SFL Corporation Ltd

NYSE:SFL

Earnings Call Transcript 2021-Q2

[Operator]

Good day and thank you for standing by and welcome to the Q2, 2021, SFL Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there would be a question and answer session. [Operator Instructions]

[Ole Hjertaker, Chief Executive Officer]

Thank you. And welcome all to SFL's Second Quarter Conference Call. I will start the call by briefly going through the highlights of the quarter. And following that, our CFO, Aksel Olesen will take us through the financials, and then the call will be concluded by opening up for questions.

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, and 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 clients 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 with the Securities and Exchange Commission for more detailed discussion over risk and uncertainties which may have a direct bearing on our operational results and our financial condition.

The announced dividend or $0.15 per share, it represents a dividend yield of around 8.5% based on closing price yesterday. And this is our 17th quarter with dividends. So it's a bit of us celebration from that perspective. Over the years we have paid nearly $28 per share in dividends or around $2.4 billion in total.

And we have had an increasing fixed-rate charter backlog recently supporting continued dividend capacity going forward. The total charter revenues was $141 million in the quarter with more than 80% of this from vessels on long-term charters and less than 20% from vessels employee from short-term charters and then the [Indiscernible] market. The EBITDA equivalent cash flow in the quarter was approximately $103 million.

And last 12 months, the EBITDA equivalent has been approximately $424 million. The net income came in at around 20 million in the quarter or $0.16 per share. There were some one-offs in the quarter, including a smaller impairment on our rig we are recycling and negative mark-to-market on interest hedging instruments.

There was also a higher interest element in the quarter. SPL already raised the capital to refinance the remaining $147 million convertible note in October and have therefore, around $2 million extra interest charge in the Second Quarter and Third Quarter until it's paid down. There were also around $900,000 higher upgrading costs in the quarter due to additional crew rotation costs linked to COVID restrictions.

Our fixed-rate backlog has increased and stands at approximately $2.7 billion from owned and managed vessels after recent acquisitions and adjusted for at the recent disposals. This is provided continued cash flow visibility going forward. The backlog excludes revenues from 16 vessels traded into short-term market and also excludes future profit share optionality.

In addition, we have excluded charter hire relating to the drilling rates to be conservative in light of the ongoing financial restructuring in Seadrill. We are very pleased to continue to execute on our commitment to invest in assets and markets with a lower carbon footprint. We have spent a lot of time on evaluating various new technology initiatives that can improve performance of vessels, including our existing vessels on the water.

In April, we agreed with the Volkswagen Group to build and charter [Indiscernible] to new build dual-fuel car carriers to sign to use liquefied natural gas or LNG for propulsion. And today, we announced an agreement to build two more vessels in the same series. The charter period for all these four vessels is 10 years from delivery in 2023 and 2024. And the perceptions of added more than $400 million through the fixed-rate charter backlog.

And important, they also added two very solid lead counterparties to our customer portfolio. We are not yet at liberty to disclose the name of the counterparty for the last two vessels, but activity to say so much that it's a large investment-grade, Asian-based, the shipping Company. And we really look forward to working with them more closely. And hopefully over time, also develop more business opportunities with that.

In addition to the car carriers, we have recently added two additional 14,000 TEU container vessels with charters to Evergreen. These are sister vessels to four vessels we already own and delivery schedule in just two to three weeks. In addition to the solid cash flow during the remaining 2.5 years or so with Evergreen, a key attraction here is to rechartering position in 2023, and 2024 for fuel - efficient vessels.

We know are very attractive assets in the market. The purchase price is confidential, but I can confirm that it's significantly below current charter-free values reported by brokers. We have also agreed to acquire two modern 6,800 TEU vessels with long-term charters to Maersk line. One of the vessels have been delivered to us already.

And the second vessel is expected in a week's time. So with good cash flow effect already this quarter. Total acquisition cost for these vessels is around $150 million. And with the rallying second end market, the charter values are in fact already off 40 to 50% from the levels we required of that, creating a nice buffer for us.

With these vessels, we will have 15 vessels on charter to Maersk. All these vessels and also the Evergreen vessels and the car carriers are on time charter terms where we are responsible for technical management and vessels operation and therefore, also have the direct interaction with the counterparties.

Coincidentally, our customer, MSC, has exercised purchase options for 18 vintage feeder vessels. Due to the age of these vessels, the deal structure was bareboat charters with no technical risks. And MSC had purchase obligations at the end of the charter period. The vessels are now 25 years old on average. And MSC has exercise for purchase options with some vessels delivering at the end of this month and the remaining in September.

Net cash proceeds out the repayment of associated debt is estimated to approximately $40 million and we expect a neutral to marginally positive book effect from this transaction in the third quarter. Excluding the drilling rigs, the backlog from owned and mileage shipping assets were 2.7 billion at the end of the quarter.

Over the years, we have changed both fleet composition and structure, and we know have more than 70 shipping assets in the portfolio and no vessels remaining from the initial fleet in 2004. In addition to the long-term charter vessels, we have 16 vessels trading in the short-term market.

We also had a significant contribution from profit share over time, both relating to charter rates and fuel savings. We do not have a set mix in this portfolio focuses on evaluating deal opportunities across segments and tried to do the right transactions from a risk-reward perspective. Over time, we believe this will balance itself off but we try to be careful and conservative in our investments and adjusted mass because money is burning in our pockets.

The two drilling rigs are not included in the reported charter backlog figures. And with respect to Seadrill and the ongoing financial restructuring, we cannot give more details than what we have disclosed in our press releases or is otherwise, publicly available. We receive approximately 75% of the lease hire under the existing charter arrangements for best cleaners in West Hercules during Seadrill Chapter 11 proceedings.

Both rigs are active and working for all companies. And the charter rate is sufficient to cover our debt service relating to the rates. And we are, of course, pleased to see a strengthening, harsh environment market in the North Sea on the back of a firm, oil products.

A few weeks ago, we entered into an amendment to the charter agreement relating to the semi-submersible drilling rig, West Hercules. Under the amendment agreement with Seadrill, the West Hercules is contracted to be employed with all major Equinor in Norway and Canada until the second half of 2022. And thereafter, we deliver to SFL in Norway.

This agreement remains to be reconfirmed by the court in September. And if so, SFL will continue to receive a bareboat hire of around $65,000 per day until Seadrill emerges from Chapter 11. And thereafter, approximately $60,000 per day while the rig is employed under a contract and generating revenues for Seadrill and approximately $40,000 per day in all other modes, including whether rig is idle and mobilized to and from Canada for the [Indiscernible]

We continued to have a constructive dialog with Seadrill regarding the rig West Linus, which is on a sub-charter to Conoco Phillips in the North Sea until the end of 2028. Seadrill has filed a plant support the agreement, which is also supported by a majority over secured creditors. Based on these filings, a potential emerging from Chapter 11 could be in early 2022. And we expect to have more clarity invest leaders well ahead of this.

Over the years, we have gone from a single asset class charter to one single customer, to a diversified fleet and multiple counterparties. And over time, the mix of the assets in charter backlog has varied from a 100% tankers to nearly 60% offshore 10-years ago to container and car carriers, now being the largest segment with 80% over the backlog.

If you look at the counterparties, it is now mainly to end users and market leaders in their respective segments and relative few are intermediaries where we have less visibility on the use of the assets and quality of operations. Strategically, this also gives us access to more deal full of opportunities such as the repeat business with Maersk, MSC, Evergreen, for example.

Our strategy, a stand for being to maintain a strong technical and commercial operating platform incorporation with our sister companies in the Seatankers Group. This gives us the ability to offer a wider range of services to our customers, from structured financing to full-time time charters.

And with full control over vessel maintenance and performance, including energy and efficiency and emission and minimizing efforts, we can impact improvements to our vessels through the life of the assets. And not only be passed of the owning vessels, employee from bareboat charter, where the customer may not always have an incentive to make such improvements. In addition, we can retain more of the residual value in the assets when we charter out on time charter basis.

And in the current environment with rising raw material costs driving replacement costs for vessels, this value is for the benefit of SFL under stake holders while for bareboat charter deals the value is usually retained by the charterers through fixed-price purchase option. And with that, I will leave the word over to our CFO, Aksel Olesen, who will take us through the financial highlights of the quarter.

[Aksel Olesen, Chief Financial Officer]

Thank you, Mr. Hjertaker. On this slide, they're from our pro forma illustration of cash flows for second 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 ultimate of extraordinary and non-cash items.

The Company generated gross charter hire of approximately 142 million in the second quarter, with more than 80% of the revenue coming from our fixed charge rate backlog, which currently stands at 2.7 billion, providing with the stronger stability on our cash flow going forward. In the second quarter, the line of fleet generated gross charter hire of approximately [Indiscernible] million, including approximately 2.4 million in profits big contribution related this year to savings on some of our large container vessels.

Of this amount, approximately 95% was derived from our vessels on long-term charters. Fully in the Company's recent acquisitions as it fell slightly feed backlog, currently it's down at approximately 2.2 billion is an average remaining charter term for approximately 4.7 years, were approximately 7.5 years, if weighted, for charter hire. Our tanker fleet generated approximately 50 million in growth charter hire. Of this amount, more than 80% was derived from our vessels on long-term charters to among others, Phillips 66 and floor plan.

The net charter hire from the Company's 22 smacks tankers, employees, inshore grew market was approximately 1.8 million compared to 2.5 million in the previous quarter. Our dry bulk fleet of 22 vessels generated approximately 39 million in gross charter hire, including approximately 1.2 million in profit share.

Contribution from our capsize vessels on charter to Golden Ocean. Of this amount, approximately half was derived from our 12 vessels along [Indiscernible] to Golden Ocean, Sinotrans, and Hyundai Glovis. While the other half was derived from our 10 supramax and handy size vessels employed in the short-term markets.

These vessels generated approximately 14.9 million in net charter hire compared to 9.8 million in the previous quarter. It's a total of two drilling rigs, which have been charged out to subsidiaries of Seadrill on variable terms. In the second charter, we received [Indiscernible] higher over approximately 12.2 million from [Indiscernible].

This summarizes to an adjusted EBITDA of approximately 103 million for the Second Quarter compared to 98 million in the First Quarter. We then move on to the profit and loss statement as reported under U.S. GAAP. As they are described in previous earnings calls, our accounting statements are different from those of a traditional shipping Company.

And that's our business strategy focuses on long-term charter contracts. A large part of our activities are classified as capital leasing. As a result, a significant portion of our charter revenues are excluded from U.S. GAAP operating revenues. And instead, looked at revenues classified as repayment of investment in finance, leases, and vessel loans result in associates and long-term investments and interest income from associates.

For the Second Quarter, report total operating revenues according to U.S. GAAP, of approximately 117 million, which is less than the approximately 142 million of charter higher actually received for reasons just mentioned. During the quarter, the Company recorded profit net income of 3.6 million, mainly related to huge savings on some of our large container vessels. And the dry bulk vessels on long-term charters to Golden Ocean.

Furthermore, the net result was impacted by a non-cash impairment of 1.9 million, reflecting the net proceeds from the recycling of [Indiscernible] during the Third Quarter. In addition to approximately 1 million in additional OpEx related to challenging crude changed logistics and approximately 2 million in additional interest cost due to the issuance of sustainability informed in April ahead of maturity of the convertible bond in October.

So overall, and according to U.S. GAAP, the Company reported a net profit of 19.5 million or $0.16 per share. Moving on to the balance sheet, at quarter-end, SFL had approximately 372 million of cash and cash equivalents, excluding approximately 8 million of cash shelves in the wholly-owned non-consolidated rig owning subsidiary. Furthermore, the comp and marketable securities of approximately 23 million based on market prices at the end of the quarter.

In April, the Company successful placed a 150 million senior secured sustainability-linked bonds due in 2026. The bond will pay a coupon [Indiscernible] and the net proceeds will be used to refinance existing debt, including our convertible bonds in maturity in October, which is included in the short-term debt with approximately 147 million outstanding at quarter-end.

The Company has remaining CapEx of approximately 670 million relating to recent acquisitions. During the Second Quarter, the Company issued approximately 10 million new shares through its ATM program with net proceeds of approximately 87 million to part-finance these acquisitions with the additional investment capacity going forward. The remaining investment amounts are expected to be found in the senior debt.

And there are no immediate plans to risk more new equity. As of today, we obtained approximately 300 million of senior debt from international banks after attractive terms addressing this funding of the vessels to be delivered during this Third Quarter.

Based on the Q2 numbers, the comp at the book equity ratio for approximately 28%. Then to summarize. The Board has declared a cash dividend of $0.15 per share for the quarter.

This represents a dividend yield of approximately 8.5.%, based on the closing share price yesterday. This is the 17th consecutive quarterly dividend. And since inception of the Company in 2004, approximately $28 per share or approximately $2.4 billion in aggregates, has been returned to shareholders through dividends.

SFL has successfully committed to close to 700 million towards accretive investments so far this year. And in the process, we have expanded our relationship with some of our key clients by investing in modern Eco-Design containerships. And at the same part and disposed of older, less efficient vessels, demonstrating our commitment to further improve our carbon footprint pursuant to our ESG strategy.

Following the recent investments, our backlog from our shipping assets now stands at 2.7 billion, providing strong visibility on future cash flow, debt service and continued distribution capacity. A 372 million of cash at quarter-end, as well as well-positioned to execute or new equity investments in the time to come. And with that, I give the word back to the Operator who will open the line for questions.

[Operator]

Thank you [Operator Instructions] We're now taking the first question from the line of Randy Giveans of Jefferies. Please go ahead.

[Randall Giveans, Jefferies]

Gentlemen. How's it going?

[Ole Hjertaker, Chief Executive Officer]

Hi there.

[Randall Giveans, Jefferies]

So I guess a first couple of questions around the new container ship acquisition, 14,000 TEU vessels. Can you give the age of the ships? Are they scrubber equipped? Some more details? I know you're not going to give the purchase price, but just trying to get some other details around that. And then looking at residual upside after the current charters end in 23 and 24.

[Ole Hjertaker, Chief Executive Officer]

Yeah, absolutely. The vessels our system vessels to four 14,000 TEU container vessels that with we have today on charter to Evergreen. These are very fuel-efficient vessels. In fact, one of our vessels was the first vessel with 51-meter beam, i.e. the very biggest you can take through the Panama Canal. So our vessel was the first of that size to go through the Canal and actually use that corridor to serve the U.S. East Coast market.

So we know there -- these are very versatile vessels with very good deadweight capacity and fuel-efficient build. And 2013 and into 2014, they don't have scrubbers. This is something we discussed with the current charter Evergreen. In the end, when your charter out a vessel, it's your customer who pays for the fuel.

So if we were to make such investment, it would of course be if we got either a compensation for that investment through linked to their fuel savings or a profit share, like we've done with Maersk and in -- on several vessels, where we have a base increase of -- for the investment and then we get the cup of the profits that comes out of that.

We have not made such agreements with Evergreen. And of course, therefore, we justify making that investment now. And of course, when we look at the new charter position, this is something we would obviously discuss with a new potential charter for these vessels, if it makes a commercial sense for us.

Right now, we know that the shipyards are all sold out for vessels of this size and category from quality shipyards. Well, 2'4 is basically as well sold out and we hear that even '25 may be challenging certainly for a series of vessels. So and we've also seen other operators out there forward fixing already vessels with chartering positions similar to ours.

So we see that the results are good demand on the potential on the customer side. But exact timing of this is something we would have to look at. And again, it's all about trying to create the best quality -- economic outcome for us from a risk-reward perspective, obviously.

[Randall Giveans, Jefferies]

Got it. Okay. And then, looking at your dry bulk asset, clearly those are outperforming most of your others now, profit sharing, fully getting from Golden Ocean. The convertible maturity, it handles Seadrill mostly in the past now.

So all of those things together, how do you view the dividend current at $0.15 chances you re-up that back to the $0.25 it was before the recent cut. And then how do you view your dry bulk fleet from here as well?

[Ole Hjertaker, Chief Executive Officer]

Yes. Thanks. It's a very valid question, of course. And on the dry bulk side, we're of course very excited to see the dry bulk market being very robust and has been increasing over the last few months.

Of course, if you look at that -- if you look at the economic side of that, and certainly from a reporting side, the cost of the new -- we call it accounting principles for shipping assets with low to discharge principal, you have effectively a delay in the revenue recognitions when the market is strengthening and then, the corresponding call it detail if the market is softening.

The $1.25 million we got in profit share from Golden Ocean, on top of the base rate. So this is just icing on the cake as we like to say it, we would of course like to see more icing on the cake. And based on the forward market, it could be significantly more than what's reported this quarter.

But it has a delay effect, as I mentioned. And of course, the profit share is in the end, actual performance for the vessels. Also, if you look at our acquisitions recently, we've done several deals that are delivering into third quarter. Some vessels are already delivered, several are to be delivered over the next very few weeks.

So we will see more -- we will see cash flow production from these assets already in the quarter. So I -- I think as we come to the finalization of the third quarter and we look at the numbers at that time, that would be a more prudent time to look at also the distribution at the time and needless to say, we -- where focused is always on distribution per-share, long-term distributable capacity per share.

So, of course, it's an objective to build dividend going forward. But exact timing and the amounts, et cetera, it's something the Board has always reserve. the right. We never -- have never in the history of SFL, given specific forward guiding on dividend. But typically, we've been correcting dividend down very, very seldom. And usually it's been stable and increasing. So Let's hope we can get back to our good old pattern also on that side.

[Randall Giveans, Jefferies]

Yeah. Sounds good. That's it for me. I'll turn out.

[Ole Hjertaker, Chief Executive Officer]

Thank you.

[Operator]

We're now taking our next question from the line of Gregory Lewis at BTIG, please go ahead.

[Gregory Lewis, BTIG]

Hey, thank you. And good afternoon Ole and team and I hope you're doing well. I guess I would like to ask -- Randy is right, a big question around the dividend. I guess I'll ask it a different way. If we were to rewind the clock a little bit, the first dividend move down was from the -- looked like it was driven by the ongoing issues around Seadrill. And then the second knockdown of the dividend was really around COVID.

And so realizing that there's a lot more than just Seadrill and COVID that drive the decision around the dividend. Are those two things kind of like hurdles or events we should be thinking about as we try to think about when we could see a return in growth to the dividend, or is it more, hey, those two things happened, what moved on and it's more just about doing some more of these transactions which we announced today around the car carriers to boost the cash flow?

[Ole Hjertaker, Chief Executive Officer]

Yeah. Good. [Indiscernible] Difficult to be very specific on that. I mean, of course when we made the adjustments, one was due to general huge market uncertainty surrounding the whole COVID, which had much wider sort of impact than just on the drilling side.

And then you had the meltdown on the rig side, where residual loss in the process of filing for Chapter 11 when we felt that it would be -- it was very prudent to take down the dividend given the heightened uncertainty around that. We have some more visibility now with Seadrill, with given what we noted in the report with One Rig where we have an agreement that will run through next year, but it's not -- we're not entirely out of the woods.

Hopefully over the next couple of months now, we will have more clarity there as well. But at the same time, we also see a very good performance in some of the other asset classes, like the dry bulk vessels that was mentioned. And we've been doing more business with these new transactions and of course, hope to execute on additional deal opportunities going forward.

So I think the best way to phrase it is probably that the board will -- is assessing call it the dividend with the perspective of what they believe is long-term sustainable in a more normalized world.. And this quarter, the dividend was kept stable.

Next quarter, management can hope that there is good performance -- continued good performance, and also better visibility, and also cash flow coming in from these new assets that we'll build that long-term distribution capacity. But again, we cannot make typical comments on what the dividend could be. Because again, this is a right to board reserves to have the appropriate flexibility.

[Gregory Lewis, BTIG]

100%. I also realizing that you are limited in what and how you can talk about the relationship with Seadrill and the rigs but I guess I'll ask it this way. It's out and then and it's been reported in the news that a couple other drilling companies are potentially looking at acquiring Seadrill.

Is it right to think that if Company A acquires Seadrill, they by default even though Ship Finance is the owner of those rigs, or is that something where then Ship Finance? I'm you're really just looking for color around the relationship, contract or agreement. How would something like that work if Seadrill were in fact to be acquired?

[Aksel Olesen, Chief Financial Officer]

Just to clarify your question, I think your question is that our rigs automatically are a part of the sale if Seadrill is required, or if is it [Indiscernible]

[Gregory Lewis, BTIG]

Yeah that's exactly right.

[Aksel Olesen, Chief Financial Officer]

Exactly, so it's really up to the board or if they acquired to make a separate proposal [Indiscernible] in that respect and up to the board to validate that proposal in -- if there should be potential deals on the table. So there's no kind of ultimately it comes to trends that then often CD20 also relates to those assets because those are assets of SFL and operating separately.

We also know said this, that we have two attractive harsh-environment assets which also seem to be the most precise asset itself. If you look at this asset, so we will just have to see how things develop.

[Gregory Lewis, BTIG]

Okay. And then as I think about that -- I'm really interested in the Conoco contract with the jack-up. I mean, is there any change of control where -- you know what I mean? Like is that something where Conoco as the, I guess, customer of that rig. Is there any approval process for them or is that something where -- I'm just kind of curious.

Do they have any input into the potential whatever segment and potentially where that rig goes in the event that Seadrill decides to have its Company deeply sold?

[Aksel Olesen, Chief Financial Officer]

I cannot talk for [Indiscernible] River that is also working for common core. But the concept on our rig and our relationship with Seadrill, [Indiscernible] equate back on their agreement at the cell house. That's basically ten suspects in right Into that contract, not to be unreasonably withheld pro forma comical.

And I think if you look and the operations of the rig is kind of it's more part of the infrastructure of the Ekofisk field, which has a long lifetime. So we believe there's interest from Conoco to keep that rig [Indiscernible]. That will have to be addressed if and when such situation occurs.

[Gregory Lewis, BTIG]

Okay. Thank you very much for that. Have a great day.

[Ole Hjertaker, Chief Executive Officer]

Thank you.

[Operator]

And we are taking our next question from the line of Liam Burke at B. Riley.

[Liam Burke, B. Riley]

Yes, thank you. On the press release, you have a capital requirement of 670 million on the acquired vessels plus newbuilds. Understanding you're taking delivery on third quarter on the existing vessels and then the new build delivery is 2024. Could you give us a sense of timing of how that outlay of 670 million would go?

[Ole Hjertaker, Chief Executive Officer]

Yes. Absolutely. I mean, we have the new buildings sold the new buildings free with that CapEx. I mean, there's some called [Indiscernible] refunding. And then the bulk maturity on delivery on the five vessels that some have been delivered and some are in the process of being delivered. I mean, financing has been secured.

Basically, with the combination of cold cash at hand and also senior bank financing at very attractive terms. So that's all secured. We've experienced a tremendous interest from financing institution based on the high quality of assets, but also high-quality counterparties on the other side. So that's of course, it's very encouraging to see. And basically, addressed in full.

[Liam Burke, B. Riley]

Okay. And you mentioned you've got additional deals that you're looking at. Would that be primarily in the container space or are you looking across the board to your entire fleet?

[Ole Hjertaker, Chief Executive Officer]

Now, we are segment diagnostic. So we look at opportunities across the board in several shipping quality sectors. We think this is a really important distinction from many other maritime companies who are focused on one single segment and therefore, it's looked into investing there.

What we have seen over time is that typically it's at the peak of the markets that the equity market is open and when banks will lead you the most money. And therefore, if you are in one single segment, you're almost program to invest the bulk of your capital, maybe at the sub-optimal time.

So what we try to look at. We look at multiple segments at the time and we evaluate risk rewards and mark dynamics within the segments and we compare them to each other. So, you can say it's a coincidence, we've done -- we've done

[Liam Burke, B. Riley]

mainly over the last couple of months. We've done mainly container ships and car carriers, which both liner type assets, but still very different market dynamics where one segment has boomed a lot and the other has strengthened, but not the -- but differently than the container side.

At the same time, we also see many opportunities in other sectors where there has been less activity. So we'll -- we're about to say we are optimistic and our mindset is that we look at diversified in both asset types and counterparties. And therefore, we're not only focused on the container side. Great. Thank you very much.

[Ole Hjertaker, Chief Executive Officer]

Thank you.

[Operator]

Thank you. There are no further questions on the line. Please continue.

[Ole Hjertaker, Chief Executive Officer]

Thank you. Then I would like to thank everyone for participating in our second quarter conference call and also thank the CFO team on board the vessel and ensure for their continuing efforts a in time with continued operational disruption caused by the COVID -19 situation. If you have any follow-up questions, there are contact details in the press release or you can get in touch with us through the contact pages in our web pages [Indiscernible]. Thank you.

[Operator]

That concludes our conference for today. Thank you for participating. You may all disconnect.