CLCO Cool Company LTD

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/

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