What SFL (SFL) Said on Its Q3 Earnings Call

Key Points

• SFL reported Q3 net income of $37 million ($0.26 per share), revenue of $202 million and adjusted EBITDA of about $122 million, and declared a $0.22-per-share dividend—its 91st consecutive quarterly payout.
• New and extended charters added more than $1.6 billion to the company’s backlog this year, bringing it to approximately $5 billion. Major deals include seven-year extensions for six Hapag-Lloyd vessels and long-term charters for new container ships and ammonia carriers.
• SFL expects about $275 million in net proceeds from selling seven tankers, while spot-market rates for two Suezmax tankers surged in early Q4. Operating expenses rose to about $85 million, largely due to preparations for the Hercules rig’s 2027 contract.

SFL NYSE: SFL reported third-quarter 2026 net income of $37 million and declared a $0.22-per-share dividend as new and extended vessel charters lifted its fixed-rate backlog to approximately $5 billion.

The maritime asset owner reported revenue of $202 million and adjusted EBITDA of approximately $122 million. Net income was $0.26 per share, up from $34 million, or $0.25 per share, in the previous quarter. Results included non-cash gains of approximately $13.3 million on derivatives and $1 million on equity investments.

Chief Financial Officer Aksel Olesen said the dividend was SFL’s 91st consecutive quarterly cash payout. CEO Ole Hjertaker said the company has returned nearly $33 per share, or more than $3 billion in total, to shareholders since 2004.

Charter deals expand backlog

SFL has added more than $1.6 billion to its charter backlog so far this year, Olesen said. Chief Operating Officer Trym Sjølie said container vessels account for about 71% of the approximately $5 billion total, followed by car carriers at 11%, drilling rigs at 7%, and gas carriers and tankers at roughly 5% each.

About 58% of contracted revenue is with investment-grade counterparties, Sjølie said. Hjertaker said nearly 80% of the backlog is covered when including a customer rated one notch below investment grade.

Among the recent agreements, SFL extended charters with Hapag-Lloyd for six container vessels by seven years, adding approximately $750 million to fixed-rate backlog. The vessels are now chartered until 2035 and 2036.

The company also agreed to acquire two 8,800-TEU container vessels for around $256 million, with eight-year firm charters to an existing investment-grade customer. The vessels are scheduled for delivery in 2027, and the deal adds around $250 million to backlog, Hjertaker said.

SFL ordered three ammonia carriers for an expected aggregate construction cost of approximately $336 million. The vessels, scheduled for delivery in the second and third quarters of 2028, have long-term charters that add around $250 million to fixed-rate backlog. Hjertaker said the initial charter duration for two vessels will be determined within six months and could increase the backlog.

The company also announced four newbuild car carriers at the beginning of the third quarter. Charters for two added $150 million to backlog, potentially rising to $300 million if options are exercised. The other two remain without charters and are due for delivery in 2029.

Tanker sales and spot market gains

SFL expects approximately $275 million in net cash proceeds from the sale of seven tankers that have been on charter to Trafigura, after profit-share obligations and associated debt repayments. Olesen said the company expects an aggregate book gain of approximately $175 million as the vessels are delivered to buyers during the fourth and first quarters.

Two Suezmax tankers trading in the spot market earned an average of around $80,000 per day in the third quarter, Hjertaker said. So far in the fourth quarter, approximately two-thirds of their vessel days had been covered at an average rate exceeding $200,000 per day. He cautioned that reported revenue would depend on trading through the end of the quarter because voyage revenue is recognized when cargo is on board.

SFL has since chartered one of the vessels to an investment-grade oil major for three years. Hjertaker said during the question-and-answer session that the company plans to keep the other in the spot market for now, while leaving open the possibility of a longer-term charter later.

Rig preparation weighs on expenses

Operating expenses rose to approximately $85 million from $74 million in the previous quarter, largely because of preparations for the Hercules drilling rig’s contract with Suncor in Canada, higher voyage expenses and scheduled dry dockings, Olesen said. Hercules generated no revenue in the third quarter and is expected to begin its roughly 400-day campaign in March 2027.

Adjusted EBITDA fell from $130 million in the previous quarter. Olesen said the company expects elevated rig operating expenses in the fourth and first quarters as preparations continue.

SFL ended the quarter with approximately $112 million in cash and $160 million available under undrawn credit facilities. Remaining newbuilding capital commitments total approximately $1.7 billion, which Olesen said the company expects to fund through existing cash and primarily pre- and post-delivery credit facilities.

About SFL (NYSE:SFL)

SFL Corporation Ltd. is a maritime and offshore asset-owning company headquartered in Hamilton, Bermuda, and listed on the New York Stock Exchange under the symbol SFL. Formerly known as Ship Finance International Limited, the company was established in 2003 and has developed a diversified portfolio of vessels and offshore assets.

The company primarily acquires, owns and leases assets under long-term charter and lease agreements. Its portfolio has included crude oil and product tankers, dry bulk carriers, container ships, car carriers, offshore drilling units and other specialized maritime assets.

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