Golar LNG (GLNG) Preliminary Q1 Revs Come in Ahead of Views
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Golar LNG Ltd. (Nasdaq: GLNG) reports preliminary Q1 operating income of $27.8 million on revs of $83.1 million. The Street was looking for revs of $81.55 million.
As expected, operating costs in the first quarter at $27.9 million is higher than the fourth quarter at $17.6 million. This is mainly due to the expensed reactivation costs for both Hilli and Gandria and represents costs which cannot be capitalized as they are deemed to be repairs in nature. Given that both vessels' re-activation is nearing completion, it is not expected that operating costs will continue at this high level into the second quarter of 2012.
The Company booked an accounting gain of $4.1 million during the quarter arising from its purchase, in January 2012, of the remaining fifty percent (50%) interest in the company that owns the Gandria. This has arisen as the Company is required to re-measure the carrying value of it's existing 50% share in the company and compare that to its fair value which is represented by the $19.5m purchase price. This resulted in a gain of $2.4million. Furthermore, the Company also recognized a gain on a bargain purchase of $1.7 million as the cost of the acquisition is less than the fair value of the net assets acquired.
Net interest expense for the first quarter at $6.1 million is slightly higher than the $5.6 million incurred in the fourth quarter mainly due to interest accruing on the Company's March 2012 convertible bond issue.
Other financial items increased to a loss of $2.6 million in the first quarter compared to a small loss of $0.05 million in the fourth quarter. This is mainly due to the negative movement in the valuation of currency swaps and forward contracts.
As expected, operating costs in the first quarter at $27.9 million is higher than the fourth quarter at $17.6 million. This is mainly due to the expensed reactivation costs for both Hilli and Gandria and represents costs which cannot be capitalized as they are deemed to be repairs in nature. Given that both vessels' re-activation is nearing completion, it is not expected that operating costs will continue at this high level into the second quarter of 2012.
The Company booked an accounting gain of $4.1 million during the quarter arising from its purchase, in January 2012, of the remaining fifty percent (50%) interest in the company that owns the Gandria. This has arisen as the Company is required to re-measure the carrying value of it's existing 50% share in the company and compare that to its fair value which is represented by the $19.5m purchase price. This resulted in a gain of $2.4million. Furthermore, the Company also recognized a gain on a bargain purchase of $1.7 million as the cost of the acquisition is less than the fair value of the net assets acquired.
Net interest expense for the first quarter at $6.1 million is slightly higher than the $5.6 million incurred in the fourth quarter mainly due to interest accruing on the Company's March 2012 convertible bond issue.
Other financial items increased to a loss of $2.6 million in the first quarter compared to a small loss of $0.05 million in the fourth quarter. This is mainly due to the negative movement in the valuation of currency swaps and forward contracts.
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