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|FLEX LNG Returns to Profitability in Jul-Sep|
|= Vessel operating revenues rise 57% due to fleet expansion, market improvement =|
Norwegian shipping company FLEX LNG returned to profitability in July-September 2019 financial results. Driven by the expansion of LNG fleet and tight shipping market, the quarter's vessel operating revenues increased by 56.8% from April-June to US$29.8 million, which led to a net income of $0.5 million, rebounding from last quarter's net loss of $3.9 million.|
This August, the company added a new LNG vessel "FLEX Courageous" and its fleet has expanded to six vessels. These vessels have MEGI propulsion and a tank with a capacity of 170,000-174,000 cubic meters. It expects vessel operating revenues will further rise to $50-55 million in October-December when these six vessels are in operation throughout the period.
The LNG freight market is in a bullish trend. The freight rate for July-September averaged $58,222 per day, up by $11,956 (25.8%) from last quarter. Transportation distance in a delivery deal increased and LNG vessels were used as offshore storage bases to secure LNG cargoes in preparation for an expected bullish market, both of which led to the tight market. The market improved to FLEX's expected level at approx. $60,000.
Environmentally-friendly LNG is drawing attraction from the market, and global LNG exports between January-September reached 268 million mt. the exports in CY2019 are estimated to be 367 million mt, up by approx. 13% from a year earlier.
To meet the increasing demand for shipping, FLEX LNG is advancing its fleet expansion. It is constructing seven LNG vessels in South Korea, of which five will be completed in 2020, the remaining two in 2021. Once completion, its fleet will expand to 13 vessels.
In 2019, LNG projects in Russia, the US, and Mozambique made final investment decisions. These projects will build a liquefaction capacity of approx. 63 million mt combined per annum, which was a record high capacity sanctioned in a year. Furthermore, an FID for a Canadian project may be decided within this year, and additional FIDs for projects in Mozambique, the US, and Qatar etc., with a total capacity of approx. 90 mtpa are planned in 2022.
|last modified : Thu 28 Nov, 2019 [16:50]|