Golar LNG Posts Bigger Loss in Q1, Expects Growth in FSRU Business

Image Courtesy: Golar

Due to slashed fleet utilization LNG shipping company Golar LNG reported a net loss of USD 80.1 million in the first quarter of 2016, widening further from USD 70.8 million reported in Q1 2015.

The company’s Q1 adjusted operating loss reached USD 41.2 million also sinking further from USD 31.6 million reported in 4Q of 2015.

Specifically, the fleet utilisation fell from 42% in 4Q 2015 to 24% in Q1, pushing down the company’s revenue from USD 20.1 million in the previous quarter to USD 16.6 million in Q1.

The company also reported an EBITDA loss of USD 21.7 million for Q1 of this year compared to loss of USD 12 million for Q4 of 2015.

Golar saw an increase in vessel operating expenses by USD 2.1 million, USD 1.7 million of which is due to a full quarter’s cost of the Golar Tundra, having been delivered in November 2015, and additional repairs and maintenance and storing up costs.

Earlier this month, the company completed the sale of the FSRU Golar Tundra to Golar LNG Partners LP for USD 300 million, generating additional USD 100 million of 2Q liquidity.

Golar Partners overall contribution to the company’s quarterly result was lower by USD 11.6 million compared to 4Q following a USD 40.4 million decrease in Golar Partner’s reported net income.

Moreover, Golar LNG refinanced in March this year its first newbuild LNG carrier Golar Seal releasing USD 48.7 million of additional liquidity.

When it comes to the shipping market, Golar says the pursuit of long-term charters is restricted by spot market that currently creates little incentive to secure long-term tonnage. However, there appear to be signs of increased shipping activity as a result of new production that commences in 2017 and 2018.

In response to the weak market and multiple FSRU opportunities, the company says it will “aggressively pursue” the FSRU market and will look to convert some of its newbuild TFDE carriers into FSRUs.

” While there appear to only be three uncommitted FSRU newbuild orders, of which Golar has one, there are some existing regasification vessels and a number of potential LNG carriers being promoted for conversion by their owners to meet the prospective FSRU project demand.  Golar is currently in serious discussions with various customers to provide bespoke carrier conversions,” the company said.

What is more, Golar anticipates that a final decision regarding its participation in Fortuna FLNG project will be taken within the next three months.

Finally, the company says its top priority is to complete and deliver its first GoFLNG unit to the CameronProject.

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