FLEX LNG Ltd.

We are doing this presentation live from Nydalen in Oslo. And following the presentation, we will do our Q&A session where you can ask questions with the chat function or send an email to ir.flexlng.com. And as usual, we have some nice gifts for you for the best question. The best question wins the Flex LNG summer kit consisting of, of course, our caps. the Flex and the City sunglasses, both in pink and black. We have a water bottle so you can hydrate. This nice Flex, just Flexit t-shirt, running shirt. I was using it yesterday. And with sunny Oslo now, 26 degrees, it's also nice to have some sunscreen, Flex on the Beach sunscreen. And we also have a big Flex on the Beach bathing towel here. So hope you provide some good questions. That's the most fun part of this presentation. So before beginning, I'm just going to remind you about our disclaimer. We will be providing some forward-looking statements, some non-GAAP measures and their limit to completeness of details. So we also recommend you to read our earnings report published today as well. Okay, let's kick off the highlights. Numbers very much in line with what we have guided. Revenues came in at 90.2 million, which was as mentioned in line with guidance of approximately 90 million. Net income and adjusted net income came in at 33.2 and 37.9 million respectively, giving an adjusted earnings per share of 62 or 70 cents respectively. Knut will give you some more details on these numbers. It's basically in our adjusted numbers, we only take in the realized gains and losses on interest rate derivatives, while in the net income and earnings per share, we take in both. Recent events. We have added quite a lot of backlog so far this year. First, we announced the extension of two ships with the Supermajor. This is a Flex Resolute, Flex Courageous. They have been now doing about two years of the three-year period they were fixed for. This contract is three plus two plus two years. And the charters have now in February and March announced that they will extend those contracts from end of Q1 2025 to end of Q1 2027. And there is a further option here until Q1 2029, which we do expect will be utilized. Additionally, Chenier, which have chartered Flex Endeavor now for getting close to three years, actually slightly more than three years. They extended this contract, which has been extended also in the past, extending this contract now by 500 days from Q3 2030 to Q1 2032. So this is now the second longest contract we have in our portfolio. And lastly, we also have secured a contract for Flex Constellation, a new contract. This is the ship you saw the picture of the funnel on the front page. We had this ship on a close to three-year contract starting in 2021. She was re-delivered in March from that charter. We took her into a dry dock. and traded her spot and we were able to find our 10 months firm charter beginning in May and which takes this ship until end of Q1 2025 where also the charter has the option to take that ship until 2026 as we have said in the past which we also said in our Q4 presentation back in February we were a bit Cautious in terms of the market, there's a lot of ships for delivery this year, while the number of molecules coming to the market is on the low side. So the balance looks a bit in favor of charters rather than owners, and we're therefore very happy to find a good contract for Flex Constellation, taking her out of the spot market for this year. This year we have two dry dockings, the sister ships Constellation and Courageous. As I mentioned, we took Constellation into dock end of March, finalized that according to plan and budget, and now we have her sister ship Flex Courageous doing a similar exercise. She's out of dock and we are doing the final modification and expect to have this ship back in operation and back on TC end of May. Q2 is the softest quarter due to the seasonality, so we do expect our time charter equivalent earnings to be reduced slightly in Q2, which has been the norm since we started this company. We expect these average rates to be around 72,000 to 74,000, as we do have one chip on variable higher charter, and we also had Constellation exposed to the spot market for a short period of time in Q2. Thus, revenues with two ships out of dry docking and the spot market as mentioned, we expect revenues to be close to 85 million for Q2. Once again, the board is pleased to announce a 75 cents per share dividend for the quarter. We have changed a bit how we are paying out the dividend. We are paying it out from contributed surplus, which might have an effect from some of our shareholders in terms of dividend taxation. This depends on where you are investing from. It means that now the last four quarters we paid out a dividend of $3.12 per share, implying a yield of around 11%. The stock was up a bit here in Oslo this morning. It's now up about 1%. However, liquidity in the Norwegian market is fairly limited, as most people investing in this company is doing that in the US. the market reacts. In any case, we are in a very strong financial position. We have added more contract backlog than we have consumed this year, and these factors all support our dividend capacity. And I will come back to the dividend in more detail shortly. Just to touch upon the guiding, as mentioned, We delivered 90.2 million. We guided the revenues of around 90. Adjusted EBITDA came in slightly higher than the guiding. We guided approximately 70 million, delivered 70.6, and also the TC in line with guidance. As mentioned, Q2 is the softest quarter. We also have two ships in dry dock for this quarter. So we expect slightly lower revenues and adjusted EBITDA for that quarter. And then typically in Q3, we will have all ships back in operation that tend to be a better quarter, impacting the ship we have on a variable higher. And usually Q4 is the strongest quarter as we are heading into the winter season where demand is peaking. Two ships in dry dock and both of these are according to schedule and budgets. We expect the capex related to this dry docking to be around 5 million and that 5 million will then be depreciated over the five-year docking cycles, about a million dollars a year in depreciation from this dry docking. Having a look at the ships, Constellation here on the left hand side and then Courageous when she was in dock, she is now berthed out alongside Kai on the yard where we're doing the final preparation to take her out to sea and back on TC end of May. Looking at our fleet portfolio today, we are still at 50 years of minimum charter backlog. There is a couple of options attached here. We do expect most of the options to be declared, which will then bring the charter backlog closer probably to 69 years than the 50 years minimum. As you can see, we have ships coming off in 2033 and they were recently extended to 2032. Vigilant last year was extended to 2031. We have two ships with a supermajor maturing 2029. We have Fridom also with the supermajor maturing 27, but where the Charter has the option to extend that ship to 29. Resolut and Courageous recently, as I mentioned, extended from Q1 2025 to Q1 2027, and there they also have an option which we expect to be declared, taking those ships to 2029. Chenier also have two ships more. They have Endeavour and Vigilant. They have Voluntæren Aurora, where Firm Parade is to Q1 26, where they have an option to take those ships to 28. And then Cheniere also have a fifth ship, Flex Ranger, which was extended in November 2022 until end of Q1 2027. So that's, except for Constellation, that's the first fully open ship we have. Flex Constellation, as mentioned, she had a docking stay. She was in a short period of time in the spot market. She's now on a 10-month charter, where the charter has the option to extend that contract until end of Q1 2026. So a lot of coverage, 100% covered for this year. And then we have one ship on a variable hire charter, where that hire is linked to the spot market. That is firm until Q3 2025, but here the Charter has five single options until Q3 2030, and given the fact they are paying market rate for the freight, and they lose the remaining options if they are not declaring the first option, we would expect at least a couple of these options to be declared. So that backlog, of course, together with our sound financial position, creates a good environment for paying good dividends. Once again, we are paying the regular 75 cents per share, approximately $40 million. The last 12 quarters now, or three years, we have paid out $510 million in dividends and counting, as we have illustrated here on the slide. So just before handing over to Knut and the financials, just the kind of key decision criteria for the dividend, as we have covered also in the past. We have become a bit colorblind on green lights. Last presentation back in February, I believe it was 7th February. We warned that we had a bit cautious outlook on the spot market, but having such a number of green lights, we forgot to take down the market outlook to yellow. We have taken it down to yellow now, given the fact that there are numerous chips in the spot market, and a bit soft spot market is dragging down the front end of the term rate curve. Except for that, our earnings and cash flow are strong. We have been growing the backlog, increasing the earnings visibility by these new contracts this year. We have a lot of cash, 383 million, that Knut will cover. Flying colors on all the covenants, no death maturities before 28. CapEx liabilities are zero. We don't have ships under construction, so CapEx liabilities are only related to the ships that we are dry docking, and we have done more or less the dry dockings for this year. So with that, I give it to you, Knut.

Thank you, Øystein. So let's have a look at the financial highlights for the quarter. Revenues in the first quarter came in at 19.2 million, or that calculates to a time charter per day of 76,500. So the lower numbers for the first quarter versus the fourth quarter, that's explained by the seasonal softer spot market impacting the revenues from Flex Artemis, as well as some off-hire days for Flex Constellations while she entered dry docking. Operating expenses in the first quarter is lower at 16.7 million and the reduction is explained by timing effects of when we expense certain operating expenses. As you may recall, in the fourth quarter we had a number of swing sets expensed on our fleet, while we had zero in the first quarter. So operating expenses will be a bit lumpy in between quarters, but we stick to our guidance of OPEX per day of 14,900 for the full year. Interest expenses during the quarter is fairly flat, quarter and quarter, but as you see on the gain on derivatives, in the first quarter we booked a net gain of 7.3 million. That includes 700,000 in unrealized gains and 6.6 million in realized gains. During the quarter we have also amended one of our interest rate swaps. We have reduced the duration of a 50 million interest rate swap and thereby we have received a cash proceed of 5 million. And I will come back to that later. That results in a net income for the quarter of 33.2 million or 62 cents per share. If we look at the adjusted numbers, here we adjust out unrealized gains of both interest rate derivatives and from foreign currencies. So we strip out 700,000 for the interest rate derivatives and also the FX loss of 400,000. And then we add back the 5 million we received from the amendment of the interest rate derivative where we reduced the tenor of that swap to July 2025. And that gives us an adjusted net income of 37.9 million or 70 cents per share. If we look at the cash flow for the quarter, we received 49 million from operations. Then we have slightly higher net working capital as we have prepayments in relation to the two dry dockings that we have. 26 million in amortizations of our debt and as we note here, If we compare the depreciation of our fleet versus the amortizations, we pay 7.5 million more to reduce our debt. And here again, the 5 million from the termination of the swap, and we paid out the 40 million in dividends, giving us an end-of-quarter cash balance of 383 million. If we look at our funding portfolio, there are no changes to our debt position, except for scheduled amortizations. And as we highlight here, the split of financing between leases and term loans, and also the geographically diversified providers of these, both from the US, Europe and Asia. And in this structure, we have the 400 million revolving credit facility, which we then use for cash management optimization during this high interest rate environment. And while we have 383 million in available cash, we repay our RCF during the quarters to save interest rate costs. A reminder that our first maturity on a loan portfolio is in 2028, and if we then revert to our interest rate hedging portfolio, which comprises of the interest rate derivatives, which has a book value today of $45 million, And in addition, we have fixed rate leases, elements of that, of nearly $200 million. That gives us a sound hedge ratio in this high interest rate environment. As I mentioned that during the first quarter, we reduced the duration of a $50 million FOP, giving us $5 million in cash proceeds. And post-quarter in the second quarter, we did a similar one for another $50 million, which gave us a $5.4 million cash proceeds that you will see in the next quarter. Today we also released our sixth annual ESG report for 2023, where we explain more about our initiatives for reducing emissions and how we deal with our environmental footprint, business ethics and code of conduct, and also health and safety for our seafarers and onshore personnel. One of the key highlights here is our 7% reduced emissions compared to 2022. And also this report should be read in conjunction with our CDP reporting, which we announced last quarter, where we received a B rating improved from B- in 2022. So that concludes the financial sections and back to you, Øystein.

Okay, great, thanks.