Slide 1: Investor Presentation March 2020
Investor Presentation March, 2020 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS MATTERS DISCUSSED IN THIS PRESENTATION MAY CONSTITUTE FORWARD-LOOKING STATEMENTS. THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 PROVIDES SAFE HARBOR PROTECTIONS FOR FORWARD-LOOKING STATEMENTS IN ORDER TO ENCOURAGE COMPANIES TO PROVIDE PROSPECTIVE INFORMATION ABOUT T
Slide 3: Fourth Quarter Highlights
FOURTH QUARTER HIGHLIGHTS Revenues of $52.0m vs. $29.8m for Q3-19 and in line with guidance of $50-55m Time Charter Equivalent(1) rate of $94kpdr vs. $58.2kpdr for Q3-19 Adjusted EBITDA(1) of $41.9m vs. $21.8m for Q3-19 Net Income of $23.9m vs. $0.5m for Q3-19 Earnings per share of $0.44 i
Slide 4: Status and Near-Term Outlook
STATUS AND NEAR-TERM OUTLOOK LNGCs Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Flex Endeavour Spot Flex Enterprise Variable TC Options to Q1-2024 Flex Ranger Fixed TC Fixed TC Option Q2-2022 Flex Rainbow Variable TC Options to Q1-2021 Flex Constellation Spot Flex Courageous Spot Flex Aurora Yard
Slide 5: Q4 Back of Envelope Return Analysis
Q4 BACK OF ENVELOPE RETURN ANALYSIS 6 SHIPS ~$190m ~$130m ~$130m ~$70m In operation during Average book value of Average gross debt per Cash holdings at end of Average equity per ship quarter and 7 under ships in operation ship in operation year i.e. about $10m in operation when construction with no
Slide 6: Brand New State-of-the-Art Fleet
BRAND NEW STATE-OF-THE-ART FLEET High Pressure Low pressure ME-GI with Partial ME-GI with Full ME-GI Reliquefaction System X-DF Reliquefaction System Ranger (2018) Endeavour (2018) Artemis (2020) Aurora (2020) Rainbow (2018) Enterprise (2018) Resolute (2020) Amber (2020) Constellation (2019) Freedom
Slide 7: Limited Remaining Newbuilding Capex
LIMITED REMAINING NEWBUILDING CAPEX $m 1,400 1,200 349 1,000 800 600 1,286 629 400 56 200 126 - 126 (1) Newbuilding capex Pre-paid capex Financing 2020 NBs Net capex 2020 NBs Capex 2021 NBs • Pre-paid capex of $349m • 30% of purchase price ($275.4m) for Artemis/Resolute/Freedom/Volunteer/Vigilant •
Slide 8: Staggered Debt Maturity Profile
STAGGERED DEBT MATURITY PROFILE $m 350 300 250 200 150 100 50 - $m 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 $300M Sale and Charterback $157.5M Sale and Leasback $100M Term Loan $250M Term Loan $629M ECA Facility • Long funding secured with first loan maturity in July 2024 • S
Slide 9: Spot Market Review
SPOT MARKET REVIEW 240,000 40 1. Wide arbitrage spread between Europe to 35 Asia as well as higher netback US to Asia 200,000 than Europe. Chinese buyers very active with 30 floating storage build-up. 160,000 2. JKM correction due to El Niño weather 4 25 conditions resulting in Chinese over- TC rate
Slide 10: 2019 Trade Flows Summarized
2019 TRADE FLOWS SUMMARIZED Trade flows 2018 vs 2017 North Import • In 2018 Asia took ~93% of new production. With Asian Asia Europe America Russia RoW growth basin in deficit due to strong Chinese demand, it Asia 7.8 2.9 6.2 0.9 11.4 29.2 absorbed most volumes from North America and RoW Europe -0.1
Slide 11: The European Sink Absorbed ~34MT LNG in 2019
THE EUROPEAN SINK ABSORBED ~34MT LNG IN 2019 Europe was 8 of top 10 LNG growth markets in 2019 Low gas prices and high carbon prices spur European demand UK China France Spain Italy Bangladesh Netherlands Belgium Portugal Greece 0 2 4 6 8 10 MT 1) Source: Shell, Kpler 11
Slide 12: LNG Product Market from Backwardation to Contango
LNG PRODUCT MARKET FROM BACKWARDATION TO CONTANGO 12.0 Oil linked (JCC 13%) is basis for ~70% of delivered cargoes 10.0 8.0 $ / MMbtu 6.0 4.0 2.0 0.0 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 NBP Europe
Slide 13: LNG Cheaper Than Coal
LNG CHEAPER THAN COAL Asian LNG again below coal adjusted for efficiency stimulating coal to gas switching 15.0 12.5 10.0 USD / MMbtu 7.5 5.0 2.5 0.0 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Aussie coal(USD/mmbtu) Brent(USD/mmbtu) LNG price Asia Coal
Slide 14: COVID-19 Effect on LNG
COVID-19 EFFECT ON LNG Coronavirus (COVID-19) outbreak in China Expected impact of Coronavirus on Chinese LNG demand • Wood Mackenzie expect that the Coronavirus will affect Chinese 10.00 LNG demand adversely by 2.6 to 6.3 MT in 2020 compared to base line level prior to the outbreak. 9.00 • BNEF exp
Slide 15: China Starting to Recover
CHINA STARTING TO RECOVER LNG imports rebounding Increased import reduced floating storage # ships Floating storage 35 30 25 20 15 10 5 0 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 1 2 3 4 5 6 7 8 9 10 Week # Atlantic MEI Asia 1) Source: Bloomber, Kpler, Poten and Company 15
Slide 16: ~25MT of Volume Growth Expected in 2020
~25MT OF VOLUME GROWTH EXPECTED IN 2020 380 Global LNG Exports New nameplate capacity start-up (12m rolling-sum) 362.05 40.0 90.0 360 35.0 80.0 340 70.0 30.0 14.3 320 60.0 25.0 MMtpa 50.0 300 MMtpa 20.0 15.4 40.0 280 15.0 11.0 CAGR: 11% 30.0 16.8 260 10.0 1.2 2.2 20.0 4.5 5.0 1.5 240 8.6 7.8 10.0 1.
Slide 17: 2019 Was Record Year for FID of New Capacity
2019 WAS RECORD YEAR FOR FID OF NEW CAPACITY FID of new volumes in 2019 Main contenders for FID in 2020/21 Volume MMtpa Likely FIDs Country (Mmtpa) 80 Golden Pass: 15,6 Mmtpa, brownfield 70 Sabine Pass T6: 4,5 Mmtpa, brownfield, Woodfibre LNG 2.1 Mozambique : 12,9 Mmtpa, greenfield Calcasieu Pass :
Slide 18: LNG Is the Transition Fuel
LNG IS THE TRANSITION FUEL LNG is the main transition fuel LNG becomes the main mode of international trade 20,000 40 % 9% 5 000 16 % 5% -10 % 37 % 15 % 43 % 45 % 16,000 4 000 12,000 3 000 BCM BCM Energy demand 1% CAGR Gas demand 2% CAGR 8,000 2 000 4,000 1 000 0 - 2019 Domestic Pipeline LNG Imports
Slide 19: Asia Will Continue to Be the Main Import Area
ASIA WILL CONTINUE TO BE THE MAIN IMPORT AREA Asia will continue to be the main driver for LNG demand Asia’s demand growth becomes less dependent on China 1 000 9% 750 48 % 8% 9% 74 % 800 600 28 % 600 450 23 % 1% BCM BCM 400 300 LNG demand 4% CAGR Asia LNG demand 4% CAGR 200 150 - - 2019 Asia Europe
Slide 20: Summary
SUMMARY • We deliver our best ever financial results with revenues of $52m in line with guidance of $50-55m and EPS of 44 cents per share • LNG freight market affected near term by combination of glut of LNG and reduced demand from China following Coronavirus outbreak • Anticipate Q1-20 TCE close to
Slide 21: Appendix
A FLEX LNG Appendix
Slide 22: Income Statement
INCOME STATEMENT Unaudited Figures in thousand of $ Three months ended Full year • Revenues of $52.0m vs. $29.8m for Q3-19 Dec 31, 2019 Sept 30, 2019 2019 (1) • Adjusted EBITDA of $41.9m vs. $21.8m for Q3-19 Vessel operating revenues 51,994 29,814 119,967 • Vessel operating expenses impacted by plan
Slide 23: Balance Sheet
BALANCE SHEET Unaudited Figures in thousand of $ Dec 31, 2019 Sept 30, 2019 • Solid liquidity of $129.1m as per Dec 31, 2019 • Assets consist of six vessels in operation and seven Assets newbuildings under construction Current assets Cash, restricted cash and cash equivalents 129,098 56,554 • Vessel
Slide 24: Cashflow
CASHFLOW Unaudited Figures in thousand of $ Three months ended Full year • Net cash flow from operating activities of $37.3m in Dec 31, 2019 Sept 30, 2019 2019 Q4-19, up from $8.4m in Q3-19 Net income/(loss) 23,856 468 16,967 • Net cash flow from operating activities of $51.5m Working capital adjust
Slide 25: Diversified Sources of Financing
DIVERSIFIED SOURCES OF FINANCING $442m $629m $344m Lease finacings(1) Bank facilities (1) ECA facility (2) • ~$1.3 billion in attractive financing secured in 2019 • Diversified funding between lease financing, bank financing and ECA financing • Expanded relationship with leading international financ