SFL .(SFL)2024-02-14 17:36Financial Data and Key Metrics - Total charter revenues for Q4 2023 were 132 million, in line with Q3 2023 [4] - Net income for Q4 2023 was 0.25 per share, impacted by one-off items such as negative mark-to-market on hedging instruments and accounting effects on Hercules [4] - The company has paid dividends every quarter since 2004, accumulating to over 2.7 billion in total [5] - Fixed rate backlog stands at approximately 92 million in gross charter hire in Q4, including 30 million in gross charter hire, while dry bulk carriers contributed 7.3 million from spot and short-term market [23][24] - Drilling rigs generated 64.1 million in Q3 due to fewer contract days for Hercules [25][27] Market Data and Key Metrics - The company has diversified its fleet and counterparties, with container vessels now representing just under 50% of the backlog [16] - 95% of charter revenues in Q4 came from time charter contracts, with only 5% from bareboats or dry leases [17] - The company operates across multiple sectors, with commercial operations in Oslo and operational management in Singapore and Stavanger [18] Company Strategy and Industry Competition - The company has transformed its operating model over the last decade, moving away from bareboat charters to assume operating exposure, making it relevant for large industrial end users [9] - The company focuses on fleet optimization, including investments to minimize off-hire, increase cargo capacity, and reduce energy consumption, particularly in light of IMO carbon intensity regulations [11] - The company is working with main container charterers like Maersk and Hapag-Lloyd to increase energy efficiency, estimating a 20% reduction in fuel consumption and emissions per TEU carried [12][13] Management Commentary on Operating Environment and Future Outlook - Management highlighted the company's strong balance sheet, with 3.2 billion providing strong cash flow visibility [37] - The company is optimistic about 2024, with opportunities in multiple segments, including tankers, car carriers, and containers, despite a slow 2023 due to rising newbuilding prices and interest rates [41][44] - Management emphasized the importance of fuel efficiency and new fuel types, such as LNG and methanol, in future vessel investments [48][49] Other Important Information - The company has 45 million upon delivery [35] - The rig Linus is scheduled for a special periodic survey in Q2 2024, with an estimated net capital expenditure of $30 million [36] Q&A Session Summary Question: Opportunities for capital deployment in 2024 - Management sees opportunities in multiple segments, including tankers, car carriers, and containers, with a focus on long-term charters and fuel efficiency [41][44] Question: Container market dynamics and operational changes - Management noted that liner companies are focused on efficiency and cost per unit, with increasing interest in fuel-efficient vessels due to longer transportation legs caused by canal disruptions [45][46] Question: Dry bulk fleet and portfolio strategy - The dry bulk fleet is primarily traded in the short-term market due to limited long-term charter opportunities, with potential for asset sales if market conditions improve [51][53] Question: Geopolitical impact on business, particularly Red Sea disruptions - Management noted that while geopolitical issues like Red Sea disruptions increase fuel consumption for customers, the company's long-term charters mitigate direct financial impact [63][65]