Cool Company (CLCO) Q2 2024 earnings summary

Executive summary

• Q2 2024 operating revenues were $83.4 million, in line with guidance, despite dry dock impacts and lower variable charter rates, with average daily TCE rising to $78,400 from $77,200 in Q1.

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

• Dividend maintained at $0.41 per share, with a yield of ~14% and payout ratio since inception of ~70%.

• Secured a 14+2-year charter with GAIL (India) for a newbuild and a 12-month charter for Kool Blizzard, with all existing fleet fully chartered.

• First newbuild delivery expected end of October 2024, second on schedule for Q1 2025, growing owned fleet to 11 plus 2 newbuilds.

Financial highlights

• Q2 2024 total operating revenues: $83.4 million; adjusted EBITDA: $55.7 million; average daily TCE: $78,400.

• Net income: $26.1 million; operating income: $41.4 million; adjusted EBITDA margin: 66.8%.

• Time and voyage charter revenues: $76.4 million; vessel operating expenses: $17,000 per day per vessel.

• Net debt as of June 30, 2024: $1,002.4 million; cash and cash equivalents: $84.4 million; available liquidity: ~$200 million.

• Dividend payout in 1H 2024: $44 million.

Outlook and guidance

• Q3 2024 expected to see moderate increases in TCE rates and charter revenues as dry docks are completed and fleet is fully chartered.

• Backlog totals $1.8 billion, equivalent to 63 years or 4.8 years per vessel, with average TCE rate of $79,000 per day (all options exercised) and $84,000 per day on firm backlog.

• Newbuilds expected to contribute to free cash flow from Q4 2024 and Q1 2025.

• Multi-year favorable outlook for modern LNG carriers, supported by new liquefaction projects and energy security focus.

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