John Fredriksen-linked Golar LNG plans to split into two, a dividend company and a high growth project company, MGN reported. The company's latest quarterly statement says the move will “will enhance value for our shareholders, and create a basis for good long term profitability”. The statement says: “It is the Company's objective to move quickly with this work and to have the restructuring completed well in advance of approaching investment decisions. The analysis and preparation completed in the second half of 2007 when the Company last considered restructuring provides a valuable platform to base the current work on.”
The company reported a Q1 net loss of US$5.1m and operating profit of $6.6m on revenues of $53.9m, down from $59.5m in Q4 2008.
First quarter average daily time charter equivalent rates also declined to $44,977 a day from $50,274 a day for Q4 2008. Average utilisation was down from 91% in Q4 to 80% in Q1. Golar notes: “Trading performance of the Company's vessels operating in the spot/short term market deteriorated over the quarter in line with the deterioration of the market. Rates are depressed due to a reduction in the demand for LNG, particularly in the Far East, coupled with an increase in the available fleet in advance of projects starting up. However, as new LNG production comes to market over the coming months should ease the vessel over supply.” It adds: “The LNG shipping spot market continues to suffer from a delay in the start up of new LNG production capacity resulting in a surplus of shipping and more recently, the downturn in the global economy. The first half of 2009 is proving to be a difficult trading environment for the Company's spot trading ships with a further material reduction in operating income anticipated for the second quarter of 2009. However, there remains a realistic expectation for improvement in the second half of 2009 as new capacity comes on stream and cargoes start trading west. [Golar's] board continues to believe that the long-term outlook for LNG demand in global markets remains strong and that production capacity currently under construction will progressively improve the situation.” Golar says that its strategy of diversifying into FSRU's and over time into liquefaction is and will continue to “deliver a more robust revenue profile as the broader LNG market moves through the different phases of the economic cycle”. Furthermore, its says, committed FSRU contracts delivering over the next 12 months will add significantly to operating cash flow.