Ukraine situation seen as boosting potential FSRU use.
Höegh LNG Holdings reported a total income of €91.8 mill and an EBITDA of $54.4 mill for the first quarter of 2022.
This was slightly down on the $94.7 mill and $56.5 mill recorded for the preceding quarter.
EBITDA decrease was mainly due to a lower share of results from associates and joint ventures and higher administrative expenses.
However, this was offset by higher revenues and lower operating expenses for ‘Höegh Gallant’, compared to 4Q21 when this vessel was idle, while being modified for FSRU operations in Jamaica.
The group recorded a net profit after tax of €2 mill for 1Q22, down from €3.6 mill in the preceding quarter.
Operating cash flows decreased by €38.2 mill to €22.6 mill, which was driven mainly by changes in working capital, predominantly caused by temporary timing effects, including a reversing effect from the previous quarter.
The recent tragic events in Ukraine have led to a surge in interest for LNG import terminals in Europe, to reduce dependency on Russian pipeline gas.
As a result, Höegh LNG signed implementation agreements with the German Federal Ministry for Economic Affairs and Climate Action to charter out two FSRUs for 10 years.
After the quarter end, Höegh LNG terminated ‘Höegh Giant’s’ FSRU contract in India following the charterer’s default of the contractual terms.
Höegh LNG claimed it was confident of its contractual right to terminate the contract and has commenced arbitration proceedings against the charterer.
In addition, Höegh LNG Holdings entered into an agreement and plan of merger with Höegh LNG Partners.
Höegh LNG will acquire by merger all of the outstanding common units representing limited partner interests of the Partnership not already owned by the company in exchange for $9.25 in cash per common unit.
The merger is expected to close in the second half of 2022 and is subject to approval by a majority of the outstanding common units of the Partnership and certain regulatory filings and customary closing conditions.
Credit Suisse International and Morgan Stanley acted as financial advisors and Kirkland & Ellis acted as legal counsel to Höegh LNG.
