Hoegh LNG Profits Dip

Maritime Activity Reports, Inc.

August 26, 2016

 Norway-based owner and operator of floating LNG import terminals, Höegh LNG  reported a second quarter profit after tax of US$3.5 million, down from $6.3 million in the first quarter 2016.

 
The company’s profit after tax was also down in comparison to the corresponding quarter in 2015 when it reached $6 million.
 
Analysts are calling the result a "marginal miss" on the numbers.  The LNG carrier stalled a little in the second quarter of the year with a lower result, while an extra vessel pushed the operating result a little notch upward, maintain analysts.
 
Richard Tyrrell, Chief Executive Officer and Chief Financial Officer stated: "During the second quarter, Höegh LNG Partners generated strong cash flows that were consistent with expectations after factoring in contractual protections in the form of indemnities and warranties that offset the cost of previously disclosed maintenance to the Höegh Gallant."
 
"Our FSRUs continued to perform according to their multi-year contracts, generating stable fixed-fee revenues. Höegh LNG Partners declared a cash distribution of $0.4125 per unit for the second quarter of 2016, which is unchanged from the previous quarter and represents a 22% increase since the initial public offering," he added.
 
Richard said: "We expect to have the opportunity to acquire the Höegh Grace once it goes on contract later this year and to be in a position to increase the distribution further. As LNG production and liquefaction continue to expand at a rapid pace, we are confident that our FSRUs will remain the preferred method of connecting new markets to global LNG trade. Our dropdown pipeline of state-of-the-art, purpose-built FSRUs, combined with Höegh's leadership in the sector, position us well to continue benefitting from these long-term trends."
 
The company looks forward to the start of an LNG project in Colombia, which is expected to boost operations.
 
Höegh is moving forward with its plans to add another floating storage and regasification unit (FSRU) to its fleet. The floating LNG giant has a fleet of eight FSRUs, with two of them still being constructed at South Korea’s Hyundai Heavy Industries.
 
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