Flex LNG reports increased Q3 earnings; expects tightening market from 2026


Flex LNG Ltd. announced its unaudited financial results for the three months and nine months ended September 30, 2023.


  • Vessel operating revenues of $94.6 million for the third quarter 2023, compared to $86.7 million for the second quarter 2023.
  • Net income of $45.1 million and basic earnings per share of $0.84 for the third quarter 2023, compared to net income of $39.0 million and basic earnings per share of $0.73 for the second quarter 2023.
  • Average Time Charter Equivalent1 (“TCE”) rate of $79,207 per day for the third quarter 2023, compared to $77,218 per day for the second quarter 2023.
  • Adjusted EBITDA1 of $74.7 million for the third quarter 2023, compared to $66.2 million for the second quarter 2023.
  • Adjusted net income1 of $36.1 million for the third quarter 2023, compared to $28.2 million for the second quarter 2023.
  • Adjusted basic earnings per share1 of $0.67 for the third quarter 2023, compared to $0.53 for the second quarter 2023.
  • The Company declared a dividend for the third quarter 2023 of $0.875 per share, consisting of a quarterly dividend of $0.75 per share and a special dividend of $0.125 per share. The dividend is payable to shareholders on record as of November 28, 2023 on or around December 5, 2023.

Øystein M. Kalleklev, CEO of Flex LNG Management AS, commented:

“After successfully completing our drydock program for the year during the second quarter when we temporarily took out three ships for five-year special survey in drydock, we had all 13 LNG carriers back in full operation during the third quarter. Higher vessel availability coupled with a stronger spot market, which positively impacted our single ship on a spot-market linked, variable rate time charter, resulted in quarterly revenues increasing by $7.9m from $86.7m in the second quarter to $94.6m in the third quarter. Hence, we delivered quarterly revenues in the top end of our guidance of $90-95m.

Strong freight income also trickles down to healthy earnings with net income for the quarter of $45.1m, equating to quarterly earnings per share of $0.84. Once again, we recorded gains on our portfolio of interest rate swaps which is hedging our cashflow against higher interest rates with gains of $15.7m consisting of $6.7m of realized gains and $9m of unrealized gains. Since we eliminate unrealized gains in our adjusted numbers, adjusted net income and adjusted earnings per share were $36.1m and $0.67 respectively. We have been ahead of the curve, hedging interest rate risk prior to Fed aggressively ramping up rates and since beginning of 2021, we have in total recorded $128m of gains on our interest rate swaps.

With seasonally stronger spot market heading into the winter season, we expect a further increase in revenues in the fourth and last quarter of the year with expected revenues of $97-99m. This is also in the high end of our guidance of $90-100m. With the third quarter numbers presented today and the guidance for fourth quarter, we are thus well on track to deliver on our revenue guidance for the year of $370m, our adjusted EBITDA target of $290-295m and the overall average Time Charter Equivalent guidance of $80,000 per day.

The overall freight and product market today ahead of the peak winter season is fairly balanced. The LNG product market is well supplied as supply curtailments have recently been limited despite the noise. That said, spot LNG prices remain at about $15/mmbtu which still reflects a tight market with LNG being priced at premium to crude oil which is somewhat unusual in historical context. As LNG export growth will continue to be fairly muted the next two years, we do expect the LNG product market to stay tight as European buyers will continue to be buyers both of first and last resort. Active buying by Europeans also means Atlantic cargoes will continue to be pulled towards Europe instead of Asia which will put a dent on sailing distances in the near term.

The spot freight market will therefore continue to experience a very high level of volatility depending on season. From the end of 2025 we do however see a wave of new LNG coming onstream, and we expect these volumes to gradually alleviate market tightness and make LNG affordable to consumers with shallower pockets. Consequently, with newbuilding deliveries peaking at end of 2025, we do see incrementally tighter shipping market from 2026 onwards. We therefore think our two fully open ships in 2027 and two fully open ships in 2028 are attractively positioned for re-contracting opportunities. This is particularly the case given the elevated newbuilding prices which have pushed up term rates to very attractive levels for owners of modern fuel-efficient tonnage.

Given our quadfecta of strong numbers, completed drydocking program, very solid cash position of $429m and the compelling long-term outlook, the Board has decided this time to declare a special dividend of $0.125 on top of our regular quarterly dividend of $0.75 bringing the quarterly dividend per share for the third quarter to $0.875. During the last twelve months, we have thus paid out dividends of $3.375 per share which provides our shareholders with an attractive annualized running yield of about 11 per cent.”


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