SFL Corporation Ltd

NYSE:SFL

Earnings Call Analysis

SFL Corporation Celebrates 20 Years of Profit

Under CEO Ole Hjertaker, SFL Corporation marks 20 years of profitability and dividends, upping its quarterly dividend to $0.26 per share—an increase from $0.25. SFL's consistent performance is mirrored in their long-term charters, such as the new dual-fuel Car Carriers, which are expected to contribute to cash flow from the second quarter. The Hercules rig discovered significant oil for Galp Energia, promising higher drilling revenues. With an $3.2 billion backlog and a nearly 9% yield, SFL is poised to maintain its unique record of dividends since its 2004 inception.

Celebrating 20 Years of Profitability and Dividends

SFL Corporation's CEO, Ole Hjertaker, opened with a note of celebration, marking 20 years of consistent profitability for the company, coupled with dividend payments to shareholders. This track record was further solidified by the announcement of another dividend increase.

Steady Performance with Prospects of Growth

SFL disclosed that charter revenues and EBITDA have been maintained at a similar level to the previous quarter. The delivery of three new dual-fuel Car Carriers is set to bolster cash flow from the second quarter onwards, pointing to potential revenue growth and efficiency gains.

Significant Oil Discovery Boosting Drilling Revenues

The company shared a notable development with the drilling rig Hercules making a significant oil discovery in Namibia, which is expected to enhance drilling revenues starting from the first quarter. This discovery, made by their customer Galp Energia, is a promising event that may positively impact the company's financials.

Dividend Increase Demonstrates Shareholder Commitment

Reaffirming their commitment to shareholder value, SFL Corporation announced an increase in the quarterly dividend to $0.26 per share, up from $0.25 per share in the third quarter. This enhancement showcases the company's confidence in its financial stability and rewarding shareholder loyalty.

Unique Maritime Infrastructure with Diversified Fleet

Hjertaker described SFL as having a 'unique profile' as a maritime infrastructure company, attributing its success to a diversified fleet. This strategy has enabled profitability and consistent dividend payments every quarter since the company's inception in 2004, distinguishing SFL within the industry.

Robust Dividend Yield and Backlog Support Long-term Prospects

The CEO pointed out that the most recently announced dividend corresponds to a yield of nearly 9%, which is significant for investors. Moreover, the company's substantial backlog, valued at $3.2 billion, underpins its capacity to sustain long-term dividend payments, offering a clear sign of financial robustness and future continuity.

Earnings Call Transcript 2023-Q4

[Ole Hjertaker, executive]

My name is Ole Hjertaker, and I am the CEO in SFL Corporation. We are very proud to celebrate 20 years of profitability and dividends and it should come as no surprise that we increased the dividend again.

There will be an earnings webcast at 10 a.m. Eastern Time or 4 p.m. Central European Time. Please check our website for details.

The charter revenues and EBITDA was in line with the previous quarter as our assets continue to deform on long-term charters. We have now taken delivery of 3 new built dual-fuel Car Carriers and will have full cash flow effect on all from the second quarter onwards.

The drilling rig Hercules arrived in Namibia during the quarter. And since then, it has made a significant oil discovery for our customer, Galp Energia. We do expect increased drilling revenues from the rig in the first quarter.

And in line with the improved results and commitment to return value to shareholders, we are increasing the quarterly dividend to $0.26 per share, up from $0.25 per share in the third quarter. So to sum it up, we are now celebrating our 80th dividend and have a unique profile as a maritime infrastructure company with a diversified fleet. This has enabled us to be profitable from operations and pay dividends every single quarter since inception in 2004, which is quite unique in our industry.

The announced $0.26 dividend represent a dividend yield of nearly 9% and our $3.2 billion backlog should support continued long-term dividend capacity. You will find the link to access the earnings webcast in a press release on our website. Thank you.