Golar LNG Partners Limited Partnership (NASDAQ:GMLP) Q4 2019 Earnings Conference Call - Final Transcript

Feb 25, 2020 • 11:30 am ET

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Golar LNG Partners Limited Partnership (NASDAQ:GMLP) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by and welcome to Golar LNG Partners LP 4Q 2019 Year Results. [Operator Instructions]

I will now like to hand the conference over to your speaker today, Graham Robjohns. Please go ahead, sir.

Executive
Graham Robjohns

Thank you, and good day to you, all.

Welcome to Golar Energy Partners' Q4 results presentation. As the operator just said, my name is Graham Robjohns. And I am joined here today by our Chairman, Tor Olav Troim, and our Head of Investor Relations, Stuart Buchanan.

Before we start the presentation, I would encourage you to read through page 2, forward-looking statements, in your own time.

Turning over to slide 3 and highlights. At $36.3 million, our operating income was slightly improved on Q3 as we had guided. This result does not however, include our interest in the operating results of the Hilli Episeyo or the capital element of the Golar Freeze contract, which is now classified as a sales type lease and disclosed as interest income. We reported net income of $30.4 million and we generated distributable cash flow of $34.6 million, also an improvement on Q3, with a distribution coverage ratio of 1.21.

Pleasingly, we have had further success in terms of reconstructing our vessels. In addition to the two year charter for the Golar Maria and two year contract extension for the Igloo, we recently agreed a one year extension for the Golar Grand.

Turning over to slide 5 and our financial summary. Revenues and operating income showed a slight improvement from Q3 despite the fact that the Igloo commenced its winter off high periods on December 1 as a result of improved earnings from the Golar Maria and the Golar Mazo.

Interest expense was slightly down as debt balances and LIBOR reduced, but more significant impact on net income came from the increase in longer-term interest rates which gave rise to a non-cash interest rate swap gain. As I mentioned, distributable cash flow improved in the quarter from $33.6 to $34.6, which led to a distribution coverage ratio of 1.21, an improvement from last quarter's 1.18.

Turning over to slide 5, segment information. In order to make a better comparison of our operating results, we have included this slide, some segment information which shows that adjusted EBITDA, inclusive of the Freeze and our share of Hilli Episeyo. As you can see, adjusted EBITDA was up from last quarter at $81.4 billion.

Turning over to slide 6 and the balance sheet. At the end of the quarter, our adjusted net debt was $1.53 billion, which includes $422 million of debt associated with the Hilli Episeyo. With an improved EBITDA and slightly lower debt, our net debt to annualized EBITDA ratio has improved again. At December '18, it was 5.1; last quarter, it's 4.8; and for the quarter ended December 2019, it was 4.7.

On slide, we have a revenue backlog chart that highlights the fact that including the additions of the Maria, Igloo and the Golar Grand, revenue