Slide 1: Second Quarter 2022 Results Presentation
Second Quarter 2022 Results Presentation August 24, 2022 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: Q2-22 Highlights
Q2-22 HIGHLIGHTS 1) Adjusted net income and adjusted EPS are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report 3 2) Annualized dividend yield assuming a share price of $34 3) As per 30 June 2022
Slide 4: We recently added ~$750M of additional firm backlog
WE RECENTLY ADDED ~$750M OF ADDITIONAL FIRM BACKLOG Flex Enterprise and Flex Amber fixtures • On June 23, 2022, we announced that Flex LNG and the existing charterer, a supermajor, agreed to replace the variable Time Charters for each ship with new seven-year fixed hire Time Charters commencing July
Slide 5: We have fixed out our ships as the market recovered
WE HAVE FIXED OUT OUR SHIPS AS THE MARKET RECOVERED Fixed in Q2-22: #13 ships Flex Amber Flex Enterprise Flex Rainbow Flex Resolute 2 ships on 3+2+2yrs fixed TC. Flex Courageous Delivery Q1-22 Flex Freedom 5yrs fixed TC. Delivery Q1-22 Flex Constellation 3yrs fixed TC. Delivery Q2-21 Flex Volunteer
Slide 6: 100% contract coverage until at least mid-2024
100% CONTRACT COVERAGE UNTIL AT LEAST MID-2024 1) Charter expiry if no option(s) are declared 6
Slide 7: Balance sheet phase 1 completed with special dividend
BALANCE SHEET PHASE 1 COMPLETED WITH SPECIAL DIVIDEND 1) Adjusted EPS is a non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report 7
Slide 8: Key financial highlights
KEY FINANCIAL HIGHLIGHTS 1) TCE, adjusted EBITDA, adjusted net income and adjusted EPS are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report 8
Slide 9: Robust and clean balance sheet
ROBUST AND CLEAN BALANCE SHEET • 13 state-of-the art LNGCs • Average fleet age of 2.6 years as per end Q2 • The fleet has been acquired at historical attractive prices compared to the newbuilding prices today, while book equity values reflect historical cost adjusted with regular depreciations • Amp
Slide 10: All time high cash position after refinancings in Q2
ALL TIME HIGH CASH POSITION AFTER REFINANCINGS IN Q2 Amounts in $m Note: Amortizations are higher in Q1 and Q3 due to semi annual repayments under the $629m ECA facility 10
Slide 11: Balance sheet optimization phase 2 initiated
BALANCE SHEET OPTIMIZATION PHASE 2 INITIATED 11
Slide 12: Interest rate risk managed by active hedging
INTEREST RATE RISK MANAGED BY ACTIVE HEDGING • During Q2 and Q3 we have amended and extended an additional $250m of shorter LIBOR based swaps to 10 years SOFR based swaps at attractive levels. • On average the interest rate for 63% of the debt (excl RCF) is fixed by LIBOR and SOFR interest rate swap
Slide 13: Global LNG volumes up by 5% in first seven months of 2022
GLOBAL LNG VOLUMES UP BY 5% IN FIRST SEVEN MONTHS OF 2022 LNG export change, YOY for January through July LNG import change, YOY for January through July 2022 vs ‘21 2022 vs ‘21 Source: Kpler 13
Slide 14: Europe built inventories despite plummeting Russian flows
EUROPE BUILT INVENTORIES DESPITE PLUMETTING RUSSIAN FLOWS EU natural gas storage inventory (% of full) EU pipeline daily flows from Russia (MCM/day) Source: GIE AGSI & Bloomberg 14
Slide 15: Worldwide gas crunch
WORLDWIDE GAS CRUNCH Spread between pipeline gas price (TTF) and LNG prices in Europe (DES NWE) is very high due import bottlenecks Cargo value: Arbitrage: $201m TTF: $84 $337M JKM: $61 Henry Hub: $10 Cargo value: Cargo value: DES NWE: $60 Cargo value: $244m $40m $241M Arbitrage: $204m Full price US
Slide 16: And gas crunch not going away anytime soon
AND GAS CRUNCH NOT GOING AWAY ANYTIME SOON Source: Bloomberg, CME, Platts 16 Dotted lines indicate forward curves, data per 22 August 2022 DES NWE is assumed at $10/mmBtu discount to TTF until May 2023
Slide 17: High LNG prices = higher earnings potential for modern LNGCs
HIGH LNG PRICES = HIGHER EARNINGS POTENTIAL FOR MODERN LNGCs Source: Flex LNG 17
Slide 18: Spot market picking up ahead of winter
SPOT MARKET PICKING UP AHEAD OF WINTER Freeport closure Source: Affinity and Spark. MEGI/XDF premium at fixed $30,000 per day to TFDE 18
Slide 19: While the term market remains very firm
WHILE THE TERM MARKET REMAINS VERY FIRM Source: Fearnleys (1yr), Affinity (3yrs) 19
Slide 20: Higher newbuild prices pushing up long term rates
HIGHER NEWBUILD PRICES PUSHING UP LONG TERM RATES Source: Clarkson SIN, SSY 20
Slide 21: Fleet renewal accelerates from 2024 based on new volumes
FLEET RENEWAL ACCELERATES FROM 2024 BASED ON NEW VOLUMES Source: Poten, Clarkson, Affinity & Fearnleys 21
Slide 22: But only 30 vessels available of the current orderbook
BUT ONLY 30 VESSELS AVAILABLE OF THE CURRENT ORDERBOOK Source: Poten, Clarkson, Affinity & Fearnleys 22
Slide 23: 100 steam vessels with contract expiry by 2027
100 STEAM VESSELS WITH CONTRACT EXPIRY BY 2027 Source: Affinity 23
Slide 24: Gas crunch creating new wave of LNG contracting
GAS CRUNCH CREATING NEW WAVE OF LNG CONTRACTING Recent LNG SPAs Recent LNG offtake agreements Source: Affinity, Clarkson and IEA 24
Slide 25: Q2-22 Highlights
Q2-22 HIGHLIGHTS 1) Adjusted net income and adjusted EPS are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report 25 2) Annualized dividend yield assuming a share price of $34 3) As per 30 June 2022
Slide 26: Bon Voyage!
Bon Voyage! 26