OSLO, Norway, Aug. 25, 2006 (PRIMEZONE) -- Second Quarter Interim Report April - June 2006
Golar LNG reports net income of $17.3 million for the second quarter of 2006. This is a significant improvement on the loss of $4.4 million reported for the second quarter of 2005 although down from net income of $27.9 million reported last quarter mainly as a result of lower spot vessel utilisation and reduced contribution from Korea Line.
Operating income for the quarter at $22.3 million has virtually doubled from the same period in 2005 but is down from $28.5 million reported last quarter. The significant improvement from the same period last year has been driven by improved spot charter rates, improved utilisation and the addition of the Grandis to the fleet in January 2006. Although the daily charter rates our vessels earned in the second quarter were reasonably consistent with the first quarter of 2006, utilisation was down particularly as a result of waiting and positioning time between charters for one of the spot traded ships. This has affected average daily time charter equivalents (TCE's) for the fleet, which were $49,700 for the second quarter as compared to $55,100 for the first quarter of 2006 and $41,200 for the second quarter of 2005.
Vessel operating expenses at $10.0 million for the quarter were only marginally increased from the same period last year despite the addition of the Grandis to the fleet. Administrative expenses were $3.8 million, which although consistent with last year were increased from $2.3 million in the first quarter of 2006. The increase is mainly due to an increase in the charge in respect of share options issued during the first half of 2006 of $0.7m.
Net interest expense for the second quarter was $14.1 million, slightly up from $13.8 million for the first quarter of 2006 as a result of a marginal increase in interest rates and the addition of the $120 million Granosa facility upon delivery of the vessel in June 2006.
Other financial items include a gain in the second quarter of $11.7 million as compared to a gain of $9.9 million for the first quarter of 2006 and a loss of $10.1 million for the second quarter of 2005. The main component of other financial items is interest rate swap valuation movements. The continued increase in long-term interest rates has resulted in valuation gains of $9.3 million for the second quarter and $8.5 million for the first quarter of 2006. Long-term rates declined during the second quarter of 2005, which resulted in a valuation loss of $7.8 million. Other financial items for the second quarter of 2006 also include a realised gain of $2.0 million in respect of a natural gas future trade. In June 2006 the Company entered into a charter, the rate for which was linked to the forward price of natural gas. The transaction was designed to hedge the Company's expected exposure to the movement in this forward price and the gas trade was closed once the charter rate was fixed.
The Company's share of Korea Line's net income for the second quarter is $0.2 million as compared to $5.6 million for the first quarter of 2006. Korea Line's results for the first quarter of 2006 were significantly boosted by income received as a result of the early termination of three charters and would be comparable to the second quarter were it not for this additional income. The Company has determined that it should equity account for its investment in Liquefied Natural Gas Limited ("LNG Ltd"). As a result equity in net earnings of associates for the quarter also includes a loss of $0.1 million in respect of our share of LNG Ltd's loss for the quarter.
The full report can be viewed on the following link: http://hugin.info/133076/R/1071562/182983.pdf