Golar LNG Limited · NASDAQ:GLNG
Golar LNG — Q2 2019 Earnings Presentation
20 slides from Golar LNG's earnings presentation, Aug 29, 2019
Slide 1: Second Quarter 2019 Results
Second Quarter 2019 Results August 29, 2019 © Golar LNG Limited
Slide 2: Forward Looking Statements
Forward Looking Statements © Golar LNG Limited 1
Slide 3: Speakers
Speakers Iain Ross Chief Executive Officer Graham Robjohns Chief Financial Officer and Deputy Chief Executive Officer © Golar LNG Limited 2
Slide 4: Second quarter 2019 group highlights
Second quarter 2019 group highlights Simplicity, earnings stability, liquidity, near-term value Simplify capital Four LNG carriers Buyback of 3 million structure; capital contracted on floating Total Return Swap efficient use of two rates, two on fixed-rate (TRS) shares quarters dividend charters In
Slide 5: Second quarter 2019 operational highlights
Second quarter 2019 operational highlights Good operational delivery; focus on cost control Shipping • TFDE fleet spin-out on track by year-end Plans on track as market set to strengthen • Dry docked four vessels during seasonally lower rates FLNG Strong operational • Gimi conversion on budget and s
Slide 6: Second quarter 2019 financial results
Second quarter 2019 financial results Solid FLNG performance offset by weaker shipping market SUMMARY RESULTS HIGHLIGHTS ($ millions) Q2 2019 Q1 2019 Operating Results: FLNG: 100% up time delivering revenues and Adjusted Total operating revenues 97 114 EBITDA1 consistent with Q1 Shipping: Seasonally
Slide 7: Strong underlying growth in Adjusted EBITDA
Strong underlying growth in Adjusted EBITDA1 Success of strategic projects flowing through into business performance Adjusted EBITDA Performance 1 1 2 Results volatility continues to be driven by the spot shipping market Year-on-year LTM further adjusted EBITDA1 has increased from $12m to $187m (1)
Slide 8: Good visibility on earnings growth
Good visibility on earnings growth Contracted projects and options will drive increased earnings ACTUAL CONTRACTED GROWTH WITHIN CONTRACTED LTM 2019 GOLAR CONTROL OPTIONS AWAITING EXECUTION UPSIDE POTENTIAL Effective run rate1 excludes ~$37m of annual dividends from the MLP Hilli oil link; $1/bbl pe
Slide 9: Progress on reducing earnings volatility
Progress on reducing earnings volatility Exposure to shipping spot market and oil indexed contracts in earnings mix will reduce significantly LTM Further Adjusted EBITDA1 $187m Potential 2023 Run Rate1 $510m 6% 17% 23% $187m $510m 22% 62% 71% Shipping Fixed Brent Shipping Fixed Brent CURRENT POSITIO
Slide 10: TRS buyback – rationale and benefits
TRS buyback – rationale and benefits Simplify financial structure and eliminate growing cost GLNG units Underlying Shares 3,000,000 Closing share price 27th August 2019 12.89 Market value of shares 38,670,000 Key advantages of closing the instrument: Initial margin posted 7,734,000 • Reduces volatil
Slide 11: Simplifying the business
Simplifying the business Strengthening the balance sheet Includes 100% of Hilli LLC debt ($878m) Contractual current portion $206m v balance sheet current portion $802m $1 bn $1 bn relates to relates to TFDE TFDE Fleet Fleet Restricted 1 1 cash 2 POST PERIOD EVENTS: Refinancing margin loan: Releases
Slide 12: FLNG: Key achievements & increasing opportunity
FLNG: Key achievements & increasing opportunity Strong Track Record Growth Pipeline FLNG Hilli Episeyo (Cameroon): “Building and broadening our portfolio” First 1.2 million tons of LNG exported by early May Unit operating with 100% commercial uptime. 25 cargoes offloaded to date Ongoing discus
Slide 13: Shipping: Market strengthening, demand outlook robust
Shipping: Market strengthening, demand outlook robust Liquefaction capacity additions (MTPA) LNG shipping market commentary 1.3-1.8x LNGCs required per MTPA dependent on end location Capacity additions (MTPA) 40 New liquefaction capacity coming on stream have 35 kept global LNG prices low, limitin
Slide 14: Current LNG prices stimulate oil-to-gas switch
Current LNG prices stimulate oil-to-gas switch LNG is trading at significant discount to its energy parity vs. alternative fuels LNG oil price parity 19% 17% LNG energy parity at 16% of oil LNG energy parity in $/mmbtu at 16% of brent oil LNG to oil price parity 15% price/bbl 13% Due to signific
Slide 15: FSRU; Downstream Distribution: Strong Brazil growth
FSRU; Downstream Distribution: Strong Brazil growth High Activity Across Value Chain Ongoing projects on target, highly active Brazil pipeline Current Downstream LNG Distribution (NE Hub/Sergipe) Future Opportunities Modest Capex, Rapid Payback Strong in Brazil, Expanding Globally Brazil: Actively w
Slide 16: Total Golar Group contract backlog of $10.1bn
Total Golar Group contract backlog of $10.1bn1 2019 2020 2021 2022 2023 2024 2025 Hilli Episeyo (44% of common units) 2027 Golar 8-year contract LNG FLNG Gimi 2042 20-year contract Golar Nanook 2045 Power Golar 25-year contract Sergipe Cashflow 2045 25-year contract Golar Spirit Cold layup Golar Fre
Slide 17: Outlook and growth focus
Outlook and growth focus • The board has approved a spin-off of Golar’s TFDE shipping business subject to market conditions to allow investors more direct exposure to an expected cyclical upturn for LNG carriers • Golar LNG will be primarily focused on floating LNG infrastructure projects with long
Slide 18: Takeaways
Takeaways Simplicity, earnings stability, liquidity, near-term value • Continued operational strength through 2Q, • Shipping spin-off by year end to simplify capital most notably Hilli Episeyo 100% commercial structure, sharply cut contractual debt, and uptime, Gimi conversion on budget and reduce e
Slide 19: Contact Us
Contact Us Stuart Buchanan Head of Investor Relations T: +44 20 7063 7911 E: Stuart.Buchanan@golar.com © Golar LNG Limited 18
Slide 20: Appendix: Non-GAAP Measures
Appendix Non-GAAP Measures Adjusted EBITDA: Adjusted EBITDA is calculated by taking net income before interest, tax, unrealized mark-to-market movements on the oil derivative instrument, depreciation and amortization. We believe that the exclusion of these items enables investors and other users of