Golar LNG Limited (GLNG) 28 Feb 232022 Q4 Earnings call transcript

Welcome to the Golar LNG Limited Q4 2022 Results Presentation. After the slide presentation by CEO, Karl Fredrik Staubo; and CFO, Eduardo Maranhão, there will be a question-and-answer session. [Operator Instructions] At this time all participants are in listen-only mode.

I will now pass you over to Karl Fredrik Staubo. Karl, please go ahead.

operator. you Thank Golar to earnings presentation. result And LNGs welcome QX Staubo, Golar LNG. My name of Fredrik Karl is CEO I’m by accompanied today our CFO, Mr. Eduardo this quarter’s present Maranhão to result.

statements into note get presentation, on forward-looking we Slide Before X. the the please

CoolCo earnings stake X, [Indiscernible] Slide and shareholding $XX sold shareholding proceeds morning Turning in have Hilli. Limited our also to net last this for Since in their our we our FLNG both we remaining backed in call, million. our about exited

a current book of shareholding million. is only with LNG Our $XX value Avenir around

Our is the increase Perenco in its recontacting is business and utilization upon flows significant owning core unit Hilli our terms a to recontracting. to operating in operating July improve commercial X XXXX for commodity due unit generates The off FLNGs link and tariff. Cameroon. for we’re Hilli coming optimistic cash very

is the on this for to Tortue Senegal target field Gimi XX-year later contract and year. Mauritania BP expected outside

to the will engage in invested cash start the $X.X million on flow project We then more today. than

also I actively annum. with of per tonnes ordering II to presentation. later X.X million in liquefaction FLNG a an that the annual Mark get capacity are back will We of pursuing

and X of $XX income highlights. XXXX QX and of Slide book share. $X.X a record Golar a $XXX reports to Turning million the equivalent about million a value net to

stands cash share. a position at Our approximately $X $X.X billion or

cash CoolCo. XXXX and QX exiting and million QX during [Indiscernible] In in total, $XXX have we be new monetized year-to-date

acquire remaning X.X stake used our in as settlement We shares NFE also NFE part in Hilli. million to

XXX unsecured of repurchased XX% amount our QX, the million of or we outstanding loans. During

million million are have basket cancel Board buyback remaining currently to and and alternatives TTF TTF shares Hilli. new million utilize exposure XXX.X commence earnings for $XX now to dividend TTF in exploring program. outstanding. we and XXXX management XXXX linked in a and/or The share X.X We also prices. and around and shares repurchase unwound a unit quarter generated had active an increase our securing million hedges approximately EBITDA. buyback We The our our We $XXX to

acquire this on year, and in We and first effective of XX% now during during first complete for agreed transaction away stake is the from sail to quarter Hilli Gimi also schedule NFE this we that close year. half. to expect January X

As growth a mentioned, for our we vessel progressed well progress FLNG by yard Mark FLNG and securing conversion, significantly II that donor ambitions unit. as discussions financing for as

We projects. continue attractive with integrated economics the to favor develop working projects of partners and integrated actively to ecology are upstream

results. the I'll now to over hand to call QX our present Eduardo

the Good group an everyone. update to Karl. XXXX. our Very provide results morning, of Thanks, on pleased for fourth quarter

Turning of over X, a financial some wanted highlights record to for this the quarter. I slide of year Golar. show to XXXX was number

on XX% than million debt to reserves equity FLNG to growth. have when $X record balance a cash full billion income billion support represented of an net free $X.X calendar total sheet our This net the QX of strong net was compared highest XXXX. leading of a now and more with year. was for further of We book increase to record $XX Our $XXX to income million, income XXXX date, and

after details EBITDA doubled slides. next regarding the have XXXX important compared I'll cash to recorded to the business, in continued where we provide we XX% total an of even compared X% to to quarter, increase grow $XXX previous our to million, a these year-on-year highlight in On the generation an of increase our XXXX. some almost an $XX performance that EBITDA compared we basis, when our This of to from adjusted adjusted EBITDA of quarter. in FLNG to $XXX few million million $XXX shipping grown It's business XXXX. million, due our to has strong disposal our further

$XXX volume million on to instruments. FLNG were was QX liquefaction and to the oil is previous XXXX, gains Due from of gas FLNG up then. in liability non-cash a accrual was annual in Hilli and and reduced of that Hilli maintenance, in combination FLNG below in services, production producing tariff total to from X.X% LNG a operating unrealized schedule our was contracted the stated in Total been quarter. XX% that revenues Because issues production upstream technical quarter. QX, derivative were comprised The compared tariffs of recognized. million has year, issues last resolved $XX resulted lower when to compared QX since revenues the previous of the

we XXXX be underutilisation million, cash where expect expect in no through liability to compensated will additional overproduction dish We of impact an expected Golar. with to production recognize XXXX, EBITDA $XX the shortfall the offsetting net

by unsecured we end far out contract million bought to As share or brought as the Karl, back $XXX of which million. -- $XXX as at bonds, quarter of have our of pointed the debt

dollars total Our shy cash end the million. a position of billion at just $XXX year the of stood at at

X. on to moving So Slide

our pursue to balance the to new company strengthen We FLNG to sheet projects. growth continue allow

remain expected more payments Our which QX. this of cash a interest annually, in the earlier year. locked acquisition expect $XX at total and consideration close of the receivables Despite will adjusted with as increase of Hilli expected stands position the part of we $XXX incremental run currently NFEs The $XXX acquisition to rate which the we $X require due is free in million hedges by debt. will considering when further Hilli were billion, and to even this add unwinding to to debt in $XXX in TTF debt, also of than cash million our million, million is EBITDA cash

have on we delevered to years to can from two debt of slide, $X significantly doubled side XXXX. balance we the of sheet have at approximately position just saw our a we we hand today. $XXX end of million, billion free in the net right Moreover, As our almost ago, debt EBITDA see, the which XXXX, you

Gimi the and acquisition in FLNG interest remaining increase We post expect of this once to continue operation. to Hilli commences

insight like further Hilli. some would from slide Moving into provide to X, earnings on to I

tariff first last fee on of the tariff, the and three is of of So Hilli main started fee, a tolling that January Brent-linked fixed comprised components; a TTF-linked year.

have managed fees saw strong greater $XX us TTF-linked very And attractive XXXX. same to in the what the a as quarter, we which than EBITDA, levels. million result increase to net last a our almost generating we times in We at of Hilli’s in quarter of hedge that, saw three is very

wanted we our provide Hilli. slide on within deal further number details the increase Moving regarding I exposure to to fee did a to X, some on

Hilli February remaining million of assumed on receives X, the NFE or So fees QX, plus and FLNG expected of we from X that, we by of to X and in also and million we The TTF will trains million to is $XXX in debt. acquire deal XX.X% shares, units the NFEs fees. plus close that control common X% fee our contracts in $XXX tolling paying interest X.X agreed after cash,

Series upon of We XXXX. debt. re high We higher contract. refinancing units end could the with Golar significant a $XX potential Brent immediate an in be agreement terms and believe TTF on in potential XX.X% which commercial and Further current improved utilization B cash million also next July of until deal current will flow the end A prices. further brings to the earnings month upside per of achieved upside EBITDA existing of the and contracting upside the at with The benefit the liquefaction year, from contributing of additional with on

slide to on XX. Moving

expected Let's closer the Hilli. take a on look earnings from

to are units, So expected base Hilli our of double increased million. in around $XXX back common on the tolling the of shareholding fees to XX.X% XXXX of

the for period and in we Following the unwinding of between XXX% we the XXXX this of the open XXXX. December until TTF our of open end to March remain swaps, between remain contract year,

Brent that remain increase would million us. every for in in and to prices exposed result incremental prices to EBITDA dollar net of also We an $X.X oil

will this on alone in and $XXX forward from million million upto expected XXXX. EBITDA Hilli TTF of XXXX Based around bring our Brent and $XXX in curves,

this debt share to around close is million free flow at $XXX resulting cash from Our million in of just equity service to year, Hilli. of $XXX expected

who a over more talk can to now about bit some the I'll updates. business hand Karl, call

Thank you, Eduardo.

on lifts and XXXX. Turning man half average an XX than slide update. of XX Gimi complete workers FLNG onboard to and We workforce first construction commissioning for are million have underway. heavy hours during of daily is with XX/X date. and and track XX% XXXX currently to more All are now worked Gimi sail-away activities

the expect to unit end on QX during start-up and arrive We sail-away of for towards site the QX. ready

The capacity of built conversion. XX, for XXX,XXX. secured a with II a Moss-type Japanese designed storage XXXX have a vessel carrier Mark slide to is Turning we now vessel Vintage

once be is agreed the that We deducted pay have option fee reservation million acquisition $XX.X price from in a declared. of $X million will the total acquisition to

the the XXX currently are committed and have We lead long topside shipyard order continue items than million and project. between lead more and long actively Golar equipment to working on $XXX of provider engineers

with progress to significant unit XXXX confirmed drive during with conversion for delivery within our that and made attractive this based ability the value FLNG increases securing believe schedule. current We’ve an We on prospective quarter clients. the shipyard delivery the

also and financing from interest units. China to banks lending have been long-term II Mark We strong for for received and construction

on including partner. upstream several tarping working integrated an opportunity opportunities for project the [ph] an together We’re with actively attractive

of our per a NFE net million Golar XX, annum. market available of about number, to that the for to world pounds same our capacity controls performing of Morgan’s it EV per contractions Golar our acquisition of and around over dollars carbon excess lowest the liquefaction slide Hilli, for currently equate Turning The following in and market of no per best of in total liquefaction marketplace. enterprise trades in cap Kinder of is now of public acquisition capacity, That capacity including technology to debt tonne the latest value is capacity would facility the tonne. Tango footprint ENI stake X.X capacity. that pricing a Dividing $XXX also [Indiscernible] currently billion liquefaction per implies Fuel liquefaction what's FLNG of tonne Exmar’s essentially liquefaction with out liquefaction at the suggest share. sale of With part the a Golar, $XX Elba in

deliver XX XX. $X, our around an Slide FOB $X the to gas $X report of to can well to Subject and to for of for known operation, MMBtu. that we And and dollar can out gas cents feed we at between and we MMBtu between earnings per and cents another Europe OpEx per or FLNG. into Slide can model FLNG or fuel latest the in end of MMBtu. users cost XX throughout ship Asia and $X that sets business Turning per is area $X.XX

between to FLNV market forward the between Hence, between or or between now landed monetization MMBtu $X and the gas, the is XXXX. $XX FLNG $X Europe is $X how project the company and project owner, resource compares at total FLNG and per $XX margin margin when per comparing associated Asia the provider. per to technology This stranded for is an Hence that the into key enables and discrepancy of MMBtu and MMBtu. between divided $XX FLNG upstream

fee the project monetizable. in projects FLNG tolling upstream MMBtu the partner charges take $X in cash including is the market This project have project full and why technology we where on $X.X unit liquefaction typical And out prices. CapEx. upside together integrated mainly between or of the than and Based tariff giving of payback the FLNG and current A stranded the enable on upstream integrated prevailing gas focus monetization is project. the the of the we spread what anywhere both in per chance FLNG a most majority a with an the of two reserves and years, gas the associated cases, breakeven less prices, projects between vast makes the

XX. XXXX. expect renewal further we growth and the ownership full Eduardo Turning and Hilli, to We can increased of rate slide builds for continued upside to through adding on in sheet from funded of FLNG the of and contract run into July see the II that Hilli, on by Hilli flexibility. of utilization This Mark operation BP. read XX-year the in we earnings Gimi increased flow see in increased summary showed balance that its further effect back free cash on slide but equity contract sort on Gimi XX, to with with earnings capacity commodity the Hence start-up existing of be linked incremental upon

exploring potential cash see free on board alternatives the dividends repurchases. assets Gimi flow equity therefore The management return or optimizing stock facilities debt to start and We to existing shareholders Hilli. to value our by are through to also to improve

a income today’s million and book record XXXX $X.X call, Golar To we to summarize value slide of will turn XX. billion. annual reports of $XXX net

billion the a overall balance of cash shareholder allow dollars, a low for have leverage FLNG engagement flow and We cash returns. that growth both and expansion operating

that contract environments. payback in on for clients strong per years priced gas tonne explained, two in believe the focus light we customer liquefaction Golar multiples, these We interaction less over With attractively recent current transactions. very on is project reasons dollar have of opportunities than and with in full the integrated price especially both capacity, and

This QX any now presentation. over earnings listening for questions. concludes for hand our in. you operator the we’ll And Thank to

first Instructions] of Ben [Operator Stifel. you. from Please Thank our comes go the line Nolan ahead. question from

line open. Your is

you. Good and do return start how my either shareholders, say we’ll Thank questions, of or with guys. capital repurchases. Eduardo, to potential to share the morning, afternoon for through I Karl I’d two going am a dividends

do covenant you in are talk part that of was recall, potentially there they’ve if direction I for you that resolved able those what if credit some there facilities. Could issues is been from way guys the prevented to through allocation? anything your of capital maybe as that As being

Ben. Hi

So we March, we the At point bonds, April under are XXXX. is only which the have restriction unsecured not currently can dividend a start. until to where start we allowed currently

we it's is, earlier. could question if the anyways, that So make

it the Right. answer through read is that’s – you’re is I working the that on And there? suppose

Yes.

suppose I we’ll All Okay. right. tuned. stay

For what, my the to looks updates of expansion how field, of is Gimi where potential a the, that your going. Tortue on different particular design, the stand curious, design, a where you project there as is was not next question, just that approach guys some FLNG going curious sort And you It that. though the if I’m your is design, opportunity? about it replicating

foremost and first a There’s be involved.

We’re will for proven is be we one this gravity for know that the And study in solution. field would out project We time through a area. and to that of potential some that and obviously Kosmos a study obviously a with field the less involved phase It the was startup a BP yesterday take Gimi. note based pre pre develop. technology

mobile We considering that were technology, also renewable sourcing. which they in region use liquefaction a application a be note drive electrical to without abundant energy would

gas from you but electricity So the is could fueled still oil. inland or land, source by

as efforts three based the that because benefit doing very contracts opposed our shore So XX see less they years for a to the it’s fixed day, repaired tolling the big especially times tried CapEx we’ve a in project, to decide really to we tariffs highlight call we, on would recessionary be majors, few fixed on expanding as the integrated the the up for At But don’t further of thereafter. to during to what next of construction, only direction based. charters it’s want focus end environment, take. years to spend interesting to on this rather in

but I Okay. back, at I’ll All and right. time have jump if Well, more limit. respect Thank two I the you. end, appreciate And I’ll there’s it. the

Thanks Nolan.

stand our now to Please you. next by. We’ll move question. Thank on

from comes Please of Deutsche ahead. go the question Bank. line from Our next Amit Mehrotra

is line open. Your

this taking for our Thanks for Chris Robertson questions. Amit. on Hi, is

Chris. Hi,

know piggyback just you’re think going to share of a off Or at regarding I you the think state dividend, price how there. thinking having Hi, around policy? the think mean, should that? regards about, dividend a the a repurchases, maybe with trade it’s a about can that the repurchase. in the for then steady much versus discussions this, questions talk given presentation. about But is a thinking current given is direction And You’re you maybe we about that a to laid today? of pretty on-going early where kind Ben’s some kind earlier policy? Do shares of share you scenario higher to out I in share of dividend

broke a referred you you Chris, bit, to. I think Well most but up I captured of what

restriction So bonds. in and a current dividend repurchase a would same the follow unsecured the

between we’re in at decisions this exploration still alternatives to and between the event firm March way, the and repurchase, engage, do wouldn’t comes either April have So all we working and been currently to the board it but to under to When we’re made balance that able management XXth. of until identify. dividend is

I think equity, dollar and value that stocks we [ph] highlight if recent multiples, in to transactions, comparisons both to the compared you’d cash flow of see significant we today. believe tonne, book value per

that talk laid can relates And it cash future as projects. balance but it. out further projects about Got sheet the to the then of here, -- we you’ve of for you going holding to just some on forward the potential mark, kind not present kind back

operations, Gimi sufficient very shareholders. of dollars and mark I just cash of Eduardo the returning billion of that, pay or healthy is, equity, think from to as even of all do be fund free cash to it flow start would the project. to flow growth a Hilli is dollars cash. to cash more million from amounts And can a sufficient you without to touching than And just

So grow we mutually have capacity and of and plenty return exclusive. cash flow equity, not they’re both to to

got Yes, here. the Yes, All a lot you liquidity certainly questions. Thank right. for it’s of taking it.

Thanks, Chris.

Thank you. our next question. Please on We’ll standby. now move to

question Chris the Tsung next line Research. from Webber of Please from go comes Our ahead.

Your is line open.

good how are afternoon, and you? Karl Hey, Eduardo

good. Oh, Yes.

you. Thank

for XX% looks at the looking II quarter. million increased it last around like, Just you I guys presentation, cost your XXX said like think Mark

it to a So price that what that is, your does just this cost costs of the FLNG? for or higher second and more higher ton part in, from a ask change per just equipment dollar wanted on is just is like guidance ordering environment lumping

you derive we of slide for that slide illustrative tonne which out dollar use to XX. be, that is on referring XX. slide you’re assume purposes, to meant I we is balance the XX use And per what the

at Golar just we set buy you XXX. today up So

or EBITDA. What same We basis. create than that we cost earnings You can the versus use Mark do An cheaper that to? would the implied II somewhat believe equate liquefaction that. XXX at

Okay, cause the in prior yes, I think earnings.

a to it like got guys around You to XXX at XXX tonne.

planning. Maintained that

that? Okay, you maintained

Yes.

question, think if And well, you’ve just how refinance Hilli? great. on liquidity could much second and Gimi Okay, I my touched you unlock Thanks. you before as this

want to Eduardo, you that tackle one?

sure. Yes,

discussed the So previous I that on we think call.

We doing have pursue, which potential alternatives in assessed to we of Depending we excess Gimi different to further Gimi. unlock see new facility. be could be a still And alone of Hilli pursuing from number require value to would we the off existing on We markets bank on facility. commercial that risk. of a a believe the That that just billion. extract or the could one capital values the further either completely $X.X we would in of and eliminating better billion $X.X potentially refinancing would construction

any So of take Gimi. commencement sort activities we before the expect to operations refinancing of don’t of

both as that the I think, with cash but Karl cash and the have discussed generation further current out enhanced well, Hilli, flow than more payments the in to we have, future. sustain growth commence pointed by further on enough as by near position and from also to FLNG, we

to So I think we comes refinancing. it will optimistic be when to try

for you. you guys. it that’s me. Thank Thank Great,

you. Thank

[Operator ahead. from line comes from you. of Instructions] B. Riley Our go Thank Financial. Burke Please Liam next the question

line open. is Your

you. Thank Hi, Karl, how are you?

Good.

you in for with would in Golar? are think projects Karl, be players line more looking that market you any potential competing FLNG seeing the would

for balance control competitor sheets, fields, major as the or the such of expansion think is Tortue. I stuff on VPN planning biggest Kosmos own the like what building as assets

for don’t that and stepping competing players in like you see business. for NFE but your Okay, any

like waters that on those NFE are mainly as of we’ve smaller again, As any pursuing the first in to LNG complementary technology have, developing. Mexico. complementary and focus them don’t we targeting seem Golar. think complementary think we [ph] that they technology And that we when resources that are of occasions mainly ours are comes currently that’s to pursuing we we U.S. that to to said They their and shallower it direct the for are is projects a they to technology competitors Gulf and numerous think on and see projects

Karl. great. Okay, Thanks

you. Thank

on We’ll move our now to next you. Thank question.

Nolan next comes of from Stifel. go Our from Ben Please line question ahead. the

open. line is Your

of acquisition in tonight II start the the bit in you you the Hi, you for actual have of that. curious what remind be wanted to slot thinking first you on said cost place could for just need the would that cover total Mark or more confirmed, In what in a And you II. me ship other yard little than I’d the would you’re terms a the I the the for spinning Mark XXXX have us is confirmed actually presentation, told log and I’m you’re I be? vessel when to of the delivery. back. when construction shipyard CapEx would you

Sure.

is in different sort II Mark slightly of that of okay, I. concepts So, Mark than

bring plant in So slide chopped ship on ships on if weld you either that to the the a be planned side the go ship you midsection. from built is of in, see can for on ship liquefaction and itself middle the Then you example, the the XX, scratch you new basically plant. you to liquefaction

the that we of the to is Hence, next this the start keep And need we majority itself to start to time the ship mid-section to construct in on would preparation year. for. shipyards ship work vast where schedule, the be intended the then will [Indiscernible]

to this So going for to or on shipped important shipyard, more the than midsection year. this side get us, the during into it’s get

less existing this unit. unit built, that an means which stick it’s So is into that’s building how

the put basically add then liquefaction plant the middle You storage. in the and

system billions slightly what believe of around terms because somewhere on up In X.X on end that should between we it’s be using, will dependent feasible. CapEx, X we mooring and

I goes interim ship, market in that in you and And would in the Is or suppose spot of color. the you good is assumption? the that shipyard trade That perfect. take something. a after it Okay, it period, delivery just fair the before

the drag is need until whole the actually but equipment. and we we try commit secure II timeframes, structure we that limit cash to No, tried I Mark way the we’ve think to the project the

the million to So the more is it pay upon full itself, paid we then also why to around the comes likely we the installment reserve when to not the next structured the ship And be this then amount but is delivery, why to of ship, pay which X in it need upon we as an option. time somewhat year final QX. that’s where option, duration money

Okay. All Thank Appreciate clear. right. Very it. you.

Ben. you, Thank

Thank you. questions There this no at further are time.

hand remarks. closing call for back the I’ll to So Karl

all our into Thank listening presentation. you for quarterly

hope about plan the pace all the excited development very XXXX. in interest thank of you keep We’re your the progress bye. to during same during and both company. project support of and good you XXXX We day a the and bye and for And continued wish

today’s conference concludes you participating. for call. This Thank

now disconnect. may You