Flex Lng Ltd. · NYSE:FLNG
Flex Lng — Investor Presentation (October 2018)
25 slides from Flex Lng's investor presentation, October 2018
Slide 1: Company Presentation October 2018
Company Presentation October 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 update
01 1 Company update 33 | | 2018 2017 2018
Slide 4: FLEX a leading LNGC shipping company with significant operating leverage towards a LNG market in early recovery
FLEX a leading LNGC shipping company with significant operating leverage towards a LNG market in early recovery • Acquisition of five 5th generation LNGC newbuilds with delivery in 2020 and 2021 Acquisition of 5x • Purchase price per vessel of USD 180m incl. supervision implying a yard cost of USD 1
Slide 5: Unique fleet comprising 13 modern 5th generation LNGCs
Unique fleet comprising 13 modern 5th generation LNGCs ME-GI and X-DF vessels are the most fuel-efficient and technically advanced LNGCs High Pressure Low pressure ME-GI with Partial ME-GI with Full ME-GI Reliquefaction System Reliquefaction System X-DF Ranger Aurora Rainbow Amber Resolute Reliance
Slide 6: ME-GI and X-DF vessels with significant fuel cost savings
ME-GI and X-DF vessels with significant fuel cost savings LNGC existing fleet and orderbook by propulsion type # of vessels Other ME-GI / X-DF DFDE/TFDE ST 70 1 Comparison of LNG Ship Types on UTC Basis* 60 0.8 50 0.6 40 0.4 30 0.2 0 20 ST 138k TFDE 160k X-DF 174k 10 0 <1990 1991 1992 1993 1994 1995
Slide 7: FLEX to become the leading owner of 5th generation LNGCs
FLEX to become the leading owner of 5th generation LNGCs Largest LNG shipping companies(1) FLEX will be the leading operator of 5th gen LNG vessels(2) 0 5 10 15 20 25 30 35 40 45 Mitsui OSK NYK Qatar Gas Teekay Maran Gas Maritime 13 MISC BW Gas FLEX Nigeria LNG Golar LNG GasLog 5 10 10 10 Kawasaki K
Slide 8: Well positioned to benefit from a tightening LNG shipping market
Well positioned to benefit from a tightening LNG shipping market FLEX is one of the few Owners with uncommitted tonnage being delivered in 2018-2021 The LNG shipping market is expected to gradually tighten from the end of 2018, with Australia, the U.S. and Russia being the driving forces for soaking
Slide 9: Accretive fleet acquisition in early stage of a LNG market recovery
Accretive fleet acquisition in early stage of a LNG market recovery Attractive price illustrating the value of being part of the Seatankers group USDm Highly accretive to FLNG shareholders Development LNGC yard prices ex. supervision USD 4.5m 2.5 180.0 177.5 182.0 Purchase price Estimated Implied ya
Slide 10: Vessels being acquired
Next generation LNGC fleet for the next wave of LNG Vessel Name Builder Engine Cargo system BOR Built Size m3 Employment FLEX Endeavour DSME ME-GI NO-96-GW+PRS 0,075 % 2018 173 400 Employed until Q2 2019 FLEX Enterprise DSME ME-GI NO-96-GW+PRS 0,075 % 2018 173 400 Spot Market FLEX Ranger SHI ME-GI M
Slide 11: Sponsor with proven track-record in timing the market
Sponsor with proven track-record in timing the market Frontline 2012 (1) Golden Ocean (1) Northern Drilling (1) 24% 46% 57% $105m $52m $550m $85m $36m $350m 78% 196% 372% Resale price @ initial PP Resale price @ time of Resale price FEB-16 Resale price today Resale price @ inital PP Resale price tod
Slide 12: Market update
02 2 Market update 12 || 2018 12 2017 2018
Slide 13: Market for seaborne LNG transport is maturing
Market for seaborne LNG transport is maturing From point-to-point utility business to global tradeable commodity business LNG 1.0 LNG 2.0 LNG 3.0 • 1960s to mid 2000s • Mid-2000s – about now • The way of the future • Traditional liner model (P2P) • Portfolio players • Commoditization of LNG • Back2b
Slide 14: The recovery cycle have started
The recovery cycle have started Estimated LNGC Spot Earnings Natural Gas Prices by Region • 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 winter early 2018
Slide 15: And charter rates are firming up
And charter rates are firming up Source: Arctic Securities Source: Affinity Available spot vessels in different basins Source: Fearnleys • Modern slow-speed two-stroke tonnage above USD 100k mark • Vessel availability significantly reduced as charterers absorbed tonnage to secure capacity for the wi
Slide 16: LNGC market has become more liquid
LNGC market has become more liquid Number of spot fixtures (less than 3 months) Number of semi-term fixtures (3mth to 5yrs) Source: Clarksons LNG 16 || 2017 16 2018
Slide 17: 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 17 || 2017 17 2018
Slide 18: Strong growth ahead for LNG
Strong growth ahead for LNG • High future demand growth is expected as natural gas increase it’s market share in the energy matrix • All top five growth countries located in Asia • China’s increased demand was about half of the added volume in 2017 and continued strong growth as aim is to increase n
Slide 19: Few available modern vessels despite recent ordering
Few available modern vessels despite recent ordering Order book for large LNG carriers Average sailing distances (laden) Source: Fearnleys • 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 • Increased sailing
Slide 20: 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 21: Financials
03 3 Financials 21 || 2018 21 2017 2018
Slide 22: Key financials
Key financials Condensed Consolidated Income Statement Condensed Consolidated Statement of Financial Position Figures in USD '000s Q2 2018 Q2 2017 Figures in USD '000s H1 2018 H1 2017 Vessel operating revenues 7 048 8 012 New building assets and capitalized costs 173 845 591 385 Vessel operating cos
Slide 23: Flexible financing secured for all 2018 deliveries
Flexible financing secured for all 2018 deliveries • USD 472.5m of attractive credit raised during 2020 2020 2019 2019 2018 2018 2018 2018 Q1- 2018 Endeavour • No requirement for fixed employment of vessels Q1- Enterprise so we can charter out vessels opportunistically Q2- Ranger • No financial cove
Slide 24: Comfortable funding situation
Comfortable funding situation USDm 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 USD 582.4m i.e. about USD 145.6m per vessel • So far raised USD 472.5m of debt for the four first vessels which gives average of USD 118
Slide 25: || 2018
25 || 2018 25 2017 2018