Flex LNG, company controlled by billionaire John Fredriksen and an emerging player in the LNG shipping business, dropped deeper into red in the second quarter of 2019.
The company reported a net loss of $3.9 million for the second quarter, a larger loss from the $2.9 million in the corresponding quarter last year.
Commenting on the results, Flex LNG CEO Øystein Kalleklev said: “The first half of 2019 has been a cold shower for most LNG industry participants with the exception of the end consumers, who have benefited from cheap, clean fuel and made significant savings on their utility bills.
“Low gas prices during the first half of the year have also negatively affected the results of Flex LNG, as excess gas supply has predominantly been absorbed by European consumers, cutting sailing distances and thus affecting shipping demand and rates.”
Average time charter equivalent rate dropped for the second quarter in a row. The rate for the second quarter stood at $46,266 per day, which is almost $4,000 per day drop from the previous quarter.
As for its revenues, Flex LNG reported $19.0 million for the second quarter of 2019, compared to $7.0 million for the same quarter in 2018.
Flex LNG also stated that they do expect an improved outlook for the second half of the year as the LNG shipping market is expected to become increasingly tight and the likelihood of a repeat of last winter’s El Nino is low.
Tighter product markets generally result in higher shipping demand due to arbitrage and re-loads, so the company expects a positive effect on the market balance in 2021.
In a separate statement, Flex LNG stated that Kalleklev and the company’s CFO Harald Gurvin acquired 5,000 and 2,000 shares in the company, respectively.
Kalleklev now holds 20,000 shares in Flex LNG with options for a further 60,000 while Gurvin holds 7,000 shares with options for a further 30,000 shares.