CoolCo Posts Lower Profit

Cool Co. Ltd. (CoolCo), a pure-play liquefied natural gas (LNG) shipping company spun off from Golar LNG, has reported a net income of $8.1 million for the third quarter of 2024. The company's net income slipped from $26.5 million for the previous quarter primarily due to a loss in mark-to-market interest rate swaps, CoolCo said in its quarterly report.

The company reported operating revenues of $82.4 million, compared to $83.4 million for the previous quarter due to the scheduled drydocking of three vessels.

CoolCo said that its fleet achieved an average time charter equivalent earnings (TCE) of $81,600, jumping from $78,400 for Q2, as one vessel started a higher rate charter.

“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“, Richard Tyrrell, CoolCo CEO, said.

CoolCo said it maintained strong fleet performance in the third quarter of 2024, achieving 98 percent utilization, similar to the previous quarter. The brief off-hire period was due to vessel repositioning. The Kool Frost and Kool Ice drydocks were completed ahead of schedule and within budget, with costs around $5 million per vessel. Additionally, the Kool Husky underwent drydocking and LNGe upgrades, including a high-capacity sub-cooler and passive air lubrication system, ahead of schedule.

Chartering activity weakened in the third quarter and has continued to slow down. Long-term charterers have delayed their requirements, opting to utilize spot market vessels for short-term needs, CoolCo said.

Despite short-term market weakness, long-term prospects for the LNG shipping sector remain strong, it said. While near-term charter rates are volatile, long-term rates are stable due to increasing demand from new liquefaction projects. The aging steam turbine fleet is expected to gradually retire, further supporting the market, according to the company.

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