SFL .(US:SFL)2025-08-19 15:00Financial Data and Key Metrics Changes - The company reported revenues of $194 million for the quarter, with an EBITDA equivalent cash flow of $112 million [5][24] - The EBITDA equivalent over the last twelve months was $526 million [5] - The net profit for the second quarter was approximately SEK 1.5 million or $0.01 per share, compared to a net loss of approximately SEK 32 million or $0.02 per share in the previous quarter [26] Business Line Data and Key Metrics Changes - The container vessel segment generated approximately $2 million in revenue, while the car carrier fleet generated approximately NOK 26 million, slightly up from the last quarter [21][22] - The tanker fleet's gross charter hire decreased to approximately NOK 41 million from NOK 45 million in the previous quarter due to scheduled dry dockings [22] - The overall utilization across the shipping fleet was 98.1%, with an adjusted utilization of 99.9% [15] Market Data and Key Metrics Changes - The charter backlog currently stands at $4.2 billion, with two-thirds of this backlog from customers with investment-grade ratings [10][29] - The company has a diversified fleet consisting of 60 maritime assets, including 30 containerships, 16 large tankers, and two drilling rigs [12] Company Strategy and Development Direction - The company is focused on strengthening its charter backlog by securing agreements with strong counterparties and investing in cargo handling and fuel efficiency upgrades [6][10] - The company has divested older, less efficient vessels and is committed to fleet renewal and new technology, with 11 vessels now capable of operating on LNG fuel [7][12] - The company aims to enhance its fleet to position itself for organic growth and comply with strict regulatory demands aimed at reducing shipping emissions [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about finding new employment for the idle drilling rig Hercules, despite current market volatility and oil price fluctuations [8][9] - The decision to adjust the dividend to $0.20 per share was made to ensure that distributions are not subsidized by idle assets, particularly the Hercules rig [10][36] - The company has a strong liquidity position, including undrawn credit lines and unencumbered vessels, which will enable continued investment in new assets [11][27] Other Important Information - The company has returned nearly $2.9 billion to shareholders over 86 consecutive quarters [10] - The average age of the vessels sold was about 18 years, reducing the fleet average by about two years [12] Q&A Session Summary Question: What’s the status with the lawsuit with Seadrill? - The company is involved in two lawsuits, with the larger one regarding the redelivery of the Hercules scheduled for 2026, and a guarantee for an adjustment amounting to approximately $45 million to $50 million has been received from Seadrill [30] Question: Can you walk us through your thought process on the decision to lower the dividend? - Management acknowledged disappointment regarding the dividend adjustment, attributing it to the idle status of the Hercules rig and the need to ensure that distributions are not subsidized by non-operational assets [34][36] Question: What are the expected costs for dry docking in the second half of the year? - Management expects dry docking costs to be significantly lower in Q3 and Q4 compared to Q2, with estimates around $3 million to $3.5 million for Q3 and $1 million to $2 million for Q4 [42][44] Question: How is the company viewing opportunities for potential acquisitions? - The company continues to look for acquisition opportunities, although the market has been slower due to general uncertainty. They have significant investment capacity following recent divestitures [46][47] Question: What should be expected for the organic EBITDA contribution from the energy side? - The energy segment is expected to have a negative drag going forward, but the shipping fleet is generating solid contributions and cash flow [50][54]