Hoegh LNG Core Earnings Rise Despite Covid-19 Headwinds

Norwegian LNG vessel operator Hoegh LNG booked a net loss of $1mn in the first quarter, versus a $4.5mn profit a year earlier, it said in results published on May 28. Core earnings (Ebitda) were higher, though, at $59.6mn versus $55.9mn a year earlier.

Hoegh LNG, whose vessels include the Independence leased to Lithuania, blamed the net reversal on foreign exchange losses, caused by the Norwegian krone's depreciation. But the company benefited from higher revenues, with its contract coverage for vessels having risen to almost 100% for 2020, after securing two new contracts for floating storage and regasification units (FSRUs) in Latin America.

The company warned that the Covid-19 crisis created significant uncertainty and volatility. Global LNG trade saw further expansion in the quarter, Hoegh LNG said, but it has lowered its forecasts for near-term demand growth. The only direct impact the pandemic has had on its operations has been delays in crew changes but the situation is improving.

"While the Covid-19 crisis has caused major disruptions and uncertainties to the energy markets, the demand for FSRUs does not appear to have been significantly affected, as can be seen by the selection of Hoegh LNG as preferred bidder for two FSRU projects in the quarter," company CEO Sveinung Stohle said in a statement.