Golar LNG Posts USD 219.2 Million in Q3 Operating Revenues (Bermuda)

Golar LNG today announced interim results for the period ended September 30, 2011.

Highlights

• Golar LNG reports consolidated net income of $13.7 million and consolidated operating income of $45.5 million for the third quarter of 2011
• Golar LNG announces an increased quarterly cash dividend of $0.30 cents per share
• Three year charter plus option for further three years secured for the Golar Grand. Annualised EBITDA contribution from this charter expected to be approximately $39.0 million
• Gimi successfully reactivated and chartered out during the quarter. Positive prospects for employment well into at least 2013 with more than $16 million of annualised EBITDA contribution expected to be achieved
• Golar LNG successfully “drops-down” Golar Freeze to Golar LNG Partners shortly after quarter end
• LNG shipping market tightening. Spot rates reached $110,000/day during the quarter
• Six active proposals for conversion and newbuild FSRU charters
• Discussions for further term business for existing and newbuild carriers progressing well

Financial Review

Golar LNG Limited reports consolidated net profit of $13.7 million and consolidated operating income of $45.5 million for the three months ended September 30, 2011 (the “third quarter”).

Revenues in the third quarter were $77.8 million as compared to $74.0 million for the second quarter of 2011. The increase is primarily as a result of the revenue contribution from Gimi after her reactivation in the third quarter as well as there being no drydocks whereas the Golar Maria was drydocked in the second quarter. Vessel utilisation in the third quarter also improved slightly to 99% as compared to 97% for the second quarter. Average daily time charter equivalent rates (TCEs) for the third quarter at $91,614 per day is consistent with second quarter at $91,666 per day.

As noted last quarter operating and administrative costs had been on the increase. The Board implemented steps to try to reverse this trend and it is therefore pleasing to note that both operating and administrative costs have decreased this quarter. Operating cost in the third quarter at $15.0 million has decreased from $16.2 million for the second quarter. Furthermore, administrative expenses are also lower in the third quarter at $6.2 million compared to $9.4 million for the second quarter.

With the exception of some minor settlements related to historical time charters which the Company expecst to close out in Q4, all of Golar Commodities’ trades have now closed and net trading results for the third quarter at $5.1 million are in line with the Company’s expectations at the time of the second quarter results announcement. In line with what was reported in the second quarter results report, Golar Commodities activity should be expected to be limited until market conditions become more favourable.

Net interest expense for the third quarter at $4.9 million is down from $6.7 million in the second quarter due partly to lower debt levels. Furthermore, net interest expense is also reduced due to the accounting requirement to capitalize interest, resulting in a credit to the income statement, based on the Company’s capital expenditure. This relates to the newbuilding program instalments and FSRU conversion cost, and is based on weighted average cost of debt. This will continue until the FSRU and newbuildings are delivered.

Other financial items have increased to a loss of $20.0 million for the third quarter compared to a loss of $9.0 million in second quarter. This is partly due to non-cash losses of $2.7 million on mark-to-market valuations of currency forward contracts in the third quarter compared to a gain of $1.1 million in the second quarter. These currency contracts relate to capital expenditure in respect of the Khannur FSRU. The increase is also as a result of increased non-cash losses on the mark-to-market valuation of interest rate swaps of $10.2 million, as compared to $5.7 million in the second quarter, due to the reduction in longer term interest rates. However, lower interest rates are ultimately beneficial to the Company as they reduce unhedged interest cost.

The Company reports operating revenues of $219.2 million, operating income of $87.2 million and a net income of $29.5 million for the nine months ended September 30, 2011. This compares to operating revenues of $179.4 million, operating income of $45.2 million and a net loss of $4.3 million for the nine months ended September 30, 2010.

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LNG World News Staff, November 17, 2011; Image: Golar LNG