Golar LNG Q1 Results 2011
(Thomson Reuters ONE) -
FIRST QUARTER 2011 RESULTS
Highlights
* Golar LNG reports consolidated net income of $16.3 million and consolidated
operating income of $20.4 million for the first quarter of 2011
* Golar LNG announces a cash dividend of $0.25 cents per share
* Significant improvement in charter rates during the quarter
* Golar secures charters for its 4 modern vessels of between 12 and 18 months.
The contracts are expected to generate approximately $80 million of EBITDA
on an annualized basis
* Successful completion of the initial public offering of Golar LNG Partners
raising gross proceeds of $310 million
* Golar LNG orders 6 new LNG carriers from Samsung Heavy Industries and has
options on a further 2 vessels
* In April 2011, Golar LNG acquired shares in subsidiary company Golar LNG
Energy Limited via private placement share swaps and cash purchases that
increased its ownership to 95.1%. A voluntary offer has subsequently been
made for the balance of the outstanding shares of Golar LNG Energy Limited
and Golar LNG currently owns 99.4 % of the shares.
* The West Java FSRU Project time charter agreement with PT Nusantara Regas
was executed in April 2011
Financial Review
Golar LNG Limited ("Golar" or the "Company") reports consolidated net income of
$16.3 million and consolidated operating income of $20.4 million for the three
months ended March 31, 2011 (the "first quarter").
Revenues in the first quarter were $67.5 million as compared to $64.6 million
for the fourth quarter of 2010 (the "fourth quarter"). The increase is primarily
due to an improved performance from Golar LNG Energy's ("Golar Energy") modern
LNG carriers offset in part by the effect of the Golar Grand being in drydock in
the first quarter. Vessel utilization for the first quarter was slightly down
at 91% as compared to 95% for the fourth quarter, but average daily time charter
equivalent rates ("TCEs") for the first quarter increased to $80,694 from
$74,206 in the fourth quarter as a result of higher rates for vessels operating
in the spot market.
Voyage expenses were slightly higher in the first quarter at $3.8 million as
compared to $3.2 million in the fourth quarter but vessel operating expenses
were lower at $14.0 million for the first quarter compared to $15.2 million for
the fourth quarter.
Other operating losses of $3.6 million in the first quarter represent costs
incurred and net mark-to-market valuations related to physical LNG cargo trades
and financial derivatives entered into by Golar Commodities in the first
quarter. It is expected that gains from the delivery and settlement of these
cargos will be realized in the second quarter of 2011.
There were no impairment charges in the first quarter where as in the fourth
quarter charges of $4.5 million were recognised principally in connection with
the write down of the company's investment in TORP LNG AS.
Net interest expense for the first quarter at $6.9 million was slightly lower
than the $7.1 million in the fourth quarter.
Other financial items have decreased by $8.3 million in the first quarter
compared to the fourth quarter. This is principally as a result of non-recurring
termination costs and the write-off of deferred charges of approximately $13
million relating to certain lease arrangements recognized in the fourth quarter.
This has been partly offset by a decrease of $2.9 million in non-cash gains on
the mark-to-market valuations of interest rate swaps in the first quarter of
$3.6 million as compared to the fourth quarter reported gains of $6.5 million.
Financing, corporate and other matters
Dividends
The Board has reviewed the Company's dividend capacity in light of the initial
public offering of Golar LNG Partners LP and the Company's newbuilding orders
and has decided to maintain the current dividend level of $0.25 cents per
quarter. A cash dividend of $0.25 per share will therefore be paid in respect
of the first quarter of 2011. The record date for the dividend is June
10, 2011, ex-dividend date is June 8, 2011 and the dividend will be paid on or
about June 27, 2011.
Golar LNG Partners LP ("Golar Partners")
In April 2011, the Company completed a public offering of 13.8 million common
units (including 1.8 million units issued in respect of an over-allotment
option) of its subsidiary, Golar Partners, which is listed on the NASDAQ stock
exchange under the symbol "GMLP". As a result of the offering the Company's
ownership of Golar Partners was reduced to approximately 65%. Golar Partners
owns and operates a fleet of two LNG carriers and two FSRUs each under long-term
charters. The 13.8 million units were priced at $22.50 per unit resulting in
gross proceeds of $310.5 million. As part of the transaction the Company has
agreed to offer to Golar Partners the right to acquire all its LNG carrier and
FSRU assets that in the future obtain contracts of greater than 5 years. The
Company expects to sell Golar Freeze and Khannur (both FSRU's with long-term
contracts) to Golar Partners during 2011 and 2012 respectively as well as others
assets as new long-term contracts are secured.
The value of Golar LNG's share holding in Golar Partners as at May 27, 2011 was
$714 million. Based on Golar Partners forecasted distributions Golar will
receive a minimum of $10 million per quarter in cash dividends.
Newbuildings
During April and May 2011, consistent with the Company's stated growth strategy,
Golar entered into firm contracts to build six 160,000 m(3) LNG carrriers with
Samsung Heavy Industries Co Ltd ("Samsung"). Four vessels are to be delivered in
2013 and two in early 2014. The total cost of the six vessels is approximately
$1.2 billion. The vessels will be delivered with fuel efficient dual fuel diesel
electric engines and lower boil-off rates in comparison to the existing LNG
carrier fleet. Furthermore, the Company has retained options to include ice
strengthening / winterisation as well as regasification capability on some
vessels. The Company considers the competitive price and payment terms,
the early delivery positions and the flexibility of design options to create a
significant commercial advantage over other operators who will enter the
newbuilding market at a later stage. The Company will use the proceeds from the
Golar Partners IPO and the proceeds from the expected sale of the Golar Freeze
and Khannur to Golar Partners as the equity contribution for the financing of
these vessels.
Acquisition of Golar LNG Energy ("Golar Energy")
On April 26, 2011 the company increased its ownership of Golar Energy from
61.1% to 90.5% by entering into agreements to acquire an additional 70,315,792
Golar Energy shares. The sellers received one newly-issued Golar LNG share for
every 6.06 Golar Energy shares. The new Golar LNG shares were effectively issued
for $30.30 per share.
The share acquisitions were organized into two transactions. In the first
transaction, the Company acquired 36,675,639 shares from international
institutional investors and, in the second transaction it acquired 33,640,153
from World Shipholding Limited, the Company's major shareholder. The shares in
respect of this second transaction will be issued upon the filing of a
prospectus with the Oslo Stock Exchange. The two transactions will increase the
Company's share capital by 11,524,911 shares.
On April 27, 2011, the Company further increased its ownership of Golar Energy
by acquiring an additional 10,536,287 shares at a price of approximately $5 per
share. This increased the Company's ownership of Golar Energy to 95.1%.
Subsequently a voluntary offer was made to acquire the remaining outstanding
shares in Golar Energy at NOK 26.80. Following the closing of this offer, Golar
owns 99.4% of the outstanding shares and will, based on Bermuda law, initiate a
compulsory acquisition offer of any remaining shares in Golar Energy and a
delisting of Golar Energy from Oslo Axess.
Vessel Charters
As previously announced the Company has entered into time charter agreements for
its four modern LNG carriers for periods between 12 to 18 months, providing
charter coverage of approximately 57 months. The fixtures commenced between
February and April 2011. Based on assumed operating expenses, the four vessels
are expected to have a combined annualized EBITDA contribution of approximately
$80m.
Financing
In April 2011, the Company entered into a new $80 million unsecured revolving
credit facility with a company related to its major shareholder, World
Shipholding. The facility bears interest at LIBOR plus 3.5% together with a
commitment fee of 0.75% of any undrawn portion of the credit facility. The
facility is available until September 2013; all amounts due under the facility
must be repaid by then. The Company drew down an initial amount of $35 million
in April 2011 to repay the amounts outstanding on its Golar Gas Facility.
Shares and options
During the quarter a total of 540,500 Golar LNG options were exercised. In
connection with this, 390,500 new shares were issued. The total remaining Golar
LNG options is 400,000. Golar Energy has outstanding options of 5,438,000 which
will be converted to Golar LNG options on a proportionate basis in line with the
share swap noted above. One Golar LNG option will be issued for every 6.06 Golar
Energy options held by directors and employees at a strike price calculated to
give the same intrinsic value to holders. Therefore 897,360 Golar LNG options
will be issued at an average strike price of $11.84. The revised share option
scheme is expected to have a lower overall accounting cost than the original as
a function of the lower volatility in Golar LNG's historical share price in
comparison to Golar Energy's. The total number of shares outstanding in Golar is
79,801,953 excluding options.
Management changes
With the merger of Golar and its subsidiary Golar Energy, Graham Robjohns will
step down as CEO and will be replaced by Doug Arnell as CEO of Golar Management
Ltd. Mr. Robjohns will also step down as CFO of Golar Management to be replaced
by current Group Financial Controller Brian Tienzo. Mr. Robjohns will however
remain as CEO for Golar LNG Partners. These changes will take effect from June
1, 2011.
Shipping
There has been strong demand throughout the quarter for available modern LNG
carriers and also demand for older vessels but there has been little
availability of either. Charterers started to take vessels for much longer
periods in the region of 12 to 18 months but there is now limited optionality
for charterers and they have had to adapt requirements to the availability of
vessels. There is strong interest for vessels both in the East and the West but
many requirements remain uncovered due to lack of vessels. Some small windows of
vessel availability will likely occur in the short-term moving forward but the
market is expected to remain tight for the next 2-3 years.
Throughout the quarter charter rates remained strong and have now pushed up
towards $90,000 per day for modern tonnage.
Based on the fundamental strength of the shipping market and the increased
activities in the FSRU market, the Board has decided to reactivate the Gimi
which has been laid up since August 2009. The vessel will go through an
extensive shipyard upgrading, at a cost of in the region of $10 million, and
will be available for trading and infrastructure projects from August this year.
Shareholders should be aware that there are large differentials in total
operating costs (including fuel cost) between older steam turbine vessels,
modern steam turbine vessels and new generation dual fuel diesel electric
("DFDE") vessels. It can be assumed that the new DFDE ships, based on size, boil
off and fuel costs are approximately $40,000 - $50,000 per day more economical
to operate than older steam vessels.
The worldwide LNG fleet currently stands at 359 vessels including FSRUs with a
further 35 on order, 16 of which have been ordered since January 1, 2011. These
of course include those recently placed by Golar with Samsung for 6 new
buildings with additional options. There is today very limited shipyard capacity
available before 2014. It is anticipated that the tonne mile demand in the
period until 2014 will grow significantly faster than the fleet. It is further
anticipated that this will lead to a tight and most likely improving freight
market.
In the period 2014 to 2015 there are expected to be a number of large LNG
projects commencing production, particularly in Australia. These projects will
need significant additional shipping capacity. Additional shipping capacity will
also be needed to support the recent change in US policy to allow LNG export
projects.
Golar's new ships will be delivered at an attractive point in time since they
will prove attractive to LNG players who may have to search for additional
tonnage sooner than anticipated due to either improving markets or for fleet
renewal purposes and will also deliver into a market for vessels that is likely
to be very tight.
Golar has already received enquiries from several major LNG producers with
respect to long-term chartering of part of its recently ordered newbuilding
fleet.
Regasification
In April 2011, Golar announced the execution of the long-term time charter in
respect of a Floating Storage and Regasification Unit (FSRU) and Mooring
facility with PT Nusantara Regas, a joint venture between Pertamina and PGN
("West Java FSRU Project "). The contract is for an initial term of
approximately eleven years with automatic conditional extension options up to
2025. The contract value for the initial period is approximately $500 million.
Project execution is progressing on schedule with all long lead items having
been ordered, detailed engineering well progressed and conversion of the Khannur
at Jurong shipyard in Singapore underway.
Floating regasification remains a strong area of growth for the Company. This
new contract establishes Golar's presence in Asia and represents its fourth FSRU
conversion. It further cements the Company's reputation as one of the leading
FSRU providers in the world.
There is also significant activity in the development of further floating
regasification projects worldwide. Golar is currently involved in four
bidding/offer processes and a further three are expected to commence soon.
Golar has proved itself as the only Company to have successfully converted an
LNG carrier into an FSRU. With its newbuilding orders Golar is now also capable
of offering newly built regasification vessels as an alternative option for
customers.
Golar Freeze has recently been going through final acceptance tests for its 10
year time charter to DUSUP and this is expected to be concluded imminently. As a
result Golar will enter into discussions with Golar Partners with respect to
agreeing a mutually acceptable purchase price for the vessel. The anticipated
sale of the vessel to Golar Partners will free up a significant amount of cash
for Golar and will help to secure future growth and increased dividend capacity
for Golar Partners.
Golar Commodities
During the first quarter, contracts were executed to acquire cargoes, on a
delivered basis to, a US Gulf coast import terminal with the intention of re-
exporting at a later date. Additionally, sales agreements were executed with
customers in premium markets for volumes, on a delivered basis, exported from
the US terminal on Golar Commodities chartered vessels. The economic uplift
derived from the transport of these cargoes to premium markets will likely
accrue in the second quarter. Term charter agreements have been executed on LNG
carriers during the quarter of varying terms with limited rights to extend. The
cost of repositioning these vessels to load cargos has been expensed in the
first quarter prior to the delivery of the cargo's.
Golar Commodities has through charter agreements secured access to two 125,000
m(3) vessels. These vessels have been taken in on charters of approximately 9
months and 2 months with extension options of 6 months plus 6 months and 3
months plus 3 months respectively.
The earthquake, tsunami and ensuing shut down of nuclear facilities in Japan has
had a significant impact on the LNG market due to the need to supplement the
country's energy requirements through additional LNG supplies. The result has
been higher LNG prices in the Far East with some ripple effect in other
geographic regions. It has had the additional effect of increasing market
shipping rates as supply line distances have increased; effectively reducing
slack and availability in LNG shipping.
Negotiations are progressing on term supply, off-take, asset optimization and
risk management transactions with a number of customers. The Company expects to
consummate some of these transactions in 2011, most of which have a term of less
than one year. Opportunities are increasingly being generated through synergies
with the Company's FSRU and other asset-oriented ventures. The Board is clearly
not satisfied with the results Golar Commodities has generated since start up,
but sees clear positive signs in recent developments and appreciates the hard
work of the organisation to create a strong strategic position.
Market
The March 11(th) tragedy in Japan caused the shut-down of some 12.4GW of nuclear
capacity which led to LNG playing an increasingly pivotal role in meeting
Japanese energy requirements. These outages in Japan's nuclear facilities as
well as the drive towards replacement gas should result in an additional 7.5
million tonnes per annum ("mmtpa") in 2011 rising to 12 mmtpa by 2015.
Although there is enough flexible LNG available in the market to allow
diversions to Japan, this will remove a substantial amount of slack that was
previously available. Qatar is able to supply the bulk of the requirements but
Japan has been accessing cargoes from other sellers. None of these suppliers
has the flexibility of Qatar but many suppliers are delaying maintenance to
maximise their output.
In China a reduced appetite for spot cargoes is evidenced on the back of
heightened Japanese activity whereas Indian imports have increased recently to
make up for reduced domestic production.
South American markets are now heading into their peak season where markets in
Argentina have been offering large premiums over Henry Hub and UK NBP. Cargo
deliveries into the US showed no signs of picking up in the first quarter. By
the end of March only 2.5 million tonnes had been imported, which is understood
to be close to the contractual minimum under existing term arrangements.
Towards the end of the quarter a number of cargoes were heading into the US
Gulf and thereafter available for re-export.
The UK continued to import record amounts of LNG in each month of the quarter
and NBP prices showed little sign of easing, which in turn helped prop up Far
East prices.
Two new projects (Pluto LNG and Angola LNG) are expected to start up in the
second half of 2011 and the first quarter of 2012 respectively. This new
production together with debottlenecking projects and the ramp up of the
significant number of new projects that have recently started up could add up to
47 million tonnes of LNG to the market by the end of 2012.
In general, the market momentum built up over the previous months as well as the
positive outlook going forward should provide some benefits to projects where
final investment decisions are yet to be taken.
Outlook
The Board believes the outlook for Golar is very positive due to the major
growth trend in LNG supply that is coming in the time period to 2015, combined
with the Company's industry leading position in the midstream infrastructure
segment of the LNG value chain. Natural gas continues to shine in comparison
with high priced oil and nuclear energy's safety concerns. It is entirely
possible that the growth of LNG supply going forward may well exceed the already
robust estimates.
Golar is well placed to take full advantage of this opportunity. The Company
will have a minimum of 10 modern vessels available for spot and long-term
charters before the end of the first quarter of 2014. In addition Golar will
have 2 vessels plus a 50% interest in a 3(rd) suitable for conversion projects.
Golar will seek to use this unique position strategically in order to build
long-term relationships and maximise value.
The Company has utilized its strong relationships with shipyards and the ability
to raise capital efficiently through the Golar LNG Partners vehicle to position
itself to be extremely competitive both on price and delivery timing. Other
owners have begun to follow Golar into the newbuilding market however the Board
still views the carrier segment to be undersupplied with only a finite shipyard
capacity remaining to close the gap in the time required.
The floating regas market, with Golar placed as a worldwide leader, continues to
build momentum. By the end of May the Company will have four live offers into
new projects with at least three more expected to come before 2011 ends. As
the only company to have constructed and operated floating regas terminals
through converting existing LNG carriers, Golar brings unequalled credibility
and price certainty to potential charterers. The Board believes there is every
chance that the Company will increase its existing fleet of FSRU's in the very
near term and maintain its industry leading position.
The next wave of midstream LNG solutions continues to be developed inside
Golar. Floating LNG to power vessel, floating storage and small scale LNG are
all on Golar's drawing board and the Company anticipates they could all add
significantly to our growth in the future. It is the Company's target to
conclude firm business for at least one of these projects before the end of the
year.
The Board also sees several other interesting opportunities for further growth.
Shareholders should anticipate continued high investment activities in the
coming quarters.
Operating income in the second quarter of 2011 is expected to be significantly
positively impacted by further improvement in earnings of the four modern
vessels. The Board anticipates strong growth in EBITDA over the next three
years. This is expected to be driven by a tighter shipping market, renewal of
the existing modern vessels time-charters at higher levels, Golar's newbuildings
commencing operations in 2013 and 2014 and by expected new infrastructure
projects including the Khannur that will commencing its 11 year charter in 2012.
The Board is excited about the outlook for the Company.
Forward Looking Statements
This press release contains forward looking statements. These statements are
based upon various assumptions, many of which are based, in turn, upon further
assumptions, including examination of historical operating trends made by the
management of Golar LNG. Although Golar LNG believes that these assumptions were
reasonable when made, because assumptions are inherently subject to significant
uncertainties and contingencies, which are difficult or impossible to predict
and are beyond its control, Golar LNG cannot give assurance that it will achieve
or accomplish these expectations, beliefs or intentions.
Included among the factors that, in the Company's view, could cause actual
results to differ materially from the forward looking statements contained in
this press release are the following: inability of the Company to obtain
financing for the new building vessels at all or on favourable terms; changes in
demand; a material decline or prolonged weakness in rates for LNG carriers;
political events affecting production in areas in which natural gas is produced
and demand for natural gas in areas to which our vessels deliver; changes in
demand for natural gas generally or in particular regions; changes in the
financial stability of our major customers; adoption of new rules and
regulations applicable to LNG carriers and FSRU's; actions taken by regulatory
authorities that may prohibit the access of LNG carriers or FSRU's to various
ports; our inability to achieve successful utilisation of our expanded fleet and
inability to expand beyond the carriage of LNG; increases in costs including:
crew wages, insurance, provisions, repairs and maintenance; changes in general
domestic and international political conditions; the current turmoil in the
global financial markets and deterioration thereof; changes in applicable
maintenance or regulatory standards that could affect our anticipated dry-
docking or maintenance and repair costs; our ability to timely complete our FSRU
conversions; failure of shipyards to comply with delivery schedules on a timely
basis and other factors listed from time to time in registration statements and
reports that we have filed with or furnished to the Securities and Exchange
Commission, including our Registration Statement on Form 20-F and subsequent
announcements and reports. Nothing contained in this press release shall
constitute an offer of any securities for sale.
May 30, 2011
The Board of Directors
Golar LNG Limited
Hamilton, Bermuda.
Questions should be directed to:
Golar Management Limited - +44 207 063 7900
Doug Arnell - Chief Executive Officer
Brian Tienzo - Chief Financial Officer
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Golar LNG Q1 Results 2011:
http://hugin.info/133076/R/1520057/456458.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Golar LNG via Thomson Reuters ONE
[HUG#1520057]
Unternehmensinformation / Kurzprofil:
Datum: 31.05.2011 - 08:50 Uhr
Sprache: Deutsch
News-ID 55142
Anzahl Zeichen: 29603
contact information:
Town:
London
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 224 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Golar LNG Q1 Results 2011"
steht unter der journalistisch-redaktionellen Verantwortung von
Golar LNG (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
