NORWAY--(Marketwire - Aug 23, 2012) -
* Golar LNG Partners reports net income attributable to unit holders of
$19.8 million and operating income of $33.0 million for the second
quarter of 2012
* Generated distributable cash flow of $20.2 million for the second
quarter of 2012
* Dividend increased to $0.44 per unit for the second quarter of 2012
* Successfully completed first public follow-on equity offering
raising total net proceeds of $223 million
* Completion of acquisition of interests in the companies that own
and operate the floating storage and regasification unit ("FSRU")
Nusantara Regas Satu.
Financial Results Overview
Golar LNG Partners L.P ("Golar Partners" or the "Partnership")
reports net income attributable to unit holders of $19.8 million and
operating income of $33.0 million for the second quarter of 2012, as
compared to $18.2 million and $31.9 million, respectively for the second
quarter of 2011.
Operating results for the second quarter of 2012 improved compared to the
same period in 2011 due largely to lower operating costs offset in part
by higher administrative expenses. All vessels operated well throughout
the quarter with 100 per cent utilization.
Net interest expenses increased to $7.8 million for the second quarter of
2012 compared to $3.8 million for the same period in 2011. This is
principally due to additional interest cost associated with the $222
million loan from Golar LNG Limited ("Golar") in connection with the
acquisition of the Golar Freeze.
Other financial items decreased by $4.7 million to a loss of $2.5
million for the second quarter of 2012 compared to the same period in
2011. The variance mainly relates to the changes in non-cash mark-to-market
valuations of financial derivative instruments, principally interest rate
swaps that are hedges against future interest rate movements.
The Partnership's Distributable Cash Flow for the second quarter of
2012 was $20.2 million as compared to $19.0 million in the first quarter
of 2012. This improvement is mainly due to the reduction in operating
costs in the second quarter of 2012 compared to the first quarter
offset in part by higher administrative expenses. Operating costs were
higher in the first quarter of 2012 partly as a result of annual
scheduled maintenance work on the two FSRU
vessels operating in Brazil.
Golar Partners declared an increased dividend for the second quarter of
$0.44 per unit, representing a 2.3% increase from the first quarter
of 2012. The dividend was paid on August 15, 2012.
Follow-on Equity Offering
In July 2012, the Partnership closed a follow on public offering
(the "Offering") of 5,500,000 common units representing limited partner
interests at a price of $30.95 per common unit. Additionally, the
Underwriters exercised in full their option to purchase an additional
825,000 common units in the Offering. The total number of common units
sold in the Offering was therefore 6,325,000 and the net public proceeds
raised was $188 million. Golar GP LLC, the Partnership's general
partner, contributed a further $4.6 million to the Partnership to
maintain its 2.0% general partner interest in the Partnership. The
Partnership also closed a private placement of 969,305 common units to
at a price of $30.95 per common unit.
Floating Storage and Regasification Unit Nusantara Regas Satu (formerly
In July 2012, the Partnership completed its acquisition of interests
in the companies that own and operate the floating storage and
regasification unit ("FSRU") Nusantara Regas Satu ("NR Satu") from Golar
for a purchase price of $385 million. The vessel left the shipyard,
following its FSRU retrofit, in April 2012 and was delivered to its
charterers, Nusantara Regas, in early May 2012. Upon delivery, the NR Satu
began operating under a charter with an initial term expiring at the
end of 2022. Acceptance and delivery tests were successfully
completed in July 2012. The FSRU is expected to contribute annual net
cash from operations (before deduction of interest cost) of approximately
$42m-$44m during the life of its charter.
The Partnership financed the acquisition of NR Satu with the $223
million in total net proceeds of its recent equity offering, cash on hand
of $7 million and vendor financing from Golar in the amount of $155
million. The Partnership expects to refinance the loan from Golar with a
bank financing during the third quarter of 2012.
Potential future growth opportunities
The Board believes that Golar Partners has significant further potential
growth opportunities; in particular with regards to the possible
acquisition of additional assets from Golar. Golar has two modern LNG
carriers that are due for
re-contracting within the next nine months and a fleet of eleven
newbuild LNG carriers and two FSRU's with delivery dates commencing in
2013. Given the tight shipping market and strong market fundamentals Golar
Partners is optimistic that further acquisition candidates will materialise
within the next twelve months.
In addition there are positive developments in the FSRU market. On July 5,
2012 Golar announced that it had been awarded the Gas Atacama Mejillones
Seaport's FSRU Project ("Gas Atacama"). The initial term of the contract,
which is subject to certain Charterer conditions being met by the end of
2012, is for 15 or 20 years and is expected to generate an average
annual earnings before interest, tax, depreciation and amortization of
approximately US$47-US$48 million. On top of the initial term, Gas Atacama
has three five-year contract extension options. Subject to the conditions
being met, the FSRU is expected to be delivered to the project in the
fourth quarter of 2015.
Financing and Liquidity
As of June 30, 2012 the Partnership had cash and cash equivalents of
$47.1 million and undrawn revolving credit facilities of $40 million.
Total debt and capital lease obligations net of restricted cash was $701
million as of June 30, 2012.
Based on the above debt amount and annualized second quarter 2012
adjusted EBITDA Golar Partners has a debt to adjusted EBITDA multiple of
As of June 30, 2012, Golar Partners had interest rate swaps with a
notional outstanding value of $454 million representing approximately 95%
of senior bank debt and capital lease obligations, net of restricted
cash. The average fixed interest rate of these swaps is approximately
2.7%. Average margins paid on outstanding debt in addition to the
interest rate are approximately 1.5%. The fixed rate of interest paid on
the $222 million Golar LNG loan is 6.75%.
The acquisition of NR Satu represents the Partnership's second
accretive acquisition. As a result of this acquisition, Golar
Partners' management recommended to the Board an increase in distribution
of 10.5% to $0.475 per unit effective for the quarter ended September
30, 2012. This would represent an increase in the Partnership's unit
distribution of 23% since its initial public offering.
Following the acquisition, the Partnership's contracted revenue backlog
stands at approximately $2.3 billion and its average contract term is
approximately 9 years.
LNG production capacity is expected to grow by in excess of 6% a year
through to 2017 and at a likely faster rate to the end of the decade. .
This could mean a requirement for in excess of 180 new LNG carriers by
2020. There are currently 75 LNG carriers on order and 349 vessels in
the existing fleet (excluding FSRU's). Of the existing fleet 46 vessels are
more than 30 years old.
The Board is pleased with the development of Golar Partners and
its two accretive acquisitions since its IPO in April 2011. During this
time market fundamentals have strengthened and the fleet of potential
dropdown candidates from Golar has increased with seven further vessel
orders in addition to the fleet of seven existing operational vessels
and six newbuildings. The Board is optimistic that Golar Partners can
continue its high growth rate and thereby continue to increase
distributions over the long-term.
August 23, 2012
Golar LNG Partners L.P.
Questions should be directed to:
C/o Golar Management Ltd - +44 207 063 7900
Brian Tienzo or Graham Robjohns
 Following the acquisition of the Golar Freeze from Golar, the
comparative results for the second quarter of 2011 assume that the Golar
Freeze was wholly owned by the Partnership for the entire period that the
vessel has been under the common control of Golar.
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
 Annualized means the year-to-date figure divided by the number of
quarters to date multiplied by 4.
 Adjusted EBITDA: Earnings before interest, other financial items,
non-controlling interest, depreciation and amortization. Adjusted EBITDA is
non-GAAP financial measure used by investors to measure our performance.
Please see Appendix A for a reconciliation to the most directly comparable
GAAP financial measure.
Golar LNG Partners LP Results Q2 2012:
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Source: Golar LNG Partners L.P. via Thomson Reuters ONE