Slide 1: Fourth Quarter 2021 & Full Year 2021 Results Presentation
Fourth Quarter 2021 & Full Year 2021 Results Presentation February 16, 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 Revenues of $115m slightly ahead of guidance of ~$110m Best ever TCE/day of $95,900 bringing 2021 average to $74,500 Net income and adj. Net income(1) of $69m and $63m EPS and adj. EPS (1) of $1.31 and $1.18 Dividend of $0.75 per share - yield of ~15% (2) Rock solid cash balance of $201m
Slide 4: Attractive Backlog With 93% of 2022 Already Covered
ATTRACTIVE BACKLOG WITH 93% OF 2022 ALREADY COVERED Vessels Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 Flex Freedom 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 Flex Constellation 3 3 3 3 3 3 3 3 3 3 2 2 2 2 2 2 Flex Endeavour 3 3 3 3 3 3 3 3 3 3 3 3 3 2 2 2 F
Slide 5: High Earnings Visibility While Maintaining Market Exposure
HIGH EARNINGS VISIBILITY WHILE MAINTAINING MARKET EXPOSURE 100% Spot/Open Options Variable hire 75% Fixed hire 50% 25% 0% Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 5
Slide 6: 2022 Revenues Versus 2021
WE ESTIMATE 2022 REVENUES +/- ~5% vs. 2021 WITH LESS VOLATILITY Revenues $m 120 100 Higher fixed charter Higher fixed charter coverage coverage 80 Lower spot exposure Slightly weaker due 60 to soft spot market 40 20 0 Q1 Q2 Q3 Q4 2021 Quarterly Revenues 1) Source: Company estimates, assumes regular
Slide 7: We Aim to Pay Out Free Cashflow Over the Cycle
WE AIM TO PAY OUT FREE CASHFLOW OVER THE CYCLE Q1-21 Q2-21 Q3-21 Q4-21 SUM Adjusted EPS $0.64 $0.29 $0.60 $1.18 $2.71 DPS $0.40 $0.40 $0.75 $0.75 $2.30 Buy-backs $0.10 $0.01 $0.04 $0.00 $0.15 Distribution 78% 141% 132% 64% 90% Decision Factors Earnings and cash flow During 2021 we also took delivery
Slide 8: Key Financial Figures for 2021
KEY FINANCIAL FIGURES FOR 2021 OPERATING DAYS TCE PER DAY CASH BREAK EVEN PER DAY FY 2021 +70% $15k 4 563 $ 96k $1700 $12 300 $ 75k $ 75k $13 400 $ 68k $43,700 $ 60k $ 58k vs 2 679 guided $45,300 $16 400 Amortization Interest G&A Opex 2020 Q1 Q2 Q3 Q4 2021 2020 Q1 Q2 Q3 Q4 2021 2021: Opex: Approx. $
Slide 9: Bigger Fleet and Higher Earnings Means Better Returns
BIGGER FLEET AND HIGHER EARNINGS MEANS BETTER RETURNS REVENUES ($m) ADJUSTED NET INCOME ($m)1 ADJUSTED EARNINGS PER SHARE ($)1 +109% +326% +332% 115 343 63 145 1.18 2.71 164 34 0.63 2020 Q1 Q2 Q3 Q4 2021 2020 Q1 Q2 Q3 Q4 2021 2020 Q1 Q2 Q3 Q4 2021 1) Adjusted net income and adjusted EPS are non-GAAP
Slide 10: Cash Increased by $63M in Q4 Despite Dividends
DESPITE $40M OF DIVIDENDS, WE INCREASED CASH BY $63M IN Q4 Amounts in US$m +63 37.6 (40.2) -1.2 -13.9 80.5 201.0 138.2 Cash 30 Cash flow from Working capital Debt amortizations Net proceeds from Dividends paid Cash 31 December September 2021 operations adjustments financing 2021 10
Slide 11: Robust and Clean Balance Sheet
ROBUST AND CLEAN BALANCE SHEET $2.6bn $2.6bn $201m • 13 state-of-the art LNGCs $889m • Average fleet age of 2.2 years (35%) • The fleet has been acquired at historical attractive prices compared to the newbuilding prices today, but book equity values reflect historical cost adjusted with regular dep
Slide 12: Balance Sheet Optimization
ALREADY OVER-DELIVERED ON $100M BALANCE SHEET OPTIMIZATION • We have received credit approved term sheets for KEY TERMS LEASE BANK attractive new financings of an aggregate $695m for five Amount: 2x $375m split in existing vessels with an accordion option(2) to add a sixth $160m i) $250m RCF and ves
Slide 13: Pushed Debt Maturities and Marginal Drydock Commitments
PUSHED DEBT MATURITIES AND MARGINAL DRYDOCK COMMITMENTS No debt maturity prior to 2025 after the refinancing of Insignificant capex commitments for the 5 years Flex Ranger, Flex Courageous and Flex Constellation drydock cycle - $3m per vessel US$m US$m Flex Ranger 2028 250 Flex Courageous Flex Const
Slide 14: LNG Volumes Up by About 5% in 2021
LNG VOLUMES UP BY ABOUT 5% IN 2021 LNG Exports up 19Mt in 2021 driven by US LNG Imports driven by China, South Korea and Brazil Australia China +10Mt Qatar Japan USA +23Mt S. Korea +6Mt Russia India Malaysia RoA Nigeria Europe Algeria MEG Egypt: +5mt RoW Trinidad & Tobago: -4Mt LatAm Brazil: +5Mt No
Slide 15: US Exports +49% in 2021 and Set for Further Growth
US EXPORTS +49% IN 2021 AND SET FOR FURTHER GROWTH IN 2022 January 2022: 7MT/84MTPA 2021: 70MT New US terminals 2022: 2020: 47MT Calcasieu Pass: 10MT February 2022 Sabine Pass T6: 5MT February 2022 1) Source: Kpler 15
Slide 16: European LNG Imports Rebounded in Q4
EUROPEAN LNG IMPORTS REBOUNDED IN Q4 European LNG imports growing ~400% 1) Source: Kpler 16
Slide 17: With US Exports Shifting Towards Europe
WITH US EXPORTS SHIFTING TOWARDS EUROPE Europe’s market share of US LNG going from 15% to 75% 1) Source: Kpler 17
Slide 18: Less Pull to Asia in Q4-21 and Early 2022
WHICH RESULTED IN LESS PULL TO ASIA IN Q4-21 AND EARLY 2022 100% 3% 2% 2% 4% 4% 4% 5% 4% 5% 7% 8% 7% 4% 90% 80% 70% 65% 60% 69% 67% 72% 73% 67% 68% 70% 82% 73% Europe’s 75% 74% 74% 50% global market 40% share of LNG 30% going from 15% to 33% 20% 33% 26% 27% 23% 24% 24% 24% 28% 10% 16% 19% 15% 16% 15
Slide 19: Why the Spot Freight Market Soured in December
WHY THE SPOT FREIGHT MARKET SOURED IN DECEMBER The LNG Product Market on November 30, 2021: The LNG Product Market on December 21, 2021: TTF: $31 TTF: $60 Cargo value: Cargo value: $124M JKM: $37 Henry Hub: $5 $240M JKM: $45 Henry Hub: $5 Cargo value: Cargo value: Cargo value: Cargo value: $148m $20
Slide 20: The Product Market as of Close February 15, 2022
THE PRODUCT MARKET AS OF CLOSE FEBRUARY 15, 2022 European gas market calmed down Arbitrage: $70m TTF: $22 JKM: $25 Henry Hub: $4.5 Cargo value: Cargo value: Cargo value: $88M $100m $18m India: $24.5 Arbitrage: $82m Singapore: $24.5 Full price US cargo typically Henry Hub +15% = $5.2 + tolling fee of
Slide 21: Healthy but Volatile Spot Market in 2021, Slow Start 2022
HEALTHY BUT VOLATILE SPOT MARKET IN 2021, SLOW START 2022 Headline rate MEGI/XDF All time high $300 000 November $250 000 January rally $200 000 $150 000 Asia summer pull $100 000 Europe gas crisis $50 000 Big Freeze $- 1 5 9 13 17 21 25 29 33 37 41 45 49 Week # 2018 2019 2020 2021 2022 1) Source: A
Slide 22: Why Are Baltic Index Zero When Headline Rates Are $40,000?
WHY ARE BALTIC INDEX ZERO WHEN HEADLINE RATES ARE $40,000? Freight rate consist of three elements Ten shades of ballast bonus 1) Headline rate: The rate in $/day that the charterer pays for the laden leg 2) Ballast bonus: The amount paid by charterer to repositioning the vessel back to load port, of
Slide 23: How Ballast Bonus Conditions Affect Spot TCE Earnings
HOW BALLAST BONUS CONDITIONS AFFECT SPOT TCE EARNINGS Soft market: “Normal” market: Hot market: Ballast leg Positioning Discharge port Load port Laden leg $40,000 on one-way economics $75,000 on round trip basis $150,000 on 3-way economics • Laden leg $40,000 per day delivery load • Laden leg $75,00
Slide 24: Despite Softer Spot Market, Term Rates Are Holding Firm
DESPITE SOFTER SPOT MARKET, TERM RATES ARE HOLDING FIRM TC rate assessment per day basis prompt delivery $140 000 $140 000 $120 000 $120 000 $100 000 $100 000 $80 000 $80 000 $60 000 $60 000 $40 000 $40 000 $20 000 $20 000 $- $- 1 yr TC MEGI/XDF (LHS) 3 yr TC MEGI/XDF (RHS) 1) Source: Fearnleys for
Slide 25: Higher Newbuilding Prices Means Higher Required Term Rates
HIGHER NEWBUILDING PRICES MEANS HIGHER REQUIRED TERM RATES $m 240 230 Recent announced newbuilding orders: 220 $220-225m 210 200 190 180 Flex LNG acquires 11 LNGC newbuilds 170 LNG NB prices LNG MEGI/XDF NB Prices 1) Source: Clarksons SIN and Tradewinds 25
Slide 26: Mass EEXI-tinction: Coming Soon to a Ship Near You
MASS EEXI-TINCTION: COMING SOON TO A SHIP NEAR YOU LNG 1.0: 219 ships LNG 2.0: 200 ships LNG 3.0: 328 ships 1st/2nd gen steam + steam hybrid 3rd/4th gen D/TFDE + QMAX/FLEX 5th gen MEGI/XDF/MEGA + Arc7 70 60 50 40 30 20 10 0 2S ARC7 D/TFDE SSD Steam 1) Source: Fearnleys, Poten, Clarksons SIN and Comp
Slide 27: The LNG Market Will Continue to Be Tight
THE LNG MARKET WILL CONTINUE TO BE TIGHT $/MMbtu 40 TTF front-month contract hitting high of ~$60/Mmbtu on December 21, 2021 35 30 25 20 15 10 5 0 HHI JKM TTF Brent 13% 1) Source: Platts, EIA and ICE 27 2) Historical TTF defined as Platts DES NEW
Slide 28: We Expect LNG Exports to Grow ~25MT in 2022
WE EXPECT LNG EXPORTS TO GROW ~25MT IN 2022 OR ABOUT 6% MT 410 1.5 1 1.5 2 400 2 2.5 2.5 390 12 380 407 370 382 360 350 2021 Exports US Norway Trinidad & Russia Algeria Nigeria Australia Qatar 2022 LNG Tobago Exports 1) Source: EIA, Energy Aspect, Kpler and Company 28
Slide 29: More LNG Export Growth in the Pipeline
AND MORE LNG EXPORT GROWTH IN THE “PIPELINE” LNG export plants under construction: Arctic LNG Portovaya 19.8 Mtpa 1.5 Mtpa LNG Canada Jul 2023 Feb 2022 14 Mtpa Baltic LNG Jul 2025 Plaquemines LNG 10-20 Mtpa 13 Mtpa Oct 2024 Jan 2025 Qatar NFE expansion Costa Azul 33-49 Mtpa 3.3 Mtpa Tortue FLNG Oct
Slide 30: Summary
SUMMARY Stellar Revenues and TCE/day of $115m and $95,900 All-time high EPS and Adj. EPS of $1.31 and $1.18 Attractive backlog with 93% of 2022 already covered Dividend of $0.75 per share providing attractive 15% yield Fundamentals remains strong despite weak Q1 spot market Solid cash position of $2
Slide 31: Q&A
Q&A 31
Slide 32: Appendix - Fleet List
APPENDIX - FLEET LIST VESSEL NAME BUILT YARD CAPACITY PROP. BOR 1 FLEX ENDEAVOUR 2018 DSME 173,400m3 MEGI + PRS 0,075% 2 FLEX ENTERPRISE 2018 DSME 173,400m3 MEGI + PRS 0,075% 3 FLEX RANGER 2018 SHI 174,000m3 MEGI 0,085% 4 FLEX RAINBOW 2018 SHI 174,000m3 MEGI 0,085% 5 FLEX CONSTELLATION 2019 DSME 173
Slide 33: Contact Details
Contact Details Flex LNG Management AS Bryggegata 3 0250 Oslo Norway +47 23 11 40 00 www.flexlng.com Investor Relations www.flexlng.com/investor-home Stock Exchange Ticker: FLNG 33