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    GLNG
    Earnings call· Dec 2025(Q4 FY25)

    GOLAR LNG Q4 FY25 earnings call GLNG

    Feb 25, 2026 Source

    Executive summary

    Golar LNG Limited Q4 FY25 — Record Execution and Strategic Review Initiated

    Golar LNG concluded FY25 with record execution, securing significant EBITDA backlog and optimizing its balance sheet through new financing and share buybacks. The company's FLNG fleet, particularly Hilli and Gimi, demonstrated strong operational performance, exceeding contracted volumes. Despite operational successes and a robust commercial pipeline for future FLNG projects, the Board has initiated a strategic review to address perceived undervaluation and explore alternative ways to enhance shareholder value, including potential partnerships or structural changes, while maintaining focus on accretive FLNG growth.

    Highlights

    5

    • Hilli FLNG achieved 100% economic uptime and recognized an additional $2.5 million of production in Q4 FY25.

    • Gimi FLNG saw increased earnings in Q4 FY25, invoicing 3% above contractual day rate due to higher production volumes and improved ambient conditions.

    • Secured $14 billion in EBITDA backlog across two 20-year contracts in Argentina during FY25.

    • Issued $500 million in 5-year senior unsecured notes at 7.5% coupon and closed a new $1.2 billion commercial bank facility for Gimi, releasing $400 million in liquidity.

    • Repurchased and canceled 1.1 million shares at an average price of $37.76 in Q4 FY25, contributing to 3.6 million shares bought back in total for FY25.

    Concerns

    2

    • The company's share price is considered undervalued by the Board, prompting a strategic review process to enhance shareholder value.

    • The company plans to push out the investment phase for the fourth and fifth FLNG units by 6 months to a year due to limited cash flow in 2026 and 2027, as Hilli undergoes upgrades and Mark II is under construction.

    Guidance & targets

    10
    CategoryTargetConfidence
    Annual Adjusted EBITDA
    $800 million
    high materiality
    High
    Mark II FLNG Delivery
    by year-end '27
    high materiality
    High
    Mark II FLNG Contract Start
    during first half '28
    high materiality
    High
    Hilli FLNG Current Contract End
    July this year
    medium materiality
    High
    Hilli FLNG Argentina Contract Start
    during the second half of '27
    high materiality
    High
    SESA Offtake LOI to Agreement
    within Q1 of this year
    medium materiality
    High
    SESA Offtake Commercial Terms Announcement
    within this quarter
    medium materiality
    High
    Hilli FLNG Commissioning Duration
    3 to 4 months
    low materiality
    High
    Mark II FLNG Commissioning Duration
    up to 6 months
    low materiality
    High
    SESA Pipeline EPC Award
    within the first half of this year
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Hilli FLNG
    Maintained market-leading track record with 100% economic uptime and overproduction. Will undergo upgrades and life extension work in Singapore from July FY26 before starting Argentina contract in H2 FY27.
    Economic uptime: 100%Excess earnings: $2.5 million (Q4 FY25)Overproduction: slight (FY25)Production milestone: 10 millionth tonne LNG since 2018 (December FY25)Annual EBITDA (Argentina contract): $285 millionAdjusted EBITDA backlog (Argentina contract): $5.7 billion (20-year period)
    		————
    Gimi FLNG
    Achieved COD in June FY25 and is optimizing operations, producing above contracted volumes. Expects to produce above contracted volumes on an annual average basis.
    Annual EBITDA (Golar's 70% share): $150 millionDay rate invoiced: 3% above contractual (Q4 FY25)Production: above contracted volumeCommercial Operations Date (COD): June FY25
    		————
    Mark II FLNG
    Construction remains on budget and schedule for delivery by year-end FY27. Equity-funded to date. Expected to start 20-year contract in Argentina in H1 FY28.
    Annual EBITDA (once operational): $400 millionConstruction completion: close to 50%Spend to date: $1.1 billion (of $2.2 billion conversion scope)Man hours without lost time injuries: >6 million
    		————

    Operational metrics

    27
    Adjusted EBITDA
    $91 million
    Q4 FY25
    Net Income
    $23 million
    Q4 FY25
    Total Operating Revenues
    $133 million
    Q4 FY25
    Cash and Equivalents
    $1.2 billion
    Year-end FY25
    Net Debt
    $1.5 billion
    Year-end FY25
    Total Gross Debt
    $2.7 billion
    Year-end FY25
    Net Debt to EBITDA Ratio
    3.4x
    Fully delivered basis

    once all FLNGs are in operation in Argentina

    Adjusted EBITDA Backlog
    $17 billion
    Long-term

    before commodity-linked earnings and inflationary adjustments

    Incremental Earnings from Commodity Upside
    $100 million
    Annual

    skewed risk reward of these commodity exposure will contribute meaningful earnings over the 20-year life of our Argentina contracts.

    Downside from Commodity Exposure
    $28 million
    Annual
    Incremental Earnings from Commodity Upside (Illustrative)
    $2.7 billion
    Annual
    Additional Commodity Upside (Current Levels)
    $200 million
    Annual
    General and Administrative Expenses
    $35 million
    Annual

    foresee long-term EBITDA generation of $800 million a year before commodity upside, inflationary adjustments and any incremental FLNG units.

    LNG Market Size
    434 million tonnes
    FY25
    LNG Market Growth
    50%
    Next 5 years

    expected to grow approximately 50% in the next 5 years, mainly driven by supply out of the U.S.

    FLNG CapEx per tonne advantage vs. land-based
    40%
    Current

    up to 40% lower CapEx per ton for Mark I and II

    Shares Outstanding
    101 million
    As of today
    Dividend per share
    $0.25
    Q4 FY25

    declared with record date March 9, payment March 18

    Dividend Capacity Increase
    5x
    Once 3 FLNGs in full operation

    could represent a total increase of over 5x our current dividend level of $1 per share

    Total Shareholder Returns (Dividends + Buybacks)
    $250 million
    FY25
    CapEx for FLNG units
    $750 million
    FY25
    Market Capitalization
    $4.5 billion
    Pre year-end FY25
    Average Daily Volume
    $50 million
    Daily
    Unsecured Bonds Outstanding
    $800 million
    Current

    issued in '24 and '25

    Convertible Bond Outstanding
    $575 million
    Current

    issued last year [FY25]

    Share Buybacks Executed
    $41 million
    Q4 FY25

    under new $150 million buyback program

    Share Buybacks Executed
    $144 million
    FY25

    consistently active on buybacks and repurchased and canceled a total of 3.6 million shares.

    Industry KPIs

    2
    MetricValueDetails
    FCF shareholder distributions$250 millionUSD
    Take or pay contract structure—

    Orderbook & backlog

    1
    Share Buyback Program Remaining Allowance$190 millionCurrent

    Under existing buyback program

    Deals & partnerships

    4
    Commercial banksNew $1.2 billion commercial bank facility for Gimi$1.2 billion

    Increased from $630 million to $1.2 billion. Equivalent to just over 5.6x Gimi's annual contracted EBITDA.

    U.S. bond marketIssued $500 million under first U.S. rated 5-year senior unsecured notes$500 million5-year

    Entered the rated U.S. unsecured bond market.

    SEFE (Securing Energy For Europe)Letter of Agreement for an 8-year offtake deal for the first 2 million tonnes of production in Argentina8-year

    SEFE is a subsidiary of the German government and existing offtaker for Hilli in Cameroon.

    nullSale of the Golar Arctic and investment in Avenir Shipping

    Fully exited LNG shipping after 50 years in the business.

    Capital programs

    3
    Mark II FLNG ConversionUnderway$2.2 billion
    Spent to date: $1.1 billion
    Funding: Equity

    Construction is now close to 50% complete. All $1.1 billion spent to date has been equity financed.

    Hilli FLNG Upgrade and Life ExtensionPlanned, long-lead items ordered$350 million
    Start: July FY26 (vessel sails to shipyard)

    Benefit: 20-year life extension, redeployment to Argentina

    Includes disconnecting, towing, bunkering, yard stay, sailing to Argentina, connecting, commissioning, OpEx, training, spares, and upgrade work. Long lead items ordered, prefabrication started.

    SESA Argentina InfrastructureUnderway$500 million
    Spent to date: $500 million

    Benefit: Gas grid connection for Hilli FLNG, land-based infrastructure for FLNG operations

    Includes pipeline connection, support vessels (tanks, supply), and construction of land-based warehouse. Contracts for turbo compressors and line pipes awarded in December FY25.

    Risks & headwinds

    4
    Perceived undervaluation of company's share price by the BoardCurrent, ongoing

    Despite $17 billion EBITDA backlog and industry-leading position, share price is not reflecting full value.

    Mitigation: Initiated a strategic review process to seek external advice and explore options to enhance shareholder value, including potential partnerships or structural changes.

    Limited cash flow in 2026 and 2027 due to Hilli upgrades and Mark II constructionFY26-FY27

    null

    Mitigation: Decision to push out the investment phase for future FLNG units (4th and 5th) by 6 months to a year to align with stronger cash flow generation post-2028; seeking cheaper access to capital.

    Cost inflation on long-lead equipment for FLNG topsidesCurrent

    Prices for equipment (e.g., gas turbines) have gone meaningfully up, and lead times extended.

    Mitigation: Acknowledged, but Mark I and II conversions still offer significant CapEx advantage. Mark III sees higher inflation due to shipyard competition.

    Need for 12 to 18 months of well data from GTA project before a decision on expansion can be made by project partners (BP and Kosmos).Next 12-18 months

    null

    Mitigation: Gimi's strong production performance above contracted amounts should aid the decision for expansion.

    What to watch in Q1 FY26

    5

    SESA Offtake Agreement Finalization

    Q1 FY26
    CurrentLOI signed with SEFE for 2 million tonnes/year
    TargetFormation into a letter of agreement and announcement of commercial terms

    Why it matters

    Finalization of this agreement will provide clarity on the commercial terms and pricing mechanisms for a significant portion of the Argentina production, impacting future revenue and commodity upside.

    We expect these LOIs to be formed into a letter of agreement within Q1 of this year, at which point the details of the commercial terms will be disclosed.

    Q&A highlights

    8

    Asked for specific process details, timing, and whether a company sale is an option.

    Tor Olav Troim declined to provide further details, stating the process needs to be kept close to the Board and is not a public process.

    “I don't want to give any further comments than what I've effectively already said. I think hopefully, the shareholders have some respect for the fact that these kind of processes kind of needs to be kept a little bit close to the Board and not effectively be a public process.”

    asked by John Mackay · answered by Tor Trøim

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Review and Shareholder Value

    The Board has initiated a strategic review process, seeking external advice to explore options for enhancing shareholder value, including potential talks with industrial and financial partners. This comes after the Board's assessment that the company's share price remains undervalued despite significant EBITDA backlog and industry-leading position. The process aims to address this valuation gap, particularly for the period before the full cash flow from Argentina contracts materializes in 2028, and does not impact day-to-day operations.

    02

    FLNG Fleet Performance and Expansion

    Golar's three FLNG vessels, Hilli, Gimi, and Mark II, are central to its strategy. Hilli maintained 100% economic uptime and exceeded production targets in Q4 FY25, recognizing an additional $2.5 million in excess earnings. Gimi, which achieved commercial operations in June FY25, is also producing above contracted volumes, invoicing 3% above its contractual day rate, with optimization efforts ongoing. The Mark II FLNG is 50% complete and on schedule for delivery by year-end FY27, with $1.1 billion of its $2.2 billion conversion scope already equity-funded.

    03

    Argentina Projects and Infrastructure

    The Mark II FLNG's 20-year contract in Argentina is fully secured. Hilli will undergo upgrades in Singapore starting July FY26 before commencing its 20-year Argentina contract in H2 FY27. SESA, the joint venture, has awarded $500 million in investments for land-based infrastructure and pipeline connections for the Argentina operations, including turbo compressors and line pipes for the Vaca Muerta pipeline. An EPC award for the pipeline construction is expected in H1 FY26.

    04

    Commercial Pipeline and Future Growth

    Golar sees strong demand for FLNG tonnage, driving a positive commercial pipeline with discussions for projects in Africa, the Middle East, and South America. The company has confirmed yard availability and pricing for three growth designs (Mark I, Mark II, 5 million tonne unit), noting attractive CapEx per tonne and construction times. However, the company plans to defer significant CapEx expenditure for a fourth FLNG unit until commercial terms mature, aligning with a strategy to leverage stronger cash flow post-2028.

    05

    Financial Strength and Capital Allocation

    Golar reported $91 million in adjusted EBITDA for Q4 FY25 and $265 million for the full year. The company maintains a strong cash position of $1.2 billion and a net debt of $1.5 billion at year-end FY25. It completed $1.7 billion in financing transactions in Q4, including a $1.2 billion bank refinancing for Gimi and a $500 million unsecured bond offering. The company returned $250 million to shareholders in FY25 through dividends and buybacks, while investing over $750 million in FLNG CapEx.

    06

    LNG Market Outlook

    The LNG market, at 434 million tonnes in FY25, is expected to grow by 50% in the next five years, primarily driven by U.S. supply. Golar notes increasing industry recognition of FLNG efficiency due to its cost advantage (up to 40% lower CapEx per tonne than land-based) and flexibility, as well as the attraction of sourcing cheaper gas reserves compared to Henry Hub-linked U.S. projects, which will drive the majority of future LNG supply.

    AI-generated summary of the company’s earnings call. Not investment advice.