John Fredriksen-controlled Flex LNG will take four ships off-hire in 2023 for their first special surveys but despite the downtime the company expects higher charter earnings to drive its revenue higher for the year.
Announcing fourth quarter results with a nod to Valentine’s Day, Flex LNG chief executive Oystein Kalleklev said the company expects its revenue to grow by around $20m this year to about $370m for 2023.
Kalleklev forecast time charter equivalent earnings of around $80,000 per day for 2023, up on the $72,800 per day seen in 2022.
“Revenues are expected to increase despite us carrying out our first five-year special surveys for four ships with associated off-hire during 2023,” he said.
Flex turned in an improved net income for 2022 of $188.1m up from $162.3m a year earlier.
Revenues climbed to $347.9m from $343.5m in 2021.
But Flex’s fourth quarter net income slipped back to $41.4m from $69.4m in the same period for 2021.
Similarly, quarterly revenues were in line with guidance but down at $97.9m from $114.6m in the corresponding period a year earlier.
The company guided that first quarter revenues for 2023 are expected to be at between $90m to $93m as the 173,400-cbm Flex Enterprise (built 2018) will go into dry-dock at the end of the period.
Kalleklev described net income for the fourth quarter as “solid”.
He highlighted that Flex realised gains of $14m on derivatives during the quarter.
The CEO said Flex has completed its balance sheet optimisation programme securing refinancing for the last three ships in its fleet.
He said this will release $387m in total.
In January 2023 Flex signed 12-year sale and leaseback agreements for 174,000-cbm Flex Amber and 173,400-cbm Flex Artemis (both built 2020) of $170m and $160m respectively.
It also inked term sheets for sheets for a $180m 10-year sale and leaseback with an Asian-based lease provider agreement for the 174,000-cbm Flex Rainbow (built 2018).
Flex said average time charter equivalent rates for its fleet in the fourth quarter were $81,699 per day, up from $75,941 per day in the preceding three months.
The company has no open charter days for its 13-vessel fleet in 2023 and 95% contract coverage for 2024, depending on charterers’ decisions on their extension options.
The company has one vessel exposed to the spot market via a variable rate long-term charter.
Kalleklev said the company’s next open vessel will be in 2024 at the earliest, depending on option declarations.
The company is sitting on a firm contract backlog of 60 years, which may increase to 87 years with the declaration of charterers’ options.
Flex is due to dry-dock two more vessels in 2024.
Flipping from a suit to a 14 February-themed t-shirt in his customary quarterly results video, Kalleklev bigged up Flex’s webcast later today with the promise of a special Valentine’s-themed prize for attendees.
