November 15, 2022Hamilton, Bermuda
Flex LNG Ltd. ("Flex LNG" or the “Company”) today announced its
unaudited financial results for the nine months ended September 30,
2022.
Highlights:• Vessel operating revenues of $91.3
million for the third quarter 2022, compared to $84.2 million for
the second quarter 2022. • Net income of $46.6 million and basic
earnings per share of $0.88 for the third quarter 2022, compared to
net income of $44.3 million and basic earnings per share of $0.83
for the second quarter 2022. • Average Time Charter Equivalent
("TCE") rate of $75,941 per day for the third quarter 2022,
compared to $70,707 per day for the second quarter 2022.• Adjusted
EBITDA1 of $70.9 million for the third quarter 2022, compared to
$66.1 million for the second quarter 2022.• Adjusted net income1 of
$42.2 million for the third quarter 2022, compared to $31.6 million
for the second quarter 2022.• Adjusted basic and diluted earnings
per share1 of $0.79 for the third quarter 2022, compared to $0.60
for the second quarter 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 a credit
approved term sheet for a $150 million term loan facility for the
re-financing of Flex Resolute.• In November 2022, the Company
received a credit approved term sheets for a $330 million sale and
leaseback agreement for the re-financing of Flex Amber and Flex
Artemis.• As per date of this report, the Company has SOFR and
LIBOR based interest rate swaps with aggregate notional principals
of $381 million and $260 million respectively. The weighted average
SOFR interest rate is 1.32% with weighted average duration of 5.3
years. Whilst 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 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 commenced their new seven-year Time Charters agreed in
June 2022. Additionally, Flex Aurora was delivered to Cheniere as
the fifth and last ship under the agreement announced in April
2021. Hence, Flex LNG today have 12 LNG carriers on fixed hire Time
Charters and one ship, Flex Artemis, on a variable time charter.
Our first fully open ship, after charterer's options, is in the
middle of 2026 with three other ships coming open in 2027. Today,
with 2027 the earliest newbuilding delivery window and newbuilding
prices at around $250 million, we are therefore upbeat about the
prospects of re-contracting our ships at attractive levels thereby
adding further backlog to the Company.
For the third quarter, Revenues came in at $91 million in line
with previous guidance of approximately $90 million. Net income
came in at a healthy $47 million equivalent to $0.88 per share. For
the first nine months of 2022, total Net income is $147 million,
fuelled by $75 million gains on interest rate derivatives, as we
have been ahead of the curve locking in long term interest rates at
very attractive levels before Federal Reserve started to hike
rates. Adjusted Net income, whereby unrealized gains on derivatives
and non-recurring items are eliminated came in at $42 million
equivalent to $0.79 per share for the quarter.
Following the completion of Balance Sheet Optimization Phase 1
in July where we raised $137 million of fresh cash by refinancing
six of our ships, we announced Phase 2 of our Balance Sheet
Optimization Program. Under Phase 2 we will optimize financing for
the remaining seven ships in the fleet with the aim of increasing
our cash position by a further $100m while at the same time
improving our overall financing terms. We have now secured
refinancing for four of the seven ships with net proceeds of $110
million. We are thus already ahead of the $100 million 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. In
total, we now expect that the Balance Sheet Optimization Program
will at least release $300 million in cash. Our cash position is
already at a healthy $271 million at quarter end thus we expect
this number to move upward as we are completing these
refinancings.
Given the strong freight market, our extensive contract backlog
and our super strong financial position we are therefore today
pleased to declare an ordinary quarterly dividend of $0.75 per
share which should provide our shareholders with an attractive
yield of approximately 10 per cent.”
Third Quarter 2022 Result PresentationFlex LNG
will release its financial results for the third quarter 2022 on
Tuesday November 15, 2022.
In connection with the earnings release, a video webcast will be
held at 3:00 p.m. CET (9:00 a.m. EST). In order to attend the
webcast use the following link:
events.webcast.no/viewer-registration/AFsFIAbO/register
A Q&A session will be held after the conference/webcast.
Information on how to submit questions will be given at the
beginning of the session.
In conjunction with the quarterly results, we have published a
short video in which Øystein Kalleklev, CEO of Flex LNG, discusses
the highlights of the third quarter. The video can be accessed
through the following link:youtu.be/tsU0jebpux0
The presentation material which will be used in the
conference/webcast can be downloaded on www.flexlng.com and replay
details will also be available at this website.
For further information, please contact:Mr. Knut Traaholt, Chief
Financial Officer of Flex LNG Management ASTelephone: +47 23 11 40
00Email: ir@flexlng.com
This information is subject to the disclosure requirements
pursuant to Section 5-12 the Norwegian Securities Trading
Act.Forward-Looking StatementsMatters 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 in order to
encourage companies to provide prospective information about their
business. Forward-looking statements include statements concerning
plans, objectives, goals, strategies, future events or performance,
and underlying assumptions and other statements, which are other
than statements of historical facts. The Company desires to take
advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is including this cautionary
statement in connection with this safe harbor legislation. The
words "believe," "expect," "forecast," "anticipate," "estimate,"
"intend," "plan," "possible," "potential," "pending," "target,"
"project," "likely," "may," "will," "would," "should," "could" and
similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based
upon various assumptions, many of which are based, in turn, upon
further assumptions, including without limitation, management’s
examination of historical operating trends, data contained in the
Company’s records and other data available from third parties.
Although management believes that these assumptions were reasonable
when made, because these assumptions are inherently subject to
significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond the Company’s control, there
can be no assurance that the Company will achieve or accomplish
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
vary materially from those projected in the forward-looking
statements. The Company undertakes no obligation, and specifically
declines any obligation, except as required by applicable law or
regulation, to publicly update or revise any forward-looking
statements, 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 such factor on our
business or the extent to which any factor, or combination of
factors, may cause actual results to be materially different from
those contained in any forward-looking statement.
In addition to these important factors, other important factors
that, in the Company’s view, could cause actual results to differ
materially from those discussed in the forward-looking statements
include: unforeseen liabilities, future capital expenditures, the
strength of world economies and currencies, general market
conditions, including fluctuations in charter rates and vessel
values, changes in demand in the LNG tanker market, the impact of
public health threats and outbreaks of other highly communicable
diseases, including the length and severity of the COVID-19
outbreak and its impact on the LNG tanker market, changes in the
Company’s operating expenses, including bunker prices, dry-docking
and insurance costs, the fuel efficiency of the Company’s vessels,
the market for the Company’s vessels, availability of financing and
refinancing, ability to comply with covenants in such financing
arrangements, failure of counterparties to fully perform their
contracts with the Company, changes in governmental rules and
regulations or actions taken by regulatory authorities, including
those that may limit the commercial useful lives of LNG tankers,
customers' increasing emphasis on environmental and safety
concerns, potential liability from pending or future litigation,
general domestic and international political conditions or events,
including the recent conflict between Russia and Ukraine, business
disruptions, including supply chain disruption and congestion, due
to natural or other disasters or otherwise, potential physical
disruption of shipping routes due to accidents, climate-related
incidents, or political events, vessel breakdowns and instances of
off-hire, and other factors, including those that may be described
from time to time in the reports and other documents that the
Company files with or furnishes to the U.S. Securities and Exchange
Commission (“Other Reports”). For a more complete discussion of
certain of these and other risks and uncertainties associated with
the Company, please refer to the Other Reports.
------(1) Time Charter Equivalent rate, Adjusted EBITDA,
Adjusted net income/(loss) and Adjusted earnings/(loss) per share
are non-GAAP measures. A reconciliation to the most directly
comparable GAAP measure is included in the end of this earnings
report.
- Flex LNG - Earnings Release Q3 2022
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