FLNG — FLEX LNG Ltd.

Summary of Flex LNG Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenues: $80.5 million ($78 million excluding EUAs).
• Net Income: $19.5 million, or $0.36 per share; adjusted net income of $16.9 million, or $0.31 per share.
• TCE (Time Charter Equivalent): Average of $65,700 per day.
• Adjusted EBITDA: Not specified in the highlights but expected to be between $255 million and $280 million for the full year.
• Dividend: Declared at $0.75 per share, marking the 19th consecutive quarterly dividend. Total dividends paid since 2021 amount to approximately $810 million.

2. Strategic Updates and Business Highlights

• Contract Extensions: Flex Resolute and Flex Courageous extended their charters from 2027 to 2029, ensuring employment until 2032. Flex Aurora secured a new 2-year contract with options potentially extending to 2034.
• Drydockings: Completed drydockings for Flex Volunteer and Flex Freedom ahead of schedule; Flex Vigilant is scheduled for drydocking later in May.
• Fleet Utilization: 91% of available days in 2026 are now fixed, with a backlog of 54 years, potentially extending to 81 years if all options are exercised.

3. Forward Guidance and Outlook

• Revenue Guidance: Updated to $345 million - $370 million for 2026, a 10% increase from previous guidance.
• TCE Guidance: Expected to rise to $73,000 - $78,000 per day, an 8% increase.
• Adjusted EBITDA Guidance: Projected between $255 million and $280 million, an 11% increase.
• Market Outlook: Strong short-term demand for LNG shipping due to geopolitical tensions affecting supply, particularly from Qatar.

4. Bad News, Challenges, or Points of Concern

• Seasonal Revenue Decline: Q1 revenues were softer compared to the previous quarter, attributed to fewer available days and off-hire related to scheduled drydockings.
• Geopolitical Risks: The ongoing war in Iran and the closure of the Strait of Hormuz have created uncertainty in the LNG market, affecting supply dynamics.
• Market Volatility: While current spot rates are strong, there is concern about medium-term uncertainty due to a heavy schedule of newbuilding deliveries and geopolitical tensions impacting supply.

5. Notable Q&A Insights

• Fleet Status: Confirmed that none of the vessels are operating in the Strait of Hormuz, mitigating immediate risk.
• Spot Market Prospects: Both Flex Volunteer and Flex Artemis are expected to secure favorable contracts, with potential for record revenues in 2026.
• Dividend Sustainability: The board is cautious about future dividends due to geopolitical risks and market exposure, maintaining an "orange" level outlook for decision-making factors.
• Long-term Contracts: The company is actively marketing vessels for long-term contracts, with a disciplined approach to securing favorable terms.

Overall, Flex LNG reported strong financial metrics and strategic developments while navigating challenges posed by geopolitical risks and market volatility. The company remains optimistic about its future prospects and continues to focus on maintaining a robust balance sheet and contract backlog.