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.

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.

Flex LNG, the Norwegian shipping company with a fleet of 13 modern vessels and several chartered to the largest US exporter, reported an 18 percent jump in first-quarter net income even amid spot freight market challenges at the end of the three months as the LNG trade abruptly shifted towards Europe from Asia.

Himalaya Shipping Ltd., the independent bulk carrier company incorporated in Bermuda, is advancing with its corporate development as it awaits the start of deliveries of 12 LNG-powered bulk carriers.

Flex LNG, the Norwegian shipowner with a fleet of 12 modern vessels, has signed charters with Cheniere Energy of the US, for at least four of its carriers, and with all but one of its six current term charters set to expire in 2021-2022.

The new charters, pending any further agreements, are not set to significantly change the proportions of Flex’s fleet that operates on the spot and term charter markets, with the owner previously keeping a large section of its fleet onto the spot market.

“We are very pleased to enter into these agreements with Cheniere. They secure attractive employment for four, possibly five, of our ships with a first-class charterer,” said Øystein M. Kalleklev, Chief Executive of Flex LNG Management.

“Our large and energy efficient ships are particularly well suited for their long-haul trade and align with Cheniere’s efforts to secure required shipping capacity while improving the environmental performance of their overall fleet,” added Kalleklev.

“ Hence, this agreement makes very much sense for both parties, so we look forward to further developing our relationship in the years to come,” he explained.

“Lastly, these contracts add substantial revenue backlog to our company which is in line with our communicated strategy of securing attractive term-employment for our ships when we think the time is right,” stated the CEO.

Flex is scheduled to publish its first-quarter results on the 28th of May 2021.

All existing Flex LNG ships are large LNG carriers with a cargo capacity of approximately 173,400 to 174,000 cubic metre s and fitted with efficient dual-fuel two-stroke propulsion.

Flex LNG has signed the charter agreements with US operator Cheniere, which will receive two carriers from the owner in the third quarter of 2021 and another in the third quarter of 2022, with an option to take a fourth in the third quarter of 2022.

Cheniere will also take Flex LNG's sole remaining undelivered newbuild, the 174,000 cubic metres capacity “Flex Vigilant” when it is delivered by South Korea's Hyundai Samho Heavy Industries in May.

The four firm charters are for 3-3.5 years, with charterer's option to extend each by up to two years.

Flex also has two carriers under long-term charters that are set to expire in the third quarter of 2021, both with Spain's Naturgy Energy.

Flex LNG also has six carriers operating on the spot market, which could potentially be used to fulfil these obligations instead.

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 growing Norwegian-listed fleet owner backed by shipping magnate John Fredriksen, posted a first-quarter loss of $14.87 million as vessel operating revenues also fell.

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 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 new time charter in what is its second deal in a month.