Q3 2024 Cool Company Ltd Earnings Call Transcript
Key Points
- Cool Co Ltd (CLCO) reached the upper end of its revenue guidance for the third quarter, supported by a $1.7 billion backlog.
- The company successfully refinanced its $570 million facility, extending maturity to 2029 and adding a revolving credit component with a 20 basis point cost saving.
- Cool Co Ltd (CLCO) introduced a $40 million share buyback program, providing an alternative channel for returning capital to shareholders.
- The company anticipates a strong long-term market for LNG, with expectations of increased shipping demand as new LNG projects come online.
- Cool Co Ltd (CLCO) maintains a solid liquidity position with approximately $200 million in available liquidity and an additional $120 million in borrowing capacity.
- The company experienced a disappointing start to the winter season, with spot market rates falling below levels not seen since 2018.
- Dividend was reduced to $0.15 per share, reflecting the impact of dry docking and the introduction of the buyback program.
- Net income was negatively impacted by a $15.5 million unrealized loss on interest rate swaps.
- The current market conditions have created a disconnect between LNG and LNG shipping markets, affecting short-term profitability.
- Cool Co Ltd (CLCO) faces challenges with older steam-turbine vessels, which are becoming less competitive due to environmental regulations and high operating costs.
Good day, and welcome to the Cool Company Limited third-quarter 2024 Business Update Call. (Operator Instructions) Please note today's call will be recorded. (Operator Instructions) It is now my pleasure to turn the call over to Richard Tyrrell, Chief Executive Officer. Please go ahead.
Good morning and good afternoon. Thank you, Todd, for the introduction. As many of you will have seen in our press release today, we've made important decisions concerning dividends and buybacks. These, along with the refinancing of our largest facility on more attractive terms are intended to ensure that we can seize opportunities in the current market from a position of strength. I'll be focusing on the current market drivers and how we see them developing in my pages; however, before delving into those, we have a quarter to report and page 3 has the key figures.
Our contracted fleet and efficient dry dockings enabled us to reach the upper end of revenue guidance for the third quarter. This was supported by
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