SFL Corporation’s Earnings Call Highlights Robust Strategy

Sfl Corporation Limited ((SFL)) has held its Q3 earnings call. Read on for the main highlights of the call.

SFL Corporation’s recent earnings call conveyed a generally positive sentiment, highlighting the company’s robust dividend history, strategic fleet renewals, and a strong charter backlog. Despite these strengths, challenges such as an idle drilling rig and reduced revenue in certain segments were acknowledged.

87th Consecutive Dividend

SFL Corporation announced its 87th consecutive dividend of $0.20 per share, underscoring its commitment to returning value to shareholders. This milestone reflects approximately $2.9 billion returned to shareholders, with a yield exceeding 10%, emphasizing the company’s dedication to consistent shareholder returns.

Strong Charter Backlog

The company reported a charter backlog of $4 billion, with two-thirds of this contracted to investment-grade counterparties. This substantial backlog provides SFL with strong cash flow visibility, ensuring a stable financial outlook and continued operational stability.

Fleet Renewal Strategy

SFL has been proactive in renewing its fleet by selling 22 older vessels, which has reduced the average fleet age by two years to under ten years. This strategy includes investments in efficiency upgrades and LNG-capable vessels, aligning with the company’s focus on modernizing its fleet and enhancing operational efficiency.

New Charters and Upgrades

The company announced new 5-year charters for three 9,500 TEU container vessels, which will add approximately $225 million to the charter backlog. These vessels will undergo upgrades for cargo handling and fuel efficiency, further supporting SFL’s commitment to operational excellence.

Strong Financial Position

SFL ended the quarter with $278 million in cash and a total liquidity of $320 million, maintaining a solid financial position. This financial strength positions the company well for future growth opportunities and potential market fluctuations.

Idle Drilling Rig – Hercules

The drilling rig Hercules remained idle during the third quarter, with ongoing evaluations for new employment opportunities. This situation highlights some uncertainty within the Offshore segment, which the company is actively addressing.

Decrease in Tanker and Dry Bulk Revenue

The company experienced a decrease in tanker revenue to $44 million and a significant drop in dry bulk revenue to $6 million from $19 million, primarily due to divestments. This decline impacted overall revenue, reflecting the challenges in these segments.

Collision Incident

The car carrier SFL Composer was involved in a collision in Denmark, resulting in a 34-day dry docking for repairs. Fortunately, insurance covered most of the costs, minimizing the financial impact on the company.

Forward-Looking Guidance

Looking ahead, SFL Corporation reported revenues of $178 million and an EBITDA equivalent cash flow of $113 million for the third quarter of 2025. The company continues to strengthen its charter backlog with long-term agreements worth approximately $225 million and is committed to improving fleet efficiency through investments in cleaner technology. SFL’s strong liquidity position, with $278 million in cash and $40 million in undrawn credit lines, ensures readiness for future growth opportunities.

In summary, SFL Corporation’s earnings call highlighted a positive outlook with a strong dividend history, strategic fleet renewals, and a robust charter backlog. While challenges remain, particularly in the Offshore segment and certain revenue streams, the company’s solid financial position and commitment to operational efficiency provide a promising foundation for future growth.