Flex LNG - New Time Charter for Flex Constellation

Rhea-AI Summary

Flex LNG, announced a new Time Charter agreement with a large Asian LNG importer for the vessel Flex Constellation. The charter commenced on May 7 with a minimum duration of 312 days, extendable up to first quarter 2026. The ship is equipped with modern technology to reduce boil-off rates. The company's CEO highlighted the addition of 6.2 years of firm backlog this year, securing 100% charter coverage for the remainder of the year.

Positive

• Secured a new Time Charter agreement with a large Asian LNG importer, providing firm backlog and 100% charter coverage for the year.

• The vessel, Flex Constellation, equipped with modern technology, reduces active boil-off rates to 0.075%, enhancing operational efficiency.

Negative

• Dependence on charter agreements for revenue generation, subject to market fluctuations and charterer decisions.

• Potential risks associated with extended charter periods, impacting flexibility and adaptability to market changes.

Insights

Maritime Transport Analyst

The recent Time Charter agreement for Flex LNG's vessel Flex Constellation with a major Asian LNG importer is a strategic move for the company. This new contract provides Flex LNG with a fixed income stream for at least 312 days and potentially extends up to an additional year, which enhances the company's financial stability. The significance of securing 100% charter coverage for the remaining year cannot be overstated, as it eliminates revenue uncertainty in the volatile shipping market. Moreover, with a 173,400 cbm capacity and advanced technology like MEGI propulsion and PRS, Flex Constellation represents a competitive asset in the LNG transportation sector, offering fuel efficiency and reduced carbon footprint. The company's existing 51 years of firm backlog, with a possibility of expansion to 70 years, is indicative of strong long-term contractual relationships, a cardinal metric for assessing the financial health in the shipping industry. Investors should note the positive direction towards which Flex LNG is moving, as contract backlogs and modern fleet capabilities are critical for profitability and operational efficiency.

Energy Sector Financial Analyst

From a financial perspective, Flex LNG's announcement of a new Time Charter for its vessel, Flex Constellation, is a notable development for the company's revenue prospects. The contract extension not only secures a steady cash flow but also demonstrates the company's ability to leverage its high-specification assets amidst a competitive LNG shipping landscape. Investors should appreciate the strategic focus on long-term contracts, which is a sound approach for managing market fluctuations and securing predictable income streams. This is particularly important given the cyclical nature of the shipping industry, where rates can significantly impact profitability. The update on Flex Constellation's successful drydock maintenance and its re-engagement from the spot market to a fixed-time charter signals effective fleet management and operational readiness, which is important for investors looking for indicators of robust corporate governance and operational excellence. The securement of charter coverage, alongside an increase in contract backlog, reflects positively on the management's forward-planning and commercial acumen, suggesting a favorable outlook for the company's financial performance.

HAMILTON, Bermuda, May 8, 2024 /PRNewswire/ -- Flex LNG, Ltd. ("Flex LNG" or the "Company") (OSE/NYSE: FLNG) is pleased to announce a new Time Charter agreement with a large Asian LNG importer, for the vessel, Flex Constellation. The Time Charter commenced on May 7 with a minimum period of 312 days i.e. until end of first quarter of 2025. The charterer has the option to extend the charter by an additional one-year period until end of first quarter 2026.

Flex Constellation is a large 173,400 cbm LNG carrier delivered from Hanwha Ocean in South Korea to Flex LNG in June 2019. She is equipped with modern two-stroke propulsion (MEGI) and Partial Reliquification System (PRS) which enable the ship to reduce the active boil-off rate to an attractive level of 0.075%.

Flex Constellation was redelivered from a three-year Time Charter at end of first quarter this year. Subsequently, she carried out her scheduled five-year special survey in drydock in Singapore on schedule and budget. Following this drydocking she has been engaged in the spot market until commencement of the new Time Charter.

Øystein Kalleklev, CEO of Flex LNG Management AS, commented:
"We are pleased to announce our fourth contract so far this year. Earlier this year we have announced two-year contract extensions for both Flex Resolute and Flex Courageous from 2025 to 2027 as well as a 500-days extension of Flex Endeavour from 2030 to 2032. With this new Time Charter, we have added 6.2 years of firm backlog so far this year and have secured 100 per cent charter coverage for the remainder of the year. In total, we now have 51 years of firm backlog which may increase to 70 years in the event the charterers are utilizing all of their extension options."

Please find the updated contract overview attached.

For more information please contact:
Knut Traaholt, Chief Financial Officer of Flex LNG Management AS
Telephone: +47 23 11 40 00
Email: IR@flexlng.com 

About FLEX LNG

Flex LNG is a shipping company focused on the growing market for Liquefied Natural Gas (LNG). Our fleet consists of thirteen LNG carriers on the water and all of our vessels are state-of-the-art ships with the latest generation two-stroke propulsion (MEGI and X-DF). These modern ships offer significant improvements in fuel efficiency and thus also carbon footprint compared to the older steam and four-stroke propelled ships. Flex LNG is listed on the New York Stock Exchange as well as Oslo Stock Exchange under the ticker FLNG.

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Flex LNG - Contract coverage 8 May 2024

 

 

 

View original content:https://www.prnewswire.com/news-releases/flex-lng--new-time-charter-for-flex-constellation-302139318.html

SOURCE Flex LNG

FAQ

What is the new Time Charter agreement announced by Flex LNG?

Flex LNG announced a new Time Charter agreement with a large Asian LNG importer for the vessel Flex Constellation, effective from May 7 for a minimum period of 312 days.

Who is the CEO of Flex LNG?

Øystein Kalleklev is the CEO of Flex LNG Management AS.

How many years of firm backlog does Flex LNG have?

Flex LNG currently has 51 years of firm backlog, potentially increasing to 70 years if charterers utilize all extension options.