SFL .(US:SFL)2024-05-14 17:32Financial Data and Key Metrics Changes - Total charter revenues for Q1 2024 were $236 million, a 13% increase from the previous quarter, driven by new car carriers and increased revenues from the drilling rig Hercules [7] - EBITDA equivalent cash flow was approximately $152 million, significantly higher than the previous quarter, with a total of $523 million over the last 12 months [8] - Net income for the quarter was around $45 million, or $0.36 per share, compared to $31.4 million or $0.25 per share in the previous quarter [40] Business Line Data and Key Metrics Changes - The container fleet generated gross charter hire of approximately $90 million, including $3 million in profit share related to fuel savings [26] - Tankers on long-term charters generated approximately $30 million in gross charter hire, consistent with the previous quarter [34] - The drilling rigs generated approximately $66.5 million in contract revenues, up from $45 million in the previous quarter, with Hercules contributing approximately $47 million [35][36] Market Data and Key Metrics Changes - The fixed rate backlog stands at approximately $3.6 billion, providing strong visibility on future cash flows [10][33] - The company has a diversified fleet with 76 maritime assets, with container vessels making up just under 50% of the backlog [18][19] Company Strategy and Development Direction - The company is focused on long-term charters with strong end users, moving away from financing-type bareboat charters [19] - Recent acquisitions include new dual fuel chemical carriers and long-term charters with Maersk, enhancing the charter backlog and revenue potential [11][15] - The company is investing in energy efficiency measures across its fleet to maintain competitiveness and reduce emissions [23][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market, citing low order books in specific segments and the potential for continued firm market conditions [48] - The company is monitoring opportunities for long-term contracts in the drilling sector, with a focus on maximizing the utilization of its assets [52][68] Other Important Information - The company announced an increase in its quarterly dividend to $0.27 per share, marking the 81st consecutive cash dividend [9][43] - A new $150 million senior unsecured sustainability-linked bond was raised to refinance existing debt and for general corporate purposes [16][41] Q&A Session Summary Question: Insights on recent chemical tanker acquisitions - Management explained the rationale for employing one vessel in Stolt-Nielsen's pool, highlighting the visibility on charter revenues and market opportunities [46][48] Question: Commentary on Hercules and Linus revenue - Management provided updates on Hercules mobilizing to Canada and the revenue increase for Linus due to index-linked contracts [50][53] Question: Thoughts on dividend sustainability - Management indicated a cautious approach to dividend increases, balancing between shareholder returns and investment opportunities [58][60] Question: Future employment opportunities for Hercules - Management discussed the potential for extended deployment of Hercules and the tight market for harsh environment rigs [56][66] Question: Long-term charter market in tankers - Management noted the shift towards long-term contracts in the tanker market and the company's strategy to find strong counterparties [67][68]