Flex LNG has reported vessel operating revenues of $90.9 mill for the fourth quarter 2024, compared to $90.5 mill for the previous quarter.
The 4Q24 figures included $1.4 mill in EU ETS revenue. An equivalent amount was also recorded under voyage expenses for the period.
Net income of $45.2 mill and basic earnings per share of $0.84 for 4Q24, compared to $17.4 mill and $0.32, respectively, for the previous quarter.
The average time charter equivalent (TCE) rate was $75,319 per day during the quarter, compared to $75,426 per day for 3Q24.
Adjusted EBITDA was $68.7 mill, compared to $70.4 mill for the third quarter, while an adjusted net income of $30.8 mill compared to $28.7 mill for 3Q24.
Adjusted 4Q24 basic earnings per share of $0.57 compared to $0.53 for the third quarter.
In October 2024, Flex LNG closed a new $160 mill JOLCO lease for ‘Flex Endeavour’, completing the $430 mill in new financing, according to plan with net proceeds of about $97 mill.
The following month, the company signed an amendment under the ‘Flex Enterprise’ $150 mill facility to convert the non-amortising term loan tranche of $83.7 mill to a non-amortising revolving credit facility. Therefore, the company's revolving credit facility capacity increased to $413.7 mill in 4Q24.
Charter extensions
The same month saw the charterer of ‘Flex Courageous’ and ‘Flex Resolute’, amend and extend the existing timecharters, to include a new firm period from 2029 to 2032, following the last two-year option under the original charter contract.
This charter extension includes additional options for the charterer to extend each vessel by up to seven years in periods of two years, two years and three years.
During November, a 15-year new timecharter contract was signed with a large Asian utility and asset backed LNG trader for the ‘Flex Constellation’.
This charter will commence during the first or second quarters of 2026, and has a firm period ending in 2041. The deal includes options for the charterer to extend the vessel by additional two years up to 2043.
Flex LNG declared a 4Q24 dividend of $0.75 per share.
Øystein Kalleklev, Flex LNG Management CEO, commented: “We are pleased to deliver stellar financial performance for the fourth quarter in line with our previous guidance. Our time charter equivalent rate for the fleet of $75,319 per day was slightly ahead of guidance of $73-75,000 per day.
Adjusted EBITDA was $68.7 mill, also in line with guidance of close to $70 mill.
“We recorded substantial profits on our portfolio of interest rate swaps, as we increased our interest rate hedging significantly during the interest rate slump at the beginning of September. During the fourth quarter, interest rates rallied, and we therefore booked $20.1 mill of gains on these derivatives of which $5.1 mill were realised during the quarter.
“Hence, adjusted net income for the fourth quarter came in at $30.8 mill, corresponding to earnings per share and adjusted earnings per share of $0.84 and $0.57, respectively.
“During 2024, and in the fourth quarter particularly, we were able to secure new attractive backlog, which will insulate us from the current market weakness.
“Flex LNG is thus very well positioned with 62 years of minimum charter backlog equal to about five years of contract backlog per ship, on average. Furthermore, this backlog may grow to 96 years in the event charterers utilise all their extension options.
“In the latter part of 2024, we also carried out some further optimisation of our balance sheet with two refinancings worth $430 mill enabling us to raise net cash proceeds of $97 mill, while at the same time, both lowering our interest costs and increasing our debt maturity profile.
“Additionally, we increased our non-amortising revolving credit facilities from $330 mill to $414 mill, which reduces the cost of having such on-demand credit accessible. As a result, we closed the year with $437 mill of cash-at-hand with first debt maturity in 2028.
“The short to medium term outlook for LNG shipping is challenging given the numerous ship deliveries ahead of ramped up new export capacity. As such, we think 2024 to 2027 will probably resemble the period 2014 to 2017.
“There is one key difference, we will likely see a sharp increase in the demolition of older, less efficient tonnage, primarily steam tonnage which will prepare the ground for improved markets, similar to what was experienced in 2017.
“We are well prepared for the current weak market. We are therefore guiding financial performance in 2025 to be in line with what we achieved in 2024,” he concluded.
