Flex LNG’s Earnings Call Highlights Strong Growth Prospects

Flex Lng ((FLNG)) has held its Q3 earnings call. Read on for the main highlights of the call.

Flex LNG’s recent earnings call painted a picture of robust financial health and promising future prospects. The company reported strong financial performance, a record dividend yield, and a solid contract backlog, all contributing to a positive outlook for 2025. Despite challenges such as softer spot market conditions and a decline in Asian LNG imports, the overall sentiment was upbeat, suggesting a strong position for future growth.

Strong Financial Performance

Flex LNG reported a net income of $16.8 million for the quarter, translating to an EPS of $0.31 per share. The adjusted net income stood at $23.5 million, or $0.43 per share, demonstrating the company’s ability to maintain profitability. An all-time high cash balance of $479 million further underscores the company’s strong financial standing.

Record Dividend Yield

The company declared a dividend of $0.75 per share, marking the 17th consecutive quarter of such dividends. With a 12-month trailing dividend of $3 per share, this implies a dividend yield of 11%. Since Q4 2021, Flex LNG has distributed a total of $730 million in dividends, reflecting its commitment to returning value to shareholders.

Solid Contract Backlog

Flex LNG boasts a minimum firm backlog of 53 years, with potential growth to 80 years if all options are declared. This extensive backlog ensures that 80% of available days are covered for the next year, providing a buffer against a softening term market.

Positive Market Outlook

The company expects full-year revenues for 2025 to reach approximately $340 million, with TCE anticipated at $71,000 to $72,000 per day. The outlook for the LNG shipping market remains positive, driven by increasing volumes and new projects on the horizon.

Spot Market Challenges

The softer spot market is affecting earnings from vessels like Flex Constellation and Flex Artemis, compounded by a reduction in available days due to drydocking. This presents a challenge that the company needs to navigate carefully.

Charter Non-Renewal

Flex LNG received notice from one of its charters about not declaring the 1-year option on the vessel Flex Volunteer, leaving it open from mid-January 2026. This development requires strategic planning to mitigate potential impacts.

Decline in Asian LNG Imports

While European LNG imports increased by 26%, Asian markets experienced a decline, with China down 18% and India down 6%. This reflects a shift in demand dynamics that could influence future strategies.

Forward-Looking Guidance

Flex LNG anticipates revenues of approximately $340 million for the full year, with an expected TCE of $71,000 to $72,000 per day and an adjusted EBITDA around $250 million. The company’s robust balance sheet, with no debt maturities before 2029, provides financial flexibility to navigate the LNG shipping market effectively.

In conclusion, Flex LNG’s earnings call highlighted a strong financial performance and a positive outlook for the future. Despite some challenges, the company’s solid contract backlog and strategic planning position it well for continued growth and success in the LNG market.