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 November , 2005
Golar LNG Limited
(Translation of registrant's name into English)
Par-la-Ville Place, 14 Par-la-Ville Road,
Hamilton, HM 08, Bermuda (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 November 29, 2005.
Exhibit 99.1
Golar LNG
INTERIM REPORT SEPTEMBER 2005
Third Quarter and Nine Months Results
Golar LNG reports net income of $11.0 million for the three months ended
September 30, 2005 and operating income of $17.0 million as compared to a net
loss of $4.4 million and operating income of $11.6 million for the second
quarter of 2005. Net cash provided by operating activities was $19.8 million for
the quarter, which has increased from $11.5 million for the second quarter of
2005.
The results for the third quarter have been positively impacted by the
mark-to-market revaluation of interest rate swaps, which has resulted in a net
gain (after minority interests) of $8.8 million and foreign exchange and
currency swap gains in respect of the Company's leases of $0.3 million. Both
these items, which total an income for the quarter of $9.1 million (net charge
of $10.2 million for last quarter), are unrealised and therefore have no cash
impact. Interest rate swap gains were impacted during the third quarter of 2005
due to an increase in long-term interest rates between June 2005 and September
2005.
The Company's share of Korea Line Corporation's ("Korea Line") net loss for the
three months to September 30, 2005, is $0.3 million as compared to last
quarter's net income of $7.4 million in respect of Golar's 21% shareholding.
Korea Line's loss this quarter is largely due to the impact of falling rates in
the drybulk market on their operating income.
The increase in operating revenues for the third quarter of 2005 to $42.8
million, up from $38.9 million last quarter is primarily due to the increased
utilisation of vessels in the Golar-Exmar joint spot market pool arrangement.
Out of the four vessels involved in this pool (three Golar and one Exmar)
effectively two were fully employed during the third quarter of 2005 as opposed
to effectively only one during the second quarter of 2005. Average daily time
charter equivalents (TCEs) for the total fleet were $45,460 for the third
quarter of 2005 compared to $41,200 for the second quarter of 2005.
Vessel operating and administrative expenses were down this quarter as compared
to last quarter. Vessel operating expenses were $9.3 million for this quarter
compared to $9.6 million for the second quarter of 2005, and administration
costs were $2.7 million this quarter compared to $3.5 million last quarter.
These reductions are in a large part due to the vessel management reorganisation
which the Company undertook earlier in 2005.
Net interest expense for the third quarter of 2005 was $12.4 million, which
compares to $11.4 million last quarter. The increase over last quarter is
largely due to the impact of higher interest rates on floating rate debt and the
effect of additional interest rate swaps entered into during the second quarter
of 2005. Interest expense and interest income includes $9.8 million and $8.0
million respectively relating to the Company's lease finance transactions.
Other financial income for the third quarter of 2005 of $9.0 million includes a
gain of $9.5 million associated with the movement in fair value of interest rate
swaps. This compares to a loss of $7.8 million last quarter. Other financial
items also include net foreign exchange translation and currency swap gains of
$0.3 million in respect of its leases during the third quarter of 2005, as
compared to a $2.2 million loss last quarter.
Earnings per share for the quarter was $0.17 as compared to a loss per share of
$0.07 for the second quarter of 2005.
For the nine months ended September 30, 2005 the Company reports revenues of
$125.9 million, operating income of $46.8 million and net income of $23.9
million as compared to $118 million, $55.0 million and $38.1 million
respectively, for the same period last year. Revenues for the nine months ended
September 30, 2005 have increased due to the addition to the fleet of the Golar
Winter and the Golar Frost during 2004 and the Golar Viking in January 2005.
However, operating income and net income have been negatively impacted as a
result of the low levels of utilization of these vessels which has meant they
have traded at a loss during 2005.
The number of shares outstanding as of September 30, 2005 was 65,562,000 (June
30, 2005: 65,562,000). The weighted average number of shares outstanding for the
third quarter of 2005 was 65,562,000 and 65,612,000 for the twelve months ended
December 31, 2004.
Corporate and Other Matters
As announced in October 2005, the Board of Golar LNG has approved a share buy
back scheme and in connection with this has entered into a 12 month equity swap
agreement with the Bank of Nova Scotia under which Scotia may acquire an amount
of up to 3.2 million Golar LNG shares. The agreement is structured so that upon
termination Scotia will pay to or receive from Golar an amount equal to the
movement in Golar's share price times the number of shares acquired by Scotia.
In consideration of this Golar will pay to Scotia compensation based upon a
floating rate of interest plus a margin on the purchase price paid by Scotia.
Golar is therefore effectively exposed to fluctuations in its share price, and
will have a right to terminate the agreement during the 12-month period.
In connection with this equity swap as at November 29, 2005 Scotia have acquired
600,000 Golar LNG shares at an average price of $11.04.
The Company continues to focus on floating energy solutions as a major area for
business development and throughout the quarter has progressed its portfolio of
terminal related projects. The Livorno FSRU project has completed all necessary
approvals/permits and is now waiting for the Ministerial decree to be issued; a
process which takes a little time and which may not be complete before the end
of the year. The Spanish Energy Company Endesa has, together with the Tuscany
based energy company Amga, effectively taken over the majority control in the
project. This should be seen as a positive development and one which reduces the
operational and completion risk of the project.
The Cyprus FPGP licence application is progressing well with regular
clarification meetings taking place between Golar, Saipem (our partners) and the
Cyprus Electricity Regulatory Authority (CERA). As reported last quarter,
significant progress has been made in developing an engineering specification
for conversion of an existing Golar vessel to an FSRU at an Asian shipyard and
this process is nearing completion. The target would be to make available a 2.0
mtpa FSRU within 12 to 16 months of building contract award. A final investment
decision in respect of this project should be expected shortly.
The Board and management have spent considerable time during the past year on
developing relationships with several major LNG players. The aim has been to
increase the utilisation of the Company's spot vessels and to develop a more
integrated business. The Board is pleased that these efforts now seem to be
showing some results.
The Company's next newbuilding will be delivered in January 2006. This ship has
been financed through a lease financing which is providing funding of $105
million.
The Board is disappointed by the fact that the Company has not so far been in
position to develop any joint business with Korea Line. The Board is
continuously evaluating this investment and may consider changing the level of
investment in order to meet the Company's objectives. The Korea Line stock is
currently trading at a substantial discount to book value and an even larger
discount to the underlying net asset value.
The technical management organisational changes which were initiated during the
first quarter of 2005 are now fully implemented and the introduction of the new
managers has been completed to the full satisfaction of our customers. The new
structure has also lead to reduced costs both onshore and offshore.
Market
With Egypt, albeit intermittently, now coming on stream and with Trinidad and
other contracts also supplying additional LNG into the market, the short-term
transportation market has undergone something of a transformation. Operators in
the Atlantic area are now in transportation balance, or even, depending on the
US/European gas pricing balance, in potential shortfall of vessels. The result
of this is improved utilization for all vessels including Golar's during the
fourth quarter. We are just entering the winter season for the Far East where
historically Korea and Japan have considerable short-term swings depending on
the weather. This should ensure that all tonnage currently idle will be employed
during the next few months. The prospects beyond then for transportation remain
unclear as the temporarily unemployed Snohvit vessels and other tonnage comes
into the market during next year. Rates have moved upwards but are still very
susceptible to any competition from project vessels competing in the spot market
prior to their long-term projects commencing.
The level of LNG transported has increased markedly with Spain and France now
taking more quantities. High prices in the US has meant a number of cargoes have
been delivered there as well, with producers once again taking by far the
largest benefit. However the recent decline in Henry Hub prices has seen a swing
back to European destinations as the winter sets in.
Long-term contracts continue to be developed, the latest of which is Qatargas
next phase for the large vessels of over 200,000 m3. In the Company's view
extraordinarily low charter hire rates have been accepted by ship owners for
both capital and operating cost elements. Qatargas and other projects like Brass
River, Shell's Qatar project, and Angola's activity will result in a requirement
for at least 50 to 60 ship orders over the next few years. However, shipyards
have now expanded their capacity to 40 ships per year or more thus largely
eliminating any potential for price pressures.
Global LNG trade rose to close to 70 million tonnes in the first six months of
the year, a 7% rise over the same period of 2004. The expected extra production
this year of approximately 23 million tonnes has by and large reached the market
after a number of delays affected almost all of the projects. A further 11.5
mmta is scheduled for 2006.
Currently there are 187 existing LNG carriers with around 130 more on order
(including 3 vessels of 74,000 m(3) but excluding smaller vessels)
However, whilst the Board remains of the view that there will be more
opportunities for spot vessels to obtain business moving forward, and some
marked improvement in utilisation and earnings, the margins available for
transportation will remain relatively small with producers able to take the
major benefit of high spot sales prices. In the medium term therefore shipping
rates are likely to remain under pressure. However, debottlenecking of
production capacity and technical problems experienced on certain vessels
together with strong US gas prices might change a slightly oversupplied market
to a balanced or even tight shipping market.
Outlook
The Board expects that the earnings from the Company's spot vessels will
increase in the fourth quarter. With this improvement and with stable underlying
earnings, shareholders should expect slightly improved operating results in the
fourth quarter. Net income for the fourth quarter will be further influenced by
the results from Korea Line and the development in long-term interest rates and
their impact on the Company's interest rate swaps.
The progress made on the project portfolio and the positive development in the
spot market leads to an improved overall outlook for our Company.
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.
November 29, 2005
The Board of Directors
Golar LNG Limited
Hamilton, Bermuda
Questions should be directed to:
Tor Olav Tr0im: Director and Chief Executive Officer +44 7734 976 575
Charlie Peile: Executive Vice President, Head of Commercial +44 207 517 8600
Graham Robjohns: Chief Financial Officer +44 207 517 8600
GOLAR LNG LIMITED THIRD QUARTER 2005 REPORT (UNAUDITED)
INCOME STATEMENT 2005 2004 2005 2004 2004
(in thousands of $) Jul- Sep Jul- Sep Jan - Sep Jan - Sep Jan - Dec
unaudited unaudited unaudited unaudited audited
(restated) (restated)
Operating revenues 42,787 43,524 125,891 118,032 163,410
Vessel operating expenses 9,253 9,673 28,470 26,172 35,759
Voyage expenses 967 988 3,413 1,893 2,561
Administrative expenses 2,658 1,812 9,295 5,420 8,471
Depreciation and amortisation 12,913 11,356 37,869 29,592 40,502
Total operating expenses 25,791 23,829 79,047 63,077 87,293
Operating income 16,996 19,695 46,844 54,955 76,117
Interest income 8,752 8,466 26,941 22,983 31,879
Interest expense (21,151) (17,151) (61,544) (44,320) (61,987)
Other financial items 8,963 (6,860) 1,498 (849) 4,804
Income before taxes and minority interest 13,560 4,150 13,739 32,769 50,813
Minority interest (2,164) 355 (5,947) (4,824) (7,575)
Taxes (152) (132) (571) (348) (420)
Equity in net earnings of investee (283) 723 16,711 10,463 13,015
Net income 10,961 5,096 23,932 38,060 55,833
Basic earnings per share ($) $0.17 $0.08 $0.37 $0.58 $0.85
BALANCE SHEET 2005 2004 2004
(in thousands of $) Sep 30 Sep 30 Dec 31
unaudited unaudited audited
(restated)
ASSETS
Short term
Cash and cash equivalents 77,710 101,503 51,598
Restricted cash and short-term investments 43,703 46,499 41,953
Other current assets 17,194 18,255 22,358
Amounts due from related parties 28 254 294
Long term
Restricted cash 708,623 668,023 714,802
Equity in net assets of non-consolidated associate 65,380 44,545 48,869
Newbuildings 109,248 95,660 145,233
Vessels and equipment, net 1,224,299 1,086,706 1,078,383
Other long term assets 10,885 6,961 6,839
Total assets 2,257,070 2,068,406 2,110,329
LIABILITIES AND STOCKHOLDERS' EQUITY
Short term
Current portion of long-term debt 65,822 65,298 66,457
Current portion of capital lease obligations 2,537 2,451 2,662
Other current liabilities 53,158 63,195 46,401
Amounts due to related parties 397 575 374
Long term
Long term debt 780,622 657,694 636,497
Long term capital lease obligations 818,671 786,119 842,853
Other long term liabilities 83,457 92,558 86,033
Minority interest 25,028 23,530 26,282
Stockholders' equity 427,378 376,986 402,770
Total liabilities and stockholders' equity 2,257,070 2,068,406 2,110,329
STATEMENT OF CASH FLOWS 2005 2004 2005 2004 2004
(in thousands of $) Jul - Sep Jul- Sep Jan - Sep Jan - Sep Jan - Dec
unaudited unaudited unaudited unaudited audited
(restated) (restated)
OPERATING ACTIVITIES
Net income 10,961 5,096 23,932 38,060 55,833
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortisation 12,913 11,356 37,869 29,592 40,502
Amortisation of deferred charges 348 365 2,697 897 1,270
Income/(loss) attributable to minority interests 2,164 (355) 5,947 4,824 7,575
Undistributed net loss/(earnings) of non-consolidated 283 (723) (15,164) (10,463) (12,844)
investee
Drydocking expenditure 145 (1,886) (9,238) (11,127) (13,299)
Change in market value of interest rate and currency (6,650) 7,050 8,096 3,618 (12,237)
derivatives
Interest element included in capital lease obligations 1,706 1,209 5,437 5,083 6,321
Unrealised foreign exchange (gain) / loss (3,221) (780) (12,524) (3,940) 5,161
Change in operating assets and liabilities 1,186 (625) 4,959 5,054 3,746
Net cash provided by operating activities 19,835 20,707 52,011 61,598 82,028
INVESTING ACTIVITIES
Additions to newbuildings (1,246) (415) (137,711) (230,187) (278,560)
Additions to vessels and equipment (312) (534) (3,816) (3,449) (8,232)
Long-term restricted cash (5,974) (845) (53,813) (37,342) (37,515)
Purchase of unlisted investments - - (3,000) - -
Short-term restricted cash and investments (2,572) (8,013) (1,750) (36,179) (31,806)
Net cash used in investing activities (10,104) (9,807) (200,090) (307,157) (356,113)
FINANCING ACTIVITIES
Proceeds from long-term debt - - 420,000 110,000 110,000
Proceeds from long-term capital lease obligation - - 44,800 163,715 163,715
Repayments of long-term capital lease obligation (529) - (2,490) - (894)
Repayments of long-term debt (11,969) (12,071) (276,509) (42,243) (62,281)
Financing costs paid (117) (13) (3,743) (2,286) (2,740)
Dividends paid to minority shareholders (7,200) - (7,200) - -
Payments to repurchase equity - - (667) (7) -
Net cash (used in) / provided by financing activities (19,815) (12,084) 174,191 229,179 207,800
Net (decrease) / increase in cash and cash equivalents (10,084) (1,184) 26,112 (16,380) (66,285)
Cash and cash equivalents at beginning of period 87,794 102,687 51,598 117,883 117,883
Cash and cash equivalents at end of period 77,710 101,503 77,710 101,503 51,598
Notes
1. The financial information included in this interim report has been derived
from information prepared by the Company in accordance with accounting
principles generally accepted in the United States of America.
2. The comparative financial information for the three months and nine months
ended September 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 nine
months ended September 30, 2004 by $0.4 million and $4.6 million
respectively, or on an earnings per share basis by $nil and $0.07
respectively.
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
(Registrant)
Date November 29, 2005 By /s/ Graham Robjohns
---------------------------
Graham Robjohns
Chief Financial Officer
03849.0004 #621941