Hoegh LNG logs profit rise, looks to find long-term work for uncommitted FSRU

Floating player Hoegh LNG reported a rise in its quarterly profit, while it looks to find work for its remaining uncommitted FSRU.

Hoegh LNG said its net profit after taxes reached $3.6 million in the fourth quarter, compared to a loss of $3.1 million in the preceding quarter and a profit of $782,000 in the same quarter in 2020.

The firm attributed the increase to certain one-off financing costs in the third quarter and lower provision for taxes in the fourth quarter compared to the third quarter.

Höegh LNG and its units reported a total income of $94.7 million for the fourth quarter, compared with $86.1 million in the preceding quarter and $84.4 million in the same quarter in 2020.

According to Hoegh LNG, the increase is mainly related to higher time charter revenue for the 170,000-cbm Hoegh Gallant FSRU after the vessels started serving New Fortress Energy’s offshore Old Harbour facility in Jamaica from end of November 2021.

For the full year of 2021, Hoegh LNG reported a total income of $351.8 million and an
Ebitda of $217.2 million, which compares with $335.1 million and $225.4 million for the previous year.

Although revenues increased, the group also incurred higher expenses in 2021, with increased opex primarily related to maintenance conducted to prepare two vessels for operations in FSRU mode, class renewals and increased SG&A, it said.

Hoegh LNG reported a net loss of $21.2 million for 2021, which compares with a $0.1 million profit for 2020.

The decrease is, in addition to the drop in Ebitda, mainly due to a tax provision recorded for uncertain tax position following a tax audit in Indonesia in 2021, Hoegh LNG said.

Long-term FSRU job for Hoegh Esperanza

Hoegh LNG’s fleet consists of ten FSRUs and two LNG carriers, including five FSRU’s owned by Hoegh LNG Partners.

Besides the long-term deal for the Hoegh Gallant with NFE last year, Hoegh LNG also signed two more FSRU contracts last year.

These include the 170,000-cbm Hoegh Gannet deal with a unit of Brazilian energy company Cosan and the 170,000-cbm Hoegh Galleon deal with Australian Industrial Energy (AIE).

However, the AIE deal is conditional as the firm still needs to take a final investment decision.

For 2022, Hoegh LNG’s fleet has a “high” contract coverage but three FSRUs currently trading in LNG carrier mode will potentially roll of existing charters in the second quarter of 2022.

These include Gannet, Galleon, and Esperanza. For Esperanza and Galleon, existing charterers have an option to extend the charters.

Hoegh LNG said its “main commercial focus is to deliver the FSRU projects that have been secured, ensure the contract with AIE becomes a firm contract, and conclude long-term FSRU employment for Esperanza.”

Hoegh previously earmarked the 2018-built Esperanza for AGL Energy’s FSRU-based LNG import project in Australia but the utility scrapped this project last year.

The unit is currently the only uncommitted FSRU in Hoegh LNG’s fleet.

Hoegh LNG Partners deal

Hoegh LNG is planning to buy all publicly held common units of New York-listed Hoegh LNG Partners as part of a move it revealed in December.

Under the non-binding buyout offer, a wholly-owned subsidiary of Hoegh LNG would purchase all publicly held common units of the partnership in exchange for $4.25 in cash per common unit.

If the two firms reach a definitive agreement, the transaction would also require approval by a majority of the holders of outstanding common units in the partnership.

Hoegh LNG said that there can be no assurance that definitive documentation would be executed or that any transaction would materialize.

FSRU Lampung dispute

In December, Hoegh LNG Partners finally completed a refinancing of the commercial tranche of its PGN FSRU Lampung debt facility.

To remind, HMLP said in August it had filed a countersuit against Indonesian state-owned gas firm PT Perusahaan Gas Negara (PGN), a unit of Pertamina, over issues related to the Lampung FSRU charter.

The vessel serves a 20-year charter deal with PGN LNG, a unit of PGN, off the southeast coast of Sumatra in Indonesia. Hoegh LNG manages the FSRU while the limited partnership owns it.

Hoegh LNG said HMLP’s main focus is the dispute with the charterer of PGN FSRU Lampung but “no assurance can be given at this time as to the outcome of the dispute.”

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