Flex Lng Ltd. · NYSE:FLNG
Flex Lng — Q1 2021 Earnings Presentation
19 slides from Flex Lng's earnings presentation, May 21, 2021
Slide 1: Q1-2021 Presentation
Q1-2021 Presentation May 21, 2021 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: Highlights
HIGHLIGHTS Unseasonably strong LNG product and freight market Secured min. ~22 years of backlog since Q4 report at attractive levels Commercial 12 ships on the water and the last newbuild set for delivery on May 31 Excellent operational performance with zero LTI despite Covid-19 Revenues of $81.3m i
Slide 4: Don't Execute, Flexecute
DON’T EXECUTE, FLEXECUTE 1 2 3 April 14, 2021 May 17, 2021 May 20, 2021 Trader Portfolio player Flex Vigilant Flex TBN 2022 Flex Constellation Flex Freedom Flex Endeavour Flex TBN 2022 (option) Flex Ranger 4 LNGCs on TC with the option for a 5th TC with a firm period of 3 years on TC with a firm per
Slide 5: Fleet Composition Post Flexecution
FLEET COMPOSITION POST FLEXECUTION Ships: Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Flex Artemis Flex Enterprise Flex Amber Flex Freedom Flex Constellation Flex Endeavour Flex Vigilant Flex Ranger Flex Courageous₁ Flex Aurora₁ Flex Resolute Flex Rainbo
Slide 6: High Coverage = High Visibility and Low Volatility
HIGH COVERAGE = HIGH VISIBILITY AND LOW VOLATILITY Expected Revenues in $m 120 100 80 60 40 20 0 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21E Q3-21E Q4-21E 1) Subject normal operations and up-time on vessels. Variations in Revenues reflects spot market exposure to spot ships and ship
Slide 7: From Investment Phase to Harvesting
FROM INVESTMENT PHASE TO HARVESTING Industry leading cash break even levels Substantial increase of attractive backlog Enabling pay-out ratio of >100% in Q1 100% 80% $0.22 $1,500 60% Adj. EPS $17,500 40% $0.64 $0.40 $13,300 $45,300 20% $0.10 $13,000 0% Q4-Pres Now Q4-Pres Now Q4-Pres Now Q4-Pres Now
Slide 8: Income Statement
INCOME STATEMENT (in thousands of $ except per share data) Three months ended • Vessel operating revenues of $81.3m vs. $67.4 for Q4-20 Mar 31, 2021 Dec 31, 2020 • TCE of $75,399/day vs. $73,712/day for Q4-20 Vessel operating revenues 81,260 67,372 Voyage expenses -1,296 -1,054 • Adj. EBITDA(1) of $
Slide 9: Balance Sheet
BALANCE SHEET (in thousands of $) Three months ended Mar 31, 2021 Dec 31, 2020 • Solid liquidity of $139m as per Mar 31, 2021 • Increase in vessels and equipment due to delivery of Assets Current assets eleventh and twelfth vessel, Flex Freedom and Flex Cash and cash equivalents 139,041 128,878 Volu
Slide 10: Cash Flow During the Quarter
CASH FLOW DURING THE QUARTER $m 180 (4.5) • Net cash flow of $10.1m for the quarter, resulting in year-end 160 (20.7) cash of $139.1m 48.4 20.0 (21.3) (11.9) 0.1 140 • Cash flow from operations of $43.9m, including negative 120 working capital adj. of $4.5m 100 • Two newbuildings delivered in Januar
Slide 11: Fully Capitalised with Diversified Sources of Funding
FULLY CAPITALISED WITH DIVERSIFIED SOURCES OF FUNDING $m 400 350 $573m 300 $861m 250 200 150 100 $467m 50 - $627m 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 $156.4M Sale & Leaseback $300M Sale & Charterback $157.5M Sale & Leaseback Lease financing Bank financing $125M Bank Facility
Slide 12: Pull from Asia Have Tighten the Market
PULL FROM ASIA HAVE TIGHTEN THE MARKET MT 104 Incremental change in demand for Q1-21 vs. Q1-20 7-8% export growth expected in 2021 102 (0.1) 100 (7.1) 5.1 98 96 101.8 101.8 0.8 101.0 0.0 0.4 94 98.2 96.6 92 94.9 90 1) Source: Kpler and EnergyAspects 12
Slide 13: Spot Market in Review
SPOT MARKET IN REVIEW Headline rate (MEGI/XDF) Prompt available vessels vs. Headline rate 250,000 35 250,000 30 200,000 200,000 TC rate $/day 25 #Vessels $/day rate $/day 150,000 150,000 20 TC rate TC 100,000 15 100,000 10 50,000 50,000 5 - - - Jan Feb Mar Apr May June Jul Aug Sept Oct Nov Dec Jan-2
Slide 14: Tighter Market Is Pushing Up Term Rates
TIGHTER MARKET IS PUSHING UP TERM RATES 110,000 100,000 90,000 80,000 70,000 60,000 50,000 April 2020 July 2020 October 2020 January 2021 April 2021 1 yr TC MEGI/XDF 3 yr TC MEGI/XDF 5 yr TC MEGI/XDF 1) Source: Fearnleys, Affinity and SSY 14
Slide 15: Product Market Review
PRODUCT MARKET REVIEW 20 16 $/MMBtu 12 8 4 0 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 HHI JKM TTF Brent 13% 1) Source: CME and Platts 15 2) Brent is 331 contract type
Slide 16: Restocking Demand Has Been Our Main Theme for the Year
RESTOCKING DEMAND HAS BEEN OUR MAIN THEME FOR THE YEAR European gas inventories (% of capacity) 100 90 80 68.3% 70 60 50 40 30 33.5% 20 10 0 5-year range 2020-2021 2019-2020 Average 2016-2020 1) Source: GIE AGSI+ 16
Slide 17: Newbuildings Tailing Off with Few Uncommitted Ships
NEWBUILDINGS TAILING OFF WITH FEW UNCOMMITTED SHIPS 60 Only 18 uncommitted vessels 8 50 40 30 9 1 20 10 0 DFDE/TFDE Delivered MEGI/X-DF Q1 MEGI/X-DF SSD Steam ST Hybrid Arc7 1) Source: Fearnleys and Company 17 2) Uncommitted vessels represents vessels to be yet to be delivered without long term cont
Slide 18: Summary
SUMMARY Revenues of $81.3m in line with guidance Secured substantial backlog with 88% of 2021 already booked Dividend hiked from $0.3 to $0.4 per share – yield of 12% p.a. All 13 ships on the water by end of May Positive market outlook with summer re-stocking Fully financed fleet with solid cash pos
Slide 19: FLEX LNG
a) FLEX LNG