Q2 2026 Flex LNG Ltd Earnings Call

August 19, 2026

Speaker #1: Welcome back to the Flex LNG Q2 2026 results presentation. Hope you all had a great summer. My name is Marius Voss, I'm the CEO of Flex LNG, and today I'm joined by our CFO, Knut Traaholt, who will walk you through the financials later in the presentation.

Marius Foss: Welcome back to Flex LNG Q2 2026 result presentation. Hope you all had a great summer. My name is Marius Foss. I am the CEO of Flex LNG, and today I am joined by our CFO, Knut Traaholt, who will walk you through the financial later in the presentation. Today, we will summarize the Q2 results and provide an update on the LNG shipping markets. As always, we will conclude this webcast with a Q&A session.

Speaker #1: Today, we will summarize the Q2 results and provide an update on the LNG shipping market. As always, we will conclude this webcast with a Q&A session.

Speaker #2: If you'd like to ask questions, please use the chat function in the webcast or send questions by email to ir@flexlng.com. Before we start, we would like to highlight the following: we are using certain non-GAAP measures, such as TCE, adjusted EBITDA, and adjusted net income.

Knut Traaholt: If you would like to ask questions, please use the chat function in the webcast or send questions by email to ir@flexlng.com. Before we start, we would like to highlight the following. We are using certain non-GAAP measures such as TCE, adjusted EBITDA, and adjusted net income. These are supplements to the earnings report, reported in accordance with US GAAP. The reconciliations of these non-GAAP measures are available in the earnings report released today. There are also limitations to the completeness of our presentation. Therefore, we encourage you to read the quarterly report together with today's presentation. With that, back to you, Marius.

Speaker #2: These are supplements to the earnings report, reported in accordance with US GAAP. The reconciliations of these non-GAAP measures are available in the earnings report released today.

Speaker #2: There are also limitations to the completeness of our presentation. Therefore, we encourage you to read the quarterly report together with today's presentation. And with that, back to you, Marius.

Speaker #1: Thank you, Knut. Let's begin with the highlights of the quarter. We are happy to present very strong results for the Q2. We sailed in revenues of close to 107 million dollars, or close to 103 million dollars excluding the US, this is our second best quarter since the Q4 of 2021.

Marius Foss: Thank you, Knut. Let us begin with the highlights of the quarter. We are happy to present very strong results for the Q2. We sailed in revenues of close to $107 million, or close to $103 million excluding the UAS. This is our second-best quarter since the Q4 of 2021. The fleet average TCE during the quarter ended up at $86,100 per day. Net income for the Q2 came in at $44.9 million, implying an earnings per share of $0.83. When adjusting for unrealized gains and interest rates, swaps, and FX, we ended up with adjusted net income of $42.5 million, or adjusted earnings per share at $0.79. Flex Artemis and Flex Volunteer have traded in a strong spot market in the Q2 and contributed to our solid quarterly results.

Speaker #1: The fleet average TCE during the quarter ended up at $86,100 per day. Net income for Q2 came in at $44.9 million, implying an earnings per share of $0.83.

Speaker #1: When adjusting for unrealized gains and interest rates, swaps, and FX, we ended up with adjusted net income of $42.5 million, or adjusted earnings per share of $0.79.

Speaker #1: Flex Artemis and Flex Volunteer have traded in a strong spot market in Q2, and contributed to our solid quarterly results. We continue to see elevated geopolitical uncertainty in the LNG space.

Marius Foss: We continue to see elevated geopolitical uncertainty in the LNG space as the conflict in Iran causes disruption to the LNG flow from the region. Lastly, with the dry docking of Flex Vigilant in June, we have completed all scheduled five-year special surveys for our fleets. We maintain our full year guidance from last quarter and expect revenues to come in between $345 million and $370 million. Similarly, we expect the TCE to come in somewhere between $73,000 and $78,000 per day. We expect adjusted EBITDA to come in between $255 million and $280 million. With our strong quarter, contract coverage, and solid balance sheets, the board has declared another dividend of $0.75 per share. This is the 20th consecutive dividend of $0.75 per share, and we have now distributed around $850 million since 2021, including special dividends.

Speaker #1: As the conflict in Iran causes disruption to the LNG flow from the region. Lastly, with the dry docking of Flex Vigilant in June, we have completed all scheduled 5-year special service for our fleet.

Speaker #1: We maintain our full-year guidance from last quarter and expect revenues to come in between $345 and $370 million. Similarly, we expect the TCE to come in somewhere between $73,000 and $78,000 per day.

Speaker #1: We expect adjusted EBITDA to come in between $255 and $280 million. With our strong quarter, contract coverage, and solid balance sheet, the Board has declared another dividend of $0.75 per share.

Speaker #1: This is the 20th consecutive dividend of 75 cents per share, and we have now distributed around $850 million since 2021, including special dividends.

Speaker #1: Our last 12-month dividend is $3 per share, implying a dividend yield of around 9.7 percent. Flex Vigilant completed her dry dock in Denmark in June.

Marius Foss: Our last 12 months' dividend is $3 per share, implying a dividend yield of around 9.7%. Flex Vigilant completed her dry dock in Denmark in June, and this was the third and final dry docking for 2026. The average cost per dry docking came in around $6 million per vessel as guided, and we spent averagely 17 days in dry dock per vessel. Flex Vigilant marks the final five-year special survey in our fleet of 13 vessels. Looking ahead, we have no dry dockings coming up in 2027, and we will commence our first 10-year docking in 2028. Let's have a look at our contract backlog. Looking at our total contracts coverage, we have 51 years of minimum firm backlog, which may grow to 78 years if all options are declared. In the near term, we have close to 89% coverage for remaining available days in 2026.

Speaker #1: And this was the third and final dry docking for 2026. The average cost per dry docking came in around $6 million per vessel, as guided, and we spent an average of 17 days in dry dock per vessel.

Speaker #1: Flex Vigilant marks the final 5-year special survey in our fleet of 13 vessels. Looking ahead, we have no dry dockings coming up in 2027, and we will commence our first 10-year docking in 2028.

Speaker #1: Let's have a look at our contract backlog. Looking at our total contracts coverage, we have 51 years of minimum firm backlog, which may grow to 78 years if all options are declared.

Speaker #1: In the near term, we have close to 89% coverage for the remaining available days in 2026. Flex Artemis and Flex Volunteer have both been trading in the spot market in Q2, and will come open at the end of Q3.

Marius Foss: Flex Artemis and Flex Volunteer have both been trading in the spot market in Q2 and will come open at the end of Q3. We are now marketing the vessel both for spot and new term contracts. With our good contract coverage for the remainder of the year, we maintain our guiding with the upgraded last quarter. This means that we expect full year revenues to come in between $345 to $370 million. Similarly, we expect TCE to come in somewhere between $73,000 and $78,000 per day. Lastly, we expect the adjusted EBITDA to come in between $255 million and $280 million. We are pleased to announce that the board has declared a dividend of $0.75 per share. Let us briefly revisit decision factors for the dividends. We maintain the orange level for market outlook.

Speaker #1: We are now marketing the vessel both for spot and new-term contracts. With our good contract coverage for the remainder of the year, we maintain our guidance with the upgrade from last quarter.

Speaker #1: This means that we expect full-year revenues to come in between $345 to $370 million. Similarly, we expect TCE to come in somewhere between $73,000 and $78,000 per day. Lastly, we expect adjusted EBITDA to come in between $255 and $280 million.

Speaker #1: We are pleased to announce that the Board have declared a dividend of $0.75 per share. Let us briefly revisit the decision factors for the dividends.

Speaker #1: We maintain the orange level for market outlook. This reflects a softer spot market and a heavier schedule of newbuilding deliveries. Looking ahead, we note the low European storage levels going into the cold winter season.

Marius Foss: This reflects a softer spot market and heavy schedule of new building deliveries. Looking ahead, we note that low European storage levels going into the cold winter season. Confidence in the long-term structural demand story remain intact, supported by the third wave of US LNG export capacity currently under construction. We keep other considerations in orange given the continued elevated geopolitical risk. There is still uncertainty around the duration of the Iran conflict and the timing of normalization of the Qatari supply. Taking all factors into account, the board has declared another quarterly dividend of $0.75 per share. This brings dividend paid over the last 12 months to $3 per share. The dividend will be paid on about 17 September to shareholders of record as of 3 September. And with that, I hand it over to you, Knut, for final financial updates.

Speaker #1: Confidence in the long-term structural demand story remains intact, supported by the third wave of US LNG export capacity currently under construction. We keep all the considerations in orange, given the continued elevated geopolitical risk.

Speaker #1: There is still uncertainty around the duration of the Iran conflict and the timing of normalization of the Qatari supply. Taking all factors into account, the board has declared another quarterly dividend of $0.75 per share. This brings the dividend paid over the last 12 months to $3.00 per share.

Speaker #1: The dividend will be paid on or about September 17 to shareholders of record as of September 3. And with that, I hand it over to you, Knut, for final financial updates.

Speaker #2: Thank you, Marius. And the second quarter was significantly improved quarter over quarter, mainly driven by higher revenues. Revenues were $106.8 million, or $102.7 million excluding EU rates.

Knut Traaholt: Thank you, Marius. Q2 was a significantly improved quarter over quarter, mainly driven by higher revenues. Revenues were $106.8 million or $102.7 million excluding EREIs. The higher revenues were driven by high spot earnings for Flex Volunteer and Flex Artemis, while both Flex Constellation and Flex Aurora contributed by having a full quarter of earnings under their new contracts that commenced in March. On the cost side, vessel OpEx was higher quarter over quarter as Q2 was impacted by higher crew travel cost related to the disruptions in the Middle East. The average OpEx per day in Q2 was 16,260, while the average OpEx for the first six months of the year was around 16,100 per day. We maintain our OpEx guidance of 16,000 per day for the full year.

Speaker #2: The higher revenues were driven by high spot earnings for Flex Volunteer and Flex Artemis, while both Flex Constellation and Flex Aurora contributed by having a full quarter of earnings under the new contracts that commenced in March.

Speaker #2: On the cost side, vessel opex was higher quarter over quarter, as Q2 was impacted by higher crew travel costs related to the disruptions in the Middle East.

Speaker #2: The average opex per day in Q2 was $16,260, while the average opex for the first six months of the year was around $16,100 per day.

Speaker #2: We maintain our opex guidance of $16,000 per day for the full year. Interest expense continued to improve, reflecting lower loan margins and active management of our RCF facilities.

Knut Traaholt: Interest expense continued to improve, reflecting lower loan margins and active management of our RCF facilities. We booked $4.7 million in gains on our interest rate derivatives, of which $2.3 million was realized gains and $2.4 million was unrealized gains. Net income came in at $44.9 million or $0.83 per share. Adjusting for non-cash items like unrealized gains from the interest derivative portfolio, the adjusted net income was $42.5 million, or equivalent to adjusted earnings per share of $0.79. This is more than double that of the first quarter. Overall, this was a very strong quarter, impacted by improved revenues from the spot market, new contracts, completion of dry docking, and continued cost controlled and improved financial efficiency. On the cash flow during the quarter, we generated strong cash flow from operations of $63 million, up from $37 million in the first quarter.

Speaker #2: We booked $4.7 million in gains on our interest rate derivatives, of which $2.3 million was realized gains and $2.4 million was unrealized gains. Net income came in at $44.9 million, or 83 cents per share, and adjusting for non-cash items like unrealized gains from the interest derivative portfolio, the adjusted net income was $42.5 million, or equivalent to adjusted earnings per share of 79 cents.

Speaker #2: This is more than double that of the first quarter. So overall, this was a very strong quarter, impacted by improved revenues from the spot market, new contracts, completion of dry docking, and continued cost control and improved financial efficiency.

Speaker #2: On the cash flow during the quarter, we generated strong cash flow from operations of $63 million, up from $37 million in the first quarter.

Speaker #2: The increase was mainly driven by higher revenues, as explained on the previous slide. This excludes $19 million in positive change in working capital, and $5 million of capex related to the dry dockings this year.

Knut Traaholt: The increase was mainly driven by higher revenues, as explained on the previous slide. This excludes $19 million in positive change in working capital and $5 million of CapEx related to the dry dockings this year. The reduction in receivables during the quarter was related to timing of advanced charter hire receipts. We repaid $28 million in scheduled debt installments and distributed $41 million to our shareholders. In sum, our net cash flow was $8 million in the quarter, and that resulted in a cash position of $397 million at the end of the quarter. Looking at our balance sheets, we maintain a clean balance sheet with mainly ships and close to $400 million in cash. Our debt financing comprise of a combination of bank loans, which gives us flexibility and attractive long-term leases. Our first debt maturity is in the first quarter of 2029.

Speaker #2: The reduction in receivables during the quarter was related to the timing of advanced charter hire receipts. We repaid $28 million in scheduled debt installments and distributed $41 million to our shareholders. In sum, our net cash flow was $8 million in the quarter, resulting in a cash position of $397 million at the end of the quarter.

Speaker #2: So, looking at our balance sheet, we maintain a clean balance sheet with mainly ships and close to $400 million in cash. Our debt financing is comprised of a combination of bank loans, which gives us flexibility, and attractive long-term leases.

Speaker #2: Our first debt maturity is in the first quarter of 2029. And if you look at the book equity ratio, it's robust at 27.4%.

Knut Traaholt: If we look at the book equity ratio, it is robust at 27.4%. As noted before, our book values reflect the historical cost adjusted with regular depreciations. Our interest rate swap portfolio is unchanged and was valued at $22 million at the end of the second quarter. The notional value of the portfolio is $775 million, with an average fixed rate of 2.46%. We expect to maintain a hedge ratio of around 70% into mid-next year. With that, I hand it back to you, Marius, for the market outlook.

Speaker #2: And as noted before, our book values reflect historical cost adjusted with regular depreciations. Our interest rate swap portfolio is unchanged and was valued at $22 million at the end of Q2.

Speaker #2: The notional value of the portfolio is $775 million, with an average fixed rate of 2.46 percent. We expect to maintain a hedge ratio of around 70 percent into mid next year.

Speaker #2: And with that, I hand it back to you, Marius, for the market outlook.

Speaker #1: Thank you, Knut. Let's have a look at the LNG trade. Global LNG trade volumes are broadly flat year to date, down less than 1 percent compared with the same period last year.

Marius Foss: Thank you, Knut. Let's have a look at the LNG trade. Global LNG trade volumes are broadly flat year to date, down less than 1% compared with the same period last year. On the supply side, the key development has been significant reduction in the Qatari exports, down around 29 million tons. This shortfall has to a large extent been offset by strong growth from the US, where exports are up 23% or close to 40 million tons. We have also seen continued growth from Australia and Russia. Other exporters have contributed strongly and are up 6 million tons from last year. These include LNG Canada, but also West Africa exporters, including Nigeria and Senegal. Industry sources report that global export capacity ran at 96% utilization in July, excluding Qatar. This is about 90% utilization seen last year and a 5 year average of 86%.

Speaker #1: On the supply side, the key development has been a significant reduction in Qatari exports, down around 29 million tons. This shortfall has to a large extent been offset by strong growth from the US, where exports are up 23 percent, or close to 40 million tons.

Speaker #1: We have also seen continued growth from Australia and Russia. Other exporters have contributed strongly, and are up 6 million tons from last year. These include LNG Canada, but also West African exporters, including Nigeria and Senegal.

Speaker #1: Industry sources report that global export capacity ran at 96 percent utilization in July, excluding Qatar. This compares to about 90 percent utilization seen last year, and the five-year average of 86 percent.

Speaker #1: On the demand side, imports into JKT remain resilient, while Europe and China are down compared to last year. At the same time, India and other importing markets have continued to grow.

Marius Foss: On the demand side, imports into JKT remain resilient while Europe and China are down compared to last year. At the same time, India and other importing markets have continued to grow. The key takeaway is that despite a significant disruption from one of the world's largest LNG exporters, Qatar, global trade volumes have remained resilient. More importantly for shipping, the growing share of US supply means more LNG coming into the Atlantic Basin. This will likely have a positive ton mile effect when those volumes move into Asia. Let's have a look a bit closer to the supply side. The reduction in Middle East LNG volumes have been significant. Combined export from Qatar and UAE are currently down around 63% compared with normal levels.

Speaker #1: The key takeaway is that, despite a significant disruption from one of the world's largest LNG exporters, Qatar, global trade volumes have remained resilient. And more importantly for shipping, the growing share of U.S. supply means more LNG coming into the Atlantic Basin.

Speaker #1: This will likely have a positive ton-mile effect when those volumes move into Asia. Let's have a look a bit closer at the supply side.

Speaker #1: The reduction in Middle East LNG volumes has been significant. Combined exports from Qatar and the UAE are currently down around 63 percent compared to normal levels.

Speaker #1: As you can see from the left-hand side, exports dropped very sharply earlier in the year, and while volumes have started to recover, they remain below historical levels.

Marius Foss: As you can see from the left-hand side, exports dropped very sharply earlier in the year, and while volumes have started to recover, they remain below historical levels. At the same time, the US have continued to ramp up LNG exports. US liquefaction capacity is up around 14 million tonnes year on year, supported by the ramp-up of the new capacity, particularly in the Plaquemines. It is also worth a mention that the long-anticipated Golden Pass LNG is slowly but steadily increasing its production. We expect to see increased loading from Golden Pass LNG going forward and from Port Arthur as it comes on stream next year. Despite substantial loss from Middle East supply, this has mitigated by strong US growth, and that shift is positive for the shipping demand. Let us have a look at the demand side on the competition between Europe and Asia for LNG.

Speaker #1: At the same time, the US has continued to ramp up LNG exports. US liquefaction capacity is up around 14 million tons year-on-year, supported by the ramp-up of new capacity, particularly in the Black Mines.

Speaker #1: It is also worth mentioning that the long-anticipated Golden Pass is slowly but steadily increasing its production. We expect to see increased loading from Golden Pass going forward, and from Port Arthur as it comes on stream next year.

Speaker #1: So, despite substantial loss from Middle East supply, this has been mitigated by strong U.S. growth. And that shift is positive for shipping demand. Let us have a look at the demand side.

Speaker #1: Regarding the competition between Europe and Asia for LNG, Europe entered the year with relatively low gas inventories. Inventories are today 61 percent full, the lowest level in over 15 years and below the 73 percent seen last year.

Marius Foss: Europe entered the year with relatively low gas inventories. Inventories are today 61% full, the lowest level in over 15 years, and below the 73% seen last year. This means Europe still has a substantial requirement to rebuild inventories ahead of the winter season. At the same time, US LNG is highly flexible and can move between Europe and Asia depending on the relative pricing. Looking at the chart on the left-hand side, there has historically been significant swings in the US LNG flows between the two regions. So far this year, both Europe and Asia have attached additional US LNG volumes, although the balance has shifted through the year. Looking forward, this sets up a continued tug-of-war of US LNG exports. If European storage remains low, Europe will need to keep bidding on Atlantic cargoes, while lack of Qatari volumes could pull more of those volumes into Asia.

Speaker #1: This means Europe still has a substantial requirement to rebuild inventories ahead of the winter season. At the same time, U.S. LNG is highly flexible and can move between Europe and Asia, depending on the relative pricing.

Speaker #1: Looking at the chart on the left-hand side, there have historically been significant swings in the US LNG flows between the two regions. So far this year, both Europe and Asia have attracted additional US LNG volumes, although the balance has shifted through the year.

Speaker #1: Looking forward, this sets up a continued tug-of-war for US LNG exports. If European storage remains low, Europe will need to keep bidding on Atlantic cargoes.

Speaker #1: While lack of Qatari volumes could pull more of those volumes into Asia, if you’re looking at the new buildings we stand out on this slide, ordering activity remains very strong.

Marius Foss: If you're looking at the newbuildings, we stand out on this slide. Ordering activity remains very strong. Even the newbuilding prices holding around $250 million and the term rates remain more moderate levels. We have already seen around 60 newbuildings ordered so far this year. A number of these are made without any employment contracts. This year orders are well above last year figures of 35 vessels. That tells us it's still significant confidence in the long-term LNG shipping markets. At the same time, elevated newbuilding prices continue to provide support for the value of modern existing tonnage, including our fleet. The order book remains substantial with around 285 vessels to be delivered going forward, equivalent to roughly 38% of the existing fleet. However, the majority of these vessels are already tied up with Qatar or other long-term employment, and the number of open vessels remain fairly limited.

Speaker #1: Even the new building prices are holding around $250 million, and the term rates remain at more moderate levels. We have already seen around 60 new building orders so far this year, and a number of these have been made without any employment contracts.

Speaker #1: This year's orders are well above last year's figure of 35 vessels. That tells us there is still significant confidence in the long-term LNG shipping market.

Speaker #1: At the same time, elevated newbuilding prices continue to provide support for the value of modern existing tonnage, including our fleets. The order book remains substantial, with around 285 vessels to be delivered going forward, equivalent to roughly 38 percent of the existing fleet.

Speaker #1: However, the majority of these vessels are already tied up with Qatar or other long-term employment, and the number of open vessels remains fairly limited.

Speaker #1: Contracting activity remains at very high levels. LNG SPA volumes signed in the first half of 2026 are already above 30 million tons per year. This continued appetite for long-term LNG supply is important because it provides the commercial basis required for new projects to reach FID.

Marius Foss: Contracting activity remains very high levels. LNG SPAs volumes signed of the H1 2026 are already above 30 million tonnes per year. This continued appetite for long-term LNG supply is important because it provides the commercial basis required for new projects to reach FID. We have already seen around 28 million tonnes of projects that reached FID so far this year, including Venture Global's expansion of the CP2, Commonwealth, and Delfin. There are additional projects that could reach FID later this year, up to 39 million tonnes. These potential projects include LNG Canada Phase 2, Cedar LNG in Canada, Delfin Phase 2, and Brownsville in the US. This would take the potential FIDs in 2026 up to around 67 million tonnes.

Speaker #1: We have already seen around 28 million tons of projected reach FID so far this year, including Venture Global's expansion of CP2, Commonwealth, and Delfin.

Speaker #1: And there are additional projects that could reach FID later this year, up to 39 million tons. These potential projects include LNG Canada Phase 2, SeaLismis in Canada, Delfin Phase 2, and Brownsville in the US.

Speaker #1: This would take the potential FIDs in 2026 up to around 67 million tons. The key takeaway is that the next wave of LNG supply continues to gain momentum, supported by strong customer contracting and a healthy pipeline of projects moving forward to FID.

Marius Foss: The key takeaway is that the next wave of LNG supply continues to gain momentum, supported by strong customer contracting and a healthy pipeline of projects moving forward to FID. Let's have a look at the spot market for the modern 2-strokes. We have seen increasingly vessel availability both west and east of Suez, and that continues to put the weight on the spot rates. It is worth mentioning that the number of vessels available today is in line with the five-year historical averages. This comes at a time when the LNG fleet is growing. This tells that the newbuildings are being absorbed by going straight into the program after being delivered from the shipyards. We did see a sharp spike in the rates early this year, but since then, the rates have normalized, and we have seen some pressure on the spot rates over the last few weeks.

Speaker #1: Let's have a look at the spot market for the modern two-strokes. We have seen increasing vessel availability, both west and east of Suez, and that continues to put weight on the spot rates.

Speaker #1: It is worth mentioning that the number of vessels available today is in line with the five-year historical averages. This comes at a time when the LNG fleet is growing. This tells us that the new buildings are being absorbed by going straight into the program after being delivered from the shipyards.

Speaker #1: We did see a sharp spike in the rates earlier this year, but since then the rates have normalized, and we have seen some pressure on the spot rates over the last few weeks.

Speaker #1: As we move into the second half of the year, we would normally expect some historical seasonal tightening. We have two vessels coming up at the end of the third quarter, well positioned for a potentially strong winter market.

Marius Foss: As we move into the H2 of the year, we would normally expect some historical seasonal tightening. We have two vessels coming open in the end of the Q3, well-positioned for potential strong winter market. With that, let's turn into a QA session.

Speaker #1: With that, let's turn to the Q&A session.

Speaker #2: Thank you, Marius. And thank you to everyone who has submitted questions on our webcast and also to our investor relations email. It's been an active quarter, with a lot of things happening, particularly in the Middle East and with the Strait of Hormuz.

Knut Traaholt: Thank you, Marius, and thank you to everyone who has submitted questions on our webcast and also to our investor relations email. It's been a

Marius Foss: An active or a lot of things happening during the quarter, particularly in the Middle East and with the Strait of Hormuz.

Knut Traaholt: An active or a lot of things happening during the quarter, particularly in the Middle East and with the Strait of Hormuz.

Speaker #2: We have a number of questions coming in around that, and also how that has impacted our operations. So, specifically, the question is: Do we have any trade in that area, or through the Strait of Hormuz, and have we had any ships being stuck inside the Strait of Hormuz?

Knut Traaholt: We have a number of questions coming in around that and also how that has impacted our operations. In specific, the question is, do we have any trade in that area or through the Strait of Hormuz, and have we had any ships being stuck inside the Strait of Hormuz?

Speaker #1: Yeah, thank you. Now, I'm pleased to confirm that all vessels in the Flex fleet—13 vessels—none of them have been trading inside since the end of February.

Marius Foss: Yeah, thank you. I am pleased to confirm that all vessels in the Flex LNG fleet of 13 vessels, none of them have been trading inside since end of February. Our charterers clients are trading elsewhere for time being.

Speaker #1: So our charter clients are trading elsewhere for the time being.

Speaker #2: And there is also then a follow-up question around this, as there are a number of additional insurances that are needed to be trading through the Strait of Hormuz.

Knut Traaholt: There are also then follow-up questions around this as there is a number of additional insurances that are needed to be trading through the Strait of Hormuz. The question is specifically, who pays for this insurance and what insurance is needed to be trading here?

Speaker #2: And the question is specifically: who pays for this insurance, and what insurance is needed to be trading here?

Speaker #1: Yeah, it's required to have insurance when you sail into high-risk areas. So, if and when our ships are ordered to other high-risk areas, this extra coverage will be paid for by the charters who are instructing the vessel to search areas.

Marius Foss: Yeah, it's required to have insurance when you sail into high-risk areas. If and when our ships are ordered to other high-risk areas, this extra coverage will be paid for by the charters who are instructing the vessel to such areas.

Speaker #2: And sticking to the Strait of Hormuz, it's more on the market view and the outlook there for, first of all, the resumption of LNG export out of Qatar and UAE, but also more on the normalization of the transit through the Strait of Hormuz.

Knut Traaholt: Sticking to the Strait of Hormuz, it's more on the market view and the outlook there for, first of all, the resumption of LNG export out of Qatar and UAE, but also more on the normalization of the transits through the Strait of Hormuz. What's your view on that?

Speaker #2: What's your view on that?

Speaker #1: Well, we believe that the Strait of Hormuz will remain closed throughout 2026, so we could potentially look at an interesting market going forward for LNG and other shipping segments.

Marius Foss: Well, we believe that the Strait of Hormuz will remain closed throughout 2026.

Marius Foss: So we could potentially look at interesting market going forward for LNG and other shipping segments.

Speaker #2: Moving on, you mentioned in the presentation that we have seen a slightly softer spot market now. So here's a question on what your expectations are for the LNG shipping market for the third quarter, and then the fourth quarter.

Knut Traaholt: Moving on. You mentioned in the presentation that we have seen slightly softer spot market now. There are questions on what your expectations of the LNG shipping market for Q3 and then Q4?

Speaker #1: Yeah, Q3 is normally a shoulder month before we head into the winter season. So, Q3 has softened up from the spot market—it's been maybe at $120,000 for a round trip during the last Q3, and has now come down to $30,000.

Marius Foss: Yeah, Q3 is normally a shoulder month before we head into the winter season. So Q3 has softened up from the spot market, has been maybe on the $120,000 for round trip during the last Q3, and now come down to $30,000. Our next ship coming open in end of Q3. We are preparing for the Q4 market, which historical has been profitable.

Speaker #1: Our next ship is coming open at the end of Q3, so we are preparing for the Q4 market, which historically has been profitable. So we are hopeful and hoping we can contribute a little bit more there on our Q3 and Q4 results, later.

Marius Foss: We are hopeful and hoping that we can contribute a little bit more there on our Q3 and Q4 results later. If Hormuz remain closed, I think this will automatically find its way back to where LNG market should be.

Speaker #1: But yeah, if Hormuz remains closed, I think this will automatically find its way back to where the energy market should be.

Speaker #2: Good. Then we have some questions on the financing. First of all, regarding our interest rate derivative portfolio: as we said, we have 70% coverage until mid-next year, and the question relates to when we expect to add more interest rate hedging to our books.

Knut Traaholt: Good. Then we have some questions on the financing. First of all, on our interest rate derivative portfolio. As we say, we have 70% coverage until mid next year. The question relates to when we expect to add more interest rate hedging to our books. In general, we are trading when the markets are favorable. We are very pleased with the coverage we have today. But obviously, when there are opportunities either for adding more on the short term or longer term interest rate hedging, that is our aim to do. There is also follow-up questions on our debt maturities in Q1 2029, when we will address that. It is a bit early to address that refinancing now, unless we see an attractive opportunity to add more or better terms to our financings. That is something we are continuously evaluating.

Speaker #2: In general, we are trading when the markets are favorable. We are very pleased with the coverage we have today, but obviously, when there are opportunities—either for adding more on the short term or longer term interest rate hedging—that is our aim to do.

Speaker #2: And there is also a follow-up question on our debt maturities in Q1 2029, and when we will address that. It's a bit early to address that refinancing now, unless we see an attractive opportunity to add more or secure better terms to our financings.

Speaker #2: That is something we are continuously evaluating. If there are attractive opportunities, we will act on them. And final question—it's a recurring question—it's about dividend sustainability and the outlook for future dividends.

Knut Traaholt: And if there are attractive opportunities, we will act on them. The final question, it is a recurring question. It is about dividend sustainability and the outlook for future dividends. As we have repeatedly said, each dividend are declared by the board by each quarter. We are fairly transparent on the decision factors, which we have also presented today. That is a repeat of the decision factors that we had last year, sorry, last quarter, which was basically a downgrade of certain factors. However, with the strong balance sheet and cash position and also the contract backlog, the board was pleased to confirm a dividend for this quarter of $0.75. Future dividends will be decided by the board and reassess all these factors, including then our backlog for the open vessels. With that concludes the Q&A session.

Speaker #2: As we have repeatedly said, each dividend declared by the board each quarter—we are fairly transparent on the decision factors, which we have also presented today.

Speaker #2: That is a repeat of the decision factors that we had last year—sorry, last quarter—which was basically a downgrade of certain factors. However, with the strong balance sheet and cash position, and also the contract backlog, the board was pleased to confirm a dividend for this quarter of $0.75.

Speaker #2: Future dividends will be decided by the Board, and they reassess all these factors, including our backlog for the open vessels. And with that, that concludes the Q&A session.

Marius Foss: Thank you. Thank you for participating our Q2 presentation. We would like to welcome you back in November for our Q3 presentation. Thank you.