Slide 1: First Quarter 2023 Results Presentation
First Quarter 2023 Results Presentation May 16, 2023 1 Flex Endeavour in dry-dock April 2023
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: First Quarter Highlights
FIRST QUARTER HIGHLIGHTS 1) Adjusted net income, adjusted EPS and TCE 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 $33
Slide 4: Reaffirm Our Revenue Guidance of ~$370M for 2023
REAFFIRM OUR REVENUE GUIDANCE OF ~$370M FOR 2023 $m 110 Revenues expected to be Higher revenues than Q2 as boosted by the ship on Revenues lower than Q1 all 13 ships expect on-hire variable hire TC 100 due to dry-docking of three with somewhat firmer spot Higher Revenues due to less market expected
Slide 5: Dry-Docking Progressing According to Plan and Budget
DRY-DOCKING PROGRESSING ACCORDING TO PLAN AND BUDGET • Flex Enterprise carried out her 5-year special survey (dry-docking) in March while the sister ship Flex Endeavour carried out her 5-year special survey in April • Average off-hire of ~18 days was below guided off-hire of 20 to 22.5 days while ca
Slide 6: High Contract Coverage – Now Marketing 2027 Positions
HIGH CONTRACT COVERAGE – NOW MARKETING 2027 POSITIONS Extended 10 years Extended 5.6 years Extended 6.4 years Extended 7 years Extended 7 years Extended 2 years 6
Slide 7: Earnings Belong to Shareholders
EARNINGS BELONG TO SHAREHOLDERS 1) Adjusted EPS is a non-GAAP measure. A reconciliation to the most directly comparable GAAP measure is included in the earnings report 7
Slide 8: Key Financial Highlights First Quarter 2023
KEY FINANCIAL HIGHLIGHTS FIRST QUARTER 2023 REVENUES TCE(1) PER DAY OPEX(1) PER DAY 1) TCE and opex per day are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report. 8
Slide 9: Income Statement
INCOME STATEMENT 1) TCE, opex, 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 9
Slide 10: First Quarter Results Affected by Non-Cash One-Offs
FIRST QUARTER RESULTS AFFECTED BY NON-CASH ONE-OFFS • Q-o-Q Operating income impacted seasonal lower Q-o-Q revenues from the variable Net Income contract and off-hire in Bridge connection with scheduled dry- docking of Flex Enterprise. • Q-o-Q changes to write-off of debt issuance cost and unrealize
Slide 11: Robust and Clean Balance Sheet
ROBUST AND CLEAN BALANCE SHEET • 13 state-of-the art LNGCs • Average fleet age of 3.4 years as per end Q1 • 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 12: All Time High Cash Position After Completion of Refinancing
ALL TIME HIGH CASH POSITION AFTER COMPLETION OF REFINANCING Amounts in $m 12
Slide 13: Interest Rate Risk Managed by Active Hedging Strategy
INTEREST RATE RISK MANAGED BY ACTIVE HEDGING STRATEGY • Entered into a ~2 year mirror swap of $181m at 4.8% (receive fixed) matching the $181m 0.9% (pay fixed) swap effectively locking in $15m of market value over the period. • Increased short term hedges with $260m during the banking turmoil as sho
Slide 14: Flexible Funding Portfolio with No Maturity Before 2028
FLEXIBLE FUNDING PORTFOLIO WITH NO MATURITY BEFORE 2028 Balance Sheet Optimization Complete Debt Distribution 1) 2035 maturity is assumed as we have an option to extend the maturity on the 10-year $330m SLB by two additional years 14
Slide 15: Continued Growth in Export, Most US Cargos Going to Europe
CONTINUED GROWTH IN EXPORT, MOST US CARGOS GOING TO EUROPE LNG export change, YTD1 2023 vs 2022 LNG import change, YTD1 2023 vs 2022 US export volumes flat in Q1 China’s LNG imports up 1.9m before increasing 17% in April representing ~120% of Asian due to Freeport restart. growth (1) Source: Kpler a
Slide 16: Gas Prices Reaching Coal Switching Levels
GAS PRICES REACHING COAL SWITCHING LEVELS 80 TTF peaks at $100/MMBTU on August 26, 2022 70 60 50 $/MMBTU 40 30 JKM/TTF now hovers 20 around $10/MMBTU 10 0 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25 Henry Hub JKM TTF Brent 13% 1) Source: Energy Aspect 16
Slide 17: The Eagle Is Back
THE EAGLE IS BACK EIA expect US LNG exports to grow ~14% in 2023 resulting in total exports of ~86mt making US the biggest exporter despite loss of Freeport volumes # of US US Export 179 cargo cancelled Freeport outage Cargoes (Mt) (due to Covid-19 resulting in 128 cargo cancelled 9 and hurricanes)
Slide 18: The Big Question: Do We See a Return of the Dragon?
THE BIG QUESTION: DO WE SEE A RETURN OF THE DRAGON? China monthly LNG imports (Mt) 9 • China’s LNG import has bounced back with 8 10% growth YTD, but where growth in March/April was on average ~17% 7 • IEA expect LNG import growth to be 10-15% for 2023 giving total LNG imports of ~70mt. This is also
Slide 19: Demand Subversion in Europe Resulting in High Storage
DEMAND SUBVERSION IN EUROPE RESULTING IN HIGH STORAGE EU natural gas storage inventory (% of full) European gas demand reduction per sector (Est. Y-o-Y change gas demand (in Mt LNG) 22/23 heating season vs 21/22 heating season) 100 90 80 70 60 % of capacity 50 40 Mild winter, 30 efficiency gains, an
Slide 20: Spot Rates Soften in Q1 but Limited Free Tonnage
SPOT RATES SOFTEN IN Q1 BUT LIMITED FREE TONNAGE 000’ $ day # of fixtures by independent owners vs sublets (short term) Headline (MEGI/XDF) spot rates log scale Spot freight rates (logarithmic axis) 400 200 100 50 25 1 6 11 16 21 26 31 36 41 46 51 Week # 2023 2022 Average 2018-21 Source: Fearnleys f
Slide 21: High Newbuilding Prices Results in Higher Term Rates
HIGH NEWBUILDING PRICES RESULTS IN HIGHER TERM RATES NB price (LHS) 5 yr TC rate (RHS) Source: Clarkson SIN, SSY 21
Slide 22: Growing Orderbook, Limited Availability of Modern Vessels
GROWING ORDERBOOK, LIMITED AVAILBALITY OF MODERN VESSELS Available NBs (% of orderbook) Propulsion split (existing fleet) Source: Fearnleys, Braemer, Affinity and Clarkson 22
Slide 23: LNG Supply Continues to Increase with More Projects Sanctioned
LNG SUPPLY CONTINUES TO INCREASE WITH MORE PROJECTS SANCTIONED Under construction / FID taken High probability Three projects with ~25 mtpa capacity close to FID in North America Sempra’s Port Arthur and Venture Global’s Plaquemines Phase 2 have Taken FID in 2023 Source: Affinity, Clarkson and IEA 2
Slide 24: First Quarter Highlights
FIRST QUARTER HIGHLIGHTS 1) Adjusted net income, adjusted EPS and TCE are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report. 24 2) Annualized dividend yield assuming a share price of $33
Slide 25: Thank you! Q&A
Ww Thank you! S Q&A