#132457
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Chavales, ¿qué os parece mejor opción a largo plazo para una mera cuenta corriente: BBVA online u Openbank?
Se está hablando de:
Cobas AM
- Experiencia de más de 30 años en inversiones a largo plazo
- Cultura con valor. Filosofía de inversión y doctrina value
- Gran experiencia del presidente y CEO, Francisco García Paramés
#132458
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Golar LNG
Golar LNG: Still Far Too Much Debt Even After Their Asset Divestitures
Sep. 05, 2021 2:12 PM ETGolar LNG Limited (GLNG)2 Comments
6.93K Followers
Bio
FollowIncome, Deep Value, Oil & Gas, EnergyContributor Since 2016I primarily provide coverage of high-yielding income investment opportunities with a heavy focus on fundamental financial analysis, which I feel ultimately determines whether the investors receive a handsome income or face a painful disappointment. My goal is to help my fellow investors separate desirable income investments from those that are likely to lose them money. This means not only highlighting desirable investments but also the ones to avoid since losses can easily weigh down otherwise stellar returns. I have been actively investing as well as engaged in associated financial activities for approximately one decade. Academically I have obtained a Bachelor degree majoring in Finance, minoring in Accounting with Honours IIA.Summary
- Golar LNG started 2021 by announcing the divestitures of their Hygo Energy and Golar LNG Partners stakes to New Fortress Energy.
- Whilst this sounds transformational, sadly they still have far too much debt even after these asset divestitures for shareholders to expect any dividends after years of waiting.
- Their leverage remains very high since most of the proceeds were shares in New Fortress Energy and their free cash flow remains negative due to high capital expenditure.
- Even if these shares were liquidated to repay debt, their leverage would still be well into the very high territory.
- At least their previous crisis level liquidity has improved but risks still remain until their debt refinancing is completed, which means that I only believe upgrading to a neutral rating is appropriate.
Introduction
The LNG shipping and regasification company, Golar LNG (NASDAQ:GLNG) started 2021 by announcing the divestiture of their Hygo Energy and Golar LNG Partners (NASDAQ:GMLP) stakes to New Fortress Energy (NASDAQ:NFE) in a multibillion-dollar deal. Whilst this sounds transformational and brings hopes of their dividends finally returning, they still have far too much debt even after their asset divestitures, as discussed in this article that provides a follow-up analysis to my previous article that preceded these divestitures.
Executive Summary & Ratings
Since many readers are likely short on time, the table below provides a very brief executive summary and ratings for the primary criteria that were assessed. This Google Document provides a list of all my equivalent ratings as well as more information regarding my rating system. The following section provides a detailed analysis for those readers who are wishing to dig deeper into their situation.
Image Source: Author.
*Even though LNG is often considered to see further growth in demand, this has to be balanced against the long-term threat from the world moving away from fossil fuels and thus the general industry outlook was deemed to be flat.
Detailed Analysis
Image Source: Author.
Instead of simply assessing dividend coverage through earnings per share, I prefer to utilize free cash flow since it provides the toughest criteria and best captures the true impact on their financial position. The extent that these two results differ will depend upon the company in question and often comes down to the spread between their depreciation and amortization to capital expenditure.
They certainly started 2021 strongly with their operating cash flow surging over 100% year-on-year to $110.7m from its previous result of $45.9m during the first half of 2020, although it should be remembered that the former was boosted by a $36.2m working capital draw. Despite this strong result and temporarily favorable working capital movement, their free cash flow was still well into the negative territory due to their capital expenditure of $177.9m, which appears set to continue further into the future, as the slide included below displays.
It can be seen that they still have a further $424m of capital expenditure relating to their Gimi FLNG vessel, which is scheduled to become operational from 2023. Whilst the exact timing of payments remains unknown, given its relative size to their operating cash flow, it stands to reason that their free cash flow will remain negative throughout the second half of 2021 as well as the entirety of 2022 and possibly part of 2023.
Their operating cash flow for the entirety of 2020 was only $145.8m, which despite being a high point during 2018-2020, it would still take essentially three years to fund their remaining capital expenditure. Since there are less than three years until it becomes operational, it indicates that their cash burn should continue with negative free cash flow. Whilst their cash flow performance remains important for the future prospects to reward their shareholders with dividends, their story remains one of deleveraging and thus centers on their financial position.
Image Source: Author.
When reviewing their capital structure, it can be seen that despite their asset divestitures, their net debt has barely decreased during the first half of 2021 with it remaining at $2.114b and thus only down a tiny 0.42% from its $2.123b at the end of 2020. Apart from their previously discussed negative free cash flow, this largely stems from the bulk of the asset divestiture proceeds being comprised of 18.6m New Fortress Energy shares. These are listed under other current assets on their balance sheet and given their current share price of $30.24, they have a market value of $563m at the time of writing.
Image Source: Author.
Since their net debt barely changed despite their asset divestitures, naturally their leverage followed suit and thus remains well into the very high territory with their respective net debt-to-operating cash flow and net debt-to-EBITDA both sitting at seldom seen levels of 14.20 and 7.46. Even if they liquidated their shares in New Fortress Energy and utilize the $563m of proceeds to repay debt, it would still amount to $1.551b and thus only push their net debt-to-EBITDA down to 5.47.
Whilst this would represent an improvement, it nevertheless remains firmly into the very high territory at over 5.01 and thus sadly it becomes apparent that they still have far too much debt even after their asset divestitures. Even they were to take this route, their remaining $424m of capital expenditure and its resulting negative free cash flow would still push their net debt and thus leverage higher at least until 2023 when their Gimi FLNG becomes operational, after which it will also depend upon their volatile shipping earnings.
This situation means that despite it now being over two years since shareholders have seen any dividends, they still have no realistic reason to expect to see them reinstated within the medium-term because their capital structure remains overleveraged. Whilst there has been discussion regarding their shipping and FLNG business segments being separated, this does not change the equation for their toxic leverage because even as management notes in the commentary included below, these are not asset divestitures and their equity is maintained.
“…we don't necessarily see a spin as a sale. As long as you spin it and maintain the equity, then we think that's really doable. So if you want to think about today, you own one Golar LNG share, which has FLNG exposure and shipping exposure.”
Image Source: Author.
Whilst their very high leverage continues to pose significant hurdles to their long-gone dividends being reinstated, their liquidity has previously been the single largest risk to their ability to remain a going concern. Thankfully their asset divestitures have at least helped this aspect with their current ratio increasing to 0.62 versus its crisis level of 0.15 when conducting the previous analysis. Whilst this represents a sizeable improvement, their liquidity remains weak with risks persisting until such time as their massive $1.323b of current debt maturities are refinanced since they clearly cannot repay these given their negative free cash flow.
Conclusion
Even though their asset divestitures were headline-grabbing and appeared transformational, sadly once again they still have far too much debt for shareholders to expect any dividend within the medium-term. At least their liquidity appears brighter and whilst it remains weak, it still decreases the risks since the previous analysis and thus I believe that upgrading my rating to neutral from bearish is appropriate.
Notes: Unless specified otherwise, all figures in this article were taken from Golar LNG’s SEC filings, all calculated figures were performed by the author.
This article was written by
6.93K Followers
Follow
I primarily provide coverage of high-yielding income investment opportunities with a heavy focus on fundame... more
Income, Deep Value, Oil & Gas, Energy
Contributor Since 2016
I primarily provide coverage of high-yielding income investment opportunities with a heavy focus on fundamental financial analysis, which I feel ultimately determines whether the investors receive a handsome income or face a painful disappointment.
My goal is to help my fellow investors separate desirable income investments from those that are likely to lose them money. This means not only highlighting desirable investments but also the ones to avoid since losses can easily weigh down otherwise stellar returns.
I have been actively investing as well as engaged in associated financial activities for approximately one decade. Academically I have obtained a Bachelor degree majoring in Finance, minoring in Accounting with Honours IIA.
Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
LikeSaveShareComment
Recommended For You
CommentsNewest
#132459
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Jodo con ALIBABA, hasta en esto esta:(ver video, acojonante)
https://forococheselectricos.com/2021/08/miedo-a-las-calles-concurridas-y-mas-caoticas-de-asia-este-robotaxi-sin-conductor-puede-ser-la-solucion.html
https://forococheselectricos.com/2021/08/miedo-a-las-calles-concurridas-y-mas-caoticas-de-asia-este-robotaxi-sin-conductor-puede-ser-la-solucion.html
#132460
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Hay unos cuantos ETFs globales (ni sectoriales ni regionales, que eso sería hacer trampa) que baten a Warren sin problemas en el largo plazo. Y algunos incluso con menor volatilidad en periodos bajistas. Y sin el riesgo de la irracionalidad del mercado, propio de tener toda tu posición concentrada en una acción, que comentaba @josmalobla
Espero sincerante equivocarme de cara al futuro y poder darte la razón, porque eso significaría que el hombre aún tiene algo que hacer contra los algoritmos y el big data. Pero a día de hoy, siendo mi objetivo modesto, me quedo con los ETFs (y con algunos fondos activos como Fundsmith).
Espero sincerante equivocarme de cara al futuro y poder darte la razón, porque eso significaría que el hombre aún tiene algo que hacer contra los algoritmos y el big data. Pero a día de hoy, siendo mi objetivo modesto, me quedo con los ETFs (y con algunos fondos activos como Fundsmith).
#132461
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
¿Pero es necesario que tengas 400.000 $ para comprar 1 acción?
¿Acaso no puedes comprar 0,5 o 0,10 acciones?
¿Acaso no puedes comprar 0,5 o 0,10 acciones?
#132462
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Por curiosidad. En tu opinión solo merece la pena disponer de la vivienda habitual. Si se queda pequeña, te compras otra y vendes la anterior. Nunca considerarías ponerla en alquiler.
En cuanto a residencia de verano supongo que te lo planteas aún menos.
En cuanto a residencia de verano supongo que te lo planteas aún menos.
#132463
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
¿Nadie que aconseje una u otra?
#132464
Re: Cobas AM: Nueva Gestora de Francisco García Paramés
Siguiendo con lo de la venta de Paladin que veo que Life no responde.
He caído en la cuenta de que según se indica en el anuncio, Paladin comunicó que iba a deshacerse del paquete a Lotus el 20 de Agosto. Hasta esa fecha Lotus se había aproximado a los $0,20 como límite superior pero andaba entre $0,15-0,18.
Si cuando Paladin avisó a Lotus ya tenía la venta del stake negociado era un precio en ese momento quizás interesante si se deseaba el cash para ya encarar el cierre financiero previo a una apertura de Langer a principios de 2023? Quizás pensaban que la subida del spot y la calentada general del mercado llegaría más adelante y era mejor opción hacer caja a $0,20 siendo un techo de una choppy trend que podría prolongarse meses. Si es así vamos, ni Paramés hubiese tenido tan mala suerte… no contaban con esta jugarreta de Sprott de levantar tanta pasta para influir directamente en la oferta mundial de uranio.
Si esto se lee así esta noche habría que vigilar Paladin por si fuese menester soltar lastre ya que la expectativa por su contribución en Kaleyekera está capada, ya es cash, no un sueño especulativo.
Si son otras razones deberíamos preocuparnos al contrario por Lotus. Se me ocurren muchas cosas. En Paladin hay gente que conoce muy bien Malawi y tiene contactos en su gobierno… no les cuadran los AIC del feasibility de la mina por la inflación u otros siniestros factores, pensaban que Langer entraría en producción sin llegar a $50/lb y entonces pájaro en mano para Langer y menos jugar al pumpeo de Sprott ya que la realidad sería mucho menos atractiva que las espectativas.
Por otro lado en Lotus parecen muy convencidos y contentos con el juguetito de clasificación del ore que parece que les va a subir la recovery…y el management comprando.
El mercado premiando a todos pero destacando a Paladin en el podium por su gran activo.
En resumen…Piter! Ayuda!
He caído en la cuenta de que según se indica en el anuncio, Paladin comunicó que iba a deshacerse del paquete a Lotus el 20 de Agosto. Hasta esa fecha Lotus se había aproximado a los $0,20 como límite superior pero andaba entre $0,15-0,18.
Si cuando Paladin avisó a Lotus ya tenía la venta del stake negociado era un precio en ese momento quizás interesante si se deseaba el cash para ya encarar el cierre financiero previo a una apertura de Langer a principios de 2023? Quizás pensaban que la subida del spot y la calentada general del mercado llegaría más adelante y era mejor opción hacer caja a $0,20 siendo un techo de una choppy trend que podría prolongarse meses. Si es así vamos, ni Paramés hubiese tenido tan mala suerte… no contaban con esta jugarreta de Sprott de levantar tanta pasta para influir directamente en la oferta mundial de uranio.
Si esto se lee así esta noche habría que vigilar Paladin por si fuese menester soltar lastre ya que la expectativa por su contribución en Kaleyekera está capada, ya es cash, no un sueño especulativo.
Si son otras razones deberíamos preocuparnos al contrario por Lotus. Se me ocurren muchas cosas. En Paladin hay gente que conoce muy bien Malawi y tiene contactos en su gobierno… no les cuadran los AIC del feasibility de la mina por la inflación u otros siniestros factores, pensaban que Langer entraría en producción sin llegar a $50/lb y entonces pájaro en mano para Langer y menos jugar al pumpeo de Sprott ya que la realidad sería mucho menos atractiva que las espectativas.
Por otro lado en Lotus parecen muy convencidos y contentos con el juguetito de clasificación del ore que parece que les va a subir la recovery…y el management comprando.
El mercado premiando a todos pero destacando a Paladin en el podium por su gran activo.
En resumen…Piter! Ayuda!