Flex LNG Posts Q4 Results
Flex LNG said its cash balances at 31 December were $1.5m (2012: $6.2m) with $1.7m net outflow (2012: $1.5m) in the quarter and $4.7m (2012: $8.5m) year to date.
In the twelve months in 2013 the operating cash outflow was $4.1m (principally the operating profit after excluding the non cash and working capital movements), additionally there have been $0.5m of capitalised expenditures.
The loss before tax was $0.7m (2012: loss – $292.0m) in the quarter and profit of $205.5m (2012: loss – $298.7m) year to date. In 2013 there has been the reinstatement of the $210.0m initial LNGC instalments, leading to an impairment writeback. In the year there was also a $0.4m cost on the option and warrant schemes, (2012: $12.4m – credit).
Outlook, Financing and Risks
In October 2013 Flex LNG announced that it had commenced a process to explore the strategic alternatives that are available to the company. The outcome of such a process may be, inter alia, FLEX LNG being part of a business combination; a full or partial sale of the company or its assets; or Flex LNG entering into a strategic partnership with a third party.
The company has reviewed a number of possible alternatives and ascertained that there is interest in the assets under construction, however at present there is an element of uncertainty in the market due to the timing of a number of key LNG export projects causing deferrals in the ordering and/or chartering of new vessels.
The company believes that interest in the assets will continue to increase as the timeline of these projects become clearer and the supply and demand balance is improved. In the short term the company is focused on the construction of the new builds and seeking charter parties for the vessels.
Flex LNG will continue to monitor the strategic alternatives to assess if any of these alternatives can add to shareholder value.
Meanwhile the company is in discussions to secure debt finance to cover all costs during the construction phase, until delivery of the vessels and hopes to conclude this process in the near future.
Press Release, February 28, 2014