Slide 1: Second Quarter 2018 Results Presentation
Second Quarter 2018 Results Presentation 28 August 2018 11 | | 2017 2018
Slide 2: Disclaimer
Disclaimer • THIS PRESENTATION (THE “PRESENTATION”) HAS BEEN PRODUCED BY FLEX LNG LTD. ("FLEX LNG" OR "THE COMPANY”), SOLELY FOR PRESENTATION PURPOSES AND DOES NOT PURPORTE TO GIVE A COMPLETE DESCRIPTION OF THE COMPANY, ITS BUSINESS OR ANY OTHER MATTER DESCRIBED HEREIN. • THE PRESENTATION DOES NOT C
Slide 3: Company Highlights
Company Highlights • Took delivery of sister vessels Flex Ranger/Rainbow June/July • Flex Enterprise and Flex Ranger employed for spot market • Spot market fundamentals are improving as we are closing in on winter season 2018/19 after a fairly weak spring • Weak trading of Flex Enterprise adversely
Slide 4: Income Statement
Income Statement Unaudited Figures in USD, 000 Q2 2018 Q1 2018 H1 2018 Voyage revenues 7 048 15 053 22 100 Voyage related costs -3 108 -11 909 -15 017 Administrative expenses -929 -796 -1 726 EBITDA 3 011 2 348 5 357 Depreciation -2 753 -2 311 -5 063 EBIT 258 37 294 Finance income 79 174 252 Finance
Slide 5: Balance Sheet
Balance Sheet Unaudited Figures in USD, 000 H1 2018 YE 2017 H1 2018 YE 2017 Newbuildings and capitalised costs 173 845 594 937 Share capital 3 680 3 680 Vessel purchase prepayment 145 878 72 000 Share premium 885 388 885 323 Vessels 607 289 3 Other equity -373 568 -368 902 Total non-current assets 9
Slide 6: Cashflow
Cashflow Unaudited Figures in USD, 000 Q2 2018 H1 2018 • About $ 190m paid-in connection with newbuilding deliveries H1-2018 (Loss) Before tax -2 857 -4 635 • About $8m Flex Endeavour Working capital adjustments 6 872 4 969 • About $8m Flex Enterprise Other non-cash items 2 790 5 113 • About $110m F
Slide 7: Flexible financing secured for all 2018 deliveries
Flexible financing secured for all 2018 deliveries • $472.5m of attractive credit raised during 2018 2020 2020 2019 2019 2018 2018 2018 2018 Q3- Q2- Q1- Q1- Endeavour • No requirement for fixed employment of vessels so we can charter out vessels opportunistically Enterprise • No financial covenants
Slide 8: Comfortable funding situation
Comfortable funding situation $ Millions 300 250 200 150 100 50 0 Q1-2018 Q2-2018 Q3-2018 Q2-2019 Q3-2019 Q2-2020 Q3-2020 Sterna RCF CAPEX Firm debt • Remaining capex of $ 582.4m i.e. about $145.6m per vessel • So far raised $ 472.5m of debt for the four first vessels which gives average of $ 118.2m
Slide 9: The recovery cycle have started
The recovery cycle have started Estimated LNGC Spot Earnings Natural Gas Prices by Region Source: Company • Early phase of the recovery cycle for LNGC shipping • Spot rate improved before winter season 2017/18 • Rates have rebounded after glut of available tonnage depressed rates coming out of the w
Slide 10: And charter rates are firming up
And charter rates are firming up Source: Affinity Available spot vessels in different basins Source: Fearnleys • Modern slow-speed two-stroke tonnage closing in on $ 100k mark • Vessel availability significantly reduced as charterers absorbed tonnage to secure capacity for the winter season 10 || 20
Slide 11: A wave of LNG is coming on-stream
A wave of LNG is coming on-stream • Demand expected to outstrip supply on or about 2025 • This means FID window for new projects are in 2018-2020 time frame Source: Bloomberg New Energy Finance 11 || 2017 11 2018
Slide 12: Strong growth ahead for LNG
Strong growth ahead for LNG • 2017 Demand growth of 25MMtpa (9.6%) and is expected to grow about 20MMtpa (7.2%) in 2018 • China’s increased demand was about half of the added volume in 2017 • High future demand growth is expected as natural gas increase it’s market share in the energy matrix Source:
Slide 13: Right Ships at the Right Time
Right Ships at the Right Time Order book for large LNG carriers Average sailing distances • About 90 orders for delivery in the period until 2021 • A deficit of about 40 vessels given start-up of about 96.5MMtpa in period 2018-2022 • Sailing distances up by about 10% last two years contributing to m
Slide 14: US-China trade conflict and impact for LNG trade
US-China trade conflict and impact for LNG trade China’s quarterly LNG import by country # of US cargos to China and US LNG market share in China China’s LNG demand and existing LNG contracts “China is building a new coal-fired power plant every week and is set to surpass America as the biggest sour
Slide 15: Summary and outlook
Summary and outlook • Unsatisfactory trading results in H1-2018 • New management focused on improving trading results and is confident performance will improve • Charter rates strengthening as we are approaching winter season • All four LNGCs on the water fully financed and Company has a very health
Slide 16: Q&A
Q&A 16 || 2017 16 2018 2018