Cool Company (CLCO) Q4 2023 earnings summary

Executive summary

• Seasonally strong Q4 delivered record TCE and adjusted EBITDA since formation, supported by fleet operations, seasonal variable-rate uplift and contracted higher-rate charters.

• Q4 revenue was $97.1m, adjusted EBITDA $69.4m, net income $22.4m and average TCE $87,300/day; contracted revenue backlog was $1.4bn.

Financial highlights

• Q4 revenue was $97.1m vs. $92.9m in Q3; operating income was $55.1m vs. $48.3m, up ~14% QoQ.

• Adjusted EBITDA was $69.4m vs. $62.8m in Q3 and $58.6m in Q4 2022; average TCE was $87,300/day vs. $82,400 and $83,600, respectively.

• Net income was $22.4m vs. $39.2m in Q3, reflecting a $13.1m unrealized swap loss versus a $9.7m gain in Q3.

• FY2023 successor-period revenue was $379.0m, operating income $200.9m, net income $176.4m and adjusted EBITDA $259.9m; operating income was ~45% higher for the full year.

Outlook and guidance

• Q1 2024 revenue guidance is ~$88–89m and Q2 guidance ~$84–85m; Q4 benefited from two vessels on attractive spot/floating rates during winter.

• Q1–Q2 2024 depreciation and amortization guidance is ~$19m per quarter; scheduled bank-facility principal repayments are ~$20m in May and November.

• Four 2024 drydocks are planned: Kool Crystal in Q2 for ~30 days; Kool Husky, Kool Frost and Kool Ice in Q3 for ~50, ~30 and ~30 days. Budgeted cost is ~$6.5m each; one includes an LNGe upgrade costing an additional $15m and 20 extra off-hire days.

• Kool Tiger and Kool Panther deliveries are expected toward the end of H2 2024; fully financed deliveries are expected to support earnings if market weakness persists.

• Next vessel openings are not expected before H2 2024; a seasonal upswing is anticipated as LNG volumes move east and voyage distances increase.