Golar LNG Partners L.P.: Golar LNG Partners LP: Interim Results for the Period Ended March 31, 2014

Golar LNG Partners L.P.: Golar LNG Partners LP: Interim Results for the Period                              Ended March 31, 2014  Highlights    oGolar LNG Partners LP ("Golar Partners" or the "Partnership") reports net     income attributable to unit holders of $32.7 million and operating income     of $53.8 million for the first quarter of 2014 ("the first quarter")   oGenerated distributable cash flow of $36.1 million for the first quarter     of 2014 with a coverage ratio of 1.06   oDeclared a first quarter 2014 distribution of $0.5225 per unit   oCompleted the acquisition of the Floating Storage and Regas Unit ("FSRU"),     Golar Igloo, from Golar LNG Limited ("Golar") for $310 million  Financial Results Overview  Golar Partners  reports  net income  attributable  to unit  holders  of  $32.7  million and  operating income  of  $53.8 million  for  the first  quarter,  as  compared to  net income  attributable to  unit holders  of $47.6  million  and  operating income of $54.7 million for the fourth quarter of 2013 ("the  fourth  quarter") and net  income attributable to  unit holders of  $30.3 million  and  operating income of $45.2 million for the first quarter of 2013.  The improvement  in  operating  income over  the  same  period in  2013  is  a  reflection of  three  factors. First,  the  Golar Spirit  commenced  2013  in  drydock and this resulted in approximately  57 days of offhire and  associated  positioning costs  during  that  quarter.  Secondly,  during  the  intervening  period, there was  a biennial  uplift to the  capital component  of the  Golar  Spirit and Golar Winter and a further  increase in the charter rate for  Golar  Winter also took effect to compensate  for the completion of the  modification  works. Thirdly, the Partnership completed the acquisition of the Golar  Maria  on February 7,  2013 and  in so  doing assumed  the operating  income of  this  vessel for the remainder of the quarter. First quarter 2014 operating  income  incorporates a full quarter's contribution from the Golar Maria. The  improved  results are partially offset by  increased depreciation and amortization as  a  consequence of the acquisition of  the Golar Maria, the additional  investment  in Golar Winter modifications and four vessel drydocks over the intervening 12 months.  Taking account of the reduced number of calendar days in the first quarter and four day revenue contribution from the recently acquired Golar Igloo,  revenue  net of  voyage expenses  was consistent  with the  fourth quarter.  Operating  expenses increased by  $1 million largely  due to an  increase in repairs  and  maintenance expenditure.  Administration  expenses were,  however,  marginally  lower in the first quarter by $0.1 million.  As anticipated, net interest expense decreased  to $9.6 million for the  first  quarter of  2014  compared  to  $10.5 million  for  the  fourth  quarter.  The  reduction primarily reflects  the expiry  of a relatively  high cost  interest  rate swap that matured during November together with reduced interest  expense  in respect of two revolving facilities that were paid down at the end of  2013  using $70 million  of the December  5th 2013 equity  issue proceeds.  Shortly  before completion  of  the Igloo  acquisition  on March  28,  these  revolving  facilities were  redrawn to  part fund  the  purchase. As  at March  31,  the  Partnership has undrawn facilities of $65 million.  Other financial items for  the first quarter recorded  a loss of $6.2  million  compared with a  gain of  $1.5 million in  the fourth  quarter. This  included  non-cash mark-to-market  valuation  losses  on interest  rate  swaps  of  $1.8  million in the first quarter compared to gains on interest rate swaps of  $6.0  million in the fourth quarter.  Tax at $2.8  million for the  first quarter has  normalized after recording  a  credit of $4.3 million in respect  of the fourth quarter following a  year-end  reassessment of 2013 tax expense.  The Partnership's Distributable Cash  Flow^1 for the  first quarter was  $36.1  million as compared to  $44.8 million in the  fourth quarter and the  coverage  ratio was 1.06 as compared to 1.32 for the fourth quarter. The elevated fourth quarter coverage  is primarily  a result  of the  2013 tax  credit. This  was  offset to some  extent by  the negative carry  on the  additional 5.2  million  units issued on  December 5th. The  lower first quarter  coverage ratio  also  reflects distributions paid on the additional units issued ahead of the  Igloo  acquisition. If  distributions paid  on  these new  units are  excluded,  the  coverage  ratio  in  the  first   quarter  would  have  been  1.16.   Declared  distributions are payable on all units as at the record date.  On April  24, 2014,  Golar  Partners declared  a  distribution for  the  first  quarter of 2014 of $0.5225 per unit, which  was paid on May 14, 2014 on  total  units of 62,870,335.  Golar Igloo Acquisition  In December 2013, the Partnership announced its intention to acquire interests in the company  that owns and  operates the FSRU,  Golar Igloo ("Igloo")  from  Golar for  a  purchase  price  of  $310  million.  The  Igloo,  which  is  the  Partnership's first newbuild FSRU, was delivered by Samsung on February 5  and  immediately proceeded to Singapore for bunkering and storing up before leaving for Kuwait on February 14. The  FSRU arrived off Kuwait and was  successfully  commissioned for her  new charterers,  the Kuwait  National Petroleum  Company  ("KNPC"), during March. Upon completion of the commissioning and satisfaction of the remaining closing conditions, Golar Partners concluded the  acquisition  on March 28.  The FSRU is  expected to generate  annual contracted  revenues,  after deducting voyage,  commission and  operating expenses  of between  $32.0  million to $34.0 million. This estimate does not include any revenues that the Igloo may earn under short-term charters for the three-month period each  year  during which the Igloo is not providing FSRU services to KNPC under  charter.  The Board  is  pleased  that  Golar  was  able  to  successfully  arrange  the  commissioning cargo for  the Igloo  and the Partnership  hopes to  be able  to  assist KNPC with the transportation of future cargo acquisitions ahead of each March regas season.  The Partnership financed the acquisition of the Igloo by assuming debt on  the  vessel amounting to $161.3 million and the remainder from the net proceeds  of  its fourth follow-on equity offering that completed in December 2013.  ^1Distributable cash flow is a non-GAAP financial measure used by investors to measure the performance of master limited partnerships. Please see Appendix A for a reconciliation to the most directly comparable GAAP financial measure.  Financing and Liquidity  As of March 31, 2014, the Partnership  had cash and cash equivalents of  $48.9  million and undrawn revolving credit facilities of $65 million. Total debt and capital lease obligations net  of restricted cash was  $1,113.5 million as  of  March 31, 2014.  Based on the above  debt amount and annualized^2  first quarter 2014  adjusted  EBITDA^3,Golar Partners has a debt to  adjusted EBITDA multiple of 3.9  times.  This multiple is expected to fall in the second quarter having been  adversely  impacted in the  first quarter  by the assumption  of the  Igloo related  debt  without a corresponding full quarter's contribution to EBITDA.  Included within the current portion of long term debt is an $83.3 million debt facility in respect  of the  Golar Maria that  matures in  December 2014.  The  Partnership plans to refinance this facility ahead of its expiration and is in discussions with a number of banks with a view to achieving the most effective capital structure. The Board is confident that the facility can be  refinanced  at attractive terms.  As of March 31, 2014, Golar Partners  had interest rate swaps with a  notional  outstanding value  of approximately  $1,211 million  (including swaps  with  a  notional value of $227.2  million in connection  with the Partnership's  bonds  but  excluding   $100  million   of  forward   starting  swaps)   representing  approximately 109%  of  total  debt  and capital  lease  obligations,  net  of  restricted cash. Whilst  the Partnership is  currently over-hedged, this  will  normalize in the second quarter when  $130 million swaps mature between  April  and May 2014. The average fixed interest rate of swaps related to bank debt is approximately 2.3%  with average  maturity of  approximately 2.8  years as  of  March 31, 2014.  As of March  31, 2014,  the Partnership had  outstanding bank  debt of  $887.5  million with average  margins, in addition  to LIBOR or  fixed swap rates,  of  approximately 2.3%. In addition, the  Partnership has bonds of $217.1  million  with a fixed rate of 6.485%.  ^2Annualized means the figure for the quarter multiplied by 4. ^3Adjusted EBITDA:  Earnings before  interest, other  financial items,  taxes,  non-controlling interest, depreciation and amortization. Adjusted EBITDA is  a  non-GAAP financial  measure  used by  investors  to measure  our  performance.  Please see Appendix  A for a  reconciliation to the  most directly  comparable  GAAP financial measure.  Outlook  The Partnership  is pleased  to have  completed the  acquisition of  theGolar  Igloo in March  2014 which also  adds a five  year contract with  KNPC to  the  revenue backlog which  in total now  stands at  $2.5 billion as  at March  31,  2014. As a  result of the  acquisition management have  guided that they  will  recommend to the Board a distribution increase of between $0.09 and $0.11  per  unit per annum,  approximately a 4.5%  increase, with effect  from the  second  quarter of 2014.  During  2013,  Golar  LNG  also  contracted  theFSRU,  Golar  Eskimo,to  the  Government of Jordan. The vessel will  be moored at a purpose built  structure  that is to be constructed by the Aqaba Development Corporation off the Red Sea port of Aqaba. The Golar  Eskimo is scheduled to be  ready for service in  the  latter part of the  fourth quarter 2014  and its ten year  contract is due  to  commence during the first quarter of 2015. This vessel will also be offered to the Partnership to acquire.  Golar  Partners  fleet  has  performed  well  during  the  quarter  with  100%  utilization underlying a strong operating earnings result. Without the  impact  of the 5.2 million units issued to finance the Igloo the coverage ratio  would  have been 1.16  as compared  to the  actual ratio  of 1.06.  Earnings for  the  second quarter  of 2014  are expected  to  be positively  impacted by  a  full  quarter's contribution from the Igloo as compared to just 4 days in the  first  quarter.  The Partnership is  also in  a strong  financial position.  Adjusting for  the  Igloo debt assumed at the end of the  first quarter and the Igloo's 4 days  of  earnings, the net debt to EBITDA ratio would have been 3.4.  With solid  operating  performance,  good  coverage  and  a  strong  financial  position, Golar Partners is well positioned to make further acquisitions  even  without raising  additional  equity. These  include  the likely  Golar  Eskimo  acquisition as  well as  further  Golar LNG  carriers, FSRUs  and  potentially  long-term contracted  floating  liquefaction  assets.  This  growth  potential  underpins the Board's confidence in  the Partnership's ability to continue  to  increase its earnings and distributions over time.  May 28, 2014 Golar LNG Partners L.P. Hamilton, Bermuda.  Questions should be directed to: C/o Golar Management Ltd - +44 207 063 7900 Brian Tienzo or Graham Robjohns  Golar LNG Partners Interim Results for the Period Ended March 31 2014  ------------------------------------------------------------------------------  This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Golar LNG Partners L.P. via Globenewswire HUG#1789193  
Press spacebar to pause and continue. Press esc to stop.