Höegh LNG posts record income on strong market

Norway’s floating storage and regasification unit (FSRU) giant Höegh LNG’s profit for the third quarter of the year rising significantly from the figures reported last year. 

The company reported a net profit for the quarter of $6 million, jumping up from $1.1 million in the third quarter last year, but it was pegged back compared to the previous quarter when it reported a net profit of $7.8 million.

Höegh LNG’s total income reached $82.3 million for the third quarter of 2018, compared with $75.8 million in the second quarter of the year.

The increase is mainly a result of higher revenues generated by Höegh Giant and Höegh Esperanza, as well as $2.1 million in revenue recognition of insurance proceeds and other reimbursements.

In its statement, Höegh LNG said this was the best underlying quarterly income, reflecting stable commercial operations, a full quarter of revenue contribution from Höegh Esperanza under its FSRU/LNGC contract with CNOOC, and higher charter hire generated by Höegh Giant.

During the third quarter, Höegh LNG received commitment letters for the financing of its two FSRUs under construction, making the newbuilding programme fully financed.

Speaking of the results president and CEO of Höegh LNG Sveinung Støhle said, “our financial position is solid, and with debt commitments received for the financing of our two newbuildings, as well as for our first refinancing completed well ahead of maturity, we are fully financed across the fleet at attractive terms.”

Støhle noted that the company continues to see an improving FSRU market and is currently exclusive and in the final selection round for four different long-term FSRU projects.

“Additional FSRU opportunities arise on a frequent basis, particularly in Asia, where China in a period of 12 months has emerged the world’s second largest LNG importer and a high-potential market for FSRUs,” he said.

The LNG market continues to develop favorably. Backed by robust demand growth in Asia, volumes continue to increase, and upstream investors have again sanctioned new LNG production capacity. This will enable further expansion of LNG markets and should support FSRU demand, Höegh LNG’s statement reads.

Höegh LNG remains involved in the final selection stages for several prospective FSRU projects with scheduled start-ups expected by 2020-2021, and intends to take an opportunistic approach to the cyclically strong LNGC chartering market.