FLEX LNG (FLNG) Q4 2023 earnings summary

Executive summary

• FY2023 revenue was $371.0m and adjusted EBITDA was $289.6m, meeting guidance; adjusted net income declined YoY to $137.3m.

• All 13 vessels were operating, with 50 years of minimum charter backlog, potentially 71 years with extension options; 94% of remaining 2024 capacity was under firm charter coverage.

Financial highlights

• Q4 vessel operating revenue was $97.2m vs. $94.6m in Q3; FY revenue was $371.0m vs. $347.9m in 2022.

• Q4 net income was $19.4m and basic EPS $0.36 vs. $45.1m and $0.84 in Q3; FY net income was $120.0m and EPS $2.24 vs. $188.0m and $3.53 in 2022.

• Q4 adjusted EBITDA was $76.2m, adjusted net income $37.8m and adjusted EPS $0.70; FY totals were $289.6m, $137.3m and $2.56, respectively.

• FY2023 revenue rose 7% YoY and adjusted EBITDA rose 6%; adjusted net income fell 9%.

Outlook and guidance

• Q1-24 guidance: TCE of $75,000-$80,000/day, revenue of ~$90m and adjusted EBITDA of ~$70m; LNG freight markets were seasonally weaker as heating season approached its end.

• FY2023 revenue of $371.0m exceeded guidance of ~$370m; TCE was $79,461/day vs. ~$80,000 guidance, and adjusted EBITDA of $289.6m was within the $290m-$295m range.

• Firm charter coverage was 94% for the remainder of 2024; spot-market exposure was 13.3% for the remainder of 2024 and 21.9% for 2025.

• Drydocking totaled 77 days vs. 80-100 guided; associated capex was $21m vs. $18m-$20m guided. Flex Constellation and Flex Courageous were scheduled for dry-docking at end-Q1 and in Q2-24, respectively.

• Management expects a more challenging freight market over the next two years as vessel deliveries outpace expected new export volumes.