(Image Courtesy: Flex LNG)
Flex LNG Ltd. announced its unaudited financial results for the three months ended March 31, 2022 on Tuesday.
Highlights:
Øystein M Kalleklev, CEO of Flex LNG Management AS, commented:
“The first quarter was a fantastic period to be a cargo owner with high demand and elevated prices for LNG given the global energy crunch. For the spot freight market, the first quarter was however challenging as the LNG trade abruptly shifted towards Europe resulting in lower sailing distances and thus higher availability of ships depressing freight economics as liquidity in the spot market also dried up.
The sentiment in the freight market did however turn positive during the end of February and spot rates for modern tonnage have now recovered to above seasonal average while the one-year and three-year Time Charter rates for remains very strong. This is evidencing that charterers are willing to pay a substantial premium to spot rates in order to lock in large fuel-efficient ships on longer periods as the forward market also price in a much tighter freight market in the second half of the year.
During the last 13 months we have successfully secured in total nine fixed hire Time Charters with first class counterparties. The minimum period of these contracts ranges from three to five years which gives us comfortable earnings visibility. We still have three ships which will be redelivered from existing Time Charterers during the next 23 months and given the strong term market and general lack of available modern tonnage we are upbeat about the prospects of re-contracting these ships at attractive terms.
Revenue wise, we are pleased to deliver revenues for the quarter of $74.6 million in line with our revenue guidance communicated in February. With 98 per cent contract coverage for the year and three of our 13 ships on variable hire contracts linked to the spot market, we do expect gradual increased revenues in the next three quarters as we also guided in February. Given the strong backlog, positive outlook and our very solid financial position, the Board is therefore again declaring a dividend for the quarter of 75 cents per share. This provides our shareholders with an annualized yield of around 12 per cent which should be attractive given the wobbly financial markets these days.”
