Business Context and Reporting Period
Company: Golar LNG Limited (GLNG)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Golar is a leading provider of Floating Liquefied Natural Gas (FLNG) as a service. The company has fully exited its legacy shipping business to focus on FLNG operations. As of December 31, 2025, the fleet consisted of two operational FLNGs (FLNG Hilli and FLNG Gimi) and one unit under conversion (MKII FLNG).
Key Financial Metrics
| Metric (in millions USD) | 2025 | 2024 |
|---|---|---|
| Total Operating Revenue | $393.5 | $260.4 |
| Net Income | $112.6 | $80.8 |
| Net Income Attributable to Stockholders | $65.7 | $50.8 |
| Adjusted EBITDA | $264.6 | $240.5 |
| Net Cash Provided by Operating Activities | $470.9 | $318.2 |
| Total Debt (Gross) | $2,805.0 | $1,474.9 |
| Cash and Cash Equivalents (including restricted) | $1,215.4 | $716.6 |
| Outstanding Common Shares (Dec 31, 2025) | 101.3 million | 104.5 million |
Material Changes vs. Prior Period
- Revenue Growth: Total operating revenue increased 51% to $393.5 million, driven primarily by the commencement of the FLNG Gimi Lease and Operate Agreement (LOA) in June 2025, which added $91.5 million in sales-type lease revenue and $48.5 million in vessel management fees.
- Profitability: Net income rose 39% to $112.6 million. This was supported by a $30.0 million gain on the deemed sale of FLNG Gimi upon Commercial Operations Date (COD) and improved equity method investment results, partially offset by higher interest expenses due to new debt issuances.
- Debt Structure: Total debt increased significantly to $2.8 billion. This reflects the issuance of $575 million in Convertible Bonds and $500 million in Senior Unsecured Notes in 2025, alongside a new $1.2 billion facility to refinance the FLNG Gimi debt.
- Asset Base: The company derecognized the FLNG Gimi asset under development ($1.82 billion) and recognized a net investment in a sales-type lease of $1.77 billion. Assets under development decreased to $1.23 billion, primarily representing the MKII FLNG conversion.
- Divestitures: The company completed the sale of its last LNG carrier (Golar Arctic) and divested its remaining equity interest in Avenir LNG, fully exiting legacy shipping operations.
Guidance, Outlook, and Risks
Outlook and Management Commentary
- Backlog: The company reports approximately $17 billion in Adjusted EBITDA backlog over the next 20 years, derived from the FLNG Gimi LOA and 20-year charters for FLNG Hilli and MKII FLNG with Southern Energy S.A. (SESA) in Argentina.
- Strategic Review: In March 2026, the company initiated a formal strategic review with Goldman Sachs International to evaluate alternatives to accelerate growth and maximize shareholder value, including potential sale, merger, or asset divestiture.
- Dividends: A quarterly dividend of $0.25 per share was declared in February 2026 for the Q4 2025 period.
Key Risks and Contingencies
- Project Execution: Significant risks exist regarding the timely and on-budget completion of the FLNG Hilli refurbishment ($350 million commitment) and the MKII FLNG conversion ($2.2 billion budget), including potential delays by shipyards (Seatrium and CIMC) and supply chain constraints.
- Customer Concentration: Revenue is highly concentrated. Perenco/SNH accounted for 58% of 2025 revenue, and bp accounted for 36%. The loss of a key customer or contract termination would materially impact financial condition.
- Geopolitical and Regulatory: Operations in Cameroon, Mauritania, Senegal, and future operations in Argentina expose the company to political instability, regulatory changes, and geopolitical tensions (e.g., Middle East conflicts affecting shipping routes).
- Financing Covenants: The company must maintain specific financial ratios (e.g., minimum unrestricted cash, current asset ratios). Breach of covenants could lead to debt acceleration.
- Taxation: Bermuda enacted a 15% Corporate Income Tax effective January 1, 2025. While the company currently expects to remain below the revenue threshold, future growth could trigger tax liabilities.
Investor Verification Checklist
- FLNG Gimi Performance: Verify actual production volumes and uptime against the 2.4 mtpa base capacity to ensure revenue stability under the LOA.
- Refurbishment Progress: Monitor the $350 million FLNG Hilli refurbishment timeline to ensure the vessel is ready for redeployment to Argentina in H2 2027, avoiding a revenue gap after the Cameroon contract matures in July 2026.
- MKII Conversion Costs: Track capital expenditures against the $2.2 billion budget for the MKII FLNG to assess risk of cost overruns or impairment charges.
- Debt Service Coverage: Review cash flow projections to ensure sufficient liquidity to service the increased debt load ($2.8 billion) and meet covenant requirements.
- Strategic Review Outcome: Monitor the progress of the strategic review initiated in March 2026 for potential M&A activity or structural changes.