FLEX LNG Ltd.
Research by MICKE
- 300.00 -8.26% (21/12/2023)
- 262.60 -19.69% (01/09/2023)
- MONITOR
The dividend is very good at around 10%, which is a reason to have this stock. The stock price has performed very well the last 2 years. There is a potential upside that new ships need higher rates to be profitable, but supply and demand will set the price. I don’t see much upside but there are significant risks with interest rates (there are significant hedges in place which will postpone this effect), more ships entering the market. LNG prices and effect on shipping as well as macro are very uncertain the coming years.
Business (3)
Revenue guidance 2023
Management's revenue guidance for 2023 is ~$370m ($348 TTM) based on an expected TCE $80k/day ($73k/d). Since >90% of the fleet has fixed contracts the guidance should be reliable into 2024/2025. This is expected to result in a 10% growth in EBITDA to $270m-$290m. The company has a strong gross margin >80% and operational margin >50% at current TCE price levels.
09/10/2023 by ALPHA｜02European demand for LNG
Since the invasion of Ukraine by Russia, Europe has changed it energy strategy and is increasingly dependent on LNG (mainly from the US). Germany decided to reduce dependency on Russian gas and started the development of a LNG gas terminals (expected online 2024). After the winter 2022-2023 gas levels are high in Europe, but European demand increased 11% in Q1 2023. It is expected to continue to increase with 11 new terminals (FSRU) being installed in the near term. Higher LNG demand supports the (elevated) LNG transport prices, although also new transport capacity enters the market.
14/07/2023 by ALPHA｜22LNG ship rates continue on high levels.
22/12/2021 by MICKE｜01Risks (1)
Drop of LNG ship rates due to more new ships produced without demand following.
27/12/2021 by MICKE｜11