Golar LNG Partners’ third-quarter profit slides

Nasdaq-listed Golar LNG Partners, a limited partnership formed by Golar LNG, reported a net income of $26.5 million for the third quarter of the year.

This compares to $56 million net profit reported in the corresponding quarter a year ago.

Total operating revenues decreased, from $136.0 million in the second quarter to $105.6 million in the third quarter, with the Partnership noting that the $30.4 million decrease was due to the conclusion of the FSRU Golar Spirit charter with Petrobras and the FSRU Golar Winter’s 12 days off-hire due to dry-docking.

Having subsequently entered temporary layup, the FSRU Golar Spirit was non-revenue earning in the third quarter.

Partially mitigating this loss of revenue was additional hire in respect of the Golar Grand, on hire for a full quarter having spent 13 days of the second quarter in scheduled dry-dock.

The FSRU market has shown clear signs of weakness with additional competition leading to declining margins in recent years, the Partnership said.

However, there has been an increasing level of interest in an emerging market for mid-sized 1-2mtpa FSRUs where the cost of unutilized capacity on larger and more expensive FSRUs undermines the economics of a switch to gas. The Partnership said it has continued active discussions and negotiations with potential customers and remains confident of a new FSRU contract award in the near future.

The company is also continuing to pursue re-contracting opportunities for the LNG carriers Golar Mazo and Golar Maria. The LNG shipping market continues to tighten and spot rates for TFDE tonnage have recently exceeded three-year highs. As prompt vessel availability falls to low single digits, rate increases and a corresponding increase in spot and short-term opportunities for steam turbine tonnage have also been noted.

Golar Partners is currently working on specific opportunities for the Golar Maria and Golar Mazo. The target is to place these vessels into medium to long-term charters. Until such opportunities are concluded the vessels will trade in the improving spot market.

Going forward, the Partnership expects the operating earnings for the fourth quarter to be negatively impacted by the 52-day dry-dock related off-hire of the Golar Winter, the conclusion of the Golar Maria time charter on December 1, and a reduced daily rate receivable from the Golar Grand post-October 31.

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