Released October 04, 2024 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--After refinancing its entire fleet of 13 vessels earlier this year, Bermuda-headquartered FLEX LNG (NYSE:FLNG) closed on $430 million in new financing, some of which would support further fleet advancements.
The company said Wednesday that about half of the new cash would finance the Flex Aurora and Flex Ranger vessels designed to carry liquefied natural gas (LNG). Both are already on the water.
"The refinancing will repay the full amount outstanding under the existing tranches of the $375 million facility, in respect of Flex Aurora and Flex Ranger," the company explained on securing the financing in July.
The rest would presumably prop up its cash balance, which was $370 million as of June 30.
In its Wednesday statement, the company said it was supporting a fleet of 13 vessels that utilize the latest technology for two-stroke propulsion systems.
"These modern ships offer significant improvements in fuel efficiency and thus also carbon footprint compared to the older steam and four-stroke propelled ships," the company explained.
The maritime shipping industry is obligated to lower its carbon footprint through a variety of means, including even using LNG as a fuel rather than diesel. Around 90% of all globally traded goods are carried by ship at some point in the supply chain, including LNG, which has supported energy security in the European economies at least since the Russian invasion of Ukraine in 2022.
The United States is the world leader in LNG exports. Data compiled by Industrial Info Resources found exporters shipped out 11.8 billion cubic feet of gas in the liquid form on Wednesday, which represents 77% of total export capacity.
Click on the image at right for a graph showing LNG exports originating at terminals across the U.S. from January 2019 through September 2024.
Knut Traaholt, the chief financial officer at Flex LNG, said its refinancing efforts came through "at very attractive terms."
"We are grateful for the trust and strong support from our banks and lease providers which have resulted in a very attractive funding platform for Flex LNG," he added. "Our financial strength together with the substantial charter backlog provide us with significant commercial and financial flexibility to further develop the company."
The LNG sector, however, is getting crowded and returns are on something of a decline. Flex LNG realized an average time charter equivalent for its vessels of $72,385 per day during the second quarter, compared to $76,539 over the three months ending March 31.
Adjusted net income during the second quarter was $30.4 million, down nearly $7 million from first quarter levels.
The company said the second quarter is typically its worst quarter of the year due to a seasonal slump after the first quarter. The company put two ships on drydock during the quarter due to the slowdown. Similar sentiment was expressed during the first quarter, however.
That said, no more drydocking is expected for the remainder of the year and the company said it expects to see a recovery due to higher rates. The company in August said it expected to see revenues increase to $90 million in the third quarter, compared with $84.7 million sequentially.
Flex LNG during the first quarter, meanwhile, said it refinanced its entire fleet, which increased its cash balance by around $380 million, after fees and expenses. The global trade in LNG, however, is expected to decline.
An early-year report from The Institute for Energy Economics and Financial Analysis found LNG projects by next year may be facing something of a bearish market.
"As new supply floods the market, today's tight markets may give way to a supply glut, with lower-than-anticipated prices, smaller netbacks, tighter margins, and lower profits for LNG exporters," it said.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The company said Wednesday that about half of the new cash would finance the Flex Aurora and Flex Ranger vessels designed to carry liquefied natural gas (LNG). Both are already on the water.
"The refinancing will repay the full amount outstanding under the existing tranches of the $375 million facility, in respect of Flex Aurora and Flex Ranger," the company explained on securing the financing in July.
The rest would presumably prop up its cash balance, which was $370 million as of June 30.
In its Wednesday statement, the company said it was supporting a fleet of 13 vessels that utilize the latest technology for two-stroke propulsion systems.
"These modern ships offer significant improvements in fuel efficiency and thus also carbon footprint compared to the older steam and four-stroke propelled ships," the company explained.
The maritime shipping industry is obligated to lower its carbon footprint through a variety of means, including even using LNG as a fuel rather than diesel. Around 90% of all globally traded goods are carried by ship at some point in the supply chain, including LNG, which has supported energy security in the European economies at least since the Russian invasion of Ukraine in 2022.
The United States is the world leader in LNG exports. Data compiled by Industrial Info Resources found exporters shipped out 11.8 billion cubic feet of gas in the liquid form on Wednesday, which represents 77% of total export capacity.
Knut Traaholt, the chief financial officer at Flex LNG, said its refinancing efforts came through "at very attractive terms."
"We are grateful for the trust and strong support from our banks and lease providers which have resulted in a very attractive funding platform for Flex LNG," he added. "Our financial strength together with the substantial charter backlog provide us with significant commercial and financial flexibility to further develop the company."
The LNG sector, however, is getting crowded and returns are on something of a decline. Flex LNG realized an average time charter equivalent for its vessels of $72,385 per day during the second quarter, compared to $76,539 over the three months ending March 31.
Adjusted net income during the second quarter was $30.4 million, down nearly $7 million from first quarter levels.
The company said the second quarter is typically its worst quarter of the year due to a seasonal slump after the first quarter. The company put two ships on drydock during the quarter due to the slowdown. Similar sentiment was expressed during the first quarter, however.
That said, no more drydocking is expected for the remainder of the year and the company said it expects to see a recovery due to higher rates. The company in August said it expected to see revenues increase to $90 million in the third quarter, compared with $84.7 million sequentially.
Flex LNG during the first quarter, meanwhile, said it refinanced its entire fleet, which increased its cash balance by around $380 million, after fees and expenses. The global trade in LNG, however, is expected to decline.
An early-year report from The Institute for Energy Economics and Financial Analysis found LNG projects by next year may be facing something of a bearish market.
"As new supply floods the market, today's tight markets may give way to a supply glut, with lower-than-anticipated prices, smaller netbacks, tighter margins, and lower profits for LNG exporters," it said.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
