Interim Results for the Period Ended 31 March 2015
(Thomson Reuters ONE) -
Highlights
* Golar LNG Partners LP reports net income attributable to unit holders of
$31.3 million and operating income of $58.7 million for the first quarter of
2015.
* Generated distributable cash flow of $40.3 million for the first quarter
with a coverage ratio of 1.05.
* Strong operational performance with 100% availability of the fleet for
scheduled operations.
* Completed the purchase of the Golar Eskimo FSRU for $390 million on January
20.
Subsequent Events
* Declared a 3% increase in distribution to $0.5775 per unit for the first
quarter.
* Successful placement of a USD 150 million bond in the Norwegian bond market.
* Received bank commitments, subject to documentation, on a $180 million
refinancing facility in respect of the Golar Maria and Golar Freeze.
Financial Results Overview
Golar LNG Partners L.P. ("Golar Partners" or the "Partnership") reports net
income attributable to unit holders of $31.3 million and operating income of
$58.7 million for the first quarter of 2015 ("the first quarter"), as compared
to 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") and net
income attributable to unit holders of $32.7 million and operating income of
$53.8 million for the first quarter of 2014.
The $4.9 million increase in 2015 first quarter operating income over the same
period in 2014 predominantly reflects a $12.2 million increase in revenue
received offset by associated ownership and operating costs in respect of the
Golar Igloo FSRU which was acquired on March 28, 2014 and the Golar Eskimo which
was acquired on January 20, 2015. The Golar Igloo FSRU operates during a nine-
month window that runs between March 1 and November 30. First quarter 2015
revenue therefore includes an additional 27 days hire in respect of the Igloo
equivalent to $4.2 million and 71 days hire in respect of the Golar Eskimo
equivalent to $9.6 million. Offsetting both was a $1.4 million revenue reduction
in respect of the Golar Grand which was returned at the end of its contract by
BG Group in mid-February and re-chartered to Golar LNG Limited ("Golar") at a
lower rate in accordance with existing agreements. Vessel operating expenses,
voyage and commission costs, administration expenses and depreciation and
amortisation increased by a collective $7.2 million compared to the same period
in 2014 primarily reflecting the additional 86 and 71 days ownership and
operating costs of the Golar Igloo and Golar Eskimo respectively.
A decrease in revenue net of voyage expenses from $101.4 million in the fourth
quarter to $98.5 million in the first quarter reflects a number of factors. The
additional $9.6 million received in respect of the 71 days hire for the Golar
Eskimo FSRU was offset by a $9.2 million reduction in revenue from the Golar
Igloo FSRU due to two of its scheduled three months downtime occurring during
the first quarter and the $1.4 million reduction in hire from the LNG carrier
Golar Grand following the Partnerships' exercise of its put option to Golar at
75% of the vessel's existing rate with BG Group. The remaining $1.9 million
reduction in revenue primarily reflects the shorter quarter (90 days versus 92
days) and a further depreciation in the value of the Brazilian Real and
corresponding reduction in revenues for the FSRUs Golar Spirit and Golar Winter.
Vessel operating expenses at $15.6 million were $1.1 million higher than the
fourth quarter cost of $14.5 million mainly due to the addition of the Golar
Eskimo FSRU to the fleet on January 20. Administration expenses at $1.5 million
were in line with the fourth quarter.
Net interest expense at $12.5 million for the first quarter was $1.5 million
higher than the fourth quarter predominantly due to associated interest costs in
respect of the assumption of $162.8 million debt and a $220.0 million vendor
loan from Golar, following the Eskimo acquisition. No new swaps were entered
into during the quarter and no existing swaps matured. As at March 31, 2015, the
Partnership had undrawn credit facilities of $45 million.
Other financial items for the first quarter were a loss of $10.4 million
compared to an $8.1 million loss in the fourth quarter. This included non-cash
mark-to-market valuation losses on interest rate swaps of $5.9 million in the
first quarter as a result of a decrease in 3-year and 5-year interest swap rates
by 19bps and 24bps respectively. This compares to a $5.0 million loss in the
fourth quarter.
Tax expense at $2.2 million was $2.5 million lower than the prior quarter. Most
of the decrease is due to a $1.2 million reduction in the amount of deferred
Indonesian tax released to the income statement.
The Partnership's Distributable Cash Flow(1) for the first quarter was $40.3
million as compared to $48.3 million in the fourth quarter and the coverage
ratio was 1.05 as compared to 1.29 for the fourth quarter. The decline in
coverage is mainly due to the two months of no earnings for the Golar Igloo
during its scheduled winter downtime.
(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.
Acquisitions
On January 20, 2015 Golar Partners completed its acquisition of the companies
that own and operate the Golar Eskimo FSRU for $390.0 million. The Partnership
financed the purchase price with $7.2 million of cash on hand, the proceeds of a
$220.0 million loan from Golar and the assumption of $162.8 million of
outstanding bank debt in respect of the Golar Eskimo on the closing date of the
acquisition.
Delivered from builders Samsung Heavy Industries in December 2014, the FSRU went
on to complete a series of modifications to make the vessel compatible with the
terminal being constructed in Aqaba, Jordan. In connection with the
acquisition, the Partnership also entered into an agreement with Golar pursuant
to which Golar pays the Partnership an aggregate amount of $22.0 million
starting in January 2015 and ending in June 2015 for the right to use the FSRU.
Of the $22 million, $9.6 million was recognised in the first quarter and $12.4
million will be recognised in the second quarter. In return, the Partnership
must 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. Accordingly, Golar will
receive all revenues in connection with a 20-day voyage charter entered into in
early May for the collection of the vessels commissioning cargo, any hire
received between May 26 and June 30 under the ten-year time charter with the
Government of the Hashemite Kingdom of Jordan and approximately $9.2 million of
revenue in respect of fees relating to the later-than-scheduled start-up of
operations in Jordan.
The transaction has been accounted for as a business combination and the
determination of the fair values of the assets and liabilities acquired from
Golar are currently provisional and will be finalized in due course.
Corporate and other matters
In January 2015 the Partnership and Golar announced the pricing of an
underwritten secondary offering of 7,170,000 common units representing limited
partner interests in the Partnership offered by Golar at a price of $29.90 per
unit. The Partnership did not receive any proceeds from the sale of common
units in the offering, and the number of common units outstanding will remain
unchanged. Golar will use the proceeds of the sale to reinvest in its GoFLNG
floating liquefaction projects.
On April 27, 2015, Golar Partners declared a distribution for the first quarter
of $0.5775 per unit. This represents a $0.015 or an approximate 3% per unit
increase from the fourth quarter 2014 distribution and brings the quarterly
distribution up to a level that was recommended by management when the
acquisition of the Eskimo was announced in December 2014.
The first quarter dividend was paid on May 14, 2015 on total units of
62,870,335.
Operational Review
Once again, Golar Partners fleet performed well during the quarter with 100%
utilisation of all vessels during their scheduled operations. No vessels were
drydocked during the quarter, although the Golar Igloo took the opportunity of
its winter downtime window to undergo some guarantee claim work performed by the
shipyard in drydock. The Golar Freeze FSRU commenced its drydock after the
quarter end and management currently expects to incur approximately 30-40 days
of offhire during the second quarter in respect of this FSRU. The Golar Grand
represents the only remaining vessel in the fleet scheduled to be dry-docked
before year end.
The Golar Eskimo has arrived in Jordan having collected an LNG cargo and is
preparing to commence commissioning.
Financing and Liquidity
As of March 31, 2015, the Partnership had cash and cash equivalents of $55.4
million and undrawn revolving credit facilities of $45 million. Total debt and
capital lease obligations net of total cash balances was $1,301.4 million as of
March 31, 2015.
Based on the above net debt amount and annualized(2) first quarter 2015 adjusted
EBITDA(3), Golar Partners debt to adjusted EBITDA multiple was 4.0 times. This
ratio is expected to decrease as a function of attaining a full quarter's
earnings for the Golar Igloo and Golar Eskimo.
Subsequent to quarter end, the Partnership has received bank commitments,
subject to documentation, for a $180 million facility comprised of a $150
million term loan and a $30 million revolving credit facility. The facility
will be used to repay approximately $134 million of long term debt, that matures
in 2015 and the $20 million revolving facility provided by Golar. The signing of
the loan documentation, drawdown and repayment are expected to occur before the
end of the second quarter. Secured against the Golar Maria LNG carrier and
Golar Freeze FSRU , the facility will have a tenor of 36-months, the $150
million term loan will be repaid in 12 quarterly instalments plus a balloon
payment of $114 million at maturity and the facility carries interest at LIBOR
plus a margin of up to 195bps.
As of March 31, 2015, Golar Partners had interest rate swaps with a notional
outstanding value of approximately $1,035.2 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
76% of total debt and capital lease obligations, net of restricted cash. The
average fixed interest rate of swaps related to bank debt is approximately
2.07% with average maturity of approximately 2.9 years as of March 31, 2015.
Subsequent to the quarter end Golar Partners has entered into a $100 million
2.0679% fixed rate non-amortising interest rate swap with a tenor of 7 years.
As of March 31, 2015, the Partnership had outstanding bank debt of $989.9
million with average margins, in addition to LIBOR or fixed swap rates, of
approximately 2.46% and a Norwegian Krone (NOK) bond of $161.3 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 March 31, 2015, which also includes an interest
rate swap element, was $73.7 million. The Partnership also has a $220 million
vendor loan from Golar entered into in connection with the acquisition of the
Golar Eskimo. The vendor loan has a tenor of 2 years and an average interest
rate of LIBOR plus 2.84%.
On May 11, 2015 the Partnership launched a USD 150 million five year non-
amortising bond in the Norwegian bond market. The oversubscribed issue
successfully priced the same day at LIBOR plus 4.4%. Golar Partners
subsequently entered into interest rate swaps to hedge the aggregate principal
of the bond such that the all-in interest cost for the $150 million will be
approximately 6.275%. The net proceeds from the bond issue are expected to be
used to repay debt, including vendor loans, and for general corporate purposes.
Golar Partners expects to refinance the balance of the vendor loan ahead of its
maturity in January 2017 and continues to monitor the secured Term Loan B market
with this in mind.
(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.
Outlook
Operating earnings and distributable cash flow coverage ratio are expected to
improve in the second quarter as a result of a number of factors. The Golar
Igloo is expected to be earning for the whole of the second quarter as compared
to only 31 days in the first quarter as a consequence of the vessels winter
downtime period. Having been acquired in January the Golar Eskimo is also
expected to provide a full quarter of operating earnings in the second quarter.
Offsetting this will be expected offhire time of approximately 30-40 days for
the Golar Freeze due to its drydock in the second quarter as well as a full
quarter of reduced earnings for the Golar Grand given its new contract rate. As
noted above there are no further dry-dockings planed in 2015 other than the
Golar Grand.
Following the acquisition of the Golar Eskimo, Golar Partners has a total order
backlog of $2.5 billion with an average remaining contract term of 5.7 years, as
at March 31, 2015.
Golar Partners distributions have increased approximately 8% for the full year
2014 and approximately 3% thus far in 2015. Further growth via acquisitions will
most likely come from vessels within Golar's fleet of 11 modern LNG carriers and
1 newbuild FSRU that get contracted on a long-term basis in the coming years.
Currently the most likely first of these is a potential long-term contract for
the Golar Tundra FSRU commencing in 2016. However, Golar Partners have in recent
months also been involved in specific discussions with regards to acquiring LNG
assets under long term contracts from third parties. To date no agreements have
been reached mainly due to differing views on valuation.
Golar LNG has recently announced that it has entered into a heads of agreement
for its second GoFLNG new building project. Golar Partners sees Golar's GoFLNG
liquefaction projects as an extremely interesting growth prospect given the high
margin and long-term nature of these assets.
With first class operations, a solid revenue backlog, a strong balance sheet and
a good coverage ratio the Partnership is very well strategically positioned.
Given with the opportunities the Partnership foresees, particularly for FLNG and
FSRU assets, the Board is confident that Golar Partners can deliver profitable
growth in earnings and increased distributions to its unitholders over the
coming years.
May 27, 2015
Golar LNG Partners L.P.
Hamilton, Bermuda.
Questions should be directed to:
c/o Golar Management Ltd - +44 207 063 7900
Brian Tienzo - Chief Finance Officer
Graham Robjohns - Chief Executive Officer
Interim Results for the Period Ended 31 March 2015:
http://hugin.info/147317/R/1924444/690306.pdf
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Source: Golar LNG Partners L.P. via GlobeNewswire
[HUG#1924444]
Datum: 27.05.2015 - 23:50 Uhr
Sprache: Deutsch
News-ID 396304
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