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Flex LNG Ltd. (âFlex LNGâ or the âCompanyâ) today announced its unaudited
financial results for the three months ended March 31, 2022.
Highlights:
- Vessel operating revenue of $74.6 million for the first quarter 2022,
compared to $114.6 million for the fourth quarter 2021.
- Net income of $55.8 million and basic earnings per share of $1.05 for the
first quarter 2022, compared to net income of $69.4 million and basic
earnings per share of $1.31 for the fourth quarter 2021.
- Average Time Charter Equivalent(1) (âTCEâ) rate of $62,627 per day for the
first quarter 2022, compared to $95,908 per day for the fourth quarter 2021.
- Adjusted EBITDA(1) of $56.3 million for the first quarter 2022, compared to
$95.5 million for the fourth quarter 2021.
- Adjusted net income(1) of $23.8 million for the first quarter 2022, compared
to $62.8 million for the fourth quarter 2021.
- Adjusted basic and diluted earnings per share(1) of $0.45 for the first
quarter 2022, compared to $1.18 for the fourth quarter 2021.
- In March 2022, the Company signed a $375 million term and revolving credit
facility, with an accordion option to increase this by $125 million, secured
against an additional vessel. The facility will be secured by the vessels
Flex Ranger, Flex Rainbow and Flex Endeavour, while Flex Enterprise is a
candidate for the accordion option. In April 2022, the Flex Ranger and Flex
Rainbow completed their re-financing with net cash provided to the Company
of $11.5 million.
- In April 2022, the Company signed an aggregate $320 million sale and
leaseback agreements for the refinancing of the existing facility for the
vessels Flex Constellation and Flex Courageous. Completion of the
refinancing is expected in May 2022, subject to customary closing conditions
in connection with delivery and acceptance of each vessel. The financing is
expected to release approximately $99.6 million to the Company.
- In April 2022, Flex Volunteer commenced its time charter agreement as the
fourth vessel with Cheniere, as part of the agreements signed in April
2021. The vessel was delivered approximately two months prior to the agreed
delivery schedule. The fixed rate time charter has a firm period ending in
the first quarter 2026.
- In April 2022, Cheniere declared their option for a fifth time charter
agreement for the vessel, Flex Aurora. The fixed rate time charter will
commence in the third quarter 2022 with a firm period ending in the first
quarter 2026.
- The Company declared a dividend for the first quarter 2022 of $0.75 per
share.
Ăystein M Kalleklev, CEO of Flex LNG Management AS, commented:
"The first quarter was a fantastic period to be a cargo owner with high demand
and elevated prices for LNG given the global energy crunch. For the spot freight
market, the first quarter was however challenging as the LNG trade abruptly
shifted towards Europe resulting in lower sailing distances and thus higher
availability of ships depressing freight economics as liquidity in the spot
market also dried up.
The sentiment in the freight market did however turn positive during the end of
February and spot rates for modern tonnage have now recovered to above seasonal
average while the one-year and three-year Time Charter rates for remains very
strong. This is evidencing that charterers are willing to pay a substantial
premium to spot rates in order to lock in large fuel-efficient ships on longer
periods as the forward market also price in a much tighter freight market in the
second half of the year.
During the last 13 months we have successfully secured in total nine fixed hire
Time Charters with first class counterparties. The minimum period of these
contracts ranges from three to five years which gives us comfortable earnings
visibility. We still have three ships which will be redelivered from existing
Time Charterers during the next 23 months and given the strong term market and
general lack of available modern tonnage we are upbeat about the prospects of
re-contracting these ships at attractive terms.
Revenue wise, we are pleased to deliver revenues for the quarter of $74.6
million in line with our revenue guidance communicated in February. With 98 per
cent contract coverage for the year and three of our 13 ships on variable hire
contracts linked to the spot market, we do expect gradual increased revenues in
the next three quarters as we also guided in February. Given the strong backlog,
positive outlook and our very solid financial position, the Board is therefore
again declaring a dividend for the quarter of 75 cents per share. This provides
our shareholders with an annualized yield of around 12 per cent which should be
attractive given the wobbly financial markets these days."
First Quarter 2022 Result Presentation
In connection with the earnings release, a webcast and conference call will be
held today at 15:00 CEST (9:00 a.m. EST).
In order to attend the webcast and/or conference call you may do one of the
following:
Attend by Webcast:
Use to the follow link prior to the webcast: https://edge.media-
server.com/mmc/p/83zu5bq6
Attend by Conference Call:
Applicable dial-in telephone numbers are as follows:
Norway: +47 215 63 015
United Kingdom: +44 (0) 207 1928 338
United Kingdom (local): 0844 481 9752
United States, New York: +1 646 741 3167
United States (toll-free): +1 877 870 9135
Confirmation Code: 5170424
A Q&A session will be held after the conference/webcast. Information on how to
submit questions will be given at the beginning of the session.
The presentation material which will be used in the conference/webcast can be
downloaded on www.flexlng.com and replay details will also be available at this
website.
For further information, please contact:
Mr. Knut Traaholt, Chief Financial Officer of Flex LNG Management AS
Telephone: +47 23 11 40 00
Email: ir@flexlng.com
(https://www.globenewswire.com/Tracker?data=2aYmEzUf7KFUfIzVjjGv5TEqAAyQJ6zI1vzi
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Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides safe
harbor protections for forward-looking statements in order to encourage
companies to provide prospective information about their business. Forward-
looking statements include statements concerning plans, objectives, goals,
strategies, future events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts. The Company
desires to take advantage of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The words âbelieve,â
âexpect,â âforecast,â âanticipate,â âestimate,â âintend,â âplan,â âpossible,â
âpotential,â âpending,â âtarget,â âproject,â âlikely,â âmay,â âwill,â âwould,â
âshould,â âcouldâ and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various
assumptions, many of which are based, in turn, upon further assumptions,
including without limitation, managementâs examination of historical operating
trends, data contained in the Companyâs records and other data available from
third parties. Although management believes that these assumptions were
reasonable when made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or impossible to
predict and are beyond the Companyâs control, there can be no assurance that the
Company will achieve or accomplish these expectations, beliefs or projections.
As such, these forward-looking statements are not guarantees of the Companyâs
future performance, and actual results and future developments may vary
materially from those projected in the forward-looking statements. The Company
undertakes no obligation, and specifically declines any obligation, except as
required by applicable law or regulation, to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. New factors emerge from time to time, and it is not
possible for the Company to predict all of these factors. Further, the Company
cannot assess the effect of each such factor on our business or the extent to
which any factor, or combination of factors, may cause actual results to be
materially different from those contained in any forward-looking statement.
In addition to these important factors, other important factors that, in the
Companyâs view, could cause actual results to differ materially from those
discussed in the forward-looking statements include: unforeseen liabilities,
future capital expenditures, the strength of world economies and currencies,
general market conditions, including fluctuations in charter rates and vessel
values, changes in demand in the LNG tanker market, the impact of public health
threats and outbreaks of other highly communicable diseases, including the
length and severity of the COVID-19 outbreak and its impact on the LNG tanker
market, changes in the Companyâs operating expenses, including bunker prices,
dry-docking and insurance costs, the fuel efficiency of the Companyâs vessels,
the market for the Companyâs vessels, availability of financing and refinancing,
ability to comply with covenants in such financing arrangements, failure of
counterparties to fully perform their contracts with the Company, changes in
governmental rules and regulations or actions taken by regulatory authorities,
including those that may limit the commercial useful lives of LNG tankers,
customersâ increasing emphasis on environmental and safety concerns, potential
liability from pending or future litigation, general domestic and international
political conditions or events, including the recent conflict between Russia and
Ukraine, business disruptions, including supply chain disruption and congestion,
due to natural or other disasters or otherwise, potential physical disruption of
shipping routes due to accidents, climate-related incidents, or political
events, vessel breakdowns and instances of off-hire, and other factors,
including those that may be described from time to time in the reports and other
documents that the Company files with or furnishes to the U.S. Securities and
Exchange Commission (âOther Reportsâ). For a more complete discussion of certain
of these and other risks and uncertainties associated with the Company, please
refer to the Other Reports.
(1) Time Charter Equivalent rate, Adjusted EBITDA, Adjusted net income/(loss)
and Adjusted earnings/(loss) per share are non-GAAP measures. A reconciliation
to the most directly comparable GAAP measure is included in the end of this
earnings report.
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