FLEX LNG Ltd. Q3 FY2025 earnings call

Key Highlights:

• Third quarter revenues: $85.7 million (excluding EUAs $83.6 million), fleet average TCE $70,900 per day. Net income $16.8 million, EPS $0.31; adjusted net income $23.5 million, adjusted EPS $0.43.
• Refinanced Flex Resolute and Flex Constellation, resulting in a cash balance of $479 million.
• Flex Volunteer will be relevered in December 2025 and go into dry dock. Flex Constellation fully booked in fourth quarter and first quarter 2026.
• Full year 2025 guidance: revenues ~$340 million, TCE $71,000-$72,000 per day, adjusted EBITDA ~$250 million.
• Board declared $0.75 per share dividend, 17th consecutive. 53 years of minimum firm backlog, may grow to 80 years if charters exercise options.

Knut's Insights:

• Q3 operating expenses $18.8 million. Interest expenses down compared to previous year. Net income $16.8 million, adjusted net income $23.5 million.
• Net operating cash flow $37 million, cash balance $479 million at end of Q3. Balance sheet strong with no debt maturity prior to 2029.

Market Section:

• Spot market positive shift, global LNG trading volumes up 3% from Jan-Oct 2025. U.S. export growth, Europe as growth engine in imports. New liquefaction capacity strong, with U.S. leading FID activity.

In the third quarter, revenues were $85.7 million, excluding EUAs it was $83.6 million. The fleet average TCE was $70,900 per day. For the full year 2025, expected revenues are around $340 million, TCE is expected to be between $71,000 to $72,000 per day, and adjusted EBITDA is expected to be around $250 million. The revenue contribution isn't broken down by product segments as it's a shipping company focused on LNG vessels.

Full Year 2025:

• Expected revenues around $340 million.
• TCE expected to be between $71,000 to $72,000 per day.
• Adjusted EBITDA expected around $250 million.
• Solid contract backlog with 53 years minimum firm backlog (may grow to 80 years with option exercise).
• No debt maturity prior to 2029, all-time high cash balance of $479 million.
• Dividend of $0.75 per share declared, 17th consecutive.

Risks:

• Soft spot market impact on earnings from Flex Constellation and Flex Artemis.
• Uncertainty around charter option on Flex Aurora.
• Older steam turbine ships reaching end of economic life, potential scrapping or challenges with dry docking.

Q: Questions regarding Flex Volunteer and Flex Aurora options A: Flex Volunteer will be relevered in December 2025 and go into dry dock; Flex Aurora's option due in Q1, waiting to see if it's declared. Optimistic about spot market momentum possibly affecting the option decision.

Q: Questions on market activity and fleet positioning A: After Gastech, there are good term requirements for Flex Artemis and others. Expect more new projects, and Flex LNG is well-positioned to capture opportunities in the next 3-4 years.

Q: Questions on cash balance and capital spending A: Strict capital discipline, prioritizing return of capital to shareholders. Maintaining solid balance sheet and liquidity for commercial flexibility.

Q: Questions on delisting A: Last day of trading on Oslo Stock Exchange was 15th September, delisted on 16th September. Encourage Oslo shareholders to transfer shares to New York Stock Exchange to continue trading