Flex LNG, the company controlled by billionaire John Fredriksen and an emerging player in the LNG shipping business, reported a net profit of $1.3 million for the fourth quarter of 2017.
This compares to a net loss of $0.02 million in the corresponding quarter last year, Flex LNG noted in its report. The company’s net loss for the twelve months of 2017 widened to $10.4 million from a net loss of $1.8 million in the previous year.
The results for the quarter were positively impacted by charter extensions of its two vessels from September 2017 through the end of the first quarter of 2018
Speaking of the results, Jonathan Cook, Flex LNG’s CEO, said the company’s two of it chartered-in vessels were employed in profitable charters throughout the quarter.
“In January, we successfully took delivery of the first two of our six newbuildings and secured a 15 to 18-month time charter for one of the vessels in line with our strategy to secure balanced fleet employment as the market continues to improve due to expected tighter supply/demand dynamics in the LNGC market,” Cook said.
Flex LNG’s delivered vessels were built by the South Korean shipbuilder Daewoo Shipbuilding and Marine Engineering (DSME), and the company has further two LNG carriers under construction at Samsung Heavy Industries and are scheduled to be delivered to the company in the second and third quarters of 2018. It also expects to take delivery of two additional LNG carriers in the second and third quarter of 2019.
The company said it will continue to evaluate opportunities to charter in third-party LNGCs to the extent that they will provide a positive contribution to earnings, although Flex LNG’s primary commercial focus is to secure attractive employment for its newbuildings.
The LNG shipping market continued to tighten throughout the fourth quarter, the company noted in its report. Seasonality and its winter peak once again brought a boost in demand for LNG shipping. The arbitrage window between European and Asian LNG prices stayed open and increased demand for spot vessels loading out of European ports.
Flex LNG expects the coming growth of LNG production and the expected growth in demand for natural gas in combination with the recent limited ordering activity of LNG carriers to gradually tighten the shipping market over the course of the next 12 months.
The company will continue to take a proactive approach and explore further accretive transactions.