Golar LNG Ltd. (GLNG)

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Golar LNG Q3 2008 Results





LONDON -- (Marketwire) -- 11/26/08 -- Highlights




* Golar reports net income of $51.7 million.* The FSRU Golar Spirit now on hire in Brazil.* Continued good progress being made in developing Floating LNG
opportunities with PTTEP
* Positive developments to secure role as equity participant and LNG
buyer in LNG Ltd's Gladstone LNG project.* Continued strong market inquiry for FSRUs.* Signed new $285 million revolving credit facility
* Golar announces cash dividend of $0.25 per share






Results



Golar LNG Limited ("Golar") reports net income of $51.7 million and operating income of $89.7 million for the three months ended September 30, 2008 (the "third quarter"). Net income has been positively impacted by the gain on sale of the Golar Frost of $78.1 million and negatively impacted by non-cash losses on mark-to-market swap valuations totalling $21.8 million.




Revenues in the third quarter were $58.1 million as compared to $52.5 million for the second quarter of 2008. Headline spot charter rates increased over the quarter and aggregate utilisation also increased from 78% last quarter to 83% this quarter. Voyage expenses, which largely relate to fuel costs associated with commercial waiting time and vessel positioning, have increased marginally from $10.4 million in the second quarter to $11.0 million for the third quarter, remaining high due to very high fuel costs as well as the level of positioning time. Third quarter average daily time charter equivalent rates (TCE's) were $41,440 per day compared to $39,890 per day during the second quarter.





The vessels Methane Princess and the Granatina dry docked during the quarter, both dockings were completed as planned. No further dry dockings are scheduled for the remainder of this year. The Hilli and the Gandria have not been employed throughout the quarter and are not expected to have earnings during the fourth quarter.

Measures remain in place to minimise operating costs on these vessels until chartering opportunities arise.




The Golar Spirit arrived at Pecem in Brazil on July 22 with a LNG cargo loaded and immediately went on hire. The vessel has now undergone a comprehensive programme of testing and commissioning prior to going into service. Final testing and commissioning will take place once Petrobras are ready to receive the vessel at the facility currently being refurbished at Pecem.




Vessel operating expenses were slightly lower at $14.6 million for the third quarter as compared to $15.8 million for the second quarter. Moving forward a stronger US dollar is likely to reduce operating and administrative expenses, some of which the Company incurs in currencies other than US dollars.




Net interest expense for the third quarter was $11.4 million, down from $12.8 million for the second quarter. The decrease in interest expense is driven by lower interest rates on floating rate debt and lower debt levels due to the repayment of the Golar Frost loan at the beginning of the quarter. Other financial items were a loss of $23.1 million in the third quarter compared to a gain of $19.5 million for the second quarter. This has primarily resulted from mark-to-market derivative valuation losses in respect of interest rate swaps, foreign currency swaps and equity swaps.




Currently approximately 74% of the Company's debt and capital lease obligations are effectively swapped to a fixed rate. The Company's current total debt and net capital lease obligations are approximately $1.1 billion. The total current cost of this debt based on the Company's swap rates, 3 month Libor and average margin's is approximately 4.75%.




Net income per share for the third quarter was $0.77 as compared to a $0.17 per share for the second quarter.




Based on results for the quarter end ended September 30, 2008, and taking into consideration expectations for the next 12 months, the Board has again declared a dividend of $0.25 per share for the quarter. The Board has declared dividends in 2008 up to and including this dividend totalling $0.75 per share and is targeting to continue with a $0.25 per share per quarterly dividend in the long-term. This could potentially change however depending upon market conditions, capital requirements and financing.




The Company now only has unfinanced capital commitments in respect of the Golar Freeze which amount to approximately $80 million. The current level of debt associated with the Golar Freeze is approximately $30 million and its charter as an FSRU will generate total revenues over 10 years of around $450 million. The Board therefore expects to be able to refinance the Golar Freeze and improve the company's liquidity position even in today's difficult market conditions.




The record date for the dividend is December 5, 2008, ex dividend date is December 3, 2008 and the dividend will be paid on or about December 19, 2008.