FLEX LNG Ltd. (NYSE:FLNG) Q1 2022 Earnings Conference Call May 11, 2022 9:00 AM ET
Company Participants
Oystein Kalleklev - Chief Executive Officer
Knut Traaholt - Chief Financial Officer
Conference Call Participants
Climent Molins - Value Investor's Edge
Oystein Kalleklev
Thank you and welcome everybody to today's Flex LNG webcast. I'm Oystein Kalleklev CEO of Flex LNG Management. And I will once again be joined by our CFO, Knut Traaholt who will talk you through the numbers a bit later in the presentation. As always we will conclude with a Q&A session.
Before we start the presentation, I will remind you of the disclaimer as we will provide some forward-looking statements, use some non-GAAP measures and there are limitations to the completeness of detail we can provide in this webcast. So we recommend that you also review our earnings report.
So okay let's kick off with the highlights and a short summary of them. It's fair to say that while the first quarter has been a fantastic period for cargo owners given the global energy shortage with elevated LNG prices worldwide. It has not been as good for shipowners with ships in the spot market. The spot freight market has been challenging due to the rather rapid shift in trade pattern. The shift in trade pattern started in late 2021, well-ahead of the wall in Ukraine and occurred as European buyers started to mop up the spot cargoes to ensure how they got supply given the low gas inventory levels.
The pull to Europe instead of Asia resulted in a sharp up in sailing distances and thus freeing up more ships in the market. With significant lower activity in the spot market, this adversely affected the earnings on the three index ships as well as approximately 1.5 ship, which we have traded in the spot or short-term TC market during the first quarter.
In any case despite a challenging spot market, we were able to deliver revenues of $74.6 million in line with our guidance presented in February. Revenues were just about $40 million lower than in Q4 last year but it's fair to say that Q4 was exceptionally good given the all-time high spot rates. About half of the decrease in revenues were due to lower earnings on the three ships on variable higher contracts, while the remaining half was due to spot exposure in Q1 for the 1.5 ships mentioned.