Golar LNG (US:GLNG)2020-08-13 22:07Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $67 million on revenue of $102 million for Q2 2020, driven by solid FLNG performance and better seasonal results in shipping [3][5] - Time charter earnings increased to $45,000 per day, representing an 88% rise over the same period last year [5] - The company experienced a net loss of $156 million, primarily due to a $135.9 million impairment on shares in Golar Partners [11][12] Business Line Data and Key Metrics Changes - FLNG operations maintained 100% commercial uptime with a stable EBITDA generation of $41 million [12] - Shipping revenues were $48 million, down due to typical seasonality but improved compared to Q2 2019 [12] - Golar Power received full capacity payments equating to $19 million in revenue, less operating costs [5] Market Data and Key Metrics Changes - The second quarter saw a decline in TFDE spot rates to around $30,000 per day, attributed to seasonal LNG demand decline and lower global economic activity due to COVID-19 [23] - The company expects Q3 TCE to be $35,000 per day, with lower LNG prices stimulating demand as a cleaner fuel alternative [26] Company Strategy and Development Direction - The company is focusing on derisking shipping and building backlog while progressing discussions for potential expansion and extension of FLNG operations [43] - Golar Power is advancing small-scale distribution projects in Brazil, with a significant MOU signed with Norsk Hydro to deliver gas to the Alunorte Alumina refinery [33][34] - The company aims to simplify its structure into four stand-alone legs: FSRU, FLNG, shipping, and Golar Power [56] Management's Comments on Operating Environment and Future Outlook - Management noted that the pace of conversations regarding FLNG projects remains steady despite market turmoil, with ongoing dialogues with potential customers [68] - The company anticipates that lower LNG prices will lead to increased demand for liquefaction and shipping in the future [27] - Management expressed confidence in achieving sufficient liquidity and cash flow for the remainder of 2020 through refinancing and operational cash generation [21] Other Important Information - The company has committed to refinancing a $150 million bilateral loan due in November 2020 and a $30 million outstanding margin loan due in August/September 2020 [18] - The company is exploring international opportunities for replicating its Brazilian model, particularly in Southeast Asia and West Africa [59] Q&A Session Summary Question: What are the strategic options for the company? - Management indicated that the Board has approved the examination of a range of strategic options, with a focus on simplifying the group into four stand-alone legs [54][56] Question: How does the company plan to replicate its success in Brazil in other regions? - Management highlighted the importance of partnering with experienced local players and identified Southeast Asia and West Africa as potential areas for development [59] Question: What are the CapEx requirements and cash flow generation potential for Golar Power? - Management stated that detailed CapEx figures will be announced upon taking FID on certain projects, but emphasized that merchant power generation will not require additional CapEx [64][65] Question: What is the status of FLNG projects and discussions with potential customers? - Management described the pace of conversations as steady, with ongoing dialogues despite low LNG prices, and expressed confidence in the competitiveness of their liquefaction projects [68][70] Question: What are the hurdles for converting MOUs into contracts? - Management noted that the final investment decision for Barcarena is contingent on obtaining necessary permits and regulatory approvals, while small-scale contracts are progressing with various customers [80]