Flex LNG (FLNG) - Teleconferência de Resultados do 2T26: Receita Forte, Guidance Mantido

Principais Destaques

• A receita no 2T26 atingiu US$ 106,8 milhões, ou US$ 102,7 milhões excluindo EUAs, marcando o segundo melhor trimestre da Flex LNG desde o 4T21.
• A taxa de afretamento por tempo equivalente (TCE) média da frota foi de US$ 86.100 por dia. O lucro líquido totalizou US$ 44,9 milhões, ou US$ 0,83 por ação, enquanto o lucro líquido ajustado foi de US$ 42,5 milhões, ou US$ 0,79 por ação.
• Os fortes ganhos no mercado spot dos navios Flex Volunteer e Flex Artemis impulsionaram a receita, juntamente com as contribuições durante todo o trimestre dos novos contratos para o Flex Constellation e o Flex Aurora.
• A Flex LNG manteve suas projeções para o ano de 2026 de receita de US$ 345 milhões a US$ 370 milhões, TCE de US$ 73.000 a US$ 78.000 por dia e EBITDA ajustado de US$ 255 milhões a US$ 280 milhões.
• O Conselho de Administração declarou um dividendo trimestral de US$ 0,75 por ação, o 20º dividendo consecutivo da empresa nesse patamar. Os dividendos nos últimos 12 meses totalizaram US$ 3 por ação.
• A cobertura contratual soma 51 anos de carteira firme mínima, podendo aumentar para 78 anos se todas as opções forem exercidas. Aproximadamente 89% dos dias disponíveis restantes da frota em 2026 estão cobertos.

Principais Dados Financeiros

A Flex LNG amortizou US$ 28 milhões em parcelas programadas de dívida e distribuiu US$ 41 milhões aos acionistas durante o trimestre. Sua carteira de derivativos de taxa de juros tinha um valor nocional de US$ 775 milhões e uma taxa fixa média de 2,46%, com valor de mercado de US$ 22 milhões ao final do trimestre.

Desempenho Operacional e dos Negócios

Os navios Flex Volunteer e Flex Artemis se beneficiaram de um mercado spot aquecido durante o 2T. Espera-se que ambas as embarcações fiquem disponíveis no final do 3T, e a empresa está promovendo-as para fretamento no mercado spot e novos contratos de longo prazo.

O Flex Vigilant concluiu a docagem seca na Dinamarca em junho, finalizando todas as vistorias especiais de cinco anos programadas para a frota de 13 navios. As três docagens secas de 2026 tiveram custo médio de aproximadamente US$ 6 milhões por navio e duração de 17 dias cada. Não há docagens secas programadas para 2027, enquanto a primeira docagem de 10 anos está planejada para 2028.

Os volumes do comércio global de GNL caíram menos de 1% no acumulado do ano. A administração afirmou que as exportações do Catar caíram cerca de 29 milhões de toneladas, enquanto as exportações dos EUA aumentaram 23%, ou quase 14 milhões de toneladas. A participação crescente da oferta dos EUA pode sustentar a demanda por transporte marítimo por meio de viagens mais longas do Atlântico para a Ásia.

A carteira de pedidos de navios gaseiros de GNL permanece substancial, em cerca de 285 embarcações, o equivalente a cerca de 38% da frota existente. A administração destacou que a maioria já está comprometida com o Catar ou outros contratos de longo prazo, deixando relativamente poucos navios disponíveis.

Projeções da Administração

A Flex LNG manteve as seguintes projeções para o ano de 2026:

A administração espera que seu índice de hedge de taxa de juros permaneça em torno de 70% até meados de 2027. A empresa afirmou que consideraria hedge adicional ou refinanciamento antes do vencimento de sua dívida no 1T29, caso as condições de mercado se tornem atraentes.

Riscos e Principais Pontos de Atenção

A administração manteve uma avaliação "laranja" para as perspectivas de mercado, citando um mercado spot mais fraco e um cronograma pesado de entrega de novas embarcações. O aumento da disponibilidade de navios a leste e a oeste de Suez tem pressionado as taxas spot recentemente.

A incerteza geopolítica permanece elevada. A administração disse que as exportações combinadas de GNL do Catar e dos Emirados Árabes Unidos ficaram cerca de 63% abaixo dos níveis normais e afirmou acreditar que o Estreito de Ormuz permanecerá fechado durante todo o ano de 2026. O momento da normalização da oferta do Catar permanece incerto.

Os estoques de gás europeus estavam em 61% da capacidade, em comparação com 73% um ano antes, no nível mais baixo em mais de 15 anos. A administração espera que a competição entre a Europa e a Ásia por cargas flexíveis de GNL dos EUA continue sendo um importante vetor do mercado de transporte marítimo.

Destaques da Sessão de Perguntas e Respostas

• Exposição ao Estreito de Ormuz: A administração confirmou que nenhum dos 13 navios da Flex LNG operou dentro da área desde o final de fevereiro. Qualquer seguro adicional para área de alto risco seria pago pelo afretador que instruísse a embarcação a entrar em tal área.
• Perspectivas do mercado spot: A administração descreveu o 3T como um período de transição sazonal e afirmou que as taxas spot de ida e volta caíram para cerca de US$ 30.000 por dia, ante aproximadamente US$ 120.000 no 3T anterior. A empresa permanece confiante de que o mercado de inverno, historicamente mais aquecido, possa dar suporte ao aproveitamento de seus dois navios disponíveis no 4T.
• Sustentabilidade dos dividendos: O Conselho de Administração revisa os dividendos a cada trimestre. A administração citou a posição de caixa, o balanço patrimonial e a carteira de contratos da empresa como suporte para a última declaração de US$ 0,75 por ação, ressaltando que dividendos futuros permanecem sujeitos a reavaliação trimestral.

Transcrição Completa da Teleconferência de Resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

H. Foss

Welcome back to Flex LNG's Second Quarter 2026 Results Presentation. Hope you all have a great summer. My name is Marius Foss. I'm the CEO of Flex LNG. And today, I'm joined by our CFO, Knut Traaholt, who will walk you through the financials later in the presentation. Today, we will summarize the second quarter results and provide an update on the LNG shipping market. As always, we will conclude this webcast with a Q&A session.

Knut Traaholt

If you would like to ask questions, please use the chat functions on the webcast or send questions to -- by e-mail to ir@flexlng.com. Before we start, we would like to highlight the following. We are using certain non-GAAP measures such as TCE, adjusted EBITDA, and adjusted net income. These are supplements to the earnings reported in accordance with U.S. GAAP. The reconciliations of these non-GAAP measures are available in the earnings report released today. There are also limitations to the completeness of our presentation. Therefore, we encourage you to read the quarterly report together with today's presentation.

And with that, back to you, Marius.

H. Foss

Thank you, Knut. Let's begin with the highlights of the quarter. We are happy to present very strong results for the second quarter. We sailed in revenues of close to $107 million or close to $103 million, excluding the EUAs. This is our second best quarter since the fourth quarter of 2021. The fleet average TCE during the quarter ended up at $86,100 per day. Net income for the second quarter came in at $44.9 million, implying an earnings per share of $0.83.

When adjusting for unrealized gains and interest rates swaps and FX, we ended up with adjusted net income of $42.5 million or adjusted earnings per share at $0.79.

Flex Artemis and Flex Volunteer have traded in a strong spot market in the second quarter and contributed to our solid quarterly results. We continue to see elevated geopolitical uncertainty in the LNG space as the conflict in Iran causes disruption to the LNG flow from the region.

Lastly, with the dry docking of Flex Vigilant in June, we have completed all scheduled 5-year special surveys for our fleet. We maintain our full year guidance from last quarter and expect revenues to come in between $345 million and $370 million. Similarly, we expect the TCE to come in somewhere between $73,000 and $78,000 per day. We expect adjusted EBITDA to come in between $255 million and $280 million.

With our strong quarter, contract coverage and solid balance sheet, the Board has declared another dividend of $0.75 per share. This is the 20th consecutive dividend of $0.75 per share, and we have now distributed around $850 million since 2021, including special dividends. Our last 12 months dividend is $3 per share, implying a dividend yield of around 9.7%.

Flex Vigilant completed her dry dock in Denmark in June, and this was the third and final dry docking for 2026. The average cost per dry docking came in around $6 million per vessel as guided, and we spent averagely 17 days in dry dock per vessel. Flex Vigilant marks the final 5-year special survey in our fleet of 13 vessels. Looking ahead, we have no dry dockings coming up in 2027, and we will commence our first 10-year docking in 2028.

Let's have a look at our contract backlog. Looking at our total contract coverage, we have 51 years of minimum firm backlog, which may grow to 78 years if all options are declared. In the near term, we have close to 89% coverage for the remaining available days in 2026. Flex Artemis and Flex Volunteer have both been trading in the spot market in the second quarter and will come open at the end of the third quarter. We are now marketing the vessels both for spot and new term contracts.

With our good contract coverage for the remainder of the year, we maintain our guiding which we upgraded last quarter. This means that we expect full year revenues to come in between $345 million to $370 million. Similarly, we expect TCE to come in somewhere between $73,000 and $78,000 per day. Lastly, we expect the adjusted EBITDA to come in between $255 million and $280 million. We are pleased to announce that the Board has declared a dividend of $0.75 per share.

Let us briefly revisit decision factors for the dividends. We maintain the orange level for market outlook. This reflects a softer spot market and heavy schedule of newbuilding deliveries. Looking ahead, we note that low European storage levels going into the cold winter season. Confidence in the long-term structural demand story remains intact, supported by the third wave of U.S. LNG export capacity currently under construction. We keep other considerations in orange given the continued elevated geopolitical risk. There is still uncertainty around the duration of the Iran conflict and the timing of normalization of the Qatar supply.

Taking all factors into account, the Board has declared another quarterly dividend of $0.75 per share. This brings dividends paid over the last 12 months to $3 per share. The dividend will be paid on or about 17th of September to shareholders of record as of 3rd of September.

And with that, I hand it over to you, Knut, for final financial updates.

Knut Traaholt

Thank you, Marius. And the second quarter was significantly improved quarter-over-quarter, mainly driven by higher revenues. And revenues were $106.8 million or $102.7 million, excluding EUAs. The higher revenues were driven by high spot earnings for Flex Volunteer and Flex Artemis, while both Flex Constellation and Flex Aurora contributed by having a full quarter of earnings under the new contracts that commenced in March.

On the cost side, vessel OpEx was higher quarter-over-quarter as the second quarter was impacted by higher crew travel costs related to the disruptions in the Middle East. The average OpEx per day in the second quarter was $16,260, while the average OpEx for the first 6 months of the year was around $16,100 per day. We maintain our OpEx guidance of $16,000 per day for the full year.

Interest expense continued to improve, reflecting lower loan margins and active management of our RCF facilities. We booked $4.7 million in gains on our interest rate derivatives, of which $2.3 million was realized gains and $2.4 million was unrealized gains. Net income came in at $44.9 million or $0.83 per share, and adjusting for noncash items like unrealized gains from the interest derivative portfolio, the adjusted net income was $42.5 million or equivalent to adjusted earnings per share of $0.79. This is more than double than of the first quarter. So overall, this was a very strong quarter, impacted by improved revenues from the spot market, new contracts, completion of dry docking and continued cost control and improved financial efficiency.

On the cash flow, during the quarter, we generated strong cash flow from operations of $63 million, up from $37 million in the first quarter. The increase was mainly driven by higher revenues, as explained on the previous slide. This excludes $19 million in positive change in working capital and $5 million of CapEx related to the dry dockings this year. And the reduction in receivables during the quarter was related to timing of advanced charter hire receipts.

We repaid $28 million in scheduled debt installments and distributed $41 million to our shareholders. And then in sum, our net cash flow was $8 million in the quarter, and that resulted in a cash position of $397 million at the end of the quarter. So looking at our balance sheet, we maintain a clean balance sheet with mainly ships and close to $400 million in cash. And our debt financing is comprised of a combination of bank loans, which gives us flexibility and attractive long-term leases.

Our first debt maturity is in the first quarter of 2029. And if we look at the book equity ratio, it's robust at 27.4%. And as noted before, our book values reflect the historical cost adjusted with regular depreciation. Our interest rate swap portfolio is unchanged and was valued at $22 million at the end of the second quarter. The notional value of the portfolio is $775 million, with an average fixed rate of 2.46%. We expect to maintain a hedge ratio of around 70% into mid-next year.

And with that, I hand it back to you, Marius, for the market outlook.

H. Foss

Thank you, Knut. Let's have a look at the LNG trade. Global LNG trade volumes are broadly flat year-to-date, down less than 1% compared with the same period last year. On the supply side, the key development has been significant reduction in the Qatari exports, down around 29 million tonnes. This shortfall has to a large extent been offset by strong growth from the U.S., where exports are up 23% or close to 14 million tonnes. We have also seen continued growth from Australia and Russia.

Other exporters have contributed strongly and are up 6 million tonnes from last year. These include LNG Canada, but also West Africa exporters, including Nigeria and Senegal. Industry sources report that global export capacity ran at 96% utilization in July, excluding Qatar. This is above 90% utilization seen last year and a 5-year average of 86%. On the demand side, imports into JKT remained resilient, while Europe and China are down compared to last year. At the same time, India and other importing markets have continued to grow. The key takeaway is that despite a significant disruption from one of the world's largest LNG exporters, Qatar, global trade volumes have remained resilient. And more importantly, for shipping, the growing share of U.S. supply means more LNG coming into the Atlantic Basin. This will likely have a positive ton-mile effect when those volumes move into Asia.

Let's have a look a bit closer to the supply side. The reduction in Middle East LNG volumes has been significant. Combined exports from Qatar and UAE are currently down around 63% compared to normal levels. As you can see from the left-hand side, exports dropped very sharply earlier in the year. And while volumes have started to recover, they remain below historical levels. At the same time, the U.S. has continued to ramp up LNG exports. U.S. liquefaction capacity is up around 14 million tonnes year-on-year, supported by the ramp-up of new capacity, particularly in the Plaquemines. It is also worth to mention that the long anticipated Golden Pass is slowly but steadily increasing its production. We expect to see increased loading from Golden Pass going forward and from Port Arthur as it comes on stream next year. So despite substantial loss from Middle East supply, this has mitigated by strong U.S. growth, and that shift is positive for the shipping demand.

Let us have a look at the demand side on the competition between Europe and Asia for the LNG. Europe entered the year with relatively low gas inventories. Inventories are today 61% full, the lowest level in over 15 years and below the 73% seen last year. This means Europe still has a substantial requirement to rebuild inventories ahead of the winter season. At the same time, U.S. LNG is highly flexible and can move between Europe and Asia depending on the relative pricing.

Looking at the chart on the left-hand side, there have historically been significant swings in the U.S. LNG flows between the 2 regions. So far this year, both Europe and Asia have attracted additional U.S. LNG volumes, although the balance has shifted through the year. Looking forward, this sets up a continued tug-of-war of U.S. LNG exports. If European storage remain low, Europe will need to keep bidding on Atlantic cargoes, while lack of Qatari volumes could pull more of those volumes into Asia.

If you are looking at the newbuildings, we stand out on this slide, ordering activity remains very strong, even with newbuilding prices holding around $250 million and the term rates remain more moderate levels. We have already seen around 60 newbuildings ordered so far this year. A number of these are made without any employment contracts. This year, orders are well above last year's figures of 35 vessels. That tells us there's still significant confidence in the long-term LNG shipping markets. At the same time, elevated newbuilding prices continue to provide support for the value of modern existing tonnage, including our fleet.

The order book remains substantial with around 285 vessels to be delivered going forward, equivalent to roughly 38% of the existing fleet. However, the majority of these vessels are already tied up with Qatar or other long-term employment, and the number of open vessels remains fairly limited.

Contracting activity remains at very high levels. LNG SPAs volumes signed in the first half of 2026 are already above 30 million tonnes per year. This continued appetite for long-term LNG supply is important because it provides the commercial basis required for new projects to reach FID. We have already seen around 28 million tonnes of projects that reached FID so far this year, including Venture Global's expansion of the CP2, Commonwealth and Delfin. And there are additional projects that could reach FID later this year, up to 39 million tonnes. These potential projects include LNG Canada Phase 2, Ksi Lismis in Canada and Delfin Phase 2 and the Brownsville in the U.S. This would take the potential FIDs in 2026 up to around 67 million tonnes. The key takeaway is that the next wave of LNG supply continues to gain momentum, supported by strong customer contracting and a healthy pipeline of projects moving forward to FID.

Let's have a look at the spot market for the modern 2 strokes. We have seen increasing vessel availability in both West and East of Suez, and that continues to put a weight on the spot rates. It is worth mentioning that the number of vessels available today is in line with the 5-year historical averages. This comes at a time when the LNG fleet is growing. This shows that the newbuildings are being absorbed by going straight into the program after being delivered from the shipyards. We did see a sharp spike in the rates earlier this year. But since then, rates have normalized, and we have seen some pressure on the spot rates over the last few weeks.

As we move into the second half of the year, we would normally expect some historical seasonal tightening. We have 2 vessels coming open at the end of the third quarter, well positioned for a potential strong winter market. With that, let's turn to a Q&A session.

Knut Traaholt

Thank you, Marius, and thank you to everyone who has submitted questions on our webcast and also to our Investor Relations e-mail. It's been an active or a lot of things happening during the quarter, particularly in the Middle East and with the Strait of Hormuz. So we have a number of questions coming in around that and also how that has impacted our operations. So in specific, the question is, do we have any trade in that area or to the Strait of Hormuz? And have we had any ships being stuck inside the Strait of Hormuz?

H. Foss

Yes. Thank you. Now I'm pleased to confirm that all vessels in the Flex fleet of 13 vessels, none of them have been trading inside since the end of February. So our charterers' clients are trading elsewhere for time being.

Knut Traaholt

And there's also then a follow-up question around this as there are a number of additional insurances that are needed to be trading to the Strait of Hormuz. And the question is specifically who pays for this insurance and what insurance is needed to be trading here?

H. Foss

Yes, it's required to have insurance when you sail into high-risk areas. So if and when our ships are ordered to other high-risk areas, this extra coverage will be paid for by the charterers who are instructing the vessel to such areas.

Knut Traaholt

And sticking to the Strait of Hormuz, it's more on the market view and the outlook there for, first of all, the resumption of LNG export out of Qatar and UAE, but also more on the normalization of the transit through the Strait of Hormuz. What's your view on that?

H. Foss

Well, we believe that Strait of Hormuz will remain closed throughout 2026. So we could potentially look at the interesting market going forward for LNG and other shipping segments.

Knut Traaholt

Moving on, you mentioned in the presentation that we have seen a slightly softer spot market now. So there's questions on what your expectations are for the LNG shipping market for the third quarter and then the fourth quarter?

H. Foss

Yes. The Q3 is normally a shoulder month before we head into the winter season. So Q3 has softened up from the spot market has been maybe on $120,000 for round trip during the last Q3 and has now come down to $30,000. Our next ship coming open in the end of Q3. So we are preparing for the Q4 market, which historically has been profitable. So we are hopeful and hoping that we can contribute a little bit more there on our Q3 and Q4 results later. But yes, if Hormuz remains closed, I think this will automatically find its way back to where the LNG market should be.

Knut Traaholt

Good. Then we have some questions on the financing. First of all, on our interest rate derivative portfolio. As we say, we have 70% coverage until mid-next year. And the question relates to when we expect to add more interest rate hedging to our books? In general, we are trading when the markets are favorable. We are very pleased with the coverage we have today. But obviously, when there are opportunities either for adding more on the short-term or longer-term interest rate hedging, that is our aim to do.

And there is also a follow-up questions on our debt maturities in Q1 2029, when we will address that? It's a bit early to address that refinancing now unless that we see an attractive opportunity to add more or better terms to our financings. That is something we are continuously evaluating. And if there are attractive opportunities, we will act on them.

And final question, it's a recurring questions. It's about dividend sustainability and the outlook for future dividends. As we have repeatedly said, each dividend is declared by the Board each quarter. We are fairly transparent on the decision factors, which we have also presented today. That is a repeat of the decision factors that we had last year -- sorry, last quarter, which was basically a downgrade of certain factors. However, with the strong balance sheet and cash position and also the contract backlog, the Board was pleased to confirm a dividend for this quarter of $0.75. Future dividends will be decided by the Board, and reassess all these factors, including then our backlog for the open vessels.

And with that, that concludes the Q&A session.

H. Foss

Thank you. Thank you for participating in our Q2 presentation. We would like to welcome you back in November for our Q3 presentation. Thank you.