National Bank Holdings Corp

NYSE:NBHC

My name is Espen Gjosund, I'm Vice President of Investor Relations in SFL. Our CEO, Ole Hjertaker, will start the call with an overview of the fourth quarter highlights. Then our Chief Operating Officer, Trym Sjolie, will comment on vessel performance matters; followed by our CFO, Aksel Olesen, who will take us through the financials. The conference call will be concluded by opening up for questions, and I will explain the procedure to do so prior to the Q&A session.

Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates or similar expressions are intended to identify these forward-looking statements.

Forward-looking statements are not guarantees of future performance. These statements are based on our current plans and expectations and are inherently subject to risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, but are not limited to, conditions in the shipping, offshore and credit markets. You should therefore not place undue reliance on these forward-looking statements.

Please refer to our filings within the Securities and Exchange Commission for a more detailed discussion of risks and uncertainties which may have a direct bearing on operating results and our financial condition.

Then I will leave the word over to our CEO, Ole Hjertaker, with highlights for the fourth quarter.

Thank you, Espen. [Audio Gap] to $132 million, which is significantly up from the second quarter. Over the last 12 months, the EBITDA equivalent has been $581 million. The net income came in at around $20 million in the quarter or $0.15 per share, and we had positive contribution relating to profit share on Capesize bulkers and fuel cost savings of $2.5 million.

Our fixed-rate backlog stands at approximately $4.3 billion. And importantly, 2/3 of this is to customers with investment-grade rating, giving us a unique cash flow visibility and resilience. This backlog figure excludes revenues from the vessels trading in the short-term market and also excludes revenue on the new dual fuel chemical carrier that operates in [ approved ] Stolt tankers. It also excludes future profit share optionality, which we have seen can contribute significantly to our net income.

And in line with our commitment to return value to shareholders, we are paying a quarterly dividend of $0.27 per share or around 10% dividend yield. Most of our vessels are on long-term charters and we have over the last 10 years completely transformed the company's operating model, making us relevant for large end users like Maersk, Volkswagen Group and [ Mittal ].

During the year, we renewed and extended multiple existing charters and took delivery of 9 new vessels in 2024. Maersk ordered 5 new large container vessels last year, which added $1.2 billion to our fixed-rate charter backlog. And we are also in the process of upgrading several other vessels, and our Chief Operating Officer, Trym Sjolie, will talk more about that later.

It has also been a busy year from a financing perspective, where we have effectively addressed virtually all short-term asset debt maturities, matching funding with charter tenor. In total, we raised $1.3 billion in financing, including $220 million in senior unsecured bonds, in 2024. And subsequent to year-end, we raised a new $150 million senior unsecured bond loan in the Nordic market with maturity in 2030.

We have had a dispute with Seadrill for some time in connection with the condition of the drilling grid Hercules when it was redelivered to us in December 2022. Last week, there was a ruling in Oslo District Court, where Seadrill was ordered to pay us approximately $48 million in compensation, including interest and legal costs. It was a comprehensive case with more than 80,000 pages of documentation and a ruling over 112 pages. This ruling is subject to appeal from both sides within a month of the judgment.

We have so far not included any potential proceeds as an asset on the balance sheet, and the legal costs have been expensed over time in our general administrative expenses. Separately, there is a case due to commence later in 2025 in connection with certain parts delivered to us by Seadrill in connection with a special survey of Hercules in 2022.

We disagree on the actual ownership of some of the parts before they were delivered to us, and therefore also the compensation claimed by Seadrill. It will most likely take several months before this case is heard and there is a final ruling.

And with that, I will leave the word over to our Chief Operating Officer, Trym Sjolie.

Thank you, Ole. Our fleet currently contain 80 maritime assets. This includes vessels, rigs and contracted newbuildings. In 2024, we took delivery from shipyard of 2 LNG dual-fuel PCTCs and 3 LR2 tankers as well as purchased 2 dual-fuel LNG 33,000 deadweight tons stainless steel chemical tankers. We also last year placed orders for 5 16,700 TEU container ships in China. Also last year, we increased the backlog to Maersk with new 5-year charters for 7 of our large container vessels, which is a result of our close relationship and cooperation on vessel upgrades and performance enhancements. The first 2 vessels out of these 7 have already been upgraded and were delivered to Maersk in Q1 this year.

On divestments, we have sold one of our old 1,700 TEU containerships, the Green Ace, that was delivered to buyers in Q4. Also, Golden Ocean, the charterer for our 8 Capesize bulk carriers, recently declared their purchase option for the 8 vessels. We expect the vessels to be delivered to Golden Ocean early Q3 this year.

Our backlog from owned and managed shipping assets thus stands at $4.3 billion, and the current fleet is made up of 15 dry bulk vessels, 38 containerships, 18 tankers, 2 drilling rigs and 7 car carriers. We have a diversified fleet of assets chartered out to first-class customers on mostly long-term charters, and a majority of our customer base is large industrial end users. Container vessels remain our largest segment with almost 68% of the backlog.

As mentioned previously by Ole, we have increasingly been investing in vessel maintenance and upgrades. From IMO and especially the EU, there are ever tightening regulatory requirements to reduce emissions from shipping, driving the need for continuous improvement. Such improvement and investing in assets is also critical for our customers, and by doing so puts us in a better position to grow organically with our existing clients by either providing new vessels to their service or by extending with our current fleet.

We see that particularly the container operators are keen to see such partnership models developing, with large upgrade projects including cargo boost, energy-saving devices, propeller modifications and even change to the hull form like new bulbous bow. We have identified major benefits from these investments, both in terms of cost saving for our customers and lower emissions.

In the fourth quarter, 96% of charter revenues from all assets came from time charter contracts and only 4% from bareboats or dry leases. In addition to fixed-rate charter revenues, we have had significant contribution to cash flow from profit share arrangements over time both relating to charter rates and cost savings on fuel.

In Q4, profit split arrangements have contributed about $1.8 million, which is lower than a typical quarter due to lower fuel cost spread between heavy fuel oil and very low sulfur fuel oil. The charter revenue from our fleet was about $232 million in Q4. We had a total of almost 6,800 operating days in the quarter, defined as calendar day less technical or fire and dry dockings. 8 vessels have been in dry dock in the quarter, including major upgrade projects. Our overall utilization across the shipping fleet in Q4 was 98.3%, mainly due to the 108 days spent in dry dock.

For the rigs, the availability was about 67%, mainly due to idle period for the Hercules rig. And on that, on the energy side, the Hercules rig was contracted with Equinor Canada until mid-November, including demobilization time to Norway. The rig is currently warm stacked and being marketed for opportunities later in 2025 and 2026. During the fourth quarter, the rig recorded revenue of $34 million and costs of approximately $26 million. Going forward, we expect the stacking cost of the rig to be considerably lower than those of Q4.

And for the Linus, the rig recorded its first full operating quarter after its special periodic survey in May to July last year and had Q4 revenue of $20.2 million. The rig's market index rate increased 2.3% in the fourth quarter and costs were $13 million in Q4 compared to $11.8 million in the previous quarter.

Subsequent to quarter end, we got a notification from our insurers that we will receive close to $5 million to partly cover the expenses we incurred for the [ spot can ] repairs during the rig's yard stay last summer.

I will now give the word over to our CFO, Aksel Olesen, who will take us through the financial highlights of the quarter.

Thank you, Mr. Sjolie. On this slide, we [indiscernible] our pro forma illustration of cash flows for the fourth quarter. Please note that this is only a guideline to assess the company's performance and is not in accordance with U.S. GAAP and also net of extraordinary and noncash items.

The company generated gross charter hire of approximately $232 million during the fourth quarter, with approximately $85 million coming from our container fleet, which was down from the previous quarter due to scheduled dry dockings and efficiency upgrades on some of our large container vessels. This includes approximately $1.7 million in profit share related to fuel savings on 7 of our large container vessels.

In the fourth quarter, the company sold a 2005-built feeder container vessel, Green Ace, for approximately $10.8 million and booked a gain of approximately $5.4 million. And subsequent to quarter end, the company has agreed to sell the sister vessel Asian Ace for approximately $9.5 million, with expected delivery to the buyer in the second quarter of 2025 after expiry of the current charter. The vessel is debt-free and a gain of approximately $4 million is expected to be recorded in the second quarter.

The car carrier fleet generated approximately $26 million of gross charter hire in the quarter, including profit share from fuel savings. Our tanker fleet generated approximately $42 million in gross charter hire, up from approximately $37 million in the previous quarter as all 5 tankers acquired in 2024 now have been delivered.

SFL has 15 dry bulk vessels, of which 8 are employed on long-term charters. The vessels generated approximately $23 million in gross charter hire in the fourth quarter, including approximately $900,000 in profit share generated from our 8 Capesize vessels on long-term charters to Golden Ocean. The 7 vessels employed in the spot and short-term market contributed with approximately $7.4 million in net charter revenue compared to approximately $8.4 million in the third quarter.

Subsequent to quarter end, Golden Ocean exercised its purchase option for 8 Capesize vessels for $112 million in aggregate. The vessels will be delivered to Golden Ocean during the third quarter of 2025 and the net cash proceeds after repayment of debt is estimated to approximately $50 million.

In the fourth quarter, our energy assets generated approximately $55 million in contract revenues compared to approximately $86 million in the third quarter as the Hercules finished its contract with Equinor in Canada in mid-October.

Linus is under a long-term contract with ConocoPhillips in Norway until May 2029. And during the quarter, revenues from the rig was approximately $20 million compared to approximately $16 million in the third quarter.

Our operating and G&A expenses for the quarter was approximately $104 million compared to approximately $99 million in the third quarter, mainly due to scheduled dry dockings and delivery of new vessels. This summarizes to an adjusted EBITDA of approximately $132 million compared to $167 million in the previous quarter.

We then move on to the profit and loss statement as reported under U.S. GAAP. For the fourth quarter, we report total operating revenues according to U.S. GAAP of approximately $229 million compared to approximately $255 million in the previous quarter. The operating revenue decrease is primarily driven by the Hercules concluding its contract with Equinor in Canada in mid-October.

During the quarter, the company recorded profit share income of approximately $2.6 million from fuel savings from some of our large container vessails, our car carrier and our 8 Capesize dry bulk vessels on charter to Golden Ocean. During the quarter, we had an increase in vessel operating expenses mainly due to scheduled dry dockings and new vessel deliveries.

Furthermore, result was impacted by nonrecurring and noncash items including a gain of approximately $5.4 million in connection with the sale of the feeder container vessel Green Ace, a negative mark-to-market effect from [ stocks ] of approximately $2 million, negative mark-to-market effects from equity investments of approximately $500,000 and a decrease in approximately $100,000 on credit loss provisions.

So overall and according to U.S. GAAP, the company reported a net profit of approximately $20 million or $0.15 per share compared to approximately $44.5 million or $0.34 per share in the previous quarter.

So moving on to the balance sheet. At quarter end, SFL had approximately $135 million of cash and cash equivalents. Furthermore, the company also had marketable securities approximately $4.6 million in addition to debt-free vessels with an estimated market value of approximately $75 million. The company has recently concluded financing arrangements of approximately $1 billion, with approximately $280 million being drawn down during the quarter.

During the fourth quarter, the company paid the second installment of approximately 5% relating to the newbuilding order for five 16,800 TEU container vessels, with scheduled delivery in 2028. The remaining balance is due closer to delivery and we expect this to be financed by pre- and post-delivery loan facilities.

And subsequent to quarter end, the company successfully placed a new sustainability-linked bond of $150 million in the Nordic market in anticipation of new investments and general corporate purposes. And based on the Q4 numbers, the company had a book equity ratio of approximately 28%.

Then to conclude, the Board has declared the 84th consecutive cash dividend of $0.27 per share, which represents a dividend yield of approximately 10%. The company has a strong balance sheet and liquidity position, and we have effectively addressed the majority of all short-term asset debt maturities, matching funding with charter tenors.

In total, we raised approximately $1.3 billion in financing, including $220 million in senior unsecured bonds. Subsequent to quarter end, we raised a new $150 million senior secured bond in the Nordic market with maturity in 2030. Our fixed charge rate backlog currently stands at approximately $4.3 billion after adding approximately $2 billion during 2024. 2/3 of the backlog is to customers with investment-grade rating, giving us strong visibility on our cash flow going forward.

And with that, I give the word back to the operator, who will open the line for questions.

Thank you, Aksel. [Operator Instructions] We will have our first question from Gregory Lewis.

I actually had a few today. The first is going to be around the semisubmersible rig, the Hercules. Clearly, the rig got back to work, had a good year in 2024. I believe it's currently warm stacked outside of -- off of Norway. I was hoping you could kind of -- a couple of questions around the Hercules. One is, how should we think about the OpEx cost as that rig is warm stacked off of Norway? And as we think about budgeting for 2025 -- or how are you thinking about budgeting that expense for 2025, just given some of the prospects that you're seeing for that rig maybe as things start to warm up or the weather improves in the North Sea as we kind of move in the summer?

Thanks, Greg. The rig just concluded very successfully a drilling campaign in Canada for Equinor. This is a rig that is one of a handful of rigs that are capable of drilling both in ultra-deep water and in [indiscernible]. It has drilled in the Arctic before and can do it again. So the issue right now is that that market is a little slow at the beginning of '25, and we believe there are more prospects in the second half and onwards.

So I would say, if you talk to market analysts, they will say that 2026 looks very promising. So for now, we are keeping the rig idle. The reason why it is in the location where it is is that it's very close to where it has a true edge. Also, we're taking the opportunity while it is idle now to do some upgrades for the rig, which makes it more attractive in the long run.

So we don't risk having to take the rig out of business when it's working to do some upgrades. That has to do with everything from the very latest drilling control systems, and frankly, many of the, what they call, 6th and 7th generation rigs have the same issue. So we're dealing with it now beforehand, and also some other upgrades that we think would make the rig more attractive.

We spent more than $100 million on the rig in early 2023. And that rig, we believe, is very attractively positioned, but a very soft first quarter definitely -- or sorry, first half, I would say. So our expectation is not to -- that that rig will be back working until later in the year.

Okay. Great. And then I did want to bounce around a little bit and kind of appreciate the stability of the dividend is kind of we look at -- we went back and looked at, say, 2023, it looked like the dividend was really funded, call it, mid-40% payout of free cash flow in 2024. That dipped down into kind of like a high 30s percentage of free cash -- or operating cash flow payout.

As -- realizing that the dividend is a decision that the Board is always focused on and always thinking about, as we think about the stability of that dividend, how should we be thinking about that, i.e., hey, if we're in this range, there's -- if we're in the kind of 30%, 40%, maybe even 50% payout of operating cash flow, the dividend is pretty -- should we expect it to be stable? Or asked another way, what could trigger a decision to move the dividend higher or lower?

Yes. Thanks. You're absolutely correct. The dividend is set on a quarter-over-quarter basis, so we cannot guide specifically what will be next quarter dividend. But generally, I would say that the dividend discussions in the company and with the Board is more -- has more to do with the long-term prospects. And if you look at the company's operating model, yes, we have this legacy asset.

And frankly, I mean, the reason why we have this asset in the operating mode where it is is because it was on a bareboat charter and our counterparty, Seadrill, failed. They went through 2 Chapter 11s and we ended up taking the rig back because that was the best solution for the company at the time.

If you look at it generally, if you look at the rest of the business, now we have 2/3 of our backlog with investment-grade counterparties. I mean that's a fundamental change in the business model. And we have more than 70 vessels. If you net out the Golden Ocean vessels, which will go out of the fleet in the third quarter -- and frankly, Golden Ocean assets, they're also legacy assets. I mean they are on an operating model where -- which is more, I would say, more of a financial nature than an operating nature.

But if you look at the rest, it's all long-term business. It's all with very strong counterparties. So we have a very stable cash flow fundament in the business. And yes, that drilling rig has had some very -- a lot of noise in the cash flow and more -- even more noise in the net income because of U.S. accounting rules, where -- when the rig is mobilizing, you cannot recognize revenues even though you're compensated [ to ] revenues. And then everything is piled up on top of the drilling days. So you have lower, higher, lower, higher, lower, higher revenue structures, which creates a bit of a noise.

But I think we should -- yes, we are managing the rig. The rig is upgraded. We spent a lot of capital on it. We had this legal case that you may have noticed, that -- where so far, Seadrill has been ordered to pay us a compensation to effectively compensate us for the costs we had back in 2023. But the rest of the model and the rest of the business is quite stable and very predictable, I would say, in nature.

So I would say it's sort of a -- we have -- the SFL model is a model, I would say, of -- it's a tale of 2 decades, as you could call it. It's from 2004 to 2014-ish, that's the financial structures, more bareboat-type deals. And from there onwards, we have switched the model more to an operating model where we basically run the vessels with the repeat business and typically with very strong counterparties.

So that's really what I can say. It's difficult to be more specific on the Hercules. We will market that rig -- we are marketing that rig and we hope to find work for it, but we cannot be specific on when -- on what exactly we are bidding and when exactly we can notify the market about contracts.

Okay. And that was super helpful. I did have -- I did want to keep going -- and I saw that you kind of were flagging and maybe like the strength of your counterparties, maybe this quarter more than most. A couple of -- a question I've gotten a little bit this morning was around tariffs. And I don't think -- I think I know the answer to this, but as we think about as you built this container ship portfolio and even the car carrier portfolio, obviously it's -- I don't know if they're interesting or volatile, I don't know what the word is in the U.S., but regardless, these tariffs that people are reading about, the question that I've gotten a little bit this morning was around -- I think the people and shipping have seen this in other industries around force majeure, how certain things can create force majeures.

As we look at these car carriers and container ships around tariffs, regardless of where these tariffs potentially go, I would think that that should provide no impact for existing charters, but I would -- if you could kind of clarify that or walk through any wrinkles, I think that might be super helpful this morning.

Yes. Thank you. I mean if you look at the car carriers we have, just to start with that, that are trading on the U.S. This is Volkswagen Group. It's a very strong counterparty and they are our counterparty. So you could say if there are any issues there, they will absorb that. And I think, frankly, they have good economic capacity to do that. And -- but also, I would like to add that when you look at the car trade as a market, yes, you have volumes going from Asia -- sorry, from Europe to the U.S., but you also have a lot of volume going from the U.S. and back.

So it's not like the car factories have -- they are producing all sorts of variations in each [ respective ] market. They typically have a trade where the logistics on sea has been very effective for them. So to them, it's of course that if this evolves, I mean, what then happens to the vehicles that are being produced locally in the U.S., for instance. And I think it's a little too early to tell, and whether or not this is, what we say, a leverage to start discussions at a different level, this is difficult to say.

But from our perspective, our counterparty there is Volkswagen Group. So we don't think we are very exposed from that perspective. Same thing goes for the liner side, our liner companies going there are Hapag-Lloyd, Maersk Line, MSC, we have very strong counterparties who've made a lot of money over the last few years and are quite robust.

So -- and also the trade between, say, China and the U.S. has changed fundamentally since what we could call the 2018/'19 trade war, if you can call it that, between U.S. and China, where you at that point of time had around 10% of the volumes going from China to the U.S. and therefore had quite a bit of an impact.

In the meantime, trade patterns have changed, and right now China to U.S. has diminished quite dramatically on the container line side. So you could say, yes, it has an impact. but it's much less than it was 6, 7 years ago. So we monitor this closely, but there at the same time we have very strong counterparties. We are not directly exposed to that. This is our customers who are potentially exposed and we are quite confident that they can easily service their charter rates to us.

Then we'll take our next question from Climent Molins.

You announced Golden Ocean will be exercising their purchase options on 8 Capesizes. As you think about redeploying the net proceeds, should we expect the focus on dry bulk investments, or are you willing to reduce your exposure to that sector?

Thank you. Generally, I would say we are segment agnostics. So for us, it's all about doing the right deals with the right structure, with the right counterparties and with the right type of economics. We would love to do more in the dry bulk space, if we can find the right structure around that. And if you look at the segments that we're in, I mean, yes, we have liners. There, we see a significant interest from companies with a very logistics mindset. We would love to do the same -- more of the same in the dry bulk sector, and we've done a few deals in the tanker segment.

I would say the only segment where we are not present right now is LNG, and that has more to do with maybe -- as we see it, maybe a lot of players chasing deals in that segment, and therefore that segment hasn't -- for us, hasn't been attractive enough from a running yield perspective and a residual exposure after the charter period perspective. So we are -- we have not sort of allocated that capital for anything in particular or anything specific, it's all about deal by deal. And we monitor that -- these markets as we go.

But maybe also, generally I would say that if you look at that deal, that is one of our obviously, call it a legacy deal. It's sort of -- it was -- had more of a financial profile really than a true operating profile. And if you look at the effective cash flow coming from those vessels compared to the equity that we now get released, we believe that we can actually reinvest that with a better return than keep rolling that deal.

So this is -- we are quite neutral to that. I mean, we wouldn't mind working with Golden Ocean. That's been -- it's been working quite smoothly, but we also believe we can very effectively reinvest that capital in other assets and get at least as good return on the capital employed.

That's very helpful. I also wanted to ask about the Seadrill award. I'm guessing you cannot provide much commentary on the $48 million ruling. But should the ruling be appealed, when should we expect to hear from the next ruling?

Sure. This is Aksel here. I mean the ruling itself is public. So it's in Norwegian, so everybody can read that ruling. The timing for appeal is -- can appeal until the 5th of March. So we will then know if it is appealed. And then it will be moved on to, call it, the second circuit, and that could potentially take up to another 12 months before that case is scheduled. So it could take some time still, yes.

We'll take our next question from [indiscernible].

A very quick one from me. Are there any significant upgrades or CapEx required to the Hercules if it were to work on Offshore Norway?

Thanks. Not particularly. I mean this rig has worked in Norway in the past. So -- but that's under another, call it, manager. So going back in with Odfjell Drilling, I would say who is maybe the premier operator on the Norwegian continental shelf. And we -- and frankly, also, we took the Linus, the other rig we have, the harsh environment jack-up, that was also taken into Norway and switched management from Seadrill to Odfjell Technology. So they're effective with the wider group. It was done in a very efficient manner.

We -- there are always some investments to be made, but we think compared to numbers you've seen from -- in other settings, I think they are quite manageable. And typically what you see when you bring rigs into Norway, the oil companies are generally willing to compensate companies for the effective investments of taking them into that environment. So we don't think that would be material, but there will be investment for sure.

And if and when a contract is awarded, we will inform the market about, what we say -- both the charter rates and the mobilization fees and investments required to get the job done effectively on it from a drilling perspective.

We have also received a question on the side here. Which shipping segment do you see as most potential/profitable in the next 2 to 3 years?

That -- it's a difficult question. And the reason why it's difficult is that we don't focus on spot market. We focus on long-term charters. And if you see the deals we've done is typically 5-, 7-, 10-year charters. So which means that we're not really exposed to the short-term market. So spot market isn't so relevant. But if you look at new business development, it typically -- the sweet spot when we get deals done and we get -- it's a setting where we have an attractive investment or entry point where we have a structure where our customer don't [indiscernible] in the front end lose money, say, from day one. So hopefully, it's like the spot market, if that's where they're facing, is a little over, and then in the long run you get to an effective cost of capital.

We have, over the years, now built quite efficient funding structures for assets. We have funded ourselves, I would say, primarily in the Asian capital market, where we have seen very attractive funding rates for long-term [ further ] structures with very strong counterparties. So we believe that we can structure deals that are quite attractive. And that's why we are insulated from that perspective, from the short-term market fluctuations. And that's sort of the nature of our business.

But if you look at shipping in general, I would say that most shipping segments, and particularly if you look at the big volume shipping segments being dry bulk, which is the biggest tanker -- smaller than dry bulk, but bigger than others -- you have a very low order book, historic low order book generally. So -- and you have a significant reduction in shipbuilding capacity. And you also have structural issues like in Japan and Korea, where you have workforce issues which could be making it difficult to keep up even also with current reduced volumes of ship production.

So from that perspective, I think shipping is in a very interesting spot where you have true shortage of shipbuilding capacity. You've had an order book where you want -- if you order a ship today, or if you want a volume of ships, newbuilds, you will have to wait until 2029. We're talking 4 to 5 -- at least 4 years to get these delivered.

And historically, it's always been the ship owners who is doing it to themselves. Typically, ship owners, as soon as you see some lightning in the market, shipowners will run out and order a lot of vessels to be put in the spot market, and then when they -- because -- and then when they get delivered, suddenly there are too many vessels and the ship and the charter rate collapse. To do that now, it will take a long time.

So I think we've been in a very interesting spot from a supply perspective at least. And then we just have to hope that the demand side is keeping up, and China and Asia, which is where -- really where the volumes are going -- there's so much noise about the U.S. and trade wars. But volumes from a shipping perspective is more Asia-centric than U.S.-centric, I think makes maritime transportation quite attractive.

Thank you, Ole. We also have another question here. What's your view regarding the huge delivery backlog of container ships in the coming years? Do you think it will affect your profitability in '26 and '27?

Trym Sjolie speaking. I think, regarding the backlog of containerships and any effect on SFL in 2026 and '27, we do not believe there will be a major impact to us. We -- our container fleet is mainly chartered out until sort of 2030 now, or 2029/2030, and the vessels that are still open, we expect there is good interest in the market still. And we see that there is a strong interest for good and large container assets from all the operators still. May sound surprising, but it's what we see. So demand is still good.

So this -- I mean for us to look at the huge order book, as you call it, from the big liners, there is definitely a demand there still. So as far as we can tell right now, we do not see a big drop in the rates or definitely not in our profitability in the next 4 to 5 years based on our current backlog.

Thank you, Trym. Then I would like to thank everyone for participating in this conference call. If you have any follow-up questions to the management, there are contact details in the press release or you can get in touch with us through the contact pages on our web page, www.sflcorp.com. Thank you, everyone.