Golar Swings to Profit

Golar LNG Ltd. (GLNG - Snapshot Report) reported its fourth quarter results on Friday. The company swung to a net income of $17.4 million, from a net loss of $1 million in the previous quarter. Excluding certain special items, earnings per share came in at 19 cents during the quarter, which easily topped the Zacks Consensus Estimate of 13 cents.
 
Golar is a mid-stream LNG company engaged in the acquisition, ownership, operation and chartering of LNG carriers and floating storage re-gasification units (FSRUs). At the end of the quarter, the company’s portfolio (including subsidiaries) consisted of 13 vessels and a 50% equity stake in an LNG carrier.
 
The Bermuda-based company recorded a strong 30.2% growth in operating revenues to $65.5 million from $50.3 million in the previous quarter. The growth was primarily driven by the Golar Winter vessel coupled with improved revenues from spot traded vessels. Average utilization grew to 93% from 80% in the prior quarter, while average daily time charter equivalent rates (“TCEs”) increased to $62,471 per day, compared to $44,142 per day in the previous quarter.
 
Total operating expenses, as a percentage of revenue, dipped by 22.1% to 70.7% from the prior quarter mainly due to lower voyage expenses as a result of better utilization of spot trading vessels, which led to reduced fuel costs. Accordingly, Golar’s operating margin expanded to 29.3% from 7.2% in the previous quarter, while operating income surged to $19.2 million from $3.6 million in the previous quarter.
 
Golar ended the quarter with cash and equivalents of $122.2 million, compared to $154.6 million in the previous quarter. During the quarter, the company deployed $40.2 million towards capital expenditure and $23.6 million towards repayment of debt.
 
Looking ahead, Golar expects performance in the first quarter of 2010 to be adversely affected by a seasonal decline in utilization of vessels operating in the spot market. The company also stated that it anticipates Golar Freeze vessel to commence charter in the second quarter of 2010 after its FSRU conversion.
 
Meanwhile, the Zacks Consensus Estimate on the company’s earnings for the first quarter of 2010 is currently pegged at 8 cents per share, which remained unchanged over the past 2 months. The Zacks Consensus Estimate for 2010 stands at $1.74 per share, which remained constant over the past 3 months.

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