SFL (SFL) Q1 2025 earnings summary

Executive summary

• Reported Q1 2025 revenue of $193 million and adjusted EBITDA of $116 million, with a net loss of $32 million or $0.24 per share, mainly due to $34 million in vessel impairments and idle rig costs.

• Declared 85th consecutive quarterly dividend of $0.27 per share, representing a 13% yield, with over $2.8 billion returned to shareholders to date.

• Executed $10 million in share buybacks during recent market softness at an average price of $7.98 per share.

• Maintains a $4.2 billion contracted revenue backlog, with over two-thirds contracted to investment grade counterparties, providing strong cash flow visibility.

• Strong balance sheet with $174 million in cash and $48 million in undrawn credit lines at quarter end.

Financial highlights

• Q1 net loss of $31.9 million or $0.24 per share, compared to a net profit of $20.2 million in Q4, driven by $34 million vessel impairments.

• Adjusted EBITDA of $116 million, down from $132 million in the previous quarter.

• Total operating revenues of $187 million, with gross charter hire received of $193.5 million.

• Vessel operating expenses totaled $58 million, including $10 million for drydocking; rig operating expenses were $18 million.

• Book equity ratio stood at 26% as of March 31, 2025.

Outlook and guidance

• $4.2 billion contracted backlog provides revenue visibility in volatile markets.

• Ongoing fleet renewal through disposal of older, non-strategic assets and upgrades to improve efficiency and reduce emissions.

• Market volatility and oil price swings have delayed new contracts for the Hercules rig, impacting near-term results.

• Ongoing vessel upgrades expected to reduce fuel consumption per container by ~20% and support higher charter rates.

• May reassess long-term distribution capacity depending on timing of new rig employment.