Flex LNG traded its vessels at cash break-even levels in the third quarter, but is expecting a significant uptick in the last three months of the year.
The John Fredriksen-controlled LNG carrier owner reported average time charter equivalent rates of $46,569 per day for the three months ending in September.
Chief executive Oystein Kalleklev said Flex LNG Management had traded its vessels at cash break-even levels “during very challenging market conditions, despite significant spot exposure and operational restrictions caused by Covid-19”.
But he said gas and freight markets have since recovered, and Flex expects to see an increase in TCE rates to $70,000 to $75,000 per day for the fourth quarter.
“Improved trading results, together with a strong financial position, which includes financing for the three remaining newbuildings, also enables us to reinstate the dividend,” he added.
The company is paying out $0.10 per share declared for the third quarter.
New York and Oslo-listed Flex reported an increase in net income to $3.8m, up from $500,000 in the same period last year.
Vessel operating revenues were $33.1m, a jump from $29.8m in last year's third quarter.
Voyage expenses rose because of higher bunker consumption, mainly due to the positioning of delivering newbuildings, with vessel operating expenses also higher on the increased fleet.
New deliveries
Flex took delivery of three newbuildings during the quarter and added a fourth in October, bringing its trading fleet to 10 LNG carriers.
Kalleklev said all four vessels — the 174,000-cbm Flex Aurora and Flex Amber, and the 173,400-cbm Flex Artemis and Flex Resolute — are chartered out on fixed or variable contracts.
The Flex Aurora and Flex Resolute started 11-month charters in August and September respectively, both with a utility company.
The Flex Artemis delivered onto long-term charter with Gunvor Group’s Clearlake Shipping where the first five of the up-to-10-years period hires are firm.
The Flex Amber began a 12-month charter at a variable rate in October with an energy major that has options to extend the hire by an additional two years.
Kalleklev said the company’s vessels have been operating with 100% up time, with Flex conducting 32 crew changes between May and October in an effort to minimise extended stays on its vessels for seafarers.
Flex owns 13 LNG carriers. Six are fixed on time charter: three on fixed hire rates and three on variable levels.
Four of its vessels are operating in the spot market.
Flex has three vessels under construction, which are scheduled to deliver in January, February and May next year.
The company said it has secured long-term financing at attractive terms for all its vessels, including the trio delivering in 2021.
