Korea Line stake sale boost Golar

JOHN Fredriksen-controlled gas carrier company Golar LNG made a Q2 net profit of US$89.6m compared to $53.3m in Q1. The company says: “This significant improvement is mainly attributable to the gain arising as a result of the sale of the Company's investment in Korea line, which resulted in a book gain of $73.5m. Operating income for the second quarter of $18.8m was down on the first quarter's $58.6 million but after adjusting for the gain on sale of a newbuilding of $41.1m booked in the first quarter there is an underlying increase in the second quarter of $1.3 million. Golar says that operating revenues have increased to $57.1m in the second quarter as compared to $53.7m for the first quarter and have benefited from improved levels of utilisation of the company's spot vessels. Revenues have however been negatively affected in both quarters by the drydocking of vessels. Average daily time charter equivalents (TCE's) for the Golar fleet were $50,936 for the second quarter as compared to $48,416 for the first quarter of 2007 and $49,700 for the second quarter of 2006. Commenting on the market Golar notes that from a depressed first quarter impacted by ships used in the later part of 2006 for floating storage all being released back onto the market in the Far East at about the same time, the second quarter has seen a steady increase in employment opportunities accompanied by a modest increase in charter rates. In July a reported accident in Japan at one of TEPCO's nuclear power plants noticeably tightened the market with cargoes originally intended for the Atlantic Basin markets now being diverted to Japan and other Far East markets to help make up the additional demand for fuel caused by the outage of the nuclear power station. It currently looks unlikely that the forward gas market conditions needed to support floating storage plays, similar to those experienced during the second half of 2006, will repeat themselves in the second half of 2007. However the forward market for gas is being watched closely by several market participants with the appetite to repeat last year's experience if the fundamentals become supportive.