Golar LNG Q4 2012 results presentation
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Transcript of Golar LNG Q4 2012 results presentation
Fourth Quarter Results 2012 4th March 2013
This presentation contains forward-looking statements (as defined in Section 21E of the Securities
Exchange Act of 1934, as amended) which reflects management’s current expectations, estimates and
projections about its operations. All statements, other than statements of historical facts, that address
activities and events that will, should, could or may occur in the future are forward-looking statements.
Words such as “may,” “could,” “should,” “would,” “expect,” “plan,” “anticipate,” “intend,” “forecast,”
“believe,” “estimate,” “predict,” “propose,” “potential,” “continue” or the negative of these terms and similar
expressions are intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of
which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such forward-looking statements. You should not
place undue reliance on these forward-looking statements, which speak only as of the date of this
presentation. Unless legally required, Golar LNG undertakes no obligation to update publicly any forward-
looking statements whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-
looking statements are: changes in liquified natural gas (LNG) and floating storage and regasification unit
(FSRU) market trends, including charter rates; changes in the supply and demand for LNG; changes in
trading patterns that affect the opportunities for the profitable operation of LNG carriers and FSRUs;
changes in Golar LNG’s ability to retrofit vessels as FSRUs and the timing of the delivery and acceptance
of such retrofitted vessels; increases in costs; changes in the availability of vessels to purchase, the time it
takes to construct new vessels, or the vessels’ useful lives; and changes in the ability of Golar LNG to
obtain additional financing, in particular, currently, in connection with the turmoil in financial markets.
Unpredictable or unknown factors herein also could have material adverse effects on forward-looking
statements.
Forward Looking Statements
2
Agenda
1. Q4 Highlights
2. Q4 Financial Highlights
3. Business Update
4. Summary and Outlook
3
Q4 2012: Highlights & Subsequent Events
4
Q4 HIGHLIGHTS
Golar reports consolidated operating income of $52.9 million and net
income of $22.8million
Q4 numbers negatively impacted by commercial waiting time for the
Maria and scheduled docking of the Spirit
Company continues to assess whether Golar Partners can be
consolidated from 13 Dec 2012 (GMLP’s first AGM). Deconsolidation a
significant possibility
Golar secures five year charter with energy major for the Golar Maria
Golar Partners repays both Freeze ($222.3m) and Nusantara Regas Satu
($155m) vendor finance facilities using proceeds of $227m unsecured
bond and $155m syndicated debt facility
Q4 2012: Highlights & Subsequent Events
5
SUBSEQUENT EVENTS
Golar announces plans to launch new entity that will pursue floating
LNG projects
Golar Partners completes two further follow-on equity issues and uses
net proceeds of $310m to part fund its acquisition of the Golar Grand
($265m) and Golar Maria ($215m) from Golar LNG
Golar chosen as preferred bidder in Jordan FSRU project. TCP
negotiations to commence this quarter
Basis of financial reporting
6
Financial highlights and 4th quarter results are presented on a
consolidated basis
However, Company continues to assess whether consolidated-basis of
preparing financial reports is appropriate following GMLP’s first annual
meeting of unitholders when majority of independent directors were
elected
Main impact of deconsolidation are:
De-recognise assets and liabilities associated with GMLP
Book value assets will be replaced by fair value investment in GMLP
Future dropdowns will be at fair value
Share of ongoing profit or losses of GMLP will be recognised as part
of operating income
Casflows to the Company are not affected
Conclusion will be reflected in Form-20F, to be filed in April
Financial Highlights
(USD million)
Q4
2012
Q3
2012
Q2
2012
Q1
2012
Q4
2011
12m to
Dec-12
12m to
Dec-11
Net operating revenues
Operating expenses
EBITDA (ex. Commodities)
Net financial expenses
Net income / loss
Vessel numbers
Time charter equivalent rates ($ p/day)
Utilisation (%)
Dividend*
107.5
23.8
76.9
(13.4)
22.8
13
91,479
79.1%
0.425*
117.8
19.4
93.4
(11.0)
44.7
13
98,473
83.2%
0.425
103.9
17.8
79.9
(12.9)
35.4
13
97,118
89.7%
0.40
82.3
27.9
48.4
(8.8)
15.2
13
90,464
99.5%
0.35
79.6
17.6
52.7
(5.6)
17.2
13
86,521
100%
0.325
411.5
88.9
299.2
(46.0)
118.2
13
94,472
87.1%
1.6
293.8
62.9
203.9
(53.1)
46.7
13
87,659
97.1%
1.15
7
* Q3 & Q4 dividend paid together in December 2012
Note: Company continues to assess whether Golar Partners can be consolidated from 13 Dec 2012 (GMLP’s first AGM). In the event it is determined that GMLP is de-consolidated from the
Company’s results, the Q4 2012 numbers will be materially different from the financial statements reported in its Form 20-F.
Net Revenue, EBITDA & Dividends
8
Note: EBITDA excludes Golar Commodities and
any group gains/losses on sale of assets
USD’M USD
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0
20
40
60
80
100
120
140
Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412
Net Revenue
EBITDA
Dividend
Balance Sheet: Assets
(USD thousands)
2012
Dec 31 (unaudited)
2012
Sep 30 (unaudited)
2012
Jun 30 (unaudited)
2012
Mar 31 (unaudited)
2011
Dec 31 (audited)
Short term assets
Cash and cash equivalents
Restricted cash and short-term investments
Other current assets
Long term assets
Restricted cash (relates to leases)
Equity in net assets of non-consolidated
investees
Vessels and equipment, net
Newbuildings
Other long term assets
TOTAL ASSETS
491,041
32,451
13,633
190,523
5,592
1,766,394
435,859
38,655
2,974,148
118,464
45,787
16,412
189,409
5,677
1,791,169
347,437
28,234
2,542,589
77,489
37,420
15,691
186,812
5,455
1,800,453
300,382
27,322
2,451,024
107,868
43,895
16,099
189,438
5,390
1,770,477
296,578
24,080
2,453,825
66,913
28,012
11,041
185,270
22,529
1,704,907
190,100
23,862
2,232,634
9
Balance Sheet: Liabilities
(USD thousands)
2012
Dec 31 (unaudited)
2012
Sep 30 (unaudited)
2012
Jun 30 (unaudited)
2012
Mar 31 (unaudited)
2011
Dec 31 (audited)
Short term liabilities
Current portion of long term debt
Current portion of capital lease obligations
Other current liabilities
Long term liabilities
Long term debt
Long term debt to related parties
Long term capital lease obligations
Other long term liabilities
Golar LNG Ltd’s stockholders’ equity
Non-controlling interest
TOTAL LIABILITIES
Percentage of Fixed Interest Debt
79,222
5,837
166,751
1,130,203
-
406,534
108,128
896,757
180,716
2,974,148
126%
74,763
5,866
155,630
799,577
-
406,430
108,113
841,802
150,408
2,542,589
71,636
6,131
175,701
811,201
90,000
399,677
109,912
703,192
83,574
2,451,024
64,433
6,152
160,661
839,381
90,000
406,263
111,702
694,234
80,999
2,453,825
64,306
5,909
185,925
627,243
80,000
399,934
113,497
677,765
78,055
2,232,634
10
Statement of Cash Flows
11
(USD thousands)
2012
Oct-Dec (unaudited)
2012
Jul-Sep (unaudited)
2012
Jan-Dec (unaudited)
2011
Jan-Dec (audited)
OPERATING ACTIVITIES
Net Income before non-controlling interests
Depreciation and amortization
Drydocking expenditure
Gain on business acquisition
Other changes in operating assets and liabilities
Net cash provided by operating activities
INVESTING ACTIVITIES
Additions to newbuildings, vessels & equipment
Other investing activities
Net cash used in investing activities
FINANCING ACTIVITIES
Proceeds from long-term debt
Proceeds from long-term debt from related parties
Repayments of long-term debt from related parties
Other
Net cash provided by financing activity
Net increase / (decrease) in cash & cash equivalents Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
36,520
23,553
(1,475)
-
23,308
81,906
(95,076)
11,555
(83,521)
353,852
-
-
20,340
374,192
372,577
118,464
491,041
57,502
23,280
(2,339)
-
(9,675)
68,768
(65,865)
(6,780)
(72,645)
-
30,000
(120,000)
134,852
44,852
40,975
77,489
118,464
163,213
88,335
(22,228)
(4,084)
13,039
238,275
(343,147)
(24,131)
(367,278)
603,852
200,000
(280,000)
29,279
553,131
424,128
66,913
491,041
68,275
70,286
(19,773)
-
(2,180)
116,608
(289,182)
(9,462)
(298,644)
23,600
80,000
-
(19,368)
84,232
(97,804)
164,717
66,913
Financing of Capital Expenditure
12
Golar’s progress in financing its newbuild programme is proceeding according
to plan
As of year end, the remaining unpaid equity contribution totalled approximately
$500 million. Against this, Golar’s cash reserves stood at approximately $500m
(excluding cash from the Maria dropdown)
Deliveries will be funded by a combination of:
ECA funding – both Korean and Norwegian ECAs have been engaged and
the Company is working through a structure with them
Bank funding - the Company continues to discuss various financing
structures with banks
Capital market transactions (such as bonds) are also under consideration
Dropdowns to GMLP - to date dropdowns have generated approximately
$1 billion for the Company. With its newbuild deliveries and other existing
assets, the Company is confident of further future dropdowns as well as
increased dividends through its IDRs
With the above sources of funds at its disposal, the Company is expected to
continue its dividend growth without additional equity raising
Market Outlook
Despite operational disruptions to several existing liquefaction facilities, delays to the delivery of new
ones and reduced arbitration opportunities in Q3, spot rates never fell below $100kpd
Rates increased quickly in late November/December as the LNG spread widened
A shortage of available cargoes has however made it difficult to exploit the many arbitrage
opportunities and this has prevented rates returning to the historical highs reached earlier in the year
13
Historical Spot Charter Rates (2008 – 2012) 2012 Spot Charter Rates (USD,000/day) vs NBP/JKM Arbitrage Window ($/mmbtu)
Source: Poten & Partners
Market Outlook
Near-term rebalancing, long-term fundamentals remain attractive
Source: Wood Mackenzie
LNG Supply
14
LNG Shipping Requirement – February 2013 (Normalized 160,000m3 ships)
Source: Poten & Partners
Note: Does not include First Generation Undedicated tonnage
0
50
100
150
200
250
300
350
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
mm
tpa
SpeculativePossibleProbable DevelopmentUnder ConstructionOperational
Liquefaction Capacity by Project Development Status - mmtpa
2012 2013 2014 2015 2016 2017 2018
Operational 240.2 249.9 246.2 240.5 237.6 237.3 236.4
Under Construction 0.0 3.3 7.1 23.3 48.3 70.4 83.3
Probable Development 0.0 0.0 0.0 0.0 0.0 2.2 6.7
Possible 0.0 0.0 0.0 0.0 0.0 3.3 17.1
Speculative 0.0 0.0 0.0 0.0 0.0 0.6 2.3
Total 240.2 253.3 253.3 263.8 285.8 313.8 345.9
44%
Golar’s Existing Portfolio
15
* Purchased by Golar LNG Partners effective February 7 2013.
Positioned to Capture the Market
16
Capacity
Ship/Hull No: Built m3 Type
Hilli 1975 125,000 LNGC
Gandria 1977 126,000 LNGC
Golar Viking 2005 140,000 LNGC
Gimi 1976 125,000 LNGC
Seal 2013 160,000 LNGC
Celsius 2013 160,000 LNGC
Igloo 2013 170,000 FSRU
Seal 2013 160,000 LNGC
Penguin 2013 160,000 LNGC
Bear 2014 160,000 LNGC
Eskimo 2014 160,000 FSRU
Frost 2014 160,000 LNGC
Glacier 2014 162,000 LNGC
Snow 2014 160,000 LNGC
Kelvin 2014 162,000 LNGC
Ice 2014 160,000 LNGC
Tundra 2015 160,000 LNGC*
OPEN POSITIONS: LNG Carrier FSRU * Possible conversion to FSRU subject to GasAtacama sat isfying f inal contract condit ions
20152013 20142012
NEWBUILDS
17
Nusantara Regas Satu
FSRUs: Project Updates
Golar Spirit leaves drydock
Golar Named Preferred Bidder for Jordan FSRU
If finalized project will be operational in 2H
2014 using Golar Hull 2024
Continued Growth of FSRU Franchise
Golar expects 1-2 more projects to make FID
in 1H 2013
Gas Atacama award subject to possible
extension of charterer conditions deadline
FSRU Market Continues to Mature
Most successful tenders are now for terms >5
years – No longer short term solution
Limited undedicated FSRU tonnage in market
Market will require new builds to satisfy future
demand
Golar is Uniquely Positioned to Capture
Opportunities in a Tight FSRU Market
Only FSRU available in 2013
Ability to build speculatively
Only company to have completed fast track
FSRU conversion projects
Floating Liquefaction
Significant interest from the market for fast
track modular liquefaction solution that is very
competitive with land based alternatives
FEED with Keppel is on schedule to be
completed by mid 2013
Construction time of less than 24 months once
initial FEED is completed
On going discussions with Douglas Channel
LNG in British Columbia, Canada
Conditionally awarded off take of project
on a joint and several basis with LNG
Partners
Several different commercial structures
being discussed
Projects in multiple countries in early stages of
development
Targeting both liquid and stranded natural gas
markets
18
New Floating LNG Production Subsidiary
Golar plans to form a new subsidiary in
the 1H of 2013
Liquefaction subsidiary will own:
Gimi, Hilli and Gandria
All liquefaction technical and FEED
work
Projects under development
New subsidiary will be focused on:
Developing technical liquefaction
concepts and organizational
capabilities
Building and financing liquefaction
vessels
Promoting the development of
integrated midstream LNG projects
Creating new, high value markets for
LNGCs and FSRUs
19
Summary and Outlook
Assessing suitability of consolidating Golar LNG Partners results following
election of majority independent directors on December 13, 2012
Q4 Earnings impacted by disruptions in production capacity (resulting in
commercial waiting time on Golar Maria) and schedule drydocking of Spirit
Financing of newbuild orders on track – cash on hand to fund anticipated
equity portion. Active discussions on going for attractive debt instruments to
round out funding
Golar Maria dropped down to Golar LNG Partners – net proceeds of $110
mm
FSRU business progressing well – selected as preferred bidder for Jordan
FSRU project. Golar discussing options for converting additional newbuild
carriers to FSRU’s
FLNGV FEED work progressing on time and budget – completion scheduled
for mid 2013 with anticipation of a 24 month project execution schedule
Golar to launch new entity for pursuing floating LNG production and other
related midstream projects
20