FLEX LNG Q4 2024 Earnings Report

FLEX LNG EPS Results

• Actual EPS: $0.57
• Consensus EPS: $0.51
• Beat/Miss: Beat by +$0.06
• One Year Ago EPS: $0.70

FLEX LNG Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $89.87 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

FLEX LNG Announcement Details

• Quarter: Q4 2024
• Date: 2/4/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, February 4, 2025
• Conference Call Time: 9:00AM ET

FLEX LNG (NYSE:FLNG) is an emerging leader in the sea-borne transport of liquified natural gas. Liquified natural gas is an economically feasible manner to ship natural gas, but it requires processing at both ends of the shipping process. The company’s objective is to outperform industry peers by focusing on the newest, most efficient vessel types that are available. In regard to reducing global emissions, LNG is the most efficient use of hydrocarbons available, and it is coming under increasingly heavy demand.

Flex LNG was formally launched in 2006 with a British Virgin Islands registration. The company IPOd with a listing in Norway in 2009, and it has been in operation ever since. In 2017 the company redomiciled itself to Bermuda which led to listing on the Oslo stock exchange and then the New York Stock Exchange in 2019.

In 2019 the company also shifted away from rented vessels to in-house management. The company now operates and maintains 13 of its own fuel-efficient LNG carriers including 9 M-type and 4 X-DF-type vessels. The management company’s home port is Oslo, Norway.

Up until 2010, the bulk of LNG carriers were using steam-powered turbines to drive the propulsion systems. That began to change in the early 2000s and then in 2010, a major advancement was made. Engineers began designing slow-speed two-stroke dual-fuel engines that burn a blend of natural gas and marine diesel (or other fuels) highly efficiently.

The two types are M and X-DF which are based on high and low-pressure systems. M-type or MEGI LNG vessels are designed to be significantly more fuel-efficient than the then-current standard and offer appreciable savings to operators. X-DF vessels are another type of fuel-efficient LNG vessel that capitalize on low-pressure technology used by other engine types. The engines also provide greater flexibility because they can burn different types of fuels depending on operating costs.

Today Flex LNG and its network of subsidiaries provide seaborne transportation of liquified natural gas globally. The company also offers chartering and management services to other natural gas carriers. The company does not have an official dividend policy but it aims to distribute free cash to investors as it becomes available. There is a dividend reinvestment plan for shareholders of record. The stock only has 1 class of shares, ordinary, that come with a par of $0.10 following a reverse stock split that was enacted in 2019.

Business is supported by the growing global demand for natural gas and LNG. The company's shipping schedule tends to stay booked out 2 to 3 years from the present with many ships booked on charters/routes for 5 or more years. One deal, with Cheniere Energy, allows for up to 19 years of use and the charter can be extended if needed. This provides a stable and steady revenue stream for the company and dividends for investors. Institutional ownership in this stock tends to run high as well. Total revenue in 2022 was $26 billion and expected to grow at a near10% CAGR.

FLEX LNG Q4 2024 Earnings Call Transcript

Presentation

[Oystein M. Kalleklev, CEO at FLEX LNG]

Hi, everybody, and welcome to Flex LNG's 4th quarter 2024 result presentation where we will also go through the numbers for the full year. My name is Karl Leclerc. I'm the CEO of Flex LNG Management. And as usual, I'm joined by our CFO, Knut Troll, who will walk you through the numbers a bit later in the presentation. As usual, we will go through the financials.

[Oystein M. Kalleklev, CEO at FLEX LNG]

We will cover the market. And after the presentation, we will do our Q and A session. As usual, we have a gift for the best question this time. It's for investor who don't want to get cold feet. We have the Flex LNG warm feet.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So while our cargo is cold minus 162 centigrade or 260 minuteus Fahrenheit, Our investor can have warm feet because we have a lot of backlog, which can weather us through this difficult market in the LNG market the last couple of months. Before we begin, I just want to highlight a a disclaimer. We will be utilizing some non GAAP measures like TCE and adjusted EBITDA and adjusted net income. Those numbers are reconciled in our earnings report also available today. And of course, there are limit to how much detail we can cover in the presentation.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So let's begin with the highlights. Revenues came in at SEK 89,500,000 in line with the guidance of close to SEK 90,000,000 For those who have read the earnings report, you will actually see our revenues was €90,900,000 This is due to EU ETS, the emission trading system coming into force in 2024. And we had the income on EU ETS carbon emissions on SEK 1,400,000 in our charters. This is for the account of our charters. So we received SEK 1,400,000 from our charters in compensation for EU ETS.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And then we also surrender those to the EU, and we have a corresponding cost of SEK 1,400,000 in our voyage expenses. So net freight income, SEK 89,500,000 as mentioned, in line with the guidance. Net income was driven by a sharp increase in interest rate in the Q4 after the election of Donald Trump. So we had derivative income of CHF 20,100,000, SEK 5,100,000 of the derivatives was realized during the quarter as a positive carry, resulting in adjusted net income of SEK 30,800,000 where we only include the realized gains and losses, not the unrealized gain and losses. That means our earnings per share came in at a healthy €0.84 or €0.57 on the adjusted basis.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Recent events we were reporting back in November, we informed you then about the extension of 2 of our ships, FlexResolute, FlexCore Aegis. They were at the beginning of 2024, these ships were extended from 2025 to 2027 where the charter has the option to extend those ships to 2029. And in November, we announced that the Charter has amended the Charter where they have a new firm period for 2029 to 2,032 with options all the way to 2,039. So we are pretty sure these ships are at least gone for to 2,032, possibly a bit longer. Following our Q3 presentation in November, we also announced end of November our new 15 year time charter for Flex Constellation.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So the start up of this charter is in Q1 or Q2 2026 given where the rates are today, which more probable that start up will be Q1 as this is in our option. 15 year takes the ship to 2,041. So we're adding a lot of backlog through these recent new charters at a very good time, I would say, given how the market has experienced the last couple of months. We also done some refinancing, as we mentioned in our presentation in November, adding more attractive debt, CHF 430,000,000 releasing CHF 97,000,000 in cash while extending our debt maturities and lowering the interest costs. We also provide a guiding today for 2025.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So despite the slump in freight rates, we are very well covered with our backlog. So we do expect that revenues will come in line with the number for 2024. The time charter equivalent earnings, it's expected to be somewhere in the mid-70s giving revenues of €340,000,000 to €360,000,000 You should note that we have 4 ships where we are planning to do the special 5 year survey in 2025, while we only took 2 ships out of operations last year. EBITDA, we also expect this number to be fairly in line with last year, SEK 250,000,000 to SEK 270,000,000 So it's pretty good and steady sailing from Flex LNG. So once again, we are declaring then our dividend of SEK 0.75 per share, taking the dividend for 20.24 to $3 implying a running yield of about 12%.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And this we can do given the fact that we have a fortress balance sheet and backlog, €437,000,000 of cash. And as I will touch upon minimum 62 years of backlog, which is about 5 year each ship. Just a kind of summary of the 2024 results. TC, dollars 74,900,000 so this is the time charter equivalent earnings. So it's like the average rate you have obtained on your ships, dollars 74,900,000 we were guiding about $75,000 Revenue, dollars 355,000,000 We were guiding $353,000,000 to $355,000,000 Our Very Narrow Range.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And then adjusted EBITDA smack in the middle of the range, dollars 271,000,000 to $274,000,000 We're delivering EUR273,000,000. And I think for the first time here, we do see Q4 numbers below Q3, given the slump in rates from end of September into Q4 and into 2025 for that matter. Just to touch upon our contract coverage. We have Flex Constellation, which was pictured on the front slide. She is on a 3 12 days time charter.

[Oystein M. Kalleklev, CEO at FLEX LNG]

We expect to get her redelivered end of February, early March. She will then have a 12 month gap where we'll have to trade her in the spot market, which will be a bit challenging and reflected in the guidance. But once she come into Q1 2026, she will commence a 15 year charter to 2,041 where the charter also have the option to extend that ship to 2,043. We also have some ships with other ships with long duration charters, FexRainbow all the way to 2,033. As I mentioned, Resolute and Courageous, we extended in November all the way to 2,032 where the charter can extend those ships to 2,039.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And then we have 2 ships with Cheniere, which we have extended back in all the way back in November 2022, where those ships have been extended to 2,032 and 2,031. We have 2 ships coming open 2029, so leaving us with Flex Freedom fixed until Q1 2027, which we think is a good window where the market will be much tighter than it is today. And then Flexvolunteer and Aurora also with Cheniere fixed until Q1 'twenty six where they have the option to take those ships to 2028. FlexRanger, again, I think it's a good window of redelivery. This ship is switching the air to 2027.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And then we have one ship on index. She's getting close to her firm period. She was fixed from delivery of yard on a variable time charter for 5 year with Gunvor. That is maturing in Q3 when we are planning to do the 5 year special survey for this ship. And then we will see whether the charter utilize their options.

[Oystein M. Kalleklev, CEO at FLEX LNG]

They can extend the ship by 5 single one years. Those options are also on index, which makes it probably a bit more possible that they utilize their extension options since they are not fixed rate higher. So altogether, 62 years of minimum firm backlog, which then might grow to 96 years if the charters utilize all the extension options. Guiding for 2025, I already touched upon it. It's going to be deja vu all over again.

[Oystein M. Kalleklev, CEO at FLEX LNG]

We expect numbers to be very much in line with the numbers we delivered in 2024. And with stable business, stable outlook, we are also having stable dividends, paying now €0.75 again, dollars 41,000,000 in total dividend. So the last 14 quarters, we paid this ordinary dividend of €0.75 per share. We also topped up from time to time with some special dividends. And altogether, this number is now €610,000,000 of dividends the last 3.5 years, which I think gives our investors a stable and good income being invested in Flex.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So before giving over to Knut, just a reminder of our kind of decision factors for putting the appropriate dividend level. We had EUR0.57 of adjusted earnings per share. We are paying slightly higher dividend given the fact we have as Knut will tell you more about, we are flushed with cash. So we think that we can pay out slightly higher than the earnings per share. The decision factors mostly have green lights except for the market outlook where short term outlook is poor.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Medium term is slightly below average, I would say. And then when we are looking at the market from 2027 onwards where we get most of our ships open, it's still compelling with long term charter rates in the mid-80s, which is above the level we are delivering today. So it means that we should be able then to reach out to those ships at better rates in the future. So with that, I think I hand it over to Knut before just to remind you about one number you will not find in this report, and it's actually the most impressive number. It's our lost time injury frequency.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So this is our main safety KPI, where 0 is the theoretical minimum given the fact then you have had no incidents and the number we delivered in 2024 was 0. So no lost injuries, lost time injuries frequency for 2024, which I think is impressive and shows that we are delivering superb service to our customers. So with that, Knut, hand it over to you and I come back with the market update.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Thank you. So let's start off since it's Q4 with a bit of a review of the full year and in particular here the operational days. As you may recall, in 2023, we had 4 dry dockings and this year we have had 2. 33 days of dry docking, which is actually 7 days below our budgets and net of the off hire days for dry docking, we're delivering 99.7% technical uptime, which is a very strong performance. On the TC, as you see here, stable TC, 75,300 for the Q4 and close to 75 for the full year.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

This shows also the stable revenue streams that we have. On OpEx, we are for the year and also for Q4 delivering slightly below our budgets and guiding, which is a strong testament to our cost discipline. For 2025, we are seeing that a number of our ships are coming close to their schedule and maintenance on running hours, in particular for the auxiliary engine and main engines. So in combination with higher crew cost, and that is crew cost for crew changes, in particular crew changes in Asia, we are now guiding an OpEx per day of 15,500 for the year. If we look at the revenues, as I mentioned, we have revenues of SEK 90,900,000 of which SEK 1,400,000 is related to EU ETS.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

And as a reminder, we are subject to EU ETS when our ships are in Europe and having port calls to Europe. This is a cost for the ship owner, but under our time charter agreements, we can reimburse and get that reclaimed from our charters. Revenues received there from the charters will be booked as operating revenues, while we correspondingly will book the same amount as voyage expenses. EBITDA, we are delivering SmackDown guidance, and one of our important numbers is the adjusted net income, where we adjust for non cash items. And for the Q4, we are adjusting SEK 15,000,000 for unrealized gains on the interest derivative portfolio and SEK 0.5 million loss of FX portion we have.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

And as we presented also on the Q4 presentation, we concluded some refinancing in Q3. That refinanced tree ship, leaving the Flex Endeavor unencumbered. So therefore, you would also see a lower debt balance and also cash balance on the Q3 numbers. The long term lease for Flex Endeavor was concluded on the 3rd October and then releasing the full amount of SEK160 1,000,000. So during the quarter, we had SEK52 1,000,000 on cash flow from operations, then the scheduled debt amortizations and then close to SEK41 1,000,000 we paid out in dividends.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

That leaves us with a very strong cash balance of SEK437 1,000,000 This is a reminder that how we keep our balance sheet, it's fairly clean. It's ships and cash. And then we have debt on the other side and the book equity. And as you show here, our book values are more or less reflecting all time low values, but we still maintain a fairly decent book equity ratio of 30% given our backlog. And most importantly, our debt funding portfolio, very attractive mix of both bank debt and leases, where we also include RCFs to manage our cash position.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

During the quarter, we converted a term loan, a Boulle term loan for 1 of our with 1 of our banks to an RCF and thereby increasing our RCF capacity to about SEK 414,000,000. That we use in between quarters for cash management and reduced interest rate cost. And net of the RCF, we see here our net debt balance. And what on our interest rate exposure, the SEK 530,000,000 in the dark blue is basically our net debt exposed to the floating rate market. Remaining here is fixed rate debt and hedged debt, which I will cover in the next slide.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Also on the debt maturity profile, our first debt maturity is in December 2028. That's related to Flex Resolute. And given that she was we announced a contract extension for her on the Q3 presentation, That is a very manageable residual to refinance. We see here a Gone Fishing sticker. You see 3 hooks.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

We did announce 3 contracts or contracts for 3 ships on last quarter, even though we have a very attractive debt funding portfolio. We will consider refinancing of these 3 ships, in particular given the long duration of those contracts. We have been managing our interest rate risk very actively. Last quarter, we did some amendments and added more duration to secure coverage during these high interest rate environments. So we have extended duration, which has also yielded very well, which is shown in both realized and unrealized gains during the Q4.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

This is a mix of traditional interest rate swaps and also fixed rate leases and fixed rate portions of our leases, which is primarily in our Japanese operating leases. So in conclusion, and also this we get a lot of questions about dividend sustainability. This slide can be read in conjunctions with the decision factors for our dividend. We have stable cash flow. We have a very healthy balance sheet with SEK437 1,000,000 in cash.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

We have barely non CapEx liabilities and 1st debt maturity in 2028. So that is what is there to support both our commercial and financial flexibility and dividend story. So with that, I hand it back to you, Kristian.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Okay. Thank you, Krit. Let's dig into the market a bit. Yes, 2024 was a year with record low growth in export volumes. We put in a recent history, we on our Kepler platform, we couldn't find any year with less growth than 2024, but I can't rule out that this could have happened sometimes in the 70s or 80s.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So I just put in recent history. Actually growth in the market was lower than 2020 when you had this wave of U. S. Cargo cancellation. In 2020, the export market actually grew 1%.

[Oystein M. Kalleklev, CEO at FLEX LNG]

It's only 0.2% this year. It's a combination of factors. It's been some delays on liquefaction plants. And then, of course, there's been the sanction on the expansion of Russian capacity, particularly the Arctic LNG 2, which I will come back to later. But despite the sanction on Russian LNG plants, Russia managed to grow their exports 4% last year, and Europe was one of the big takers of Russian LNG.

[Oystein M. Kalleklev, CEO at FLEX LNG]

U. S. Only 1% growth in 2024. Nigeria have resolved some other issues with feed gas problems and managed to show a healthier growth both in Q4 'twenty four and for the full year. On the import side, it's been a year where Europe has stepped back.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Europe has had the benefit of 2 very mild winters in a row prior to this winter, resulting in Europe coming out of the winter season last year with very high inventory levels and a step back from the market giving more room for Asian countries, particularly than China, which grew healthy last year, getting close to the record levels they had prior to the invasion of Ukraine. So I believe they ended up at 78,500,000 or 79,000,000. The record high is 80,000,000 tonnes. And then India, up actually 14%. This has changed a bit in the past with the cold winter and the big inventory draws in Europe.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Europe has been making a comeback in the market as we've shown on this graph. Before the invasion of Ukraine by Russia, Europe imported around 80,000,000 tonnes. And then during this energy crisis of 2022, they really were the buyer of 1st and last resort, increasing their imports all the way to 127,000,000 tonnes, primarily sourcing a lot of spot U. S. LNG at that time.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Import stayed stable in 2023, but then given the 2 mile winter, they came out of last winter season with high inventory. So imports in 2024 slumped to 103,000,000 tons, but this is changing now with our colder winter, less renewable output, especially in Germany. We see that the inventories in Europe are well below the last couple of years and we do expect Europe to come out of the winter with low inventories with a big need for restocking during the summer months and this is also reflected in the price of LNG. So we have this graph here showing the 3 main indices for natural gas prices. It's the Henry Hub in the U.

[Oystein M. Kalleklev, CEO at FLEX LNG]

S, which is the main benchmark price for natural gas, hovering around $3 to $4 cheaper one of the cheapest gas sources you can have. Then JKM, meaning Japan, Korea market. So this is more like the spot LNG price in Asia, although most of the Asian players, the big nations like Japan, China, Korea, they have a lot of LNG they buy on long term contracts linked to oil price. So this is the spot price. And then you have the more like the regulated European market where the main benchmark for Northwest Europe is TTF, Title Transfer Facility, which is our virtual pricing hub in the Netherlands.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So generally, what we have seen now is that prices have been picking up and picking up to a level where LNG becomes expensive for $15,000,000 per 1,000,000 BTU, meaning oil price at above $80 resulting in more of the Asian nations turning to more affordable energy like coal. So we see here that the pull from Europe is pushing up prices where the kind of killing off the arbitrage, meaning it's more profitable to send the U. S. Cargoes to Europe rather than Asia despite actually shipping being now more or less for free. So this change in trading pattern in the latter part of 'twenty four and into 'twenty five have resulted in a big slump in the freight market, which I will also cover later.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Looking at Asia, had a good start of the year, pulling a lot of cargoes, up at record high levels. And then we see a bit lower growth from Asia at the end of the year as Europe came full force into the market. Stable market in the kind of mature markets being JKT, meaning Japan, Korea, Taiwan. Taiwan did grow their imports quite a lot, but Japan and Korea fairly stable. China, as I mentioned, growing fairly steady and the same goes with South Central Asia.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Then going turning back to Russia and the sanctions. There are a couple of big LNG export plants in Russia. 2 of them are not sanctioned. This is Sakhalin, primarily exporting to Japan, Korea, China and then Yamal, which generally can export cargoes to Asia via the Northern Sea route with specialized LNG tankers. But when the ice is thick, they like to export those cargoes into Europe and Europe has been our willing buyer.

[Oystein M. Kalleklev, CEO at FLEX LNG]

As you can see on the graph on the left hand side here, Europe record high import of Russian LNG last year. Some of the newer projects, as I mentioned, been sanctioned, particularly then Arctic LNG 2. It's a big plant. The first train is up and running, but they have not been successful in placing those cargoes in the market. And the second train is also ready for commissioning.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So we'll see how this develops, whether there will be a grand bargain with EU, Trump, Russia, Ukraine and whether this part of the deal will be a lifting of the sanction on Russian gas and LNG. Then some of these cargoes might come back into the market at least. Seems to be some signals from part of the EU that they are willing to make certain concession in order to leave this war behind us. Then looking at the export market, there is a lot of volume coming to the market, a lot of volume which were already sanctioned or given the green light prior to Biden putting in the moratorium on new export licenses January 2024. And of course, as we expected and mentioned when we had our Q3 presentation in November, we did expect that President Trump would remove these limitations very quickly, which he did.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So there is a lot of new projects in the U. S. Ready to be FID. We see on this lower on the right hand side here, we have picked out some of the key contenders to get FID either this year or next year being Lake Charles, Delfin LNG, Sabine Pass expansion, Woodside, Louisiana, CP2 and possibly as well as Alaska LNG. However, there's a lot of trade disputes going on.

[Oystein M. Kalleklev, CEO at FLEX LNG]

We saw overnight China coming in putting a tariff on U. S. LNG similar to what they did back in 20 eighteentwenty 19 when we had a period of time with 13 months without China sourcing any LNG from U. S. So the Chinese have made contracts with a lot of these U.

[Oystein M. Kalleklev, CEO at FLEX LNG]

S. Expansion projects. And in case this tariff stays in place, we would expect them to resale those cargoes possibly to European buyers and rather source more LNG from Qatar, Australia, Russia, West Africa. So this is still up in the air a bit. These trade wars are volatile.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Certainly, there is tariffs and then there are 30 days' grace. So we just have to monitor the development. But in any case, there is a lot of LNGs coming to the market. And unless there is a really big trade war here, we do expect a lot of new U. S.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Projects to come into the Piper, also given the fact that Europe also is expected to have some trade conflict with the U. S. Where President Trump is really forcing Europe to be buying more LNG from U. S. Touching upon the freight market, which is the market which we are active in.

[Oystein M. Kalleklev, CEO at FLEX LNG]

As I mentioned, the market was behaving quite normal during 2024, actually a bit firmer during the summer months than we expected. And but once we came into the winter season rather than the market or the freight rates shooting up, which is usually the case, they slumped. And they have continued to slump throughout 2025 where they are now at rock bottom level at around $10,000 per day, which makes it very uneconomically, especially for the older tonnage. What are the drivers? It's caused the change in trading pattern where most cargoes are going into Europe, cutting down the sailing distance.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And this is freeing up a lot of ships. As you can see here on the left hand side of the graph, a lot of ships in the around 35 ships available in the market. This is softening then the freight rates. We also saw during last year a big grow in spot fixtures. As kind of the cargo prices have come down, the panic has been alleviated.

[Oystein M. Kalleklev, CEO at FLEX LNG]

More of the charters are tapping into the spot market given the vessel availability, fixing their ships on spot voyages rather than fixing them on longer term contracts. So in that regard, I think we have done well. We have been utilized that window during 2021, 2022, 2023 and also into 2024 fixing a lot of ships on longer term contracts rather than just playing spot. Looking at the most inefficient ships, the steam tonnage. Generally, we could say there are 3 types of ships there.

[Oystein M. Kalleklev, CEO at FLEX LNG]

It's the older steam ships, there's still around 200 of these ships in the market. And then there are the high fuel or dual fuel diesel electric ships. And then we have the modern ships, the 2 stroke, which has, of course, better economics given that they are larger and has a much more efficient propulsion system. Rates for steam tonnage, we peg the tail on the Affinity and Clarkson numbers at $2,500 per day. If we look at the further number today, the number for the rate for steam tonnage, it's actually 0.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So we have been talking about this for a long time. It's an overdue scrapping cycle for steam tonnage. These ships have been surviving because you have had generally quite good markets, especially in 'twenty two and 'twenty three and into at least the Q1 of 2024. So given the slump in the market and making these ships unattractive, we do expect to see a big uptick in scrapping this year, next year and the coming years, driven not only by economics but also by environmental rules, which put a disadvantage on these ships except for the fuel EU maritime, which I'm going to cover also lately. In terms of newbuilding prices, they have stabilized at around $255,000,000 per ship, delivery window now generally being 2028, elevated newbuilding prices and also fairly high interest rate in recent history is also then driving up long term charter rates.

[Oystein M. Kalleklev, CEO at FLEX LNG]

In order to invest in new ships, you need a rate at least in the mid-eighty thousand to get a reasonable return on such an investment. So longer term rates are holding up for those contracting ships for delivery 2020 out 2028 and onwards. Looking at the order book, it's a big wall of new buildings hitting the market and is one of the reasons why we try to fix our ships until 'twenty seven, 'twenty eight where we think the market looks better balanced. For 'twenty four, we were expecting 68 ships for delivery given the soft market. There's been some slippage, which usually happen in a soft market.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So only 60 ships for delivery last year, meaning there will be more ships for delivery in 2025, 93, we expect and then 83 ships for delivery, 'twenty six and 'twenty seven. As you should note here, most of the ships or almost all of them are built towards long term charters Given the elevated newbuilding prices and given the size of the order book, there's hardly any speculative ordering left. There are a few ships which are uncommitted delivery in 'twenty 25, 'twenty 6, 'twenty 7. And then from 'twenty 8 onwards, all those ships are either for long term projects and also the Qatari, which has expanded the fleet by more than 120 ships in order to renew their fleet and also to have more ships for the big expansion going on in Qatar. So if you look at the market here, we have been in our phase with limited growth now the last 2 years and then the growth will pick up in 'twenty five, continue to grow in 'twenty six, 'twenty seven onwards, which will rebalance the market together with scrapping of older ships.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So when it comes to older ships, we put out the different types of ships there. As I mentioned, our less efficient ships being the steam turbine ships, and that's why they have a big penalty on the EU emission trading system cost per day for a steamship, euros 7,200 per day. This tax is paid in euro. Euro and dollar is more or less the same today. So you don't really need to be have a FX conversion to calculate the dollar amount.

[Oystein M. Kalleklev, CEO at FLEX LNG]

The other generation, the tri fuel or the dual fuel diesel electric, EUR 5,600 a day. And then the more modern ships, the MEGI and the XDF, which our fleet consists entirely of, we have 9 mega ships. And 4 XDF ships, they have a smaller kind of EU ETS drag, EUR 4,600 per day. However, EU, they don't like to make things simple. So while I think most ship owners support this system, we generally like a predictable carbon tax, which is penalizing the less efficient ships.

[Oystein M. Kalleklev, CEO at FLEX LNG]

EU has also implemented this year what they call the fuel EU maritime, which is a system for decarbonizing maritime fuel. Since LNG is a cleanup burning fuel, you will get kind of reward for burning LNG compared to very low sulfur oil or heavy fuel oil with a scrubber. There is a huge penalty if you are not complying with the FuelEU Maritime Regulation, the penalty being €2,400 per metric ton of VLSFO equivalent. It's a complicated word. So we've taken the numbers from the ship book affinity and calculated what will that benefit be.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So you can see on our ships, we will get the benefit from pretty big benefit from the fuel EV maritime, more so on the MEGU, which we have 9 of because they have hardly any methane slip. Slightly less benefit on the XDF because of they have a higher methane slips than the mega ships and then a further penalizing of the dual fuel diesel electric or tri fuel diesel electric due to the high methane slip. However, the steam ship, which doesn't have any methane slip, they do, however, have a huge fuel consumption. That's why they are being penalized by the EU ETS. But they also get a huge benefit from the fuel EU maritime.

[Oystein M. Kalleklev, CEO at FLEX LNG]

I don't really think that they can it's inconceivable that they will be able to sell these kind of rewards to other, but they can enter into certain pooling arrangement where they can reduce the penalty or kind of swapping costs for other parts of the fleet, for example, if you have all the containerships, bulkers or tankers. So in general, we think this system is unnecessary. And given how it's structured today, it's actually favoring the steam ships because they are burning a lot of LNG, which is clean fuel. So we just put up a good old quote from Ronald Reagan and modified it to 2025. The 9 most terrifying words in English language in 2025 is not the government, but I'm from the EU and I'm here to help.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So more about the EU, they like to make a lot of rules. Some of these rules are also driving business costs. Most recent now, the CSDR, we have also gone through the Corporate Sustainability Reporting Directive. We are listed 2 places in Oslo and in New York. And then we have to comply with both sets of rules, both the U.

[Oystein M. Kalleklev, CEO at FLEX LNG]

S. Rules and the European Union rules. This is driving up cost for us. It's not like we want to avoid reporting on sustainability. We actually have provided our ESG report every year since 2018 where we give full disclosures on a lot of numbers according to the Sustainability Accounting Standard Board.

[Oystein M. Kalleklev, CEO at FLEX LNG]

On top of that, we have added the Global Reporting Initiative. And based on feedback from investor, we also added the carbon disclosure projects. And our ranking will come out on Thursday. Last year, we had a B ranking on the carbon disclosure project reporting. And our ESG report for 2024 will also be available probably around April.

[Oystein M. Kalleklev, CEO at FLEX LNG]

However, having to deal with 2 sorts of regulation, which is quite costly in terms of consultants, auditors and such, And given the fact that 95% of our trading today is on New York Stock Exchange and the fact that New York Stock Exchange is planning to widen the opening hours or trading hours to 22 hours a day, we have decided to propose to the Board for the approval of the Annual General Meeting in May to delist in Oslo and rather save that money so we can rather spend that on focusing on one set of reporting requirements instead of having to deal with 2 conflicting sets of reporting requirements. So with that, I just think we're going to run through the summary before going for our Q and A session. As mentioned, revenues in line with guiding, we are delivering very strong results, €45,000,000 or €31,000,000 depending on whether it's the net income or adjusted net income giving our EPS of €0.84 or €0.57 We have added a lot of new backlog during Q4, putting us in a very good position to deal with the slump in the freight market during 2025 as we are guiding very similar results for 2025 as we achieved in 2024.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And with a big backlog, a big cash position, once again, we are paying out €0.75 giving you guys $3 in dividend per share or a yield of 12%. So with that, I think we head over to the Q and A session. And Knut, you probably have some questions ready.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Already. So maybe we should start taking 2 steps back and looking at the natural gas market. And we use abbreviation for certain pricing hubs, JKM, TTF and also Henry Hub. There's a question here if we can explain more what these hubs are and the interlinks between them.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Yes. I think I did it in the slide with the gas prices with Henry Hub being the main index in U. S, JK being the spot price for LNG in Asia, meaning Japan, Korea market and then TTF being the virtual gas hub in Netherlands, which is a big importer and a kind of a central hub in the pipeline network in Northwest Europe. Of course, there are a lot of other gas hubs. Last year, 2024, the average price on the Vaja gas hub in U.

[Oystein M. Kalleklev, CEO at FLEX LNG]

S, which is West Texas, the average price was 0. So actually, they were producing more gas than they could export. So they have to give it away with a price of 0. So this kind of in U. K, for example, you have the national balancing point, but these three indexes, Henry Hub, TTF, JK are the most relevant.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Do you see pricing on TTF and JKM? When do you see cargo moving the other way around?

[Oystein M. Kalleklev, CEO at FLEX LNG]

Yes. We had a good question earlier today about that. What is the sweet spot for these kind of prices? In general, if you're doing shipping, you would like to have sailing distances as long as possible because that is driving up demand for shipping. So I think in a sweet spot scenario, we would have HENRIB at around where it is today, dollars 3 or so.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Generally, there is a liquefaction toll. So you need to have a certain margin to move that cargo to Europe. So if HENRIB is $3 we'd probably like to have $7, $8 in Europe and then maybe $8 to $9 in Asia because then you would incentivize people to send the cargoes to Asia rather than sending them all the cargoes to Europe. And at the same time, you would like to have gas pricing coming down. Dollars 15 is at a level where people would rather like to burn coal.

[Oystein M. Kalleklev, CEO at FLEX LNG]

If we are to replace coal with natural gas, we need to get prices lower. If you have $10 a barrel of oil is 5,800,000 btu, meaning that $10 gas price means $58 per barrel of oil. So then it's also cheap comparable to oil. So that's the level where we want to have it, where it's not destroying demand but actually stimulating demand and stimulating substitution away from coal.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Yes. And we touched upon in the presentations with the new President, Mr. Trump in office, day 1, scrapping the moratorium. Do you see any movement in new FIDs? Or when do you expect to see these FIDs being taken and new products can

[Oystein M. Kalleklev, CEO at FLEX LNG]

progress? There is a lot of projects now. So the people who have this project, they have not been idling now for 13 months since the Biden moratorium. So while this moratorium has been in place, I think everybody understood that this moratorium would be removed whether or not Trump won. So even with Kamala Harris, we would expect the moratorium to be lifted, although probably it would take a bit more time.

[Oystein M. Kalleklev, CEO at FLEX LNG]

With TRUMPF, it was removed immediately. So while these process have been ongoing, those projects have been signing up new SPAs or sale and purchase agreements for LNG, what you call the offtake agreement. So typically, if you have a big LNG export, it's quite capital intensive. You would probably like to have contracts for 80%, 90% of that volume in order to make that investment. So a lot of these projects now have a very high level of contracted LNG, which means that a lot of the projects are also ready to push the button this year on green light for expansion.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And then typically, it takes 3, 4 years for first cargo to be produced. Plaquamina Snow, which is owned by Venture Global, which recently did the IPO in the U. S. Market, they managed to do the first cargo after 30 months after the FID. On the previous project, Calcea Pass, it was also something similar.

[Oystein M. Kalleklev, CEO at FLEX LNG]

I believe it was 28 months. So although it's not like 30 months and you get full production, then you need to ramp it up over a period of time. So in general, I think 3 to 4 years is a good so if they do the FID this year, you could see those volumes coming from 'twenty eight, 'twenty nine as we also shown in the graph where we expect the growth to come from those projects. So first, we will have growth from the pipeline of projects already under construction being mostly Qatar and U. S.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And then there's a new wave of FIDs. However, it's not very constructive with the trade rhetoric from term, which tend to scare away buyers because if suddenly there are tariffs, that might make it uneconomically to take those LNG cargoes to those import nations who have acquired them. We would like to see our toning down of the trade rhetoric. That would be very helpful for the LNG market for sure.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Yes. That leads into the next question because they push forward 1 week and Trump introduces tariffs and there's a lot of question on geopolitical risk. But in particular, on tariffs against China and how do you see that play out?

[Oystein M. Kalleklev, CEO at FLEX LNG]

Yes. This time, no big surprise. The Chinese has been preparing for this. So they have their playbook ready. So once he put on that new tariff, they had ready playbook for what to do.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And not surprisingly, like they did last time, they are slapping on tariff 15% on LNG. Last time this happened, 2018, 2019, they started with 10% tariff, increasing it to 25%. And you had this 13 months window where they didn't import a single LNG cargo from the U. S. And then finally, they had like a trade Phase 1 where China again started to import a lot of LNG and actually committed to import a lot more LNG from U.

[Oystein M. Kalleklev, CEO at FLEX LNG]

S. Together with soybeans and oil. So I'm not surprised that they're coming with this retaliation. As I understand, Trump will talk to Xi Jinping this week already. But I think it's not going to be sorted out very quickly.

[Oystein M. Kalleklev, CEO at FLEX LNG]

China has a huge trade surplus. Donald Trump is a very mercantilist in terms of trade. He thinks that the trade deficit with every country should be more or less 0, which doesn't really make sense from an economic perspective. So we would expect this to last for some time, whether there will be a grand bargain, maybe a trade agreement Phase 2. Let's see.

[Oystein M. Kalleklev, CEO at FLEX LNG]

I think for Trump, his favorite President is Reagan. And he made certain similar agreements with the Japanese in the '80s. And I think that is the plan and we'll see how that develops. I think in general anyway, the cargoes they will be produced and it's just where they will end up. So in case China import less LNG from U.

[Oystein M. Kalleklev, CEO at FLEX LNG]

S, then Japan and South Korea, Thailand, other countries will import more, also Europe and then China will just have to substitute the U. S. LNG with other LNG. And very soon, they will also have the alternative of sourcing LNG from Canada, from the LNG Canada project.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

And that moves us over to the fleet and the fleet balance. There are sort of two questions here. Starting off with opportunities. There are uncommitted ships in the newbuilding fleet and there are also existing modern ships in the fleet. Do you see that open up opportunities in this market for attractive acquisitions or M and A opportunities?

[Oystein M. Kalleklev, CEO at FLEX LNG]

Yes. There's just a handful of uncommitted ships. There's very few and we know certainly know who the owners are of those ships. In general, we've been saying this for years. I don't want to repeat myself too much, but we have a very good company.

[Oystein M. Kalleklev, CEO at FLEX LNG]

We have very happy customers who are repeating customer comes back and extend the ships with us for longer periods. As I mentioned, we deliver very good operations. You saw the technical off hire, 99.7 percent uptime. As I mentioned, lost time injury frequency, our key health and safety measure was 0, which is the theoretical minimum in 2024. So we have a good operation.

[Oystein M. Kalleklev, CEO at FLEX LNG]

We have a good setup. We have good access to financing being both equity capital markets and debt markets. So we could easily scale this company more. We're always open if somebody who have modern ships who would like to consolidate and be part of a bigger company then we are open to grow our company and we can do that easily without adding much cost. So we are open to consolidation.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Buying ships is very easy. You just pay the highest price, the higher than anybody else, then you will be able to grow your fleet. What we try to be is disciplined. So we are paying the right price and a price that makes sense for the Flex LNG shareholders.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Then on fleet balancing, the question is that you we've talked about the steam tankers and scrapping and the question here relates more to UC conversion projects to import terminals either for the steam tankers or the dry fuels. So that helped the fleet balance in the short term.

[Oystein M. Kalleklev, CEO at FLEX LNG]

It's not enough. It's like 200 steamships. So you can't have 200 FSRUs. So I think really a lot of these older ships typically they were put on our 20, 25 year charter when they were built. And we have shown in the past, we have had certain graphs about this on the roll off of steam tonnage on existing legacy contracts.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So there's a lot of steam ships coming open and they will find a very hard time in the spot market. Nobody wants to fix those ships. As I mentioned, Fearnleys is quoting rate for steam ships today at 0. So we do think that scrapping will certainly pick up. Steel prices are still pretty well at the well level.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So you get $15,000,000 or so for scrapping that ship, which has no future. So we think that somehow a lot of these ships will be scrapped. Some might be converted to FS as a floating storage ships. Some may be FSRUs. Some may be power ships, which actually will drive demand for LNG as those needs to be fueled by LNG.

[Oystein M. Kalleklev, CEO at FLEX LNG]

And actually, the trifolds are better candidates for FSRU conversions. But we do expect some of the 1st generation of dual fuel diesel electric. We will also find a difficult time in the market because they are subscale. And as I mentioned on this environmental metrics, both EU ETS and the fuel maritime, they score very poorly.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

On the steam tankers, we talked about scrapping due to high cost for the 20, 25 year special surveys, and they're earning 0 today. So Claire Pennington asked, so the cash burn now, what kind of OpEx levels are they for either cold storage or in operations? For how long will they survive?

[Oystein M. Kalleklev, CEO at FLEX LNG]

The OpEx is quite similar. So our steam ship, let's call it $15,000 a day in OpEx. Of course, you can put a ship in layup, then you can either do it a cold layup or a warm layup, warm layup being that you have a crew on board. So if you have a crew on board, basically you will have those running costs. Then there is a cost of layup that really depends on where you're laying up the cost.

[Oystein M. Kalleklev, CEO at FLEX LNG]

The ship, if there are certain port costs or not, this varies. You rather want to have cold weather so you don't get too much barnacles on the hull. But in general, these ships have lived out their life. They are not economically. So of course, you can put a ship in warm layer for a short period of time.

[Oystein M. Kalleklev, CEO at FLEX LNG]

But given the numerous ships coming here, the wall of ships coming in 2025, 2026, 2027, we don't really see that the market turning up very quickly. And that's why we built the backlog. So I think that it's better probably to retire those ships. Time value of money is quite high today even after the Fed has cut our interest rates. The interest rate is like 4.5%.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So if you are delaying that kind of if you scrap the ship, you get a $15,000,000 payout. If you are instead waiting and incurring costs and then if you're incurring those costs with the layup, they will also have other implications. You will lose your certificates. This is what you generally what we call the SARE certificate. You might have extra cost for rebooting the ship, which will drive also the cost of reactivation.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So in general, I think the steamships really aren't layup candidates. They are scrapping candidates today, which is going to be helpful in terms of bringing back the market balance to 2027. I believe last quarter in November, we had a graph showing how we and SSY expect the market balance to develop where we see that the market going back to a better balance in 2027 and where they then are assuming 53 steam ships to be scrapped within that time frame. Last year, it was 8 ships. Market was okay last year.

[Oystein M. Kalleklev, CEO at FLEX LNG]

No market is not okay. So we do think that this number of steam ships, 50 or so ships to be scrapped, seems actually a bit low now given the outlook.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Then moving over to our fleet and there are basically questions related to 2 of our ships. It's Flex Constellation and 15 year contract. I think we covered this last quarter as well, but it's a question, is this related to or linked to particularly liquefaction projects or an SBA?

[Oystein M. Kalleklev, CEO at FLEX LNG]

No, it's really linked to our portfolio. So we haven't disclosed the charter. I think Tradewinds have done that for us. But what we have said is a huge Asian industrial LNG buyer or agglomerator. So they buy a lot of LNG.

[Oystein M. Kalleklev, CEO at FLEX LNG]

It's one of the biggest LNG buyers out there. They buy LNG from a lot of different projects and then they need to renew their fleet of ships, finding the most efficient ships. And this ship will go into the portfolio where they source LNG worldwide from various projects.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

And then following up on 15 year contract in this period, are there another or a lot of other 10 year opportunities or similar tenders out there?

[Oystein M. Kalleklev, CEO at FLEX LNG]

Right now, it's a pretty slow market. It's really the cargo owners or the charters who can pick and choose what ships they want. Given where the rates are today, most people are doing, as I've shown on the graph earlier today, spot fixtures have gone up a lot. That typically happen when there is too many ships in the market. Nobody really are in any rush to fix ships on longer term contracts.

[Oystein M. Kalleklev, CEO at FLEX LNG]

They rather just tap into the spot market whenever they have a need for a ship. I expect that to continue until the market tightens. And also then when people expect it to tighten, so typically what happens is that, of course, people are dynamic here. So once you see that the market is gradually tightening, somebody wants to be smarter than other and kind of jump on the wagon before it leaves and try to fix some ships on longer term charters before the rates picks up. So that is something that not sure that's going to happen this year, but probably when we are getting into 'twenty six and 'twenty seven.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

Another ship is the Flex Artemis on variable hire contract. I believe the question is more of a reminder how does this variable hire contract work?

[Oystein M. Kalleklev, CEO at FLEX LNG]

Yes. It's a we fixed that ship on a variable hire contract back. It was the first term deal we did. We did that end of 2019 and we announced it was with Gunvor, which is one of the big LNG traders. Initial period firm period was 5 years for home delivery.

[Oystein M. Kalleklev, CEO at FLEX LNG]

That ship was delivered August 17 from DSME, which is now called Hanva, 2020. So as you go on a variable charter where the rate is set for each voyage with a certain floor. So the rate cannot be lower than a certain floor and it cannot be higher than a certain ceiling. So in that range, we will get a rate and the rate will be pegged depending on the spot rates observed for modern tonnage, meaning MEGI, XDF, Mega, the 2 stock ships. This firm period is coming to our end then in August 2025.

[Oystein M. Kalleklev, CEO at FLEX LNG]

The charters do have 5 single year options. All of those options are also at a similar index. So meaning that if they declare the options, they will also benefit from having our rate linked to the spot market. So right today, of course, they are paying our rate at the floor, maybe not too surprisingly. And once we're getting closer to August, we will know whether they will extend that ship.

[Oystein M. Kalleklev, CEO at FLEX LNG]

If not, we will do the 5 year special survey of that ship and have it ready for the winter market. It's a very attractive ship. It's together with Resolute and the Freedom, the most efficient ship we have with a so called full re liquefaction plant. So they have 2 compressor where they can take the boil off down to 0.0 percent, 3%, 5%, meaning that we can kind of form a ship which is a thermos, minus 162 centigrades. You always have a heating up of that cargo and that heat creates gas vapor.

[Oystein M. Kalleklev, CEO at FLEX LNG]

We utilize that gas vapor to burn as fuel on the ship. On these 3 ships, you have our full relic system where you can basically reliquify almost all of the boil off gas. So in case you are waiting or you have to take down speed, you can regulate that with these compressors. We also have 4 ships which are partial reliqued systems. So it's one of the best ships.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So hopefully, they will continue with the ship as a happy customer, but we will know once we're getting closer to the final maturity of that contract.

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

I think that concludes the Q and A session. So it's time to announce the winner. Yes.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Okay. Do you have an idea?

[Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd at FLEX LNG]

We have received a lot of good questions from Claire Pannington from Independent Commodity Intelligence Services.

[Oystein M. Kalleklev, CEO at FLEX LNG]

Also known as ISIS, but it's not It's a friendly one. Yes, it's the friendly ISIS, yes. So okay, thank you then, Claire. You have been asking me a lot of questions during the year. So you will have these swanky socks.

[Oystein M. Kalleklev, CEO at FLEX LNG]

As I mentioned cold cargo, but you will keep your warm feet. I will send you 2 of these pairs. And that concludes today's presentation. It's my 3rd quarterly presentation. So I'm looking forward to presentation 31 in May.

[Oystein M. Kalleklev, CEO at FLEX LNG]

So thank you everybody for listening in and hope to see you soon again.

Participants

Executives

• Oystein M. Kalleklev, CEO
• Knut Traaholt, CFO of Flex LNG Management AS & Principal Financial Officer FLEX LNG Ltd