Slide 1: Third Quarter 2022 Results Presentation
Third Quarter 2022 Results Presentation November 15, 2022 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: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS 1) 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 3 2) Annualized dividend yield assuming a share price of $34
Slide 4: High coverage with ships open for play in 2026-2027
HIGH COVERAGE WITH SHIPS OPEN FOR PLAY IN 2026-2027 4
Slide 5: Attractive quarterly dividend of $0.75 – LTM yield ~10%
ATTRACTIVE QUARTERLY DIVIDEND OF $0.75 – LTM YIELD ~10% 1) Adjusted EPS is a non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report 5
Slide 6: Why we have made $93M on interest rate swaps since 2021
WHY WE HAVE MADE $93M ON INTEREST RATE SWAPS SINCE 2021 Transcript Q4-20 Earnings presentation, Feb 17, 2021(1): …Because we started to worry about inflation a lot earlier than Federal Reserve “The medicine against Covid-19 is not only newly developed messenger RNA vaccines, but old Keynesian fiscal
Slide 7: How the business landscape has played out
HOW THE BUSINESS LANDSCAPE HAS PLAYED OUT Biden push big European gas Markets Invasion of Energy security Fed increase How to solve Europe at peril fiscal stimulus inventories at starting to Ukraine is is suddenly rate by 0.25% the energy due to Russian on top of very low levels worry that creating
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 years as per end Q3 • 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 • Ampl
Slide 10: Maintain strong cash balances despite XO-dividend payment
MAINTAIN STRONG CASH BALANCES DESPITE XO-DIVIDEND PAYMENT Amounts in $m Note: Amortizations are higher in Q1 and Q3 due to semi annual repayments under the Including $26m $629m ECA facility special dividend 10
Slide 11: Interest rate risk managed by active hedging strategy
INTEREST RATE RISK MANAGED BY ACTIVE HEDGING STRATEGY • During Q3 and Q4 we have amended and terminated some interest swaps to optimize exposure and take money off the table. Proceeds from termination of swaps will be used for interest expenses i.e. hedging through cash on account. • Thus the hedge
Slide 12: Flexecuting balance sheet optimization phase 2
FLEXECUTING BALANCE SHEET OPTIMIZATION PHASE 2 ✓ TARGET MET AHEAD OF SCHEDULE ✓ ALL PRIORITIES MET ✓ POTENTIAL FOR ADDITIONAL $100M 1) Age adjusted repayment profile 12 2) Proceeds expected net of i) outstanding debt as per Q4-22 and ii) fees
Slide 13: Fortifying the balance sheet
FORTIFYING THE BALANCE SHEET 13
Slide 14: Global LNG volumes up by 5% in first 10 months of 2022
GLOBAL LNG VOLUMES UP BY 5% IN FIRST 10 MONTHS OF 2022 LNG export change, YOY for January through October LNG import change, YOY for January through October 2022 vs 2021 2022 vs 2021 Freeport outage estimated to have removed ~7Mt for 2022 +11% +12% +13% +2% +57% -22% -1% -17% Source: Kpler 14
Slide 15: Demand subversion alleviating Europe's gas crunch
DEMAND SUBVERSION ALLEVIATING EUROPE’S GAS CRUNCH Europe gas consumption trending down 12% …with October temperatures well above average YOY per for the first ten months… Source: BP, Eurostat, AGSI, The Economist, Bruegel 15
Slide 16: Resulting in tank tops despite Russian export curtailments
RESULTING IN TANK TOPS DESPITE RUSSIAN EXPORT CURTAILMENTS EU natural gas storage inventory (% of full) EU pipeline daily flows from Russia (MCM/day) Source: GIE AGSI & Bloomberg 16
Slide 17: European supply gap in 2023 as Russian flows probably halts
EUROPEAN SUPPLY GAP IN 2023 AS RUSSIAN FLOWS PROBABLY HALTS Europe natural gas balance in 2021 (LNG tonne Illustrative change Europe gas balance 2022 equivalent) LTM inventory build ~18Mt Likely close to zero in 2023 Source: BP, Eurostat, AGSI 17
Slide 18: And gas crunch not going away anytime soon
AND GAS CRUNCH NOT GOING AWAY ANYTIME SOON Henry Hub Europe – TTF Asia - JKM Near-term contango still incentivizes Arbitrage between US and storage import nations in Europe and Asia will stay at elevated levels supporting freight market economics NWE DES discount trading at circa $10/mmBtu Source: C
Slide 19: Floating storage having record impact on spot market
FLOATING STORAGE HAVING RECORD IMPACT ON SPOT MARKET Approximately 40 ships tied up in floating storage due to congestion and contango Source: Kpler 19
Slide 20: As spot freight market has boomed, liquidity evaporated
AS SPOT FREIGHT MARKET HAS BOOMED, LIQUIDITY EVAPORATED Spot freight rates (logarithmic axis) Number of spot fixtures split by Owners 45 800,000 40 400,000 35 $/day (NOTE: log scale) 30 200,000 Independent Re-lets 25 20 100,000 15 10 50,000 5 Week # 25,000 0 Jan-22 Mar-22 Jul-22 Mar-21 Jul-21 Jan-21
Slide 21: Higher newbuild prices pushing up long term rates
HIGHER NEWBUILD PRICES PUSHING UP LONG TERM RATES Source: Clarkson SIN, Tradewinds 21
Slide 22: New wave of LNG projects will supply 2026 and onwards
NEW WAVE OF LNG PROJECTS WILL SUPPLY 2026 AND ONWARDS Historical and potential / likely FIDs New liquefaction capacity coming on stream 2022-24 FIDs backfilling LNG volumes from 2026 and 2027 Source: Wood Mackenzie 22
Slide 23: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS 1) 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 23 2) Annualized dividend yield assuming a share price of $34
Slide 24: Bon Voyage!
Bon Voyage! 24