Flex LNG Ltd. ("Flex LNG" or the "Company") today announced its unaudited financial results for the nine months ended September 30, 2024.
Highlights:
* Vessel operating revenues of $90.5 million for the third quarter 2024, compared to $84.7 million for the second quarter 2024.
* Net income of $17.4 million and basic earnings per share of $0.32 for the third quarter 2024, compared to net income of $21.8 million and basic earnings per share of $0.41 for the second quarter 2024.
* Average Time Charter Equivalent ("TCE") rate of $75,426 per day for the third quarter 2024, compared to $72,385 per day for the second quarter 2024.
* Adjusted EBITDA of $70.4 million for the third quarter 2024, compared to $63.2 million for the second quarter 2024.
* Adjusted net income of $28.7 million for the third quarter 2024, compared to $30.4 million for the second quarter 2024.
* Adjusted basic earnings per share of $0.53 for the third quarter 2024, compared to $0.56 for the second quarter 2024.
* In September 2024, the new $270 million bank facility financing Flex Aurora and Flex Ranger was completed, and the previous $375 million bank facility was repaid in full. Consequently, the Flex Endeavour was unencumbered at end of Q3-2024.
* In October 2024, we closed the new $160 million JOLCO lease for Flex Endeavour, and thereby completing the $430 million in new financings according to plan with net proceeds of about $97 million.
* In November 2024, we signed an amendment under the Flex Enterprise $150 million Facility to convert the non-amortizing term loan tranche of $83.7 million to a non-amortizing revolving credit facility. The Company's revolving credit facility capacity has therefore increased from $330.0 million as at September 30, 2024 to $413.7 million.
* In November 2024, the charterer of Flex Courageous and Flex Resolute, agreed to amend and extend by way of addendum to the existing time charters, to include a new firm period from 2029 to 2032 following the last two-year option under the original time charter contract. The addendum 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.
* In November 2024, the charterer of Flex Constellation sent notice that they will not utilize their extension option under the time charter. The vessel is expected to be re-delivered from the existing contract late in the first quarter of 2025. Following the re-delivery, the vessel will be marketed for short and long-term contracts.
* The Company declared a dividend for the third quarter 2024 of $0.75 per share. The dividend is payable on or about December 11, 2024 to shareholders, on record as of November 27, 2024.
Øystein M. Kalleklev, CEO of Flex LNG Management AS, commented:
"Third quarter results came in as expected. Revenues were $90.5 million in line with guidance of ~$90 million, Adjusted EBITDA was $70.4 million, spot on guidance of ~$70 million and our average Time Charter Equivalent (TCE) rate was $75,426 per day, also in line with guidance of $75,000 to 77,000 per day. Adjusted Net Income, where we only include realized gains and losses on derivatives, came in at $28.7 million, corresponding to an adjusted Earnings Per Share (EPS) of $0.53. The slump in interest rates during the third quarter on the back of the sharp interest rate cut by Fed, adversely affected our ordinary earnings due to $10.5 million in unrealized losses on interest rate swaps. However, we utilized this window to significantly increase our hedging duration at a favourable time and recouped more than the third quarter unrealized loss just in the month of October alone.
During this winter season, the freight market has come under pressure due to a combination of high fleet growth, relatively small arbitrage between Europe and Asia, marginal intra-month arbitrage disincentivizing floating storage while export volume growth remains lacklustre at about 1%. Hence, we have seen spot rates behaving totally different from the seasonal norm in the fourth quarter with spot rates for modern tonnage being pushed down to the $20,000s where you effectively trade steam tonnage out of the market. As we have 100% charter coverage for the year and a substantial backlog, our exposure to the spot market is limited to one ship, Flex Artemis, on a variable Time Charter linked to the spot market rates. Hence, we expect only marginal changes in the fourth quarter with revenues expected to come in close to $90.0 million versus $90.5 million in the third quarter.
We are also pleased to announce additional backlog with the extension of Flex Courageous and Flex Resolute. These two LNG carriers commenced a 3+2+2 year time charter with a supermajor during first quarter of 2022, where the charterer during the first quarter utilized its first extension option from 2025 to 2027. We have now agreed an amendment of the time charter where we have added a firm three-year period from 2029 to 2032 and where the charterer has the right to extend the time charter for additional periods until 2039. Since reporting in August, we have executed the announced $430 million refinancing where we have improved our overall financing terms while at the same time raising net cash proceeds of $97 million. As we closed the last JOLCO financing of Flex Endeavour on October 3, our pro-forma cash following this refinancing subsequent to quarter-end was $450 million.
The Board has decided to declare once again an ordinary dividend per share of $0.75. This is the thirteenth consecutive time we have paid an ordinary dividend of $0.75 per share. We have also during this period paid special dividends on three separate occasions underlining the stability of our business. This dividend corresponds to an annualized dividend yield of approximately 13% which we do hope will make it attractive for our investors to stay invested in Flex LNG. Our dividend continues to be supported by strong financial performance, a solid financial position coupled with a substantial backlog with minimum charter backlog of 50 years which may grow to 82 years in the event charterers utilized all their extension options."
Third Quarter 2024 Result Presentation
In connection with the earnings release, a video webcast will be held at today 15:00 CET (09:00 a.m. EST).
In order to attend the live video webcast use the following link:
Third Quarter 2024 Earnings Presentation
A Q&A session will be held after the webcast. Information on how to submit questions will be given at the beginning of the session.
