Golar LNG Limited ((GLNG)) has held its Q4 earnings call. Read on for the main highlights of the call.
Golar LNG Limited’s recent earnings call painted a picture of a company successfully navigating its transition to a pure Floating Liquefied Natural Gas (FLNG) entity. The sentiment was largely positive, underscored by a robust financial position and significant project backlogs, although some challenges were noted in securing conversion candidates and addressing infrastructure needs in Argentina for future projects.
Transition to Pure FLNG Company
Golar LNG has completed its transformation into a pure FLNG company with the sale of Avenir LNG and Golar Arctic. This move marks the end of a 50-year era in the LNG shipping market, allowing Golar to focus entirely on its FLNG operations.
Significant EBITDA Backlog
The company boasts an impressive EBITDA backlog of $11 billion, excluding commodity exposure. This backlog provides strong earnings visibility, particularly with the anticipated long-term charter for the MKII FLNG, which is expected to further enhance financial stability.
Strong Financial Performance
Golar LNG reported an adjusted EBITDA of $241 million for the full year 2024 and maintains a healthy cash position of $700 million. Additionally, the company declared a dividend of $0.25 per share for the quarter, reflecting its strong financial health.
Hilli’s Operational Excellence
The FLNG Hilli has been a cornerstone of Golar’s operations, delivering 128 cargoes since its start-up in 2018 and generating $277 million in EBITDA during 2024. The recent acquisitions are expected to boost these figures further.
Gimi’s Commissioning and Upcoming Operations
The FLNG Gimi is on track to commence full commercial operations in the second quarter, unlocking approximately $3 billion of EBITDA backlog, which is a significant milestone for Golar.
Mark II FLNG Construction Progress
Construction of the Mark II FLNG is proceeding as planned, with delivery expected in 2027. This project is a key component of Golar’s long-term growth strategy.
Increased Interest in Argentine Project
The Argentine project has gained momentum with the involvement of three major gas producers, enhancing its economic foundation and increasing the potential for further FLNG deployments in the region.
Challenges in Acquiring Conversion Candidates
Despite identifying potential conversion candidates for FLNG units, Golar faces challenges due to price pressures in the LNG carrier market, which complicates acquisitions.
Infrastructure Needs in Argentina
For future FLNG deployments in Argentina, a dedicated gas pipeline from Vaca Muerta is essential. This requires coordination and investment from gas producers, highlighting a critical infrastructure need.
Forward-Looking Guidance
Looking ahead, Golar LNG’s leadership provided detailed guidance, emphasizing the company’s strong financial metrics and strategic plans. The company aims to secure a charter for the MKII FLNG and is considering ordering a fourth FLNG unit. Opportunities for further FLNG deployments in Argentina and other markets are also being explored, promising potential growth.
In conclusion, Golar LNG’s earnings call conveyed a positive outlook, driven by a successful transition to a pure FLNG company and a strong financial foundation. While challenges remain, particularly in securing conversion candidates and infrastructure development, the company’s strategic initiatives and robust backlog position it well for future growth.