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01/10 00:30
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: while there's a strong backlog and liquidity position, financial metrics like net income and EBITDA have declined. The Q&A indicates interest in longer-term charters and potential market opportunities, but also highlights geopolitical and economic pressures. The share repurchase program is a positive factor, but increased expenses and financial risks temper optimism. Overall, the neutral sentiment reflects balanced positive and negative factors, with no clear catalyst for significant stock movement.
Total Operating Revenue $85.5 million, up from $84.6 million in Q4, primarily driven by higher revenue from the newbuild GAIL Sagar and increased on-hire days for the Kool Tiger.
Adjusted EBITDA $53.4 million, down from $55.3 million in Q4, due to increased vessel operating and voyage-related expenses associated with the newbuild delivery.
Average TCE Rate $70,600 per day, down from $73,900 in Q4, reflecting off-hire periods related to repositioning redelivered vessels and moving the newbuild GAIL Sagar.
Operating Income $34.6 million, down $3.9 million from Q4, driven by higher time and voyage charter revenues offset by increased positioning expenses and vessel operating costs.
Net Income $9.1 million, down from $29.4 million in Q4, due to lower operating income, $2.8 million in interest expenses for the GAIL Sagar, and a $14.3 million swing in the fair value of mark-to-market swaps.
Average Vessel Operating Expenses $16,300 per day per vessel, down from approximately $17,600 per day a year ago, due to successful completion of dry docks and performance upgrades.
Total Contracted Revenue Backlog Exceeds $1.6 billion, representing approximately 59 vessel years of backlog, with an average TCE rate of around $78,000 per day.
Liquidity Total available liquidity of $256 million, including $136 million in cash and cash equivalents and $120 million in undrawn capacity under the RRCF.
New Vessel Delivery: The GAIL Sagar was successfully delivered and repositioned to the U.S. Gulf for a 14 plus 2-year charter to GAIL at a cost of $1.9 million.
Newbuild Employment: The Kool Tiger has achieved near continuous employment in the spot market while pursuing long-term charter opportunities.
Market Dynamics: European storage levels have dropped to 34% in April, necessitating more gas replenishment and elevated gas prices.
LNG Supply Growth: LNG supply is projected to increase by over 20% from 2024 levels by the end of 2026, with significant new projects coming online.
Operational Efficiency: Average vessel operating expenses decreased to $16,300 per day per vessel, down from $17,600 per day a year ago.
Dry Dock Program: Completed 2 dry docks in the quarter, with 6 of the cycle's dry docks completed, leading to operational efficiencies.
Chartering Strategy: Pursuing a portfolio strategy to manage risk, capturing upside on a limited number of vessels while maintaining coverage.
Share Repurchase Program: Repurchased approximately 692,000 shares at an average price of $5.59 per share, reducing total share count by 1.3%.
Market Conditions: Market conditions have been challenging, with LNG carrier rates under pressure and not recovering significantly. This is attributed to a combination of factors including increased repositioning expenses and a cold winter affecting European storage levels.
Competitive Pressures: There is widespread uncertainty related to geopolitics and tariff policy, which adds hesitation for charterers and impacts trade patterns. This uncertainty may limit opportunities for securing long-term contracts.
Supply Chain Challenges: The company is facing challenges related to repositioning expenses, which have increased due to the delivery and repositioning of vessels. Additionally, the market is experiencing a significant influx of new LNG supply, which could further impact shipping rates.
Economic Factors: The current TTF price is significantly higher than last year, making LNG too expensive for many markets. This economic factor is contributing to a lack of demand from price-sensitive buyers in the East.
Operational Risks: The company has experienced increased vessel operating and voyage-related expenses associated with newbuild deliveries, which have impacted adjusted EBITDA.
Financial Risks: The company reported a significant swing in the fair value of mark-to-market swaps, which shifted from an unrealized gain to a loss, indicating potential financial volatility.
Strategic Initiatives: CoolCo is pursuing a portfolio strategy aimed at managing risk, capturing upside on a limited number of vessels while maintaining coverage to stagger exposure.
Dry Dock Program: The company has completed 6 of the dry docks planned for this cycle, with 2 remaining, which is expected to support EBITDA once completed.
Long-term Employment: CoolCo remains confident in securing long-term employment for the Kool Tiger at strong rates.
Asset Management: The company has demonstrated a disciplined approach to value creation through active asset management and selective asset acquisitions.
Revenue Guidance: Total operating revenues for Q1 were $85.5 million, exceeding previous guidance and reflecting a strong backlog of $1.6 billion.
EBITDA Expectations: Adjusted EBITDA for Q1 was $53.4 million, with expectations for continued operational efficiencies and economies of scale.
Contract Coverage: For the remainder of 2025, contract coverage is approximately 83%, with 72% coverage from today through the end of 2026.
Future Revenue Projections: LNG supply is projected to increase by over 20% from 2024 levels by the end of 2026, which is expected to create additional charter opportunities.
Liquidity Position: The company maintains total available liquidity of $256 million, supporting potential growth and opportunistic expansion.
Share Repurchase Program: As of May 16, the company had repurchased approximately 692,000 shares at an average price of $5.59 per share, reducing the total share count by 1.3%. The timing, pricing, and amount of any additional repurchases will depend on various factors, including market conditions and the company's financial position.
The earnings call summary shows strong financial performance with increased EBITDA and net income, and a successful share buyback program. The Q&A session revealed optimism in the charter market and asset management, though some details were vague. The positive sentiment from the liquefaction side and strategic asset management indicates potential growth. Despite minor declines in TCE, the overall financial health and strategic initiatives suggest a positive outlook. The company's liquidity position and operational efficiencies further support a positive sentiment.
The earnings call reveals mixed signals: while there's a strong backlog and liquidity position, financial metrics like net income and EBITDA have declined. The Q&A indicates interest in longer-term charters and potential market opportunities, but also highlights geopolitical and economic pressures. The share repurchase program is a positive factor, but increased expenses and financial risks temper optimism. Overall, the neutral sentiment reflects balanced positive and negative factors, with no clear catalyst for significant stock movement.
The earnings call summary reflects several challenges: the chartering market is at historic lows, supply chain issues, and geopolitical tensions. Although financial metrics like revenue and EBITDA have improved, the lack of dividend declaration and unclear guidance on vessel usage and charters are concerning. The Q&A section reveals management's evasive responses, particularly on layup costs and charter commitments, further adding to negative sentiment. Despite financial flexibility and a strong backlog, the market's current state and management's unclear communication suggest a negative stock price reaction in the short term.
The earnings call summary highlights several negative factors: reduced dividends, significant unrealized losses, and market oversupply impacting rates. Despite some positive elements like increased revenue and cash position, the Q&A session reveals concerns about market conditions and unclear strategies. The negative sentiment is further reinforced by regulatory challenges and economic factors, leading to a cautious outlook. The share buyback program is a positive, but overall, the sentiment leans negative due to financial risks and market volatility.
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