Financial Data and Key Metrics Changes - Total operating revenue for Q2 2025 remained steady at $85.5 million, consistent with Q1 2025 [4][22] - Adjusted EBITDA increased to $56.5 million from $53.4 million in Q1 2025, reflecting a modest year-on-year increase [4][22] - Average Time Charter Equivalent (TCE) was slightly down at $69,900 per day compared to $70,600 in Q1 2025 [4][22] Business Line Data and Key Metrics Changes - The delivery of the Cool Tiger and Gale Saga contributed positively to EBITDA despite a challenging market [5] - The company has successfully chartered vessels as they come open, supported by a backlog in a competitive environment [5][20] Market Data and Key Metrics Changes - LNG supply is projected to increase by 2339% compared to 2024 volumes by 2026 and 2028, indicating a positive outlook for the LNG shipping market [7][10] - Year-over-year storage levels were at 76%, down from 90% in the previous year, affecting U.S. supply flow to Europe [8] Company Strategy and Development Direction - The company remains disciplined in seeking asset acquisitions that enhance long-term value through active management [31] - The strategic focus includes managing the business with a prudent long-term perspective, especially given the current low spot market rates [31] Management's Comments on Operating Environment and Future Outlook - Management noted that the current market is challenging, but the backlog provides a healthy foundation against market volatility [31] - There is optimism regarding the gradual recovery of rates, with expectations for a more balanced market by 2027 [21][31] Other Important Information - The company has completed nine drydocks, with four including performance upgrades, leading to a decrease in average vessel operating expenses to $15,900 per day [25][26] - Approximately 75% of total notional debt is hedged or fixed, providing greater predictability in cash flows [27] Q&A Session Summary Question: Impact of recent liquefaction activity on charter market sentiment - Management indicated that recent positive news has started to focus market participants on their long-term shipping needs [36] Question: Potential asset acquisitions - Management stated they are always looking for acquisition opportunities but have nothing concrete at this time [38][39] Question: Return on investment for vessel upgrades - Management confirmed satisfaction with returns from upgrades, currently yielding $5,000 per day, with potential for more [44][45] Question: Scheduling of drydocking based on chartering environment - Management noted no significant changes in scheduling, pleased to complete drydocks during a low-rate environment [46][47] Question: Status of LNG E upgrades - Four out of five upgrades are completed, with limited incremental costs remaining [50] Question: Shift in demand from Europe to Asia - Management highlighted that the balance could shift based on various factors, including outages and storage refilling in Europe [53][55] Question: Metrics within the three-year variable charter - Management confirmed the charter is tied to an index, with a floor of $20 million and a ceiling of $100 million [61] Question: Upside from upgrades - Management indicated the potential upside from upgrades is $10,000 per day, with current sharing at $5,000 [63][64] Question: Plans for vessels coming off contracts in 2026 - Management stated that while spot trading is an option, there are various deal structures being considered based on market conditions [66][67]

Core Insights - Flex LNG declared an ordinary dividend of $0.75 per share for the quarter, resulting in a trailing twelve-month yield of 12%, supported by $410 million in cash at the end of Q1 2025 [1] - The company reaffirmed full-year 2025 revenue guidance in the range of $340 million to $360 million [1][8] Financial Performance - The balance sheet optimization program aims to unlock an additional $120 million in free cash, with plans for refinancing ships Flex Resolute and Flex Constellation [2] - At the end of Q1 2025, the company held $410 million in cash and has its first scheduled debt maturity in 2028 [2] - The refinancing initiatives are expected to lower the average cost of capital and extend debt maturities, supporting liquidity [3] Risk Management - Flex LNG increased its interest rate swap portfolio to $700 million notional by the end of Q1 2025, providing 70% hedge coverage over the next 24 months [4] - The company added an additional $150 million in swaps, increasing the total to $850 million at a weighted average rate of approximately 3.5% [5] Contractual Strength - As of May 2025, Flex LNG has a minimum contract backlog of 59 vessel-years, potentially rising to 88 years if charter options are exercised [6][7] - This exceptional contractual coverage provides predictability and cushions earnings against short-term spot rate pressure [7] Future Outlook - Management reaffirmed full-year 2025 revenue guidance of $340 million to $360 million, with debt maturities extended and interest costs reduced [8]