Höegh LNG Optimistic on FSRU Demand as It Posts Black in Q416
Floating energy solutions provider Höegh LNG posted a profit after tax of USD 0.8 million in the fourth quarter of 2016, returning to black when compared to the same period from 2015 when a loss of USD 33 million was reported.
EBITDA for the fourth quarter of 2016 amounted to USD 31.2 million, compared with USD 25 million for the corresponding period in 2015.
According to the group, the increase in EBITDA reflects the start-up of Höegh Grace under the long-term floating storage and regasification unit (FSRU) contract with Sociedad Portuaria El Cayao S.A. E.S.P. (SPEC) in December 2016. The rise in EBITDA was also due to reduced operating expenses and the fact that all units were operated in accordance with their long-term contracts in 4Q 2016.
During the fourth quarter of 2016, Höegh LNG signed a contract with Quantum Power Ghana Gas Limited to provide an FSRU for the Tema LNG import terminal located close to Accra in Ghana. Following this, the company’s capital was freed up by the partial sale of Höegh Grace to Höegh LNG Partners.
Höegh LNG subsequently entered into a letter of intent for a new FSRU with Samsung Heavy Industries, before a new 20-year contract was inked with Global Energy Infrastructure Limited (GEIL) in Pakistan and an additional FSRU shipbuilding contract was placed at Hyundai Heavy Industries.
Furthermore, Höegh LNG placed NOK 1,500 million (USD 179 million) in the Nordic bond market, with the proceeds being partially used to refinance a NOK 750 million bond which matures in October 2017.
The company said it continues to operate in a positive market environment, since accelerating LNG exports are being mirrored by an increase in the number of FSRU contract awards.
“With a solid operational and financial platform in place, and backed by a positive market environment, Höegh LNG continues to pursue additional business opportunities,” Höegh LNG said in its outlook for 2017.
By placing new orders in 4Q 2016, the company moves forward towards its goal of 12 FSRUs by 2019. Currently, the firm has 10 FSRUs in operation or under construction.