Golar LNG Partners Posts Lower 2Q Operating Results, Bermuda

Golar Partners reports net income attributable to unit holders of $28.0 million and operating income of $44.4 million for the second quarter of 2013, as compared to net income attributable to unit holders of $30.3 million and operating income of $45.2 million for the first quarter of 2013 and net income attributable to unit holders of $30.2 million and operating income of $45.3 million for the second quarter of 2013.

Lower operating results for the second quarter of 2013 compared to the same period in 2012 is due largely to drydocking offhire time incurred in the second quarter of 2013, with none incurred in the comparable period, and increased drydocking cost amortization partly offset by the contribution of the NR Satu and Golar Maria in the second quarter. NR Satu was on hire throughout the second quarter of 2013 but was in the final stages of its FSRU conversion and commissioning during the earlier half of the second quarter of 2012, and, therefore, not generating revenues. Comparable results for 2012 do not reflect the contribution of Golar Maria as this vessel was not under the common control of Golar at the time of her acquisition by the Partnership in the first quarter of 2013.

Operating results for the second quarter are slightly lower than the first quarter primarily due to increased drydocking offhire days and higher drydock cost amortization, partly offset by a full quarter’s contribution from Golar Maria, which was acquired on February 7, 2013.

Offhire time for the Golar Winter drydocking and modification work and the Methane Princess drydocking was approximately ten weeks in total. The Golar Mazo also completed its docking during the quarter without incurring offhire due to a drydocking allowance in its time charter. Partly mitigating the impact of the above dockings has been the biennial revision of the Golar Spirit and Golar Winter time charter rates resulting in an increase to hire rates during the quarter. The second quarter drew to a close an intense program of drydockings, the next scheduled drydockings are for Golar Freeze and Golar Grand which are not due until 2015. All other vessels operated well throughout the quarter with overall utilization at 100 per cent.

Following completion of the agreed modification work to Golar Winter and her redelivery to charterers, Golar Partners will receive approximately $24 million in additional revenue spread evenly over the remaining eleven years of the contract. This uplift is before the biennial rate revisions provided for in the charter.

Net interest expenses increased to $11.7 million for the second quarter of 2013 compared to $10.1 million for the first quarter. This is largely due to additional Indonesian witholding tax allocated to interest expense rather than corporation tax. As with the other Indonesian taxes incurred in connection with the vessel concerned, this tax is effectively rechargeable to the charterer.

Other financial items for the second quarter of 2013 recorded a small loss of $0.1 million compared with a gain of $1.1 million in the first quarter. Mark-to-market valuation gains on interest rate swaps were higher by approximately $2.5 million in the second quarter of 2013 compared to the first quarter but this was offset by the write off of deferred financing fees associated with the refinancing of the Golar Winter and Golar Grand leases.

The Partnership’s Distributable Cash Flow2 for the second quarter of 2013 was $26.4 million as compared to $27.6 million in the first quarter.

On July 25, 2013, Golar Partners declared a distribution for the second quarter of 2013 of $0.515 per unit which was paid on August 14, 2013.

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LNG World News Staff, August 30, 2013