UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of March , 2005
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Golar LNG Limited
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(Translation of registrant's name into English)
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [_]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [_] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
Item 1. INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 99.1 is a copy of the press release of Golar LNG Limited
(the "Company"), dated March 1, 2005.
Exhibit 99.1
Golar LNG
December 2004
FOURTH QUARTER AND TWELVE MONTHS RESULTS
Golar LNG reports net income of $19.1 million for the three months ended
December 31, 2004 and operating income of $21.2 million as compared to $5.2
million (restated) and $19.7 million, respectively, for last quarter ($13.9
million and $17.6 million, respectively, for the fourth quarter of 2003). Net
cash provided by operating activities has increased from $14.2 million for the
fourth quarter of 2003 to $18.6 million for the fourth quarter of 2004.
These results include the Company's share of Korea Line Corporation's ("Korea
Line") net income for the three months to December 31, 2004, of $3.9 million as
compared to last quarter's $0.8 million (restated) in respect of Golar's 21%
shareholding. Following the completion of work to convert Korea Line's financial
results from Korean GAAP to US GAAP, adjustments have been to the amounts
originally reported in previous quarters for Golar's share of Korea Line's US
GAAP net income. The adjustments relate to the accounting treatment of foreign
currency transactions since under US GAAP the functional currency of Korea Line
is different to that under Korean GAAP. As a result the Company has restated the
net earnings contributions from Korea Line during the nine months to September
30, 2004 from $15.0 million to $11.9 million. Net income from Korea Line for the
quarter ended September 30, 2004 and June 30, 2004 have been restated to $0.8
million and $5.9 million from $1.1 million and $7.3 million respectively.
Stockholders' equity as at September 30, 2004 as restated amounts to $378.4
million as compared to $382.3 million as originally stated.
Basic earnings per share for the nine months to September 30, 2004 as restated
amounts to $0.60 as compared to $0.65 as originally reported. Basic earnings per
share for the quarter ended June 30, 2004 as restated amounts to $0.32 as
compared to $0.34. There was no restatement to basic earnings per share for the
three months ended September 30, 2004.
Golar's net income from Korea Line in the fourth quarter of 2004 under US GAAP
is considerably less than a 21% share of Korean Line's reported Korean GAAP
earnings due to a large foreign currency translation gain on US dollar
borrowings caused by the weakness of the US dollar in the fourth quarter of
2004, which does not arise when Korea Line's results are converted to US GAAP.
Earnings this quarter have been affected by a net gain (after minority interest)
on interest rate swaps of $2.6 million and unrealised foreign exchange and
currency swap gains of $2.6 million.
Earnings per share for the quarter were $0.29 as compared to $0.08 last quarter
($0.22 for the fourth quarter of 2003).
For the twelve months ended December 31, 2004 the Company reports net income of
$58.6 million as compared to $39.6 million for the same period in 2003 and
operating income of $76.1 million as compared to $62.1 million for the same
period in 2003. Earnings per share for the twelve months to December 31, 2004
were $0.89 and were $0.68 for the same period in 2003.
Operating revenues for the fourth quarter of 2004 were $45.4 million as compared
to $43.5 million for the third quarter of 2004 ($38.2 million for the fourth
quarter of 2003). Average daily time charter equivalents (TCEs) were $54,300 for
the fourth quarter of 2004 against last quarter's $54,520 ($57,500 for fourth
quarter of 2003). The average daily TCE was affected by commercial waiting time
in respect of the Golar Frost, which was unemployed due to the weakness in the
market for most of the quarter.
Vessel operating expenses for the fourth quarter of 2004 were $9.6 million
compared with $9.7 million for the previous quarter ($8.5 million for the fourth
quarter of 2003). The increase from last year is due to the addition of the
Golar Frost and Golar Winter to the fleet.
Administration costs were $3.1 million for the quarter as compared to $1.8
million last quarter and $2.3 million for the fourth quarter of 2003. The
weakness in the USD continues to adversely impact administrative expenses due to
the fact that the majority of Golar's administrative costs are incurred in
British pounds (GBP). This exchange exposure should be alleviated to some extent
in the future due to the fact that some of the GBP expenses at Golar's London
office will effectively be replaced by USD management fees from the ship
managers as a result of Golar's reorganisation announced in January 2005. In
addition to currency effects administrative expenses have been impacted this
quarter in particular by a provision for accounting and auditing costs
associated with the work required in respect of Korea Line's results.
Net interest expense for the fourth quarter of 2004 was $8.8 million, which
compares to $8.7 million for third quarter of 2004 and $6.4 million for the same
period in 2003. Interest expense and interest income includes $10 million and
$8.6 million respectively relating to the Company's lease finance transactions,
including the Golar Winter funded lease.
Other financial items of $5.7 million expense includes a gain of $4.1 million
associated with the increase in fair value of interest rate swaps, which include
this quarter the effect of an additional $85.0 million of interest rate swaps,
as compared to a $5.3 million loss last quarter ($4.7 million gain for the
fourth quarter of 2003). The gain on the swaps which relate to the 60% owned
Golar Mazo, is reduced by the minority interest element of 40% resulting in a
net book gain on all swaps of $2.6 million as compared to a $3.6 million loss
last quarter ($2.8 million gain for the fourth quarter of 2003). Other financial
items also include net foreign exchange translation and currency swap losses.
The Company recorded a net unrealised foreign exchange and currency swap gain of
$2.6 million in respect of its leases during the fourth quarter of 2004, as
compared to a loss of $1.0 million last quarter.
The number of shares outstanding as of December 31, 2004 was 65,612,000
(December 31, 2003: 65,612,000). The weighted average number of shares
outstanding for the fourth quarter of 2004 and the twelve months ended December
31, 2003 was 65,612,000 and 58,532,548 respectively.
FINANCING
The Company has entered into interest rate swaps on an additional $85 million of
debt for varying periods of between 5 and 10 years during the quarter and a
further $60 million during January 2005. As at December 31, 2004 approximately
$428 million of debt accrues interest at a fixed rate ($488 million as at
February 28, 2005), which represents approximately 51% of total bank debt and
net (after deduction of restricted cash deposits) capital lease obligations.
In January 2005, the Company entered into a $120 million loan facility in
respect of its newbuilding the Golar Viking, which was delivered in January
2005. This generated $27 million in additional liquidity for the Company.
Refinancing plans, reported last quarter, for Golar's existing fleet are at an
advanced stage and it is expected that a refinancing will be completed before
the end of Q1 2005. It is anticipated that this will release approximately $45
million of additional liquidity.
CORPORATE AND OTHER MATTERS
As at December 31, 2004 Golar has a 21% shareholding in Korea Line, which is
unchanged from June 30, 2004. The total cost of this investment was $34.1
million. As at February 28 2005, the market value of this investment was
approximately $79 million, based on Korea Line's share price.
On January 17, 2005 the Company announced a reorganisation of its technical
fleet operation, the aim of which is to improve service level to the Company's
customers through closer proximity and to secure a long-term high quality
workforce for the ships. The reorganisation will lead to the opening of two new
offices, one based in Singapore to cover the Asia / Pacific market and one based
in Oslo to cover the Atlantic market. The Company has teamed up with two leading
ship managers to run these offices. The Singapore office will operate with Thome
Ship Management and the Oslo office will be operated with Barber Ship
Management. Control and supervision of technical fleet operations will however
remain with Golar.
The second and final Service Conference in respect of the Livorno project has
been postponed until April 2005. Discussions are currently taking place
regarding a broader participation by Golar in this project.
The Company is continuing to evaluate several other potential terminal projects
in addition to the potential investment in "TORP" technology announced on
January 11, 2005. In particular the Company has had discussions with the
ministries of energy in several countries regarding the introduction of floating
LNG storage and regasification units. The purpose of these discussions is mainly
to lower the cost of electricity production by introducing LNG as supplementary
feedstock to oil products.
The technical upgrading of the four vessels on charter to BG will be completed
in the first quarter of 2005. Approximately $50 million has been spent on
upgrading and drydocking during the last three years. Unscheduled offhire for
repairs and maintenance for the whole fleet has been less than 60 hours in 2004.
MARKET
Worldwide consumption of LNG has never been higher; there are an unprecedented
number of LNG projects under construction and development, and prevailing energy
prices in both East and West have ensured that any available LNG production is
immediately committed.
LNG production during 2004 was at a record level of 134.8 million tonnes per
year (MMTA) with a further 10.9 MMTA due on-stream during 2005 and 21.5 MMTA in
2006. The continued strength of demand for LNG has ensured accelerating
development of new LNG production projects: Total's Yemen Project is now firm
and is seeking tonnage, while the expected confirmation of Shell's Qatar
project, following the ExxonMobil and ConocoPhillips projects, as well as new
projects in Nigeria will further enhance demand for shipping. It is further
assumed that Korea's Kogas will be in need of additional tonnage to meet
increasing demand.
At the end of 2004 there were 174 existing LNG carriers with 105 more on order.
2007 will see more than 30 vessels delivered, the first time that more than 30
ships will be delivered in one year. In spite of this output the huge increase
in demand, particularly from Qatar, is likely to lead to further pressure on the
availability of newbuillding slots and thereby newbuilding prices.
The strong Asian demand for LNG has supported strong Asian LNG prices and has
weakened the shipping market by reducing the tonne-mile demand compared to
longer haul transportation.
Restricted LNG supply has reduced the number of cargoes available on the spot
market, which has limited the commercial opportunities for the strategic
alliance with Exmar.
The Board anticipates that the market for spot tonnage will remain weak for the
next 1-2 years. The weakness in the spot market is likely to lead to
opportunities to consolidate the market further.
OUTLOOK
Considerable management time is currently being spent on developing tailor made
floating LNG infrastructure alternatives. Strong oil prices relative to Gas
prices, the environmental benefits of burning gas compared to oil and the
shortage of power in various parts of the world, particularly China, has created
an interesting niche for floating LNG / power solutions. The Board has a strong
belief in this market where the availability of the Company's older vessels will
give the Company a competitive edge. The Board is of the opinion that the cost
savings generated through such solutions will make this a better margin business
than the very competitive long-term charter business.
As more LNG comes to the market and shipbuilding market remains tight, it is
likely that the commercial value of the Companies spot tonnage will increase.
The majority of the Company's fleet (7 vessels) is committed long-term to first
class charterers. These 7 ships are likely to show an improved net income result
for 2005. The net income break even for the remaining three ships is
approximately$39,500 per day, while the cash break even is approximately$37,000
per day. One of the open ships is covered by a short-term charter for the first
quarter 2005. In the current market conditions it is not likely that the three
spot ships will generate a positive net income contribution for 2005.
Net income for the first quarter of 2005 will be impacted by the dry-docking of
two vessels, although no off hire is expected to be incurred for one of these,
the Golar Mazo, because of the way its charter is structured. Interest rate swap
valuations will continue to be a material factor.
The Board remains optimistic about the Company's long-term outlook, but sees
challenges in the short-term created by the temporary over supply of tonnage.
Financially the Company is well prepared to meet these challenges.
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 newbuilding 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.
March 1, 2005
The Board of Directors
Golar LNG Limited
Hamilton, Bermuda
Questions should be directed to:
Tor Olav Troim: Director and Chief Executive Officer +44 7734 976 575
Graham Robjohns: Chief Accounting Officer & Group Financial Controller
+44 207 517 8600
Charlie Peile: Executive Vice President, Head of Commercial +44 207 517 8600
GOLAR LNG LIMITED FOURTH QUARTER 2004 REPORT (UNAUDITED)
2003
2004 2003 2004 Jan - Dec
INCOME STATEMENT Oct - Dec Oct - Dec Jan - Dec unaudited
(in thousands of $) unaudited unaudited unaudited (restated)
------------------- --------- --------- --------- ----------
Operating revenues 45,378 38,249 163,410 132,765
Vessel operating expenses 9,587 8,537 35,759 30,156
Voyage expenses 668 1,053 2,561 2,187
Administrative expenses 3,051 2,290 8,471 7,138
Depreciation and amortisation 10,910 8,756 40,502 31,147
Total operating expenses 24,216 20,636 87,293 70,628
Operating income 21,162 17,613 76,117 62,137
Interest income 8,896 6,390 31,879 14,800
Interest expense (17,667) (12,798) (61,987) (37,157)
Other financial items 5,653 6,030 4,804 7,217
Income before taxes and minority interest 18,044 17,235 50,813 46,997
Minority interest (2,751) 3,056 (7,575) (7,052)
Taxes (72) 247 (420) (375)
Equity in net earnings of investee 3,916 - 15,780 -
Net income 19,137 13,932 58,598 39,570
Earnings per share ($) $0.29 $0.22 $0.89 $0.68
2003
2004 Dec 31
BALANCE SHEET Dec 31 unaudited
(in thousands of $) unaudited (restated)
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ASSETS
Short term
Cash and cash equivalents 51,598 117,883
Restricted cash and short-term investments 41,953 32,095
Other current assets 22,358 20,598
Amounts due from related parties 294 180
Long term
Restricted cash 714,802 623,179
Equity in net assets of non-consolidated associate 51,634 12,031
Newbuildings 145,233 207,797
Vessels and equipment, net 1,078,383 764,483
Other long term assets 6,839 5,577
Total assets 2,113,094 1,783,823
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Current portion of long term debt 66,457 61,331
Current portion of capital lease obligations 2,662 -
Other current liabilities 46,401 60,190
Amounts due to related parties 374 600
Long term
Long term debt 636,497 593,904
Long term capital lease obligations 842,853 616,210
Other long term liabilities 86,033 94,226
Minority interest 26,282 18,706
Stockholders' equity 405,535 338,656
Total liabilities and stockholders' equity 2,113,094 1,783,823
2003
2004 2003 2004 Jan-Dec
STATEMENT OF CASH FLOWS Oct - Dec Oct -Dec Jan - Dec unaudited
(in thousands of $) unaudited unaudited unaudited (restated)
------------------- --------- --------- --------- ----------
OPERATING ACTIVITIES
Net income 19,137 13,932 58,598 39,570
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortisation 10,910 8,756 40,502 31,147
Amortisation of deferred charges 373 254 1,270 1,574
Income attributable to minority interests 2,751 3,056 7,575 7,052
Equity in profit of non-consolidated associates (3,916) - (15,780) -
Drydocking expenditure (2,172) (1,735) (13,299) (12,737)
Change in market value of interest rate and currency (15,855) (4,680) (12,237) (6,401)
derivatives
Unrealised foreign exchange loss/(gain) 9,100 (1,664) 5,161 (2,993)
Change in operating assets and liabilities (1,742) (3,716) 3,744 205
Net cash provided by operating activities 18,586 14,203 75,534 57,417
INVESTING ACTIVITIES
Additions to newbuildings (49,573) (19,778) (278,560) (77,783)
Additions to vessels and equipment (3,583) 289 (8,232) (6,308)
Long-term restricted cash (173) 2,315 (37,515) (543,643)
Short-term restricted cash and investments 4,546 (9,570) (31,633) (30,781)
Net cash used in investing activities (48,783) (26,744) (355,940) (658,515)
FINANCING ACTIVITIES
Proceeds from long-term debt - - 110,000 506,128
Proceeds from long-term capital lease obligation - - 163,715 616,298
Repayments of long-term capital lease obligation (461) - (894) -
Repayments of long-term debt (20,038) (18,882) (62,281) (528,505)
Repayments of long-term debt due to related parties - - - (32,703)
Additions to long-term lease obligation 1,238 1,506 6,321 2,660
Financing costs paid (447) (9) (2,733) (2,140)
Dividends paid to minority shareholders - - - (1,695)
Proceeds from issuance of equity net of issuance costs - 51,006 (7) 106,197
Net cash (used in) / provided by financing activities (19,708) 33,621 214,121 666,240
Net (decrease)/increase in cash and cash equivalents (49,905) 21,080 (66,285) 65,142
Cash and cash equivalents at beginning of period 101,503 96,803 117,883 52,741
Cash and cash equivalents at end of period 51,598 117,883 51,598 117,883
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Golar LNG Limited
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(Registrant)
Date March 1, 2005 By /s/ Graham Robjohns
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Graham Robjohns
Secretary and Chief Accounting Officer
03849.0004 #552010