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Golar LNG Ltd GLNG
Q2 2012 Earnings Call Transcript

Transcript Call Date 08/23/2012

Operator: Good day ladies and gentlemen and welcome to the Second Quarter 2012 Results Presentation Conference Call. For your information today's conference is being recorded. At this time I would like to turn the conference over to Mr. Brian Tienzo. Please go ahead sir.

Brian Tienzo - CFO: Thank you. Hello, everyone and welcome to Golar LNG second quarter results presentation. As the administrator said, my name is Brian Tienzo, and I will be going through with you the second quarter highlights, as well as the financial highlights. I am joined here today by our CEO Doug Arnell, who will take you through the business updates and the outlook section.

On that note let's turn now to Page 4 to go through our second quarter highlights. Consolidated operating income increased by 108% over Q1 $58 million, alongside that we have net income increase of approximately 133% to $35.4 million. Quarterly cash dividend has been increased by 14% to $0.40 per share, that's a jump of $0.05 from Q1 and again reflects the Board's confidence in the Company's earnings capability. There were material increases in average time charter rates and virtual 100% utilization on chartered vessels. There is also a significant decrease in operating expenses of 36%.

As announced during the quarter, Nusantara Regas Satu commenced charter on May the 4th. The vessel FSRU then completed commissioning and was accepted on July 13. She was subsequently sold down to Golar LNG Partners on July 19. The FSRU has been working well since her completion.

Golar LNG successfully achieves an award for the Gas Atacama FSRU, and again, this meant the Company's profile is one of the leading FSRU solution providers in the FSRU projects. During Q3, Golar Maria was rechartered on a voyage basis at historically higher rates. We expect longer term contracts will be contemplated in the coming months.

In July, Golar LNG Partners raised net proceeds from public bond offering of approximately $188 million as part of the Nusantara Regas Satu dropdown.

Let's now turn over to Page to go through our financial highlights. As highlighted there, our net operating revenue for the quarter of $103 million, $104 million I should say is being increased from $82.3 million from Q1. This is a result of full contribution from Arctic, which has approximately $45 million in EBITDA, Grand which has $39 million approximately in EBITDA, and also paltry contributions from Viking and Khannur whose charters commenced during the quarter.

Although operating expenses, we mentioned last quarter that the level of which we reported $27.9 million was exceptionally high. That was particularly as a result of the reactivation cost we incurred for Hilli and Gandria in Q2. That level of expenses did not materialize and as a result our operating expenses for Q2 is at a much better level at $17.8 million.

Those two factors contributed to 65% increase in EBITDA from $48.4 million in Q1 to approximately $8 million in Q2. Our net financial expenses during Q2 have increased to $12.9 million, while $8.8 million in Q1. This is as a result of two factors we only incurred partial charge of convertible bond interest in Q1, whereas in Q2 that was a fourth quarter charge.

Read our Earnings Call Transcript disclaimer.
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