Oslo-based Höegh LNG reported a second quarter profit after tax of US$3.5 million, down from $6.3 million in the first quarter 2016.
The company’s profit after tax was also down in comparison to the corresponding quarter in 2015 when it reached $6 million, Höegh LNG’s report issued on Thursday reveals.
Total income for the quarter reached 57.1 million, up from the $55.4 million in the first quarter.
EBITDA was also on the up from $26.6 million in the first quarter to $27 million in the second quarter.
However, Höegh LNG’s net cash flows for the quarter were negative dropping to $41.8 million in the quarter under review, from a positive $13.3 million in the first quarter.
Half-year results improve
During the first half of 2016, EBITDA was $53.6 million and net profit after taxes came to $9.9 million, compared with $39.1 million and $3.7 million respectively for the first half of 2015.
The improvements in the results are mainly due to Höegh Gallant being in operation during the full first half of 2016 and lower business development costs, in part because FLNG activities ceased in February 2016, the report shows.
Höegh Gallant started operations as LNG import terminal in Ain Sokhna, Egypt in April 2015 under a five-year charter deal with the Egyptian Natural Gas Holding Company (EGAS).
This was, however, offset by last year’s charter of LNG Libra and the negative contribution from Höegh Grace’s spot charter, Höegh LNG said.
FSRU market set for growth as LNG carriers market remains subdued
With new liquefaction projects starting up, and lower demand from some established markets, LNG market has been oversupplied.
Höegh LNG notes that current market fundamentals have boosted the demand for FSRUs, and the emerging markets like Egypt, Pakistan and Jordan have utilized their chartered units to peak capacity.
Currently, only 10 percent of the 150 mtpa of additional capacity set to come on-stream from 2016 to 2020, has hit the market, Höegh LNG said.
With ample supply expected to come on the market and continued low LNG prices, Höegh LNG expects the FSRU market to grow.
On the opposite, LNG carrier spot and short-term market remains weak although there are some signs of improvement from a very low base.