Flex LNG Losses Widen

Oslo-listed LNG carrier owner Flex LNG reported a bigger loss in the second quarter after being stung by lower gas prices.

The company, set up by billionaire John Fredriksen and Belgian shipping group Exmar in 2015, suffered a net loss of $3.9mn in the three months ending June 30, compared with $2.9mn in the same period last year, it said on August 20.

Commenting on the results, Flex CEO Oystein Kalleklev said the first half had been “a cold shower” for the LNG industry, with only end consumers benefiting from the slump in gas prices. “Excess gas supply has predominantly been absorbed by European consumers, cutting sailing distances and thus affecting shipping demand and rates,” he said.

The company’s time charter equivalent rate for the second quarter averaged $46,266/day, up from $42,644 in the previous three months. Vessel operating revenues dipped to $19mn, down from $7mn a year earlier, although adjusted pre-tax earnings (Ebitda) improved, rising to $11.3mn from $3mn.

Flex LNG noted that the market showed signs of a gradual recovery in the second quarter, with spot LNG freight rates stabilising and supply tightening. “Tighter product markets general result in higher shipping demand due to arbitrage and re-loads, so the company expects a positive effect on the market balance in 2021,” it said.