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Flex LNG release Q1 results

Published by , Editor
LNG Industry,

Flex LNG has released its unaudited results for the three months ended 31 March 2018.

Highlights for Q1 2018:

  • On 9 and 11 January 2018 Flex LNG successfully took delivery of its first LNGC newbuildings the Flex Endeavour and the Flex Enterprise, respectively.
  • Flex Endeavour commenced its time charter to Uniper Global Commodities, a leading international energy company headquartered in Germany while Flex Enterprise was operating in the spot market.
  • Reported revenues of US$15.1 million compared to US$1.3 million in Q1 2017.
  • Reported a positive EBITDA of US$2.4 million compared to a negative EBITDA of US$2.4 million in Q1 2017.
  • Reported net loss of US$1.8 million compared to a net loss in Q1 2017 of US$1.0 million due to weak utilisation of the Flex Enterprise during the quarter as well as increased financing costs related to US$315 million term loan facility.
  • The company transitioned from IFRS to US GAAP on 1 January 2018. There were no changes to the balance sheet as a result of this change in accounting principles.

Other and subsequent events:

  • On 18 April 2018 Flex LNG entered into a 12 months time-charter agreement with Enel Trade S.p.A. The time charter period of 12 months will commence during the second half of 2019. Enel also has the option to extend the contract by an additional 12 months subsequent to the firm period.
  • On 28 May 2018, Flex LNG received credit approval for a sale leaseback of the LNGC newbuilding Flex Rainbow with an Asian Lessor based on term sheet signed by the parties 20 March 2018. The sale price under the lease is approximately 75% of the relevant ship building price for Flex Rainbow and where the remaining 25% represent the advance hire for the ten year lease period.
  • On 28 May, Flex LNG entered into an agreement to acquire two 174 000 m3 X-DF LNGC newbuildings under construction at HHI for an attractive price of $184 million each vessel which includes building supervision. Payment terms are favourable with 20% of amount due following signing of such agreement while remaining 80% is due at delivery. Hence seller is funding part of pre-delivery capex which illustrate commitment and support of the largest shareholder.
  • Jonathan Cook, Chief Executive Officer of Flex LNG Management Ltd, decided on 28 May 2018 to resign his position to pursue other interests. The Board has decided to appoint Board member Marius Hermansen as Interim CEO and will actively pursue recruitment process of a permanent Chief Executive Officer. The Company has also hired Marius Foss as Head of Commercial. Foss comes from a similar role at Golar LNG Ltd.
  • Following the changes in management 28 May and the recruitment of Mr Foss, the Board has increased its focus on building a strong team around the Company's modern LNGC fleet, and given the market outlook, transportation of LNG will be the Company's core focus going forward.

Øystein M Kalleklev, CFO comments:
"Although we are disappointed by the financial performance in first quarter, we are pleased to be able to announce an attractive sale-leaseback of Flex Rainbow. This lease enables the Company to grow organically based on its existing paid-in equity by the acquisition of two additional high specification LNGC newbuildings at very attractive terms and conditions. The newbuildings are both fitted with X-DF propulsion, giving us a broader offering to our customers once delivered from yard mid-2020. The market for LNG transportation is cyclically recovering from lows experienced beginning of first quarter and we remain very confident about the long-term structural prospects for this market and are thus positioning for this up-turn with this accretive fleet expansion."

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