UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2025
Commission File Number: 001-32199
SFL Corporation Ltd.
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(Translation of registrant's name into English)
Par-la-Ville Place
14 Par-la-Ville Road
Hamilton, HM 08, Bermuda
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F [ X ] Form 40-F [ ]
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached hereto is a copy of the press release of SFL Corporation Ltd. ("SFL" or the "Company"), dated May 14, 2025, announcing preliminary financial results for the quarter ended March 31, 2025.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SFL Corporation Ltd. | |||||||||||
| Date: May 14, 2025 | By: | /s/ Ole B. Hjertaker | |||||||||
| Name: | Ole B. Hjertaker | ||||||||||
| Title: | SFL Management AS | ||||||||||
| (Principal Executive Officer) | |||||||||||
Preliminary Earnings Release
Q1 2025
SFL Corporation Ltd.
Preliminary Q1 2025 results and quarterly cash dividend of $0.27 per share
Hamilton, Bermuda, May 14, 2025, SFL Corporation Ltd. (“SFL” or the “Company”) today announced its preliminary financial results for the quarter ended March 31, 2025.
Highlights
•85th consecutive quarterly dividend declared, $0.27 per share
•Net loss of $31.9 million, or $0.24 per share in the first quarter, after impairments relating to older drybulk vessels
•Received charter hire1 of $193.5 million in the quarter, including $1.5 million of profit share
•Adjusted EBITDA2 of $108.0 million from consolidated subsidiaries, plus $7.7 million adjusted EBITDA2 from associated companies
•$10 million share buyback at an average price of $7.98 per share
•Fleet renewal continues with the sale of older dry bulk vessels and containerships
Ole B. Hjertaker, CEO of SFL Management AS, said in a comment:
«The first quarter result was impacted by several one-off items, including impairments on some older drybulk vessels traded in the spot market, and also the drilling rig Hercules being idle in the quarter. The rest of the portfolio is performing very well, and we have upgraded several vessels in the quarter, boosting both cargo intake and fuel efficiency in connection with charter extensions at higher rates than before.
We continue to renew our fleet and have recently agreed to divest some older bulkers and containerships traded in the spot market. Our focus remains on assets with charter backlog supporting our long term dividend distribution capacity. In addition, we have been actively repurchasing shares in the recent market softness, as part of our overall capital allocation strategy with the aim to maximize long term distribution capacity per share.»
Quarterly Dividend
The Board of Directors has declared a quarterly cash dividend of $0.27 per share. The dividend will be paid on or around June 27, 2025. The record date and ex-dividend date on the New York Stock Exchange will be June 12, 2025.
Results for the Quarter ended March 31, 2025
The Company reported total U.S. GAAP operating revenues on a consolidated basis of approximately $186.7 million in the first quarter of 2025. This figure is lower than the cash received as it excludes approximately $9.7 million of charter hire which is not classified as operating revenues pursuant to U.S. GAAP. This comprises of ‘repayment of investment in sales-type assets’ and gross charter hire from entities classified as ‘investment in associates’ for accounting purposes.
1 Charter hire represents the amounts billable in the period by the Company and its associates for chartering out vessels and rigs. This is mainly the contracted daily rate multiplied by the number of chargeable days plus any additional billable income, including profit share and attributable mobilization fees, if any. Long term charter hire relates to contracts undertaken for a period greater than one year. Short term charter hire relates to contracts undertaken for a period less than one year, including voyage charters.
2 ‘Adjusted EBITDA’ is a non-U.S. GAAP measure. It represents cash receipts from operating activities before net interest and capital payments.
The net result in the first quarter was also impacted by non-recurring or non-cash items, including vessel impairments of $34.1 million relating to seven dry bulk vessels trading in the spot market, net negative mark-to-market effects from swaps of $1.8 million, negative mark-to-market effects from equity investments of $0.4 million, and a decrease of $0.2 million in credit loss provisions.
There were also a number of vessels in scheduled drydock in the quarter, and drydocking expenses for ships are being expensed when incurred. Furthermore, the vessels are out of service during the drydock period, reducing revenues temporarily.
Reported net loss pursuant to U.S. GAAP for the quarter was $31.9 million, or $0.24 per share.
Business Update
As of March 31, 2025 the estimated fixed rate charter backlog3 from the Company’s fleet of 79 wholly or partly owned vessels and newbuildings under construction was approximately $4.2 billion with a weighted remaining charter term of 6.7 years. Furthermore, approximately 68% of the fixed rate charter backlog is to customers with an investment grade credit rating, illustrating the strength of our charter portfolio.
Some of the charters include purchase options which, if exercised, may reduce the fixed rate charter backlog and the average remaining charter term, but will increase capital available for new investments. Additionally, several charters include profit sharing features that may improve SFL’s operating results.
The majority of our vessels are employed on time charter contracts where SFL is responsible for technical, operational, and commercial management. In addition, some vessels are employed on bareboat charters where the Company’s customers are responsible for these services.
During the quarter, the Company’s fleet generated gross charter hire4 of $193.5 million, including $1.5 million of profit share.
Container
SFL has a container fleet of 38 vessels, including five vessels on order. The container fleet generated approximately $85.0 million of charter hire in the quarter, including profit share from fuel savings.
The Company has agreed to sell the 2005-built 1,700 teu container vessel Asian Ace for approximately $9.5 million, with expected delivery to the buyer in May. The vessel is debt free, and a gain of approximately $4.3 million is expected to be recorded in the second quarter.
Seven older containerships on bareboat charter to MSC will be redelivered to MSC at the end of the second quarter pursuant to the chartering agreement. We expect approximately $4.5 million positive liquidity effect after repayment of associated debt.
Car carrier
SFL has a car carrier fleet of seven vessels. All the vessels are chartered out on long term time charters, and generated approximately $25.2 million of charter hire in the quarter, including profit share from fuel savings.
3 Fixed rate backlog as of December 31, 2024 includes fully owned vessels, rigs and 100 % of four partially owned 19,000 teu container vessels, which SFL also manages. It also includes subsequent transactions. The backlog excludes charterers’ extension options and purchase options (if applicable).
4 Charter hire represents the amounts billable in the period by the Company and its associates for chartering out vessels and rigs. This is mainly the contracted daily rate multiplied by the number of chargeable days plus any additional billable income, including profit share and attributable mobilization fees, if any. Long term charter hire relates to contracts undertaken for a period greater than one year. Short term charter hire relates to contracts undertaken for a period less than one year, including voyage charters.
Tanker
SFL has a fleet of 18 crude oil, product, and chemical tankers. Most of the vessels are chartered out on long term time charters. The vessels generated approximately $42.7 million of charter hire during the quarter.
Dry Bulk
The Company had 15 dry bulk carriers which generated approximately $18.2 million of gross charter hire in the quarter.
Seven dry bulk vessels, comprising of five supramax and two kamsarmax bulkers, have been employed in the spot and short term charter market for several years. We have recently sold one of the vessels, a 2010-built supramax bulker, and have agreed to sell a 2011-built supramax bulker with expected delivery in the second quarter. Aggregate sales price for the two vessels is approximately $21 million, and the vessels were debt free at quarter end.
The book value of the spot traded vessels is higher than the current market values, and we have recorded an aggregate impairment of $34.1 million in the first quarter. As a consequence, asset depreciation will also be reduced going forward.
As previously reported, our eight capesize bulk carriers will be redelivered to Golden Ocean in the beginning of the third quarter pursuant to the chartering agreement. We expect approximately $50 million positive liquidity effect after repayment of associated debt.
Energy
SFL owns two harsh environment drilling rigs, the large jack-up rig Linus and the ultra-deepwater semi-submersible rig Hercules. The rigs generated approximately $22.4 million of charter hire in the quarter.
Linus is under a long term contract with ConocoPhillips in Norway until May 2029 and Hercules is currently warm-stacked in Norway pending new drilling contracts.
Financing and Capital Expenditure
As of March 31, 2025, SFL carried approximately $174 million of cash and cash equivalents on its balance sheet, with an additional $48 million available under undrawn credit lines, totalling approximately $222 million of available liquidity. The Company also had unencumbered vessels and marketable securities with a combined market value of approximately $190 million at quarter end.
During the first quarter, SFL issued a $150 million senior unsecured, sustainability-linked bond with a coupon of 7.75% that will mature in 2030. Also during the quarter, the Company made extraordinary repayments on debt of a total of $47 million, which included extinguishing three financing facilities that would come to maturity.
The Company currently has five 16,800 teu container vessels under construction with scheduled delivery in 2028 and a remaining capital expenditure of approximately $850 million. These remaining yard instalments are due closer to delivery and expected to be financed by pre- and post-delivery credit facilities.
As of the end of the quarter, the Company also had $35 million in remaining capital expenditures relating to efficiency upgrades on existing assets, primarily container vessels.
Corporate and other matters
In February 2025, there was a ruling in Oslo District Court in favor of an SFL rig owning subsidiary where subsidiaries of Seadrill Ltd. (“Seadrill”) were ordered to pay an amount equivalent to a total of approximately $48 million in compensation, including late payment interest and legal costs. The ruling has been appealed by Seadrill.
In a separate ruling from the Oslo District Court from April this year, an SFL rig owning subsidiary was fully acquitted and awarded legal costs in a case where Seadrill had sued in connection with certain capital spares acquired in connection with the redelivery of the Hercules rig. This verdict may still be appealed by Seadrill.
The Company’s Board of Directors has authorized the repurchase of up to an aggregate of $100 million of the Company's common shares from time to time, valid until June 2026. So far this year, the Company has utilized approximately $10 million at an average price of $7.98 per share, and approximately $80 million is remaining under the program.
The Company also has dividend reinvestment (“DRIP”) and “at the market” (“ATM”) offering programs, pursuant to which it may sell up to 10 million and $100 million of its common shares, respectively, from time to time.
Any of the above referenced transactions, including sale or repurchase of shares will be at the discretion of the Company and the timing, including the amount of any sale or repurchase of shares (as applicable), will depend on, among other things, legal requirements, market conditions, stock price, alternative uses of capital, capital availability, and other factors. SFL is not obligated under the terms of any board authorization, including in respect of the ATM, DRIP or share repurchase program, to issue, sell or repurchase any number of shares and the foregoing may be amended, suspended or reinstated at any time at the Company's discretion and without further notice.
Strategy and Outlook
SFL’s business model is to own and operate modern maritime assets in combination with long term charters to high quality companies in multiple end markets. Owning a diversified portfolio of vessels on long term charters provide high earnings visibility, lower residual value risk and decreases the concentration risk to individual shipping markets. This has become apparent in the past few months where market volatility has had a negligible impact on earnings and cash flow from our core shipping