Flex LNG Ltd. announced its unaudited financial results for the three months ended March 31, 2023.

Highlights:

* Vessel operating revenues of $92.5 million for the first quarter 2023, compared to $97.9 million for the fourth quarter 2022.
* Net income of $16.5 million and basic earnings per share of $0.31 for the first quarter 2023, compared to net income of $41.4 million and basic earnings per share of $0.78 for the fourth quarter 2022.
* Average Time Charter Equivalent1 (“TCE”) rate of $80,175 per day for the first quarter 2023, compared to $81,699 per day for the fourth quarter 2022.
* Adjusted EBITDA1 of $72.5 million for the first quarter 2023, compared to $79.1 million for the fourth quarter 2022.
* Adjusted net income1 of $35.2 million for the first quarter 2023, compared to $54.5 million for the fourth quarter 2022.
* Adjusted basic earnings per share1 of $0.66 for the first quarter 2023, compared to $1.02 for the fourth quarter 2022.
* In March 2023, we completed our Balance Sheet Optimization Programme which has resulted in the re-financing of all ships in our fleet over a 16 month period which has increased the our cash balance by approximately $382.4 million after all fees and expenses, extended the maturity profiles to the earliest in 2028 and reduced interest margins. Most recently:
– In February 2023, we completed a $330 million 10-year sale and leaseback with an Asian-based lease provider for the vessels, Flex Artemis and Flex Amber.
– In March 2023, we completed a $180 million 10-year sale and leaseback with an Asian-based lease provider for the vessel, Flex Rainbow; and
– In March 2023, we completed a $290 million term and revolving credit facility with margin of 1.85%, 6 year tenor and a 22 year age-adjusted repayment profile.
* As per date of this report, the Company has SOFR and LIBOR based interest rate swaps with aggregate notional principals of $660 million and $160 million, respectively. The weighted average SOFR interest rate is 1.81% with weighted average duration of 5.3 years. While the weighted average LIBOR interest rate is 0.96% with a weighted average duration of 2.0 years.
* The Company declared a dividend for the first quarter 2023 of $0.75 per share.

Øystein M Kalleklev, CEO of Flex LNG Management AS, commented:

“We are today publishing our first quarter 2023 results and we are pleased to announce that revenues came in at $92.5 million, spot on our guidance of $90 to $93 million. This resulted in adjusted earnings per share of $0.66 for the quarter. As we completed the balance sheet optimization program during the first quarter, we had some additional financing costs in our accounts for the first quarter. However, we have now put in place new attractive long-term financing for all our thirteen ships boosting our cash balance to $475 million at quarter-end or about $9 per share.

Given our very strong financial position and our extensive charter backlog with a minimum of ~57 years remaining contractual backlog, the Board has therefore once again declared an ordinary quarterly dividend of $0.75 per share. During the last twelve months, we have thus paid out $3.75 of dividend per share which should provide investor with an attractive annualized yield of about 11 per cent.

We have now also completed our two first scheduled dry-docking of the LNG carriers Flex Enterprise and Flex Endeavour being docked during March and April respectively. We are pleased to say that these dry-dockings have been carried out according to both time and costs while minimizing off-hire periods. During the second quarter we will carry out the two last drydocking for the year. Revenues are therefore expected to pick up in the second half of the year when the drydocking program for the year is expected to be completed by end of June.

We also re-affirm our guidance for the year. Despite off-hire in connection with four ships carrying out dry-docking, we do expect revenues to increase from $348 million in 2022 to about $370 million for 2023. The average Time Charter Equivalent Rate for the fleet is expected to come in at about $80,000 per day for 2023 in line with the $80,175 per day we delivered in the first quarter.

While the spot market right now is at a seasonable low, we maintain a positive long-term view. Our exposure to the spot market is also limited to one of the thirteen ships which is on a variable time charter where earnings are typically higher in the winter season. Our first fully open ships are not open before 2027 and with newbuilding prices are now exceeding $260 million for ships with deliveries in 2027 this is putting upward pressure on charter rates. Hence, we believe Flex LNG continues to be very well positioned for opportunities to re-contract our ships for longer periods at higher rates in the near future, like we have evidenced in the past.”

First Quarter 2023 Earnings Presentation

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.
Source: FLEX LNG