Flex LNG swings to profit, secures $650 mln new financing in 2019

Flex LNG, the company controlled by billionaire John Fredriksen and an emerging player in the LNG shipping business, swung to a profit in the third quarter of the year. 

The company reported a net income of $0.5 million for the quarter under review, which compares to a $3.9 million net loss in the previous quarter.

Average time charter equivalent (TCE) rate of $58,222 per day for the third quarter of 2019, compared to $46,266 per day for the second quarter of 2019.

Commenting on the quarter, Flex CEO Øystein Kalleklev said, “In line with our expectations, the freight market has become increasingly tighter in the second half of 2019 resulting in much more favorable market conditions despite low gas prices.”

Harald Gurvin, Flex LNG’s CFO added that the company has already executed $650 million in new financings during 2019.

“The new $629 million facility for the five newbuildings delivering in 2020 means have we secured long term funding for 11 of our 13 vessels, with comfortable remaining capex for the two vessels delivering in 2021,” he said.

The company currently has six vessels on the water and an additional seven newbuildings under construction, which are scheduled for delivery between the second quarter of 2020 and the second quarter of 2021.

As for the revenue, it reached $29.8 million for the third quarter of 2019, compared to $19.0 million for the second quarter of 2019.

Outlook for LNG shipping demand remains compelling due to the rapidly increasing demand for LNG. The market has absorbed new tonnage as it has arrived, and despite lower than expected tonne mile growth due to muted US – Asia trade and limited arbitrage opportunities, we believe that the market is reasonably balanced.

The long term outlook for the industry continues to be well supported, and the company believes it is well-positioned to capitalize on the global shift for cleaner energy.