Golar LNG Widens Loss amid Flat Shipping Market
Owner and operator of LNG carriers Golar LNG reported a widened net loss for the second quarter of 2017 on the back of a relatively flat shipping market in the period.
In the second quarter the company generated a net loss of USD 73.8 million, compared to a net loss of USD 65.8 million reported in the first quarter of the year.
Golar said that its operating loss was at USD 24 million in the second quarter of 2017, as compared to loss of USD 41.4 million seen in the previous three-month period.
A pick-up in utilization toward the end of the quarter did, however, contribute to a small rise in time charter revenues which increased from USD 20.1 million in the first quarter to USD 24 million in the second quarter.
Following the end of the quarter, on August 16, the company entered into deal for the sale of an interest in the Hilli Episeyo to Golar Partners and affiliates of Keppel and Black and Veatch. The closing of the sale is expected to take place on or before April 30, 2018.
The Hilli Episeyo conversion is nearing completion. The FLNG unit is scheduled to leave Singapore for Cameroon at the end of September or beginning of October, while LNG bunkering is booked for mid-September.
There was no material improvement in the second quarter shipping market. The quarter commenced with intense competition for fixtures in both basins which continued to be reflected in poor rates and minimal compensation for positioning and ballast legs. A tightening market was, however, highlighted toward the end of the quarter as reduced redeliveries in both the Atlantic and Middle East culminated in an isolated six figure voyage rate being secured.
The predicted third quarter upturn in the shipping business “is now underway and appears to be on a more sustainable footing. July 2017 represented the most active month for spot voyages on record.”
Although partly driven by seasonal factors, the recovery is being supported by a step-up in new liquefaction, an increase in the number of 1, 3 and 5+ year tenders and a widening bid-ask spread for 2018 charters, according to Golar.