Flex LNG – Second Quarter 2024 Earnings Release

Flex LNG Ltd. (“Flex LNG” or the “Company”) today announced its unaudited financial results for the six months ended June 30, 2024.

Highlights:

* Vessel operating revenues of $84.7 million for the second quarter 2024, compared to $90.2 million for the first quarter 2024.

* Net income of $21.8 million and basic earnings per share of $0.41 for the second quarter 2024, compared to net income of $33.2 million and basic earnings per share of $0.62 for the first quarter 2024.

* Average Time Charter Equivalent (“TCE”) rate of $72,385 per day for the second quarter 2024, compared to $76,539 per day for the first quarter 2024.

* Adjusted EBITDA of $63.2 million for the second quarter 2024, compared to $70.6 million for the first quarter 2024.

* Adjusted net income of $30.4 million for the second quarter 2024, compared to $37.9 million for the first quarter 2024.

* Adjusted basic earnings per share of $0.56 for the second quarter 2024, compared to $0.70 for the first quarter 2024.

* In April 2024 and May 2024, we successfully completed our scheduled drydocking for Flex Constellation and Flex Courageous, respectively, on-time and on-budget.

* In April 2024, the charterer of Flex Endeavour exercised an option to extend the time charter by 500 days from the Q3 2030 to Q1 2032.

* In May 2024, Flex Constellation commenced a time charter with a large Asian utility and asset backed LNG trader. The charter has a firm period ending at the end of Q1 2025 and the charterer has the option to extend by an additional one year to the end of Q1 2026.

* In July 2024, we received credit-approved term sheets for a six-year $270 million term and revolving credit facility. The refinancing will repay the full amount outstanding under the existing tranches of the $375 Million Facility, in respect of Flex Aurora and Flex Ranger.

* In July 2024, we also received credit-approved term sheets for a $160 million, ten-year sale and leaseback with an Asian-based lease provider for Flex Endeavour. Following the refinancing, the $375 Million Facility will be fully repaid.

* The Company declared a dividend for the second quarter 2024 of $0.75 per share. The dividend is payable on or about September 12, 2024 to shareholders, on record as of August 29, 2024.

Øystein M. Kalleklev, CEO of Flex LNG Management AS, commented:

“Flex LNG’s second quarter came in as guided with revenues of $84.7 million, which was in line with our guidance of “close to $85 million”. The second quarter is generally the weakest quarter of the year, and this was also the case this year with spot earnings bottoming out during the first half of the quarter in line with the normal seasonal pattern. Seasonally low spot rates affected the quarterly earnings for Flex Artemis, our only ship on variable hire linked to the spot market, as well as Flex Constellation, which traded spot for a short period during April and May before she commenced a 10-month fixed hire Time Charter in May. This new Time Charter is this fixed until end of first quarter 2025 with the charterer having an option to extend her by one year until end of first quarter 2026. On the bottom line we delivered net income and adjusted net income of $21.8 million and $30.4 million respectively.

The seasonal slowdown in the market during the second quarter is also the reason why we put two ships in drydock during the quarter. During the quarter, we completed the five-year special survey of the sister ships Flex Constellation and Flex Courageous according to plan and budget. Both ships were back in operation during the quarter, and we have no more drydocking stays planned for the rest of the year. We expect our revenues to increase in the second half of the year due a new fixed hire contract for Flex Constellation, higher earnings for the ship with variable hire as spot rates have been picking up and the fact that we have no more scheduled off-hire for the year. For the third quarter, we therefore expect revenues to increase to approximately $90 million.

While we recently carried out a balance sheet optimization program, we haven’t stopped exploring ways to further optimize our balance sheet. Hence, we are today pleased to announce two new financing facilities. On the back of the recent charter extension of Flex Endeavour, we have secured an attractive $160 million sale and leaseback maturing in 2034. Additionally, we have secured a new $270 million bank loan for Flex Aurora and Flex Ranger which will mature in 2030. These two new facilities will refinance an existing $375m bank facility, subject to final documentation and customary closing conditions. The $375 million facility is our first scheduled debt maturity in Q2-2028. Hence, by refinancing this facility we have not only addressed our first debt maturity, but we have achieved lower cost of financing, extended debt maturity and repayment profile while at the same time raising net cash proceeds of approximately $97 million.

At quarter-end, we had a healthy cash balance of $370m. Our pro-forma cash balance adjusted for this refinancing thus increase to a solid $467 million. The combination of a solid cash position, high degree of earnings visibility with minimum 47 years of firm backlog which may grow to 66 years if charterers utilize their extension options, improved earnings outlook for the second half of the year and the positive long-term outlook for the LNG market all contribute to Flex LNG being well positioned and this is reflected in our dividend. For the second quarter, the Board has declared a dividend of $0.75 per share. The trailing twelve months dividend is thus $3.125 per share which gives our investors an attractive dividend yield of approximately 12 per cent per annum.”

Full Report

Source: Flex LNG