FLEX LNG Ltd

OSE:FLNG

Earnings Call Transcript

[Øystein Kalleklev, executive]

Hi, everybody. I'm Oystein Kalleklev, CEO of Flex LNG. And today, we are delivering our third quarter numbers. So let's review the highlights.

Revenues for the quarter came in at $94.6 million in the high end of our guidance of $90 million to $95 million. This resulted in strong earnings with net income of $45.1 million, translating to $0.84 per share. Adjusted for the gains on our derivatives, adjusted net income came in at $36.1 million or $0.67, respectively.

As you might recall, we have been doing drydocking of four ships this year. But in Q3, we had all the touring ships back in operation, taking out three ships during Q2 for the special survey for 5-year class. We have also seen seasonally stronger spot market, and this is positively impacting the earnings we have on Flex Artemis, and these are the two main reasons why revenues are higher in Q3 than Q2.

Overall, the LNG market, both freight and product is well balanced with high gas inventory levels in Europe now prior to the heating season. That means LNG prices have come down to more normal levels, but they are still at a premium to Brent oil price.

With a good spot market heading into the winter season, we do expect even better numbers for Artemis in Q4. So we expect revenues to be somewhere around $97 million to $99 million for Q4, also in the high end of our $90 million to $100 million guidance. So with good numbers in Q3, even stronger numbers in Q4, we are well on track to deliver our guidance for the year, $370 million of revenues and an adjusted EBITDA of $290 million to $295 million.

So with good numbers, good outlook and a very strong financial position, where we are sitting on $429 million of cash, the Board has decided to once again pay a special dividend of $0.125 on top of the regular $0.35 per share. This gives a dividend per share of $0.875 per share. In total, we have paid out $3.375 per share of dividend, last 12 months, which provides a running yield of about 11%, which I hope is attractive for our investors.

So don't forget our full video webcast at 3:00 Central European Time, 9:00 Eastern Standard Time. We will give a good update on the market, and we will conclude with a Q&A session, where the best question will win a gift consisting of the Flex LNG Thermos, which comes in nicely in the winter season as well as our Flex LNG beanie from the Norwegian brand, [ Amazon ]. So I hope you join the full webcast, and thank you for listening in.