LNG

Flex LNG, the Norwegian shipping company with a fleet of 13 vessels and several chartered to some of the largest market players, reported a halving of fourth-quarter net profits and forecast a challenging next two years for the sector with more ships in the global fleet.

“We see a somewhat more challenging freight market as there are more ships for delivery compared to the expected new export volumes,” said Øystein Kalleklev, Chief Executive of Flex LNG Management whose charterers include Cheniere of the US and UK major BP.

“Hence, we think Flex LNG is very well positioned as we have 94 percent charter coverage for 2024 and 50 years minimum firm charter backlog, which may increase to 71 years if all charterer’s options are extended,” Kalleklev explained.

Fuel savings

“Additionally, our fleet consists entirely of large LNG carriers fitted with the most modern two-stroke propulsion system resulting in significant fuel savings compared to older generation tonnage,” the CEO added.

Flex earnings showed a halving of fourth-quarter net income to $19.39 million from $41.47M in the same three months of 2022.

Annual net profits dropped to $120.04M from $188.04M in the 2022. Vessel operating revenues in 2023 came to $371.02M versus $347.91M in the previous year.

“The increase is due to a higher proportion of our fleet on improved longer term fixed-rate contracts as well as a relatively stronger spot market compared to 2022,” said Kalleklev.

“This is offset by scheduled dry-dockings of the vessels ‘Flex Enterprise’, ‘Flex Endeavour,’ ‘Flex Ranger’ and ‘Flex Rainbow’ in 2023, resulting in 77 off-hire days,” the CEO said.

Vessel expenses for the fourth quarter came to $97.2M compared with $94.6M for the third quarter 2023.

Average Time Charter Equivalent (TCE) rates amounted to $81,114 per day for the fourth quarter versus $79,207 per day for the third quarter 2023.

Revenues

“We guided that our revenues would increase from $348M in 2022 to approximately $370M in 2023 and we delivered revenues of $371M in 2023, while revenues for the fourth quarter came in at $97.2M in line with quarterly guidance,” Kalleklev stated.

In an overview the LNG fright market, Flex noted that there were 630 live ships in the fleet at the end of 2023, with 210 steamers still in service.

“An additional 33 newbuilds were added to the fleet last year while 68 newbuild orders were placed, representing a significant decrease from the 145 orders in 2022 and 69 newbuilds are scheduled to be delivered in 2024, with seven uncommitted for long-term contracts,” Flex said.

Flex also stated that newbuild prices for the base specifications have “somewhat tapered off” from the peak of $265M, with ship brokers quoting $258M to 262M as of early February 2024.

Flex LNG, the Norwegian shipping company with a fleet of 13 vessels and several chartered to the largest exporters, posted solid net income and increased vessel operating revenues with all ships available after previous dry-dockings.

May 16 (LNGJ) - Flex LNG, the Norwegian shipping company with a fleet of 13 vessels and several chartered to the largest US exporter Cheniere Energy, reported a fall in first-quarter profits despite a rise in operating revenues. The average time charter equivalent rate declined in the quarter to $80,175 per day compared with $81,699 per day for the fourth quarter of 2022.

   Flex reported vessel operating revenues in the first quarter of $92.47 million compared with $74.57M in the same three months of 2022. Net income dropped to $16.53M from $55.76M in the prior-year quarter. “As we completed the balance sheet optimization program during the first quarter, we had some additional financing costs in our accounts for the first quarter,” explained Øystein M. Kalleklev, Chief Executive of Flex LNG Management AS. “However, we have now put in place new attractive long-term financing for all our 13 ships, boosting our cash balance to $475M at quarter-end, or about $9 per share,” added Kalleklev.

Flex LNG, the Norwegian shipping company with a fleet of 13 vessels and several chartered to the largest US exporter Cheniere Energy, reported lower fourth-quarter net income and revenues from a year ago though expects an increase in revenues for all of 2023 even amid off-hires for four ships undergoing surveys.

Flex LNG, the Norwegian shipping company with a fleet of 13 modern vessels, said it had extended the time-charters for three ships with Cheniere Energy, owner of the Sabine Pass and Corpus Christi exporting plants on the Gulf Coast, and meaning that Cheniere now has five Flex vessels chartered.

Flex LNG, the Norwegian shipping company with a fleet of 13 modern vessels and several chartered to the largest US exporter Cheniere Energy, reported higher third-quarter revenues and profits as global demand soared for cargoes.

“The gas crunch is not going away anytime soon and arbitrage between the US and import nations in Europe and Asia will stay at elevated levels supporting freight market economics,” said Flex in presenting its earnings.

Flex explained that about 40 LNG carriers in the global fleet were tied up in floating storage due to traffic congestion and contango - when the futures price was at a higher level than the spot price as has happened throughout the third quarter.

Flex’s vessel operating revenues in the third quarter amounted to $91.3 million to the end of September 2022 compared with $81.8M in the same three months of 2021 and $84.2M for the second quarter of 2022.

Net income increased to $46.6M from $32.8M in the prior-year quarter and $44.3M in the second quarter this year.

Charter rates

The Bermuda-based company’s average time charter equivalent (TCE) rates for the three months came to $75,941 per day versus $68,341 per day a year ago and $70,707 per day for the second quarter of this year.

“During the third quarter, ‘Flex Enterprise’ and ‘Flex Amber’ commenced their new seven-year time charters agreed in June 2022,” said Øystein Kalleklev, Chief Executive of Flex LNG Management AS.

“Additionally, ‘Flex Aurora’ was delivered to Cheniere as the fifth and last ship under the agreement announced in April 2021,” he added.

“Flex LNG today has 12 LNG carriers on fixed-hire time charters and one ship, ‘Flex Artemis’, on a variable time charter,” stated Kalleklev.

The CEO noted that Flex’s first fully open ship, after charterer’s options, is in the middle of 2026 with three other ships coming open in 2027.

“With 2027 the earliest newbuilding delivery window and newbuilding prices at around $250M, we are therefore upbeat about the prospects of re-contracting our ships at attractive levels thereby adding further backlog to the company,” said Kalleklev.

Rate derivative gain

“For the first nine months of 2022, total net income was $147M, fuelled by $75M gains on interest rate derivatives, as we have been ahead of the curve locking in long-term interest rates at very attractive levels before the Federal Reserve started to hike US rates,” he explained.

Flex said it planned to optimize financing for the remaining seven ships in the fleet with the aim of increasing its cash position by a further $100M while at the same time improving overall financing terms.

“We have now secured refinancing for four of the seven ships with net proceeds of $110M. We are thus already ahead of the $100M target, and we expect the cash release to grow further as we are also making good progress on the refinancing of the remaining three ships,” said the CEO.

“Given the strong freight market, our extensive contract backlog and our super strong financial position we are therefore pleased to declare an ordinary quarterly dividend of $0.75 per share which should provide our shareholders with an attractive yield of approximately 10 percent,” added Kalleklev.

The company noted in its presentation that the fleet had been acquired at “historical attractive prices” compared to the newbuilding prices today, while book equity values reflect historical costs adjusted with regular depreciations.

July 6 (LNGJ) - Flex LNG, the owner of 13 LNG carriers, has updated its market and revenues guidance to be presented at a conference organized by Norwegian investment bank Arctic Securities. “Given the recently announced Time Charter Agreements for ‘Flex Rainbow’, ‘Flex Enterprise’ and ‘Flex Amber’ which have secured in total 24 years of fixed hire employment, Flex LNG has made positive adjustments to its revenue guidance for the year,” said the company.

   Flex LNG now expects revenues for the second quarter of 2022 to be around $85 million compared with $80M previously, $90M in the third quarter and $90 to $100M in the fourth quarter. The company added that it expected higher Time Charter Equivalent Earnings (TCE) in 2023 compared with 2022. “This was due to repricing of its employment portfolio and significantly reduced spot exposure which had dragged down revenues in the first quarter of 2022 due to the pull of US cargoes to Europe in this period,” said the company.

Nov 16 (LNGJ) - Flex LNG, the shipping company with a fleet of 13 vessels, reported higher third-quarter revenues of $81.8 million and increased quarterly net income to $32.8M. “In the fourth quarter, we will also be handsomely rewarded for maintaining a 30 percent exposure to the spot market as the spot market is currently at all-time highs,” said Øystein Kalleklev, Chief Executive of Flex LNG Management AS.

   The Bermuda-based company’s average time charter equivalent rates were $68,341 per day for the third quarter, up from $57,780 per day in the previous three months. “Since April, we have secured long-term fixed hire employment for eight of our ships, with an option for a ninth,” said Kalleklev. “Our firm contract backlog is now about 33 years with a further 36 years of optional backlog,” added the CEO.

Flex LNG, the growing Norwegian-listed fleet owner with 13 modern carriers, 10 now on the water and three other newbuilds, swung back to profits in the third quarter as four new vessels were delivered from South Korean shipyards.

Flex LNG, the Norwegian-listed company with a fleet of six carriers and seven other under construction and with controlling interests held by shipping magnate John Fredriksen, reported a fourth-quarter surge in net income and revenues.

Flex reported revenues of $52.0 million for the fourth quarter of 2019, compared with $29.8M for the third quarter and $36.1M for the fourth quarter of 2018.

Net income was $23.9M for the fourth quarter versus $500,000 for the previous three months and $15.2M for the fourth quarter of 2018.

“Lower than expected tonne-mile growth due to muted US-Asia trade and limited arbitrage opportunities has been a challenge for the LNG freight market,” said Flex.

“In spite of the lower than expected tonne-mile growth, LNG freight rates performed well in the fourth quarter, suggesting that the recent years fleet growth to a large degree has been absorbed by the market,” the company added.

“The glut of liquefaction volumes continues to affect LNG prices, with the average Asian benchmark prices (JKM) averaging $5.4 per million British thermal units in the fourth quarter compared to $9.1 per MMBtu the year before,” stated Flex.

Flex stated the average the Time Charter Equivalent (TCE) rate was $94,000 per day for the fourth quarter compared with $58,222 per day for the third quarter.

The company in November received firm commitments from a syndicate of 11 banks and the Export-Import Bank of Korea (Kexim) for a $629 million financing for five of the newbuilds scheduled for delivery in 2020. 

Flex also entered into a long-term time-charter with Clearlake Shipping, a subsidiary of the commodities firm Gunvor, for the newbuild “Flex Artemis”. The period under the charter is up to 10 years, whereby the first five years are firm. 

Then in December, Flex entered into a 12-month time-charter with Spanish utility Endesa for the vessel “Flex Ranger”.

Flex noted that it had also strengthened its commercial team with the appointment of Ben Martin  as Chief Commercial Officer, who will join Flex LNG on or about April 1, 2020. 

“The year was eventful and productive year for Flex LNG,” said Oystein M Kalleklev, Chief Executive of Flex LNG Management AS.

“We continue to build our organization with exceptional people, most recently with today's announcement of  the recruitment of Ben Martin who will join us from Trafigura,” added Kalleklev.

“Furthermore, we are taking a greater responsibility of the management of our fleet with Flex LNG Fleet Management currently managing four of our six vessels on the water,” explained the CEO.

“Ship management continues to perform excellently with no loss time injuries recorded for the second year in a row,” he added.

Flex stated that due to the uncertainty and disruptions created by the coronavirus and associated low gas prices, the company had elected to be cautious by maintaining a $0.10 dividend for the fourth quarter, and for the time being rather preserve liquidity, which stood at close to $130M at year-end. 

“While the freight and gas markets are currently challenging, LNG continues to be a long-term story with expected annual growth of around 3 to 4 percent for the next two decades as natural gas, and to a greater extent LNG, is the transition fuel for a cleaner and more sustainable future,” said the company.