Slide 1: Q3-2020 presentation
Q3-2020 presentation November 17, 2020 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 • Weak spot market in Q2/Q3 due to Covid-19 affecting freight demand • Significantly improved marked in Q4 with freight rates >$100,000 Commercial • 100% technical availability of ships despite pandemic • Taken delivery of four newbuildings between July and October • TCE(1) of $47kpdr in
Slide 4: Well positioned fleet
WELL POSITIONED FLEET Fixed hire TCs Variable hire TCs Spot market Newbuildings • Flex Ranger • Flex Enterprise • Flex Endeavour • Flex Freedom (Jan-21) • Flex Aurora • Flex Artemis • Flex Rainbow • Flex Volunteer (Feb-21) • Flex Resolute • Flex Amber • Flex Constellation • Flex Vigilant (May-21) •
Slide 5: Covid-19 priorities
COVID-19 PRIORITIES Ensuring safety of crew and cargo Minimizing extended ship stays • Standard Operating Procedures for joining and off-signing crew with quarantine and PCR testing 7% • Outbreak management plan and emergency drills • Conducted remote ship visits, class surveys, change of management
Slide 6: Income statement
INCOME STATEMENT (in thousands of $ except per share data) Three months ended Sep 30, 2020 Jun 30, 2020 • Vessel operating revenues of $33.1m, up from $25.8m for Q2-20 Vessel operating revenues 33,147 25,753 Voyage expenses (1,121) (316) • Adjusted EBITDA(1) of $21.9m up from $17.4m Vessel operating
Slide 7: Balance sheet
BALANCE SHEET (in thousands of $) Sep 30, 2020 Jun 30, 2020 • Increase in vessels and equipment due to delivery of three newbuildings during the Assets quarter, increasing the operating fleet from six to Current assets Cash, restricted cash and cash equivalents 75,813 115,993 nine vessels at quarter
Slide 8: Cashflow
CASHFLOW $m 160 • Cash flow from operations of $19.7m 140 • Financing fees of $6.0m include (9.3) 19,7 up-front and commitment fees 120 (6.0) on $629m ECA facility and (27.2) $125m facility for Flex Volunteer 100 • Newbuilding capex of $414.6m 25,7 vs. drawdown of debt of (17.8) 80 $387.4m, giving n
Slide 9: Long-term financing secured for all vessels
LONG-TERM FINANCING SECURED FOR ALL VESSELS $m $m 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 - Q4 2020 Q1 2021 Q2 2021 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Newbuilding Capex $629M ECA Facility $156.4M Sale & Leaseback $300M Sale & Charterback $157.5M
Slide 10: Spot market review
SPOT MARKET REVIEW Spot LNGC headline freight rates per day (MEGI/XDF) Ballast bonus conditions sharply improved in Q3 250 000 10 200 000 7,5 RT 150 000 5 FBB 100 000 2,5 50 000 - 0 Jan Feb Mar Apr May June Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 2019 2020
Slide 11: Global gas prices rallied from summer lows
GLOBAL GAS PRICES RALLIED FROM SUMMER LOWS $/Mmbtu 12,00 10,00 8,00 6,00 4,00 2,00 - HHI JKM TTF Oil linked (high) Oil linked (low) Oil linked pricing ~70% volumes 1) Source: CME, Energy Aspect, IGU 11 2) Oil linked (high) is 331 formula with 14% Brent slope while oil price (low) is 331 formula with
Slide 12: From European sink to Asian pull
FROM EUROPEAN SINK TO ASIAN PULL European imports (Mt) Asian demand (Mt) 12,0 27,0 10,0 25,0 8,0 23,0 6,0 21,0 4,0 19,0 2,0 17,0 0,0 15,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 2019 2020 2017 2018 2019 2020 5 Change in global exports
Slide 13: We expect ~20MT lost exports due to Covid-19
WE EXPECT ~20MT LOST EXPORTS DUE TO COVID-19 2 12 35 45 45 26 9 5 0 25 US Cargo cancellations: 179 ~280 cargoes ~25 ship years 15 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -5 Month growth 2019 Month growth 2020 Pre-covid expectation Actual/Assumed acc growth 1) Source: Platts, Kpler, Energy
Slide 14: US feedgas to LNG export plants fully recovered
US FEEDGAS TO LNG EXPORT PLANTS FULLY RECOVERED Total feedgas delivered to US LNG export plants Economics and then weather caused US shut-ins Delta Beta Laura 1) Source: S&P Platts and Energy Aspects 14
Slide 15: US was the main driver of global supply growth in 2020
US WAS THE MAIN DRIVER OF GLOBAL SUPPLY GROWTH IN 2020 90 2019 2020E 78 80 76 77 80 70 60 48 50 44 42 40 34 30 31 30 26 23 21 21 20 16 15 13 13 12 10 10 10 10 0 Qatar Australia US Russia Malaysia Nigeria Indonesia T&T Algeria Oman RoW 1) Source: Kpler, Energy Aspect, EIA and IGU 15
Slide 16: US exports will also be key factor in 2021
US EXPORTS WILL ALSO BE KEY FACTOR IN 2021 US first wave LNG ramp-up • US export capacity in 2020 ~62MT, while expected actual exports to be ~48MT • Cancellation of ~13MT or ~180 US cargoes Exports 2021: ~65MT (1) • In 2021 US export capacity increases to ~71MT due to ramp up of plants in 2020 plus
Slide 17: Significant LNG available in 2021 despite limited new volumes
SIGNIFICANT LNG AVAILABLE IN 2021 DESPITE LIMITED NEW VOLUMES MT 45 40 35 30 25 20 15 10 5 0 US exports Prelude Idku (50%) Gorgon Bintulu Yamal T4 Portovaya Melkøya Potential Idku US (100%) Damietta Full (88%) increase (100%) (100%) capacity 2021 Probable volumes 2021 Possible volumes 2021 1) Source
Slide 18: Summary
SUMMARY • Flex LNG navigated safely through challenging freight markets in Q2 and Q3 due to Covid-19 pandemic • Strong rally in global gas prices during the autumn has improved freight markets • Expected TCE of $70-75k per day in Q4 • Successful delivery of four newbuildings between July and October
Slide 19: Bon voyage!
Bon voyage! 19