Interim results for the period ended 30 June 2017
Golar LNG Partners LP reports net income attributable to unit holders of $53.8 million and operating income of $87.4 million for the second quarter of 2017 ("the second quarter" or "2Q"), as compared to net income attributable to unit holders of $23.6 million and operating income of $54.9 million for the first quarter of 2017 ("the first quarter" or "1Q") and net income attributable to unit holders of $28.0 million and operating income of $66.9 million for the second quarter of 2016, the company said in its press release.
As anticipated, total operating revenues increased, from $101.4 million in the first quarter to $136.0 million in the second quarter. The $34.6 million increase reflects three events. Firstly, the FSRU Golar Igloo was on hire for a full quarter having spent January and February off-hire for its scheduled winter downtime. Secondly, in anticipation of her new charter, the LNG carrier Golar Grand was taken out of layup and dry-docked. This resulted in 46 days off-hire during 1Q and a lesser 13 days in 2Q.
Finally, the FSRU Golar Spirit received a one-off termination fee as a result of Petrobras opting to end the charter in June 2017 as opposed to the original end date of August 2018. Having discharged all of its obligations under its time charter with Petrobras on June 23, this fee was recognized in its entirety in 2Q.
Operating expenses at $18.6 million were $1.5 million higher than the prior quarter. Additional costs were incurred preparing the LNG carrier Golar Grand for post dry-dock operations and for the FSRU Nusantara Regas Satu which was undergoing its five-yearly maintenance program in lieu of dry-dock which also resulted in additional operating costs.
Depreciation and amortization at $26.1 million increased $1.4 million over 1Q mainly due to an accelerated amortization of the Golar Winter's dry-dock cost as a result of its drydock occurring earlier than originally anticipated.
Interest expense at $18.9 million for the second quarter was higher than the first quarter at $18.2 million. Most of the increase reflects the cost of servicing the new February 2017 issued $250 million high yield bond for a full quarter together with the balance outstanding in respect of the October maturing 2012 high yield bond. Other financial items recorded a loss of $7.7 million for 2Q of which $4.1 million was attributable to non-cash interest rate swap losses as a result of a decrease in swap rates.
The tax charge for the quarter at $4.7 million was $1.2 million higher than 1Q. A full quarters taxable earnings in respect of the FSRU Golar Igloo together with additional tax charges in other territories, predominantly Indonesia, accounts for most of the variance.
As a result of the foregoing, 2Q distributable cash flow1 was higher at $72.1 million compared to $36.4 million in the first quarter. The distribution coverage ratio1 increased accordingly from 0.89 to 1.77 in 2Q.
