Flex LNG Ltd. 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.”
