Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SFL Corp Ltd (NYSE:SFL) reported a significant increase in EBITDA equivalent to $581 million over the last 12 months.
• The company has a strong fixed rate backlog of approximately $4.3 billion, with two-thirds of this from investment-grade customers, ensuring cash flow visibility and resilience.
• SFL Corp Ltd (NYSE:SFL) is paying a quarterly dividend of $0.27 per share, representing a 10% dividend yield.
• The company successfully raised $1.3 billion in financing, including $220 million in senior unsecured bonds, and a new $150 million bond in the Nordic market.
• SFL Corp Ltd (NYSE:SFL) won a legal dispute, with Cyrill ordered to pay approximately $48 million in compensation, including interest and legal costs.

Negative Points

• Net income for the quarter was $20 million, or $0.15 per share, which is a decrease from the previous quarter's $44.5 million or $0.34 per share.
• The Hercules rig experienced a low utilization rate of 67% due to idle periods, impacting revenue generation.
• The company faced increased vessel operating expenses due to scheduled dry dockings and new vessel deliveries.
• Profit share contributions were lower than typical quarters due to reduced fuel cost spreads.
• The potential appeal of the $48 million ruling against Cyrill could delay the final resolution and receipt of compensation.

Q & A Highlights

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Q: How should we think about the operating expenses for the Hercules rig while it is warm stacked off Norway, and what are the prospects for this rig in 2025? A: The Hercules rig recently completed a successful drilling campaign in Canada. Currently, the market is slow, but prospects are expected to improve in the second half of 2025 and beyond. The rig is being kept idle to perform upgrades, making it more attractive for future contracts. The expectation is that the rig will not be back in operation until later in the year. (Unidentified_6)

Q: How stable is the dividend, and what factors could influence a change in the dividend payout? A: The dividend is determined quarterly, focusing on long-term prospects. The company's operating model has shifted to long-term business with strong counterparties, providing stable cash flow. While the dividend is stable, any changes would depend on long-term business conditions and cash flow stability. (Unidentified_6)

Q: How do tariffs and potential force majeure events impact your container ship and car carrier portfolios? A: The company has strong counterparties like Volkswagen Group for car carriers, which can absorb potential tariff impacts. The trade patterns have shifted since the US-China trade war, reducing direct exposure. The company is confident in its counterparties' ability to service their charters despite potential tariff changes. (Unidentified_6)

Q: With Golden Ocean exercising their purchase option, how will SFL redeploy the net proceeds? Will you focus on dry bulk investments or reduce exposure to that sector? A: SFL is segment agnostic and focuses on the right deals with the right structure and counterparties. The company is open to more dry bulk investments if the right structure is found. The capital from Golden Ocean's purchase will be reinvested in assets with better returns. (Unidentified_6)

Q: What is the status of the $48 million ruling against Cyrill, and what is the timeline for any potential appeal? A: The ruling is public, and Cyrill has until March 5th to appeal. If appealed, the case could take up to 12 months to be scheduled in the second circuit. (Unidentified_4)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.