Golar LNG Partners Limited Partnership (NASDAQ:GMLP) Q3 2020 Earnings Conference Call - Final Transcript

Nov 30, 2020 • 11:30 am ET

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Golar LNG Partners Limited Partnership (NASDAQ:GMLP) Q3 2020 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 Third Quarter 2020 Earnings Presentation. [Operator Instructions] I must advise you that this conference is being recorded today, 30th of November 2020.

I would now like to hand the conference over to first speaker today, Karl Staubo, Partners' CEO. Please go ahead, sir.

Executive
Karl Fredrik Staubo

Thank you, speaker. And welcome all to the Golar LNG Partners Q3 earnings release. Please make a note of the forward-looking statements on Page 2.

I'll then proceed to Page 3, Recent Highlights. Operating income for the quarter came in at $32.1 million, excluding the Partnership's interest in Hilli. Our quarterly net income was $17.4 million for the quarter. Total adjusted EBITDA, including the FLNG Hilli, came in at $76.5 million. Distributable cash flow was $20.7 million with a coverage ratio of 14.5 times. We declared a distribution of $0.0202 per common unit. And we've entered into a cooperation agreement with Hygo, as also previously disclosed. And lastly, we are now -- we have now received credit approved commitments from four lead banks for the contemplated refinancing of the seven-vessel bank facility maturing in April of next year. And we expect further bank commitments following a syndication exercise.

Turning to the third quarter results on Page 4. Operating revenue for the quarter was $71 million, just below Q2 revenue of $72.1 million as a result of the scheduled step down in the daily rate for one of our FSRUs as anticipated. Adjusted EBITDA for the quarter was $76.5 million, marginally below Q2 of $77.7 million, mainly driven by the same drop in the FSRU charter rate and somewhat higher opex due to lifting of COVID restriction on certain maintenance works. Distribution coverage ratio for the quarter came in at 14.50, down from 20.1 in Q2 due to dividends received from Hilli after quarter end. For Q4, we expect distribution coverage ratio to revert to Q2 2020 levels as we expect the Hilli dividends to come inside the quarter.

Turning to segment information on Page 5. We continue to see stable operations across the fleet. We maintained 100% utilization for the FSRU fleet in the quarter, with both revenue and EBITDA in line with Q2 adjusted for a contractual step down in the time charter for one of our FSRUs. The LNG carrier Maria started its longer-term charter and shipping. Earnings were therefore very stable for the quarter. The FLNG Hilli continued its very strong utilization with another quarter of 100% utilization and the vessel has now delivered its 47th LNG cargo.

Turning to Page 6 and the balance sheet. As in the previous quarter, there has been no significant unexpected movements in our balance sheet for the quarter. We ended the quarter with a total cash position of $223 million, split between $42 million of free cash and $184 million in restricted cash. Our net interest bearing debt at quarter end was $1.4 billion with a net interest bearing debt to EBITDA multiple