SFL Corporation Ltd. (NYSE:SFL) Q3 2023 Earnings Conference Call November 8, 2023 8:30 AM ET

Company Participants

Ole Hjertaker - Chief Executive Officer

Trym Sjølie - Chief Operating Officer

Aksel Olesen - Chief Financial Officer

Conference Call Participants

Richard Diamond - Castlewood Capital

Unidentified Company Representative

Welcome to SFL's Third Quarter 2023 Conference Call. My name is [indiscernible] and I'm an analyst in SFL.

Our CEO, Ole Hjertaker will start the call by briefly going through the highlights of the quarter. Following that our Chief Operating Officer, Trym Sjølie will comment on vessel performance matters before our CFO, Aksel Olesen will take us through the financials. The call will be concluded by opening up for questions and I will explain the procedure to do so before 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 US 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 our operating results and our financial condition.

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

Ole Hjertaker

Thank you, [indiscernible]. The charter revenues were $214 million in the quarter, which is up 23% from the previous quarter, primarily due to the drilling rig Hercules now back in service. The EBITDA equivalent cash flow in the quarter was approximately $130 million, which was also higher than the second quarter and over the last 12 months the EBITDA equivalent cash flow has been $485 million in total.

The net income came in at around $29 million in the quarter or $0.23 per share. The net income was impacted by some one-off items in the quarter including gains on a vessel sale in the third quarter and some mark-to-market effects. This was offset by two tankers that were dried up in the quarter and an unscheduled of fire of around 14 days on the jack-up rig lines due to repair works on the top drive with associated higher OpEx in the quarter.