Flex LNG - Fourth Quarter 2024 Earnings Release

HAMILTON, Bermuda, Feb. 4, 2025 /PRNewswire/ -- Flex LNG Ltd. ("Flex LNG" or the "Company") today 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."

Fourth 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:

Fourth 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.

In conjunction with the quarterly results, we have published a short teaser with the highlights of the fourth quarter. The video can be accessed through the following link:

YouTube Link 

The presentation material which will be used in the live video webcast can be downloaded on www.flexlng.com and replay details will also be available at this website.

For further information, please contact:
Mr. Knut Traaholt, Chief Financial Officer of Flex LNG Management AS
Telephone: +47 23 11 40 00
Email: [email protected]

This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

Forward-Looking Statements

Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbour protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbour provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbour legislation. The words "believe," "expect," "forecast," "anticipate," "estimate," "intend," "plan," "possible," "potential," "pending," "target," "project," "likely," "may," "will," "would," "should," "could" and similar expressions identify forward-looking statements.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although management believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the Company's control, there can be no assurance that the Company will achieve or accomplish these expectations, beliefs or projections. As such, these forward-looking statements are not guarantees of the Company's future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements. The Company undertakes no obligation, and specifically declines any

obligation, except as required by applicable law or regulation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict all of these factors. Further, the Company cannot assess the effect of each such factor on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

In addition to these important factors, other important factors that, in the Company's view, could cause actual results to differ materially from those discussed in the forward-looking statements include: unforeseen liabilities, future capital expenditures, the strength of world economies and currencies, inflationary pressures and central bank policies intended to combat overall inflation and rising interest rates and foreign exchange rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the LNG tanker market, the impact of public health threats, changes in the Company's operating expenses, including bunker prices, drydocking and insurance costs, the fuel efficiency of the Company's vessels, the market for the Company's vessels, availability of financing and refinancing, ability to comply with covenants in such financing arrangements, failure of counterparties to fully perform their contracts with the Company, changes in governmental rules and regulations or actions taken by regulatory authorities, including those that may limit the commercial useful lives of LNG tankers, customers' increasing emphasis on environmental and safety concerns, potential liability from pending or future litigation, global and regional economic and political conditions or developments, armed conflicts, including the war between Russia and Ukraine, as well as the developments in the Middle East, including continued conflicts between Israel and Hamas and the conflict regarding the Houthi attack in the Red Sea, trade wars, tariffs, embargoes and strikes, the impact of the U.S. presidential and congressional election results affecting the economic, future government laws and regulations and trade policy matters, such as the imposition of tariffs and

other import restrictions, business disruptions, including supply chain disruption and congestion, due to natural or other disasters or otherwise, potential physical disruption of shipping routes due to accidents, climate-related incidents, or political events, vessel breakdowns and instances of off-hire, and other factors, including those that may be described from time to time in the reports and other documents that the Company files with or furnishes to the U.S. Securities and Exchange Commission ("Other Reports"). For a more complete discussion of certain of these and other risks and uncertainties associated with the Company, please refer to the Other Reports.

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SOURCE Flex LNG