FLNG

• Quarterly Financial Performance: The Q2 2026 result was the second strongest quarter for Flex LNG since Q4 2021, driven by strong spot market performance from Flex Artemis and Flex Volunteer, and full-quarter contributions from Flex Constellation and Flex Aurora under new contracts that started in March 2026. The fleet average time charter equivalent (TCE) for Q2 was $86,100 per day.
• Fleet and Operational Updates: All scheduled five-year special service surveys for the company's 13-vessel fleet were completed in June 2026, following the dry docking of Flex Vigilant (Flex Vigilant, previously referenced as Flex Vigeland, was the third and final dry docking of 2026). Average dry docking cost came in at $6 million per vessel (in line with guidance), with an average of 17 days per vessel in dry dock. No dry dockings are scheduled for 2027, with the first 10-year docking set to begin in 2028.
• Contract Backlog and Coverage: Flex LNG holds 51 years of minimum firm contract backlog, which could grow to 78 years if all options are exercised. Near-term coverage for remaining available days in 2026 stands at 89%. Flex Artemis and Flex Volunteer, which traded spot in Q2, will come off contract at the end of Q3 2026 and are currently being marketed for both spot and term contracts.
• Dividend Declaration: The board declared a quarterly dividend of $0.75 per share, marking the 20th consecutive dividend at this level. Total distributions since 2021 (including special dividends) are approximately $850 million, with a trailing 12-month dividend of $3 per share, implying a 9.7% dividend yield. The dividend will be paid September 17 to shareholders of record as of September 3.
• LNG Market Dynamics: Global LNG trade volumes year-to-date are broadly flat (down less than 1% YoY), with a 29 million ton reduction in Qatari exports largely offset by 23% (40 million ton) growth in US exports, plus additional growth from Australia, Russia, Canada, and West African exporters. Global export capacity utilization (excluding Qatar) hit 96% in July 2026, above 2025's 90% and the 5-year average of 86%. European gas inventories are currently at 61% capacity, the lowest level in 15 years and well below last year's 73%, leaving Europe with significant inventory rebuilding needs ahead of winter. New LNG vessel ordering activity remains strong, with 60 orders placed year-to-date 2026 (well above 2025's full-year 35 orders), bringing the total order book to ~285 vessels (equivalent to 38% of the existing global fleet). Most of these new vessels are already tied to long-term contracts with Qatar or other counterparties, leaving a limited number of open un-contracted vessels. Long-term LNG supply contracting activity remains robust, with 30 million tons per year of SBA volumes signed in H1 2026, supporting project FIDs: 28 million tons of projects have already reached FID in 2026, with an additional 39 million tons potentially reaching FID by the end of the year, bringing total 2026 FIDs to ~67 million tons, confirming continued momentum for the next wave of global LNG supply growth.

• Full-year 2026 guidance is maintained unchanged from the prior quarter: total revenues are projected between $345 million and $370 million, full-year average fleet TCE between $73,000 and $78,000 per day, and adjusted EBITDA between $255 million and $280 million.
• Full-year 2026 vessel operating expenditure (OPEX) guidance is maintained at $16,000 per vessel per day. Q2 average OPEX was $16,260 per day, and H1 2026 average OPEX was $16,100 per day.
• The company expects to maintain an interest rate hedge ratio of approximately 70% through mid-2027.

Flex LNG reports consolidated financial results for the quarter, with no separate breakdown of individual product/segment performance provided. Total Q2 2026 revenues were $106.8 million, or $102.7 million excluding EUAs. Net income for the quarter was $44.9 million ($0.83 earnings per share), and adjusted net income (adjusted for unrealized gains on interest derivatives, interest rate swaps, and FX) was $42.5 million ($0.79 adjusted EPS). Operating cash flow for Q2 was $63 million, up from $37 million in Q1 2026. The company ended the quarter with $397 million in cash and a book equity ratio of 27.4%.

• Elevated geopolitical uncertainty persists due to the ongoing conflict in Iran, which has disrupted LNG exports from the Middle East. Combined exports from Qatar and UAE are currently around 63% below normal levels, and uncertainty remains around the duration of the conflict and the timeline for normalization of Qatari LNG supplies.
• A large global LNG new vessel order book (equal to ~38% of the existing fleet) has put downward pressure on spot market rates, which have softened from earlier 2026 spikes. Current spot rates are down to $30,000 per roundtrip from ~$120,000 in the prior year's third quarter.
• A significant portion of 2026 new vessel orders have been placed without secured employment contracts, adding potential supply-side pressure to the spot market if these vessels enter the open market upon delivery.
• Crew travel costs have been impacted by Middle East disruptions, leading to slightly higher OPEX in Q2 2026.

Q: Does any Flex LNG vessel currently trade through the Strait of Hormuz, and have any vessels been stuck there amid the regional conflict?

A: None of Flex LNG's 13 vessels have traded in the region since the end of February 2026. All of the company's chartered clients have re-routed vessels to trade elsewhere for the time being, so no vessels have been stuck or impacted by the closure.

Q: Who covers the cost of additional war risk insurance required for trading through the Strait of Hormuz and other high-risk areas?

A: Extra insurance coverage required for sailing into high-risk areas is paid for entirely by the charterer that instructs the vessel to enter those areas. Flex LNG does not bear this cost when charters order vessels into high-risk zones.

Q: What is management's outlook for the resumption of normal LNG exports through the Strait of Hormuz, and how does this impact market expectations?

A: Management expects the Strait of Hormuz will remain closed for the rest of 2026. Sustained closure would support tighter LNG shipping market conditions, which could benefit rates going into the winter peak season.

Q: What is the outlook for the LNG shipping spot market in Q3 and Q4 2026, given recent softening?

A: Q3 is typically a slower shoulder season ahead of winter, and spot rates have softened from 2025 Q3 levels to around $30,000 per roundtrip. The company's two vessels coming open at the end of Q3 are well-positioned for the typical seasonal winter tightening, especially if the Strait of Hormuz remains closed through the end of the year.

Q: What is the outlook for the current 75 cent per share dividend level going forward?

A: Future dividends are decided quarterly by the board, which reassesses market conditions, geopolitical risk, contract backlog, and balance sheet strength each quarter. With a strong balance sheet, solid cash position, and strong contract coverage, the board maintained the 75 cent dividend for this quarter, and future decisions will depend on updated assessments of all key factors.