Golar LNG Partners L.P.

August 18, 2011 09:03 ET

GOLAR LNG PARTNERS LP - INTERIM RESULTS FOR THE PERIOD ENDED JUNE 30, 2011

HAMILTON, BERMUDA--(Marketwire - Aug 18, 2011) -


EARNINGS RELEASE - INTERIM RESULTS FOR THE PERIOD ENDED JUNE 30, 2011

Highlights

  * Golar LNG Partners L.P. reports results for its first quarter after
    successfully completing its initial public offering ("IPO")
    in April 2011
  * Net income attributable to unit holders of $13.1 million and operating
    income of $25.4 million for the second quarter of 2011
  * Generated distributable cash flow of $18.2 million for the second
    quarter of 2011
  * Declared dividend for the second quarter of $0.385 per unit ($0.3342
    per unit on a pro-rata basis from the closing of the IPO through
    June 30, 2011) in line with forecasted distribution at IPO
  * Significant potential future growth outlook

Financial Results Overview

Golar LNG Partners L.P. ("Golar Partners" or the "Partnership) reports net income attributable to Golar Partners owners of $13.1 million and operating income of $25.4 million for the second quarter of 2011 (the "second quarter"), as compared to $12.2 million and $25.0 million for the same period in the prior year. Operating results improved slightly mainly due to an increase in revenue as a result of higher charter rates due to inflation escalators contained within the charters, in particular the two floating storage and regasification units ("FSRUs") on charter to Petrobras, which both had bi-annual rate increases in April 2011 amounting to an approximate 5 per cent increase over the two year period. This revenue increase was partly offset by higher operating costs. However all vessels operated well throughout the quarter with virtually 100 per cent utilisation. Net financial expenses decreased to $9.4 million for the second quarter, compared to $10.1 million for the same period last year.

For accounting purposes, in accordance with U.S. GAAP, Golar Partners is required to recognize in the income statement market valuations of certain financial items. These include the change in the fair value of certain of its derivative instruments, principally interest rate swap derivatives, as well as the retranslation of long-term lease balances denominated in British Pounds and the valuation of related currency swaps. These gains or losses do not affect cash flow or the calculation of distributable cash flow. They are unrealized gains or losses included in the income statement and will only become realized if a derivative or a lease is terminated. Other Financial Items in both the second quarter of 2011 and of 2010 reflect such losses. In respect of interest rate swaps, the loss was $4.6 million in the second quarter of 2011 and $4.1 million in the second quarter of 2010. In respect of net currency retranslation and currency swaps, the unrealized loss was $0.5 million in the second quarter of 2011 and $1.3 million in the second quarter of 2010.

[1] Golar Partners generated strong distributable cash flow of $18.2 million for the second quarter.

On July 29, 2011, the Partnership declared a dividend for the second quarter of $0.385 per unit ($0.3342 per unit on a pro-rata basis from the closing of the IPO through June 30, 2011) in line with forecasted distribution at IPO.

Financing and Liquidity

On April 13, 2011, the IPO of 13.8 million common units (including 1.8 million units issued in respect of an over-allotment option) of Golar Partners was completed. The Partnership is listed on the NASDAQ stock exchange under the symbol "GMLP". As a result of the offering Golar LNG Limited's ownership of Golar Partners was reduced to approximately 65%. Golar Partners owns and operates a fleet of two LNG carriers and two FSRUs, all of which operate under long-term charters.

As at June 30, 2011, the Partnership had cash and cash equivalents of $45.4 million and undrawn revolving credit facilities of $20 million. Total debt and capital lease obligations, net of restricted cash, were $429 million as of June 30, 2011.

As at June 30, 2011, Golar Partners had interest rate swaps outstanding of $316 million, which included an additional $138 million of interest swap agreements entered into since the IPO. In July 2011, the Partnership entered into a further $50 million of interest swap agreements, increasing the total to $366 million. This represents 85% of debt and capital lease obligations, net of restricted cash, as of June 30, 2011. The average fixed interest rate of these swaps is 3.3%. Average margins paid on outstanding debt in addition to the interest rate are approximately 1.1%.

Outlook

The Board is pleased with the start up performance of Golar Partners, operations are running well and there has been some growth in operating income.

As part of the IPO, Golar Partners received an option to acquire two additional FSRUs, the Golar Freeze and the Khannur, both of which are subject to long-term contracts. The Golar Freeze is currently operating under a 10 year charter with Dubai Supply Authority and the Khannur is scheduled to commence its 11 year charter with Nusantara Regas (a joint venture Pertamina and Indonesian gas distributor PGN) in Indonesia in the first quarter of 2012.

Golar Partners also has the right to acquire any of Golar LNG Limited's LNG carriers and FSRUs that in the future obtain charters of greater than five years. Golar LNG has a significant fleet of LNG vessels in addition to the Golar Freeze and the Khannur; four existing modern LNG carriers, two older LNG carriers and a 50% share in a third, eight newbuild LNG carriers ordered and one newbuild FSRU ordered. It is anticipated that Golar LNG Limited will look to secure long-term contracts for a number of these vessels which would therefore provide further potential dropdown candidates for Golar Partners. In addition Golar Partners is looking at other interesting LNG investment opportunities outside of Golar LNG. The Board is confident that Golar Partners can, over the next three to five years, deliver solid growth for unit holders.

August 18, 2011
Golar LNG Partners L.P.
Hamilton, Bermuda.

[1] 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.

GOLAR LNG PARTNERS Q2 RESULTS 2011: http://hugin.info/147317/R/1539367/470438.pdf

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Source: Golar LNG Partners L.P. via Thomson Reuters ONE

[HUG#1539367]

Contact Information


  • Questions should be directed to:
    C/o Golar Management Ltd
    +44 207 063 7900
    Brian Tienzo
    or
    Graham Robjohns