FLEX LNG .(US:FLNG)2022-11-15 18:55Financial Data and Key Metrics Changes - Revenues for Q3 2022 were $91 million, aligning with previous guidance of $90 million, with net income at $47 million and adjusted net income at $42 million, resulting in earnings per share of $0.88 and adjusted earnings per share of $0.79 [2][12] - Operating expenses for the quarter were $17 million, translating to an OpEx per day of $14,600, which was higher than the guided level of $13,000 due to COVID-related expenses and crew changes [12][36] - The company expects Q4 revenues to be between $95 million and $98 million, also in line with previous guidance [3][25] Business Line Data and Key Metrics Changes - Three ships commenced new Time Charters, contributing positively to revenue, with Flex Artemis benefiting from a variable higher Time Charter [2][12] - The company has a strong contract coverage for 2023 and a minimum coverage of 91% for 2024, with options for charter extensions [3][25] Market Data and Key Metrics Changes - LNG exports from the US grew by 11% despite the Freeport shutdown, while European imports increased by 57% due to high demand and reduced imports from China, which saw a 22% decline [18][19] - The high price of LNG has led to demand destruction in countries like Bangladesh and Pakistan, pushing them to revert to coal [18][19] - European gas consumption decreased by 12% this year, aided by mild weather and high prices stimulating energy savings [19][20] Company Strategy and Development Direction - The company is focused on maintaining a disciplined approach to fleet growth, prioritizing securing employment for existing ships over newbuilding due to high newbuilding prices [32][33] - The company is optimistic about recontracting ships at better rates due to a strong backlog and favorable market conditions [25][30] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of the current financing market, which is favorable for blue-chip companies, allowing for attractive long-term financing options [38] - The company is confident in its ability to sustain dividends, with a declared quarterly dividend of $0.75 per share, reflecting a yield of around 10% [3][25][39] Other Important Information - The company has secured $630 million in refinancing for four ships, surpassing its $100 million cash release target [2][14] - The company is introducing a dividend reinvestment plan for shareholders [5] Q&A Session Summary Question: How are the earnings calculated for the Flex Artemis? - Earnings are tied to the spot market with a ceiling higher than $100,000 and a floor around the cash breakeven level [28][29] Question: What is the interest for vessels coming open in 2026 and 2027? - There is significant interest, with expectations for long-term charters starting at rates around $90,000 [30] Question: How are the rates adjusted for option periods? - Option rates tend to be higher than firm rates, as options are not given away for free [31] Question: What are the plans for fleet growth and newbuilding? - The company aims to be disciplined and secure employment for existing ships rather than rushing into newbuilding due to high costs [32][33] Question: How does the company plan to use the released cash? - The company plans to maintain cash for servicing interest and providing optionality for future investments [38] Question: When will dividends be paid? - Dividends will be paid on or about December 6 for US investors and December 9 for Oslo Stock Exchange investors [39] Question: How involved is the main shareholder in decision-making? - The main shareholder, John Fredriksen, is heavily involved and provides valuable advice based on his extensive experience [41]