FLEX LNG said its cash balances at 31 December were $6.2m ($14.8m) with $1.5m net outflow ($2.1m net outflow) in the quarter and $8.5m net outflow ($4.9m – net inflow) year to date. In the twelve months in 2012 the operating cash outflow was $8.5m (principally the operating loss excluding non cash movements).
The loss before tax was $292.0m ($116.9m) in the quarter and $298.7m ($135.9m) year to date, with a year to date retained net loss of $298.8m ($136.0m). In the current quarter there has been an impairment adjustment of $301.4m, reduced staff and general overhead costs, partly offset by additional legal expenditures. The legal expenditures for the year were $1.5m, with the majority relating to legal counsel advice following the review of historical contracts and correspondence with Samsung. In the year there was also a net credit of $12.4m as the accounting on the option and warrant schemes was amended to reflect that the Company expects that the majority of these will not vest by the scheme expiry date, (2011: $4.3m – charge).
In the 2011 statutory accounts, the Group recognised an impairment write-down on the new build assets under IAS 36, of $112.3m. IAS 37 covers the recognition criteria and measurement applied to contingent assets. It is the view of the Company that the valuation basis for the new building assets now falls within the definition of a contingent asset. Contingent assets are only recognised where realisation is virtually certain. Where the realisation of the asset is probable the asset should not be recognised in the statement of financial position. In Q4 2012 the new building assets have therefore been written down by $285.0m. The final valuation will either depend on the arbitration process or a possible agreement between the parties. Once the outcome of the legal position with Samsung is virtually certain the resultant asset value will be reinstated in the financial statements. In addition a calculation of the recoverable amount for the Topside capitalised costs has been completed under IAS 36 and a further $16.4m impairment write down has been incurred.
LNG World News Staff, February 25, 2013; Image: Flex LNG