LNG

March 24 (LNGJ) - Flex LNG, the Norwegian shipping company with a fleet of 13 vessels and several chartered to the largest US exporter Cheniere Energy, has signed a new $290 million loan agreement for the refinancing of two vessels, the “Flex Freedom” with 173,400 cubic metres capacity and the “Flex Vigilant” with 174,000 cbm of capacity.

   Flex said that since last month’s earnings report it had also re-financed another four ships during February and in the past 16 months the whole fleet had been refinanced. “We are pleased to have completed our approximately $2 billion refinancing process according to plan and on schedule despite the recent turmoil in the financial markets,” said Knut Traaholt, Chief Financial Officer of Flex LNG Management AS.

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.

Flex LNG, the Norwegian shipping company with a fleet of 13 carriers, has given an overview of the current LNG market in March 2022 and the various arbitrage windows values and netbacks.

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 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.

Flex LNG, the growing LNG shipping company with six vessels operating and seven others on order and whose largest shareholder is a company controlled by Norwegian magnate John Fredriksen, has entered into a time charter with a subsidiary of commodities firm Gunvor.