Slide 1: Interim Report Presentation
Interim Report Presentation Period ending 31 March 2019 May 31, 2019 11 | | 2017 2019
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: Highlights
Highlights • Flex LNG reports Revenues for Q1-19 of $19.1m, below the $36.1m reported in Q4-18, but in line with Revenues of $19.0m in Q3-18 • Operating income of $3.0m vs. $21.5m in Q4-18 • Net loss of $3.4m vs. Net profit of $15.2m Q4-18 • Secured 12 months TCP for Flex Enterprise • Entered into a
Slide 4: Update on US listing process
Update on US listing process • Adopted US GAAP as of January 1, 2018 • As Flex LNG raised $300m in October 2018, we opted to pursue a direct listing, which is a lighter process without issuance of any new shares • On March 4, 2019 we announced a reverse stock split (10:1) in order to comply with NYS
Slide 5: Integration to ensure high quality customer experience
Integration to ensure high quality customer experience • In collaboration with Bernhard Schulte, we will bring ship management in-house by Q4-19 • A team of experience technical personnel have recently been recruited and these will fill key roles in new management company • Bernhard Schulte, which h
Slide 6: Income Statement
Income Statement Unaudited Figures in thousand of $ Q1 2019 Q4 2018 Q3 2018 • Flex LNG reports Q1-19 revenues of $19.1m, Voyage operating revenues 19,141 36,101 19,008 below Q4-18 revenues of $36.1m, but in line with Vessel operating costs -8,315 -5,977 -5,167 Q3-18 revenues of $19.0m as guided Admi
Slide 7: Balance Sheet
Balance Sheet Unaudited Figures in thousand of $ Q1 2019 YE 2018 • Balance sheet consist of four vessels on the Assets water and nine newbuildings under construction Current assets • Vessel purchase prepayments of $421m relates Cash, restricted cash and cash equivalents 45,616 55,097 Other current a
Slide 8: Cashflow
Cashflow Unaudited Figures in thousand of $ Q1 2019 Q4 2018 Q3 2018 • Cashflow from operation negative $3.6m in line with P&L result for the period Net Income (loss) -3,438 15,238 1,179 Working capital adjustments -6,244 1,309 -1,378 • Change in working capital of $6.2m mainly due Other non-cash ite
Slide 9: Attractive take-out financing secured for 2019 deliveries
Attractive take-out financing secured for 2019 deliveries • $250m bank financing secured for Flex Constellation and Flex Courageous • Blue-chip terms and conditions • Interest rate of Libor+235bps p.a. (margin) • Loan tenor of five years and repayment profile of 20 years • Attractive average cash br
Slide 10: A deal that fits like a Glovis
A deal that fits like a Glovis • 10-year sale and time-charter transaction with Hyundai Glovis for Flex Endeavour and Flex Enterprise • $300m net consideration to Flex LNG • $420m aggregate gross sales price • $120m non-amortizing and non-interest bearing seller’s credit • Transaction will free up a
Slide 11: Staggered debt maturity profile with first balloon due in 2023
Staggered debt maturity profile with first balloon due in 2023 (1) $m Annual amortization following Glovis transaction 250 Endeavour/ 200 Enterprise Constellation/ Courageous 150 Ranger 100 Rainbow 50 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Endeavour Enterprise Ranger Rainbow Conste
Slide 12: Well capitalized for remaining newbuildings
Well capitalized for remaining newbuildings $m (1) $m (2) ~$110m Pro-Forma (PF) liquidity post Glovis deal $349m of capex pre-paid 160 1 400 140 1 200 180 Vigilant 120 349 1 000 180 Volunteer 100 186 126 80 800 126 Freedom 60 600 186 130 Resolute 186 130 40 400 Reliance 130 20 184 147 200 Amber 0 18
Slide 13: Freight market rebounded
Freight market rebounded Spot $/Day 250 000 Spot Market, daily rates ($) Type of vessel Atlantic Middel East Pacific 174 cbm 2-stroke 60 000 60 000 55 000 200 000 160 cbm TFDE 55 000 53 000 48 000 145 cbm ST 38 000 35 000 32 000 150 000 Ballast Bonus Round Trip Round Trip Round Trip 100 000 Availabl
Slide 14: Seasonal impact on growing demand
Seasonal impact on growing demand China, Japan & South Korea Imports (Quarterly YoY Change) 8,0 6,0 1,6 4,0 4,5 2,0 3,4 - -2,7 -2,0 -2,2 -4,0 -6,0 -8,0 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 2015 2016 2017 2018 2019 China YoY Change South Korea YoY Chang
Slide 15: It takes two (stroke) to Contango
It takes two (stroke) to Contango World Exported less Imported LNG Balance Mt (Adjusted for boil-off) 9,00 2,50 8,30 8,35 8,50 2,00 7,85 8,00 1,50 7,50 6,98 1,00 7,00 0,50 $/Mmbtu 6,50 6,07 6,79 6,80 6,74 - 6,00 6,47 5,34 (0,50) 5,50 5,00 4,73 (1,00) 5,00 5,41 4,50 (1,50) 4,00 4,50 (2,00) 4,19 3,50
Slide 16: China continues to grow quickly due to Blue Skies and price of LNG
China continues to grow quickly due to Blue Skies and price of LNG Prices for natural gas in China by source • Ramp-up of the four terminals (CNOOC’s ShenzheDiefu, Sinopec Tianjian, ENN Zhoushan, GuanghuiQidongPhase II) commissioned in 2018, totaling about 11MMtpa, will support LNG demand growth. •
Slide 17: Potential LNG upstream project FIDs 2019-23
Potential LNG upstream project FIDs 2019-23 17 || 2017 17 2019 Source: Bloomberg
Slide 18: FIDs in 2019 expected to approach ~100MMtpa
FIDs in 2019 expected to approach ~100MMtpa MMtpa MMtpa LNG Capacity to FID by location 35 600 1,5 82 30 2 19,8 562 3,6 25 2 550 15,2 20 2,5 2,4 0,9 2,1 1,2 16,5 16,5 15 29,3 30,3 12,9 9 1 500 10 3 32 10,8 18,5 18,5 15,6 4,5 5 8,5 8,9 9 3,8 450 2,5 3,4 0 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 19: Few available vessels before 2020
Few available vessels before 2020 Order book for large LNG carriers Committed Open Average sailing distances (laden) 14 4 800 12 4 600 10 6 8 2 4 400 Nautical Miles 7 # Vessels 8 10 4 200 6 9 3 7 4 000 4 8 7 6 2 5 5 1 2 4 4 3 800 1 2 2 2 1 1 1 1 1 0 3 600 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
Slide 20: Ordering activity in historical perspective
Ordering activity in historical perspective LNG Contracting activity 80 70 # No of Vessels 60 50 40 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 194 vessels 131 vessels 20 || 2017 20 2019 Source: Poten and Company
Slide 21: How will 60 to 100 ships from Qataris affect the market?
How will 60 to 100 ships from Qataris affect the market? Qatargas + Nakilat Fleet Breakdown 25 - 70 Trading - 25 Steam 20 - 44 SSD (Q-Max) - 1 MEGI (Q-Max) - 4 on order (2 MEGI + 2 X-DF) 15 10 20 17 4 5 Project Capacity Multiplier Vessel demand 5 3 4 Qatar expansion 33 1,39 46 3 3 3 2 2 2 2 2 1 1 Go
Slide 22: Tonnage demand by key LNG export areas
Tonnage demand by key LNG export areas ~2,2 x Vsl ~1,75 x Vsl ~1,5 x Vsl ~1,4 x Vsl ~0,8 x Vsl ~1,2 x Vsl 2018 2019 2020 % of Vessel Vessel % of Vessel % of US LNG Export by Destination Country / Region supply multiplier New Export demand supply New Export demand supply 62% Africa 10 % 1,46 0,70 1 1
Slide 23: Summary and outlook
Summary and outlook • Revenues of $19.1m in line with $19m reported for third quarter in 2018 as guided • NYSE trading expected to commence in June • Recently secured $550m of attractive financing • Expect slightly better TCE numbers in second quarter and outlook for H2-19 is very strong • Very favo
Slide 24: X ENDEAVOUR
X ENDEAVOUR iA 24 | 2019 ©) rex ine