Golar LNG 2025 Q1 Earnings Misses Targets as Net Income Declines 80.5%

Golar LNG (GLNG) reported its fiscal 2025 Q1 earnings on Jun 06th, 2025. Golar LNG's Q1 2025 results fell short of expectations with a notable decline in net income and EPS from the previous year. The company did not adjust its guidance, maintaining its revenue and income targets for the quarter. Despite the earnings miss, Golar LNG remains focused on strategic investments and long-term contracts to bolster future growth, as indicated in the CEO's commentary.

Revenue
Golar LNG experienced a slight decrease in total revenue for Q1 2025, reaching $62.50 million compared to $64.96 million in Q1 2024. Liquefaction services generated $55.69 million, vessel management fees and other revenues contributed $5.94 million, while time and voyage charter revenues added $876,000. Overall, the company's operating revenues equaled the total revenue figure of $62.50 million.

Earnings/Net Income
Golar LNG's EPS saw a steep decline of 84.9%, dropping to $0.08 in Q1 2025 from $0.53 in Q1 2024. Net income similarly decreased by 80.5%, reaching $12.94 million compared to $66.50 million in the previous year. The significant reduction in EPS reflects a challenging quarter for Golar LNG.

Price Action
The stock price of Golar LNG has edged down 0.85% during the latest trading day, has edged up 1.94% during the most recent full trading week, and has climbed 4.72% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing GLNG shares when revenues fall short and holding them for 30 days has proven effective, delivering a remarkable 500.25% return, outstripping the benchmark's 85.73% gain. However, this approach carries substantial risk, as indicated by a relatively low Sharpe ratio of 0.81, suggesting modest risk-adjusted returns. The maximum drawdown of -55.30% underscores the considerable risk involved, making it potentially unsuitable for risk-averse investors. Despite these risks, the strategy has demonstrated strong potential for returns, showcasing the volatile yet profitable nature of investing in GLNG following revenue misses.

CEO Commentary
Karl Fredrik Staubo, CEO of Golar LNG, highlighted the company's solid operational performance in Q1 2025, driven by significant long-term charters for its FLNG units. He noted that despite a decline in net income, the strategic pre-COD invoicing contributed to the strong EBITDA of $41 million. Staubo emphasized the importance of ongoing investments in infrastructure, particularly the conversion of the Mark II FLNG, and securing contracts in Argentina, which positions Golar LNG favorably for future growth. His tone reflected cautious optimism as he acknowledged challenges in the market while reinforcing the company's commitment to operational efficiency and expansion.

Guidance
Golar LNG expects to achieve total revenues of approximately $62.5 million for Q1 2025, with a net income of about $12.9 million, translating to an EPS of $0.08. The company is focused on maintaining a conservative leverage ratio of around 5x and anticipates no material CAPEX related to FLNG Gimi in Q2 2025. Golar LNG also aims to engage in strategic investments and secure further long-term charters to bolster its EBITDA backlog, which exceeds $17 billion, while actively exploring opportunities to enhance its market positioning.

Additional News
Golar LNG has made notable progress in reshaping its board and enhancing its FLNG business focus. During the 2025 Annual General Meeting held on May 20, 2025, in Hamilton, Bermuda, the company successfully re-elected five directors and welcomed two new directors, Benoît de la Fouchardiere and Mi Hong Yoon, strengthening its transition to a pure play FLNG business. Additionally, Golar LNG secured transformative 20-year agreements for FLNG units in Argentina, creating one of the world's largest FLNG development projects. Furthermore, Golar LNG maintained its commitment to shareholder value by declaring a $0.25 quarterly dividend, reflecting confidence in future cash flows supported by a substantial contract backlog.