Golar LNG Interim results for the period ended 31 March 2021
Golar has made significant progress simplifying its business, crystalizing the value of its asset portfolio, and strengthening its balance sheet.
We are encouraged by the strength of shipping rates during what is normally a seasonally weak period, with TFDE1 spot rates currently around $70,000 per day. The negative impact of potential EEXI regulations on the viability of up to 254 steam turbine carriers relative to a global on-the-water fleet of 597 vessels and a 130 vessel orderbook means that Golar’s longer term view of the shipping business has also materially improved.
The few shipyards capable of building LNG carriers are filling with container newbuild orders and we do not see potential for significant new LNG carrier orders before 2024. Over the same timeframe LNG trade is expected to continue to grow by a 4% CAGR. This should allow for improved earnings from our carrier portfolio and create a supportive backdrop for this as a stand-alone business.
Current and forward energy prices are also strengthening, increasing the attractiveness of LNG upstream investments and our FLNG technology. We continue to pursue FLNG growth projects including both tolling arrangements and opportunities to develop hydrocarbon exposure through ownership of gas molecules suitable for production by our FLNG technology.
Q1 highlights and recent events
Financial:
- Net income of $25.4 million for the quarter.
- Adjusted EBITDA of $77.6 million, in line with Q4.
- Entered into merger agreements for the sale our interest in both Hygo and GMLP to NFE. Upon closing on April 15, Golar received a total of $131 million in cash and 18.6 million Class A shares in NFE in combined merger consideration.
- 1.2 million Golar shares bought back and held as treasury shares at a cost of $13.7 million.
- 18.6 million Class A NFE shares valued at $780 million as of May 19, 2021, the equivalent of $7.08 per Golar LNG share.
- $45 million drawn down against FLNG Gimi debt facility. Total of $345 million drawn down as at March 31, 2021. A further $65 million drawn in early April.
- Agreed a one-off debt payment of $60 million spread evenly across four LNG carriers and an accelerated lease profile resulting in cashflow net savings of $42 million and a total reduction to Golar’s remaining debt principal of $102 million.
- Published comprehensive ESG report including audited emissions data and ambitious performance targets.
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