John Fredriksen-controlled Flex LNG has seen charterers snap up options to extend the hire on three of its vessels ahead of what is expected to be a strong winter market.
Reporting second-quarter results — which were up on last year’s figures but lower than those recorded in the first three months of this year — Flex said the charter on its 174,000-cbm Flex Amber (built 2020) had been extended in August by one year.
Six-month options to extend the hire on the company’s 174,000-cbm Flex Aurora and Flex Resolute (both built 2020) had also been taken up.
During the second quarter, Flex also locked away four of its vessels to Cheniere Energy, with the US producer having an option to take a fifth vessel as well.
Lone spot trader
Flex chief executive Oystein Kalleklev said the company has now booked 96% of the available days for the year but remains exposed to the general market through one ship trading spot and three ships on variable hire.
Kalleklev said: “As the market and outlook have significantly improved recently due to strong LNG demand, we have acted on opportunities to add substantial length to our charter backlog with six new attractive long-term charters executed during the second quarter with an aggregate minimum duration of 20 years.”
The CEO added that as vessels roll into their new contracts the company expects revenue to “grow steadily” in the second half of this year.
“With a very healthy cash position, industry low cash break-even levels and high earnings visibility we thus remain well positioned,” he said.
Turnarounds
Flex logged net income of $12.7m for the second quarter of 2021, a turnaround on a net loss of $6.7m in the same period last year, but down on the $47.2m profit the company reported in the first three months of this year.
Revenue for the quarter came in at $65.8m, more than double the $25.8m logged in the three months of 2020, but lower than the $81.3m recorded in the first three months of 2021.
Flex’s interim revenue for the first six months of 2021 soared to $147.1m, from $64m in the corresponding period last year.
The company reported an average time charter equivalent rate of $57,780 per day for the second quarter, down on the comparable figure of $75,399 per day for the first three months of this year.
During the quarter, the company took delivery of its 13th and final LNG carrier newbuilding. The 174,000-cbm newbuilding Flex Vigilant (built 2021) started a three-year charter, Kalleklev said.
Flex declared a cash dividend for the second quarter of $0.40 per share.
