SFL .(SFL) - 2025 Q2 - Quarterly Report

SEC Filing Information Details the filing of Form 6-K by SFL Corporation Ltd. for August 2025, including official signatures Form 6-K Details SFL Corporation Ltd. filed Form 6-K for August 2025 as a foreign private issuer - SFL Corporation Ltd. filed Form 6-K for August 2025, reporting as a foreign private issuer[1][2] Signatures Official signatures authorize the Form 6-K report on behalf of SFL Corporation Ltd - The report was signed by Ole B. Hjertaker, Principal Executive Officer of SFL Management AS, on August 19, 2025[8][9][10] Preliminary Q2 2025 Earnings Overview SFL announced preliminary Q2 2025 results, a $0.20 dividend, and strategic fleet management, despite rig challenges Announcement and Highlights SFL announced preliminary Q2 2025 results, a $0.20 dividend, strengthened charter backlog, and asset sales - SFL announced preliminary Q2 2025 results and a quarterly cash dividend of $0.20 per share[14] - The company strengthened its charter backlog with strong counterparties and deployed high-quality assets, including cargo-handling and fuel-efficiency upgrades[16] - Continuous fleet renewal involved selling and redelivering older dry bulk and container vessels, generating over $200 million[19] | Metric | Q2 2025 | | :----- | :------ | | Net income | $1.5 million | | EPS | $0.01 | | Charter hire received | $194 million | | Adjusted EBITDA (consolidated) | $104 million | | Adjusted EBITDA (associated companies) | $8 million | CEO Commentary CEO discussed strategic steps to strengthen charter backlog, improve fleet efficiency, and dividend adjustment from asset sales and reduced cash flow - Decisive steps taken to strengthen charter backlog, including investments in cargo-handling and fuel-efficiency upgrades and divesting older, less efficient vessels[16] - The market for the Hercules drilling rig remains challenging, impacting near-term financial results, but the company remains optimistic about new employment[17] - Asset sales increased available capital but reduced near-term cash flow, leading to a dividend adjustment to $0.20 per share[17] - SFL has distributed $2.9 billion to shareholders through 86 consecutive quarterly cash dividends since 2004, demonstrating ability to renew and diversify its portfolio[18] Financial Performance Summary SFL reported Q2 2025 financial results, including a $0.20 dividend, GAAP figures, and segmented performance Quarterly Dividend Declaration The Board of Directors declared a quarterly cash dividend of $0.20 per share for Q2 2025, payable around September 29, 2025 | Dividend Metric | Value | | :-------------- | :---- | | Quarterly Cash Dividend | $0.20 per share | | Payment Date | On or around September 29, 2025 | | Record Date (NYSE) | September 12, 2025 | | Ex-dividend Date (NYSE) | September 12, 2025 | Q2 2025 Consolidated Financial Results (U.S. GAAP) SFL reported Q2 2025 GAAP operating revenues of $192.6 million and net income of $1.5 million, impacted by non-recurring items - Total U.S. GAAP operating revenues were approximately $192.6 million in Q2 2025, which is lower than cash received due to accounting classifications[22] - Net income was impacted by non-recurring items such as a $4.2 million net gain on vessel sales, negative mark-to-market effects from hedging derivatives ($2.4 million), and equity investments ($1.0 million)[23] - Scheduled drydocking activity in the quarter temporarily reduced revenues and increased expenses, with lower activity expected in future quarters[24] | Income Statement Item | Q2 2025 (in thousands of $) | Q1 2025 (in thousands of $) | Full Year 2024 (audited, in thousands of $) | | :-------------------- | :-------------------------- | :-------------------------- | :---------------------------------------- | | Total operating revenues | 192,588 | 186,739 | 904,404 | | Gain on sale of vessels | 4,242 | — | 5,374 | | Total operating expenses | (151,347) | (176,077) | (603,061) | | Operating income | 45,483 | 10,662 | 306,717 | | Net income/(loss) | 1,460 | (31,871) | 130,653 | | Basic earnings/(loss) per share ($) | 0.01 | (0.24) | 1.01 | Segmented Financial Performance SFL's Q2 2025 financial results are segmented into Shipping and Energy, with Shipping contributing positively and Energy reporting a loss | Income Statement Item (in thousands of $) | Shipping | Energy | Total | | :-------------------------------------- | :------- | :----- | :---- | | Total operating revenues | 166,644 | 25,944 | 192,588 | | Gain on sale of vessels | 4,242 | — | 4,242 | | Total operating expenses | (117,451) | (33,896) | (151,347) | | Operating income/(loss) | 53,435 | (7,952) | 45,483 | | Net income/(loss) | 14,919 | (13,459) | 1,460 | Shipping Segment Performance The Shipping segment reported total operating revenues of $166.6 million and net income of $14.9 million for Q2 2025 | Shipping Segment (in thousands of $) | Q2 2025 | | :--------------------------------- | :------ | | Total operating revenues | 166,644 | | Operating income | 53,435 | | Net income | 14,919 | Energy Segment Performance The Energy segment generated $25.9 million in operating revenues but incurred an operating loss of $7.9 million and net loss of $13.5 million | Energy Segment (in thousands of $) | Q2 2025 | | :------------------------------- | :------ | | Total operating revenues | 25,944 | | Operating loss | (7,952) | | Net loss | (13,459) | Adjusted EBITDA Reconciliation SFL reported a consolidated Adjusted EBITDA of $104.1 million for Q2 2025, including contributions from associates - Adjusted EBITDA is a non-U.S. GAAP measure representing cash receipts from operating activities before net interest and capital payments[53][71] | Adjusted EBITDA (in thousands of $) | Shipping | Energy | Total | 49.9% owned associates | | :-------------------------------- | :------- | :----- | :---- | :--------------------- | | Net cash provided by operating activities | 68,707 | 1,429 | 70,136 | 4,539 | | Adjusted EBITDA | 97,490 | 6,560 | 104,050 | 7,769 | Business Operations and Fleet Update SFL's Q2 2025 charter backlog, diversified fleet details, and operational updates across segments Charter Backlog and Fleet Overview SFL's fixed rate charter backlog was $4.2 billion as of June 30, 2025, with a weighted remaining term of 6.7 years | Metric | Value | | :----- | :---- | | Fixed Rate Charter Backlog (as of June 30, 2025) | ~$4.2 billion | | Weighted Remaining Charter Term | 6.7 years | | Number of Vessels/Newbuildings | 60 | | Backlog from Investment Grade Customers | ~66% | - Some charters include purchase options that may reduce backlog but increase capital, and profit-sharing features that may improve operating results[26](index=26&type=