This release includes business updates and unaudited interim
financial results for the three ("Q2", "Q2 2023" or the "Quarter")
and six months ("1H 2023") ended June 30, 2023 of Cool Company Ltd.
("CoolCo" or the "Company") (NYSE:CLCO / CLCO.OL).
Q2 Highlights and Subsequent Events
- Generated total operating revenues of $90.3 million in Q2,
compared to $98.6 million for the first quarter of 2023 ("Q1" or
"Q1 2023"), the reduction mainly related to the sale of Golar Seal
in late March 2023.
- Net income of $44.6 million in Q2, compared to $70.1 million
for Q1;
- Achieved average Time Charter Equivalent Earnings ("TCE")1 of
$81,100 per day for Q2, compared to $83,700, per day for Q1, mainly
attributable to a lower variable rate charter that is linked to the
spot-market;
- Adjusted EBITDA1 of $59.9 million for Q2, compared to $67.8
million for Q1;
- The Company announced that it has exercised its option to
acquire two newbuild 2-stroke LNG carriers from affiliates of EPS
Ventures Ltd (“EPS”). The state-of-the-art MEGA LNG carriers (the
“Newbuilds”) are scheduled to be delivered from Hyundai Samho Heavy
Industries (“HHI”) in Korea in September and December of 2024;
- On June 28, 2023, bank approval was granted for a $70 million
increase under the senior secured sustainability linked amortizing
term loan (the “$570 million bank facility"), in addition to a
reduction in the interest rate margin under the $570 million bank
facility from 275 basis points to 225 basis points;
- Declared a dividend for Q2 of $0.41 per share, to be paid to
shareholders of record on September 11, 2023.
Richard Tyrrell, CEO, commented:
“During the second quarter, we achieved full utilization across
the CoolCo fleet and secured well-timed growth through the exercise
of our option on two state-of-the-art newbuild MEGA LNG carriers
with deliveries in late 2024, newbuild pricing materially below
current levels and committed financing in place subject to
documentation. By exercising our option to acquire these vessels
with scheduled delivery years well in advance of comparable
newbuild orders, we are one of the few independent owners with
availability in an early period of rapid expected growth in LNG
supply. In conjunction with our three existing vessels that come
into the charter market in 2023 and 2024, of which two are
currently at rates well below prevailing levels, we have a clear
path towards the realization of significant incremental value,
cashflow, and continued dividend-paying capacity.
“With the approach of winter in the Northern Hemisphere, which
is typically accompanied by a surge in LNG carrier demand related
to both increased gas consumption and additional utilization for
floating storage, trading arbitrage involving lengthy voyages to
the Far East, and weather-related delays that soak up shipping
capacity, the market seems tightly coiled. Moreover, the recent
extreme volatility in gas pricing demonstrates a continued emphasis
on energy security, as importers continue to put a premium on the
commodity and the shipping capacity required to ensure security of
supply.
“It remains to be seen how the coming winter will ultimately
play out, but similar tightness of both cargoes and shipping
capacity has historically presaged dramatic inflections in the spot
charter market and provided firm support for both rates and charter
durations in the more stable time charter market. As owners of
modern LNG carriers that will be available for time charter
employment through the medium term, we believe that our strategy of
combining the certainty of long-term charter coverage with a
measured amount of charter market exposure has the potential to
shine in the quarters ahead.”
1 Refer to 'Appendix A' - Non-GAAP financial measures and
definitions, for definitions of these measures and a reconciliation
to the nearest GAAP measure.
Financial Highlights
The table below sets forth certain key financial information for
Q2 2023, Q1 2023, 1H 2023 and 1H 2022, split between Successor and
Predecessor periods, as defined below.
Q2 2023
Q1 2023
1H 2023
1H 2022
(in thousands of $, except TCE)
Successor
Successor
Successor
Successor
Predecessor
Total
Time and voyage charter revenues
82,071
91,168
173,239
49,822
37,289
87,111
Total operating revenues
90,316
98,649
188,965
56,892
43,456
100,348
Operating income
45,484
52,022
97,506
25,631
27,728
53,359
Net income
44,646
70,132
114,778
17,659
23,244
40,903
Adjusted EBITDA1
59,894
67,814
127,708
33,527
33,473
67,000
Average daily TCE1
(to the closest $100)
81,100
83,700
82,500
60,500
57,100
59,100
Note: As noted previously, the
commencement of operations and funding of CoolCo and the
acquisition of its initial tri-fuel diesel electric ("TFDE") LNG
carriers, The Cool Pool Limited and the shipping and FSRU
management organization from Golar LNG Limited ("Golar") were
completed in a phased process. It commenced with the funding of
CoolCo on January 27, 2022 and concluded with the acquisition of
the LNG carrier and FSRU management organization on June 30, 2022,
with vessel acquisitions taking place on different dates over that
period. Results for the six months that commenced January 1, 2022
and ended June 30, 2022 have therefore been split between the
period prior to the funding of CoolCo and various phased
acquisitions of vessel and management entities (the "Predecessor"
period) and the period subsequent to the various phased
acquisitions (the "Successor" period). The combined results are not
in accordance with U.S. GAAP and consist of the aggregate of
selected financial data of the Successor and Predecessor periods.
No other adjustments have been made to the combined presentation.
We cannot adequately benchmark the operating results for the six
month period ended June 30, 2023 against the previous period
reported in our comparative unaudited condensed consolidated and
combined carve-out financial statements without combining the
applicable Successor and Predecessor periods and do not believe
that reviewing the results of the periods in isolation would be
useful in identifying trends in or reaching conclusions regarding
our overall operating performance.
LNG Market Review
The average Japan/Korea Marker gas price ("JKM") for the Quarter
was $11.06/MMBtu compared to $17.05/MMBtu for Q1 2023. The Quarter
commenced with Dutch Title Transfer Facility gas price ("TTF") at
$14.31/MMBtu and quoted TFDE headline spot rates of $58,500 per
day. The Quarter concluded with TTF at $10.91/MMBtu and quoted TFDE
headline spot rates of $69,250 per day.
The LNG market experienced typical seasonal weakness and
relatively lower prices during the quarter, reaching price parity
with oil for the first time since before the invasion of Ukraine.
Shorter haul voyages to southern hemisphere markets increased, as
is customary for the time of year. LNG volumes into Europe remained
elevated by historic standards, as LNG replaces Russian pipeline
gas and filled onshore storage. European inventory levels reached
78% by the end of the quarter and ~90% today. While the impact of
these factors on the LNG carrier spot market was pronounced, the
spot market continued to be populated almost entirely by sublets
and this only affected CoolCo because of a single remaining
variable rate charter. Owner-controlled vessels, of which very few
are coming into the charter market in the short-term, have remained
focused on time charters of 12 months or longer, where terms have
remained largely stable at rates well above those prevailing in
recent years, as charterers look to ensure access to carriers
through the critical winter season in the northern hemisphere.
With the winter approaching, the supply of LNG carriers
available for term employment remains minimal. The recent extreme
volatility in LNG commodity pricing is indicative of a very tight
supply/demand balance and the relative fragility of global supply
chains still adapting to the sudden removal of large volumes of
Russian pipeline gas that previously provided a significant
proportion of the EU’s energy needs. Whether as a result of
geopolitical developments, labor action, industrial issues, or the
weather or congestion-related issues that the industry experiences
with some regularity, it is clear that the fast-growing LNG market
remains highly dynamic. In this environment, importers are
prioritizing certainty of access to both the LNG molecules and the
transportation capacity, rather than managing towards maximal
efficiency and risking being short gas at a critical juncture. We
continue to expect that term rates will remain strong and with the
potential of sharp seasonal upswing in the spot market, we expect
to fix our vessel coming available in September 2023 on attractive
terms.
Operational Review
CoolCo's fleet continued to perform well with no technical
off-hire during the Quarter, resulting in a Q2 fleet utilization of
100%, unchanged from Q1. There are no drydocks planned for 2023,
with the next drydock expected during the second quarter of
2024.
Business Development
In June 2023, CoolCo signed contracts with HD Hyundai Global
Service, a ship service subsidiary of HD Hyundai Group, to retrofit
five LNG carriers with sub-coolers for LNG boil-off reliquefaction
units. The contract value is approximately $10.0 million per
vessel.
On June 28, 2023, the Company announced that it had exercised
its option to acquire two newbuild 2-stroke LNG carriers from
affiliates of EPS. The Newbuilds are scheduled to be delivered from
HHI in Korea in September and December of 2024. Each of the two
Newbuilds is being acquired for an amount of approximately $234
million. The initial option exercise price was $56.9 million per
vessel, resulting in a total of $113.8 million paid to EPS on July,
3 2023. The Newbuilds, named Kool Tiger and Kool Panther, are
expected to be funded with a combination of cash on hand, including
cash that was recently released from the sale of the Golar Seal,
and committed debt financing.
CoolCo is in discussions with multiple potential charterers
seeking work for the Newbuilds.
Financing and Liquidity
In June 2023, the Company announced that the syndicate of
existing lenders in the $570 million bank facility approved an
increase in the debt amount of $70.0 million and a reduction of the
interest rate margin from 275 basis points to 225 basis points. The
$570 million bank facility's underlying, secured overnight
financing rate ("SOFR") exposure is fully hedged and the scheduled
amortization has been adjusted proportionally for the increased
size. The additional debt funding under this $570 million bank
facility will fund the LNGe conversion of five vessels, including
retrofits with sub-coolers for LNG boil-off reliquefaction under
the recently announced contract with HD Hyundai Global Service.
As of June 30, 2023 CoolCo had cash and cash equivalents of
$309.4 million and total short and long-term debt, net of deferred
finance charges, amounted to $1,063.9 million. Total Contractual
Debt1 stood at $1,179.4 million, which comprised of $504.4 million
in respect of the $570 million bank facility maturing in March
2027, $481.3 million in respect of the four-vessel bank financing
facility maturing in May 2029 (the “$520 million term loan
facility”), and $193.8 million in respect of the two sale and
leaseback facilities maturing in the first quarter of 2025 (Kool
Ice and Kool Kelvin).
During Q2, we entered into further floating interest rate (SOFR)
swap agreements for a notional amount of $40.0 million in respect
of the $520 million term loan facility. Overall, the Company’s
interest rate on its debt is fixed or hedged for approximately 90%
of the notional debt, adjusting for existing cash on hand, but
excluding cash that was earmarked for the option exercise of the
Newbuilds.
Corporate and Other Matters
As of June 30, 2023, CoolCo had 53,688,462 shares issued and
outstanding. Of these, 31,254,390 shares (58.2%) were owned by EPS
Ventures Ltd ("EPS") and 22,434,072 (41.8%) were publicly
owned.
In line with the Company’s variable dividend policy, the Board
has declared a Q2 dividend of $0.41 per ordinary share. The record
date is September 11, 2023 and the dividend will be distributed to
DTC-registered shareholders on or around September 18, 2023, while
due to the implementation of Central Securities Depositories
Regulation in Norway, the dividend will be distributed to Euronext
VPS-registered shareholders on or about September 22, 2023.
Outlook
Since the end of the Quarter, TTF has increased to $12/MMBtu and
TFDE spot rates have increased to $120,000 per day.
In the coming years, the global supply of LNG is set to increase
by more than 50% on the basis of projects that have already reached
FID, of which at least 40 mtpa of capacity has reached FID in 2023
alone, equal to approximately 10% of total 2022 LNG production. In
understanding the current 51% order book-to-fleet ratio (by
volume), it is critical to understand that the order book has
overwhelmingly been built on the basis of long-term contracts to
service new liquefaction facilities, with the timing and quantity
of their deliveries intended to match the commencement of new
production. Furthermore, to the extent that project development
delays result in vessels delivering to their charterers before
their intended startup time, we would expect to see a dynamic
similar to that which has recently prevailed, in which the market
is sharply bifurcated between charterers seeking to fill interim
periods in the spot market and owners such as CoolCo who are in a
position to offer multi-year time charters. A number of additional
liquefaction projects remain under development across North America
and the Middle East in particular, but also in a wide variety of
other geographies as there remains a strong and widespread desire
to decarbonize by substituting LNG for the vast amounts of coal
still being consumed, particularly in emerging markets.
Among LNG carriers currently on the water, the older, less
efficient vessels in the charter market are expected to face
growing competitive pressure over time, particularly among the
steam turbine vessels that continue to make up over 30% of the
global fleet by volume. The imposition of the IMO’s carbon
intensity indicator (“CII”) rules from the beginning of this year,
as well as forthcoming European carbon pricing set to come into
effect next year, are set to increase the relative advantage of
modern, efficient TFDE and 2-stroke tonnage such as those in the
CoolCo fleet.
The limited supply of modern vessels available for time charter
employment through the medium term is concentrated among a small
number of owners, including CoolCo. Given the improved bargaining
position afforded by a combination of scarcity and concentration,
such owners have remained focused primarily on longer-term charters
that would bridge the period from now until the next wave of LNG
volumes arrives in 2026-2027. A newbuild vessel ordered today would
be subject to an approximately 4-year lead time and a purchase
price exceeding $260 million, limiting the likelihood of unforeseen
newbuild tonnage during that period while further supporting the
benchmark against which the overall fleet is priced.
FORWARD LOOKING STATEMENTS
This press release and any other written or oral statements made
by us in connection with this press release include forward-looking
statements. All statements, other than statements of historical
facts, that address activities and events that will, should, could
or may occur in the future are forward-looking statements. These
forward-looking statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. You can identify these forward-looking statements by words or
phrases such as “believe,” “anticipate,” “intend,” “estimate,”
“forecast,” “project,” “plan,” “potential,” “will,” “may,”
“should,” “expect,” “could,” “would,” “predict,” “propose,”
“continue,” or the negative of these terms and similar expressions
are intended to identify such forward-looking statements. These
forward-looking statements include statements relating to our
ability and expectations to charter available vessels and
chartering strategy, outlook, expected results and performance,
expected drydockings, delivery dates of newbuilds, intended uses of
our financing facilities, dividends and dividend policy, expected
growth in LNG supply, expected industry and business trends
including expected trends in LNG demand and market trends, expected
trends in LNG shipping capacity, LNG vessel supply and demand,
trends of the spot market and the term market, and factors
impacting supply and demand of vessels such as CII and European
carbon pricing backlog, expected trends in charter and spot rates,
expectations on rates for future charters, contracting, utilization
(including expected revenue backlog), LNG vessel newbuild
order-book, expected winter demand, commodity volatility statements
under “LNG Market Review” and “Outlook” and other non-historical
matters.
The forward-looking statements in this document are based upon
management’s current expectations, estimates and projections. These
statements involve significant risks, uncertainties, contingencies
and factors that are difficult or impossible to predict and are
beyond our control, and that may cause our actual results,
performance or achievements to be materially different from those
expressed or implied by the forward-looking statements. Numerous
factors could cause our actual results, level of activity,
performance or achievements to differ materially from the results,
level of activity, performance or achievements expressed or implied
by these forward-looking statements including:
- our limited operating history under the CoolCo name;
- changes in demand in the LNG shipping industry, including the
market for modern TFDE vessels and modern 2-stroke vessels;
- general LNG market conditions, including fluctuations in
charter hire rates and vessel values;
- our ability to successfully employ our vessels;
- changes in the supply of LNG vessels;
- our ability to procure or have access to financing and
refinancing, including financing for the Newbuild Vessels;
- our continued borrowing availability under our credit
facilities and compliance with the financial covenants
therein;
- potential conflicts of interest involving our significant
shareholders;
- our ability to pay dividends;
- general economic, political and business conditions, including
sanctions and other measures;
- changes in our operating expenses due to inflationary pressure
and volatility of supply and maintenance including fuel or cooling
down prices and lay-up costs when vessels are not on charter,
drydocking and insurance costs;
- fluctuations in foreign currency exchange and interest
rates;
- vessel breakdowns and instances of loss of hire;
- vessel underperformance and related warranty claims;
- potential disruption of shipping routes and demand due to
accidents, piracy or political events;
- compliance with, and our liabilities under, governmental, tax
environmental and safety laws and regulations;
- information system failures, cyber incidents or breaches in
security;
- changes in governmental regulation, tax and trade matters and
actions taken by regulatory authorities; and
- other risks indicated in the risk factors included in CoolCo’s
Annual Report on Form 20-F for the year ended December 31, 2022 and
other filings with the U.S. Securities and Exchange
Commission.
The foregoing factors that could cause our actual results to
differ materially from those contemplated in any forward-looking
statement included in this report should not be construed as
exhaustive. Moreover, we operate in a very competitive and rapidly
changing environment. New risks and uncertainties emerge from time
to time, and it is not possible for us to predict all risks and
uncertainties that could have an impact on the forward-looking
statements contained in this press release. The results, events and
circumstances reflected in the forward-looking statements may not
be achieved or occur, and actual results, events or circumstances
could differ materially from those described in the forward-looking
statements.
As a result, you are cautioned not to place undue reliance on
any forward-looking statements which speak only as of the date of
this press release. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise unless
required by law.
Responsibility Statement
We confirm that, to the best of our knowledge, the interim
unaudited condensed consolidated financial statements for the three
and six months ended June 30, 2023, which have been prepared in
accordance with accounting principles generally accepted in the
United States (US GAAP) give a true and fair view of the Company’s
consolidated assets, liabilities, financial position and results of
operations. To the best of our knowledge, the financial report for
the three and six months ended June 30, 2023 includes a fair review
of important events that have occurred during the period and their
impact on the interim unaudited condensed consolidated financial
statements, the principal risks and uncertainties, and major
related party transactions.
August 31, 2023 Cool Company Ltd. Hamilton, Bermuda
Questions should be directed to: c/o Cool Company Ltd - +44 207
659 1111
Richard Tyrrell - Chief Executive
Officer
Cyril Ducau (Chairman of the
Board)
John Boots - Chief Financial
Officer
Antoine Bonnier (Director)
Mi Hong Yoon (Director)
Neil Glass (Director)
Peter Anker (Director)
COOL COMPANY LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
For the three months
ended
For the six months
ended
Apr-Jun 2023
Jan-Mar 2023
Apr-Jun 2022
Jan-Jun 2023
Jan-Jun 2022
(in thousands of $)
Successor
(Consolidated)
Successor
(Consolidated)
Successor
(Consolidated)1
Predecessor (Combined
Carve-out)2
Successor
(Consolidated)
Successor
(Consolidated)1
Predecessor (Combined
Carve-out)2
Time and voyage charter revenues
82,071
91,168
45,537
747
173,239
49,822
37,289
Vessel and other management fee
revenues
3,757
3,376
—
2,933
7,133
—
6,167
Amortization of intangible assets and
liabilities - charter agreements, net
4,488
4,105
7,070
—
8,593
7,070
—
Total operating revenues
90,316
98,649
52,607
3,680
188,965
56,892
43,456
Vessel operating expenses
(18,835
)
(18,588
)
(11,652
)
440
(37,423
)
(13,302
)
(7,706
)
Voyage, charter hire and commission
expenses, net
(877
)
(1,499
)
(1,034
)
(229
)
(2,376
)
(357
)
(1,229
)
Administrative expenses
(6,222
)
(6,643
)
(1,282
)
(2,192
)
(12,865
)
(2,636
)
(5,422
)
Depreciation and amortization
(18,898
)
(19,897
)
(13,974
)
(6
)
(38,795
)
(14,966
)
(5,745
)
Total operating expenses
(44,832
)
(46,627
)
(27,942
)
(1,987
)
(91,459
)
(31,261
)
(20,102
)
Other operating income
—
—
—
4,374
—
—
4,374
Operating income
45,484
52,022
24,665
6,067
97,506
25,631
27,728
Other non-operating income
21
42,528
—
—
42,549
—
—
Financial income/(expense):
Interest income
2,791
1,517
59
4
4,308
59
4
Interest expense
(19,863
)
(19,485
)
(5,798
)
(47
)
(39,348
)
(6,672
)
(4,725
)
Gains/(Losses) on derivative
instruments
16,705
(6,001
)
—
—
10,704
—
—
Other financial items, net
(414
)
(393
)
(301
)
1,267
(807
)
(1,359
)
622
Financial expenses, net
(781
)
(24,362
)
(6,040
)
1,224
(25,143
)
(7,972
)
(4,099
)
Income before income taxes and
non-controlling interests
44,724
70,188
18,625
7,291
114,912
17,659
23,629
Income taxes, net
(78
)
(56
)
—
(71
)
(134
)
—
(385
)
Net income
44,646
70,132
18,625
7,220
114,778
17,659
23,244
Net income/(loss) attributable to
non-controlling interests
344
(1,287
)
(811
)
279
(943
)
(811
)
(8,206
)
Net income attributable to the Owners
of Cool Company Ltd
44,990
68,845
17,814
7,499
113,835
16,848
15,038
Net income/(loss) attributable
to:
Owners of Cool Company Ltd
44,990
68,845
17,814
7,499
113,835
16,848
15,038
Non-controlling interests
(344
)
1,287
811
(279
)
943
811
8,206
Net income
44,646
70,132
18,625
7,220
114,778
17,659
23,244
(1)
The commencement of operations and funding
of CoolCo and the acquisition of its initial TFDE LNG carriers, The
Cool Pool Limited and the shipping and FSRU management organization
from Golar LNG Limited ("Golar") was completed in a phased process.
On January 26, 2022, CoolCo entered into various agreements (the
"Vessel SPA") with Golar, as amended on February 25, 2022, pursuant
to which CoolCo acquired all of the outstanding shares of nine of
Golar’s wholly-owned subsidiaries on various dates in March and
April 2022. Eight of these entities were each the registered or
disponent owner or lessee of the following modern LNG carriers:
Crystal, Ice, Bear, Frost, Glacier, Snow, Kelvin and Seal (disposed
subsequently). The Cool Pool Limited was the entity responsible for
the marketing of these LNG carriers. For CoolCo, for three and six
month periods ended June 30, 2022, the successor period reflects
the period beginning from January 27, 2022 with the closing of
CoolCo’s Norwegian equity raise and the date CoolCo operations
substantially commenced and were considered meaningful. Vessel SPA
acquisition dates were staggered reflecting results, as the
successor, from the date CoolCo obtained control of the respective
vessel entities.
(2)
Predecessor period includes results
derived from the carve-out of historical operations from Golar
entities acquired by CoolCo as part of the Vessel SPA and ManCo SPA
until the day before the staggered acquisition date per legal
entity during the period beginning from January 1, 2022 to June 30,
2022.
COOL COMPANY LTD
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
At June 30,
At December 31,
(in thousands of $)
2023
2022
(Audited)
ASSETS
Current assets
Cash and cash equivalents
309,419
129,135
Restricted cash and short-term
deposits
3,554
3,435
Intangible assets, net
2,570
5,552
Trade receivable and other current
assets
10,379
6,225
Inventories
604
991
Total current assets
326,526
145,338
Non-current assets
Restricted cash
474
507
Intangible assets, net
8,571
8,315
Newbuildings
113,787
—
Vessels and equipment, net
1,733,799
1,893,407
Other non-current assets
20,024
10,494
Total assets
2,203,181
2,058,061
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt and
short-term debt
159,739
180,065
Trade payables and other current
liabilities
252,610
98,524
Total current liabilities
412,349
278,589
Non-current liabilities
Long-term debt
904,162
958,237
Other non-current liabilities
98,669
105,722
Total liabilities
1,415,180
1,342,548
Equity
Owners' equity includes 53,688,462 common
shares of $1.00 each, issued and outstanding
718,102
646,557
Non-controlling interests
69,899
68,956
Total equity
788,001
715,513
Total liabilities and equity
2,203,181
2,058,061
COOL COMPANY LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
For the six months
ended
Jan-Jun 2023
Jan-Jun 2022
(in thousands of $)
Successor
(Consolidated)
Successor
(Consolidated)
Predecessor (Combined
Carve-out)
Operating activities
Net income
114,778
17,659
23,244
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expenses
38,795
14,966
5,745
Amortization of intangible assets and
liabilities arising from charter agreements, net
(8,593
)
(7,070
)
—
Amortization of deferred charges and fair
value adjustments
2,319
441
1,588
Gain on sale of Golar Seal vessel
(42,549
)
—
—
Drydocking expenditure
(4,284
)
—
—
Compensation cost related to share-based
payment
1,197
—
238
Change in fair value of derivative
instruments
(6,446
)
—
—
Changes in assets and liabilities:
Trade accounts receivable
(3,885
)
(2,285
)
(117
)
Inventories
387
(1,298
)
—
Other current and other non-current
assets
(4,892
)
5,158
(7,226
)
Amounts (due to) /from related parties
(1,270
)
3,067
1,252
Trade accounts payable
26,966
991
(400
)
Accrued expenses
(7,178
)
3,261
(180
)
Other current and non-current
liabilities
12,236
(598
)
2,957
Net cash provided by operating
activities
117,581
34,292
27,101
Investing activities
Additions to vessels and equipment
(872
)
—
—
Proceeds on sale of vessel
184,300
—
—
Additions to intangible assets
(432
)
—
—
Consideration for acquisition of vessels
and management entities
—
(218,276
)
—
Net cash provided by / (used in)
investing activities
182,996
(218,276
)
—
Financing activities
Proceeds from short-term and long-term
debt
70,000
570,000
—
Repayments of short-term and long-term
debt
(144,828
)
(24,862
)
(498,832
)
Repayments of Parent's funding
—
(136,351
)
Financing arrangement fees and other
costs
(1,892
)
(6,128
)
—
(Repayments to) / contributions from
CoolCo in connection with acquisition, net of equity proceeds
(581,072
)
581,072
Net proceeds from equity raise
267,056
—
Cash dividends paid
(43,487
)
—
—
Net cash used in / (provided by)
financing activities
(120,207
)
224,994
(54,111
)
Net increase / (decrease) in cash, cash
equivalents and restricted cash
180,370
41,010
(27,010
)
Cash, cash equivalents and restricted
cash at beginning of period
133,077
50,892
77,902
Cash, cash equivalents and restricted
cash at end of period
313,447
91,902
50,892
COOL COMPANY LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
For the six months ended June
30, 2023
(in thousands of $, except number of
shares)
Number of common
shares
Owners’ Share Capital
Additional Paid-in
Capital(1)
Retained Earnings
Owners' Equity
Non- controlling
Interests
Total Equity
Consolidated successor balance at
December 31, 2022 (Audited)
53,688,462
53,688
507,127
85,742
646,557
68,956
715,513
Net income
—
—
—
113,835
113,835
943
114,778
Share based payments contribution
—
—
1,197
—
1,197
—
1,197
Dividends
—
—
—
(43,487
(43,487
)
—
(43,487
)
Consolidated successor balance at June
30, 2023
53,688,462
53,688
508,324
156,090
718,102
69,899
788,001
(1)
Additional paid-in capital refers to the
amounts of capital contributed or paid-in over and above the par
value of the Company's issued share capital.
For the six months ended June
30, 2022
(in thousands of $, except number of
shares)
Number of common
shares
Parent’s / Owners’ Share
Capital
Contributed/ Additional
Paid-in Capital (1)
Retained (Deficit) /
Earnings
Total Parent's / Owners'
Equity
Non- controlling
Interest
Total Equity
Combined carve-out predecessor balance
at December 31, 2021 (Audited)
1,010,000
1,010
779,852
(212,305
)
568,557
174,498
743,055
Net income
—
—
—
15,038
15,038
8,206
23,244
Share based payments contribution
—
—
238
—
238
—
238
Deconsolidation of lessor
VIEs
—
—
—
—
—
(115,412
)
(115,412
)
Combined carve-out predecessor balance
upon disposal
1,010,000
1,010
780,090
(197,267
)
583,833
67,292
651,125
Cancellation of Parent's equity
(1,000,000
)
(1,000
)
(780,090
)
197,267
(583,823
)
—
(583,823
)
Combined carve-out equity
balance prior to acquisition
10,000
10
—
—
10
67,292
67,302
Consolidated successor balance upon
acquisition
10,000
10
—
—
10
—
10
Issuance of shares from private
placement
27,500,000
27,500
239,393
—
266,893
—
266,893
Issuance of shares to Golar
12,500,000
12,500
114,703
—
127,203
—
127,203
Recognition of non-controlling
interest upon acquisition
—
—
—
—
—
67,292
67,292
Fair value adjustment in relation to
acquisition
—
—
—
—
—
(95
)
(95
)
Net income
—
—
—
16,848
16,848
811
17,659
Consolidated successor balance at June
30, 2022
40,010,000
40,010
354,096
16,848
410,954
68,008
478,962
(1)
Additional paid-in capital refers to the
amounts of capital contributed or paid-in over and above the par
value of the Company's issued share capital.
APPENDIX A - NON-GAAP FINANCIAL MEASURES AND DEFINITIONS
Non-GAAP Financial Metrics Arising from How Management Monitors
the Business
In addition to disclosing financial results in accordance with
U.S. generally accepted accounting principles (US GAAP), this
earnings release and the associated investor presentation and
discussion contain references to the non-GAAP financial measures
which are included in the table below. We believe these non-GAAP
financial measures provide investors with useful supplemental
information about the financial performance of our business, enable
comparison of financial results between periods where certain items
may vary independent of business performance, and allow for greater
transparency with respect to key metrics used by management in
operating our business and measuring our performance. These
non-GAAP financial measures should not be considered a substitute
for, or superior to, financial measures calculated in accordance
with US GAAP, and the financial results calculated in accordance
with US GAAP. Non-GAAP measures are not uniformly defined by all
companies, and may not be comparable with similar titles, measures
and disclosures used by other companies. The reconciliations from
these results should be carefully evaluated.
Non-GAAP measure
Closest equivalent US GAAP
measure
Adjustments to reconcile to
primary financial statements prepared under US GAAP
Rationale for
adjustments
Performance
Measures
Adjusted EBITDA
Net income
+/- Other non-operating income
+/- Net financial expense, representing:
Interest income, Interest expense, Losses on derivative instruments
and Other financial items, net
+/- Income taxes
+ Depreciation and amortization
- Amortization of intangible assets and
liabilities - charter agreements, net
Increases the comparability of total
business performance from period to period and against the
performance of other companies by removing the impact of other
non-operating income, depreciation, amortization of intangible
assets and liabilities -charter agreements, net, financing and tax
items.
Average daily TCE
Time and voyage charter revenues
- Voyage, charter hire and commission
expenses, net
The above total is then divided by
calendar days less scheduled off-hire days.
- Measure of the average daily net revenue
performance of a vessel.
- Standard shipping industry performance
measure used primarily to compare period-to-period changes in the
vessel’s net revenue performance despite changes in the mix of
charter types (i.e. spot charters, time charters and bareboat
charters) under which the vessel may be employed between the
periods.
- Assists management in making decisions
regarding the deployment and utilization of its fleet and in
evaluating financial performance.
Liquidity
measures
Total Contractual Debt
Total debt (current and non-current), net
of deferred finance charges
+ VIE Consolidation and fair value
adjustments upon acquisition
+ Deferred Finance Charges
We consolidate two lessor VIEs for our
sale and leaseback facilities (for the vessels Ice and Kelvin).
This means that on consolidation, our contractual debt is
eliminated and replaced with the Lessor VIEs’ debt.
Contractual debt represents our actual
debt obligations under our various financing arrangements before
consolidating the Lessor VIEs.
The measure enables investors and users of
our financial statements to assess our liquidity and the split of
our debt (current and non-current) based on our underlying
contractual obligations.
Total Company Cash
CoolCo cash based on GAAP measures:
+ Cash and cash equivalents
+ Restricted cash and short-term deposits
(current and non-current)
- VIE restricted cash and short-term
deposits (current and non-current)
We consolidate lessor VIEs for our sale
and leaseback facilities. This means that on consolidation, we
include restricted cash held by the lessor VIEs.
Total Company Cash represents our cash and
cash equivalents and restricted cash and short-term deposits
(current and non-current) before consolidating the lessor VIEs.
Management believes that this measure
enables investors and users of our financial statements to assess
our liquidity and aids comparability with our competitors.
Reconciliations - Performance
Measures
Adjusted EBITDA
For the three months
ended
Apr-Jun 2023
Jan-Mar 2023
Apr-Jun 2022
(in thousands of $)
Successor
(Consolidated)
Successor
(Consolidated)
Successor
(Consolidated)1
Predecessor (Combined
Carve-out)2
Net income
44,646
70,132
18,625
7,220
Other non-operating income
(21
)
(42,528
)
—
—
Interest income
(2,791
)
(1,517
)
(59
)
(4
)
Interest expense
19,863
19,485
5,798
47
Gains / (Losses) on derivative
instruments
(16,705
)
6,001
—
—
Other financial items, net
414
393
301
(1,267
)
Income taxes
78
56
—
71
Depreciation and amortization
18,898
19,897
13,974
6
Amortization of intangible - charter
agreements, net
(4,488
)
(4,105
)
(7,070
)
—
Adjusted EBITDA
59,894
67,814
31,569
6,073
For the six months
ended
Jan-June 2023
Jan-Jun 2022
(in thousands of $)
Successor
(Consolidated)
Successor
(Consolidated)1
Predecessor (Combined
Carve-out)2
Net income
114,778
17,659
23,244
Other non-operating income
(42,549
)
—
—
Interest income
(4,308
)
(59
)
(4
)
Interest expense
39,348
6,672
4,725
Gains on derivative instruments
(10,704
)
—
—
Other financial items, net
807
1,359
(622
)
Income taxes
134
—
385
Depreciation and amortization
38,795
14,966
5,745
Amortization of intangible - charter
agreements, net
(8,593
)
(7,070
)
—
Adjusted EBITDA
127,708
33,527
33,473
Average daily TCE
For the three months
ended
Apr-Jun 2023
Jan-Mar 2023
Apr-Jun 2022
(in thousands of $, except number of days
and average daily TCE)
Successor
(Consolidated)
Successor
(Consolidated)
Successor
(Consolidated)1
Predecessor (Combined
Carve-out)2
Time and voyage charter revenues
82,071
91,168
45,537
747
Voyage, charter hire and commission
expenses
(877
)
(1,499
)
(1,034
)
(229
)
81,194
89,669
44,503
518
Calendar days less scheduled off-hire
days
1,001
1,071
718
10
Average daily TCE (to the closest
$100)
$
81,100
$
83,700
$
62,000
$
51,800
For the six months
ended
Jan-Jun 2023
Jan-Jun 2022
(in thousands of $, except number of days
and average daily TCE)
Successor
(Consolidated)
Successor
(Consolidated)1
Predecessor (Combined
Carve-out)2
Time and voyage charter revenues
173,239
49,822
37,289
Voyage, charter hire and commission
expenses
(2,376
)
(357
)
(1,229
)
170,863
49,465
36,060
Calendar days less scheduled off-hire
days
2,072
817
631
Average daily TCE (to the closest
$100)
$
82,500
$
60,500
$
57,100
(1)
The commencement of operations and funding
of CoolCo and the acquisition of its initial TFDE LNG carriers, The
Cool Pool Limited and the shipping and FSRU management organization
from Golar LNG Limited ("Golar") was completed in a phased process.
On January 26, 2022, CoolCo entered into various agreements (the
"Vessel SPA") with Golar, as amended on February 25, 2022, pursuant
to which CoolCo acquired all of the outstanding shares of nine of
Golar’s wholly-owned subsidiaries on various dates in March and
April 2022. Eight of these entities are each the registered or
disponent owner or lessee of the following modern LNG carriers:
Crystal, Ice, Bear, Frost, Glacier, Snow, Kelvin and Seal (disposed
subsequently). The Cool Pool Limited was the entity responsible for
the marketing of these LNG carriers. For CoolCo, for three and six
month periods ended June 30, 2022, the successor period reflects
the period beginning from January 27, 2022 with the closing of
CoolCo’s Norwegian equity raise and the date CoolCo operations
substantially commenced and were considered meaningful. Vessel SPA
acquisition dates were staggered reflecting results, as the
successor, from the date CoolCo obtained control of the respective
vessel entities.
(2)
Predecessor period includes results
derived from the carve-out of historical operations from Golar
entities acquired by CoolCo as part of the Vessel SPA and ManCo SPA
until the day before the staggered acquisition date per legal
entity during the period beginning from January 1, 2022 to June 30,
2022.
Reconciliations - Liquidity
measures
Total Contractual Debt
(in thousands of $)
At June 30, 2023
At December 31, 2022
Total debt (current and non-current) net
of deferred finance charges
1,063,901
1,138,302
Add: VIE consolidation and fair value
adjustments
108,923
106,829
Add: Deferred finance charges
6,557
6,186
Total Contractual Debt
1,179,381
1,251,317
Total Company Cash
(in thousands of $)
At June 30, 2023
At December 31,
2022
Cash and cash equivalents
309,419
129,135
Restricted cash and short-term
deposits
4,028
3,942
Less: VIE restricted cash
(3,554
)
(3,435
)
Total Company Cash
309,893
129,642
Other definitions
Revenue Backlog
Revenue backlog is defined as the contracted daily charter rate
for each vessel multiplied by the number of scheduled hire days for
the remaining contract term. Revenue backlog is not intended to
represent adjusted EBITDA or future cashflows that will be
generated from these contracts. This measure should be seen as a
supplement to and not a substitute for our US GAAP measures of
performance.
This information is subject to the disclosure requirements in
Regulation EU 596/2014 (MAR) article 19 number 3 and section 5-12
of the Norwegian Securities Trading Act.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230830205366/en/
+44 207 659 1111 / ir@coolcoltd.com
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