Cool Company (CLCO) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating revenues were $83.4M, with average daily TCE rising to $78,400 and full fleet chartered; new long-term charters secured, including a 14+2-year GAIL India contract for a newbuild.

• Net income for Q2 was $26.1M–$26.5M, down from Q1 due to reduced unrealized gains on interest rate swaps.

• Dividend of $0.41/share declared, with payout ratio since inception at ~70% of net income; yield is ~14%.

• Backlog reached $1.8B, equivalent to 63 vessel-years, with all vessels chartered and two newbuilds on schedule.

• Fleet grew to 11 owned vessels plus 2 newbuilds expected; full-quarter contributions from two vessels on improved charters supported TCE increase.

Financial highlights

• Q2 2024 total operating revenues: $83.4M; net income: $26.1M–$26.5M; adjusted EBITDA: $55.7M; average daily TCE: $78,400.

• Operating income was $41.4M, a decrease from Q1, with cost management yielding $2M in savings.

• Cash and equivalents at June 30 were $84M–$84.4M; available liquidity stands at ~$200M.

• Net debt as of June 30, 2024: $1,002.4M–$1,024M; total contractual debt: $1,108.3M.

• Adjusted EBITDA margin for Q2 2024: 66.8%.

Outlook and guidance

• Q3 2024 expected to see moderate increases in TCE rates and charter revenues, with winter season anticipated to support rates.

• Newbuilds to be delivered in Q4 2024 and Q1 2025, expected to boost free cash flow.

• LNG market expected to strengthen in winter, with long-term demand growth driven by new supply and Asian demand.

• Fleet is largely fixed through the medium term, with focus on securing additional coverage for limited charter market exposure in 2024-25.

• Scheduled drydocks in 2H 2024 for three vessels, with expected offhire periods.