Golar LNG Partners expects improved distribution coverage ratio level for Q3
The company said, "The full quarter's contribution to Adjusted EBITDA from both Golar Igloo and Golar Freeze contributed to an anticipated improvement in both 2Q distribution coverage ratio and the Adjusted Net Debt to Annualized Adjusted EBITDA ratio. The distribution coverage ratio has however been negatively impacted by the disappointing Average Daily TCE achieved for the spot traded vessels Golar Maria and Golar Mazo. While the Golar Maria is currently on hire and well positioned for more attractive charters over the winter period, Golar Mazo is currently idle. The current shipping market is however showing strong signs of recovery with significant interest being shown in all vessels including modern steam turbines. Based on current forecasts a further improved distribution coverage ratio level is expected for 3Q. Golar Power continues to make good progress on its Brazilian project portfolio, including an opportunity that could utilize the Golar Spirit. Market dynamics are also changing in the Middle East as new pipelines connect markets to fields offshore Egypt and Israel. It is currently unclear how this will manifest itself in terms of FSRU requirements however security of supply remains particularly important in this region.Should an extension be secured for the FSRU Golar Igloo, remaining modification works necessary for the vessel to meet increasing peak demand in Kuwait will be completed in 1Q 2020 during its scheduled winter downtime. Current low LNG prices have also stimulated the number of requests for FSRUs which may create further employment opportunities. Development times for these projects are however typically slow. With the Partnership's Revenue Backlog of $2.16B, a distribution coverage ratio in excess of 1 and a falling Adjusted Net Debt to Annualized Adjusted EBITDA1 ratio, Golar Partners is on a solid financial footing. The size of future distributions will however be influenced by successful re-contracting of existing FSRUs as well as an expected increased utilization of the Partnership's idle assets."