Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cool Co Ltd (CLCO, Financial) reported an increase in total operating revenue to $85.5 million in Q1, up from $84.6 million in Q4.
- The company successfully delivered the GAIL Sagar and secured employment for two vessels, enhancing its revenue backlog.
- Cool Co Ltd (CLCO) has a strong contracted revenue backlog exceeding $1.6 billion, providing long-term financial stability.
- The company completed several dry docks on time and within budget, minimizing downtime and ensuring uninterrupted service.
- Cool Co Ltd (CLCO) maintains a strong balance sheet with solid liquidity and no debt maturities until mid-2029.
Negative Points
- Average TCE rates decreased to $70,600 per day from $73,900 in the previous quarter due to repositioning expenses.
- Adjusted EBITDA decreased to $53.4 million from $55.3 million in Q4, impacted by increased vessel operating expenses.
- Net income for the quarter dropped to $9.1 million from $29.4 million in Q4, partly due to interest expenses and swap losses.
- The LNG market conditions remain challenging with spot market rates below economic breakeven levels.
- Cool Co Ltd (CLCO) faces uncertainty in securing long-term charters due to geopolitical and market volatility.
Q & A Highlights
Q: Where are you seeing the tipping point with respect to term for fixed rate versus floating rate charters? Is the appetite for fixed rate deals more or less capped at 12 months?
A: Richard Tyrrell, CEO: We are seeing interest in longer durations, especially for newer vessels. For TFDEs, there is interest for charters up to three to five years. However, the rates for longer-term charters are significantly above current levels, which sometimes results in charterers opting for shorter terms.
Q: How do you see the uncontracted volumes from the US Gulf impacting the carrier market in the next three to five years?
A: Richard Tyrrell, CEO: The upcoming volumes will make a material difference to the market. The impact will depend on where the LNG is shipped. If it goes to Europe, fewer ships are needed compared to Asia, which will drive shipping requirements and influence the market.
Q: What are the current asset prices for non-older vessels, and is there potential to add to the fleet?
A: Richard Tyrrell, CEO: Asset prices remain high, with two-stroke vessels costing around $250 million. We are always looking for opportunities to add to the fleet but remain disciplined. Currently, we haven't found suitable opportunities, but we continue to evaluate the market.
Q: Are you considering forward fixing for the Kool Tiger, similar to the capital contract starting in 2027?
A: Richard Tyrrell, CEO: Yes, we are considering similar opportunities. Although we didn't secure that specific contract, we view the levels at which it was done as positive and are exploring other opportunities along the same lines.
Q: Are the Chinese leases on newbuilds an issue with USTR port fees, and how easy is it to refinance without penalties?
A: Richard Tyrrell, CEO: The LNG fleet, including our vessels, is not affected by USTR port fees until 2029/2030. We have call options from day one, but there are prepayment penalties for the first six years. We are monitoring developments closely.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
