UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT
OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange
Act of 1934
For the month of August 2009
Golar
LNG Limited
(Translation of registrants name into English)
Par-la-Ville
Place,
14 Par-la-Ville Road,
Hamilton,
HM 08,
Bermuda
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F
Form 20-F [X]
|
Form 40-F [ ]
|
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ]
|
No [X]
|
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-_____________________
Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 99.1 is a copy of the press release of Golar LNG Limited dated August 31, 2009.
Exhibit 99.1
SECOND QUARTER 2009 RESULTS
Highlights
| Golar LNG reports net income of $11.9 million and operating income of $1.9 million |
| Spot traded vessel earnings weak as anticipated, some signs of improvement now appearing |
| Restructuring and equity offering in respect of Golar LNG Energy completed post quarter end |
| Golar LNG and PTTEP sign agreements to jointly enter FEED studies in respect of an FLNG project located offshore North West Australia |
| Gladstone LNG project and various FSRU discussions continue to progress |
Financial Review
Golar LNG Limited (Golar or the Company) reports a net income of $11.9 million and operating income of $1.9 million for the three months ended June 30, 2009 (the second quarter). Net income has been positively impacted by other financial items gain of $24.8 million largely relating to non-cash interest rate and equity swap valuation gains.
Operating income is decreased from the first quarter of 2009 (the first quarter) mainly as a result of reduced revenue due to Golar Arctic and Ebisu being idle for virtually the entire quarter, offset to some extent by reduced operating expenses. Net income for the second quarter at $11.9 million is improved from the first quarter loss of $5.1 million largely as a result of other financial items gain of $24.8 million as noted above.
Results for the three months to June 30, 2009
Revenues in the second quarter were $46.8 million decreased from $52.5 million for the second quarter of 2008. Average utilisation decreased to 69% in the second quarter of 2009 from 78% for the same quarter in 2008. Second quarter average daily time charter equivalent rates (TCEs) in 2009 fell to $37,600 per day as compared to $39,900 per day for the second quarter of 2008. The Golar Spirit was on hire for the whole of the second quarter of 2009 but not for the second quarter of 2008 and the Khannur was drydocked in the second quarter of 2008 and there were no drydockings in the second quarter of 2009. However, these improvements in revenue in the second quarter of 2009 have been offset by the fact that; Golar Winter was not on hire for the second quarter of 2009, Golar Arctic was idle in 2009 but similar to Golar Winter on hire in 2008, the Golar Freeze completed its long-term charter at the end of May 2009 and a general decrease in earnings from vessels trading in the spot market in the second quarter of 2009 as compared to the second quarter of 2008.
Voyage expenses increased marginally from $10.4 million in the second quarter of 2008 to $11.3 million for the second quarter. Vessel operating expenses were lower at $14.0 million for the second quarter in 2009 as compared to $15.8 million for the second quarter of 2008 whilst administrative expenses for the second quarter in 2009 remained in line with the same quarter in the prior year at $4.5 million.
1
Net interest expense of $11.5 million for the quarter to June 30, 2009 is down from $12.8 million for the second quarter of 2008. The decrease is as a result of the reduction of interest rates in respect of floating rate debt not swapped to a fixed rate and due to slightly lower levels of debt.
Other financial items show a considerable gain in the second quarter of 2009 of $24.8 as opposed to $19.5 million for the same period in 2008. The increase is mainly attributable to increased gains in respect of mark-to-market gains on equity swaps, some of which were not in place for the second quarter of 2008. In addition gains in respect of foreign currency retranslations and mark-to-market gains on foreign currency forward contracts were increased partly offset by reduced interest rate swap mark-to-market gains.
Results for the six months to June 30, 2009
Golar reports net income of $6.8 million and operating income of $8.6 million for the six months ended June 30, 2009.
Revenues in the first six months were $100.7 million as compared to $111.2 million for the first six months of 2008. The average daily time charter equivalent rates (TCEs) also declined to $41,274 per day for the first six months of 2009 from $46,550 per day for the similar period in 2008 with the average utilisation of 74% and 85% respectively.
Voyage expenses increased to $22.7 million for the first six months of 2009 from $11.9 million for the first six months of 2008, largely due to the charter in expense related to Golar Frost and Ebisu. Ebisu was chartered in September 2008 and Golar Frost was sold and chartered back in July 2008.
Vessel operating expenses at $30.0 million for the first six months have decreased from $31.3 million for the same period in 2008. Administrative expenses were slightly less at $8.7 million as compared to $8.9 million for the first half of 2008.
Net interest expense for the first six months was $21.9 million down from $27.3 million for the first six months of 2008 quarter as a result of lower Libor interest rate in respect of floating rate debt.
Other financial items were a gain of $26.7 million in the first six months of 2009 as compared to a loss of $1.95 million for the same period of 2008. The gain resulted primarily from the non-cash gain on interest rate swap valuations.
Financing, corporate and other matters
In June 2009, the Company entered into a revolving credit facility with World Shipholding, the Companys major shareholder, to provide short-term bridge financing, please refer to note 3 for further information.
Consistent with the announcement made in Golar's first quarter report the Company recently announced that it had incorporated Golar LNG Energy Limited ("Energy") in Bermuda for the purpose of transferring the part of its asset portfolio not employed on long term charters. The transfer included the following assets and activities:
| the ownership of 4 modern LNG carriers ("Gracilis", "Grandis", "Granosa" and "Golar Arctic") |
| the ownership of 3 1970's built LNG carriers ("Khannur", "Gimi" and "Hilli") |
| a 50 % ownership interest in another 1970's build LNG carrier ("Gandria") |
| a 13,6 % ownership interest in the Australian listed company LNG Ltd. |
| Golar's current project portfolio |
| certain financial obligations, notably swap arrangements. |
In addition, Energy has acquired the subsidiary owning the 1970 built LNG carrier "Golar Freeze" which is scheduled to be converted to an FSRU vessel. The purchase of the "Golar Freeze" was financed by way of a
2
seller's credit. Golar has been granted an option to reacquire "Golar Freeze" from Energy when its conversion to FSRU vessel is completed. Energy will have an identical option to sell "Golar Freeze" to Golar. The price to be paid by Golar in this transaction shall equal the aggregate of the seller's credit and the conversion cost of the vessel.
Subsequent to the restructure Golar was pleased to announce that Energy had completed an equity offering. A total of 55 million shares (USD 110 million) were issued mainly to International and Norwegian institutional investors. Attached to the offering is a 'green shoe' option. The managers were therefore granted an over allotment option, exercisable for 30 days for an additional 5 million shares (USD 10 million). Energy shares are currently trading on the Oslo OTC market, but the process to move to a full listing on the Oslo Stock Exchange is well underway.
The underlying rationale for the restructuring was to create an aggressive, well funded high growth, mid stream LNG Company with a focus on regasification projects, liquefaction and transport and trading of LNG. The remaining Golar LNG business will have a low risk profile with a focus on long term charters. Golar will have a fleet of 5 LNG carriers (including "Golar Freeze") and a controlling interest in Energy
When Golar Freeze commences its charter in Q2 2010, assuming Golar effects its option to reacquire Golar Freeze, the Company will have five vessels (LNGCs and FSRUs) on long term charter agreements at attractive rates. The total contract value of these charters is approximately $1.9 billion and the five vessels will, when Golar Freeze commences its charter in 2010 have an EBITDA of approximately $1551 million per annum.
Based on current debt amortisation plus an assumed increase in debt associated with Golar Freeze to a level of approximately $125 million together with assumed rates of interest, the five ships will generate approximately $75 million2 per annum in free cash after debt service and net of minority interests once the Golar Freeze is on hire, which is expected to be in the second quarter of 2010.
It is the Companys intention to distribute the significant majority of its cash generation to shareholders by way of dividend. As noted above when Golar Freeze commences its charter in the second quarter of 2010, the five vessels will generate approximately $75 million in free cash flow after debt service. In 2013 the debt in respect of Golar Mazo will be fully paid down and the increase in free cash flow will be approximately $15 million p.a. (after minority interests). The Company expects dividend payments to commence from no later than the second quarter of 2010. The commencement of dividend payments will however be dependant, in particular, upon raising the required debt financing in respect of the Golar Freeze. Golar intends, in addition, to distribute some of its shares in Energy as a special dividend to shareholders in second half of 2009.
Operational Review
Shipping
Trading performance of the Companys vessels operating in the spot/short term market weakened over the quarter as was expected. Rates have been depressed due to a reduction in demand for LNG (especially in the Far East) and an oversupply of LNG Shipping tonnage due to project delays and LNG plant outages.
However, there are some demonstrable signs of improvement with a number of FOB cargoes soaking up spot market tonnage in the Atlantic basin, new LNG production ramping-up or coming to market over the next few months and increasing use of floating storage. This should ease the vessel over-supply, especially the growing disparity in demand for shipping between the East & West markets which has become evident over the last month or two. With an already limited amount of tradable tonnage in the West any vessels employed to load Atlantic Basin cargoes will change the scenery of the market and should provide (along
3
with Terminal compatibility issues and an increased need for economic and efficient vessels due to eroding commodity margins) an upward price push as we move into the Autumn and Winter period.
Indeed, two of the Companys vessels, Golar Arctic and Ebisu, have recently been fixed on short-term charters from mid-August after prolonged periods of idle time at rates above those seen in the second quarter.
The longer term LNG Shipping market is becoming interesting with Australian developments on both East and West coast leading the way and BG currently in the market for up to two vessels for between 2 and 8 years. Additionally there have been no orders so far this year for LNG tankers (and only six placed in 2008). Furthermore, only two tankers are scheduled for delivery in 2012 and there are indications are that some new supply projects are also considering employing existing tonnage rather than ordering new vessels.
Regasification
Positive progress continues on Golar's strategy to be a world leader in floating regasification solutions and the recent restructuring of the Company and establishment of Golar LNG Energy creates the platform to grow this business. Golar LNG Energy places a high priority on securing additional floating regasification commitments.
Outlook
Global market
inquiry for new floating regasification projects remains strong, particularly
in non-OECD countries. During 2Q09, Israel issued an Prequalification Document
(PQ) to be followed by an Invitation to Bid in 1Q10 for an offshore
LNG Receiving Terminal. Additionally, market reports suggest Indonesia and Uruguay
ITBs will follow in the coming months. In addition to formal tenders, Golar
LNG Energy is developing numerous other projects directly with interested parties.
Golar LNG Energy is aggressively pursuing new business and is well positioned to deliver 'fast track' projects to market. With new liquefaction plants now coming on-stream against weaker short and mid-term pricing fundamentals, new developers should have a 'window of opportunity' to fast track their projects.
Current projects
After departure from Keppel
shipyard in Singapore Golar Winter collected a cargo of LNG in Trinidad en-route
to Petrobrass Pecem Terminal, Brazil. Initial commissioning and testing
commenced in Pecem before the vessel departed for Petrobrass Rio Terminal
for a further period of testing. The vessel then left Rio and together with
Golar Spirit has split load a full cargo brought to Pecem by another LNG carrier.
Golar Winter is now returning to Rio to complete testing and commissioning in
September. During the testing period some minor modification work has been required
to the vessel and the vessel is expected to commence its long term charter agreement
in September.
Detailed engineering for the Golar Freeze FSRU project is now well advanced and the site team are now being mobilised to supervise the vessel conversion process at Keppel Shipyard. Construction of the regas-skids is well underway, and Keppel have commenced prefabrication for the conversion. Golar Freeze will enter the shipyard early September and is scheduled to commence operations with the Dubai Supply Authority in the second quarter of 2010.
Liquefaction
Gladstone Project
Good progress continues
to be made on the Gladstone LNG project. In addition to the milestones reported
in last quarters report the Company is encouraged by positive results
from technical reviews carried out by Foster Wheeler and SK Engineering of the
technology to be used in the project; good progress on final FEED; acceptance
of the membrane tank technology by the Queensland approving authorities and
progress towards the selection of an LNG industry experienced/proven Project
Management Consultant.
4
Golar has in parallel with the project development activity continued a dialogue with prospective LNG buyers. Discussions with the short listed buyers are progressing positively and the Company anticipates the satisfactory conclusion of an HOA in the fourth quarter.
PTTEP Floating LNG
Projects
Golar recently announced
that it had signed agreements to jointly enter into FEED (Front End Engineering
and Design) with PTTEP in relation to developing a floating LNG project
offshore North Western Australia in respect of the Coogee Resources oil and
gas fields recently acquired by PTTEP. Golars agreement with PTTEP
provides for an option for Golar to farm into the gas reserves held by PTTEP
resulting from its acquisition of Coogee Resources on a 50:50 basis.
The FEED study will involve the complete scope of the project including the development of the upstream gas fields as well as the floating liquefaction unit (FLNG unit). Both new buildings and conversion of existing assets will be considered for the FLNG unit. The FEED studies have commenced and the next milestone will be the completion of the PRE FEED studies in the first half of 2010.
In addition to the Coogee project Golar and PTTEP are also looking at other potential FLNG opportunities.
Market
The first half of 2009 has seen a significant amount of liquefaction plant outages. Although outages are a normal part of the commissioning process at new LNG trains, most of this years closures have been unscheduled and extended.
Recent closures have been seen at Sakhalin-T2, Tangguh T1 and Qatargas-2 T4. Snohvit is also planning another three-month outage from mid-August at the end of which the plant will be operating at full capacity. North West Shelf and Atlantic LNG also plan maintenance this quarter. The security situation continues to hamper output from Nigeria and in Algeria exports have also been reduced due to feed-gas supply problems
Nonetheless confidence remains high that these plants will resume capacity production in the near term and with new start-ups, further floating storage, new trade routes and diversions, which should all be positive for LNG Shipping and trading.
Additionally new start-ups continue to bring more product to the market with Sakhalin-2s 4.8 MTPA T2 now producing. The second 3.8 MTPA Tangguh train will begin operating in September and Yemen LNGs 3.35 MTPA Train 1 is undergoing commissioning. Further, Qatars Rasgas Train 6 officially started production in mid August and another 15 MTPA from Qatargas-2 T 5 and RasGas T7 is also due on line by end-year.
Outlook
Following the creation of Golar LNG Energy the mission of Golar LNG Limiteds has been reduced to the following objectives:
| Operate its five vessels in a safe, professional and cost efficient way. |
| Be an active shareholder and maximize the value of the Companys share holding in Golar LNG Energy |
| Organize the Companys financing with the purpose of optimising cash flow in order to be able to sustain the highest possible long-term dividend payment to shareholders. |
Whilst the short-term LNG shipping sector has been depressed during the first half of 2009 there are discernable signs of improvement and the overall outlook for the LNG sector looks positive. Spot vessel
5
earnings are expected to be somewhat improved in the third quarter. It is further anticipated that the utilisation of the LNG fleet will improve over the next three to five year period. Increased LNG production, lower vessel supply growth and a focus on clean cheap energy will be the major contributors.
The results for Q3 will influenced by a termination of the Companys equity swap in respect of Arrow Energy realising income of approximately $9 million, of which approximately $7.8 million will be booked as income in the third quarter of 2009.
The creation of Golar LNG Energy provides a platform for growth within the mid-stream of the LNG supply chain and Energy plans to aggressively pursue the development of its regasification and liquefaction projects as well as shipping and trading opportunities.
The creation of Energy has also paved the way for the transformation of Golar LNG Ltd, into a high paying dividend stock with significant growth opportunity linked to its investment as major shareholder in Golar LNG Energy.
Forward Looking Statements
This press release contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including examination of historical operating trends made by the management of Golar LNG. Although Golar LNG believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond its control, Golar LNG cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Included among the factors that, in the Company's view, could cause actual results to differ materially from the forward looking statements contained in this press release are the following: inability of the Company to obtain financing for the new building vessels at all or on favourable terms; changes in demand; a material decline or prolonged weakness in rates for LNG carriers; political events affecting production in areas in which natural gas is produced and demand for natural gas in areas to which our vessels deliver; changes in demand for natural gas generally or in particular regions; changes in the financial stability of our major customers; adoption of new rules and regulations applicable to LNG carriers and FSRUs; actions taken by regulatory authorities that may prohibit the access of LNG carriers or FSRUs to various ports; our inability to achieve successful utilisation of our expanded fleet and inability to expand beyond the carriage of LNG; our ability to complete on our restructuring plans; increases in costs including: crew wages, insurance, provisions, repairs and maintenance; changes in general domestic and international political conditions; the current turmoil in the global financial markets and deterioration thereof; changes in applicable maintenance or regulatory standards that could affect our anticipated dry-docking or maintenance and repair costs; our ability to timely complete our FSRU conversions; failure of shipyards to comply with delivery schedules on a timely basis and other factors listed from time to time in registration statements and reports that we have filed with or furnished to the Securities and Exchange Commission, including our Registration Statement on Form 20-F and subsequent announcements and reports.
Nothing contained in this press release shall constitute an offer of any securities for sale.
August 28, 2009
The Board of Directors
Golar LNG Limited
Hamilton, Bermuda
Questions should be directed to:
Golar Management Ltd -
+44 207 063 7900:
Graham Robjohns: Chief Financial Officer
6
Golar LNG Limited
SECOND QUARTER CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2009
|
2008
|
Condensed
Consolidated Income Statement
|
2009
|
2008
|
2008
|
||||||
Apr-Jun
|
Apr-Jun
|
(in
thousands of $, except per share data)
|
Jan-Jun
|
Jan-Jun
|
Jan-Dec
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Operating
revenues
|
|||||||||||
46,819 | 52,470 | Time charter revenues | 100,678 | 111,242 | 228,779 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
46,819 | 52,470 |
Total
operating revenues
|
100,678 | 111,242 | 228,779 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
- | - | Gain on sale of vessel/newbuilding | - | - | 78,108 | ||||||
Operating expenses | |||||||||||
13,977 | 15,826 | Vessel operating expenses | 30,042 | 31,284 | 61,868 | ||||||
11,293 | 10,365 | Voyage and charter-hire expenses | 22,695 | 11,906 | 33,126 | ||||||
4,461 | 4,469 | Administrative expenses | 8,738 | 8,971 | 17,815 | ||||||
15,146 | 14,634 | Depreciation and amortization | 30,636 | 30,372 | 62,005 | ||||||
- | (226 | ) | Gain on sale of long-lived asset | - | (226 | ) | (430 | ) | |||
- | 64 |
Impairment
of long-lived assets
|
- | 64 | 110 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
44,877 | 45,132 |
Total
operating expenses
|
92,111 | 82,371 | 174,494 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
1,942 | 7,338 |
Operating
income
|
8,567 | 28,871 | 132,393 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
Financial income (expenses) | |||||||||||
3,136 | 12,196 | Interest income | 7,793 | 24,722 | 45,828 | ||||||
(14,614 | ) | (24,959 | ) | Interest expense | (29,733 | ) | (52,067 | ) | (96,489 | ) | |
24,764 | 19,489 |
Other
financial items, net
|
26,712 | (1,949 | ) | (82,100 | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
13,286 | 6,726 |
Net
financial expenses
|
4,772 | (29,294 | ) | (132,761 | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity in net | |||||||||||
earnings of investees, income taxes | |||||||||||
15,228 | 14,064 | and minority interest | 13,339 | (423 | ) | (368 | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
(350 | ) | 120 | Income taxes | (591 | ) | 125 | (510 | ) | |||
(837 | ) | (24 | ) | Equity in net earnings of investees | (1,371 | ) | (289 | ) | (2,406 | ) | |
Net income attributable to non | |||||||||||
(2,171 | ) | (2,456 | ) | controlling interest | (4,627 | ) | (3,384 | ) | (6,705 | ) | |
- | - | Gain on sale of investee | - | - | - | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
11,870 | 11,704 | Net income/ (loss) | 6,750 | (3,971 | ) | (9,989 | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
Per common share amounts: | |||||||||||
$0.18 | $0.17 | (Loss) earnings - Basic | $(0.10 | ) | $(0.06 | ) | $(0.15 | ) |
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
7
Golar LNG Limited
SECOND QUARTER CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2009 |
2008
|
Statement
of Comprehensive Income
|
2009
|
2008
|
2008
|
||||||
Apr-Jun |
Apr-Jun
|
(in
thousands of $)
|
Jan-Jun
|
Jan-Jun
|
Jan-Dec
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
11,870 |
11,704
|
Net
(loss) income
|
6,750
|
(3,971
|
)
|
(9,989
|
)
|
||||
Other comprehensive (loss) income, net of tax: | |||||||||||
- | - | (Losses) gains associated with pensions | - | - | (1,821 | ) | |||||
- | 327 | Unrealized (losses) gains on marketable | - | (153 | ) | (399 | ) | ||||
securities held by the Company and investee | |||||||||||
- | - | Other-than-temporary impairment of available- | - | - | 399 | ||||||
for-sale securities reclassified to the income | |||||||||||
statement | |||||||||||
10,947 | - | Unrealized net loss on qualifying cash flow | 12,459 | - | (25,916 | ) | |||||
hedging instruments | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
10,947 | 327 |
Other
comprehensive income (loss)
|
12,459 | (153 | ) | (27,737 | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,817 | 12,031 | Comprehensive income (loss) | 19,209 | (4,124 | ) | (37,726 | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
8
Golar LNG Limited
SECOND QUARTER CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheet |
2009
|
2008
|
2008
|
|||
(in thousands of $) | Jun-30 | Jun-30 | Dec-31 | |||
|
|
|
|
|
|
|
ASSETS | ||||||
Current Assets | ||||||
Cash and cash equivalents | 58,412 | 72,055 | 56,114 | |||
Restricted cash and short-term investments | 49,144 | 54,868 | 60,352 | |||
Other Current Assets | 19,827 | 27,234 | 27,766 | |||
Amounts due from related parties | 684 | 281 | 538 | |||
Held for sale assets | ||||||
Vessel and equipment held for sale, net | - | 153,236 | - | |||
|
|
|
|
|
|
|
Total current assets | 128,067 | 307,674 | 144,770 | |||
Long-term assets | ||||||
Restricted cash | 618,506 | 753,009 | 557,052 | |||
Equity in net assets of non-consolidated investees | 30,529 | 17,461 | 30,924 | |||
Vessels and equipment, net | 1,566,208 | 1,501,414 | 1,561,313 | |||
Other long-term assets | 80,774 | 80,636 | 65,670 | |||
|
|
|
|
|
|
|
Total assets | 2,424,084 | 2,660,194 | 2,359,729 | |||
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY | ||||||
Current liabilities | ||||||
Current portion of long-term debt | 74,736 | 172,759 | 71,395 | |||
Current portion of obligations under capital leases | 7,809 | 5,819 | 6,006 | |||
Other current liabilities | 131,915 | 88,040 | 189,488 | |||
Amounts due to related parties | 196 | 269 | 140 | |||
|
|
|
|
|
|
|
Total current liabilities | 214,656 | 266,887 | 267,029 | |||
Long-term liabilities | ||||||
Long-term debt | 754,644 | 720,800 | 737,226 | |||
Long Term capital leases obligations | 860,751 | 1,021,393 | 784,421 | |||
Other long-term liabilities | 75,474 | 76,236 | 77,220 | |||
|
|
|
|
|
|
|
Total liabilities | 1,905,525 | 2,085,316 | 1,865,896 | |||
|
|
|
|
|
|
|
Commitments and contingencies (See Note 30) | ||||||
Total stockholders equity | 473,604 | 534,512 | 452,145 | |||
Non controlling interest | 44,955 | 40,366 | 41,688 | |||
|
|
|
|
|
|
|
Total liabilities and equity | 2,424,084 | 2,660,194 | 2,359,729 | |||
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
9
Golar LNG Limited
SECOND QUARTER CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2009
|
2008
|
STATEMENT
OF CASH FLOWS
|
2009
|
2008
|
2008
|
||||||
Apr-Jun
|
Apr-Jun
|
(in
thousands of $)
|
Jan-Jun
|
Jan-Jun
|
Jan-Dec
|
||||||
|
|
|
|
|
|
||||||
OPERATING
ACTIVITIES
|
|||||||||||
11,870 |
11,704
|
Net
income / (loss)
|
6,750
|
(3,971
|
)
|
(9,989
|
)
|
||||
Adjustments to reconcile net income/ (loss) to | |||||||||||
net cash provided by operating activities: | |||||||||||
15,146 | 14,634 | Depreciation and amortisation | 30,636 | 30,372 | 62,005 | ||||||
- | (226 | ) | Gain on sale of vessels/newbuildings | - | (226 | ) | (78,108 | ) | |||
321 | 323 | Amortisation of deferred charges | 642 | 670 | 2,773 | ||||||
- | - | Fixed rate debt settlement costs | - | - | 8,998 | ||||||
- | - | Gain on sale of long lived asset | - | - | (430 | ) | |||||
2,171 | 2,456 | Income attributable to minority interests | 4,627 | 3,383 | 6,705 | ||||||
Undistributed net earnings of non-consolidated | |||||||||||
836 | 24 | investee | 1,370 | 288 | 2,406 | ||||||
(95 | ) | (11,129 | ) | Drydocking expenditure | (229 | ) | (11,950 | ) | (19,598 | ) | |
628 | 788 | Stock-based compensation | 1,353 | 1,591 | 3,092 | ||||||
Other than temporary impairment of available | |||||||||||
- | - | for sale securities. | - | - | 1,871 | ||||||
Change in market value of equity, interest rate | |||||||||||
(44,326 | ) | (19,448 | ) | and currency derivatives | (47,067 | ) | 1,587 | 99,900 | |||
Interest element included in capital lease | |||||||||||
254 | 532 | obligations | 549 | 1,062 | 1,908 | ||||||
17,490 | (154 | ) | Unrealised foreign exchange loss / (gain) | 15,159 | (452 | ) | (42,767 | ) | |||
0 | 64 | Impairment of long-lived assets | - | 64 | 110 | ||||||
6,346 | 16,239 | Change in operating assets and liabilities | 9,628 | 20,445 | 9,619 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
10,641 | 15,807 |
Net
cash provided by operating activities
|
23,418 | 42,863 | 48,495 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES | |||||||||||
(28,577 | ) | (32,128 | ) | Additions to vessels and equipment | (50,778 | ) | (246,171 | ) | (322,183 | ) | |
- | 1,900 | Proceeds from disposal of long lived assets | - | 1,900 | 233,244 | ||||||
9,426 | 37,131 | Long-term restricted cash | 4,105 | 38,361 | 42,352 | ||||||
- | - | Additions to unlisted investments | - | (3,063 | ) | (25,970 | ) | ||||
- | - | Purchase of marketable securities | (85 | ) | (2,372 | ) | (2,372 | ) | |||
- | - | Proceeds from disposal of marketable securities | - | - | 165 | ||||||
7,535 | 7,284 | Short-term restricted cash and investments | 11,208 | (2,762 | ) | (8,246 | ) | ||||
- | - | Proceeds from termination of equity swap | (1,844 | ) | - | (538 | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
(11,616 | ) | 14,187 |
Net
cash used in investing activities
|
(37,394 | ) | (214,107 | ) | (83,548 | ) | ||
|
|
|
|
|
|
|
|
|
|
|
10
Golar LNG Limited
SECOND QUARTER CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
2009
|
2008
|
STATEMENT
OF CASH FLOWS
|
2009
|
2008
|
2008
|
||||||
Apr-Jun
|
Apr-Jun
|
(in
thousands of $)
|
Jan-Jun
|
Jan-Jun
|
Jan-Dec
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|||||||||||
20,000 | - | Proceeds from long-term debt | 55,000 | 120,000 | 370,000 | ||||||
Repayments of long-term capital lease | |||||||||||
(1,680 | ) | (1,267 | ) | obligation | (3,125 | ) | (2,494 | ) | (5,497 | ) | |
(23,217 | ) | (26,119 | ) | Repayments of long-term debt | (34,241 | ) | (42,107 | ) | (377,044 | ) | |
- | (557 | ) | Financing & debt settlement costs paid | - | (1,693 | ) | (13,600 | ) | |||
- | - | Cash dividends paid | - | (16,896 | ) | (67,438 | ) | ||||
(1,360 | ) | - | Dividends paid to non controlling interests | (1,360 | ) | - | (2,000 | ) | |||
Proceeds from the disposal of/receipt of | |||||||||||
- | 343 | dividends on treasury shares | - | 750 | 1,007 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
(6,257 | ) | (27,600 | ) |
Net
cash provided by financing activities
|
16,274 | 57,560 | (94,572 | ) | |||
|
|
|
|
|
|
|
|
|
|
|
|
(7,232 | ) | 2,394 | Net (decrease) / increase in cash and cash | 2,298 | (113,684 | ) | (129,625 | ) | |||
equivalents | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
65,644 | 69,661 | Cash and cash equivalents at beginning of | 56,114 | 185,739 | 185,739 | ||||||
period | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
58,412 | 72,055 |
Cash
and cash equivalents at end of period
|
58,412 | 72,055 | 56,114 | ||||||
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
11
Golar LNG Limited
SECOND QUARTER CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
Statement of Changes
in Equity (in thousands of $) |
Share
Capital |
Treasury
Shares |
Additional
Paid in Capital |
Accumulated
Other Comprehensive Loss |
Retained
Earnings |
Total
Stockholders Equity |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at Dec 31, 2007 |
67,577
|
(8,201 | ) | 288,672 | (6,902 | ) | 211,386 | 552,532 | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - | - | - | - | (9,989 | ) | (9,989 | ) | ||||
Cash dividends | - | 348 | - | - | (67,438 | ) | (67,090 | ) | ||||
Grant of share options | - | - | 3,092 | - | - | 3,092 | ||||||
Disposal of treasury | ||||||||||||
shares on exercise of | ||||||||||||
share options | - | 1,019 | (479 | ) | - | 130 | 670 | |||||
Gain on issuance of | ||||||||||||
shares by investees | - | - | 667 | - | - | 667 | ||||||
Other comprehensive loss | - | - | - | (27,737 | ) | - | (27,737 | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at Dec 31, 2008 | 67,577 | (6,834 | ) | 291,952 | (34,639 | ) | 134,089 | 452,145 | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss | - | - | - | - | 6,750 | 6,750 | ||||||
Cash dividends | - | - | - | - | - | - | ||||||
Grant of share options | - | - | 1,353 | - | - | 1,353 | ||||||
Gain on issuance of | ||||||||||||
shares by investees | - | - | 890 | - | - | 890 | ||||||
Other comprehensive loss | - | - | - | 12,466 | - | 12,466 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at Jun 30, 2009 | 67,577 | (6,834 | ) | 294,196 | (22,173 | ) | 140,839 | 473,604 | ||||
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated interim financial statements.
12
Golar LNG Limited
Notes to Condensed Consolidated Interim Financial Statements
1. GENERAL
Golar LNG Limited (the Company or Golar) was incorporated in Hamilton, Bermuda on May 10, 2001 for the purpose of acquiring the liquefied natural gas (LNG) shipping interests of Osprey Maritime Limited (Osprey) and of Seatankers Management Co. Ltd (Seatankers), which were controlled by Mr. John Fredriksen. The Companys ordinary shares are listed on Nasdaq and on the Oslo Stock Exchange.
2. ACCOUNTING POLICIES
Basis of accounting
The financial statements
are prepared in accordance with accounting principles generally accepted in
the United States of America. The condensed consolidated financial statements
do not include all the disclosures required in the annual financial statements,
and should be read in conjunction with the Companys annual financial statements
as at December 31, 2008.
Significant accounting
policies
The accounting policies
adopted in the preparation of the condensed interim consolidated financial statements
are consistent with those followed in the preparation of the Companys
annual consolidated financial statements for the year ended December 31, 2008,
except for the adoption of following standards - SFAS No. 141(R), Business
Combinations; SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements, (FAS 160); SFAS No. 161, Disclosures
about Derivative Instruments and Hedging Activities; SFAS No. 162, The
Hierarchy of Generally Accepted Accounting Principles, SFAS No. 165, Subsequent
Events, and SFAS No. 168, The FASB Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles a replacement
of FASB Statement No. 162.
None of these new or revised accounting standards has had a material impact on the current or prior periods except that noncontrolling interest is now classified as a component of equity in accordance with FAS 160. The Company has evaluated subsequent events through August 28, 2009, the date of issuance of our financial position and results of operation
3. DEBT
In June 2009, the Company entered into an $80 million revolving credit facility with World Shipholding, to provide short-term bridge financing. The facility accrues fixed interest at a rate per annum of 8% together with a commitment fee of 0.75% of any undrawn portion of the credit facility. The revolving credit facility is available for a period of two years. All amounts due under the facility must be repaid within two years from the date of the first draw down. The Company drew down an initial amount of $20 million on June 30, 2009. The facility is currently unsecured. However, in order to draw down amounts in excess of $35 million the Company will be required to provide security to the satisfaction of World Shipholding. This is envisaged to take the form of a second priority lien over cash generating assets.
In connection with the Companys Golar LNG Partners revolving credit facility, the Company drew down a further $25.0 million in January 2009 and the remaining $10.0 million of the facility in March 2009.
4. FINANCIAL INSTRUMENTS
Fair values
The carrying value and estimated
fair value of the Companys financial instruments at June 30, 2009 and
December 31, 2008 are as follows:
13
(in
thousands of $)
|
Jun
30,
2009 Carrying Value |
|
June
30
2009 Fair Value |
|
Dec
31,
2008 Carrying Value |
|
Dec
31,
2008 Fair Value |
|
Non-Derivatives: | ||||||||
Cash and cash equivalents | 58,412 | 58,412 | 56,114 | 56,114 | ||||
Restricted cash and short-term investments | 49,144 | 49,144 | 60,352 | 60,352 | ||||
Long-term restricted cash | 618,506 | 618,506 | 557,052 | 557,052 | ||||
Long-term unlisted investments | 10,707 | 10,707 | 10,347 |
N/a
|
||||
Marketable Securities | - | - | 360 | 360 | ||||
Short-term debt floating | 74,736 | 74,736 | 71,395 | 71,395 | ||||
Long-term debt floating | 754,644 | 754,644 | 737,226 | 737,226 | ||||
Long-term debt fixed | - | - | ||||||
Short-term obligations under capital leases | 7,809 | 7,809 | 6,006 | 6,006 | ||||
Long-term obligations under capital leases | 860,751 | 860,751 | 784,421 | 784,421 | ||||
Derivatives: | ||||||||
Interest rate swaps liability | 38,316 | 38,316 | 65,329 | 65,329 | ||||
Foreign currency swaps liability | 25,845 | 25,845 | 50,088 | 50,088 | ||||
Equity swaps liability | - | - | 8,211 | 8,211 | ||||
Equity swaps asset | 1,899 | 1,899 | - | - |
The carrying value of cash and cash equivalents, which are highly liquid, is a reasonable estimate of fair value.
The estimated fair value for restricted cash and short-term investments is considered to be equal to the carrying value since they are placed for periods of less than six months. The estimated fair value for long-term restricted cash is considered to be equal to the carrying value since it bears variable interest rates, which are reset on a quarterly basis.
The fair value of the Companys marketable securities is determined using the closing quoted market price.
As at June 30, 2009, the Company did not identify any events or changes in circumstances that would indicate the carrying value of its unlisted investments in both TORP Technology and OLTO were not recoverable.
Accordingly, the Company did not estimate the fair value of these investments as at June 30, 2009.
The estimated fair value for floating long-term debt is considered to be equal to the carrying value since it bears variable interest rates, which are reset on a quarterly or six monthly basis. The estimated fair value for long-term debt with fixed rates of interest of more than one year is estimated by obtaining quotes for breaking the fixed rate at the year end, from the related banking institution.
The estimated fair values of long-term lease obligations under capital leases are considered to be equal to the carrying value since they bear interest at rates, which are reset on a quarterly basis.
The fair value of the Companys derivative instruments is the estimated amount that the Company would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates, foreign exchange rates, closing quoted market prices and the creditworthiness of the Company and its swap counterparties.
The following table summarizes the valuation of the Companys financial instruments by the SFAS 157 pricing levels as of June 30, 2009:
14
(in thousands of $) |
Quoted
market prices in active markets (Level 1) |
Significant
Other Observable Inputs ( Level 2) |
Total
|
|||
Interest rate swaps liability position |
-
|
38,316
|
38,316
|
|||
Foreign currency swaps liability position |
-
|
25,845
|
25,845
|
|||
Equity swaps asset position |
-
|
1,899
|
1,899
|
SFAS 157 states that the fair value measurement of a liability must reflect the non-performance risk of the entity. Therefore, the impact of the Companys creditworthiness has also been factored into the fair value measurement of the derivative instruments in a liability position.
6. RELATED PARTY TRANSACTIONS
Receivables (payables) from related parties:
(in thousands of $) |
6months
to
June 2009 |
2008
|
||
Frontline | 438 | 385 | ||
Seatankers | (62 | ) | (24 | ) |
Ship Finance | 111 | 37 | ||
Arcadia | - | - | ||
|
|
|
|
|
487 | 398 | |||
|
|
|
|
Receivables and payables with related parties comprise primarily of unpaid management fees, advisory, administrative services. In addition, certain receivables and payables arise when the Company pays an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled quarterly in arrears.
During the periods ended June 30, 2009 and December 31, 2008, Faraway Maritime Shipping Company, which is 60% owned by Golar and 40% owned by China Petroleum Corporation ("CPC"), paid dividends totalling $3.4 million and $5.0 million, of which 60% was paid to Golar and 40% was paid to CPC.
In June 2009, the Company entered into an $80 million revolving credit facility with World Shipholding Limited, to provide short-term bridge financing, please refer to note 3.
As of June 30, 2008, World Shipholding Limited, a company indirectly controlled by Mr. John Fredriksen owned 46.17% (2008: 45.97%) of Golar.
7. OTHER COMMITMENTS AND CONTINGENCIES
Assets Pledged
(in thousands of $) |
June
30,
2009 |
December
31,
2008 |
||
Book value of vessels secured against long-term loans | ||||
and capital leases |
1,564,700
|
1,559,858
|
||
|
|
|
|
|
8. SUBSEQUENT EVENTS
On August 12, 2009 Golar LNG Limited completed a restructuring and equity offering in a new Bermudan incorporated subsidiary, Golar LNG Energy Limited (Energy). The restructuring resulted in the transfer of the following key assets:
- 4 modern LNG carriers
("Gracilis", "Grandis", "Granosa" and "Golar Arctic")
- 3 1970's built LNG
carriers ("Khannur", "Gimi" and "Hilli")
- 50 % ownership interest
in another 1970's build LNG carrier ("Gandria")
- 13.6 % ownership
interest in the Australian listed company LNG Ltd.
- Golar's current project
portfolio
15
- other financial obligations, notably swap arrangements.
In addition, Energy has acquired the subsidiary owning the 1970 built LNG carrier "Golar Freeze" which is scheduled to be converted to an FSRU vessel. The purchase of the "Golar Freeze" was financed by way of a seller's credit. Golar has been granted an option to reacquire "Golar Freeze" from Energy when its conversion to FSRU vessel is completed. Energy will have an identical option to sell "Golar Freeze" to Golar. The price to be paid by Golar in this transaction shall equal the aggregate of the seller's credit and the conversion cost of the vessel.
Subsequent to the restructure Golar was pleased to announce that Energy had completed an equity offering. A total of 55 million shares (USD 110 million) were issued mainly to International and Norwegian institutional investors. Attached to the offering is a 'green shoe' option. The managers were therefore granted an over allotment option, exercisable for 30 days for an additional 5 million shares (USD 10 million). Energy shares are currently trading on the Oslo OTC marketand the process to move to a full listing on the Oslo Stock Exchange is well underway.
Responsibility Statement
We confirm, to the best of our knowledge, that the condensed consolidated interim financial statements for the period January 1 to June 30, 2009 have been prepared in accordance with U.S generally accepted accounting principles, and give a true and fair view of the Companys assets, liabilities, financial position and profit or loss as a whole. We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed interim financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties transactions.
The Board of Directors
16
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Golar
LNG Limited (Registrant) |
||
Date: August 31, 2009 | By: | /s/ Graham Robjohns Graham Robjohns Chief Financial Officer |