OSLO, Norway, Aug. 30, 2005 (PRIMEZONE) -- Golar LNG reports operating income of $11.6 million for the three months ended June 30, 2005 and a net loss of $4.4 million as compared to operating income of $18.3 million and net income of $17.3 million for the first quarter of 2005 ($18.0 million and $19.2 million (a), respectively, for the second quarter of 2004). Net cash provided by operating activities remains positive for the quarter at $11.5 million, compared to $20.6 million for the first quarter of 2005.The results for the second quarter have been impacted by the mark-to-market revaluation of interest rate swaps, which has resulted in a net loss (after minority interests) of $8.0 million and foreign exchange and currency swap losses in respect of the Company's leases of $2.2 million. Both these items, which total a charge for the quarter of $10.2 million (net gain of $4.0 million for the last quarter), are unrealised and therefore have no cash impact. Interest rate swap losses were impacted during the second quarter of 2005 due to long-term interest rates hitting a relative low point at the end of June 2005.
The Company's share of Korea Line Corporation's ("Korea Line") net income for the three months to June 30, 2005, is $7.4 million as compared to last quarter's $9.6 million ($4.2 million 1 for the second quarter of 2004) in respect of Golar's 21.9% shareholding. Continued weakness in the spot market has led to a fall in operating revenues for the second quarter of 2005 to $38.9 million as compared to $44.2 million for the first quarter of 2005 ($38.5 million for the second quarter of 2004). Average daily time charter equivalents (TCEs) were $41,200 for the second quarter of 2005 against last quarter's $50,600 ($55,150 for second quarter of 2004). The average daily TCE has again been affected by commercial waiting time in respect of the Golar Winter, which traded for two months out of the quarter, and the Golar Frost and Golar Viking both of which were idle during the second quarter for all but a few days. The above three 'spot' vessels participate in the Golar-Exmar joint arrangement together with one Exmar vessel, with net revenues pooled and shared between the two companies. Exmar's vessel, the Excalibur, embarked on a short-term charter towards the end of June but was idle for the balance of the second quarter.
Vessel operating expenses for the second quarter of 2005 were the same as the first quarter of 2005 at $9.6 million ($8.3 million for the second quarter of 2004). The increase over 2004 is attributable to the operating costs of the three new vessels delivered in 2004 and early 2005.
Administration costs were $3.5 million for the quarter as compared to $3.2 million last quarter and $1.9 million for the second quarter of 2004.
Net interest expense for the second quarter of 2005 was $11.4 million, which compares to $10.7 million last quarter and $6.6 million for the same period in 2004. The increase over last quarter is primarily due to higher levels of debt as a result of the refinancing in March offset by reduced margins, and generally higher interest rates. Interest expense and interest income includes $10.4 million and $8.7 million respectively relating to the Company's lease finance transactions.
Other financial expenses for the second quarter of 2005 of $10.1 million include a loss of $7.8 million associated with the fair value of interest rate swaps, including the effect of an additional $155 million of interest rate swaps entered into during the quarter. This compares to a gain of $6.4 million last quarter ($9.9 million gain for the second quarter of 2004). Other financial items also include net foreign exchange translation and currency swap losses of $2.2 million in respect of its leases during the second quarter of 2005, as compared to a $1.5 million loss last quarter.
Loss per share for the quarter was $0.07 as compared to an earnings per share of $0.26 last quarter and $0.29 1 for the second quarter of 2004.
The number of shares outstanding as of June 30, 2005 was 65,562,000 (March 31, 2005: 65,562,000). The weighted average number of shares outstanding for the second quarter of 2005 was 65,562,000 and 65,612,000 for the twelve months ended December 31, 2004.
FORWARD LOOKING STATEMENTS
This press release contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including examination of historical operating trends made by the management of Golar LNG. Although Golar LNG believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies, which are difficult or impossible to predict and are beyond its control, Golar LNG cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.
Included among the factors that, in the Company's view, could cause actual results to differ materially from the forward looking statements contained in this press release are the following: inability of the Company to obtain financing for the new building vessels at all or on favourable terms; changes in demand; a material decline or prolonged weakness in rates for LNG carriers; political events affecting production in areas in which natural gas is produced and demand for natural gas in areas to which our vessels deliver; changes in demand for natural gas generally or in particular regions; changes in the financial stability of our major customers; adoption of new rules and regulations applicable to LNG carriers; actions taken by regulatory authorities that may prohibit the access of LNG carriers to various ports; our inability to achieve successful utilisation of our expanded fleet and inability to expand beyond the carriage of LNG; increases in costs including: crew wages, insurance, provisions, repairs and maintenance; changes in general domestic and international political conditions; changes in applicable maintenance or regulatory standards that could affect our anticipated dry-docking or maintenance and repair costs; failure of shipyards to comply with delivery schedules on a timely bases and other factors listed from time to time in registration statements and reports that we have filed with or furnished to the Securities and Exchange Commission, including our Registration Statement on Form 20-F and subsequent announcements and reports.
(a) The comparative financial information for the three months and six months ended June 30, 2004 reflect adjustments from the Company's previously reported results for those periods, which relate to the Company's equity in net earnings of Korea Line Corporation and which were reported at the time Golar's audited financial statements were filed in June 2005. The adjustments reduce the reported net income for the three months and six months ended June 30, 2004 by $3.1 million and $4.2 million respectively, or on an earnings per share basis by $0.05 and $0.06 respectively.
August 30, 2005 The Board of Directors Golar LNG Limited Hamilton, Bermuda
The full report including tables can be downloaded from the following link: http://hugin.info/133076/R/1008936/156093.pdf