Company Overview - SFL Corporation Ltd. has a unique track record in the maritime industry, having paid dividends every quarter since its initial listing on the New York Stock Exchange in 2004 [3] - The company's fleet includes tanker vessels, bulkers, container vessels, car carriers, and offshore drilling rigs, supported by a portfolio of long-term charters and significant growth in the asset base over time [3] Financial Results Announcement - SFL plans to release its preliminary financial results for the first quarter of 2025 on May 14, 2025 [1] - A conference call and webcast for stakeholders will be held on the same day at 10:00 AM (EST) / 4:00 PM (CET) [1] Investor Relations - Relevant materials for the financial results will be available on the Investor Relations section of the company's website on the same day as the announcement [1] - Investors can join the conference call in listen-only mode via the company's website or participate in a live Q&A through Zoom [2]

Group 1 - The main focus is on algorithmic trading and trading strategies, with a particular interest in macroeconomic topics related to China [1] - The individual has a background in Economics and Finance, nearing completion of a bachelor's degree and planning to pursue a master's in quantitative finance [1] - Experience includes participation in finance-related events and holding a CISI level 3 certificate in Wealth and Investment Management [1] Group 2 - The trading track record shows a conservative approach, with a portfolio yielding 17.5% at the end of 2020 and a near-flat performance in 2022 with a loss of only 0.16% [1] - The worst year recorded a gain of only 0.8% while the market was performing well, highlighting the need for a systematic approach to market entry and exit [1] - The portfolio yielded 12.84% last year with a beta of less than 0.6, indicating a lower risk profile while achieving positive returns [1]

Company Information - SFL Corporation Ltd. has a strong track record in the maritime industry, having paid dividends every quarter since its initial listing on the New York Stock Exchange in 2004 [2] - The company's fleet includes tanker vessels, bulkers, container vessels, car carriers, and offshore drilling rigs, supported by long-term charters and significant asset growth over time [2] Upcoming Events - The 2025 Annual General Meeting of SFL Corporation Ltd. is scheduled for May 8, 2025, with a record date for voting set on April 4, 2025 [1]

Company Overview - SFL Corporation Ltd. has a strong track record in the maritime industry, having paid dividends every quarter since its initial listing on the New York Stock Exchange in 2004 [3] - The company's fleet includes tanker vessels, bulkers, container vessels, car carriers, and offshore drilling rigs, supported by long-term charters and significant asset growth over time [3] Financial Reporting - The annual report on Form 20-F for the financial year ended December 31, 2024, has been filed with the U.S. Securities and Exchange Commission and is accessible on SFL's website [1] - Shareholders can request a hard copy of the Annual Report, which includes the complete audited financial statements for 2024, free of charge [2]

Financial Performance - Net profit for the year ended December 31, 2024, was $130.7 million, a 55.8% increase from $83.9 million in 2023[381] - Total operating revenues increased by 20.2% to $904.4 million in 2024, compared to $752.3 million in 2023[383] - Drilling contract revenues rose by 61% in 2024, primarily due to increased activity from the Hercules rig[390] - Time charter revenues increased by $75.0 million in 2024, attributed to the delivery of new vessels[388] - The company recorded a net gain of $5.4 million from asset disposals in 2024, down from $18.7 million in 2023[391] - Profit sharing revenues of $6.4 million were recorded in 2024, a new revenue stream compared to 2023[386] - The company recorded a loss of $1.3 million from the buyback of various senior unsecured floating rate bonds in 2024, compared to a loss of $0.5 million in 2023[405] - Tax expense increased to $10.6 million in 2024 from $3.3 million in 2023, primarily due to increased operations of the drilling rig Hercules[411] Debt and Financing - Interest expense for 2024 was $183.0 million, up from $167.0 million in 2023, driven by new loans and increased interest rates[401] - Total debt principal outstanding as of December 31, 2024, was $2.9 billion, compared to $2.2 billion in 2023[400] - Total short-term and long-term debt outstanding increased to $2.9 billion as of December 31, 2024, compared to $2.2 billion in 2023[428] - The company had $0.4 billion in borrowings subject to forward-starting or conditional minimum value covenants, secured against 17 vessels with combined charter-free market values of approximately $0.7 billion[435] - As of December 31, 2024, the company was in compliance with all financial covenants in its financing agreements[436] - Total contractual cash obligations as of December 31, 2024, amounted to $4.32 billion, including total debt repayments of $2.86 billion and total interest payments of $248.3 million[445] Cash Flow and Investments - Cash and cash equivalents as of December 31, 2024, were $134.6 million, down from $165.5 million in 2023[422] - Operating cash flows increased to $369.9 million in 2024 from $343.1 million in 2023, primarily due to changes in total operating income and timing of receivables[423] - Investing activities used $617.5 million in 2024, significantly higher than $103.9 million in 2023, mainly due to vessel acquisitions and capital improvements[424] - Financing activities provided cash of $216.7 million in 2024, a turnaround from a net cash outflow of $262.1 million in 2023, driven by increased debt proceeds[425] Operational Expenses - Administrative expenses increased by $5.0 million in 2024, mainly due to higher professional and legal fees[398] - Vessel and rig operating expenses rose by $49.5 million in 2024, primarily due to the delivery of new vessels[394] Market and Fleet Performance - The tanker market saw a crude tanker demand increase of approximately 0.9% in 2024, while the crude fleet grew by approximately 0.2%[451] - Average spot earnings for a 2010-built VLCC were $33,500 per day in 2024, down from $43,200 per day in 2023[453] - The dry bulk fleet increased by 3.0% in total deadweight tonnage (dwt) during 2024, while demand increased by 5.0% in terms of tonne miles[454] - Capesize earnings in 2024 averaged approximately $25,100 per day, up 51% from 2023[455] - Kamsarmax earnings in 2024 averaged approximately $14,800 per day, up 2% from 2023[455] - Supramax earnings in 2024 averaged approximately $14,600 per day, up 18% from 2023[455] - Global container trade (TEU-miles) is estimated to have increased by 18% in 2024, with containership fleet capacity expanding by more than 10%[458] - The car carrier fleet capacity grew by 8% in 2024, with global deep-sea car trade reaching a record 24.5 million cars, approximately 15% above pre-COVID-19 levels[459] - The utilization of offshore drilling rigs increased from 83% in 2020 to 93% in 2023[464] Asset Management - As of December 31, 2024, the aggregate carrying value of the company's 71 assets was $3.6 billion[476] - The company owned 69 vessels and two rigs, with tanker vessels valued at $893 million and liners valued at $1,805 million[477] - The orderbook as of January 2025 stood at 779 vessels representing 8.3 million TEU, which is 27% of TEU capacity compared to the existing fleet[458] - The company committed $33.4 million towards capital upgrades on vessels, expected to take place in 2025[452] - The company has commitments under shipbuilding contracts totaling $818.1 million for five new dual-fuel 16,800 TEU container vessels, expected to be delivered in 2028[452] Other Financial Metrics - The company paid dividends totaling $138.5 million in 2024, up from $123.0 million in 2023, with a dividend per share increase from $0.97 to $1.07[427] - The net income from equity in earnings of associated companies remained stable at $2.8 million for both 2024 and 2023[410] - A 10% reduction in charter-free market values in 2024 would not lead to material prepayments or reduced availability on revolving credit facilities after scheduled loan repayments[434] - No impairment was recognized in 2024, while two chemical tankers were impaired in 2023[474]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of approximately $132 million for Q4, down from $167 million in the previous quarter, with a total EBITDA equivalent of $581 million over the last 12 months [7][33][100] - Net income for the quarter was around $20 million, or $0.15 per share, compared to approximately $44.5 million, or $0.34 per share, in the previous quarter [8][36][100] - The fixed-rate backlog stands at approximately $4.3 billion, with two-thirds of this backlog attributed to customers with investment-grade ratings, enhancing cash flow visibility [8][41][100] Business Line Data and Key Metrics Changes - The container fleet generated approximately $85 million in gross charter hire during Q4, down from the previous quarter due to scheduled dry dockings and efficiency upgrades [27][30] - The tanker fleet generated approximately $42 million in gross charter hire, an increase from approximately $37 million in the previous quarter, as all five tankers acquired in 2024 were delivered [29][30] - The energy assets generated approximately $55 million in contract revenues, down from approximately $86 million in the previous quarter, primarily due to the Hercules rig finishing its contract with Equinor [32][34] Market Data and Key Metrics Changes - The overall utilization across the shipping fleet in Q4 was 98.3%, primarily affected by 108 days spent in dry dock [21][115] - The rig market index rate increased by 2.3% in Q4, with the Hercules rig recording revenue of $34 million and costs of approximately $26 million [24][116] - The company has a diversified fleet consisting of 15 dry bulk vessels, 38 containerships, 18 tankers, 2 drilling rigs, and 7 car carriers, with container vessels making up almost 68% of the backlog [17][111] Company Strategy and Development Direction - The company has transformed its operating model over the last 10 years to focus on long-term charters with large end users, such as Maersk and Volkswagen Group [10][100] - There is a strong emphasis on vessel maintenance and upgrades to meet tightening regulatory requirements for emissions reduction, which is critical for customer relationships and organic growth [19][112] - The company is segment agnostic and seeks to pursue the right deals with strong counterparties across various shipping segments, with a focus on dry bulk investments if the right opportunities arise [68][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Hercules rig's prospects in the second half of 2025, despite a slow market at the beginning of the year [45][46] - The company anticipates stable cash flow fundamentals due to two-thirds of its backlog being with investment-grade counterparties, which supports the stability of dividends [52][56] - Management noted that the shipping industry is currently experiencing a historic low order book and reduced shipbuilding capacity, which could lead to favorable market conditions in the future [86][88] Other Important Information - The company raised approximately $1.3 billion in financing, including $220 million in senior unsecured bonds in 2024, and a new $150 million senior unsecured bond loan was raised post-quarter end [11][39][40] - A ruling in favor of the company against Seadrill ordered approximately $48 million in compensation, which is subject to appeal [12][105][76] Q&A Session Summary Question: Regarding the Hercules rig's operational expenses while warm stacked - Management indicated that the Hercules rig is currently warm stacked and undergoing upgrades, with expectations for lower stacking costs in the future [44][116] Question: Stability of the dividend and payout ratio - Management confirmed that the dividend is set on a quarter-over-quarter basis, with discussions focused on long-term prospects and stable cash flow fundamentals [49][50] Question: Impact of tariffs on shipping operations - Management reassured that strong counterparties like Volkswagen Group mitigate risks associated with tariffs, and the company is not directly exposed to these issues [60][61] Question: Future investments after Golden Ocean's purchase options - Management stated that they are segment agnostic and will pursue the best deals regardless of sector, with a focus on dry bulk if suitable opportunities arise [68][70] Question: Commentary on the Seadrill ruling and potential appeals - Management noted that the ruling is public and the appeal process could take up to 12 months [76] Question: Upgrades required for the Hercules rig to operate in Norway - Management indicated that while some investments are necessary, they are manageable and typically compensated by oil companies [78][81] Question: Shipping segments with the most potential in the next 2-3 years - Management emphasized that they focus on long-term charters rather than the spot market, and they see potential in dry bulk and tanker segments due to low order books [83][86]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of approximately $132 million for Q4, down from $167 million in the previous quarter [33] - Net income for the quarter was around $20 million, or $0.15 per share, compared to approximately $44.5 million, or $0.34 per share, in the previous quarter [36] - The fixed-rate backlog stands at approximately $4.3 billion, with 2/3 of this backlog attributed to customers with investment-grade ratings [101][40] Business Line Data and Key Metrics Changes - The container fleet generated approximately $85 million in gross charter hire during Q4, down from the previous quarter due to scheduled dry dockings and efficiency upgrades [27] - The tanker fleet generated approximately $42 million in gross charter hire, an increase from approximately $37 million in the previous quarter [29] - The energy assets generated approximately $55 million in contract revenues, down from approximately $86 million in the previous quarter [32] Market Data and Key Metrics Changes - The overall utilization across the shipping fleet in Q4 was 98.3%, primarily affected by 108 days spent in dry dock [114] - The rig market index rate increased by 2.3% in Q4, with the Hercules rig recording revenue of $34 million and costs of approximately $26 million [116][24] - The company has a diversified fleet with 15 dry bulk vessels, 38 containerships, 18 tankers, 2 drilling rigs, and 7 car carriers [110] Company Strategy and Development Direction - The company has transformed its operating model over the last 10 years to focus on long-term charters with large end users [10] - There is a strong emphasis on investing in vessel maintenance and upgrades to meet tightening regulatory requirements and improve customer partnerships [112] - The company is segment agnostic and seeks to pursue the right deals with strong counterparties across various shipping segments [69] Management's Comments on Operating Environment and Future Outlook - Management expects a slow market for the Hercules rig in the first half of 2025, with more prospects anticipated in the second half [45] - The company believes that the dividend stability is tied to long-term prospects, with a focus on maintaining a strong cash flow foundation [50][52] - Management does not foresee a significant impact on profitability from the large delivery backlog of container ships due to the current long-term charters in place [92] Other Important Information - The company raised approximately $1.3 billion in financing, including $220 million in senior unsecured bonds in 2024 [104] - A recent court ruling ordered Seadrill to pay approximately $48 million in compensation, which is subject to appeal [105][76] - The company has a strong balance sheet with approximately $135 million in cash and cash equivalents at quarter-end [36] Q&A Session Summary Question: What are the operational expenses for the Hercules rig while warm stacked? - Management indicated that the Hercules rig is currently warm stacked and is being upgraded to enhance its attractiveness for future contracts [46][47] Question: How stable is the dividend payout? - The dividend is set on a quarter-over-quarter basis, with discussions focused on long-term prospects and cash flow stability [50][52] Question: What is the company's view on tariffs and their impact on shipping? - Management believes that strong counterparties like Volkswagen Group can absorb tariff impacts, and the company is not directly exposed to these risks [61][64] Question: What are the plans for redeploying proceeds from the sale of Capesize vessels? - The company is open to various segments and will focus on finding the right deals with strong structures and counterparties [68][72] Question: What is the expected timeline for the Seadrill appeal ruling? - The appeal period ends on March 5, and if appealed, it could take up to 12 months for a new ruling [76]

Financial Highlights - The company declared a dividend of $0.27 per share for the quarter[5] - The company's net income was $20 million, resulting in earnings per share of $0.15[5] - The company's adjusted EBITDA was $132 million[5] - The company's fixed-rate charter backlog stood at $4.3 billion[5] - The company added over $2.0 billion to its backlog in 2024[5] - The company completed over $1.3 billion in asset financings and senior unsecured bond loans in 2024, plus $150 million in January 2025[5] Operational Performance - The company's overall fleet utilization was 97.9% in Q4 2024[13] - Container vessel utilization was 91%, car carrier utilization was 100%, tanker utilization was 100%, and dry bulk utilization was 100%[13] - The company's total operating revenues were $229.102 million[20]

Core Insights - SFL Corporation Ltd. announced preliminary financial results for Q4 2024, reporting a net profit of $20.2 million, or $0.15 per share, and a quarterly cash dividend of $0.27 per share [1][8]. Financial Performance - The company received charter hire of $231.7 million in the quarter, which includes $2.6 million from profit share [8]. - Adjusted EBITDA from consolidated subsidiaries was $124.0 million, with an additional $7.9 million from associated companies [8]. - The company issued a new $150 million five-year bond and agreed to sell an older 1,700 TEU feeder container vessel [8]. Growth Strategy - SFL added over $2 billion in fixed-rate charter backlog in 2024, reflecting its growth strategy and transformation into a maritime infrastructure company [3]. - The company emphasizes owning, operating, and upgrading its fleet to high standards, which includes fuel efficiency measures to reduce carbon footprint [4]. Shareholder Returns - Since its inception in 2004, SFL has returned $2.8 billion to shareholders through 84 consecutive cash dividends, demonstrating its ability to renew and diversify its asset portfolio [5].

Core Insights - The article discusses the investment potential of SFL, highlighting its strong market position and financial performance [1][2] Financial Performance - SFL reported a significant increase in revenue, with a year-over-year growth of 15%, reaching $200 million in the last quarter [1] - The company's net income also saw a rise, up 10% to $50 million compared to the previous year [1] Market Position - SFL maintains a competitive edge in the shipping industry, benefiting from increased demand for maritime logistics [1] - The company has expanded its fleet, adding three new vessels, which is expected to enhance operational capacity [1] Investment Opportunities - Analysts suggest that SFL's current stock price presents a buying opportunity, given its strong fundamentals and growth trajectory [1] - The company is positioned to capitalize on emerging trends in the shipping sector, particularly in e-commerce and global trade [1]