Slide 1: Second Quarter 2023 Result Presentation
Second Quarter 2023 Result Presentation August 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: Second Quarter Highlights
SECOND 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 $32
Slide 4: Drydockings for the Year Completed
DRYDOCKINGS FOR THE YEAR COMPLETED Flex Endeavour: March 2023 Flex Enterprise: April 2023 Flex Ranger: June 2023 Flex Rainbow: June 2023 • The four scheduled drydockings this year were carried out according to plan and budget • Total off-hire of 77 days compared to 80-90 days guided in February 2023
Slide 5: 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 6: High Contract Coverage – Marketing 2027 Positions
HIGH CONTRACT COVERAGE – MARKETING 2027 POSITIONS 54 years of minimum contract backlog which may increase to 80 years with charterer’s extension options Extended to 2031 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
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 3.6 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: Solid Cash Position of $450M
SOLID CASH POSITION OF $450M Amounts in $m 10
Slide 11: Interest Rate Risk Managed by Active Hedging Strategy
INTEREST RATE RISK MANAGED BY ACTIVE HEDGING STRATEGY • No changes to the swap portfolio during the quarter • High hedge coverage over the next 12-18 months provides cost visibility • Swap portfolio valued at $58.7m on the balance sheet • The LIBOR based swaps will transition to SOFR during Q3 11
Slide 12: Flexible Funding Portfolio with No Maturities Prior 2028
FLEXIBLE FUNDING PORTFOLIO WITH NO MATURITIES PRIOR 2028 Debt Distribution Debt Maturity Profile $m Diversified and supporting group of financiers 1) The maturity in 2035 is subject to Flex LNG exercising the 2 years extension option under the 10-year $330m SLB financing Flex Artemis and Flex Amber
Slide 13: Steady Volume Growth with Continued Flow to Europe
STEADY VOLUME GROWTH WITH CONTINUED FLOW TO EUROPE LNG export change, YTD 2023 vs 2022 LNG import change, YTD 2023 vs 2022 US export volumes flat in Q1 Nuclear restarts in Japan have before increasing from April due supressed demand while Chinese to restart of Freeport demand rebounded from March gr
Slide 14: Supply Events Continue to Drive Gas Price Volatility
SUPPLY EVENTS CONTINUE TO DRIVE GAS PRICE VOLATILITY 80 70 60 50 $/MMBTU 40 30 20 10 0 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Henry Hub JKM TTF Brent 13% 1) Source: Energy Aspect, CNN, Reuters, S&P Global, WSJ, Bloomberg, CME 14
Slide 15: Possible Strike in Australia Put 10% of Global LNG at Risk
POSSIBLE STRIKE IN AUSTRALIA PUT 10% OF GLOBAL LNG AT RISK LNG export destinations Mt (Gorgon/NWS/Wheatstone) • Workers at three large Australian export terminals representing 50 ~41Mtpa of Australian export capacity (close to 50% of capacity) are threatening industrial action hereunder strike with
Slide 16: EU: No Russian Piped Gas, But Please Send More Russian LNG
EU: NO RUSSIAN PIPED GAS, BUT PLEASE SEND MORE RUSSIAN LNG …EU has replaced Russian piped gas with LNG …But Russian LNG has gained market share in Europe 50% The share of LNG and Russian piped gas in EU natural gas demand Mt Russian LNG to EU: 2021: 37%, 2022: 47%, 2023: 51% 3.5 70% 45% 3.0 60% 40%
Slide 17: Europe Expected to Reach Inventory Target by End August
EUROPE EXPECTED TO REACH INVENTORY TARGET BY END AUGUST EU natural gas storage inventory (% of full) IEAs EU gas storage trajectory without Russian piped gas (Gas storage in bcm under different scenarios during the 2023/24 winter season) 100 Storage soon at 90% level well ahead of EU target Nov 1, 2
Slide 18: Spot Rates in Six Digits and Set to Follow the Seasonal Pattern
SPOT RATES IN SIX DIGITS AND SET TO FOLLOW THE SEASONAL PATTERN $’000/day Headline (MEGI/XDF) spot rates # of fixtures by independent owners vs sublets (short term) 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 Sourc
Slide 19: Newbuild Prices Up ~30% Last Two Years Pushing Up Term Rates
NEWBUILD PRICES UP ~30% LAST TWO YEARS PUSHING UP TERM RATES Term rates have been affected by lower spot rates but are still at historical high levels Source: Clarkson SIN, SSY, 19
Slide 20: Contracting Tailing Off, Few Available Modern Vessels
CONTRACTING TAILING OFF, FEW AVAILBALE MODERN VESSELS Available NBs (% of orderbook) Propulsion split (existing fleet) Source: Fearnleys, Braemer, Affinity and Clarkson 20
Slide 21: LNG Supply Continues to Increase
LNG SUPPLY CONTINUES TO INCREASE Under construction / FID taken High probability of FID Next Decade’s Rio Several projects moving towards Grande made their FID whereof five in the US with an long-anticipated FID aggregate capacity of ~55 mtpa this summer following Sempra’s Port Arthur and Venture Gl
Slide 22: Second Quarter Highlights
SECOND 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. 22 2) Annualized dividend yield assuming a share price of $32
Slide 23: Thank you! Q&A
Ww Thank you! S Q&A