NEWS
Golar LNG posts loss on swaps, spot business
London, Aug 30 (LNG journal)
- Golar LNG, the time-charter and carrier leasing company, on Tuesday posted a second-quarter net loss of $4.4 million because of the impact of the revaluation of interest rate swaps and foreign exchange losses on company leases.
Golar, which operates 10 LNG carriers and is awaiting delivery of three others, said operating income for the quarter to June 30 was $11.6m compared with $18.3m in the first quarter and net income of $17.3m. Net income in the same quarter of 2004 was $19.2m.
Its main long-term customers include the UK's BG Group and the Indonesian state oil and gas company Petramina.
Golar also holds a 21.9 percent share in Korea Line Corp. It said this stake contributed net income for the three months to June 30 of $7.4m compared to $9.6m in the first quarter and $4.2m for the second-quarter of 2004.
“Continued weakness in the spot market has led to a fall in operating revenues for the second quarter of 2005 to $38.9m as compared to $44.2m for the first quarter of 2005, (and) $38.5m for the second quarter of 2004,” Golar said.
Average daily time charter equivalents (TCEs) were $41,200 for the second quarter of 2005 against last quarter's $50,600, and $55,150 for second quarter of 2004.
The average daily TCE has again been affected by commercial waiting time in respect of the Golar Winter, which traded for two months out of the quarter, and the Golar Frost and Golar Viking both of which were idle during the second quarter for all but a few days.
These three “spot” vessels participate in the Golar-Exmar joint arrangement together with one Exmar vessel, with net revenues pooled and shared between the two companies.
Exmar's vessel, the Excalibur, embarked on a short-term charter towards the end of June but was idle for the balance of the second quarter, Golar said.
Vessel operating expenses for the second quarter of 2005 were the same as the first quarter of 2005 at $9.6m ($8.3m for the second quarter of 2004). The increase over 2004 is attributable to the operating costs of the three new vessels delivered in 2004 and early 2005.
Administration costs were $3.5m for the quarter as compared to $3.2m last quarter and $1.9m for the second quarter of 2004.
Net interest expense for the second quarter of 2005 was $11.4m, which compares to $10.7m in the last quarter and $6.6m for the same period in 2004.
The increase over the last quarter is primarily due to higher levels of debt as a result of the refinancing in March offset by reduced margins, and generally higher interest rates. Interest expense and interest income includes $10.4m and $8.7m respectively relating to the company's lease finance transactions.
Other financial expenses for the second quarter of 2005 of $10.1m include a loss of $7.8m associated with the fair value of interest rate swaps, including the effect of an additional $155m of interest rate swaps entered into during the quarter. This compares to a gain of $6.4m last quarter ($9.9m gain for the second quarter of 2004).
Other financial items also include net foreign exchange translation and currency swap losses of $2.2m in respect of its leases during the second quarter of 2005, as compared to a $1.5m loss last quarter.
Loss per share for the quarter was $0.07 as compared to an earnings per share of $0.26 last quarter and $0.29 1 for the second quarter of 2004.
