Loading...
•
Mar 31, 2024
•/
Cool Company Ltd Q1 2024 Earnings Report
Cool Company Ltd reported its Q1 2024 earnings with a decrease in total operating revenues but an increase in net income, primarily due to unrealized mark-to-market gains on interest rate swaps.
Key Takeaways
Cool Company Ltd reported total operating revenues of $88.1 million for Q1 2024, a decrease from Q4 2023. However, net income increased to $36.8 million, largely driven by unrealized mark-to-market gains on interest rate swaps. The company achieved an average Time Charter Equivalent Earnings of $77,200 per day and declared a quarterly dividend of $0.41 per share.
Total operating revenues for Q1 2024 were $88.1 million, down from $97.1 million in Q4 2023, mainly due to brief off-hire on the Kool Husky and a lower floating rate on another vessel.
Net income increased to $36.8 million in Q1 2024 from $22.4 million in Q4 2023, primarily due to unrealized mark-to-market gains on interest rate swaps.
Average Time Charter Equivalent Earnings (TCE) for Q1 2024 were $77,200 per day, a decrease from $87,300 per day in Q4 2023.
The company secured a 14-year charter with GAIL (India) Limited for one of its newbuild MEGA LNG carriers, expected to be delivered towards the end of 2024, increasing its firm revenue backlog to over $1.2 billion.
Cool Company Ltd
Cool Company Ltd
Cool Company Ltd Revenue by Segment
Revenue by Segment
Time & Voyage Charter Revenue
CapyFin.comManagement Fees Revenue
CapyFin.comCharter Agreement Amortization Revenue
CapyFin.com Forward Guidance
The company anticipates increased volatility in LNG markets as the winter heating season approaches, with potential for more cargoes heading east and increased use of LNG carriers for storage. They expect longer voyage distances in the second half of 2024. The imposition of carbon pricing and environmental regulations are expected to disadvantage older steam turbine vessels.
Positive Outlook
- Energy security concerns continue to support LNG prices above $9/MMBTU.
- Next available vessels are well spaced and do not come open before the second half of 2024, when the market is anticipated to be in a seasonal upswing.
- Expectation of longer voyage distances in the second half of 2024 as greater volumes of LNG head east.
- Liquefaction projects reaching FID are set to increase total LNG volume by over 50% in the coming years, with heavy commissioning in 2025, requiring more tonnage.
- The charter market is positioned to tighten considerably as new volumes come online, potentially reorienting charterers towards risk-averse, energy security focus.
Challenges Ahead
- The spot LNG carrier market is likely to remain substantially detached from multi-year secondhand employment or very long-term charters for newbuilds.
- Charterer comfort levels have been buoyed by two consecutive mild winters in the northern hemisphere.
- Delays to commissioning and startup of very late-stage liquefaction facilities have enlarged the pool of vessels available for short-term employment.
- Increased willingness of charterers to rely upon the availability of temporary tonnage.
- Imposition of a carbon pricing scheme and increasingly stringent environmental regulations are increasingly disadvantaging older steam turbine vessels in mainstream LNG trades.
Revenue & Expenses
Visualization of income flow from segment revenue to net income