November 15, 2022
FlexLNG Ltd. (“Flex LNG” or the “Company”) today announced its unaudited financial results for the nine months ended September 30, 2022.
• Vessel revenue of $91.3 million for the third quarter of 2022, compared to $84.2 million for the second quarter of 2022.
• Net earnings of $46.6 million and basic earnings per share of $0.88 for the third quarter of 2022, compared to net earnings of $44.3 million and basic earnings per share of $0.83 for the second quarter of 2022.
• Average Time Charter Equivalent (“TCE”) rate of $75,941 per day for the third quarter of 2022, compared to $70,707 per day for the second quarter of 2022.
• Adjusted EBITDA1 of $70.9 million for the third quarter of 2022, compared to $66.1 million for the second quarter of 2022.
• Adjusted net income1 of $42.2 million for the third quarter of 2022, compared to $31.6 million for the second quarter of 2022.
• Adjusted and diluted basic earnings per share1 $0.79 for the third quarter of 2022, compared to $0.60 for the second quarter of 2022.
• In September 2022, the Company signed a $150 million term loan facility for the financing of Flex Enterprise.
• In November 2022, the Company received an approved term sheet for a $150 million term loan facility for the refinancing of Flex Resolute.
• In November 2022, the Company received approved credit terms for a $330 million sale-leaseback agreement for the refinancing of Flex Amber and Flex Artemis.
• As of the date of this report, the Company has interest rate swaps based on SOFR and LIBOR with total notional principal amounts of $381 million and $260 million respectively. The weighted average interest rate of the SOFR is 1.32% with a weighted average duration of 5.3 years. While the weighted average LIBOR interest rate is 1.11% with a weighted average duration of 2.6 years.
• The Company declared a dividend for the third quarter of 2022 of $0.75 per share.
Øystein M Kalleklev, CEO of Flex LNG Management AS, commented:
“During the third quarter, Flex Enterprise and Flex Amber launched their new agreed seven-year on-time charters in June 2022. Additionally, Flex Aurora was delivered to Cheniere as the fifth and final vessel under the agreement announced in April 2021. As a result, Flex LNG now has 12 LNG carriers on fixed-time lease and one vessel, the Flex Artemis, on variable-time lease. Our first fully open vessel, after charterer options, is in mid 2026 with three more vessels opening in 2027. Today with 2027 the first newbuild delivery window and newbuild prices of approximately $250 million, so we are optimistic about the prospects of renewing our vessels at attractive levels, adding additional backlog to the company.
For the third quarter, revenue was $91 million, in line with previous guidance of around $90 million. Net income was $47 million, or $0.88 per share. For the first nine months of 2022, total net income is $147 million, fueled by gains of $75 million on interest rate derivatives as we were ahead of the curve in locking in rates long-term interest rates at very attractive levels before the Federal Reserve starts raising rates. . Adjusted net income, where unrealized gains on derivatives and one-time items are eliminated, was $42 million, or $0.79 per share for the quarter.
Following the completion of phase 1 of balance sheet optimization in July, during which we raised $137 million in fresh cash by refinancing six of our vessels, we announced phase 2 of our optimization program of the balance sheet. As part of Phase 2, we will optimize financing for the remaining seven vessels in the fleet with the aim of increasing our cash position by an additional $100 million while improving our overall financing terms. We have now secured the refinancing of four of the seven vessels with net proceeds of $110 million. We are therefore already ahead of the $100 million target and expect the cash release to continue to increase as we also make good progress in refinancing the remaining three vessels. In total, we now expect the balance sheet optimization program to free up at least $300 million in cash. Our cash position is already at a healthy level of $271 million at the end of the quarter, so we expect this number to increase as we complete these refinancings.
Given the strength of the freight market, our large order backlog and our extremely solid financial situation, we are therefore pleased to declare today an ordinary quarterly dividend of $0.75 per share, which should provide our shareholders an attractive return of around 10%.
Presentation of the results for the third quarter of 2022
Flex LNG will release its third quarter 2022 financial results on Tuesday, November 15, 2022.
As part of the results release, a video webcast will take place at 3:00 p.m. CET (9:00 a.m. EST). To attend the webcast, use the following link: events.webcast.no/viewer-registration/AFsFIAbO/register
A Q&A session will take place after the conference/webcast. Information on how to submit questions will be given at the beginning of the session.
Alongside the quarterly results, we released a short video in which Øystein Kalleklev, CEO of Flex LNG, discusses the highlights of the third quarter. The video is accessible via the following link:
The presentation material that will be used in the conference/webcast can be downloaded from www.flexlng.com and replay details will also be available on this website.
For more information, please contact:
Mr. Knut Traaholt, Finance Director of Flex LNG Management AS
Telephone: +47 23 11 40 00
E-mail: [email protected]
This information is subject to the disclosure requirements in accordance with section 5-12 of the Norwegian Securities Act.
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements to encourage companies to provide forward-looking information about their businesses. Forward-looking statements include statements regarding future plans, objectives, goals, strategies, events or performance, as well as underlying assumptions and other statements, that are other than statements of historical fact. The Company wishes to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and includes this disclaimer as part of such safe harbor legislation. The words “believe”, “expect”, “plan”, “anticipate”, “estimate”, “intend”, “plan”, “possible”, “potential”, “pending”, ” target”, “project”, “likely”, “may”, “will”, “should”, “could” and similar expressions identify forward-looking statements.
The forward-looking statements contained in this press release are based on various assumptions, many of which are based, in turn, on other assumptions, including, without limitation, management’s review of operating trends historical information, data contained in company records and other data available from third parties. Although management believes that these assumptions were reasonable when made, since these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and which are beyond the Company’s control, nothing guarantees that the Company will achieve or achieve these expectations. , beliefs or projections. As such, these forward-looking statements are not guarantees of the Company’s future performance, and actual results and future developments may differ materially from those projected in the forward-looking statements. The Company undertakes no obligation, and specifically disclaims any obligation, except as required by applicable law or regulation, to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time and it is not possible for the Company to predict all of these factors. Further, the Company cannot assess the effect of each of these factors on our business or the extent to which any one factor, or combination of factors, could cause actual results to differ materially from those contained in the forward-looking statements.
In addition to these important factors, other important factors that the Company believes could cause actual results to differ materially from those discussed in the forward-looking statements include: unforeseen liabilities, future capital expenditures , the strength of global economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the LNG carrier market, the impact of threats to the public health and outbreaks of other highly communicable diseases, including the duration and severity of the COVID-19 outbreak and its impact on the LNG carrier market, the evolution of the Company’s operating expenses, including bunker prices, dry-docking and insurance costs, energy efficiency of the Company’s vessels, market for the Company’s vessels, availability of finance and refinance ments, the ability to meet covenants in such financing agreements, the inability of counterparties to fully perform their contracts with the Company, changes in governmental rules and regulations or actions taken by regulatory authorities, including those which may limit the commercial life of LNG carriers, increasing customer focus on environmental and safety concerns, potential liability from pending or future litigation, general national and international political conditions or events, including the recent conflict between Russia and Ukraine, trade disruptions, including supply chain disruption and congestion, due to natural or other or other disasters, potential physical disruption of shipping routes due to accidents, incidents related to climate or political events, ship breakdowns and cases of e non-lease, and other factors, including those that may be described from time to time in reports and other documents the Company files with or furnishes to the United States Securities and Exchange Commission (“Other Reports”) . For a fuller discussion of some of these and other risks and uncertainties associated with the Company, please refer to Other Reports.
(1) Time Charter Equivalent Rate, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per Share are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included at the end of this earnings report.