Firm market boosts Flex LNG

Thursday, 25 November 2021
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Flex LNG has reported an increase in revenues to $81.8 mill for the third quarter 2021, compared to $65.8 mill for the previous quarter.

Net income was $32.8 mill and earnings per share $0.62 for 3Q21, compared to $12.7 mill and $0.24, respectively for the second quarter.

The average timecharter equivalent (TCE) rate was $68,341 per day for 3Q21, compared to $57,780 per day for 2Q21, while adjusted EBITDA was $64.5 mill against $46.8 mill for the second quarter.

Adjusted net income of $32 mill for 3Q21, compared to $15.7 mill for the second quarter.

The company said that it had secured attractive long-term timecharters with a mixed portfolio of market rate and fixed rate contracts and when the report was issued, the fleet had an aggregate of 33 years firm periods and with charterer's options, this could extend to over 69 years, if declared.

Flex LNG declared a 3Q21 dividend of $0.75.

Flex LNG Management CEO, Øystein Kalleklev, commented: "We are pleased to announce another strong quarterly report with revenues for the third quarter of $82 mill in line with our guidance of approximately $80 mill.

“In the fourth quarter, we will also be handsomely rewarded for maintaining a 30% exposure to the spot market, as the spot market is currently at all time highs. Hence, we are consequently lifting our revenue estimate for the fourth quarter from previously guided $85 to $100 mill to about $110 mill, thus further improving earnings in the near term.

“We have also recently secured another two attractive timecharters, which will further add to our growing backlog while de-risking our portfolio. Since April, we have secured long term fixed hire employment for eight of our ships, with charterers option for a ninth vessel next year, in line with our communicated strategy of securing high margin revenue backlog once the market has improved.

“Our firm contract backlog is now about 33 years with a further 36 years of optional backlog. This highlights the attractiveness of owning and operating highly efficient ships with significantly lower carbon footprint than the older generation ships.

“Given our healthy earnings, positive outlook and super-strong financial position the Board has therefore decided to lift our quarterly dividend level from $0.40 per share to $0.75 per share, which provides our shareholders with a compelling yield of approximately 14%," he concuded.

Long term charters

During the second and third quarters of this year, Flex LNG agreed long term charters for six vessels. In the second quarter, ‘Flex Endeavour’ and ‘Flex Vigilant’ commenced their charters with Cheniere Marketing International with firm periods of 3.8 and three years, respectively and ‘Flex Constellation’ commenced her charter with international trading house for a firm period of three years.

In 3Q21, ‘Flex Ranger’ commenced her long term charter with Cheniere with a firm period of 3.6 years. In addition, the company had options declared on ‘Flex Aurora’ and ‘Flex Resolute’, which extended their fixed rate timecharters by an additional six months on each charter at attractive rates. The option periods commenced in this quarter.

This month, the company entered into fixed rate timecharter agreements with minimum firm periods of three years with an international energy major for the ‘Flex Resolute’ and ‘Flex Courageous’. Both vessels will be delivered during the first quarter 2022 in direct continuation of their existing timecharters. Included in the agreements are options to extend each vessel by up to four years in two-year periods. 

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