Hi, everybody, and welcome to fourth quarter results presentation for Flex LNG. It's February 14, Valentine's Day. So, I'm Oystein Kalleklev. I'm the CEO of Flex LNG Management. And will be joined by our CFO, Knut Traaholt, who will give you some more details on the numbers a bit later in the presentation. The presentation will be concluded with a Q&A session. And as you might recall, best question this round will get an original [Flexington] [Ph] bed linen set for two people. So, I hope you can provide some questions either by sending us an email on ir@flexlng.com or just use the Q&A button in the webcast. So, before we being, just want to remind you about our disclaimer related to forward-looking statements. We do provide some non-GAAP measures and, of course, the detail level we can provide here is limited given the time. So, with that let's review the highlights. Revenues for the quarter came in at $98 million, in line with previous revenues guidance of $95 million to $98 million, where our numbers this quarter was boosted by our [index ship] [Ph] in a booming spot market. Net income and adjusted net income came in at $41 million and $55 million, respectively, where the main difference is we realized gains of $14 million on derivatives during Q4. Earnings per share and adjusted earnings per share was $780,000 and $1.02 respectively. In November last year, we announced the extension of three ships with Cheniere, where we added a minimum of 14 years of contractual backlog to an already, rather sizable backlog. Knut will tell you today that we have finalized our balance sheet optimization program. He is presenting a refinancing of three last ships in our fleet. And altogether, the balance sheet optimization program will have released $387…

Thank you, Oystein, and let's have a look at the key financial figures for the fourth quarter and 2022 full-year. 2022 was the first year where we had the full fleet available for the whole year, as we had three deliveries of new buildings in 2021. If you look at the time charter earnings per day, we achieved $82,000 in Q4, and $73,000 for the full-year. OpEx per day, slight improvement, where Q4 ended up at $13,500 per day, and for the full-year, $13,400. Moving on to the revenues, the fourth quarter delivered $98 million in revenues for the year, and reflects the higher earnings under the variable time charter for the Flex Artemis. For the full-year, we ended up at $348 million. If you look at net income and adjusted net income, $41 million for the quarter, and adjusted net income of $55 million for the quarter. The difference here is the realized gains on termination of derivatives, and that were done in October, in 2022. Net income for the year, $188 million, and adjusted net income is $151 million for the full-year. If you look at the cash flow, cash increased by $61 million in the quarter, and we ended up with the record high cash position of $323 million. This is mainly driven by the net proceeds from financing, where we concluded the refinancing of the Flex Resolute, in December. And we -- mentioned the realization of the derivative swaps which were terminated. In addition, we raised $14 million from our ATM program. And as a reminder, amortization in Q4 is slightly lower than Q1 and Q3 due to the semi-annual repayments under the ECA facility. As we will announce later on, this ECA facility will be refinanced in full. So, for the coming quarters, amortization should…

Okay. Now, let's review the LNG product market. Product exports were up 5% last year, driven by U.S. up 9% despite the outage on Freeport which removed about 112 cargos from the market equivalent to 8 million tonnes. Freeport has been exporting cargos again this weekend. So, that will add growth of U.S. volumes. This year, Russia despite all the sanctions -- sanctions don't apply to LNG; Russian exports were 9% and 3 million tonnes in total; Malaysia also recovering, up 11%, and then, other countries up 2%, bringing the total export market for 2022 to 400 million tonnes. On the import side, we had some major shifts in trade flows given the high prices of LNG. And the economic downturn in China caused by the Zero COVID policies, imports in China was down a whopping 20% in 2022, which was a very welcome relief for European market. European buyers have been struggling getting access to natural gas, given the curtailment of Russian flows. And European imports were up 45 million tonnes or 54% in total. Looking at the import nations, you can see how six top import gainers last year were all Europeans dominated by France, U.K., Belgium, Spain, Netherlands, and Italy. So, just like in 2019, when we also had a weak market in China, we saw the European buyers at that time buying up LNG cargoes because the price was low. This time they are buying up cargoes because of the curtailment of corrosion flows. And on the other side, here you see China, Brazil, and also some developing countries where the price of LNG has been so high that buyers in Pakistan, India, Bangladesh has been struggling to be able to pay such a high price for LNG. And as we see here coming soon is…

[Indiscernible] Let's go. Let's [technical difficulty] and as last quarter, Omar Nokta, and now also, [indiscernible] asked what is the key strategic priorities for management, and main objectives going forward?

Yes, near-term, of course, it's to close -- for Knut to close the current financing during the first quarter, releasing this $204 million of cash. Longer-term, I think I highlighted it in the chartering strategy. We have two ships now open 2027, which we are marketing in our market where term rates have gone up. So, of course, our key priority is to try to secure some attractive long-term contracts for those ships, and then thereby increasing our backlog and hopefully also improving the earnings profile to higher term rates on those ships. We also have ships -- two ships coming open early '28, which I also think will be finding a marketing window during the year. So, it's mostly about building more backlog. I think the financing process is done for now. As we have highlighted in the past, and I also mentioned, that new building prices are quite stiff, so we rather focus on building more backlog for existing ships which are the same type of technology. And let's see, we have a strong balance sheet, so we can always act on opportunities quickly; $400 million revolving credit line available for us in case we see opportunities. I think we can easily scale the company. As I mentioned here, we have fantastic uptime and quality on the service we are delivering. So, nothing like big for the moment, I don't think it's the time to rush to the yards, but keep building the business step-by-step like we've done the last couple of years now.

And there's a number of questions here about fleet, fleet expansion, and how do you look at your -- the new building prices and ability to go to the yard for new buildings.

Yes, I think I mentioned it already. One thing is, when interest rate are zero and you are coming to a new building contract where you have a lead time of close to four years today. So, kind of the alternative return on that money, which you're tying up in yard fee and installments, you have zero return on that capital. And that means that a ticket price of $250 million is certainly approaching $270 million-$280 million when you are kind of taking into account the alternative return on that money you are tying up in that investment. So, I think it's not really attractive for us. Of course, if there is a tender where there are long-term contracts, given the high or elevated new building prices, I think you need to see 10-15-years contract in order to kind of defend such an investment, which I think makes it a very good window for us to fix our existing ships. So, we are always open for consolidation. The sea tankers group of companies, Frontline, Golden Ocean, SFL; we have also been open to consolidate. We don't have any big egos there. We want to do what's best for the shareholders. So, we always have the door open for consolidation, but only if it's good for our shareholders, not necessarily for us as management.

Good. Then moving over to capital, and we have this ATM program. And a number of questions, can you give some color on the background, the rationale for it, and how to use the proceeds?

Yes, it's -- when we started thinking about listing this company in the U.S., it was 2018. And one of the things we did then was to change our accounts from IFRS to U.S. GAAP already in 2018. Capital markets in 2019 for LNG shipping companies were very poor. So, what we did was a direct listing, and we listed the company in U.S., June, 2019. When we did the direct listing, that meant we never issued any shares in the U.S. market. So, it took a while before the liquidity of the stock became to a level where it's today. At the same time, when we had the slump during COVID, in 2020, our stock price was negatively affected by that, and we bought back stock, 980,000 shares we bought back in that period, which we have still in our treasury today. So, the ATM is kind of a way of us improving the liquidity of the stock since no stocks have ever been issued in the U.S. So, basically, we are selling back some of the shares we have bought back in order to create a bit better flow in the stock. We don't have any immediate capital requirements for this cash. And also one of the reasons why we are paying out a special dividend today of $0.25 on top of the $0.75, which gives the investors a good time on Valentine's.

Moving a bit over to more shipping-related and the contract portfolio, the questions about termination risk in case if natural gas prices falls down how do you look at the stability for the charters to amend their contracts?

Yes, I think you the super stress test on this in 2020, during COVID, when LNG price in Europe went below $1.00 per MMBtu. It was up, as I mentioned in the presentation, in August, above $100 per MMBtu. And Asian prices were as low as $1.80. I've never seen -- I don't think anybody else have seen termination of these contracts ever since the LNG industry started, 50 years ago. These are hell-or-high-water contracts. Usually, the people who are shipping, they also have a cargo they need to ship. And of course, the cost of the freight is usually quite low compared to the value of the cargo. So, it's not something we have ever seen, and we didn't see it in 2020, even though people were losing money, even though a lot of cargos in the U.S. were cancelled, and a lot of ships were idling, we still saw that everybody honored their contract. And keep in mind, LNG is the big boys' game. If you think about the super majors, their size in the oil market is very small compared to all the traders and the national oil companies. In LNG, it's mostly the super majors and it's the big national oil companies like Qatar Gas. So, it's not a lot of shady counterparties, it's good counterparties, and that also make it reliable partners for us to do freight.

Yes. You mentioned LNG is a big boys' game. There's a question here if Flex will start buying and trading LNG, and not only transporting it?

Yes, it's not -- LNG -- selling and buying LNG is incredibly complex. You need a totally different organization for doing that. You need to have master sales and purchase agreement with all the relevant buyers and sellers. And of course, keep in mind, the cargo values can be substantial, with cargo values going to $200 million. So, it needs a -- you need a lot of working capital to finance that type of activity. Another point is, of course, we would be competing against our customers for spot cargos, which I would think that some of the charters would maybe shy away from chartering our ships if we are competing head-on-head with them. So, we'd rather focus on the transportation side of the business, which is our shipping business, which we find a good and attractive business and we can run a lean organization doing that activity, which we couldn't have done on the LNG trading side.

Then more shipping-specific, how many days does a ship use to cross the Atlantic?

Yes, usually U.S.-Europe, five, six -- mostly 6,000 nautical mile. It's fairly simple to calculate this. So, in natural boiler speed, we are at 18 knots, there's 24 hours a day. That means you are traveling 432 nautical miles in a day. So, that means 14 days U.S.-Europe. You need some time for the loading; you need some time for the discharging. So, basically, you can do one cargo a month, that translates into 12 cargos a year. And then you are lifting 900,000 tonnes a year, give or take.

Okay.

Of course, if you're going into Asia, it's a longer distance. Then, it's 10,000 nautical miles through Panama. And if the Panama canal gets clogs, which usually happens from time to time, then you have go through Cape of Good Hope and you are 15,000 nautical miles. So, that means when cargos are flowing from U.S., the long way either through Panama or Cape of Good Hope or Suez to Asia that usually tightens the LNG shipping market because ships are able to transport less cargo here.

And then there is another of question of de-carbonization and environmental impacts, and focused that on regulators side than politicians, how will that impact the LNG shipping and FLEX in particular?

I think our main competitor is coal. And as I have shown on the graph here, coal consumption is a lot in Europe. It's not only up in Europe. It's up a lot in China. 2022 peak coal consumption in the world. And actually, we see people are expanding more on the coal side as well because it's affordable. And of course, if you are a developing country maybe you are not able to pay the price for LNG. The price of LNG will come down I feel in Europe today. We are at such low prices on the natural gas, oil, and LNG that we are getting into the territory of coal to natural gas switching which is a long time we have seen, because in Europe you have carbon prices as well. And if you are burning coal, it's twice as much CO2 emissions. And you need to buy more of this carbon permits which is costing close to €100 per tonne. So, with lower prices -- we actually prefer prices because that stimulate demand and usually stimulate demand more in Asia which is driving sale in businesses. In terms of EGS, this -- what we are trying to do is to replace coal with natural gas which is reducing CO2 but also cleaning up the local air quality soaks in particle matters and NOx which is reduced 85% to 99%. So, that is also a side factor of it. Another element is that CO2 pricing, which I mentioned in Europe, that will also now start soon for shipping. That means ships calling European cost will have to pay CO2 price for their emissions for that voyage. And of course, our ships are much more efficient than the older steam generation of ship. So, our CO2 footprint compared to older steamship is down about 60%. That means that if you are shipping a cargo on our ships into Europe, you have less CO2 tax on it. And that will improve further our competitive advantage towards older generation of ships. And we do think that eventually CO2 prices will spread to other parts of the world and just Europe. And also Europe is signaling that if other countries are not doing this, they will then start to collect that tax for full voyage and not just the half of the voyage which has so far been suggested.

Then there is a question if our revenues are sensitive to the LNG commodity price.

Now, we have 12 of our ships are on fixed heir rates. So, the rate is fixed. It is not linked to the commodity. One ship is on verbal heir. Contract is not linked to the commodity price. It's linked to spot rates for freight. So, no, that's not the case.

Then there is a final question if we are having a balance sheet optimization program Phase 3? Maybe, I can take it. We have done Phase 1 and 2. And now, we introduced 2.1. So, you can say it's Phase 3, but now we have refinanced the -- all of the 13 vessels. And long-term maturity dates. And we are pleased with what we have. So, you will pause on that for now.

Yes, that's good.

So, that concludes the Q&A round. And then the big question is who is the winner?

Who is going to sleep well at night, and it's going to be [indiscernible]. Thank you for the questions. You have not only sent questions today. But I have been getting questions from you for the last two years or so. And really like your engagement whereby sending us questions in the middle of the night U.S. time. So, we will send over some [Flexington] [Ph] bed linen kits to you and also two T-shirt. So, you can enjoy that as well and sleep even better. So, that concludes today's presentation. Once again, I would thank you for joining. I would like to thank our financers providing about $2 billion of new financing. I would like to thank all you investors. And not least, I would like to thank our onshore and offshore personnel making this possible, making the propellers turn everyday despite all the challenges we have had with COVID. As I've shown today, we have perfect time and quality record. So, thank you very much, and we wish you a very good Valentine's Day, and we will be back for more updates in May when we're doing our Q1 presentation. Thank you.

Thank you.