Bermuda-based Golar LNG said the market for chartering of LNG shipping has remained weak for the first half of 2015.
With close to 40 LNG carriers currently idle it will take some time to see a full recovery, Golar LNG said in its first quarter report on Wednesday.
Golar LNG generated a net profit of $24.6 million in the first quarter, with underlying EBITDA decreasing to a loss of $4.3 million compared to profit of $7.8 million in the quarter before.
According to Golar LNG, the first signs of an improved chartering environment, albeit from a very low base, are starting to become evident as new LNG production capacity is prepared for start-up and new markets for receiving LNG in Pakistan, Jordan and Egypt have started to receive their first cargoes.
Golar said it hopes to see this manifest itself in a gradual improvement to utilisation, net revenue and operating results from 3Q onwards.
In contrast to the market for LNG carriers, the level of enquiry and interest for FSRU’s is the strongest it has been for some time. The company is therefore very optimistic that the FSRU Tundra will be contracted on terms that make it a suitable near-mid-term dropdown candidate to Golar Partners, it said in the report.
“The Board is clearly not satisfied with the 1Q results or with the underlying results anticipated for 2Q linked to the poor spot market and the charter back of Golar Eskimo and Golar Grand,” Golar said.
According to Golar, all alternatives to improve this weak performance are being contemplated ahead of the improvement expected for 3Q once the Eskimo charterback has terminated and the chartering market begins to recover. Supporting the more positive sentiment for 3Q, Golar have, recently employed 7 of its idle ships on spot voyages commencing between June and July.
Net income for Q2 will be materially influenced by mark to market of interest swaps and total return swaps on the Company’s shares. Based on interest rate curves and the Golar share price as of May 26th these items are expected to contribute positively to net income by approximately $50 million, Golar added.
LNG World News Staff; Image: Golar LNG