SFL · SFL Corporation Ltd.

SFL Corporation Ltd. reported solid preliminary Q1 2026 results with total GAAP operating revenues of $174.5 million, slightly below prior quarter's $175.5 million but driven by strong contributions across segments: containers at $81 million with 99% utilization, car carriers $26 million at 100%, tankers $46 million at 100%, bulkers $2 million, and energy $23 million. Adjusted EBITDA reached $108 million, bolstered by $8 million from associates, reflecting robust cash generation before interest and capex. Net income of $26.1 million ($0.20/share) marked a turnaround from Q4 2025 loss, aided by a $11.5 million gain on Suezmax tanker SFL Thelon sale, $2.5 million hedging gains, and $1.9 million equity investment mark-to-market positives, offsetting depreciation and interest expenses. Gross charter hire totaled $177 million including $1.3 million profit share, with spot market strength from Suezmax tankers averaging $54,000 TCE daily. The board raised the dividend to $0.22/share, the 89th consecutive quarterly payout, signaling confidence in cash flows. Balance sheet remains strong with $128 million cash, $160 million undrawn credit (total liquidity $288 million), despite higher current debt post-refinancings. Key strategic moves included a $170 million 400-day drilling contract for Hercules rig with investment-grade oil major starting Q1 2027, and $250 million rig refinancings (Linus $150M term loan, Hercules $100M revolver, undrawn). Post-quarter $75 million bond tap at 103.5% raised $77.6 million (6.8% YTM). Backlog of $3.7 billion (6.3 years remaining, 68% investment-grade) underpins visibility, with 5 newbuild containers ($850M capex) set for 2028 delivery on 10-year charters. Director Klepsland's resignation shrinks board to six without issues, while renewed $100M buyback, DRIP, and ATM programs enhance capital flexibility amid $21M upgrade capex.