Highlights:
• Vessel operating revenues of $84.2 million for the second quarter 2022, compared to $74.6 million for the first quarter 2022.
• Net income of $44.3 million and basic earnings per share of $0.83 for the second quarter 2022, compared to net income of $55.8 million and basic earnings per share of $1.05 for the first quarter 2022.
• Average Time Charter Equivalent1 (“TCE”) rate of $70,707 per day for the second quarter 2022, compared to $62,627 per day for the first quarter 2022.
• Adjusted EBITDA1 of $66.1 million for the second quarter 2022, compared to $56.3 million for the first quarter 2022.
• Adjusted net income1 of $32.5 million for the second quarter 2022, compared to $23.8 million for the first quarter 2022.
• Adjusted basic and diluted earnings per share1 of $0.61 for the second quarter 2022, compared to $0.45 for the first quarter 2022.
• In June 2022, the Company replaced the existing variable rate time charters with new seven year time charters for the Flex Enterprise and Flex Amber which commenced in the third quarter 2022.
• In June 2022, the Company signed a 10 year fixed rate time charter for Flex Rainbow commencing in the first quarter 2023.
• In August 2022, the Company successfully executed a call option for $137 million to buy back the Flex Enterprise under its sale and leaseback agreement. As a result, the vessel is currently unencumbered.
• In August 2022, the Company declared a call option to repurchase the Flex Endeavour, which will be re-financed under the $375 Million Facility in September 2022.
• The Company now has SOFR and LIBOR based interest rate swaps with an aggregate notional principals of $450 million and $403.4 million respectively. The weighted average SOFR interest rate is 1.90% with weighted average duration of 9 years. Whilst the weighted average LIBOR interest rate is 1.04% with a weighted average duration of 2.8 years.
• The Company declared a dividend for the second quarter 2022 of $1.25 per share, consisting of a quarterly dividend of $0.75 per share and a special, one-time dividend of $0.50 per share.

Øystein M Kalleklev, CEO of Flex LNG Management AS, commented:
“We in Flex LNG are today pleased to release solid second quarter results. We are in the midst of a global gas crunch where buyers, especially in Europe, are scrambling to get their hands on LNG cargoes to ensure adequate energy supplies ahead of the winter. Hence, we are seeing increased interest for LNG with several new export projects now being pushed forward. New LNG export projects will create future freight demand, further underpinning the very sound long-term fundamentals of our industry.

In the second quarter we delivered revenues of $84.2 million. This is about $10 million higher than in the first quarter, and in line with our previous revenue guidance. Net income for the quarter came in at a healthy $44.3 million or 83 cents per share. Unlike the Federal Reserve, we have been ahead of the curve, hedging a substantial part of our interest rate exposure prior to inflation concerns surfacing. We are therefore booking further gains on our interest rate hedges. In the second quarter the gains were $14.5 million, and this comes on top of the $31.9 million we booked in the first quarter. Adjusting for the non-cash portion of the hedging gains, our adjusted net income came in at $32.5 million or 61 cents per share.

We recently announced three attractive new long-term contracts. Two seven-year charters for Flex Enterprise and Flex Amber commenced on July 1st while Flex Rainbow will commence a ten-year contract early next year. In total, these three contracts have added 24 years of backlog which is expected to generate approximately $750 million of revenues in total. Consequently, our backlog has increased to minimum 54 years, and this provides a very high level of earnings visibility going forward.

We are therefore reiterating our revenue guidance of about $90 million for the third quarter and somewhere between $90 and $100 million for the fourth quarter. Hence, we expect even stronger results in the second half of the year as we are re-pricing our portfolio of ships with longer duration contracts.

We recently finalized the first phase of our balance sheet optimization program in which we raised $137 million of additional cash while also improving financing terms. We have now initiated the second phase of this balance sheet optimization program with the aim of raising an additional $100m of fresh cash while simultaneously improving financing terms.

With a super strong cash balance at quarter end of $283.7 million we have therefore decided to distribute some of our surplus cash back to our shareholders.

On the back of this, we are once again declaring an ordinary quarterly dividend of 75 cents per share. Further, we are also pleased to reward our shareholders with a special dividend of 50 cents per share, bringing the total dividend in the second quarter to $1.25 per share. With this special dividend, the dividend for the last four quarters adds up to $3.5 per share annually which provides our shareholders with an attractive yield of around 10 per cent.”

Second Quarter 2022 Result Presentation
Flex LNG will release its financial results for the second quarter 2022 on Wednesday August 24, 2022.

In connection with the earnings release, a video webcast will be held at 3:00 p.m. CEST (9:00 a.m. EST). In order to attend the webcast use the following link: https://events.webcast.no/viewer-registration/DWEGc5CD/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.
Source: Flex LNG Ltd.