partners L.P. ("Golar Partners" or the "Partnership") reports net
income attributable to unit holders of $36.7 million and operating income of
$63.2 million for the fourth quarter of 2014 ("the fourth quarter"), as compared
to net income attributable to unit holders of $66.9 million and operating income
of $65.4 million for the third quarter of 2014 ("the third quarter") and net
income attributable to unit holders of $47.6 million and operating income of
$54.7 million for the fourth quarter of 2013.
The $8.5 million improvement in 2014 fourth quarter operating income over the
same period in 2013 primarily reflects the addition of the FSRU Golar Igloo to
the fleet during the intervening period. This floating storage and
regasification unit ("FSRU"), acquired on March 28, 2014, added approximately
$10.2 million to the fourth quarter 2014 operating income. Included in this
additional $10.2 million operating income from the Golar Igloo is $4.7 million
of net revenue in respect of the 1-month extension to the 2014 regasification
season which would normally end in November of each calendar year.
A decrease in revenue net of voyage expenses from $102.0 million in the third
quarter to $101.4 million in the fourth quarter partly relates to lower
recognised revenue in respect of the Golar Mazo in the fourth quarter. The Golar
Mazo charterer pays the operating element of the charter hire rate, which for
the Golar Mazo includes drydocking, on a pass through basis. In the third
quarter, there was an acceleration of the recognition of drydock related revenue
as the vessel was drydocked earlier than expected. In the fourth quarter, Golar
Mazo revenue related to the operating element is lower due to lower operating
costs. Deterioration in the value of the Brazilian Real during the fourth
quarter also negatively impacted the Brazilian Real denominated operating cost
component of Golar Spirit and Golar Winter FSRU revenues.
Vessel operating expenses at $14.5 million were in line with the prior quarter
cost of $14.3 million. Administration expenses at $1.5 million were also in line
with the prior quarter.
Net interest expense at $11.0 million for the fourth quarter was, as expected,
also in line with the third quarter charge of $11.1 million. No new swaps were
entered into during the quarter and no existing swaps matured. As at December
31, 2014, the Partnership had undrawn credit facilities of $30 million.
Other financial items for the fourth quarter were a loss of $8.1 million
compared to a gain of $0.1 million in the third quarter. This included non-cash
mark-to-market valuation losses on interest rate swaps of $5.0 million in the
fourth quarter as a result of a decrease in 5-year and 10-year interest swap
rates of 15bps and 35bps respectively. This compared to a $4.2 million gain in
the third quarter.
Tax expense at $4.7 million normalised during the fourth quarter following the
substantial $15.1 million tax credit recorded in the third quarter. This credit
reflected the recognition of a deferred tax asset that will be used over time.
Approximately $2.3 million of the $4.7 million fourth quarter charge was usage
of this deferred tax asset with the $2.4 million balance representing the
underlying cash expense. This underlying tax cost is within the expected range.
The Partnership's Distributable Cash Flow(1) for the fourth quarter was $48.3
million as compared to $53.2 million in the third quarter and the coverage ratio
was 1.29 as compared to 1.47 for the third quarter. Whilst this represents a
decline in coverage, the elevated third quarter coverage ratio is predominantly
attributable to the tax credit noted above.
Acquisitions
In December 2014, Golar Partners announced that it had entered into an agreement
to acquire the ownership interests in the companies that will own and operate
the Golar Eskimo, an FSRU, from Golar LNG Limited ("Golar") for an aggregate
purchase price of approximately $390.0 million. The acquisition was
subsequently completed on January 20, 2015. The Partnership financed the
purchase price with cash on hand, the proceeds of a $220.0 million loan from
Golar and the assumption of outstanding bank debt in respect of the Golar
Eskimo on the closing date of the acquisition of $162.8 million.
The Golar Eskimo was built by Korean shipyard Samsung Heavy Industries Co. Ltd.
and was delivered in December 2014 and is currently undergoing some minor
modifications required for her contract. The Partnership expects the Golar
Eskimo to commence her service under a ten-year time charter (the "Golar Eskimo
Time Charter") with the Government of the Hashemite Kingdom of Jordan ("Jordan")
in the second quarter of 2015. The charterer has the option to terminate the
Golar Eskimo Time Charter after five years upon payment of a specified early
termination fee. The Partnership has entered into an agreement with Golar
pursuant to which Golar will pay to the Partnership an aggregate amount of $22.0
million in six equal monthly installments starting in January 2015 and ending in
June 2015 for the right to use the FSRU. In return the Partnership will remit
to Golar any hire payments actually received with respect to the vessel during
this period and, at Golar's request, charter the vessel to a third party prior
to the earlier of the commencement of hire payments from Jordan under the Golar
Eskimo Time Charter and June 30, 2015.
Additionally, the acquisition agreement for the Golar Eskimo provides that, in
the event improved terms for the Partnership under the Golar Eskimo Charter are
negotiated with Jordan after the date of the acquisition agreement and prior to
June 30, 2015, the Partnership will pay Golar for the fair value of the improved
terms. The fair value of any improved terms (e.g., an increased hire rate or
longer term) must be approved by Golar and the Partnership's conflicts
committee. The conflicts committee and Golar may retain an outside financial
advisor to determine the fair value of such improved terms. Any determination of
fair value by such financial advisor will be binding upon Golar and the
Partnership.
The Partnership estimates that the Golar Eskimo acquisition will generate annual
contracted revenues, net of voyage expenses, operating expenses and taxes,
("Annual Contracted Revenues") of approximately $45 million to $47 million with
respect to the first five years of service under the Golar Eskimo Time Charter.
The Partnership expects such Annual Contracted Revenues to decrease to
approximately $41 million to $43 million with respect to the second five-year
period under the Golar Eskimo Time Charter. However, the Partnership may not
realize these levels of estimated annual revenues from the acquisition of
the Golar Eskimo.
Corporate and other matters
On January 27, 2015, Golar Partners declared a distribution for the fourth
quarter of $0.5625 per unit. This represents a $0.015 or an approximate 3% per
unit increase from the third quarter 2014 distribution. The increase relates to
the Board's approval of an earlier than anticipated commencement of the
distribution increase related to the acquisition of the Golar Eskimo. At the
time of the Golar Eskimo acquisition, the Partnership's management declared its
intention to recommend to the Board an increase in the Partnership's quarterly
cash distribution of between $0.0275 and $0.0325 (or an annualized increase of
between $0.11 and $0.13) as a result of the Golar Eskimo acquisition. The
balance of this recommended increase will be considered by the Board for the
first quarter 2015. Any such further distribution increase would be conditioned
upon, among other things, the commencement of the Golar Eskimo's operations, the
approval of such increase by the Board and the absence of any material adverse
developments or potentially attractive opportunities that would make such an
increase inadvisable.
The fourth quarter dividend was paid on February 13, 2015 on total units of
62,870,335.
Golar Partners announces that with effect from today Mr. Hans Petter Aas and Mr.
Bart Veldhuizen will leave the Board. Mr. Aas and Mr. Veldhuizen have been Board
members of Golar Partners from its infancy as a publicly listed Limited
Partnership since March 2011 and September 2011 respectively. They have been
instrumental in the growth of the Partnership from its initial 4 vessel fleet to
its current 10 vessels and the Board would like to take this opportunity to
thank them for their significant contribution over this period and wish them
well for the future.
To fill the vacancies The Board is pleased to announce that it has appointed Mr.
Andrew Whalley and Mr. Alf Thorkildsen. Mr. Thorkildsen will also serve on the
Partnership's conflicts committee.
Mr. Thorkildsen is currently a senior partner with Hitecvision who he joined in
2013, from the position as Chief Executive Officer of Seadrill. During his
tenure, Seadrill grew to become the world's largest driller by market
capitalisation and enterprise value. Mr. Thorkildsen joined Seadrill in 2006 as
CFO. Prior to this, he was the CFO of Smedvig ASA, a leading Norwegian drilling
company, which was acquired by Seadrill in 2006. Alf C. Thorkildsen started his
career in 1980 in Larsen and Hagen Shipping and worked thereafter for 20 years
in Shell in numerous senior positions.
Mr. Whalley is a Bermudian lawyer called to the Bar in 1995. He has experience
in aviation and shipping law, as well as general corporate matters. He is
currently of Counsel to Alexanders, a Bermuda law firm and is also an
independent consultant providing legal and corporate secretarial services. Mr.
Whalley is a Director and Co-Founder of Provenance Information Assurance
Limited, a company involved in the development of software for the legalisation
of documents.
As previously announced Golar has appointed Mr. Doug Arnell to the Board to fill
a casual vacancy.
Operational Review
Golar Partners fleet again performed well during the quarter with 100%
utilization and ongoing control over operating costs underlying a strong
operating earnings result. No vessels were drydocked during the quarter. The
Golar Freeze and the Golar Grand are expected to drydock in the second quarter
of 2015 and there are currently no further anticipated drydocks for 2015.
Financing and Liquidity
As of December 31, 2014, the Partnership had cash and cash equivalents of $99.0
million and undrawn revolving credit facilities of $30 million. Total debt and
capital lease obligations net of restricted cash was $1,031.1 million as of
December 31, 2014.
Based on the above debt amount and annualized(2) fourth quarter 2014 adjusted
EBITDA(3), Golar Partners continues to maintain a strong balance sheet with a
debt to adjusted EBITDA multiple of 3.0 times.
During the quarter, the Partnership accepted an offer from the incumbent lenders
to extend the December 2014 maturing Golar Maria facility for up to 12 months on
terms largely consistent with the existing facility. This $79.5 million debt is
reported under current portion of long-term debt. The Partnership has continued
to monitor the Senior Secured Term Loan market with a view to refinancing
existing debt, including the $220 million loan from Golar related to the Golar
Eskimo. Negative sentiment toward companies in the energy sector has resulted in
sub optimal market conditions and the Partnership has decided to wait before
considering launching a Term Loan or other debt capital markets refinancing. The
Partnership will however continue to monitor the US debt capital markets and in
the meantime is discussing with its commercial bank lenders indicative offers to
refinance its long-term debt that matures in 2015, which totals $143 million.
As of December 31, 2014, Golar Partners had interest rate swaps with a notional
outstanding value of approximately $1,046.3 million (including swaps with a
notional value of $227.2 million in connection with the Partnership's bonds but
excluding $100 million of forward starting swaps) representing approximately
101% of total debt and capital lease obligations, net of restricted cash. The
average fixed interest rate of swaps related to bank debt is approximately
2.06% with average maturity of approximately 3.1 years as of December 31, 2014.
As of December 31, 2014, the Partnership had outstanding bank debt of $858.1
million with average margins, in addition to LIBOR or fixed swap rates, of
approximately 2.42%. In addition, the Partnership has Norwegian Krone (NOK)
bonds of $174.5 million with a fixed rate of 6.485%. The Partnership has a
currency swap to hedge the NOK exposure in this bond. As the US dollar has
appreciated against the NOK the value of the bonds in USD terms has fallen
whilst the swap liability has grown. The total swap liability as at December
31, 2014, which also includes an interest rate swap element, was $56.6 million.
Golar Partners had another strong operating quarter with 100% utilization and a
healthy distributable cash flow coverage ratio at 1.29. The fleet is expected
to maintain its high level of utilization during the first quarter of 2015.
However, the first quarter of 2015 and earnings moving forward will be
negatively impacted by a reduced hire rate for the Golar Grand. The vessel has
completed its charter with BG Group and as they have not exercised their
extension option, the vessel will be chartered to Golar from mid-February at a
rate that represents an approximate 25% loss of daily revenue to Golar Partners.
Additionally the Golar Igloo will not earn its day rate during January and
February, in accordance with the contract, as a result of its shut down for the
winter season.
The Golar Freeze and the Golar Grand are expected to drydock in the second
quarter of 2015 and there are currently no further anticipated drydocks for
2015.
Following the acquisition of the Golar Eskimo, Golar Partners has a total order
backlog of $2.7 billion with an average remaining contract term of 6.0 years, as
at December 31, 2014, including the Golar Eskimo.
As a result of the early adoption of part of the distribution increase related
to the Golar Eskimo acquisition, Golar Partners distributions have grown by
approximately 7.7% for the full year 2014. In 2015, as a function of the
acquisition of the Golar Eskimo and management's recommendation to the Board for
a further distribution increase, distribution growth for 2015 is expected to be
at least 3%(4).
Beyond this there are good possibilities of further FSRU and LNG carrier
acquisition opportunities from Golar over the next 24 months given Golar's large
newbuild LNG carrier fleet and in particular its as yet uncontracted newbuild
FSRU the Golar Tundra.
Looking further forward, the Board is excited about the potential acquisition of
floating liquefaction assets from Golar, which will likely be high margin and
long contract duration assets. This growth potential underpins the Board's
confidence in the Partnership's ability to continue to increase its earnings and
distributions over time.
February 24, 2015
Golar LNG Partners L.P.
Hamilton, Bermuda.
Questions should be directed to:
C/o Golar Management Ltd - +44 207 063 7900
Brian Tienzo or Graham Robjohns
(1)Distributable cash flow is a non-GAAP financial measure used by investors to
measure the performance of master limited partnerships. Please see Appendix A
for a reconciliation to the most directly comparable GAAP financial measure.
(2)Annualized means the figure for the quarter multiplied by 4.
(3)Adjusted EBITDA: Earnings before interest, other financial items, taxes, non-
controlling interest, depreciation and amortization. Adjusted EBITDA is a non-
GAAP financial measure used by investors to measure our performance. Please see
Appendix A for a reconciliation to the most directly comparable GAAP financial
measure.
(4)Any such increase in distributions will be subject to board approval and the
absence of any material adverse developments in the business of the Partnership
that would make such an increase inadvisable.
Preliminary Fourth Quarter and Financial Year 2014 Results:
http://hugin.info/147317/R/1897007/673152.pdf
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originality of the information contained therein.
Source: Golar LNG Partners L.P. via GlobeNewswire
[HUG#1897007]
Datum: 25.02.2015 - 00:27 Uhr
Sprache: Deutsch
News-ID 373986
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contact information:
Town:
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