This release includes business updates and unaudited interim
financial results for the three ("Q3", "Q3 2024" or the "Quarter")
and nine months ("9M 2024") ended September 30, 2024 of Cool
Company Ltd. ("CoolCo" or the "Company") (NYSE:CLCO / CLCO.OL).
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Q3 Highlights and Subsequent Events
- Generated total operating revenues of $82.4 million in Q3,
compared to $83.4 million for the second quarter of 2024 ("Q2" or
"Q2 2024"), due to three vessels undergoing scheduled drydocking
during the Quarter;
- Net income of $8.11 million in Q3, compared to $26.51 million
for Q2 with the decrease primarily related to a loss in our
mark-to-market interest rate swaps;
- Achieved average Time Charter Equivalent Earnings ("TCE")2 of
$81,600 per day for Q3, compared to $78,400 per day for Q2,
primarily due to contribution from one vessel that recently started
a higher rate charter;
- Adjusted EBITDA2 of $53.7 million for Q3, compared to $55.7
million for Q2;
- Took delivery of newbuild vessel, Kool Tiger, from shipyard in
October which was repositioned in the Atlantic Basin for spot
market employment on an interim basis until a long-term charter is
secured;
- Completed drydocks for two vessels during Q3 2024, taking
around 21 days and ahead of schedule. Subsequent to the Quarter, a
drydock for another vessel was completed, which included LNGe
upgrades;
- Obtained commercial bank approval for a refinancing of our $570
million bank facility into a reducing revolving credit facility,
which will provide approximately $120 million in additional
borrowing capacity, while lowering margin and extending maturity to
late 2029;
- Declared a quarterly dividend of $0.15 per share, payable to
shareholders of record on December 2, 2024;
- Subsequent to Quarter end, the Board approved a share
repurchase program of up to $40 million to be executed over a
24-month period.
Richard Tyrrell, CEO, commented:
“Our contracted fleet and efficient dry-docking enabled us to
reach the upper end of TCE guidance for the third quarter, despite
a soft market backdrop that is expected to impact us in the fourth
quarter. While we work to secure their long-term employment, the
newly delivered Kool Tiger and the available Kool Glacier are
currently subject to weaker rates in the short-term market.
However, by design, our backlog from our remaining 10 vessels and
one newbuild vessel, set for delivery in January, limits our
exposure.
This winter's market is expected to be impacted by unfavorable
short-term trading dynamics and the delivery of orderbook vessels
in the fourth quarter ahead of the new LNG supply they are intended
to serve. LNG prices for immediate delivery have remained high,
encouraging prompt delivery rather than the contango-driven
floating storage that is customary at the onset of winter.
Additionally, high prices in Europe have closed the East-West
arbitrage that would result in a greater number of cargoes shipping
to the distant East. While these trading dynamics could quickly
reverse, we nevertheless expect vessels delivered ahead of their
intended liquefaction projects to be absorbed in stages throughout
2025 as those projects and their associated LNG volumes come
online. If the current market has a silver lining, it is the
knocking out of the steam-turbine vessels from the fleet. These are
falling off charter at a rate of 20-30 per year (in addition to the
92 that have already reached this age), not being extended, and
exiting the active market in a way that cannot be easily
reversed.
Longer-term, LNG remains the transition fuel of choice with
well-established geopolitical credentials that are highly
supportive of future development. It is expected that the
moratorium on new LNG export projects in the US will soon be
relaxed, resulting in material additional shipping demand towards
the end of this decade.
CoolCo anticipates that current market conditions will provide
growth opportunities, which it intends to seize from a position of
strength. We are in the process of refinancing our $570 million
bank facility into a reducing revolving credit facility, further
increasing our liquidity by approximately $120 million while
lowering the margin and extending the maturity from early 2027 to
late 2029 (with options for two one-year extensions). After the
transaction closes, our nearest debt maturity will come due in 4.5
years.
In connection with our current drydocking cycle (with 3
dry-dockings either finishing or starting during the third
quarter), we have also reduced the quarterly dividend payment in
line with our variable dividend policy's parameters and expanded
this policy to include a share repurchase program as a capital
return alternative, approving a buyback program of up to $40
million over 24 months. By targeting repurchases of shares trading
well below our Net Asset Value, and our own assessment of the
inherent value and prospects of the business, we aim to capitalize
on the current market price of our shares and deliver enhanced
value to our shareholders.”
Financial Highlights
The table below sets forth certain key financial information for
Q3 2024, Q2 2024, Q3 2023, and for the nine months ended September
30, 2024 (“9M 2024”) and 2023 (“9M 2023”).
(in thousands of $, except average daily
TCE)
Q3 2024
Q2 2024
Q3 2023
9M 2024
9M 2023
Time and voyage charter revenues
77,745
76,401
84,523
232,856
257,761
Total operating revenues
82,434
83,372
92,901
253,931
281,864
Operating income
38,948
41,361
48,336
124,406
145,844
Net income 1
8,124
26,478
39,170
71,414
153,952
Adjusted EBITDA2
53,722
55,679
62,754
167,942
190,466
Average daily TCE2 (to the closest
$100)
81,600
78,400
82,400
79,000
82,400
LNG and LNG Shipping Market Review
The average Japan/Korea Marker gas price ("JKM") for the Quarter
was $13.10/MMBtu compared to $11.10/MMBtu for Q2 2024; with average
JKM for Q4 2024 at $13.31/MMBtu as of November 12, 2024. The
Quarter began with Dutch Title Transfer Facility gas price ("TTF")
at $10.40/MMBtu and quoted TFDE headline spot rates of $62,250 per
day. By Quarter-end, TTF prices had risen to $12.08/MMBtu, while
TFDE headline spot rates had fallen to $46,250 per day.
Subsequently, the TFDE headline spot rates have decreased further
to a quoted $18,750 per day as of November 12, 2024.
While robust LNG prices would typically support shipping rates
in many markets, the lack of associated price volatility has had
the opposite effect in this case. Near-term LNG prices in Europe
have been bolstered by pipeline gas supply outages, capacity
remaining in onshore storage, and security supply concerns related
to the remaining Russian gas flowing into Europe. This has led to
two main consequences: a lack of contango in the market, which
would otherwise limit LNG carrier availability by encouraging
charterers to store cargoes on ships at this time of year; and
fairly minimal redirection of destination flexible cargoes from the
Atlantic Basin to the more distant Pacific Basin.
Despite LNG pricing, capacity for the markets to take on
additional cargoes is variable, opening a potential need for
shipborne storage, especially in Asia. Following two unusually warm
winters, an onset of cold weather would also be anticipated to add
impetus to the shipping rates as charterers seek to achieve
associated delivery windows.
In addition to these challenging trading dynamics, newbuild
deliveries arriving ahead of the LNG supply for which they were
ordered are impacting rates. During Q3, 21 ships were delivered,
compared to 28 during the first half of 2024. This relative
increase in deliveries has not been matched by a corresponding rise
in LNG production, which has seen only a 1.2% year-on-year increase
as of September 30, 2024. Annual LNG production is forecast at 410
MTPA, with the run-rate increasing by 50 MTPA, or 12%, as numerous
projects are expected to come online during 2025, including the
following: Corpus Christi (4.2MTPA), Plaquemines LNG (13.3 MTPA),
LNG Canada (14 MTPA), Tortu FLNG (2.5MTPA), Energia Costa Azul (2.4
MTPA), North Field Expansion (7.8MTPA) , Eni Congo (2.4 MTPA), and
Nigeria LNG (4.2 MTPA).
As of September 30, 2024, there were 233 steam turbine-powered
vessels, of which 22 are currently idling, according to Clarksons
Research. These idled vessels, mostly built in the 2000s and
originally chartered on 20-year contracts as prevalent at the time,
are expected to be replaced by more modern tonnage as they
redeliver over the next few years. With today’s low prevailing
charter rates and customers increasingly disfavoring older, less
efficient tonnage, this trend is likely to accelerate, which we
expect will lead to nearly all steam turbine vessels being idled
and scrapped in the relative near term.
Operational Review
CoolCo's fleet maintained strong performance, achieving 98%
fleet utilization in Q3, the same level as Q2 2024. The minor
off-hire period was due to the repositioning of a vessel between
charters. Both the Kool Frost and the Kool Ice completed their
drydocks ahead of schedule in Q3, with average costs in line with
estimates at approximately $5 million per vessel. Additionally, the
Kool Husky entered drydock during September which was completed
along with upgrades for LNGe specifications ahead of schedule in
October. These LNGe upgrades included a high-capacity sub-cooler
retrofit, a passive air lubrication system, and various smaller
performance enhancements.
Business Development
Chartering activity in the third quarter was subdued and this
has extended beyond the end of the Quarter. Long-term charterers
have responded by pushing out their requirements in the expectation
that nearer-term cargos can be transported with vessels from the
spot market.
CoolCo has successfully chartered its one TFDE vessel available
in the fourth quarter on a spot voyage and anticipates continuing
with similar employment until the vessel enters drydock in early
February. This vessel will be upgraded with LNGe specifications and
is scheduled to be in the yard for approximately 50 days.
CoolCo’s other available vessel in the quarter is the newly
delivered Kool Tiger. She was delivered from the shipyard in
October and repositioned to the Atlantic Basin for spot market
employment on an interim basis, while pursuing a long-term
charter.
Financing and Liquidity
As of September 30, 2024, CoolCo had cash and cash equivalents
of $142.4 million and total short and long-term debt, net of
deferred finance charges, amounting to $1,063.7 million. Total
Contractual Debt2 stood at $1,169.2 million, which is comprised of
$456.7 million in respect of the $570 million bank facility
maturing in March 2027, $442.5 million in respect of the $520
million term loan facility maturing in May 2029, $155.2 million of
sale and leaseback financing in respect of the two vessels maturing
in the first quarter of 2025 (Kool Ice and Kool Kelvin) and $114.8
million in respect of the Newbuilds' pre-delivery financing.
Overall, the Company’s interest rate on its debt is currently
fixed or hedged for approximately 80% of the notional amount of net
debt, adjusting for existing cash on hand.
Subsequent to the end of the Quarter, the Company obtained
commercial bank approval for a refinancing of its existing $570
million bank facility into a reducing revolving credit facility.
The refinancing will provide approximately $120 million in
additional borrowing capacity, while lowering the margin and
extending the maturity to late 2029, including two one-year
extension options. With this refinancing, the Company’s first debt
maturity will come due in 4.5 years.
Corporate and Other Matters
As of September 30, 2024, CoolCo had 53,702,846 shares issued
and outstanding. Of these, 31,254,390 shares (58.2%) were owned by
EPS Ventures Ltd ("EPS") and 22,448,456 (41.8%) were owned by other
investors in the public markets.
In line with the Company’s variable dividend policy, the Board
has declared a Q3 dividend of $0.15 per common share. The record
date is December 2, 2024 and the dividend will be distributed to
DTC-registered shareholders on or around December 9, 2024, while
due to the implementation of the Central Securities Depositories
Regulation in Norway, the dividend will be distributed to Euronext
VPS-registered shareholders on or around December 13, 2024.
The Board has further approved a share repurchase program that
authorizes the Company to conduct buy-backs at times when the
Company’s common stock trades at a material discount to its Net
Asset Value (“NAV”).
Under the repurchase program, the Company may at its discretion,
repurchase outstanding common shares worth up to approximately $40
million over the next 24 months. Repurchases under the share
repurchase program may be made from time to time through open
market repurchases or through privately negotiated transactions
subject to market conditions, applicable legal requirements and
other relevant factors. Repurchases are expected to be conducted
through a combination of a non-discretionary plan and a
discretionary plan during open trading windows in accordance with
applicable securities laws.
The Company is not obligated under the share repurchase program
to acquire any particular amount of common shares. The manner,
timing, pricing and amount of any repurchases will depend on a
number of factors including market conditions, the Company’s
financial position and capital requirements, financial conditions,
competing uses of cash and other factors. The repurchase program
may be initiated, suspended or discontinued at the Company’s
discretion at any time and may not be completed in full.
Outlook
With the current charter market weakness being driven by a
combination of seasonal factors and a temporary oversupply of
vessels that are expected to be absorbed as their related
liquefaction projects come online throughout 2025, there remains a
material disconnect between conditions and sentiment in the spot
and short-term charter markets and those in the more stable,
long-term time charter market. Prevailing rates in the long-term
market remain within a narrower and materially higher range,
reflecting the fundamentals of the LNG shipping sector. While
charterers have less interest in near-term deliveries, rates for
later start dates remain strong.
In addition to the anticipated 2025 absorption of newbuilds
currently operating in the sub-let market, the supply-demand
balance of the sector is expected to be materially supported by
increasing pressure on legacy steam turbine vessels. Steam turbine
vessels, which represent approximately 30% of the global LNG
carrier fleet, are increasingly redelivering from long-term initial
charters and either idling or struggling to achieve a competitive
level of utilization. While this phenomenon is currently in its
early stages, such redeliveries are set to sharply ramp in the
near-term, at which point many or all of those older vessels would
be expected to leave the mainstream trading fleet, whether due to
scrapping, conversion into floating infrastructure, or redeployment
into niche regional trades.
In contrast to the volatility and uncertainties of the near-term
market, we believe longer-term sector prospects remain strongly
supported by the pipeline of new liquefaction projects that have
already reached Final Investment Decision (FID) and are set to
increase the total volume of LNG on the water by more than 50% in
the coming years. The sizable current newbuild orderbook consists
mainly of vessels secured on a long-term basis to transport these
new volumes, with a significant portion of that orderbook destined
for charterers who have traditionally been disinclined to maximize
vessel utilization through the out-charter/sub-let market. Coupled
with the expected departure of steam turbine ships from mainstream
trades, net fleet growth in the years ahead is expected to be well
matched and potentially outpaced by expected increased demand for
modern LNG carrier tonnage. With both an energy security focus and
winter market factors capable of absorbing even more tonnage beyond
underlying transportation demand, we anticipate that the multi-year
outlook remains highly favorable for independent owners of
high-quality modern vessels.
1 Net income includes a mark-to market
loss on interest rate swaps amounting to $12.5 million for Q3 2024,
compared to gain of $4.1 million for Q2 2024, of which $15.5
million was unrealized loss for Q3 2024 compared to $1.0 million
unrealized gain for Q2 2024 .
2 Refer to 'Appendix A' - Non-GAAP
financial measures and definitions, for definitions of these
measures and a reconciliation to the nearest GAAP measure.
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 within the meaning of and made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. All statements, other than statements of historical facts,
that address activities and events that will, should, could, are
expected to or may occur in the future are forward-looking
statements. You can identify these forward-looking statements by
words or phrases such as “believe,” “anticipate,” “intend,”
“estimate,” “forecast,” “outlook,” “project,” “plan,” “potential,”
“will,” “may,” “should,” “expect,” “could,” “would,” “predict,”
“propose,” “continue,” or the negative of these terms and similar
expressions. These forward-looking statements include statements
relating to our outlook, industry trends, expected results, plans
to upsize and/or refinance the existing facilities, expectations on
LNG prices, chartering and charter rates, chartering plan and
expectations, expected drydockings including the cost, timing and
duration thereof, and impact of performance enhancements on our
vessels, dividends and dividend policy, statements about our share
repurchase program, potential growth opportunities in light of
current market conditions, expected growth in LNG supply and the
impact of new LNG and liquefaction projects on LNG volume, expected
industry and business trends and prospects including expected
trends in LNG demand and market trends expectations of
steam-turbine vessels leaving the market, anticipated rates of net
fleet growth, LNG vessel supply and demand factors impacting supply
and demand of vessels, rates and expected trends in charter rates,
contracting, market outlook and LNG vessel newbuild order-book and
expectations that newbuilds will be absorbed in the market in 2025,
statements made under “LNG and LNG Shipping 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:
- general economic, political and business conditions, including
sanctions and other measures;
- general LNG market conditions, including fluctuations in
charter hire rates and vessel values;
- changes in demand in the LNG shipping industry, including the
market for our vessels;
- changes in the supply of LNG vessels, including whether older
steam vessels leave the market as expected;
- our ability to successfully employ our vessels;
- changes in our operating expenses, including fuel or cooling
down prices and lay-up costs when vessels are not on charter,
drydocking and insurance costs;
- compliance with, and our liabilities under, governmental, tax,
environmental and safety laws and regulations;
- risks related to climate change, including climate-change or
greenhouse gas related legislation or regulations and the impact on
our business from physical climate-change related to changes in
weather patterns, and the potential impact of new regulations
relating to climate change and the potential impact on the demand
for the LNG shipping industry;
- changes in governmental regulation, tax and trade matters and
actions taken by regulatory authorities;
- potential disruption of shipping routes and demand due to
accidents, piracy or political events and/or instability, including
the ongoing conflicts in the Middle East and changes in political
leadership in the US and other countries;
- vessel breakdowns and instances of loss of hire;
- vessel underperformance and related warranty claims;
- our ability to procure or have access to financing and
refinancing and to complete the upsize and/or refinancing of our
facilities;
- continued borrowing availability under our credit facilities
and compliance with the financial covenants therein;
- fluctuations in foreign currency exchange and interest
rates;
- potential conflicts of interest involving our significant
shareholders;
- our ability to pay dividends and repurchase shares;
- information system failures, cyber incidents or breaches in
security;
- amounts repurchased under share repurchase programs; and
- other risks indicated in the risk factors included in our
Annual Report on Form 20-F for the year ended December 31, 2023 and
other filings with and submission to 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 nine
months ended September 30, 2024, 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 nine months ended September 30, 2024 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.
November 21, 2024 Cool Company Ltd. London, UK
Questions should be directed to: c/o Cool Company Ltd - +44 20
7659 1111
Richard Tyrrell (Chief Executive Officer
& Director)
Cyril Ducau (Chairman of the Board)
John Boots (Chief Financial Officer)
Antoine Bonnier (Director)
Joanna Huipei Zhou (Director)
Sami Iskander (Director)
Neil Glass (Director)
Peter Anker (Director)
Cool Company Ltd.
Unaudited Condensed Consolidated
Statements of Operations
For the three months
ended
For the nine months
ended
(in thousands of $)
Jul-Sep
2024
Apr-Jun
2024
Jul-Sep
2023
Jan-Sep
2024
Jan-Sep
2023
Time and voyage charter revenues
77,745
76,401
84,523
232,856
257,761
Vessel and other management fee
revenues
767
2,479
3,860
8,169
10,993
Amortization of intangible assets and
liabilities - charter agreements, net
3,922
4,492
4,518
12,906
13,110
Total operating revenues
82,434
83,372
92,901
253,931
281,864
Vessel operating expenses
(17,950
)
(17,037
)
(18,556
)
(52,581
)
(55,979
)
Voyage, charter hire and commission
expenses, net
(1,179
)
(900
)
(1,137
)
(3,518
)
(3,512
)
Administrative expenses
(5,661
)
(5,264
)
(5,936
)
(16,984
)
(18,797
)
Depreciation and amortization
(18,696
)
(18,810
)
(18,936
)
(56,442
)
(57,732
)
Total operating expenses
(43,486
)
(42,011
)
(44,565
)
(129,525
)
(136,020
)
Operating income
38,948
41,361
48,336
124,406
145,844
Other non-operating income
—
—
—
—
42,549
Financial income/(expense):
Interest income
1,186
1,357
2,176
4,248
6,484
Interest expense
(18,825
)
(19,180
)
(20,379
)
(57,683
)
(59,727
)
(Losses)/Gains on derivative
instruments
(12,485
)
4,065
9,689
2,881
20,393
Other financial items, net
(533
)
(972
)
(605
)
(1,985
)
(1,411
)
Financial expenses, net
(30,657
)
(14,730
)
(9,119
)
(52,539
)
(34,261
)
Income before income taxes and
non-controlling interests
8,291
26,631
39,217
71,867
154,132
Income taxes, net
(167
)
(153
)
(47
)
(453
)
(180
)
Net income
8,124
26,478
39,170
71,414
153,952
Net loss/(income) attributable to
non-controlling interests
25
(411
)
(340
)
(624
)
(1,283
)
Net income attributable to the Owners
of Cool Company Ltd.
8,149
26,067
38,830
70,790
152,669
Net (loss)/income attributable
to:
Owners of Cool Company Ltd.
8,149
26,067
38,830
70,790
152,669
Non-controlling interests
(25
)
411
340
624
1,283
Net income
8,124
26,478
39,170
71,414
153,952
Cool Company Ltd.
Unaudited Condensed Consolidated
Balance Sheets
At September 30,
At December 31,
(in thousands of $, except number of
shares)
2024
2023
(Audited)
ASSETS
Current assets
Cash and cash equivalents
142,439
133,496
Restricted cash and short-term
deposits
1,676
3,350
Intangible assets, net
—
825
Trade receivable and other current
assets
13,450
12,923
Inventories
909
3,659
Total current assets
158,474
154,253
Non-current assets
Restricted cash
476
492
Intangible assets, net
7,999
9,438
Newbuildings
209,206
181,904
Vessels and equipment, net
1,690,329
1,700,063
Other non-current assets
7,168
10,793
Total assets
2,073,652
2,056,943
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt and
short-term debt
245,427
194,413
Trade payable and other current
liabilities
118,501
98,917
Total current liabilities
363,928
293,330
Non-current liabilities
Long-term debt
818,291
866,671
Other non-current liabilities
77,853
90,362
Total liabilities
1,260,072
1,250,363
Equity
Owners' equity includes 53,702,846 (2023:
53,702,846) common shares of $1.00 each, issued and outstanding
742,366
735,990
Non-controlling interests
71,214
70,590
Total equity
813,580
806,580
Total liabilities and equity
2,073,652
2,056,943
Cool Company Ltd.
Unaudited Condensed Consolidated
Statements of Cash Flows
(in thousands of $)
Jan-Sep
2024
Jan-Sep
2023
Operating activities
Net income
71,414
153,952
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expenses
56,442
57,732
Amortization of intangible assets and
liabilities arising from charter agreements, net
(12,906
)
(13,110
)
Amortization of deferred charges and fair
value adjustments
2,899
3,228
Gain on sale of vessel
—
(42,549
)
Drydocking expenditure
(14,636
)
(4,372
)
Compensation cost related to share-based
payment, net
1,640
1,792
Change in fair value of derivative
instruments
6,356
(13,043
)
Changes in assets and liabilities:
Trade accounts receivable
5,450
(4,294
)
Inventories
2,750
(2,961
)
Other current and other non-current
assets
(3,655
)
(4,098
)
Amounts due to related parties
(479
)
(1,270
)
Trade accounts payable
584
22,476
Accrued expenses
(7,545
)
(6,123
)
Other current and non-current
liabilities
6,096
1,935
Net cash provided by operating
activities
114,410
149,295
Investing activities
Additions to vessels and equipment
(15,085
)
(147,792
)
Additions to newbuildings
(23,391
)
—
Additions to intangible assets
(132
)
(997
)
Proceeds from sale of vessels &
equipment
—
184,300
Net cash (used in) / provided by
investing activities
(38,608
)
35,511
Financing activities
Proceeds from short-term and long-term
debt
74,848
70,000
Repayments of short-term and long-term
debt
(72,513
)
(164,296
)
Financing arrangement fees and other
costs
(4,830
)
(1,892
)
Cash dividends paid
(66,054
)
(65,499
)
Net cash used in financing
activities
(68,549
)
(161,687
)
Net increase in cash, cash equivalents
and restricted cash
7,253
23,119
Cash, cash equivalents and restricted
cash at beginning of period
137,338
133,077
Cash, cash equivalents and restricted
cash at end of period
144,591
156,196
Cool Company Ltd.
Unaudited Condensed Consolidated
Statements of Changes in Equity
For the nine months ended
September 30, 2024
(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 balance at December 31,
2023
53,702,846
53,703
509,327
172,960
735,990
70,590
806,580
Net income for the period
—
—
—
70,790
70,790
624
71,414
Share based payments contribution
—
—
1,773
—
1,773
—
1,773
Forfeitures of share based
compensation
—
—
(133
)
—
(133
)
—
(133
)
Dividends
—
—
—
(66,054
)
(66,054
)
—
(66,054
)
Consolidated balance at
September 30, 2024
53,702,846
53,703
510,967
177,696
742,366
71,214
813,580
(1) Additional paid-in capital refers to
the amount of capital contributed or paid-in over and above the par
value of the Company's issued share capital.
For the nine months ended
September 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 balance at December 31,
2022
53,688,462
53,688
507,127
85,742
646,557
68,956
715,513
Net income for the period
—
—
—
152,669
152,669
1,283
153,952
Share based payments contribution
—
—
1,792
—
1,792
—
1,792
Dividends
—
—
—
(65,499
)
(65,499
)
—
(65,499
)
Consolidated balance at
September 30, 2023
53,688,462
53,688
508,919
172,912
735,519
70,239
805,758
(1) Additional paid-in capital refers to
the amount 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 presentation of
the non-GAAP measure
Performance Measures
Adjusted EBITDA
Net income
+/- Other non-operating income
+/- Net financial expense, representing:
Interest income, Interest expense, (Gains)/Losses on derivative
instruments and Other financial items, net
+/- Income taxes, net
+ 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 two 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
(in thousands of $)
Jul-Sep
2024
Apr-Jun
2024
Jul-Sep
2023
Net income
8,124
26,478
39,170
Interest income
(1,186
)
(1,357
)
(2,176
)
Interest expense
18,825
19,180
20,379
Losses/(Gains) on derivative
instruments
12,485
(4,065
)
(9,689
)
Other financial items, net
533
972
605
Income taxes, net
167
153
47
Depreciation and amortization
18,696
18,810
18,936
Amortization of intangible assets and
liabilities - charter agreements, net
(3,922
)
(4,492
)
(4,518
)
Adjusted EBITDA
53,722
55,679
62,754
For the nine months
ended
(in thousands of $)
Jan-Sep
2024
Jan-Sep
2023
Net income
71,414
153,952
Other non-operating income
—
(42,549
)
Interest income
(4,248
)
(6,484
)
Interest expense
57,683
59,727
Gains on derivative instruments
(2,881
)
(20,393
)
Other financial items, net
1,985
1,411
Income taxes, net
453
180
Depreciation and amortization
56,442
57,732
Amortization of intangible assets and
liabilities - charter agreements, net
(12,906
)
(13,110
)
Adjusted EBITDA
167,942
190,466
Average daily TCE
For the three months
ended
(in thousands of $, except number of days
and average daily TCE)
Jul-Sep
2024
Apr-Jun
2024
Jul-Sep
2023
Time and voyage charter revenues
77,745
76,401
84,523
Voyage, charter hire and commission
expenses, net
(1,179
)
(900
)
(1,137
)
76,566
75,501
83,386
Calendar days less scheduled off-hire
days
938
963
1,012
Average daily TCE (to the closest
$100)
$ 81,600
$ 78,400
$ 82,400
For the nine months
ended
(in thousands of $, except number of days
and average daily TCE)
Jan-Sep
2024
Jan-Sep
2023
Time and voyage charter revenues
232,856
257,761
Voyage, charter hire and commission
expenses, net
(3,518
)
(3,512
)
229,338
254,249
Calendar days less scheduled off-hire
days
2,902
3,084
Average daily TCE (to the closest
$100)
$ 79,000
$ 82,400
Reconciliations -
Liquidity measures
Total Contractual Debt
(in thousands of $)
At September 30,
2024
At December 31,
2023
Total debt (current and non-current) net
of deferred finance charges
1,063,718
1,061,084
Add: VIE consolidation and fair value
adjustments
99,054
97,245
Add: Deferred finance charges
6,472
5,563
Total Contractual Debt
1,169,244
1,163,892
Total Company Cash
(in thousands of $)
At September 30,
2024
At December 31,
2023
Cash and cash equivalents
142,439
133,496
Restricted cash and short-term
deposits
2,152
3,842
Less: VIE restricted cash
(1,676
)
(3,350
)
Total Company Cash
142,915
133,988
Other definitions
Contracted Revenue Backlog
Contracted 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. Contracted 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/20241120414649/en/
c/o Cool Company Ltd - +44 20 7659 1111
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