Flex LNG Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenues: $106.8 million ($102.7 million excluding EUAs), marking the second-best quarter since Q4 2021.

Net Income: $44.9 million, or $0.83 per share; adjusted net income was $42.5 million, or $0.79 per share.

TCE (Time Charter Equivalent): Average of $86,100 per day.

Adjusted EBITDA: Expected between $255 million and $280 million for the full year.

Dividends: Declared at $0.75 per share, marking the 20th consecutive quarterly dividend, totaling $850 million distributed since 2021.

2Strategic Updates and Business Highlights

Fleet Operations: Successfully completed all scheduled 5-year special surveys for the fleet, with no dry dockings planned for 2027.

Contract Backlog: 51 years of minimum firm backlog, potentially growing to 78 years if all options are exercised. Approximately 89% coverage for available days in 2026.

Market Positioning: Flex Artemis and Flex Volunteer are currently in the spot market, with marketing efforts for both spot and new term contracts.

3Forward Guidance and Outlook

Revenue Guidance: Maintained at $345 million to $370 million for the full year.

TCE Guidance: Expected to be between $73,000 and $78,000 per day.

Market Outlook: Despite a softer spot market, confidence in long-term demand remains strong, bolstered by ongoing U.S. LNG export capacity expansions.

4Bad News, Challenges, or Points of Concern

Geopolitical Risks: Elevated uncertainty due to the ongoing conflict in Iran, which has disrupted LNG flows from the region. The Strait of Hormuz is expected to remain closed throughout 2026.

Spot Market Pressure: A noted decline in spot rates, with current rates significantly lower than previous highs, indicating potential headwinds in Q3.

Operational Costs: Increased vessel operational expenses due to higher crew travel costs related to Middle East disruptions.

5Notable Q&A Insights

Operations in High-Risk Areas: All vessels are currently not trading in the Strait of Hormuz, with charterers opting for alternative routes.

Market Expectations: Q3 is traditionally a shoulder month, and while spot rates have softened, there is hope for a stronger Q4 market due to seasonal demand.

Dividend Sustainability: Future dividends will be assessed quarterly based on financial health, contract backlog, and market conditions, with the Board expressing confidence in maintaining the current dividend level. This summary encapsulates the key points from the earnings call, highlighting Flex LNG's strong financial performance, strategic positioning, and the challenges posed by geopolitical risks and market fluctuations.