Slide 1: Second Quarter 2024 Result Presentation
Second Quarter 2024 Result Presentation 1 August 14, 2024
Slide 2: Disclaimer
DISCLAIMER MATTERS DISCUSSED IN THIS PRESS RELEASE 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 THEIR BUSINESS.
Slide 3: Q2 Highlights
Q2 HIGHLIGHTS Note: 1) Adjusted net income, adjusted EPS and TCE are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report, 2) LTM dividend yield assuming a share price of $26.1 3
Slide 4: Q2 Results in Line with Guiding
Q2 RESULTS IN LINE WITH GUIDING Q2-2024 Key metrics Guiding Actuals Guiding for Q3-2024 TCE rate ~$70-75’/day ~$72,400/day ~$75-77’/day Revenues Close to $85m $84.7m Approx. $90m Adj. EBITDA Close to $65m $63.2m Approx. $70m • 5-year special survey of both Flex Constellation and Flex Courageous Dryd
Slide 5: High Contract Coverage and Earnings Visibility
HIGH CONTRACT COVERAGE AND EARNINGS VISIBILITY… 47 years of min charter backlog which may grow to 66 years with charterer’s extension options 5 7 E y V E d I R NA E A NA E NA R Extended to 2027 C A R NA C New contract A O O 5
Slide 6: Support Stable Attractive Dividend
…SUPPORT STABLE ATTRACTIVE DIVIDEND… Quarterly dividend, $m $ … S O 6
Slide 7: And Earnings Belong to Shareholders
…AND EARNINGS BELONG TO SHAREHOLDERS Note: 1) Adjusted EPS is non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report 7
Slide 8: Key Financial Figures
KEY FINANCIAL FIGURES Revenues, $m TCE per day, $’ Vessel OPEX, $’ Note: 1) TCE and Vessel OPEX are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report 8
Slide 9: Adjusted Net Income of $30.4M in the Quarter
ADJUSTED NET INCOME OF $30.4M IN THE QUARTER Adjusted net income bridge, $m RELEVANT PERFORMANCE METRIC EPS: $0.41/share EPS: $0.56/share ( ) Cash proceeds of $5.4m from the termination of the back-end of an interest rate swap in the quarter N ( ) () ( )C A NOTE: 1) Adjusted net income is a non-GAAP
Slide 10: Healthy Cash Position Which Is Set to Grow
HEALTHY CASH POSITION WHICH IS SET TO GROW Cash flow from Q1-2024 to Q2-2024, $m $ 370 10
Slide 11: Derivative Exposure Steered to Capture Falling Interest Rates
DERIVATIVE EXPOSURE STEERED TO CAPTURE FALLING INTEREST RATES Hedge ratio1 Q2-24, $m S • In April, the maturity of a $50m interest swap was reduced from 2032 to July 2025 with $5.4m compensation paid in H cash. We also cut duration for a $50m swap in March • In August, two $100m mirror swaps were ca
Slide 12: Debt Fine-Tuning Releasing Close to $100 Million
DEBT FINE-TUNING RELEASING CLOSE TO $100 MILLION • Secured attractive Japanese Operating Lease («JOLCO») for Flex Endeavour on the back of the contract extension with Cheniere • The lenders in the $375m facility have agreed to amend & extend the financing for the remaining two ships in the $375m fac
Slide 13: China and Emerging Asia Continue to Drive LNG Demand
CHINA AND E ERGING ASIA CONTINUE TO DRIVE LNG DE AND… Top LNG exporters, H1-2024, MT -1% +1% +4% Top LNG importers, H1-2024, MT -0.4 MT +1.8 MT +2.4 MT % = Percentage change H1-2024 from H1-2023 + MT = Absolute change H1-2024 from H1-2023 5 68 +3% +3% +0.4 MT -20% +0.5 MT -13.3 MT -1% -0.4 MT 7 56 +
Slide 14: While European LNG Demand Contracted in H1-2024
…WHILE EUROPEAN LNG DE AND CONTRACTED IN H -2024 US LNG exports by destination continent, % Y/y change in European semi-annual natural gas demand1, MT 100% P R 80% 60% H H H H H H H EU natural gas storage inventory, % of full 40% 100 80 60 20% 40 20 0% 0 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan
Slide 15: Lower Gas Prices Boost Demand from Asia
LOWER GAS PRICES BOOST DEMAND FROM ASIA H1-24 vs. H1-23 LNG imports to key Asian countries, MT Asian LNG imports, H1-2024, MT 30 C 27 S 24 21 T T 18 P 15 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec S H H 2018 - YTD-'24 range 2023 2024 Source: Kpler, Clarksons 15 Note:
Slide 16: Rising Concerns About the Supply of Russian Pipeline Gas
RISING CONCERNS ABOUT THE SUPPLY OF RUSSIAN PIPELINE GAS E ’ d a R a a Gas futures prices, $/MMBtu • Gas prices rallied in early August as Ukrainian troops pushed into the Russian border near a vital gas interconnection point into Europe 20 Current futures curve • Russian gas flows enter Europe via
Slide 17: Spot Rates Follow the Seasonal Trend
SPOT RATES FOLLOW THE SEASONAL TREND Spot rates 2- k , ’ /day 250 200 150 100 50 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Week 2023 2024 Average 2019-23 Sparks Source: Fearnley, Spark Commodities 17
Slide 18: Newbuilding Prices Stabilized, Long-Term Rates at ~$95,000/Day
NEWBUILDING PRICES STABILIZED, LONG-TERM RATES AT ~$95,000/DAY Source: Fearnleys, Clarksons, SSY 18
Slide 19: We Are Insulated from High Vessel Growth Near Term
WE ARE INSULATED FROM HIGH VESSEL GROWTH NEAR TERM LNGC newbuild delivery, # of vessels Uncommitted vessels represent less than 7% of the total orderbook N Includes QatarEnergy’s 18 QC-Max-size LNG vessels with delivery between 2028 and 2031 Source: Fearnley 19
Slide 20: Softer Spot Markets Push Steam Vessels Toward Scrapping
SOFTER SPOT MARKETS PUSH STEAM VESSELS TOWARD SCRAPPING Vessel age of steam LNGCs at contract redelivery date 145,000 cbm spot rate, $’ 40 A Y Imminent scrapping candidates 35 $ A H 30 25 Vessel age 20 15 10 • The spot market for steam vessels is weakening, 5 which represents poorer economics for th
Slide 21: High Demand for Long-Term Contract Volumes
HIGH DEMAND FOR LONG-TERM CONTRACT VOLUMES LNG SPAs concluded in H1-2024, MTPA LNG SPAs FY2022 – H1-2024, MTPA MTPA Avg. Avg. Avg. MTPA ~17.5 yrs. ~14 yrs. ~14 yrs. SA C M P O Y Y H • ~48 MTPA of LNG SP signed in H1-2024, of which 13.4 MTPA related to E ’ North Field Expansion project • Offtake agre
Slide 22: Strong Global FID Activity in H1-2024
STRONG GLOBAL FID ACTIVITY IN H1-2024 Global LNG FID activity H1-2024, MTPA Projects close to FID, MTPA CP N NG NG C P R NG AE P A P C C NG C R G P C C P M NG O C T A NG S H TM NG N Source: Company reports, Affinity, Rystad Energy, IEA 22
Slide 23: Third Wave of LNG Will Add >200 MTPA in New Capacity
THIRD WAVE OF LNG WILL ADD >200 MTPA IN NEW CAPACITY Liquefaction supply, MTPA 800 1st wave: 2nd LNG wave: 3rd LNG wave: 2006-’10 2015-’20 2026-’30 700 Qatar adds Australia adds ~40 ~50 MT MT, and US add 600 >60 MT 500 USA 400 Australia 300 Qatar 200 100 Other 0 2005 2010 2015 2020 2025 2030 Source:
Slide 24: Q2 Highlights
Q2 HIGHLIGHTS Note: 1) Adjusted net income, adjusted EPS and TCE are non-GAAP measures. A reconciliation to the most directly comparable GAAP measure is included in the earnings report, 2) LTM dividend yield assuming a share price of $26.1 24
Slide 25: Thank you!
Ww Thank you! a