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01/11 03:22
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
EBITDA backlog $17 billion before commodity upside and inflationary adjustments. This is a result of the fully contracted fleet of 3 FLNGs on 20-year charter durations.
Cash position $1 billion. This is after concluding $1 billion in new corporate debt facilities and retiring a $190 million Norwegian bond maturity.
Net debt position $1.4 billion. This reflects the company's financial standing after the aforementioned debt activities.
Adjusted EBITDA (last 12 months) $221 million, mainly from the operations of the Hilli.
Quarterly adjusted EBITDA $83 million. This includes contributions of $51 million from Hilli and $48 million from Gimi, with some one-off expenses related to Gimi's start-up.
Net income (Q3 2025) $46 million, inclusive of $12 million of noncash items such as adjustments in the value of embedded TTF and Brent derivatives within the Hilli contract.
Operating revenues (Q3 2025) $123 million, reflecting the full operations of both Hilli and Gimi.
Dividend $0.25 per share for Q3 2025, with a record date of November 17 and payment scheduled for November 24.
Buyback program $150 million approved by the Board, in line with the company's track record of buying back over 9 million shares in the last 5 years.
EBITDA growth projection Set to quadruple by 2028, driven by the full delivery and operation of the 3 FLNG units.
Development of fourth FLNG unit: Significant technical and commercial progress made in deciding on size and design of the next units, with three growth designs (Mark 1, 2, and 3) ranging from 2.5 to 5.4 million tons of liquefaction capacity.
Hilli redeployment: Hilli will return to its original construction shipyard in Singapore for redeployment between contracts in Cameroon and Argentina.
Mark II FLNG: Final investment decision (FID) reached, with operations expected to commence in Argentina in 2028. $1 billion spent out of the $2.2 billion conversion budget.
Expansion in Argentina: Secured a 20-year charter for Mark II FLNG in Argentina, adding $8 billion to the EBITDA backlog.
Global FLNG market opportunity: Positioned as the only proven provider of FLNG as-a-service, with plans to grow the fleet and capitalize on the increasing adoption of FLNG technology globally.
EBITDA growth: Generated $221 million of adjusted EBITDA over the last 12 months, with EBITDA set to quadruple by 2028 as the fleet is fully delivered.
Operational efficiencies in Gimi: Gimi started operations under a 20-year contract with BP offshore Mauritania and Senegal, with daily production frequently exceeding base capacity.
Debt refinancing and liquidity: Secured $1.2 billion bank refinancing facility for Gimi and raised $500 million through U.S. bonds, improving liquidity to $1 billion.
Shareholder returns: Approved a $150 million buyback program and declared a $0.25 per share dividend, continuing a track record of $812 million returned to shareholders over the last 5 years.
Supply Chain Disruptions: Significant pressure on long lead items due to increased demand from AI data center boom in the U.S., leading to price and delivery challenges.
Economic Uncertainties: Potential cost pressures from inflationary adjustments and commodity price fluctuations, which could impact EBITDA projections.
Regulatory and Fiscal Risks: Despite strong contractual protections, operations in Argentina and other regions may face risks related to changes in fiscal or regulatory terms, even with safeguards in place.
Debt and Financial Risks: High net debt position of $1.4 billion and reliance on refinancing and debt optimization to fund growth, which could be impacted by market conditions.
Operational Risks: Challenges in stabilizing and optimizing operations for new units like Gimi, which incurred one-off expenses during start-up.
Competitive Pressures: Increased competition for gas turbines and other resources from tech companies like Google and Meta, which could impact project timelines and costs.
Development of Fourth FLNG Unit: The company is focused on developing its fourth FLNG unit, with significant technical and commercial progress made on size and design. A decision on the next FLNG project is expected in the coming months.
EBITDA Growth: EBITDA generation is set to quadruple by 2028 as the existing fleet is fully delivered.
Earnings Visibility: Earnings visibility for all assets extends through 2045 and beyond, with a total earnings backlog of $17 billion before commodity upside and inflationary adjustments.
Mark II Project Timeline: The Mark II project is on schedule for delivery in Q4 2027, with operations expected to commence in Argentina during 2028.
Future FLNG Projects: The company plans to order long lead items for the fourth FLNG unit imminently and expects to decide on the design in the coming months. Construction timelines for new units range from 36 to 48 months depending on the design.
Market Opportunity: The company sees strong growth potential in the FLNG industry, with increasing adoption of FLNG technology as a cost-effective solution for monetizing stranded and associated gas resources.
Commodity Price Upside: Incremental free cash flow upside under the SESA charters in Argentina is estimated at approximately $100 million per year for every $1/MMBtu increase in FOB prices above $8/MMBtu.
Funding Growth: The company plans to use liquidity from debt financing proceeds to fund further FLNG growth, with potential to raise up to $3 billion from refinancing existing debt and new financings.
Shareholder Returns: The company plans to return most operating cash flow after debt service to shareholders, with a new $150 million buyback program approved.
Dividend Declaration: A dividend of $0.25 per share was declared for the quarter, with a record date of November 17 and payment scheduled for November 24.
Share Buyback Program: The Board approved a new $150 million buyback program. Over the last 5 years, the company has repurchased more than 9.3 million shares at an average price of $125 per share, totaling $800 million returned to shareholders, including dividends.
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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