SFL .(US:SFL)2024-11-07 21:15Financial Performance - Total operating revenues for the nine months ended September 30, 2024, increased to $675,302,000, up 24.4% from $542,713,000 in the same period of 2023[11] - Net income for the nine months ended September 30, 2024, was $110,455,000, representing a 109.8% increase compared to $52,569,000 in 2023[11] - Basic earnings per share rose to $0.86 for the nine months ended September 30, 2024, compared to $0.42 in the prior year, reflecting a 104.8% increase[11] - The company reported a comprehensive income of $106,226,000 for the nine months ended September 30, 2024, compared to $51,836,000 in 2023, indicating a growth of 104.5%[14] - The company reported a net income available to stockholders of $110,455,000 for the nine months ended September 30, 2024, compared to $52,569,000 for the same period in 2023, representing a 109.7% increase[36] - Operating income rose to $241.8 million for the nine months ended September 30, 2024, up from $167.2 million in the prior year[134] Assets and Liabilities - Total assets as of September 30, 2024, amounted to $4,099,698,000, an increase from $3,731,389,000 at the end of 2023, marking a growth of 9.8%[17] - Total current liabilities decreased to $747,081,000 as of September 30, 2024, from $969,195,000 at the end of 2023, a reduction of 22.9%[17] - Long-term debt increased to $2,204,512,000 as of September 30, 2024, compared to $1,713,828,000 at the end of 2023, reflecting a rise of 28.6%[17] - The total debt principal increased to $2,623,741,000 as of September 30, 2024, from $2,163,688,000 at the end of 2023, reflecting a 21.2% rise[50] - The total liabilities as of September 30, 2024, amount to $539,136,000, with a fair value of $528,251,000, indicating a significant increase in liabilities compared to the previous period[72] Cash Flow and Investments - Cash and cash equivalents at the end of the period were $163,807,000, slightly down from $165,492,000 at the start of the period[21] - Cash generated from operating activities increased to $268.0 million for the nine months ended September 30, 2024, up from $262.2 million in the same period of 2023[155] - Cash used in investing activities surged to $501.4 million for the nine months ended September 30, 2024, compared to $43.7 million in the same period of 2023, primarily due to higher spending on vessel acquisitions[156] - Net cash provided by financing activities was $231.7 million for the nine months ended September 30, 2024, compared to a net cash used of $288.8 million in the same period of 2023[157] Shareholder Actions - The company repurchased shares totaling 8,242,146 during the nine months ended September 30, 2024, increasing the number of shares outstanding to 145,708,524[24] - Cash dividends paid during the nine months ended September 30, 2024, were $103,739,000, compared to $91,293,000 in the same period of 2023, an increase of 13.7%[24] - The Company declared dividends of $0.26, $0.27, and $0.27 per share during the nine months ended September 30, 2024, maintaining a consistent dividend policy[83] - The Company has authorized a share repurchase program of up to $100 million, with approximately $90 million remaining as of September 30, 2024[79] Debt and Financing - The Company issued NOK600 million senior unsecured bonds due 2025, with a net outstanding amount of NOK590 million ($58.1 million) as of December 31, 2023, after incurring a loss of $0.4 million on the redemption[53] - In April 2024, the Company issued $150 million senior unsecured sustainability-linked bonds, with a net outstanding amount of $145.2 million as of September 30, 2024, after purchasing and reselling bonds totaling $10.8 million and $6.0 million respectively[54] - The Company issued NOK750 million senior unsecured floating rate bonds due 2029 in September 2024, with a net outstanding amount of NOK750 million ($71.0 million) as of September 30, 2024[55] - The total balance of U.S. dollar floating rate debt facilities was $1,243.6 million as of September 30, 2024, an increase from $1,014.8 million as of December 31, 2023[58] - The Company has entered into lease debt financing with a total outstanding balance of $716.1 million as of September 30, 2024, compared to $573.5 million as of December 31, 2023[64] Operational Highlights - The company took delivery of two dual-fuel newbuild car carriers at a total cost of $170.2 million during the nine months ended September 30, 2024[42] - The company sold two container vessels, MSC Margarita and MSC Vidhi, during the nine months ended September 30, 2024, with proceeds of $11,983,000 and a loss of $17,000[34] - The company has outstanding commitments of approximately $866.3 million related to shipbuilding contracts for five new dual-fuel 16,800 TEU container vessels expected to be delivered in 2028[97] - The company recorded $43.3 million for a Special Periodic Survey and capital upgrades on the drilling rig, Linus, during the nine months ended September 30, 2024[113] - The company has paid approximately $161.7 million related to the acquisition of three LR2 product tankers under construction, with total commitments of $231.0 million[92] Revenue Streams - Time charter revenues increased by 18% to $457.8 million for the nine months ended September 30, 2024, compared to $388.5 million in the same period of 2023, primarily due to the delivery of new vessels and higher rates[136][137] - Voyage charter and pool revenues decreased by 58% to $13.0 million for the nine months ended September 30, 2024, down from $31.3 million in the same period of 2023, mainly due to the sale of two Suezmax tankers and two chemical tankers[138] - Drilling contract revenues rose by 78% to $181.8 million for the nine months ended September 30, 2024, compared to $102.0 million in the same period of 2023, driven by operational activities of the Hercules drilling rig[139] Risks and Challenges - Key risks affecting the Company's performance include inflationary pressures, rising interest rates, and the ability to generate cash to service its indebtedness[168] - The Company faces challenges related to the cyclical and volatile nature of the seaborne transportation industry, including fluctuations in charter hire rates and vessel values[168] - The potential impact of geopolitical events, such as the Russian-Ukrainian conflict and developments in the Middle East, on supply chain disruptions and market volatility is highlighted[170] - The Company is subject to various regulatory risks, including compliance with environmental regulations and potential liabilities related to safety and environmental requirements[169] - The aging of the Company's fleet may lead to increased operating costs and potential impairments[169] - The Company acknowledges the risks associated with the purchase of second-hand vessels and the potential for significant additional expenditures related to compliance with regulations[169] - The Company is focused on managing planned growth and the associated risks, including the ability to retain qualified key personnel[169] - The Company is aware of the impact of increasing scrutiny regarding its Environmental, Social, and Governance (ESG) practices from investors and other market participants[169] - The Company cautions that actual results may differ materially from forward-looking statements due to various important factors, including market conditions and operational risks[167]