HAMILTON, BERMUDA--(Marketwired - May 30, 2013) -
Highlights
* Golar LNG Partners reports net income attributable to unit holders of $30.3 million and operating income of $45.2 million for the first quarter of 2013
* Generated distributable cash flow of $27.6 million for the first quarter of 2013
* Declared increased distribution of $0.515 per unit for the first quarter of 2013
* Completed third follow-on offering raising net proceeds of approximately $130 million
* Completion of acquisition of interests in the company that owns and operates the LNG carrier Golar Maria
* Completed first drydock of the Golar Spirit since its 2008 FSRU retrofit
Subsequent events
* Golar Mazo drydock completed. Golar Winter and Methane Princess drydockings commenced
* Required modifications for Golar Winter relocation underway
Financial Results Overview
Golar LNG Partners L.P. ("Golar Partners" or the "Partnership") reports net income attributable to unit holders of $30.3 million and operating income of $45.2 million for the first quarter of 2013 ("the first quarter"), as compared to net income attributable to unit holders of $24.3 million and operating profit of $34.9 million for the first quarter of 2012(1).
There was a significant improvement in operating results for the first quarter of 2013 compared to the same period in 2012 due largely to the contribution of the NR Satu. This is because the NR Satu was on hire throughout the first quarter of 2013 but was in lay up before undergoing its conversion to an FSRU during the first quarter of 2012 and, therefore, not generating revenues. This also reflects the contribution of Golar Maria which was acquired by the Partnership on February 7, 2013. The improvement is partially offset by a reduction in revenues due to the ongoing but scheduled drydocking of the Golar Spirit. The Golar Spirit was offhire from December 11, 2012 to February 26, 2013, when the vessel undertook its first drydock as an FSRU since 2008. This is not however, expected to be indicative of future drydock offhire time for this FSRU or any of the others in the fleet.
(1)Following the acquisition of the Golar Grand and NR Satu from Golar, the comparative results for the first quarter ended 2012 assume that the Golar Grand and NR Satu were wholly owned by the Partnership for the entire period that the vessels have been under the common control of Golar.
Operating results for the first quarter of 2013 are slightly lower than the fourth quarter of 2012 mainly due to more offhire days for the Golar Spirit in the first quarter of 2013. The Golar Grand incurred a few days unplanned offhire in the first quarter of 2013 but all other vessels operated well throughout the quarter with overall utilization at 99 per cent.
The Golar Mazo completed its drydock at the beginning of the second quarter of 2013 without incurring offhire time due to the time allowance for drydocking provided by the charter. The Golar Winter commenced its drydock early in the second quarter and is expected to be offhire for between five and six weeks. The Golar Winter drydock was originally expected to commence in the first quarter. Following completion of the agreed modification work to Golar Winter, which is being carried out in conjunction with its drydocking, Golar Partners will receive approximately $24 million in additional revenue evenly over the remaining term of the contract (eleven years) commencing in the third quarter of 2013. This is before the effect of rate escalation as provided for in the time charter. Drydocking of the Methane Princess commenced during the last week of May 2013 and is expected to take approximately three weeks. Upon completion early in the third quarter, the 2013 program of drydockings will be complete. The Partnership does not anticipate a repeat of such an intensive program of drydockings before 2018.
Net interest expenses increased to $10.1 million for the first quarter of 2013 compared to $7.1 million for the same period in 2012. This is principally due to additional interest cost associated with the $155 million term loan with a group of banks. Compared to the net interest expense in fourth quarter of 2012 of $10.7 million, net interest expenses is lower by $0.6 million due to the NR Satu vendor loan having been refinanced by cheaper bank debt.
Other financial items for the first quarter of 2013 is a gain of $1.1 million compared with a loss of $1.1 million in the first quarter of 2012. This is mainly due to a net foreign currency gain on the Golar Winter and Methane Princess leases of $1.4 million in the first quarter of 2013 compared to a loss of $0.4 million in the first quarter of 2012 as a result of the appreciation of the U.S. dollar against the British Pound in the first quarter of 2013. Compared to other financial items in the fourth quarter of 2012 of a loss of $0.5 million, other financial items improved in the first quarter of 2013 also mainly as a result of the appreciation of the U.S. dollar against the British Pound and its impact on the Golar Winter and Methane Princess leases.
During the period from the IPO of Golar Partners in April 2011 until the time of the Partnership's first annual general meeting ("AGM") on December 13, 2012, Golar LNG Limited ("Golar" or "Golar LNG") retained the sole power to appoint, remove and replace all members of the Partnership's board of directors. From the first AGM four of the seven board members became electable by the common unitholders and accordingly, from this date, Golar no longer retains the power to control the board of directors and, hence, the Partnership. As a result, the Partnership is no longer considered to be under common control with Golar and as a consequence, commencing with the Golar Maria acquisition, the Partnership will no longer account for vessel acquisitions from Golar as a transfer of equity interests between entities under common control. From December 13, 2012, Golar Partners will therefore not restate comparatives for the historical results of acquisitions and will record acquisitions at fair value rather than book value.
The Partnership's Distributable Cash Flow(2) for the first quarter of 2013 was $27.6 million as compared to $22.4 million in the fourth quarter of 2012. The amount in the fourth quarter of 2012 is after adjustments to remove the Golar Grand results prior to its actual acquisition date. The increase in the first quarter is also due to the contribution of the Golar Maria from February 7, 2013.
(2)Distributable cash flow is a non-GAAP financial measure used by investors to measure the performance of master limited partnerships. Please see Appendix A for a reconciliation to the most directly comparable GAAP financial measure.
On April 29, 2013, Golar Partners declared an increased distribution for the first quarter of 2013 of $0.515 per unit. This represented a 3.0% increase from the fourth quarter of 2012 and reflected the full accretive value of the acquisition of the Golar Maria. The dividend was paid on May 16, 2013.
Follow-on Equity Offering
In February 2013, the Partnership completed its third follow-on offering selling a total of 3,900,000 common units, representing limited partner interests, at a price of $29.74 per common unit. In addition, Golar GP LLC, the Partnership's general partner, contributed approximately $2.6 million to the Partnership to maintain its 2.0% general partner interest. Simultaneously, the Partnership also closed a private placement of 416,947 common units to Golar at a price of $29.74 per common unit. The Partnership's total combined net proceeds amounted to approximately $130 million.
Acquisition
LNG carrier Golar Maria
In February 2013, the Partnership completed its acquisition of interests in the company that owns and operates the LNG carrier, the Golar Maria, from Golar LNG for a purchase price of $215 million. The Golar Maria was delivered to its current charterer, LNG Shipping S.p.A. ("LNG Shipping"), a subsidiary of Eni S.p.A in November 2012 under a charter with an initial term expiring in December 2017. The acquisition is expected to generate annual revenues between $28 million and $29 million and annual net cash from operations (before the deduction of interest costs) between $22 million and $24 million during the term of its charter with LNG Shipping.
The Partnership financed the acquisition of the Golar Maria by assuming the debt on the vessel amounting to approximately $89 million and the remainder from the net proceeds of its equity offering that completed in February 2013.
Financing and Liquidity
As of March 31, 2013 the Partnership had cash and cash equivalents of $33.0 million and undrawn revolving credit facilities of $40 million. Total debt and capital lease obligations net of restricted cash was $978.4 million as of March 31, 2013.
Based on the above debt amount and annualized(3) first quarter 2013 adjusted EBITDA(4 )Golar Partners has a debt to adjusted EBITDA multiple of 4.2 times.
In February 2013, the Partnership entered into interest rate swaps to fix the LIBOR interest rate on a principal amount of $122.5 million in connection with the NR Satu financing at an average annual rate of 1.27%. As of March 31, 2013, Golar Partners had interest rate swaps with a notional outstanding value of $920.9 million (including swaps of notional amount of $227.2 million in connection with the Partnership's bonds) representing approximately 94.1% of total debt and capital lease obligations, net of restricted cash. The average fixed interest rate of swaps related to bank debt and capital lease obligations is approximately 2.4%. Average bank margins paid on outstanding bank debt in addition to LIBOR or fixed swap rates are approximately 1.74%. However, the all in rate of interest payable on the Partnership's bonds is 6.485%.
(3)Annualized means the figure for the quarter multiplied by 4.
(4)Adjusted EBITDA: Earnings before interest, other financial items, taxes, non-controlling interest, depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure used by investors to measure our performance. Please see Appendix A for a reconciliation to the most directly comparable GAAP financial measure.
Outlook
Following the acquisition of Golar Maria in the first quarter the Partnership has increased its distributions to $0.515 per quarter or approximately 3%.
There are significant medium term opportunities for growth for Golar Partners from Golar LNG's new building fleet and projects such as the Jordanian FSRU project. Golar LNG also announced today their participation in the Douglas Channel LNG project, where Golar will have the opportunity to provide shipping to the project, which could provide growth opportunities for Golar Partners. The Board is however also focused on further growth in the short term in order to maintain Golar Partners year on year high level of distribution growth. This could potentially come from contracted vessels from Golar LNG's new buildings delivering in 2013.
Second quarter 2013 operating results will be positively impacted by a full quarter's contribution from the Golar Maria but will also reflect offhire related to the Golar Winter drydock and modification and the Methane Princess drydock. The rate increase in connection with the Golar Winter modification work will commence in the third quarter of 2013.
Whilst the short-term LNG shipping market has softened somewhat, market fundamentals remain strong with growing production levels and increased shipping and infrastructure requirements in the medium term.
The Board is confident that Golar Partners can continue to significantly grow its earnings and distributions over the long-term.
May 30, 2013
Golar LNG Partners L.P.
Hamilton, Bermuda.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
Golar LNG Partners LP Q1 Results 2013: http://hugin.info/147317/R/1705908/564392.pdf
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Source: Golar LNG Partners L.P. via Thomson Reuters ONE
[HUG#1705908]
Questions should be directed to: C/o Golar Management Ltd +44 207 063 7900 Brian Tienzo or Graham Robjohns
