Thank you, welcome to today's FLEX LNG webcast, where we will be presenting our second quarter results. I am Øystein Kalleklev, the CEO of FLEX LNG Management, I will be joined today by our CFO, Knut Traaholt, who will walk and talk you through the numbers a bit later in the presentation before we conclude with a Q&A session. If you'd like to ask a question, you can either ask by teleconference or use the chat function. On the cover page today, we have a picture of a recent addition to the fleet, FLEX Vigilant, which is our 13th and last ship for delivery. She was delivered all according to plan on May 31st immediately commenced a time charter with Cheniere with a minimum period of three years, I will return to that shortly.
Disclaimer, before we start the presentation, I will remind you of the disclaimer with regards to, among others, forward-looking statement, non-GAAP measures and completeness of detail. We also recommend that the presentation is read together with the earnings report, which we also released today. Let's go. Slide number three, highlights. The LNG market is booming, and if anything, we actually think the LNG prices are, at the moment, a bit too hot. The Asian spot LNG price, JKM, is at about $17 per million BTU. This is the highest seasonal price in nearly a decade and implies oil energy equivalent price of above $100. Keep in mind, Brent oil price averaged $99 per barrel back in 2014 when we saw these kind of LNG prices. LNG prices are currently at a big premium to oil.
Meanwhile, the European gas prices are trading at all-time high levels, with the European gas prices, TTF, above $15, driven by high carbon and coal prices as well as very low gas inventory levels. Low gas inventories are something we have pointed to in the past would be a supportive driver of the gas market this year. With cargo prices at about $60 million-$70 million, there is ample room to pay premium rates for freight, which I will revert to in the market section. The second quarter is, however, traditionally the weakest quarter in the year, and not surprisingly, also the case this year. This is due to a combination that we are coming out of the winter and gas demand is generally at its lowest level in Q2 when there is less heating demand and it's too early in the season for cooling demand.
At the same time, we generally see more new building deliveries at the start of the year, as these tend to be skewed towards the start of the year, which is also the case this year. We have taken delivery of our last three new buildings, and the last new building, FLEX Vigilant, was, as I mentioned, delivered on May 31st. We have just completed our approximately $2.5 billion investment program and now have 13 state-of-the-art LNG carriers on the water, all generating revenues. As we presented in our first quarter presentation in May, we have utilized a strong freight market to execute on our strategy of securing a higher degree of employment visibility and thus de-risking the company's freight exposure. We have recently secured attractive term contracts for six, possibly seven of our vessels, with about 20 years of minimum fixed higher employment for the six ships.
Despite the challenges imposed by the COVID-19 pandemic when it comes to crew changes, inspection, and services, we have continued to operate our ships with excellent safety and operational performance. The Delta variant have created further complication to our operations, particularly in Asia, where vaccination levels lags U.S. and Europe, and this means crew change is still difficult to carry out in this region. However, I am pleased to say we are working diligent on minimizing crew which is overdue on the contracts, and we have been able to maintain 98% of our crew on time and with no personnel now being more than 30 days overdue. A great thanks to our seafarers and onshore personnel for a very good job done despite these obstacles.
In terms of financial, I am pleased to say that we deliver revenues of $65.8 million for the second quarter in line with the guidance of approximately $65 million. Our time charter equivalent earnings or TCE in Q2 was $57,800, and the year-to-date number is $66,300, which translates into healthy earnings. In Q2, our adjusted net income, this is the number adjusted for change in value of our interest rate derivatives, which tend to fluctuate, was $15.7 million or $0.29. This brings the adjusted net income for the first half of the year to about $50 million. With normal GAAP earnings, the number is actually $10 million higher. This is a result which we are reasonably satisfied with.
Despite raising our dividend to $0.40 in Q1, taking delivery of a new building and buying back some stocks in the quarter, our cash pile grew by $5 million- $144 million at quarter end. $144 million of cash is a liquidity position which we consider very comfortable, particularly given how we have de-risked our business through building profitable backlogs. The board has decided to pay a dividend of $0.40 for Q2.
This provides an attractive yield of slightly above 11% on an annualized basis, as the stock price have traded quite a bit down today for reasons I don't really comprehend, given that we are delivering numbers in line with our guidance. As our stock is continuing to trade below both book value and particularly replacement value of our fleet, despite all ships being on the water with attractive financing and considerable backlog, we therefore find it attractive to continue to buy back our stock. So far, we have bought back 900,000 shares at an average price of $9.20 per share since we announced the buyback program last November. Given recent improved outlook and backlog, the board has decided to raise the buyback threshold from $14- $15 per share. Let's review our contract portfolio on slide four. Today, we have three ships on variable hire contracts.
This means the earnings are linked to the general spot market earnings. This is FLEX Artemis, which is on a long-term TCP with Gunvor until Q3 2025, with options for another five years. We have FLEX Enterprise and FLEX Amber, also on variable hire contracts, where FLEX Amber was recently extended by another year with early redelivery now being fourth quarter next year. Moving on to the ships under fixed hire time charterers. FLEX Freedom is on a shorter term TC, which expires in Q1 next year. Where we have fixed the ships on a time charter to a portfolio player with a minimum period of either three or five years. The firm minimum period, i.e., three or five years, will be declared shortly. FLEX Constellation was booked to a trader in May on a time charter with a minimum period of three years.
We have FLEX Endeavor, FLEX Vigilant, and FLEX Ranger, which have been fixed to Cheniere for a minimum period ranging from 3- 3.8 years. All these ships have now been delivered to Cheniere, and Cheniere will also take one more ship on a three-and-a-half-year time charter in the third quarter next year. Cheniere also has the option of adding one more ship next year, bringing the total to five ships. In this overview, we have, for illustrative purposes, assumed FLEX Courageous and FLEX Aurora as Cheniere vessel four and five. We have the option of nominating performing vessels, which provide us with some flexibility in our portfolio. FLEX Courageous was fixed on an 11-month short-term time charter in April, and we expect to get her back at the end of Q1 next year.
FLEX Aurora and FLEX Resolute were recently extended by six months, and the charter hire for these optional periods are substantially higher than the initial firm period, which commenced in connection with delivery of these ships last year. We have FLEX Rainbow, which was fixed on a 12-month time charter commencing in Q1 this year, where the charter has the option to extend this vessel by another year. We have FLEX Volunteer, which is trading in the spot market, which is a market which we think will be very attractive, as I will explain a bit later in the presentation. With this contract portfolio, our charter cover for the year is 96%, but as mentioned, earnings for four of our ships are tied to the spot market.
Hence, our earnings in the second half of the year will be partly determined by how the spot market develops in this period. As you can also see from the graph, charter coverage is also healthy the next couple of years, thus providing us with more stable earnings than in the past. On slide five is the guidance. Revenue guidance is very similar to our last presentation, where the variation is depending on the earnings for the four ships linked to the spot market, as mentioned. However, we have accommodated the analysts in adding grid lines to the graph as it seems some of them prefer this rather than using a ruler to estimate the range in the revenue guidance. We do hope these grid lines make the analyst's job a bit easier, even if the visual expression is somewhat adversely impacted.
As we mentioned in the Q1 presentation in May, we expected revenues of about $65 million, down from $81.3 million in the first quarter, and the actual number we ended up with was $65.8 million. Time Charter Equivalent income of $64.9 million after deducting $980,000 in voyage-related expenses. As mentioned in the highlights, and as you can see from the graph, second quarter tends to be the softest quarter, and we expect revenues to bounce back in the third quarter, with revenues expected to be around similar levels as in Q1, i.e., around $80 million. Q4 revenues have slightly higher variability, as it's difficult to accurately predict how high spot rates will go when we are getting into the winter market. In any case, we do expect Q4 to be the strongest quarter, which tends to be the case in LNG shipping.
Except for Q1 this year, where a long and cold winter resulted in us generating slightly higher TCE numbers in Q1 than Q4. In Q1 , we also benefited from having more ships on the water, resulting in a jump in revenues, as you can see. Keep in mind our costs are fixed with an industry-low cash break-even level of around $45,000 per day. With all ships on the water now, a dollar increase in revenue is basically a dollar increase in our free cash flow and thus our dividend capacity, given our ample liquidity position. As a back-of-envelope calculation, a $1,000 increase in charter rates increase our annual cash flow by close to $5 million. Slide number six, the dividends. Speaking of it, let's discuss our dividend philosophy. As mentioned, our investment program is now completed.
We might invest in new ships in the future, but at the moment, we have no plans to do so. During the last 3.5 years, we have been in an investment phase, taking delivery of 30 ultramodern large LNG carriers. This has been a major investment of close to $2.5 billion, and our focus in this period has primarily been to secure financing for the ships and attractive contracts for our ships, while building the software with an inexperienced top management and in-house technical management for all our ships. As we are now moving into the next phase, we have incrementally increased our dividend in line with our cash flow generation. Last November, we became increasingly upbeat about the prospect, given less COVID-19 concerns and a rebound in the LNG demand. We therefore decided to reinstate our $0.10 dividend while also announcing a share buyback scheme.
Our assessment of the outlook turned out pretty accurate, and we generated serious cash flow in Q4 with $0.45 of adjusted EPS, thus enabling us to hike the dividend to $0.30. In Q1, we generated $0.64 of adjusted EPS, and we hiked the dividend again to $0.40. This is our level we have decided to maintain for Q2. The dividend, coupled with the buyback, represents a payout ratio of 96% in this 12-month period. Keep in mind that we, during these four quarters, have taken delivery of seven new buildings with associated CapEx in connection with delivery. Despite this, our cash balance has kept on growing throughout this period and today stands at $144 million, which is an all-time high cash balance for us.
As we have guided, revenues are expected to grow in the second half of the year, and as our costs are more or less fixed, this will increase our free cash flow considerably and thus dividend capacity, as I explained on the previous slide. We do not have a formal dividend policy with, for example, 50% of EPS to be paid as dividend or some sort of minimum level of dividend. Our dividend philosophy is similar to what we have in our affiliated shipping companies, Frontline, Golden Ocean, and SFL, which have all a very good track record in the capital markets. Let me explain a bit in more detail how we think about this. When we consider the dividend level, there are several factors we consider when we determine the appropriate level.
Earnings is, of course, the most self-explanatory factor, and our adjusted earnings are a very good proxy on free cash flow, although there can be working capital adjustment from quarter to quarter. That said, in general, our working capital needs are very limited. Our charterers pay charter hire in advance as we trade on the time charter, and this actually result in us having negative working capital, which is different from what a shipping company which trades ships on voyage charterers typically have. As mentioned in relation to Q3 last year, market outlook also influence our dividend level. This relates to how we assess the outlook and our confidence level with this assessment. Having a higher level of backlog makes prediction about the future easier.
As we currently have 96% of the year booked and a significant backlog for the next couple of years, this also plays a major part when considering our dividend. When assessing the dividend level, we also take into consideration our financial position such as liquidity position, which I have already mentioned is at all-time high and more than twice the requirement under the financial covenant in our bank loans. In general, our financial covenants are easy to comprehend. We are required to maintain book equity level of above 25% of total assets, and this is currently about 34%. Under our bank loans, we need to have a liquidity position above $25 million and 5% of net debt, while under our leases, cash requirement is no higher than $25 million. Hence, we are passing liquidity and covenant test with flying colors.
Given the fact we have taken delivery of all our new buildings and we have secured long-term debt for all our ships, debt maturities and CapEx is no concern for us, particularly since we have issued no bonds. Other consideration is a bucket list of item for big events which can create risk and uncertainty. Think Black Monday, 9/11, Lehman Brothers, and COVID-19. The Delta variant and other possible mutation of COVID-19 is the main reason for this light not being dark green at the moment. Just like Matthew McConaughey writes in his new book, Greenlights, which is, by the way, a surprisingly readable book, we are also chasing green lights. Nearly all our lights have now turned green, and we do expect that improved revenues and earnings in the second half of the year, coupled with further rollouts of vaccine, will turn all parameters dark green.
Although vaccine rollouts are out of our hands. Rest assured, we have a well-thought approach to dividends, and we are fully aligned with shareholders. In our view, the free cash flow belongs to our shareholders and will certainly not be used by management in empire building. I think it's a convenient time for you, Knut, to discuss the financial in more details, and I will revert with a short market update afterwards.
Thank you, Øystein. Let's turn to slide seven. Since second quarter last year, we have more than doubled the fleet with the new building program, which is now completed. As FLEX Vigilant was delivered in end of May, she had 30 days available during the second quarter, so we had earnings from 12.3 vessels in Q2. Therefore, Q3 will be the first quarter where we will have the earnings capacity from the full 13-vessel fleet. Turning to slide eight. As Øystein already has mentioned, our TCE earnings for Q2 was $57,800 per day. This is down from the $75,400 per day in Q1, and the lower TCE is explained by the normal seasonality, where Q2 is a low quarter. This impacts our earnings from the vessels trading spots and the vessels on variable hire contracts.
We from Q3 and onwards will phase in more of the long-term contracts agreed in Q2, the seasonality effect as experienced in Q2 will be reduced going forward. The TCE for the first half of the year was solid at $66,340 per day, a substantial increase compared to the same period last year. Our operating expenses were impacted by extra costs related to COVID-19, and in particular related to crew changes in Asia. If we look at the first six months with an OpEx of $13,600 per day in OpEx, that's about $500 per day, which is related to COVID. The underlying operating expenses remains within the guided level of $13,000 per day. Mentioned by Øystein, we do continue to face challenging crew changes, in particular in Asia, higher lube oil prices, and general supply chain challenges for delivery of spare parts.
We expect that the operating expenses continue to be a bit bumpy in the coming quarters, as long as the travel restrictions and quarantines are affecting our operations. Gross revenues for the quarter came in at $65.8 million, in line with our guidance for the quarter of $65 million. Adjusted EBITDA was $47 million, an adjusted net income of $15.7 million, and adjusted earnings per share at $0.29 per share. The numbers are adjusted for a $2.8 million loss on an interest rate derivative, which includes an unrealized loss of $1.1 million. Quarter by quarter, our numbers are down due to the explained seasonality in the second quarter compared with the very strong first quarter. The first half figures shows the financial impacts of the increase in the fleet size, as shown in the previous slide, and the earnings potential in the fleet.
On the financing, interest expenses are slightly up, reflecting a full quarter on the interest on the debt drawn for FLEX Freedom and the drawdown of the loan related to delivery of FLEX Vigilant. Moving to our balance sheet, which is quite straightforward after delivery of the last new building. On the asset side, we have cash of $144 million and vessel just shy of $2.4 billion. Development in cash will be explained on the next slide, and the increase of book value is explained by the delivery of FLEX Vigilant in May. On the liability side, we have about $1.6 billion of long-term debt from international banks and financial institutions. The increase in debt is related to the aforementioned drawdown of the bank loan related to delivery of FLEX Vigilant.
We have book equity of $152 million, which is about $100 million higher than the market cap, despite us having the ship at much lower prices than the new building prices today. Let's turn to slide nine. Despite a seasonal low quarter, we ended up with a positive cash flow of $5 million during the quarter. This is driven by approximately $30 million from operations and $17.6 million from working capital adjustments. As we are mainly operating on a time charter basis only, we receive charter hire in advance, which is advantageous from a working capital perspective. Debt amortizations were $13.2 million, and you will see that Q2 and Q4 have low amortizations, as our ECA financing, the financing, has semi-annual repayment profile. During the quarter, we paid $21.3 million in dividends and spent about $400,000 on buybacks of our share under share buyback program.
In total, we bought back 27,344 shares during second quarter. That leaves us with a solid cash position of $144 million at the end of the quarter. We turn to slide 10. This is a familiar slide which we have shown several quarters. It's still relevant, as we have financed our vessels with attractive long-term financing. We have no maturity before Q2 2024. The debt is a diversified mix of bank loans, ECA, revolving credit facilities, and leases, which leaves us in a very comfortable funding position. With that, I hand the word back to Øystein, who will give an update on the market.
Thanks, Knut, for the financial review. Hopefully, life in shipping feels better than in banking. Slide number 11, Chimerica. Chimerica, I believe, is a reference to U.S. and China, and I think it was coined by Harvard Professor Niall Ferguson. In our Q1 presentation back in May, we started off with an overview of the LNG market where Asia was pulling cargos away from Europe. A shift from European to Asian demand is positive for the freight market as it increases the sailing distances as the incremental cargos are typically sourced from the Atlantic Basin, very often flexible U.S. cargos. This trend continued in the second quarter. U.S. was the main driver of export growth while the three largest import nations, China, Japan, and South Korea, was the main growth regions on the demand side.
Also note that growth from South America, predominantly Brazil and Argentina, have been remarkably strong in 2021, while as mentioned, European imports are down compared to last year. It's fair to say that European imports were high last year due to European buyers buying a lot of cargos for storage at the cheap following the slump in demand due to COVID-19. All in all, export volumes were up by about 4% in first half of 2021 compared to last year. We do, however, expect growth to accelerate in the second half of 2021. Due to the COVID-19 fallout last year, gas prices hit rock bottom and we saw about 180 U.S. cargos being canceled, and most of them in the third quarter of 2020. The export volumes in the first half of 2021 are 8% higher than the volumes in the second half of 2020.
Given the high gas prices, which I will cover shortly, there have been no cargo cancellation this summer, and we do not expect any either. We therefore expect export volumes to grow by around 10% or more in the second half of the year, bringing the growth for the year to around 25,000,000 tons or about 7% annual growth. The steady growth of the LNG market this year have taken many by surprise. Volumes are actually very much in line with our market projection in our Q3 report last November. We argued that significantly higher gas prices, both spot and future prices, would result in high volume growth for 2021 as there would be few, if any, incentive to repeat the cargo cancellation seen last year.
At the same time, we also expected Egypt to return as a large LNG exporter, and Egypt have so far exported 4,000,000 tons this year compared to only 1,500,000 tons in 2020. Slide 12, European gas inventories have recently become a permanent part of our slide deck. As we started to highlight in our December 2020 presentation, the strong demand from Asia at end of 2020 into 2021 was pulling cargos away from the Atlantic basin and away from European buyers with rapid depletion of gas inventories in Europe as a consequence. As illustrated on last slide, this Asian demand pull has continued into 2021 and thus starving Europe from natural gas at a time when gas demand in Europe has been strong due to a long and cold winter while high coal prices and even higher carbon prices have incentivized switching from coal to gas.
At the same time, Gazprom has elected to not increase pipeline flows through Ukraine above the minimum agreed volumes, and Norwegian gas flows have also been on the soft side due to maintenance deferrals last year due to the COVID-19 situation. The European gas inventories remains low and Europe will probably enter the winter with significantly lower storage levels than the previous two winters. In the last couple of months, we have seen fierce global competition for gas. During this period, the European gas prices have acted as the global benchmark price where correlation between gas prices in Europe and Asia have been remarkably high with Asian prices at a slightly higher level reflecting the higher shipping costs. Lower gas inventories also increase the probability of high volatility in gas prices as another cold winter in Europe can result in rapid depletion of gas inventories.
With a 70% chance of another La Niña winter according to the U.S. National Oceanic and Atmospheric Administration or NOAA, we could therefore be in for a winter with sharp movement in gas prices. Turning to slide 13, the spot market for freight. The freight market boomed at the start of the year with all-time high freight rates and LNG prices. With the winter in Asia turning a bit hotter in February and a lot of new building deliveries at the start of the year, the market softened from the elevated level seen at the start of the year.
As you can see from the graph on the right-hand side, vessel availability shot up in February, particularly in the Pacific region, but also to some extent in the Atlantic due to the big freeze in U.S., which resulted in temporary export curtailment for some LNG export plants there. The seasonal downturn was fairly shallow, with the market bouncing back by end of April. We started to see green shoots in March with ballast bonus sentiment bottoming out in week nine, while rates started to pick up in week 11. Since reporting in May, freight rates have moved like a snake between $70,000-$90,000 per day for modern tonnage. Big charterers have generally been long tonnage after a flurry of term business this spring and summer, so most spot fixtures have been relets.
These relets, which is tonnage controlled by charterers, are typically only available for shorter duration as the charterers typically want to control these ships during the peak winter season. We are now approaching the time of the year where spot rates tend to move upwards, and the market expectation is for much higher rates as we can infer from the one-year time charter rates, which I will cover on the next slide. Slide number 14, the one-year time charter market. One-year time charter rate, which is the best proxy for the future earnings in the spot market, has been on a tear the last four months. For most of 2020, the one-year TC rate was around $60,000 per day, and this was also the case at the start of 2021 until the market sentiment abruptly turned more positive in April.
Since then, the one-year time charter rate has nearly doubled. The one-year time charter rate for modern tonnage quoted by Fearnleys is currently $115,000 per day. This illustrates that market participants expect spot rates to move upwards as there is willingness to pay premium to spot rates for one-year periods and even more so for six-month periods. As LNG have become pricier, advantage of having large fuel efficient ships is also becoming more advantageous. The spread between mega XDF ships with approximately 174,000 cubic meter of cargo capacity and a standard 160,000 cubic TFDE ship is now $22,000 per day. Given today's LNG prices and thus the entailed savings of utilizing more modern tonnage with higher cargo capacity, we actually think this spread should widen even more.
The firm one-year time charter rate is also pushing up longer-term charter rates with both SSY and Affinity quoting three-year time charter rates at $90,000 per day, which is maybe not too surprisingly as the lead time for LNG carrier today is about three years. At the same time, new building prices have been moving steadily upwards closer to $210 million, which means new building also require higher rates than what was the case 12 months ago. Just as an example, if you were to replicate FLEX LNG today with new builds, you would need to spend about $2.7 billion in CapEx, then another $30 million in building supervision. Assuming similar debt level as FLEX, about $1.5 billion net debt with about $20 million in financing fees. You would also need to spend money building up the organization.
Let's assume you would have to raise $1.3 billion of equity to finance this investment. If you have a similar share count to FLEX LNG, that would translate into a required equity price per share of $24. However, if you did this investment in our new FLEX at $24 per share, you would be getting zero return on the investment before taking delivery of ships probably in 2024 and 2025, and thus be missing out on a lot of dividends if you rather elected to be invested in FLEX. Turning to slide 15, gas prices. Gas prices have been on a bull run since bottoming out last summer, and as mentioned in the introduction, they are in our view right now actually a bit too high. The market have, in one year time, turned upside down, going from too much LNG to too little LNG.
LNG evidenced that it was more resilient than other sources of energy last year, being the only energy source except for renewables growing. With the recent dash for gas, which is very complementary to renewables, there haven't been enough of it to go around, and prices have therefore responded upwards. Currently, the Asian spot price, JKM, is trading at around $17, while its European pair, TTF, is trading at around $15 per million BTU. The spread between European and Asian prices are also positive, which is important for incentivizing cargos to be pulled to Asia, and the spread is expected to widen during the winter, as we do expect congestion to pile up again in Panama, resulting in even longer voyages for Atlantic cargos heading to Asia. As we have communicated in the past, future prices have a mixed record of predicting future spot prices.
Today's future prices, in any case, suggest a very firm market. The winter JKM prices actually surpassed the level we saw at the start of the year when February JKM contracts hit the average of about $18 with a high of $32.5. Expectations are for continued high gas prices over the winter, with a gradual normalization of gas prices by the middle of 2023 when they are converging towards the typical oil-linked price at about 25% discount to oil parity. This also makes sense as we do expect considerable new LNG export volumes to be ramped up by 2024 onwards. What is most important for us is that the LNG price is sufficiently high enough with a positive spread between U.S. and where Asian prices are at a premium to European prices, that is certainly the case today. Slide 16, the order book.
As the term market has been very active recently, the number of available ships is declining, and today about 80% of the ships on order is linked to a long-term charter. Where we expect that more uncommitted ships will be tied up on term charter prior to delivery, if not already, as such announcements are very often delayed. New building orders have picked up recently, but with new building prices above $200 million, there are very few speculative new building orders, as illustrated here. We have discussed in great length in the past the implication of new decarbonization rules for all ships or EEXI, as it is called, and there is undoubtedly a lot of new buildings set for delivery which will replace older tonnage, particularly the older inefficient steam generation of ships.
That EU decided to add shipping to its carbon trading scheme will further put these ships at a disadvantage compared to new modern tonnage, as the new generation mega XDF ships have a carbon footprint per unit of cargo of close to 60% less than the steam generation. However, keep in mind that Europe is only about 20% of the LNG import demand. Asia is the big import region, where we also see more or less all the growth going forward. It could be that some of the less efficient ships are therefore doing short-haul intra-Asia unless similar mechanisms are put in place in that region. The European carbon tax will be applicable for ships trading intra-Europe. If the ships are bringing imports from outside the European emission trading area, half the voyage will be applicable for carbon taxation in Europe.
The carbon taxation will ramp up from 2023, when 20% of applicable emissions will be taxed. This level increases to 45% in 2024, 70% in 2025, finally from 2026 and onwards, 100% of the applicable emissions will be taxed. Slide 17, COVID. Despite recent progress on COVID, this remains a big challenge for the shipping industry. While vaccination rollout has rapidly increased in Europe, with Europe surpassing U.S. in vaccination levels, vaccination levels in other parts of the world remain low, there are questions whether all vaccines have similar efficiency against the Delta variant. Only about 20% of LNG cargos end up in Europe, as mentioned, while about three-quarters end up in Asia. Vaccination level and restriction in Asia is thus of more importance to the LNG industry.
Because of the lack of vaccine rollout in Asia, crew rotation remains very difficult to carry out in this region. We are therefore still meeting a lot of obstacles carrying out crew changes. Nevertheless, we work hard to minimize the share of seafarers which are overdue on their contracts. I think our onshore personnel and crew have done a remarkable job in this regard with 98% of our seafarers being on time. Once again, thanks for your hard work. Vaccination levels of seafarers are also mixed. A big share of our crew are Filipinos, and for them to get access to vaccines are providing more difficult than in the West. We just try to take every advantage of vaccination of crew whenever possible. We are glad to see that the U.S. allows visiting seafarers to take the vaccine when calling U.S. ports and terminals.
This is something we have done for several of our ships now. Most recently, FLEX Rainbow, where we on August the fourth were able to vaccinate 19 of our crew members when we loaded a cargo at the Freeport terminal. By doing so, we increased our crew vaccinated to 23 out of 26 being fully vaccinated, with one crew member being partly vaccinated. However, in order to organize vaccinations, we need to call ports where such vaccines are available, and we do hope more countries can make vaccines available to seafarers, as seafarers are key workers. Without shipping, about 90% of good transportation will dry up, and then everybody will feel the pain. Let us summarize today's presentation. Revenues of $65.8 million in line with guidance.
Coverage for 2021, the next couple of years is great, although we keep exposure to the spot market through four ships as mentioned. Dividend maintained at $0.40. Upside here in the second half of the year when we expect revenues to bounce back after the usual seasonal low point in Q2. All our ships are on the water. All of our ships are now on hire. We are positive to outlook, both short-term and long-term. Finally, our balance sheet is in great shape with a big cash pile enabling us to do this with our free cash flow. That's it. I am happy to take some questions. Let us open up operator.
Okay, ladies and gentlemen, we will now begin the question-and-answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Once again, that is star and one if you wish to ask a question. Okay, we will now take our first question, it comes from the line of Randy Giveans from Jefferies. Your line is now open.
Howdy, gentlemen. How is it going?
Hi, Randy. Good you could make it. I was thinking maybe you were busy with some workouts.
Yeah. Finished those earlier. Long time listener, first time caller. I guess two questions. One, on the share repurchase, minimum level or maximum level. The last couple of quarters, you increased it by $2 a share this quarter by $1. What was the thinking of that to 15, and where do you see your current NAV?
It's a good question. I think actually I've already more or less answered your question about the NAV, with my back of the envelope calculation of what it would cost to make a new FLEX LNG. As mentioned, it would be probably $2.7 billion of ships, add all the costs, and you have to issue stocks at $24 and missing out on the dividends. I do think that the NAV is well above our book value of our stocks, which is around $16. Our NAV is if you are putting in $210 million on ships, it should be more than $20. You analysts, I guess you can come up with a lot of different estimates on this, but as far as I can see from some of the analysts sending out reports today, it seems to be in that range.
In terms of the buybacks, why the certain level? I think, once we had financing in place for all the ships in November, and we started to feel very comfortable about the outlook, we initiated a buyback program because I had been saying for some time that the stock had been on Black Friday prices for some time. We implemented that, and at that time, I do think that the stock price was trading at around maybe around $8, $7, $8. We put the threshold at $10. Things started to look better, and the share price appreciated, we moved it to $12, and then $14. At least now we are getting into more sensible valuation. With the stock recently trading at around $14, we increased it to $15, in order to be able to have the opportunity to buy the stock in the market.
That said, of course, we do have our main principal shareholder, the John Fredriksen family, which has a stake today of around 47%. There are some limitations to how aggressive we can be on the buybacks. We felt it sensible to increase the threshold to 15 so we can be in the market on days like this when the stock is not performing very well, and buying back the stock. In general, of course, we do prefer paying dividends. We're trying to do both, and by increasing the threshold, we can do a bit of both. As I mentioned, we do also think there is room to increase the dividend in the second half of the year.
Great. I know. Very thorough answer there. I guess the second and last question, just around the Qatari tenders and maybe growth opportunities there. Is that something FLEX is participating in? What are your thoughts on those projects?
It's a fantastic project for the Qataris. As far as I understand, there you will have a very competitive production price. It's a very efficient field. You will have the industry lowest, call it the FOB price, so kind of the price at the export terminal. They will do this 33,000,000 tons first. They probably need 45 ships for that. They have still 25 steam ships, which they probably want to replace. That's 70 ships, and then they probably need 25, maybe even 30 ships for Golden Pass. There you are, 100 ships. Of course, they are planning to add 16 more million tons, so that's another 25, 30 ships. We are participating in that, and we are looking into it.
Of course, I think with our current stock price, which is well below kind of replacement CapEx, we are not there that we will pursue growth unless it's attractive for us to do so. With the stock price we have today and the implied valuation per ship, we focus on the dividend and buybacks. We will only pursue it, if it's accretive to our shareholders. Yeah.
Got it. All right. Well, thanks again for having me. Good catching up.
Good to hear from you, Randy.
Okay, we will now take our next question. It comes in the line of Gregory Lewis from BTIG. Your line is now open.
Hey, thank you, and good afternoon, everybody. Hey, Øystein, thanks for the presentation. Always super helpful. I was hoping for a little more color around slide 14, where, I mean, clearly there's been a nice uptick in charter rates driven by the counter seasonal spot market. Realizing you fixed the five-year, I guess a couple of questions here. One is, for that multi-year contract you had, how competitive was that process, i.e., was it FLEX competing against another competitor? I'm kind of curious, any color around the competition for that? Just as we think about the one-year Time Charter market, clearly rates are higher. The way to parcel out the breadth or depth of that market, i.e., in say, the last couple months or quarter versus what was happening in that market last quarter before previously?
Yeah. Okay. I will try to start giving you some answers there. First, as you alluded to, we have had a significant backlog the last couple of months. In April, we did four, possibly five ships with Cheniere. In relation to that process, of course, all these processes are competitive. The charters always try to get the best terms, and so do we as owners. Of course, there's not really that many owners you can go to who have five new modern ships available in the market. Of course, it's not like it's a big tender with a lot of people because there is really nobody else who could give them, maybe with one or two exceptions, give them that many ships in one go. I don't think anybody could have done it with those kind of delivery slots that we had.
Of course, we had a dialogue with them, and I think we find a deal that works well for us. We could add significant backlog where when we started the year, we had nine of our 13 ships linked to the spot market. It was a good way for us to de-risk our portfolio, and we got a reasonable return on our equity. Then, of course, since then by us doing that, it also kind of improved the sentiment in the term market because suddenly there was less ship available, and also gas prices really rallied from a low of $5.5 starting in March to $17 today. That also increased willingness to pay for freight, and we added two more time charters in May. One for prompt delivery, FLEX Constellation, where I think we got a very good rate.
Since we don't have that many ships left open in 2021, we were able to fix forward a ship for delivery Q1 next year. That is also a good position for us. It's usually a bit of the softer period of the year, and we are fixing forward a ship for three to five years also on what I think is a good, attractive return for us. Of course, there's been competition, but I think we said all along the way that one of the reasons for us building in our ship management was in order to be in position to act on these kind of opportunities when they have arise. We thought so that that might be the case in 2019 and 2020, for reasons I dwelled into in the past. That wasn't possible to achieve those kind of contracts in that market.
In 2021, the market's been firm, a lot of term interest, and then we have just acted on those opportunities, de-risking our charter position, and just having a bit more stable income and thus enabling us to pay attractive dividends. When it comes to the one-year time charter rate, it's been fairly liquid, I would say, recently as there's been considerable term interest and as there's been fewer and fewer ships available and LNG rates have been picking up on a monthly basis there. The implied price for a one-year time charter rate has just picked up, We are now at very good levels, which implies that also the winter season will be good with quotations now 6- 7 months of $130,000. I personally think that rates will be moving higher than that, Let's see.
Again, I think for us it's been about finding good charters which gives us a good return, de-risk our business, and enabling us to really pay juicy dividends. Are you there, Greg?
Okay, he got disconnected, sir. Okay, we will now take our next question. Our next question comes in the line of J Mintzmyer from Value Investor's Edge. Your line is now open.
Hey, good afternoon, Øystein. Congrats on an excellent quarter.
Good to hear from you, J. What do you think?
Yeah, absolutely. Well, I'm very happy. You reported results exactly within your guidance, but apparently the market cannot read your Q1 slides, so that's kind of entertaining. Anyways, you have an all-time record high in cash balances. You have no CapEx required. You don't really want to bid on the Qatari vessels, or at least that's what I read between the lines. How much cash do you think you need? Because right now I think it was $144 million. How much do you think is a responsible amount of cash versus how much is available for repurchases or whatnot?
I think we have, of course, plenty of cash today, and J , this is a new all-time high. You have asked me in the past, and as I mentioned during the presentation, some of our bank loans, they have a cash covenant which would imply a minimum cash of $70 million. This doesn't apply for all leases, but for the ship's finance and the bank loans, this is the case. $70 million then. Usually you would like to have some buffer on this. Given how we have de-risked our business, of course, this buffer or cushion needs to be less than probably in the past. I think when we have discussed this before, and I have alluded to having $100 million of cash is a very satisfactory position for us. Right now, we have 44% higher than that.
We are sitting with a lot of cash, and that's why we are eager to start distributing more to our shareholders through dividends and buybacks. We certainly have more cash than we need.
Yeah. It certainly seems that way. You got about $40 million of extra cash, as you kind of alluded to there. Look, you increased your repurchase authorization to $15 a share. Right now in the U.S. markets, I know you had to convert to Oslo and whatnot, but it trades about $14.20. I was just curious, you have 3 million more shares authorized to repurchase. Is there any appetite for something like, say, a $15 tender offer? You could do 3 million shares at $15 for $45 million. That would take care of your cash balance, and it would also add extreme value to shareholders. Any thoughts on that?
Yeah, it's something we considered in the past. When we opted for this program back in November, there's a couple of ways you can do it. I think when we just started it in November, we saw that the volatility in the stock price was keeping a lot of investors awake at night. By us coming into the market and by regulation under such a buyback program, we can buy up to 25% of applicable volume. You can't buy 25% of the daily volume. This is calculated over the last month or so. You can really come in and stabilize the share price to some extent. You also get more information during the road. I think in November, a lot of analysts were concerned about the 54 ships for delivery in 2021.
I think we were a bit more upbeat because we were very bullish on volumes and with all 25,000,000 Tons expected increase in 2021. I felt we started a bit. We didn't want to scare off people that we were spending too much money on this, and we have incrementally used this and incrementally increased the threshold in order to, as we have seen things have been turning brighter and brighter along the ride, and we bought back so far 900,000 stocks. There are certain limitations, as I mentioned also to Greg, where we have our shareholder, which has a very big position in the company, 47%, Geveran or John Fredriksen family. There are some implications if he goes above 50%, which we would like to avoid. So far we have just decided to buy back in the market and rather pushing the dividends up.
If we do see that there are disconnects, I wouldn't rule out we're doing something more than just buying in the market. Let's see. The stock price in America last night closed at $15.84. It seems to be very volatile these days.
Yeah, certainly good explanation, Øystein. I think some new investors maybe just didn't read the previous guidance, but I'm sure they'll be happy with Q3, and they're going to be really happy with Q4. Always good talking with you.
Yeah. Good to talk to you as well. Yeah.
Okay. We will now take our next question, and it comes from the line of Joe Gianfriddo from Shareholder. Your line is now open.
Great. Thank you. I'm a private investor. I've been with you since the U.S. IPO. Thanks again for meeting your goals and being very transparent. A lot of us here are really confident in you all. Thank you so much for adding grid lines to slide five.
Okay. We will keep that in mind for future.
My question is around your forecast. Last quarter, you gave a three-month forecast. This quarter, you're only giving two. My question is, when you look at slide four, your backlog. When you look at Q4 and 1 Q, you're about the same. What's different in 1 Q other than it's a quarter further that you're not giving that forecast for Q1?
Yeah. No, it's a good question. Usually historically, we have only provided guidance for the next quarter. When we did all these contracts in April and May, we added significant length to our backlog. We've helped in order for people to understand the economic rationale of this and the financial implications. We decided to do something we have not done in the past, which is actually to guide for the rest of the year. We didn't guide just Q2, but also Q3 and Q4. When we are presenting today, we basically have said that we repeat that guidance. We repeat the guidance we had last time. We have narrowed the variability a bit on the revenues, more or less they are the same. We haven't really kind of started a new kind of principle of guiding the next three quarters.
It's a good point and once we are reporting again in November, of course, we can consider trying to give some more guidance on 2022. Keep in mind that we do have ships on variable hire contracts and these export rates, which are feeding into these indexes, tend to fluctuate quite a lot. Once you're getting further down the road, the variability in the revenues will, of course, increase. We have some ships coming off charter during Q1 next year. How will the market be in Q1 next year? It really depends on how the winter will be. Will we have a repeat of the last winter? It seems like the probability of a warm winter is fairly low given the 70% of La Niña.
That's really, once you're getting very far into the future on these kind of things, the variability in the revenue guidance become much bigger and then kind of the value of providing it might become a bit less. We can have a look at it and maybe we can provide some numbers on at least the number of days booked for 2022. As you can see from the fleet overview there, the coverage, for 2022, 2023, and even into 2024 is pretty high.
Sure. I'm not suggesting that you do three quarters or more every time. I was just curious to see what was different, and I think you've answered that, so thank you.
Yeah. Okay, thanks.
Okay. Once again, if you wish to ask a question, please press star and one. Once again, that's star and one if you wish to ask a question.
We got one question by chat. It was about our dry dock schedule. Some people were asking, when do we have the dry dock on these ships? In general, the rule is that you dry dock the ship every five years. In 2018, we had delivery of four ships, so they will be due for dry docking then in 2023. We have two ships in 2019, which is due for docking in 2024, four ships in 2020 due for docking in 2025, and then three ships in 2021, which is due for docking in 2026. Typically, a dry docking takes something between 15-20 days in the dock. Costs, somewhere around $2.5 million-$3 million, depending a bit on how well you are maintaining your ships during the operations. I hope that answered that question, or did you have one more or?
No, that was it.
Okay. Okay, with that, I think we conclude today's presentation. I wish you a good day. Thank you for listening in. We will be back then with the Q3 numbers. As we have guided, we expect higher revenues in Q3 and probably presenting those in the middle of November. I hope you will join then. Thank you.