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Flex LNG – Fourth Quarter 2024 Earnings Release

Wednesday, 05 February 2025 | 01:00

Flex LNG Ltd. announced its unaudited financial results for the three months and year ended December 31, 2024.

Highlights:

  • Vessel operating revenues of $90.9 million for the fourth quarter 2024, compared to $90.5 million for the third quarter 2024. The fourth quarter 2024 include $1.4 million in EU ETS revenue. An equivalent amount has been recorded under Voyage Expenses for the period.
  • Net income of $45.2 million and basic earnings per share of $0.84 for the fourth quarter 2024, compared to net income of $17.4 million and basic earnings per share of $0.32 for the third quarter 2024.
  • Average Time Charter Equivalent (“TCE”) rate of $75,319 per day for the fourth quarter 2024, compared to $75,426 per day for the third quarter 2024.
  • Adjusted EBITDA of $68.7 million for the fourth quarter 2024, compared to $70.4 million for the third quarter 2024.
  • Adjusted net income of $30.8 million for the fourth quarter 2024, compared to $28.7 million for the third quarter 2024.
  • Adjusted basic earnings per share of $0.57 for the fourth quarter 2024, compared to $0.53 for the third quarter 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 therefore increased to $413.7 million in the fourth quarter of 2024.
  • 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, Flex Constellation signed a new time charter contract with a large Asian utility and asset backed LNG trader for a period of 15 years. The charter will commence during the first or second quarter of 2026, and has a firm period ending in 2041. The contract includes options for the charterer to extend the vessel by additional two years up to 2043.
  • The Company declared a dividend for the fourth quarter 2024 of $0.75 per share. The dividend is payable on or about March 5, 2025 to shareholders, on record as of February 20, 2025.

Øystein M. Kalleklev, CEO of Flex LNG Management AS, 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/day was slightly ahead of guidance of $73-75,000/day. Adjusted EBITDA was $68.7 million, also in line with guidance of close to $70 million. 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 million of gains on these derivatives of which $5.1 million were realized during the quarter. Hence, adjusted net income for the fourth quarter came in at $30.8 million, 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. In November, we announced extension of the Time Charters for Flex Courageous and Flex Resolute where we added up to 10 years of new charter period for each ship from 2029 onwards, in which the three first years are firm. During the first quarter of 2024, the charterer also extended these time charters by two years each from 2025 to 2027 with a further option to extend these two ships from 2027 to 2029, coinciding with the new charter period from 2029. Furthermore, in December, we announced a new 15-year Time Charter for Flex Constellation from 2026 to 2041 where the charterer has the option to extend the ship up to 2043. 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 utilize all their extension options.

In the latter part of 2024, we also carried out some further optimization of our balance sheet with two refinancings worth $430 million enabling us to raise net cash proceeds of $97 million while at the same time both lowering our interest costs and increasing our debt maturity profile. Additionally, we increased our non-amortizing revolving credit facilities from $330 million to $414 million which reduces the cost of having such on-demand credit accessible. As a result, we closed the year with $437 million 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. In any case, Flex LNG utilized the upturn in 2021 to 2023 well to build both a fortress balance sheet and charter backlog and 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.

Our dividend is also steady with the Board once again declaring an ordinary quarterly dividend per share of $0.75. This is our fourteenth ordinary quarterly dividend of $0.75 per share and when adding the special dividends, we will have paid out $610 million of dividends to our shareholders the last 3.5 years.”
Source: Flex LNG

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