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01/11 03:20
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call and Q&A highlight strong financial performance, growth strategies, and efficient operations. The company's backlog and EBITDA projections are robust, with potential upside from commodity prices. Management's focus on share buybacks and asset acquisitions demonstrates confidence in intrinsic value. While some uncertainties remain, such as market recognition and specific project details, the overall sentiment is positive, driven by strategic positioning, contract security, and future growth prospects.
Total Operating Revenues $75 million, with FLNG tariffs reaching $82 million in the quarter, a significant increase from the previous quarter due to Gimi COD on June 12.
Total EBITDA $49 million in Q2, positively impacted by Gimi COD. Total EBITDA for the last 12 months ended in Q2 stood at $208 million.
Net Income $31 million, inclusive of non-cash items such as adjustments in the value of embedded TTF and Brent derivatives within the Hilli contract, changes in interest rate swaps, and a $30 million gain recognized on day 1 after the start-up of Gimi's contract.
Cash Position Just under $900 million at the quarter end, significantly strengthened by a $575 million convertible bond issuance.
Net Debt Position Just under $1.2 billion at the end of the quarter.
Dividend Declared $0.25 per share for the quarter, with a record date of August 26 and payment scheduled for around September 4.
EBITDA Backlog $17 billion over the next 20 years, before further commodity upside and inflation adjustments.
FLNG Tariffs $82 million in the quarter, including realized gains from TTF and Brent-linked fees as well as all revenues under the Gimi contract.
Mark II FLNG: Secured a 20-year charter and final investment decision (FID). Conversion is 19% complete, with delivery scheduled for Q4 2027 and operations starting in 2028.
Hilli FLNG: Secured a 20-year redeployment charter in Argentina, adding $5.7 billion in EBITDA backlog. Delivered 137 cargoes since startup, exporting over 9.5 million tons of LNG.
Gimi FLNG: Reached commercial operations in June 2025. Conducting an appraisal period to maximize liquefaction capacity. Offloaded 8 cargoes since operations began.
Global FLNG Fleet: Golar remains the market leader in liquefaction capacity. The global fleet includes 7 units on water and 4 under construction. Golar plans to add a fourth unit, with potential for a fifth.
Argentina Market: Secured long-term contracts for Hilli and Mark II FLNG units, highlighting strong demand for FLNG solutions in the region.
Convertible Bond Issuance: Raised $575 million, increasing cash position to just under $900 million. Used $103 million to repurchase 2.5 million shares.
EBITDA Growth: Achieved $49 million in Q2 EBITDA, with a 4x growth expected by 2028 due to long-term contracts and operational expansions.
FLNG Growth Strategy: Focused on adding a fourth FLNG unit and potentially a fifth. Strategy includes securing shipyard agreements and design decisions by Q3 2025.
Cost Efficiency: FLNG solutions offer lower costs compared to land-based liquefaction, with a CapEx of $600 per ton versus double for land-based solutions.
Regulatory Approvals: The Mark II FLNG charter remains subject to regulatory approvals and customary conditions precedent, which could delay or impact the project timeline.
Refinancing Delays: The $1.2 billion Chinese sale leaseback refinancing facility has faced delays due to stakeholders outside of Golar's control, potentially impacting financial flexibility.
Commodity Price Volatility: Golar's contracts have significant exposure to commodity prices, such as Brent and TTF gas prices, which could lead to financial variability.
Supply Chain and Construction Risks: The construction and conversion of FLNG units involve long lead times for critical components and potential delays in shipyard schedules.
Geopolitical and Host Country Risks: Operations in regions like Argentina, Cameroon, and offshore Mauritania and Senegal expose Golar to geopolitical and host government risks, despite contractual buffers.
Economic Uncertainty: Global economic conditions and inflationary pressures could impact operational costs and financing terms for future projects.
Stakeholder Dependencies: Delays in stakeholder approvals and external dependencies, such as the Chinese refinancing facility, could hinder project execution and financial planning.
Future FLNG Growth: Golar plans to add a fourth FLNG unit and potentially a fifth unit, with the fourth unit expected to be ordered within Q3 2025. The company is progressing discussions with shipyards and expects to finalize design, size, and shipyard selection in the coming months. Financing for these units will be supported by proceeds from debt financing activities and balance sheet flexibility.
Mark II FLNG Project: The Mark II FLNG is under construction and is 19% complete. It is scheduled for delivery in Q4 2027 and will begin a 20-year operation in Argentina in 2028. Financing initiatives for the unit are progressing, with asset-level debt expected to be added in 2026.
Hilli Redeployment: The Hilli FLNG has secured a 20-year redeployment charter in Argentina, adding $5.7 billion in EBITDA backlog. A redeployment, upgrade, and life extension contract is expected to be concluded within Q3 2025.
Gimi FLNG Operations: The Gimi FLNG reached its commercial operations date in June 2025 and is conducting an appraisal period to maximize liquefaction capacity. The company is exploring alternative refinancing structures for the unit.
EBITDA Growth and Backlog: Golar's EBITDA backlog stands at $17 billion, with significant upside potential from commodity exposure. Fully delivered adjusted EBITDA is expected to grow more than 4x compared to the last 12 months' EBITDA.
LNG Market Trends: Global LNG supply is expected to grow by 40% by 2030, with the U.S. increasing its market share. Golar anticipates upward pressure on international LNG prices due to cost inflation and increased domestic demand in the U.S.
Dividend and Shareholder Returns: Golar plans to use free cash flow generation to significantly increase shareholder returns, including dividends and share buybacks, as fully delivered adjusted EBITDA grows.
Dividend Declaration: Declared a dividend of $0.25 per share for the quarter, with a record date of August 26 and payment scheduled for around September 4.
Historical Dividends and Buybacks: Over the past 4.5 years, the company has distributed $787 million in dividends, share, and asset buybacks. This includes buying back over 9.3 million shares at an average price of $125.
Future Dividend Plans: Plans to use free cash flow generation to significantly increase shareholder returns, including dividends, as EBITDA grows with the addition of new FLNG units.
Share Buyback Program: Repurchased 2.5 million shares for $103 million during the quarter at an average price of $41.09 per share.
Convertible Bond Issuance: Issued $575 million in convertible bonds, with proceeds partially used for share buybacks and to strengthen liquidity for future growth.
Future Shareholder Returns: Plans to allocate liquidity from debt financing to fund FLNG growth while using free cash flow for increased shareholder returns, including share buybacks.
The earnings call summary and Q&A indicate positive sentiment. Golar's strategic plan highlights significant growth prospects with additional FLNG units, a strong EBITDA backlog, and increased shareholder returns. The Q&A reveals analyst interest in these developments, with management addressing concerns effectively. Despite some uncertainties, such as competition and production increases, the overall outlook is optimistic with potential for stock price appreciation.
The earnings call and Q&A highlight strong financial performance, growth strategies, and efficient operations. The company's backlog and EBITDA projections are robust, with potential upside from commodity prices. Management's focus on share buybacks and asset acquisitions demonstrates confidence in intrinsic value. While some uncertainties remain, such as market recognition and specific project details, the overall sentiment is positive, driven by strategic positioning, contract security, and future growth prospects.
The earnings call presents a mixed picture. The company has a strong market position and future prospects with a large EBITDA backlog and new contracts. However, current financial performance is weak with a significant drop in EBITDA and potential supply chain challenges. Shareholder returns are stable with a declared dividend, but management's lack of clarity on strategic alternatives and asset valuation raises concerns. The Q&A session did not provide additional positive insights to offset these issues. Overall, the stock is likely to remain neutral over the next two weeks.
The earnings call summary indicates strong strategic positioning with a robust EBITDA backlog and competitive market strategies. The Q&A section reveals management's cautious optimism and strategic focus, with no major concerns raised. Dividend declarations and a strong cash position bolster shareholder confidence. Although there are supply chain and debt challenges, these are mitigated by clear long-term growth plans and strong market demand forecasts, leading to a positive sentiment.
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