Cool Company Ltd.'s Q4 2024: Unpacking Contradictions in Production, Margins, and Market Demand

These are the key contradictions discussed in Cool Company Ltd.'s latest 2024 Q4 earnings call, specifically including: Blackwell production and supply chain constraints, gross margin expectations, and issues with product roadmap execution and supply chain:



Market Conditions and Revenue Performance:
- CoolCo reported **revenue of $84.6 million** for Q4 2024, showing a slight increase from the previous quarter.
- This performance was driven by reduced drydock days and a strong backlog, despite challenging market conditions with rates below breakeven.

Backlog and Chartering Performance:
- CoolCo's firm backlog exceeded **$1 billion**, equating to approximately 4.7 years of backlog per vessel.
- The chartering team's efforts provided solid support, maintaining high utilization rates of 92% in Q4 and expected to exceed this in Q1 2025.

Dividend Decision and Financial Flexibility:
- The company decided not to declare a dividend for the quarter, citing rates languishing below breakeven and financial flexibility as priority.
- This decision allows for capacity to pursue opportunistic growth and resilience in the face of market uncertainties.

Supply and Demand Dynamics:
- The market faces downward pressure from high LNG prices in Europe, delivery of new vessels, and sublets increasing market supply.
- Despite these challenges, CoolCo is positioning itself for growth opportunities by upgrading vessels and maintaining a strong backlog.