SFL .(US:SFL)2023-03-16 20:32Financial Adjustments and Dividends - The cumulative effect of adopting ASU 2020-06 resulted in a $4.3 million adjustment to opening retained earnings and a $5.9 million reduction to additional paid-in capital [623]. - During the year ended December 31, 2022, the company paid four dividends totaling $0.88 per common share, amounting to $111.6 million, compared to $0.63 per share and $77.6 million in 2021 [633]. Cash Obligations and Commitments - As of December 31, 2022, total contractual cash obligations amounted to $3,484.8 million, with $1,250.8 million due in less than one year [636]. - The company has commitments under shipbuilding contracts totaling $209.7 million for constructing four new dual-fuel car carriers [637]. Market Trends and Performance - The tanker market saw a 5.1% year-on-year increase in global seaborne crude trade, reaching 39.3 million barrels per day in 2022 [642]. - Average earnings for VLCC, Suezmax, and Aframax sectors in December 2022 were approximately $51,800, $83,900, and $100,300 per day, respectively [642]. - Crude tanker demand is expected to grow by 6.5% in 2023, while the fleet is projected to grow by only 1.9% [643]. - The dry bulk fleet increased by 2.8% in total deadweight tonnage (dwt) during 2022, while demand decreased by 1.9% in terms of tonne miles [644]. - The Shanghai Containerized Freight Index (SCFI) peaked at 5,110 in January 2022, but fell to 1,030 by January 2023, representing an 80% decline [646]. - Global seaborne container trade declined by 3.8% in 2022 to 200 million TEU, down from a 6.6% increase in 2021 [646]. - Trade between the Far East and Europe decreased by an estimated 10.3% in 2022 compared to 2021 [646]. Offshore Drilling and Fuel Consumption - Offshore drilling rig utilization improved from 78% in 2020 to 90% in early 2023 due to increased demand and lower supply [648]. - Global liquids fuel consumption is projected to rise from 99.4 million barrels per day in 2022 to 102.3 million barrels per day by 2024 [649]. - The offshore drilling market has faced volatility, with Brent crude prices fluctuating between $20 in 2020 and over $100 in 2022 [647]. Financial Instruments and Risk Management - Interest rates have increased recently, and the company has hedged a substantial portion of its floating rate debt through swap agreements [650]. - The fair value cost of options granted under the Share Option Scheme was $1.4 million in 2022, up from $1.0 million in 2021 [629]. Charter Agreements and Demolition Activity - The dry bulk vessels chartered to Golden Ocean are subject to long-term charters with fixed base charter hire and profit-sharing payments based on average daily rates exceeding fixed rates [645]. - Limited demolition activity in the container segment, with only 8 vessels sold for recycling in 2022 compared to 16 in 2021 [646]. Market Outlook and Caution - The company acknowledges that market developments may differ from current expectations and advises caution in predictions [651].