Norwegian shipping firm Flex LNG reported higher earnings in the third quarter and raised its revenue estimate for the upcoming quarter due to the strong spot market.
Flex reported revenues of $81.8 million for the third quarter, compared to $65.8 million in the prior quarter and $33.1 million in the same period last year.
The company controlled by billionaire John Fredriksen said net income had reached $32.8 million, up from $12.7 million in the second quarter and $3.8 million in the third quarter last year.
According to Flex, average time charter equivalent (TCE) rate reached $68,341 per day for the third quarter, compared to $57,780 per day in the prior quarter.
Flex LNG recently said it had signed charter deals for two of its liquefied natural gas carriers with an “energy major”.
The firm did not reveal much regarding the contracts but it is a good time to sign new contracts as charter rates have last month surged to over $200,000 a day in the Pacific.
The company has now secured long-term time charters with a mixed portfolio of market rate and fixed rate contracts.
Currently, the company’s fleet of 13 LNG carriers has an aggregate of 33 years firm periods and with charterer’s options this could extend to over 69 years, if declared, it said.
Spot market at “all time highs”
Chief executive Øystein Kalleklev said the third-quarter revenues of $82 million “are in line with our guidance of approximately $80 million.”
“In the fourth quarter, we will also be handsomely rewarded for maintaining a 30 percent exposure to the spot market as the spot market is currently on at all time highs,” he said.
“Hence, we are consequently lifting our revenue estimate for the fourth quarter from previously guided $85 to $100 million to about $110 million, thus further improving earnings in the near term,” he said.
In addition, Flex also decided to raise its quarterly dividend level.
“Given our healthy earnings, positive outlook and super-strong financial position the board has therefore decided to lift our quarterly dividend level from $0.40 per share to $0.75 per share, which provides our shareholders with a compelling yield of approximately 14 percent,” Kalleklev said.