SFL .(US:SFL)2024-03-14 20:54Financial Obligations and Shareholder Returns - The company redeemed the full outstanding amount of $84.9 million under the 4.875% senior unsecured convertible bonds due 2023, settling the remaining principal in cash [610]. - During the year ended December 31, 2023, the company repurchased a total of 1,095,095 shares at an average price of approximately $9.27 per share, totaling $10.2 million, with $89.8 million remaining under the authorized Share Repurchase Program [614]. - The company paid four dividends totaling $0.97 per common share, amounting to $123.0 million during 2023 [619]. - As of December 31, 2023, the company had total contractual cash obligations of $3,268.1 million, with $1,088.7 million due within one year [621]. Market Trends and Performance - The tanker market saw average earnings of approximately $40,000 per day in December 2023, with a forecasted crude tanker demand increase of approximately 5.9% for 2023 [628]. - The dry bulk fleet increased by 3.0% in total deadweight tonnage (dwt) during 2023, while demand increased by 4.4% in tonne miles [630]. - The containership charter market experienced a correction in 2023 but is now strengthening due to rerouting of vessels, resulting in elevated freight and chartering rates [632]. - Global seaborne container trade is estimated to have increased by 7% year over year during Q4 2023, with full year volumes only marginally up by approximately 0.3% or 1.6% in TEU-miles [633]. - The total container vessel fleet is projected to be 20% larger by the end of 2025 compared to the start of 2023, driven by continued fleet capacity growth [633]. Offshore Drilling Market Insights - The offshore drilling rig utilization improved from 83% in 2020 to 93% in 2023 due to increased global demand for oil and gas and a lower supply of offshore drilling rigs [635]. - Increased capital expenditures by oil and gas companies have led to more exploration and development activity, positively impacting the demand for offshore drilling rigs [635]. - The market outlook for offshore drilling rigs has improved as older rigs have been retired and demolished, contributing to better utilization rates [635]. - The offshore drilling market has faced challenges due to fluctuating oil prices, with Brent crude prices ranging from $20 in 2020 to above $100 per barrel in 2022 [634]. - Financial difficulties have been experienced by some drilling rig owners and operators due to lower oil prices since 2014, leading to breaches of bank covenants and financial restructurings [634]. Shipping Index and Volatility - At the end of January 2024, the Shanghai Containerized Freight Index (SCFI) increased to approximately 2,200 points, reflecting a recovery from the low of 1,030 points in January 2023, which was down 80% from the peak of 5,110 points in January 2022 [633]. - The SCFI index at the end of 2021 was over 5,000 points, indicating significant volatility in the container shipping market over the past few years [633]. - Market sources anticipate continued pressure for container shipping in the coming years, influenced by developments in the Red Sea [633]. Share Options and Capital - The company awarded a total of 440,000 options to officers, employees, and directors in February 2023, with an initial strike price of $10.34 per share [616]. - The additional paid-in capital arising from share options granted was $1.6 million in 2023 [615].