Interim Results for the Period Ended June 30, 2015
(Thomson Reuters ONE) -
Highlights
* Golar LNG Partners LP reports net income attributable to unit holders of
$41.0 million and operating income of $62.3 million for the second quarter
of 2015.
* Generated distributable cash flow of $41.4 million for the second quarter
with a coverage ratio of 1.07.
* Strong operational performance with 100% availability of the fleet for
scheduled operations and 94% availability taking account of the Golar Freeze
drydock.
* Successful placement of a $150 million bond in the Norwegian bond market.
* Repaid $120 million of the $220 million Golar Eskimo vendor financing
together with a maturing $20 million revolving facility also provided by
Golar LNG Limited.
* Executed 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 $41.0 million and operating income of
$62.3 million for the second quarter of 2015 ("the second quarter or 2Q"), as
compared to 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 or 1Q") and net income attributable to unit holders of $37.8 million and
operating income of $62.1 million for the second quarter of 2014.
Second quarter operating income was in line with the same period in 2014.
Additional revenue in respect of the Golar Eskimo, which was acquired on January
20, 2015, was offset by reduced earnings from the Golar Freeze as a result of
its drydock during the quarter, a full quarter of reduced earnings for the Golar
Grand given its new contract rate and associated ownership and operating costs
in respect of the Golar Eskimo FSRU. Second quarter 2015 revenue increased by
$4.1 million over 2Q 2014 and includes an additional $12.4 million hire in
respect of the Golar Eskimo. This was offset in part by a reduction in revenue
due to the drydock of the Golar Freeze equivalent to $6.7 million and a $2.1
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. Vessel operating expenses, voyage and
commission costs, administration expenses and depreciation and amortisation
increased by a collective $4.0 million compared to the same period in 2014
primarily reflecting the additional ownership and operating costs of the Golar
Eskimo. Despite additional debt servicing costs on financing of the Golar
Eskimo, second quarter 2015 net financial expenses were $3.8 million lower than
2Q 2014. The reduction is predominantly reflective of a $6.0 million non-cash
mark-to-market valuation gain on interest rate swaps compared to a $3.3 million
loss in 2014. Taxes in respect of 2Q 2015 were $0.8 million higher than the
same period in 2014 when a credit to tax expense resulting from a year-to-date
reassessment of current tax estimates was recognised.
An increase in revenue net of voyage expenses from $98.5 million in the first
quarter to $103.6 million in the second quarter reflects a number of factors.
An additional $8.6 million was recognised in respect of the Golar Igloo which
was on charter for all of the second quarter, whereas two of its scheduled three
months downtime occurred during the first quarter. The Golar Eskimo was also
receiving revenue for all of the second quarter compared to 71 days hire
received in respect of the first quarter. This resulted in an additional $2.8
million of revenue being recognised in 2Q. Offsetting these was a $6.9 million
reduction in revenue from the Golar Freeze which commenced its scheduled drydock
during 2Q resulting in 51 days of offhire and a $1.2 million reduction in hire
from the LNG carrier Golar Grand which spent part of 1Q on hire to BG Group at a
higher rate. The majority of the remaining $1.8 million increase in revenue
reflects the longer quarter (91 days versus 90 days).
Vessel operating expenses at $17.2 million were $1.6 million higher than the
first quarter cost of $15.6 million. This was mainly due to higher essential
repair expenditures across the fleet and higher Golar Freeze non-drydock related
repairs in particular. It also reflects a full quarter of operations in respect
of the Golar Eskimo which operated for 71 of the 90 days in the first quarter.
Administration expenses at $1.5 million were in line with the prior quarter.
Net interest expense at $13.8 million for the second quarter was $1.3 million
higher than the first quarter due to a full quarters interest on a $162.8
million debt facility and a $220.0 million vendor loan from Golar, which
together financed the acquisition of the Golar Eskimo on January 20. On May
12, Golar Partners issued a USD 150 million bond in the Norwegian bond market,
the majority of the proceeds of which were subsequently used to repay existing
debt facilities. Other financial items for the second quarter were a loss of
$1.5 million compared to a $10.4 million loss in the first quarter. This
included non-cash mark-to-market valuation gains on interest rate swaps of $6.0
million in the second quarter as a result of an increase in 3-year and 5-year
interest swap rates by 14bps and 26bps respectively. This compares to a $5.9
million loss in the first quarter.
The Partnership's Distributable Cash Flow(1 )for the second quarter was $41.4
million as compared to $40.7 million in the first quarter and the coverage ratio
was 1.07 as compared to 1.06 for the first quarter. The coverage ratio was
negatively impacted in the first quarter by 2 months of scheduled downtime for
the Golar Igloo and in the second quarter by 51 days offhire for the Golar
Freeze scheduled drydock.
(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.
Corporate and other matters
Our General Partner, Golar, announced on August 4, 2015 a unit purchase program
of up to $25 million worth of Golar Partners outstanding units over the
subsequent 12 months. To date, Golar has purchased 167,000 shares in open market
transactions increasing its stake in the Partnership to 30.3% inclusive of its
General Partner stake.
On July 27, 2015, Golar Partners declared a distribution for the second quarter
of $0.5775 per unit. The second quarter dividend was paid on August 14, 2015 on
total units of 62,870,335.
Operational Review
The fleet performed well during the quarter with 100% utilisation of all vessels
except for the Golar Freeze which incurred 51 days offhire as a result of its
scheduled drydock, which was longer than the anticipated 30-40 days offhire.
Golar Freeze recommenced operations in Dubai on July 4 and will therefore report
3 further days offhire in 3Q. The Golar Grand represents the only remaining
vessel in the fleet scheduled to be dry-docked before year end. The exact timing
of the Golar Grand drydock will however depend on the vessels planned operations
and may be postponed into 2016.
FSRU Golar Eskimo arrived off Aqaba on May 25, issued a notice of readiness,
commenced its charter on June 24 and went on to complete it's commissioning for
the Hashemite Kingdom of Jordan without issue on July 12. Since commencement,
the FSRU has since been producing at close to peak capacity and with 100%
availability.
Financing and Liquidity
As of June 30, 2015, the Partnership had cash and cash equivalents of $59.5
million and undrawn revolving credit facilities of $80 million. Total debt and
capital lease obligations net of total cash balances was $1,305.4 million as of
June 30, 2015.
Based on the above net debt amount and annualized(2) second quarter 2015
adjusted EBITDA(3), Golar Partners debt to adjusted EBITDA multiple was 3.8.
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 at LIBOR plus 4.4%. Golar Partners intends to list the bond
in the Norwegian market. 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 is 6.275%. The majority of the proceeds were used to
repay existing debt; $120 million was applied against the vendor financing
provided in connection with the acquisition of the Golar Eskimo and a further
$20 million was used to extinguish a maturing $20 million revolving facility,
also provided by Golar.
On June 16, the Partnership executed a $180 million facility comprised of a $150
million term loan and a $30 million revolving credit facility. The facility was
used to repay $133.4 million of long term debt that matured in 2015. Secured
against the Golar Maria LNG carrier and Golar Freeze FSRU, the facility has 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.
Golar Partners expects to refinance the remaining $100 million Golar Eskimo
vendor loan and the Golar Maria/Freeze facility ahead of their maturities in
January 2017 and June 2018.
As of June 30, 2015, Golar Partners had interest rate swaps with a notional
outstanding value of approximately $1,218.0 million (including swaps with a
notional value of $377.2 million in connection with the Partnership's bonds but
excluding $100 million of forward starting swaps) representing approximately
93% of net debt. In addition to the Bond swaps, a new $100 million 7-year swap
was also entered into and a $55 million swap matured during the quarter. The
average fixed interest rate of swaps related to bank debt is approximately
2.14% with average maturity of approximately 3.2 years as of June 30, 2015.
As of June 30, 2015, the Partnership had outstanding bank debt of $970.6 million
with average margins, in addition to LIBOR or fixed swap rates, of approximately
2.32%, a Norwegian Krone (NOK) bond of $165.5 million with a fixed rate of
6.485% and a $150.0 million Norwegian USD bond with a swapped all-in rate of
6.275%. The Partnership has a currency swap to hedge the NOK exposure for the
Norwegian Krone bond. As the US dollar has depreciated against the NOK during
the quarter, the value of this bond in USD terms has increased whilst the swap
liability has fallen. The total swap liability as at June 30, 2015, which also
includes an interest rate swap element, was $68.4 million. The Partnership also
has a $100 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%
(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 third quarter as a result of improved fleet utilization. The
second quarter was negatively impacted by 51 days offhire for the Golar Freeze
due to its drydock. There are no drydocks planned for the third quarter and the
only other planned drydock for 2015 is the Golar Grand, although this may be
postponed until 2016.
Following the acquisition of the Golar Eskimo, Golar Partners has a total
revenue backlog of $2.5 billion with an average remaining contract term of 5.5
years, as at June 30, 2015.
Golar Partners distributions have increased 8% for the full year 2014 and 3% for
2015. Further growth via acquisitions will most likely come from vessels within
Golar's fleet of 11 modern LNG carriers and 2 newbuild FSRU's 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. Golar's Ghana FSRU project has made slow progress; Golar is
therefore simultaneously pursuing alternative projects. The recent setback in
the unit price is however a limiting factor with respect to Golar Partners
current ability to grow accretively.
The demand for FSRUs remains strong in an environment of increasing LNG supply
and lower LNG prices. Given Golar's recent order of a newbuild FSRU delivering
in 2017 plus options for 2 further FSRU's and the level of FSRU enquiry and
ongoing discussions, Golar Partners also believes that there will be significant
further FSRU growth opportunities through the balance of the decade.
In 2017 and moving forward from then, Golar Partners views Golar's GoFLNG
projects as attractive growth opportunities. Golar's first project in Cameroon
is expected to receive formal approval by the end of September 2015. Golar has
recently announced that it has entered into an agreement for its third GoFLNG
vessel with Keppel and Black & Veatch. Golar Partners therefore 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 diversified asset
portfolio and a strong balance sheet, the Partnership is strategically well
positioned. The current weakness in the MLP market and the expected negative
future growth in US oil production have focussed investor attention on MLP's
ability to generate stable distributable cash flow. The business model of Golar
Partners is not linked to increased US oil production. The Company's
distribution is well protected with an average coverage ratio of 1.22 over the
last two years. In Comparison to many US oil focused MLP's, who will be
influenced by negative growth in shale production, Golar Partners is in the same
period operating in the global LNG market which is expected to grow by 7-10% per
annum.
The Board is confident that Golar Partners has as of today a sustainable
dividend with the potential to increase earnings and distributions to its
unitholders over the coming years through growth particularly linked to the
acquisition of FLNG and FSRU assets.
August 26, 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 June 30 2015:
http://hugin.info/147317/R/1947812/707355.pdf
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Source: Golar LNG Partners L.P. via GlobeNewswire
[HUG#1947812]
Datum: 26.08.2015 - 23:48 Uhr
Sprache: Deutsch
News-ID 416179
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contact information:
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