Slide 1: Q4-2020 Presentation
Q4-2020 Presentation February 17, 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 LNG market going from gloom in Q2/Q3 to boom by end of Q4 Three recent deliveries (Flex Amber, Flex Freedom and Flex Volunteer) Commercial 12 ships on the water and the last newbuild set for delivery in Q2-21 Excellent operational performance despite Covid-19 with zero LTI TCE(1) of $74kp
Slide 4: Well Positioned Fleet
WELL POSITIONED FLEET Flex Ranger (Feb-21) Consistent guidance history Fixed hire TCs Flex Rainbow (Jan-22) Period Guidance Reported Flex Aurora (Aug-21) Q4-2018 Revenues of ~ $35m Revenues of $36m Flex Resolute (Aug-21) Q1-2019 Similar revenues as Q3-2019 ($19m) Revenues of $19m Q2-2019 Slightly hi
Slide 5: Allocation of Earnings for 2020
ALLOCATION OF EARNINGS FOR 2020 Adjusted EPS of $0.63 for 2020 Allocation of earnings during 2020 $0.18 $0.20 $0.40 $0.45 $0.03 Adj. EPS Q4 Adj. EPS Q1-Q3 Dividends Treasury shares Net newbuilding capex 1) Adjusted earnings per share is a non-GAAP measure. A reconciliation to the most directly compa
Slide 6: Covid-19 Priorities
COVID-19 PRIORITIES Ensuring safety of crew and cargo Seafarers on time up from 93% to 96% • Standard Operating Procedures for joining andoff-signing 4% 7% crew with quarantine and PCR testing • Outbreak management plan and emergency drills • Conducted remote ship visits, class surveys, change of ma
Slide 7: Rapidly Shifting Business Landscape
RAPIDLY SHIFTING BUSINESS LANDSCAPE Trade war Deglobalization Covid-19 Energy transition ESG & ETFs Free money 1) Source. The Economist 2018-2020 7
Slide 8: Income Statement
INCOME STATEMENT (in thousands of $ except per share data) Three months ended Full year • Revenues of $67.4m vs. $33.1m for Q3-20 Dec 31, 2020 Sep 30, 2020 2020 • TCE of $73,712/day vs. $46,569/day for Q3-20 Vessel operating revenues 67,372 33,147 164,464 Voyage expenses -1,054 -1,121 -3,697 • Adj.
Slide 9: Balance Sheet
BALANCE SHEET (in thousands of $) Dec 31, 2020 Sep 30, 2020 Dec 31, 2019 • Solid liquidity of $129m at year-end • Increase in vessels and equipment due to Assets Current assets delivery of tenth vessel, Flex Amber, in October Cash and cash equivalents 128,878 75,765 129,005 • Vessel purchase prepaym
Slide 10: Cashflow 4Q 2020
CASHFLOW 4Q 2020 $m 160 • Net cash flow of $53.1m for the quarter, resulting in year-end 140 cash of $129m (7.1) (0.2) (9.4) 23.2 • Cash flow from operations of 120 (5.0) $51.6m, including positive 51.6 working capital adj. of $14.4m 100 • $156.4m sale and leaseback for 80 Flex Amber executed in Oct
Slide 11: Cashflow Full Year 2020
CASHFLOW FULL YEAR 2020 $m 250 • Cash flow from operations of $89.3m • More than $900m in financing 200 (36.3) secured for remaining vessels in 89.3 2020, with associated financing (17.5) costs of $17.5m as follows: 150 (21.8) • Upfront fees: $9.9m (12.5) • KEXIM premium: $3.2m (1.4) • Commitment fe
Slide 12: Fully Capitalised with Diversified Sources of Funding
FULLY CAPITALISED WITH DIVERSIFIED SOURCES OF FUNDING $m 400 350 $580m 300 $835m 250 200 150 $451m 100 50 $639m - 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Lease financing Bank financing $156.4M Sale & Leaseback $300M Sale & Charterback $157.5M Sale & Leaseback ECA financing C
Slide 13: A Lean Machine with High Cashflow Potential
A LEAN MACHINE WITH HIGH CASHFLOW POTENTIAL (2) Attractive cash breakeven level of $~45kpdr (1) Yearly FCF at different TCEs $ 250m ~ $1,500 $ 200m ~ $13,000 $ 150m ~ $17,500 $ 100m ~ $13,300 $ 50m Operating expense Interest expense Repayment of debt G&A $ 0m 45kpdr 55kpdr 65kpdr 75kpdr 85kpdr 95kpd
Slide 14: Gas and Renewables Will Fuel the Future
GAS AND RENEWABLES WILL FUEL THE FUTURE 6.6% 1.0% -2.5% -4.5% -5.3% -6.7% -6.6% -8.5% Oil Coal CO2 emissions Total energy demand Nuclear Gas LNG Renewable power generation 1) Source: IEA and Kpler 14
Slide 15: Spot Market in Review
SPOT MARKET IN REVIEW Headline rate (MEGI/XDF) Prompt available vessels vs. Headline rate 250,000 30 250,000 25 200,000 200,000 TC rate $/day #Vessels TC rate $/day 20 150,000 150,000 15 100,000 100,000 10 50,000 50,000 5 - - - Jan Feb Mar Apr May June Jul Aug Sept Oct Nov Dec Jan-20 Mar-20 May-20 J
Slide 16: Liquidity of Spot Market Significantly Improved
LIQUIDITY OF SPOT MARKET SIGNIFICANTLY IMPROVED # fixtures 1) Source: Clarksons Platou 16
Slide 17: Product Market Review
PRODUCT MARKET REVIEW 20 JKM front month contract hit all-time high of $32.5 on 18 13/14 January, 2021 which is ~18x the level of $1.825 on 29/30 April, 2020 which marked its all-time low 16 14 $/MMBtu 12 10 8 6 4 2 - Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-2
Slide 18: European Storage Levels Rapidly Depleted
EUROPEAN STORAGE LEVELS RAPIDLY DEPLETED 100% 90% 80% 70% 60% 65.3 % 50% 40% 41.7 % 30% 20% 10% 0% January February March April May June July August September October November December January February 5-year range 2020-2021 2019-2020 1) Source: GIE AGSI+ 18
Slide 19: This Winter Has Evidenced the Need for Flexible Gas
THIS WINTER HAS EVIDENCED THE NEED FOR FLEXIBLE GAS 1) Source: Bloomberg, Washington Post, WSJ, Electroverse, Financial Express 19
Slide 20: U.S. Acted as Swing Producer in 2020
U.S. ACTED AS SWING PRODUCER IN 2020 MTPA 120 100 80 60 40 20 0 Q1-2016 Q4-2016 Q3-2017 Q2-2018 Q2-2019 Q1-2020 Q4-2020 Q3-2021 Q2-2022 Q1-2023 Q4-2023 Q3-2024 Q2-2025 Sabine Pass Cove Point Elba Island Corpus Christi Cameron Freeport Golden Pass Calcasieu Pass Historical (export) Forecast (export)
Slide 21: Top Exporting and Importing Countries in 2020
TOP 10 EXPORTING AND IMPORTING COUNTRIES IN 2020 1 10 2 9 3 8 4 7 5 6 6 5 7 4 8 3 9 2 10 1 0 mt 20 mt 40 mt 60 mt 80 mt 0 mt 20 mt 40 mt 60 mt 80 mt LNG Exports 2019 Increase Decrease LNG Imports 2019 Increase Decrease 1) Source: Kpler 21 2) Exporting countries in descending order: Qatar, Australia,
Slide 22: LNG Market Rebounded with Pull from Asia
LNG MARKET REBOUNDED WITH PULL FROM ASIA 450 80% 400 75% 350 70% Mtpa 300 65% 250 60% 200 55% Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Annualized export Asian import share (RHS) 1) Source: Kpler 22
Slide 23: US Cargoes Have Travelled Far During the Winter
US CARGOES HAVE TRAVELLED FAR DURING THE WINTER Voyages 120 100 9 80 10 5 53 60 9 4 6 46 30 40 3 4 36 5 1 5 12 34 47 39 28 20 22 26 35 22 37 22 23 27 21 11 8 7 8 9 3 3 5 5 0 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Cape of Good Hope Pana
Slide 24: New Projects Being Sanctioned Again
NEW PROJECTS BEING SANCTIONED AGAIN Qatargas expansion kicking off 2021 FID’s Main contenders for FID in 2021/22 MMtpa Volume 80 Likely FIDs Country (Mmtpa) 70 Woodfibre LNG 2.1 60 20.6 Rovuma LNG 15.2 Pluto Train 2 5.0 50 Goldboro 10.0 40 19.8 16 Option Plaquemines 9.9 30 1.5 3.6 Driftwood LNG Phas
Slide 25: We Are Committed to ESG
WE ARE COMMITTED TO ESG • We publish yearly ESG report according to SASB Estimated emission reduction of natural guidelines which includes information about: gas vs. coal in power generation(1) » Environmental Footprint of Fuel Use » Ecological Impacts » Business Ethics » Health & Safety 2020 ESG re
Slide 26: Decarbonizing Shipping Is the Next Big Thing
DECARBONIZING SHIPPING IS THE NEXT BIG THING 2020: 2021: 2022: 2023: 2026: 2030: 2050: SOx cap NOx ECA Baltic EEDI Phase III EEXI EEXI review GHG 40% cut GHG 70% cut EEDI Phase II and North Sea SEEMP/CII 1) Source: DNV, ABS 26
Slide 27: LNG 3.0: The Granular View
LNG 3.0: THE GRANULAR VIEW 60 LNG 2.0: 223 ships 3rd/4th gen D/TFDE + QMAX/FLEX + Hybrid 50 LNG 3.0: 248 ships 5th gen MEGI/XDF+Arc7 40 LNG 1.0: 208 ships 1st/2nd gen steam 30 20 10 0 DFDE/TFDE MEGI/X-DF SSD Steam ST Hybrid Arc7 1) Source: Fearnleys and Company 27 2) Conventional LNG Carriers > 100k
Slide 28: Few Uncommitted Newbuildings with an Ageing Steam Fleet
FEW UNCOMITTED NEWBUILDINGS WITH AN AGEING STEAM FLEET Available vessels are limited Steam propulsion - Age composition 27 21 77 63 25 26 17 27 11 2 16 5 1 8 1 4 2 5 3 Age 2021 2022 2023 2024 2025 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 Available Committed Layup Live 1) Source: Fearnleys, Pote
Slide 29: About 27MT Increased Production Expected in 2021
ABOUT 27MT INCREASED PRODUCTION EXPECTED IN 2021 MT 40 35 30 25 20 15 10 5 0 US exports Prelude Egypt (68%) Malaysia Yamal T4 Portovaya Melkøya Potential US full capacity Production with (88%) (PFLNG2) increase US 100% 1) Source: Energy Aspects, Kpler, EIA and Company 29
Slide 30: Summary
SUMMARY Delivered TCE of $74kpdr in line with guidance of $70-75kpdr Expect Revenues to grow from $67m in Q4 to $80-90m in Q1 Dividend hiked from $0.1 to $0.3 per share – yield of 13% p.a. 12 ships on the water and last ship due for delivery Q2-21 Improved market outlook with re-stocking of gas requ
Slide 31: Q&A
Q&A 31