Q1 2024 SFL Corp Ltd Earnings Call
It will take us through the downturn.
Comprehensively complete opening.
Speaker Change: Christian will explain the procedure.
Speaker Change: To do so prior to the Q&A session.
Unknown Executive: Our CFO, Aksel Olesen, will take us through the financials. The conference call will be completely open to questions, and I will explain the procedure to do so prior to the Q&A session. Before I begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the U.S. 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.
Speaker Change: Before we begin presentation I want to note that this conference call will contain forward looking stance with meaning of the U S. Private Securities Litigation Reform Act of 95.
Christian: Words, such as expects and Intel.
Christian: Intense.
Christian: Research professionals are intended to identify these forward looking statements.
Unknown Executive: 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 a forward-looking statement. Important factors that could cause actual results in the green boost are not limited to conditions in the shipping, offshore, and credit market. You should therefore not place underlines on these forward statements.
Speaker Change: Forward looking statements on guarantees of future performance. These statements are based on our current plans.
Speaker Change: <unk> and are inherently subject to risks and uncertainties could.
Speaker Change: Could cause future activities and results.
Speaker Change: Operation to be materially different from any forward looking statements.
Speaker Change: Important factors that could cause actual results to dream.
Speaker Change: Limited.
Speaker Change: On this in the shipping offshore and credit markets.
Unknown Executive: Please refer to our filings with 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 conditions. Then I will leave the word over to our CEO, Ole Hjertaker, with highlights for the first quarter. Thank you, Sander.
Speaker Change: You should therefore not place undue reliance on these forward looking statements.
Speaker Change: Please refer to our filings within the Securities Exchange Commission for a more detailed discussion of risks and uncertainties, which may have a direct bearing on operating results and our financial condition.
Speaker Change: Then I'll leave the word over to our CEO quarterly a decade right.
Ole Bjarte Hjertaker: We are now announcing our 81st dividend and have built a unique profile as a maritime infrastructure company with a diversified fleet. The total charter revenues were $236 million in the quarter, which is up 13% from the previous quarter, primarily due to the delivery of our new car carriers and also increased revenues on the drilling rig Hercules. The EBITDA equivalent cash flow in the quarter was approximately $152 million, which was also significantly higher than the previous quarter. And over the last 12 months, the EBITDA equivalent has been $523 million. The net income came in at around $45 million in the quarter, or $0.36 per share.
Speaker Change: First quarter.
Speaker Change: Thank you.
Speaker Change: We all know and.
Speaker Change: I have built unique profile semi retirement.
CEO: The diverse fleet.
Speaker Change: Total revenues were $236 million.
Speaker Change: Which up 13% from the previous quarter, primarily due to a deliberate over a new car carriers and also increased revenues from the drilling rigs.
EBITDA equivalent cash flow in the quarter.
Speaker Change: Plus approximately $152 million.
Speaker Change: He was also significantly higher than the previous quarter and over the last several months to.
Speaker Change: So that has been from $123 million.
Speaker Change: <unk> came in at around $45 million in the quarter.
Ole Bjarte Hjertaker: We had a positive contribution of 2.2 million relating to profit share on tape size bulkers and 3.3 million relating to fuel cost savings and also some minor one-off items, including 1.8 million mark to market gain on interest rate swaps. In line with the improved results and commitment to return value to our shareholders, we are again increasing our quarterly dividend, and this time to $0.27 per share. We have paid dividends every quarter since our inception in 2004, and this has accumulated to more than $30 per share, or more than $2.7 billion in total.
Speaker Change: <unk> per share.
Speaker Change: We had a positive contribution of $2 2 million related to purchase share on Capesize smokers and $3 3 million relating to fuel both savings and also some minor one off items, including $1 8 million mark to market gains on interest rate swaps.
Speaker Change: In line with the improved results and commitment to return value to our shareholders. We are again, increasing our quarterly dividend at this time.
Speaker Change: Dividends every quarter.
Speaker Change: <unk>.
Speaker Change: Four.
Speaker Change: This has accumulated more than $30 per share or more than.
Ole Bjarte Hjertaker: And we have a robust and increasing charter backlog, supporting continued dividend capacity going forward. Our fixed-rate backlog stands at approximately $3.6 billion, and importantly, the backlog is concentrated on longer charters to very strong users. And I would note that the backlog figure excludes revenues from vessels trading in the short-term market and also excludes revenues from the new dual-fuel chemical carriers that will operate in a pool with store deals. And it also excludes future profit share optionality, which we have seen contribute significantly to our net income.
Speaker Change: $1 billion in total.
John Doe: We have a robust and increasing charter backlog supporting continued dividend capacity going forward.
Speaker Change: Our fixed rate backlog extensive.
Speaker Change: Approximately three $6 billion importantly, the backlog is concentrated on long term charter to very strong.
Speaker Change: And I would note that the backlog.
Speaker Change: Figures exclude revenues from the vessels trading in the short term market and also excludes <unk> revenue.
Speaker Change: They do dual fuel ethical.
Speaker Change: That switch.
Speaker Change: So.
Speaker Change: And it's also exclude future optionality.
Ole Bjarte Hjertaker: We have recently announced several new acquisitions and charters. In March, we announced the acquisition of three new 110,000 deadweight tonne LR2 product tankers for an aggregate purchase price of approximately $230 million, in combination with long-term time charters to a world-leading energy and commodities company. The vessels are currently under construction in China and have a conventional propulsion system with the latest eco-design features. We expect to take delivery of the vessels between June and October this year, and the charter period will be a minimum of five years plus up to three years of extension options. This adds around $200 million to our fixed rate backlog, excluding the optional year.
And contribute significantly to our net income.
Speaker Change: We have recently announced.
Speaker Change: Positions in charters.
Speaker Change: In March we announced the acquisition of <unk> 110000, deadweight ton <unk> two product tankers for an aggregate purchase price of approximately $250 million.
Speaker Change: Inclination.
Speaker Change: Hi, <unk>.
Mortgage company: Mortgage company.
Mortgage company: That is currently under construction in China, and unconventional propulsion system with the latest eco design features.
Speaker Change: We expect to take delivery of the vessels.
Speaker Change: June and October this year.
Speaker Change: Our periods will be minimum.
Speaker Change: Yes.
Speaker Change: The three years of extension options.
Speaker Change: Yes around 200 million to a fixed rate.
Speaker Change: Backlog, excluding optional yes.
Ole Bjarte Hjertaker: The Charter will have options to purchase the vessels after years five and eight, subject to a profit share mechanism with SFL. In April, we announced an agreement to acquire two 33,000 deadweight tonne chemical carriers with LNG dual fuel propulsion systems. The vessels will be built in 2022 and 2023 and fitted with stainless steel cargo tanks. The aggregate purchase price is approximately $115 million. We expect to take delivery of the vessels in July and have arranged long-term employment for the vessels with affiliates of Stolt Tankers, a subsidiary of the world leading chemical logistics company Stolt Nielsen. Both vessels will be employed for a minimum of 8 years, when one vessel will be on a fixed rate time charter and one vessel will be employed in a pool with similar sized vessels.
Speaker Change: The charter will have options to purchase the vessels after year five.
SFA: Sure mechanism with SFA.
Speaker Change: In April we announced agreements to acquire 233000 deadweight chemical carriers.
Speaker Change: LNG.
Speaker Change: Posted.
Speaker Change: That's sort of built into 2022.
Speaker Change: 300.
Speaker Change: Okay.
Speaker Change: Aggregate purchase price was approximately one.
T Mo: T Mo dollars.
Speaker Change: We expect to deliver the vessels in July and we remain long term employment for the vessel the affiliate of bankers.
Speaker Change: A subset of the world's leading logistics company.
Speaker Change: Okay.
Speaker Change: Both vessels will be treated for a minimum of eight one.
Ole Bjarte Hjertaker: The fixed rate vessel has extension options of up to three years, in addition to purchase options after years five and eight, subject to a profit share mechanism with SFL. We have a very close business relationship with Maersk Line and have 17 vessels on long-term orders with them. We recently agreed to extend the choice for three 10,600TU vessels until 2030, and Maersk also emphasized the one-year pre-agreed extension options on three other vessels ranging from 8,700 to 9,500TU.
Speaker Change: So it will be.
Speaker Change: Time charter among muscle.
Speaker Change: When approved similar sized vessels.
Speaker Change: The fixed rate.
Speaker Change: Extension option after three years.
Speaker Change: In addition to purchase options.
Speaker Change: Sorry, Matt.
Speaker Change: A mechanism with <unk>.
Maersk line: We have very low lease relationship with Maersk line and the 17 vessels long promised to them.
Speaker Change: We just agreed to extend charters for three.
Speaker Change: 603, new vessels until.
Ole Bjarte Hjertaker: In addition to this, we have also fixed our 1,700 feeder green ace on a short-term charter to Maersk until late 2024. In aggregate, this adds approximately $250 million to our charter backlog. And in addition, we have a profit share relating to scrubber benefits on some of the vessels that is expected to add additional revenues for us over time. In April, we raised a new $150 million senior unsecured sustainability link in the Nordic market. Maturity will be in the second quarter of 2028, and the coupon is 8.25%.
Speaker Change: And ask also.
Speaker Change: One <unk>.
Speaker Change: We'd beat extension options on the vessels.
Speaker Change: <unk> from 8790 500 <unk>.
Speaker Change: In addition to this.
Speaker Change: Also fake or 700.
Speaker Change: Rebase on short term charters until 'twenty.
Speaker Change: 2024.
Speaker Change: Aggregate adds approximately $250 million per trial.
Speaker Change: In addition, we have a profit share relating to scrubber benefits on some of the vessels.
Speaker Change: Effected to additional revenues for us over time.
Ole Bjarte Hjertaker: Proceeds are for refinancing existing debt for general purposes. As part of the use of this facility, we have repaid a Norwegian Kroner denominated bond loan due in June 2024 with the equivalent of $81 million outstanding at the end of the first quarter. And with that, I will give the word over to our Chief Operating Officer, Trym Sjlie. Thank you all.
Speaker Change: In April we raised a new.
Speaker Change: $150 million unsecured sustainability linked bond in the market.
Speaker Change: Okay.
Speaker Change: It'll be in the second quarter of 2020, and the coupon of 820 <unk>.
Speaker Change: Is that.
Speaker Change: Proceeds are for refinancing existing debt and for general corporate purposes.
Speaker Change: As part of the use of this facility.
Speaker Change: Sweden kronor denominated loan due in June 2024, with the equivalent of <unk>.
Trym Otto Sjlie: Including vessels to be delivered this year, we have 76 maritime assets in our portfolio, and our backlog from owned and managed shipping assets stands at $3.6 billion. The current fleet is made up of 15 five-boat vessels, 34 container ships, 18 bankers, two drilling rigs, and several carriers.
Speaker Change: Men.
Speaker Change: Outstanding in the first.
Speaker Change: First quarter.
Speaker Change: And that gives us comfort towards Chief operating officer.
Speaker Change: Sure.
Speaker Change: Thank you.
Speaker Change: Including those to be delivered this year.
Trym Otto Sjlie: We have a diverse fleet of assets charted out to first class charters and most long-term charters. Container vessels are now a larger segment with just under 50% of the backlog. We have, over the last eight and a year, completely transformed the company operating model, and I've moved away from financing-type variable charters and instead assumed full operating exposure. This makes us relevant for large industrial end users like, Both are dry and wet segments.
Mike: Thanks, Mike in our portfolio.
Speaker Change: Okay.
Speaker Change: Shipping.
Speaker Change: $610.
Mike Smith: Police medical 15 bulk vessels.
Mike Smith: Ships.
Mike Smith: Thanks, Chris.
Speaker Change: Two drilling rigs.
Speaker Change: <unk>.
Chris: We have a diverse fleet of assets charters.
Speaker Change: Charters, most long term toxicities.
Chris: Container vessels is now the largest segment with just under 50.
Trym Otto Sjlie: The two new dual-fuel chemical tankers on time-charter stocks and fuel-with-stock tankers are a recent example of this. In the third quarter, 95% of charter revenues from all assets came from time charter contracts, and only 5% of our votes were our leases. In addition to fees for charter revenues, we've had a significant contribution to cash flow from profit share arrangements, over time flow relating to other rates and savings on fuel. And in Q1, profit split arrangements contributed about $5.5 million. Out of the 76, we have 11, on bareboot contracts at 65 on TimeCharter and Spots.
Speaker Change: Order backlog.
Speaker Change: He went over.
He: <unk> completely transformed company talking months.
Speaker Change: Okay.
Speaker Change: Hi.
Speaker Change: Got it.
Speaker Change: And instead of same store operator.
Speaker Change: It makes it relevant for light industrial end users.
Speaker Change: And for both dry and wet segments the.
Speaker Change: The two new chemical tankers on Sunshine.
Speaker Change: At this.
Sunshine: <unk> is a reason to celebrate.
Speaker Change: In the third quarter.
Speaker Change: Separately revenues from oil assets came from ton of complex.
Speaker Change: Okay.
Speaker Change: Bareboat leases.
Speaker Change: Leases.
Speaker Change: And the phase III charter revenues.
Trym Otto Sjlie: Operations are quite complex on vessels across multiple sectors and have grown commercial operations out of Sloan, operational management out of Singapore and Stavanger. In Q1, we had a total of almost 6,500 operating days, defined as calendar day, less technical or fire, and dry dockings. One vessel has been in dry docking water.
Speaker Change: <unk> contribution to cash flow from profit sharing arrangements.
Speaker Change #100: Both were netting underway and savings from fuel and.
Speaker Change: In Q1.
Speaker Change #101: <unk> contributed.
Speaker Change: $5 million.
Speaker Change: Yes.
Speaker Change: Out of the 7% to six.
Speaker Change: <unk>.
Speaker Change: On April six.
Speaker Change: 65.
Speaker Change: Time charter and spot.
Trym Otto Sjlie: Our overall utilization of the fleet as a whole was 99.5%. Revenue from our fleet was $236 million in Q1, and OPEX for the fleet was $81 million. Our OPEX philosophy is to continuously invest in our fleet to optimize the vessel's performance and maintain a high level of service. This includes increasing the minimum cost as well as investments to increase cargo carrying capacity and reduce energy consumption.
Speaker Change: <unk>.
Speaker Change: Operations, but complex investment across multiple sectors.
Speaker Change: Ron.
Ron: Slow and operational management.
Ron: And finally.
Ron: Q1, we added a total of almost 6500 operating days.
Ron: Calendar day.
Ron: Okay.
Speaker Change: One last quarter.
Ron: Quarter.
Speaker Change: Our overall utilization.
Trym Otto Sjlie: Such investments and cooperation with our charters is important as a way to grow our relationship and increase backlog from existing vessels. As part of our fleet upgrade program, we are working with our main container charters, MERSK and PAPAGLOID, to increase the energy efficiency of our container fleet. With MERSK, we are making investments across the long-term chartered fleet for various energy efficiency measures, including hull and propeller modifications when the vessels are in dry dock. These modifications ensure the vessels remain attractive to charters all the time.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Yeah.
Ron: Revenue from our fleet was $236 million in Q1.
Speaker Change: And I'll pay for that.
Speaker Change: 41 million.
Ron: Okay.
Speaker Change #106: Our opex alone.
Ron: Physically invest in bulk.
Speaker Change: Talked about the vessel's performance among the high level of service.
Speaker Change: Okay. Thank you.
Speaker Change: Okay.
Speaker Change: To increase cargo carrying capacity and reducing energy consumption.
Speaker Change: Okay. Thanks.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Okay.
Trym Otto Sjlie: And as Ole mentioned, we just entered into new five-year time charters of three 10,600 TU container ships with MERS, in which energy efficiency was an important consideration. For the six Hapag-Lloyd vessels, we are investing in energy-saving devices, an improved hull form with a new bulbous bow, new propellers and fittings, anti-fouling paint, and exhaust gas scrubbers. Furthermore, we are boosting the cargo intake up to nominally 15,400 TU by increasing the dead weight and modification to the lashing bridges and lashing gears.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: To increase energy efficiency of our container fleet.
Maersk line: And Maersk, we're making investments across.
Speaker Change: The long term feed for various energy efficiency measures, including holding some modification to the vessels are in drydock.
Maersk line: Modifications ensure the vessels remain attractive to charterers with time.
Maersk line: Yeah.
Trym Otto Sjlie: Two of the vessels have already been upgraded and delivered to Hoppag Lloyd, and we estimate that fuel consumption and emissions per TU carried are down by approximately 20%. And with that, I will give the word over to our CFO, Aksel Olesen, who will take us through the financial highlights of the quarter. Thank you, Trym.
Speaker Change: And as already mentioned, we just entered into new five year term.
Speaker Change: Our 310600 Teu containership burst.
Speaker Change #102: And we can efficiency is an important consideration.
Speaker Change: For the six up alloyed vessels were investing in energy saving devices to help them with new bookings.
Speaker Change #104: Propellers and fittings.
Aksel C. Olesen: On this slide, they've shown a performance illustration of cash flows for the first quarter. Please note that this is only a guideline to assess the company's performance, and it's not in accordance with US GAAP and also net of extraordinary and non-cash items. The company generated gross charter hire revenue of approximately $236 million in the first quarter, with approximately 93% of revenue coming from our fixed chart rate backlog, which currently stands at $3.6 billion, providing us with strong visibility on the cash flow going forward.
Speaker Change: Antifouling paint on <unk> progress.
Speaker Change: Furthermore, we are boosting our cargo and take up nominally 15400 teu by increased debt modification.
Speaker Change #103: Just a lashing gears.
Speaker Change: Two of the vessels.
Speaker Change #105: Already been upgraded undelivered to help at Lloyd and we estimate that fuel consumption and emissions per Teu Harry.
Speaker Change: Down by approximately 20%.
Speaker Change: Okay.
Speaker Change: And with that that will give the word over to our CFO Aksel Olesen, who will take us through the financial highlights of the quarter.
Aksel C. Olesen: On this side of their shown our pro forma illustration of cash flows for the first quarter. Please note that this is on a guideline to assess the company's performance and is not in accordance with U S. GAAP.
Aksel C. Olesen: In the first quarter, the container fleet generated gross charter hire of approximately $90 million, including approximately $3 million in profit share related to fuel savings on some of our large container vessels. With seven car carriers on charter following the delivery of our two remaining dual-fuel LNG car carriers during the quarter, gross charter hire increased to approximately $25 million in the first quarter, compared to approximately $22 million in the fourth quarter. Our tankers on long-term charters generated approximately $30 million in gross charter hire during the first quarter, in line with the previous quarter. The company has 15 drivable car carriers, of which 8 were employed on long-term charters.
Speaker Change: And also net of extraordinary and non cash items.
Speaker Change #108: Continental generated gross charter hire plenty of 236 million in the first quarter approximately 93% of revenues coming from our fixed charter backlog, which currently stands at $3 6 billion.
Speaker Change #109: Strong visibility on our cash flow going forward.
Speaker Change #110: In the first quarter the container fleet generated gross charter hire of approximately $90 million, including approximately $3 million in profit share relates to fuel savings on some of our large container vessels.
Aksel C. Olesen: The vessels generated approximately $24 million in gross charter hire in the first quarter, including approximately $2 million in profit share generated from our 8 Cape Sussex vessels on charter to Golden Ocean. Seven of these vessels were employed in the spot and short-term market and contributed approximately $6.5 million in net charter hire compared to approximately $7.3 million in the previous quarter. SFL owns two modern harsh environment-driven rigs, the large stack-up liners and the semi-submersible ultra-deepwater rig Hercules.
Speaker Change #110: It's seven car carriers on charter following the delivery of our two remaining <unk> LNG carriers during the quarter.
Speaker Change #111: We'll start to higher increased to approximately $25 million in the quarter compared to approximately $22 million in the fourth quarter.
Speaker Change #111: Congress on long term charters generated approximately $30 million and gross truck during the first quarter in line with the previous quarter.
Speaker Change #110: The Compton assistant Drybulk car carriers, no dry bulk carriers with atria employed.
Speaker Change: Margaret.
Speaker Change #117: The vessels generated approximately seven 4 million and gross charter hire in the first quarter, including approximately $2 million of its shares generated from our eight capesize vessels on charter to the motion.
Aksel C. Olesen: During the first quarter, the rigs generated approximately $66.5 million in contract revenues compared to approximately $45 million in the fourth quarter. During the quarter, Lion's revenue was approximately $19.6 million compared to approximately $19 million in the previous quarter.
Speaker Change #107: Seven of these vessels were employed in the spot and short term market and contributed approximately $6 5 million in net charter hire compared to $7 3 million in the previous quarter.
Aksel C. Olesen: The rig is currently at the yard in Norway for its 10-year special periodic survey, with an estimated net capital expenditure of approximately $13 million. In connection with the SPS, we expect the rig to be off-fire for approximately five weeks. In the first quarter, Perkles was on a contract with Galp Energia in Namibia, recording approximately 47 million in revenue, compared to 26 million in the previous quarter, and half of the quarter was spent in mobilization mode.
Speaker Change #115: As the film to modern harsh environment drilling rigs the largest active blindness in the semi submersible ultra deepwater rig currently.
Speaker Change #116: During the first quarter.
Speaker Change #124: Approximately $66 5 million and contract revenues compared to approximately $45 million in the fourth quarter.
Speaker Change #107: During the quarter license revenue was approximately $19 6 million compared to approximately $19 million in the previous quarter.
Aksel C. Olesen: The rig is currently mobilizing to Canada for a contract with Equinor, and on the U.S. gap, mobilization fees and costs are deferred and amortized over the course of the contract. SFL is accordingly expecting to record lower income and costs on Perkles in the second quarter.
Speaker Change #113: It's currently at the yard in Norway with tenants.
Speaker Change #125: The Arctic survey with an estimated net capital expenditure of approximately $13 million.
Speaker Change #121: In connection with this we expected <unk> to be offline for approximately five weeks.
Aksel C. Olesen: Our operating and G&A expenses for the quarter were $85 million, compared to $80 million in the fourth quarter after Hercules won the contract for the full quarter. This summarizes to an adjusted dividend of approximately 152 million compared to 132 million in the previous order. We then move on to the Profit and Loss Statement as reported by the U.S. Bank.
Speaker Change #126: In the first quarter purchases.
Speaker Change #122: Contract with golf on the Gi in Namibia, According approximately $47 million of revenue compared with $26 million in previous quarter and half.
Speaker Change #118: Third quarter and mobilization mode.
Speaker Change #107: The biggest trend marvellous mobilizing Canada per contract, we think the norm.
Speaker Change #114: The U S GAAP will recession fees and costs are deferred and amortized over the course of the contract.
Aksel C. Olesen: As we have described in previous earnings calls, our accounting statements are different from those of a traditional shipping company because our business strategy focuses on long-term charter contracts. A large part of our activities are classified as capital leasing. Therefore, a portion of our charter revenues are excluded from US GAAP operating revenues. This includes repayment of investment in sales tax, direct financing leases and leaseback assets, and revenue from entities classified as investment associates for accounting purposes.
Speaker Change #120: As opposed accordingly, expecting to record lower income and costs when I heard this.
Speaker Change #120: In the second quarter.
Speaker Change #114: Our operating and G&A expenses for the quarter was $85 million.
Speaker Change #119: To $80 million in the fourth quarter. After this one contract for <unk> for.
Speaker Change #123: This summarizes the.
Speaker Change #123: Approximately $152 million.
Speaker Change #123: Yeah.
Speaker Change #127: So $2 million in accretive this okay.
Speaker Change #128: We then move on to the profit and loss statement as reported under U S.
Aksel C. Olesen: So the first quarter's total operating revenues according to US GAAP of approximately $229 million, which is less than approximately $236 million of charter hire actually received for reasons just mentioned. During the quarter, the company recorded profit-sharing income of approximately 5.5 million from fuel savings for large container vessels, a car carrier, and eight capsized dry bulk vessels on charter to Golden Ocean. On the financial items, we have positive non-cash market-to-market effects from swaps of approximately 1.8 million, negative market-to-market effects from equity investments of approximately 400,000, and an increase of approximately 100,000 on the credit loss provision.
Speaker Change #127: Okay.
Speaker Change #129: As we have described in previous earnings calls for accounting statements are different from those of a traditional shipping company.
Speaker Change #134: Our business strategy focuses on long term charter contract.
Speaker Change #130: A large part of our activities are classified as capital leasing therefore, a portion of our charter revenues are excluded from us.
Speaker Change #131: GAAP operating revenues I think as repayment of investment in sales type.
Speaker Change #132: Nancy leaders like assets and Randy from entities.
Speaker Change #133: If I have this investment in associates for accounting purposes.
Nancy: Through the first quarter report total operating revenues. According to U S. GAAP, approximately $229 million, which is less than that to the $236 million of charter hire actually received.
Aksel C. Olesen: Furthermore, we had an increase in tax-linked operations of the Hurt List in Namibia. So overall, and according to US GAAP, the company reported a net profit of approximately $45.3 million, or $0.36 per share, compared to approximately $31.4 million, or $0.25 per share, in the previous four. Moving on to the balance sheet, at quarter end, SFL had approximately $168 million of cash-to-cash equivalents.
Speaker Change #133: And as just mentioned.
Speaker Change #135: During the quarter. The company recorded a profit share of income of approximately $5 5 million from fuel savings.
Speaker Change #135: For large panel vessels.
Speaker Change #135: Our core carrier alright keeps us public vessels on charter to Golden Ocean.
Speaker Change #136: On the financial items positive noncash mark to market effects from swaps are appropriate.
Speaker Change #136: $8 million.
Speaker Change #137: Negative mark to market fix from equity investments of approximately 400000.
Speaker Change #138: <unk> increased approximately upon the tough.
Aksel C. Olesen: Furthermore, the company has marketable securities of approximately $5.1 million, in addition to debt-free vessels with an estimated market value of more than $100 million. In terms of CapEx commitments, we have recently acquired five tankers with a total CapEx of approximately 340 million, of which we expect approximately 240 million to be financed with senior bank financing. In addition, our horse environment, Dacca Brig Linus, is scheduled to undergo its 10-year STPS with an estimated net capital expenditure of approximately 30 million.
Speaker Change #139: Visit observations.
Speaker Change #139: Furthermore, we have an increase in tax linked operations.
Speaker Change #140: And let me backup.
Speaker Change #141: And according to U S GAAP.
Speaker Change #142: <unk> reported a net profit of approximately $5 3 million with 30 <unk> sure.
Speaker Change #142: Petrobras estimate to $31 4 million or 25 cents per share in the previous quarter.
Speaker Change #142: Okay.
Speaker Change #143: Moving onto the balance sheet.
Speaker Change #143: At quarter end.
Speaker Change #144: Approximately $168 million.
Speaker Change #144: Okay.
Speaker Change #144: <unk>.
Speaker Change #145: Furthermore, the comp and marketable securities of approximately $5 1 million. In addition to that degree of vessels.
Aksel C. Olesen: Subsequent to quarter-end, the company successfully placed a new sustainability-linked bond of $150 million, addressing the 2024 knock-on maturity, in addition to proceeds for general corporate purposes. Furthermore, the company has a range of $37 million EOKO financing for the previously debt-free container vessel Mersk Buket at very attractive terms and maturity matching the long-term charter. So based on Q1 numbers, the company had a book equity ratio of approximately 28%. Thanks for watching. Please like, comment, and subscribe.
Speaker Change #145: <unk> market value.
Speaker Change #146: $100 million.
Speaker Change #147: In terms of Capex commitments.
Speaker Change #148: A recent pilot tankers.
Speaker Change #149: Approximately $340 million with phase two.
Speaker Change #150: $240 million refinanced senior bank financing.
Speaker Change #150: Our harsh environment that could be scheduled.
Speaker Change #150: <unk>.
Speaker Change #151: Yes. It is.
Net capital expenditure of approximately $30 million.
Subsequent quarters the complex.
Aksel C. Olesen: The company delivered another strong quarter with growth in both revenues and EBITDA. The board declared the 81st consecutive cash dividend and increased the dividend to $0.27 per share, which represents a dividend deal of approximately 8%. Our fixed chart rate backlog currently stands at $3.6 billion, which provides strong visibility on the cash flow going forward. And with that, we conclude the presentation and move on to the Q&A session. Thank you, Aksel.
Speaker Change #152: Placed on mute.
Speaker Change #153: 150 million addressing disadvantage.
Speaker Change #154: In addition to proceeds for general corporate purposes.
Speaker Change #154: Furthermore, the content.
Speaker Change #155: A 37 million in the local financing where previous to this free container vessel.
Speaker Change #156: At very attractive terms and maturity matching the long term charter.
Speaker Change #156: So based on Q1 numbers the compound thank you Rachel.
Speaker Change #156: Okay fantastic.
Unknown Executive: We will now open the floor to our question and answer session. For those of you who are following this presentation through Zoom, please use the raise your hand function to ask a question. When your name is called out, please unmute your speaker to ask a question.
Speaker Change #157: Then to conclude.
The company: The company has delivered another strong quarter with growth in both revenues and EBITDA.
The company: The board has declared a cash.
The company: Dividends.
Speaker Change #159: The increase in dividends in 2007.
Speaker Change #160: Sure, which represents a dividend yield of approximately eight.
Speaker Change #161: Our fixed charter backlog current down a.
Unknown Executive: Thank you. And we'll have our first question from Climent Molins. Please unmute your speaker to ask a question.
Cleveland: Cleveland 6 billion prices strongly stability on the cash flow going forward.
Ole Bjarte Hjertaker: Good afternoon, Ole and team. Thank you for taking my questions. I wanted to start by asking about the recent chemical tanker acquisitions. Adding a long-term contract on one of them is aligned with your usual structure, but could you provide some insight on the reasoning for employing one of them in Stoll, Nielsen's pool? Absolutely.
Speaker Change #163: And with that we conclude the presentation.
Speaker Change #164: Q&A session.
Speaker Change #165: Thank you we will now open for questions.
Tejas: Concessions, but also through our quality presentation to assume tejas erase that function basket question.
Tejas: Paul.
Paul: Based on what you see here to ask a question. Thank.
Paul: Thank you.
Ole Bjarte Hjertaker: So Nielsen is the leader in chemical logistics. They are operating these vessels in the market, but they have a very high proportion of volume contracts with freightmen, i.e., you know, call them volume contracts with their customers. There is, therefore, visibility on charter revenues relating to those vessels. And the reasoning for doing a combination of the two, in reality, is that we have then the support on the one vessel with a fixed rate, and then we have the market, call it opportunity and exposure on the other vessel.
Paul: And last question.
Climate line: Climate line. Please mute your seeking to ask a question.
Climate line: Good afternoon.
Thank you for taking my question.
Climate line: Understood.
Speaker Change #169: By asking about the recent chemical tanker acquisitions.
Speaker Change #170: I think along the contract on one of them is aligned with your usual et cetera.
Speaker Change #171: We provide some insight on the reasoning from one of the installed base.
Speaker Change #171: Paul.
Speaker Change #171: Absolutely.
Benson: So benson.
Paul: So as the leader of the chemical logistics.
Paul: Thanks.
Our operating these vessels.
Benson: And the market, but they have a very high proportion of that.
Ole Bjarte Hjertaker: And right now, the market or the near-term market based on the COA coverage is significantly higher than the fixed rate charter on one vessel. So the balance looks to be very good in the near term. From time to time, you know, we have taken some market exposure, but if you look at it on an overall basis, you know, the vast proportion of the charter rates that we received are fixed rates. But on top of that, we also have profit share relating to earnings and, you know, and for some assets, and also on fuel savings on other assets.
Speaker Change #173: Contracts to perfect sense I E.
Speaker Change #174: With volume contracts with.
customers: With our customers.
Speaker Change #176: Therefore, our visibility on charter revenues.
Speaker Change #177: To those vessels.
Speaker Change #177: And.
Speaker Change #178: The reasoning for doing a combination of all of it.
District Court: Two in reality is that we have them district court of.
Speaker Change #180: On the one vessels with fixed rate and then we have the market call.
Speaker Change #181: Call it opportunity.
Speaker Change #182: Oh sure on the older vessels.
Speaker Change #182: And right now.
Speaker Change #183: Market or that market based on the Coa.
Market Analyst: Coverage is significantly higher than the fixed rate.
Ole Bjarte Hjertaker: So this is, from a portfolio perspective, as we see it, you know, a good way to participate in this market. And we believe there are reasons to believe that this market will remain quite firm going forward, also based on the very low order book in this specific segment. Also, these vessels have dual fuel LNG dual fuel propulsion, which we believe will be an increasing trend to make them increasingly attractive, also for the large chemical companies that are the customers of Stolt-Nielsen where these vessels will be employed. Makes sense. Thanks for the call, Art.
Market Analyst: Charter on one vessel so the bounce.
Speaker Change #185: Okay, very good and the near term.
Speaker Change #186: From time to time, we have taken some market exposure, but if you look at it on an overall basis.
Speaker Change #187: The vast proportion.
Speaker Change #188: <unk> said that we received are fixed rate, but on top of that we also have profit share relating to earnings.
Speaker Change #189: And also on the funeral saving on other assets.
Speaker Change #190: So this is a trough.
unknown: The portfolio perspective.
Speaker Change #192: As we see it.
Speaker Change #192: Okay.
Ole Bjarte Hjertaker: Thank you. I also wanted to ask about the two offshore... Regarding Hercules, could you provide some commentary on what the bid for a long-term contract is? And secondly, on Linux, revenue increased quarter over quarter. Is that attributable to the index link component of the contract?
Speaker Change #193: A good way to participate in this market.
Speaker Change #194: We believe.
Speaker Change #195: The reasons due to due to believe that this market will remain.
Speaker Change #196: Going forward also based on the very low order book It is specifics.
Also these vessels.
Speaker Change #197: Fuel LNG propulsion.
Speaker Change #198: Propulsion we.
Speaker Change #199: We believe will be an increasing.
Ole Bjarte Hjertaker: Yeah, I mean, to start with Hercules, Hercules is now mobilizing from Nabibia on its way to Canada to start drilling for Equinor, so we expect that to start in Canada in early July. So it will be in transit. And, you know, in the meantime, it started to transit just a week or so ago. And that, you know, so and that contract runs until the fourth quarter. However, exact timing is not 100% clear yet.
David: Treating the attack David also for the large.
Tom: Tom accomplished several of the customers almost stopped Nielsen where he used vessels will be employed.
Tom: Hey, Tim Thanks for the color.
Tim: I also wanted to ask I hope to offshore.
Tim: Regarding the <unk> could you provide some commentary on awards.
Tim: For long term contract.
Tim: Thanks.
On the <unk> revenue increased quarter over quarter.
Speaker Change #203: Today in the two components of the contract.
Ole Bjarte Hjertaker: This depends on, you know, when the rig drilling commences and also the scope of work that is needed and the time to drill the wells. But we believe, you know, during the fourth quarter is a realistic time when that rig will be released. From a period charter perspective, we are, of course, monitoring the market, looking at opportunities that are out there, but we cannot be specific on employment for the rig, you know, going forward, but we naturally look at all the opportunities that make good sense for a rig of this caliber. You know, there are very few harsh environment deepwater rigs in the market.
Hercules: Yes, I mentioned that liquidity with the Hercules Hercules is now.
Hercules Hercules: Mobilizing from <unk>.
Hercules Hercules: Honest way to Canada to start paying for it.
Speaker Change #208: So with the adapters.
Sara: Back to Sara.
Sara: In early July.
Speaker Change #206: So it will be in transit.
Todd Mitchell: And Todd Mitchell transfer just a week or so.
Todd Mitchell: Ago.
Todd Mitchell: That's.
Ron: That's correct, Ron some tail of the fourth quarter.
Speaker Change #210: It's not 100% declaring a dividend.
Ron Smith: No wonder drilling commences and so.
Ron Smith: Typical work.
Ron Smith: As needed at the time to drill those wells, but we believe.
Ole Bjarte Hjertaker: It's a relatively tight market, so we believe having this asset there could prove to be very interesting over time. If you look at the Linus, you know that the charter rate there is now increasing. It's coming up from just over $200,000 per day and will now go to around $220,000 per day for us from May onwards. The charter rate is linked to the market index with an adjustment of 10%.
Ron Smith: During the fourth quarter as artistic time without the rig will be released.
Ron Smith: From a period charter.
Speaker Change #213: Third we are a horse.
Ron Smith: The market.
Speaker Change #217: Looking at opportunities that are out there.
Speaker Change #212: But cannot be specific on that.
Speaker Change #212: Deployment for the rig.
Speaker Change #216: Going forward, but naturally.
Speaker Change #214: Look at all the opportunities that is.
Speaker Change #220: Does that make sense for <unk>.
Speaker Change #214: Thanks Oliver.
Speaker Change #214: Yes.
Speaker Change #214: Okay.
Speaker Change #215: The poor risk in the market at a relatively tight market.
Speaker Change #222: There has been good.
Ole Bjarte Hjertaker: And this adjustment is really to balance the fact that this rig does not have any commercial off-fire between contracts that you normally see with rigs that go from contract to contract. In the second quarter, this rig will be in the dry dock for a 10-year special survey. It just arrived at the shipyard yesterday. We expect the work to take around five weeks, so we expect the rig to be back out again at the very end of the month.
Speaker Change #219: It could prove to be better.
Speaker Change #214: Okay.
Speaker Change #214: It looks like.
Speaker Change #214: Yeah.
Speaker Change #214: Okay.
Speaker Change #218: There is increasing.
Speaker Change #214: We are coming from.
Speaker Change #223: Just over 200000.
Speaker Change #224: And we'll now go to around 220.
Speaker Change #221: Today plus.
Speaker Change #214: Okay.
Speaker Change #214: Yes.
Qatar: Qatar is too.
Speaker Change #226: Marketing tactics.
Speaker Change #226: With that I will address.
Speaker Change #214: So.
Speaker Change #214: 10%.
Speaker Change #214: And so just matters.
Ole Bjarte Hjertaker: That rig has a long-term charter, so it will then go back to the charter to ConocoPhillips that runs until the end of 2028. We also believe that there could be more work potential at the Ecofisc field. Conoco and their license partner had their license extended, from 2028 to 2048, just over a year ago. And we hope that, you know, and we believe Linus will continue to do a good job for Conoco.
Speaker Change #214: Two two.
Speaker Change #214: <unk>.
Speaker Change #214: That's great.
Speaker Change #233: Have a cola commercial fire between contract that you normally see with the rigs that go from <unk> from contract to contract.
Speaker Change #227: In the second quarter of this bank.
Speaker Change #238: It will be in and the drive for 10 year Special survey.
Speaker Change #230: It just after shipyard yesterday.
Speaker Change #231: We expect to take around highway.
Speaker Change #214: We expect to reach back out again at the very end of the month.
Speaker Change #228: That brings us home term charter.
Speaker Change #235: It will.
Ole Bjarte Hjertaker: And then that there could be opportunities for extended deployment beyond 2028. But we are still quite some time away from any commercial discussions around the future deployment of Vafri. Thanks for the cover. That's all from me. I'll pass it over.
Speaker Change #229: If I go back to the chart.
Philips: Philips that runs until the end of 'twenty eight 'twenty.
Philips: We also believe that there could be more of a potential the ekofisk field.
Philips: And there are losses partner on their license.
Philips: From 2028 to <unk> 48.
Unknown Executive: Thank you for taking my questions. Thank you. We will take our next question from Gregory Lewis. Please unmute your speaker to ask your question.
Speaker Change #234: Just over a year ago.
Speaker Change #234: And.
Speaker Change #239: We had hoped.
We: We believe lenders. So we will continue to do a good job.
Ole Bjarte Hjertaker: Good afternoon, and thank you for taking my questions. Yeah, Ola, I was hoping you could talk a little about how we should be thinking about the dividend, you know, and just returning cash to shareholders. I mean, you know, I guess this is another increase. I think there've been three consecutive increases. You know, clearly, as we look at, not even cash flows, but just net income, there's definitely, you know, room to increase that dividend even more.
Carnival: For Carnival.
Carnival: And that there could be opportunity is.
Carnival: For extended deployment during 2020, we are still.
Carnival: Quite some time away from any commercial discussions around.
Carnival: Future point of view.
Speaker Change #243: Thanks for all the color that's it for me I'll pass it over thanks for taking my question, yes. Thank you.
Speaker Change #243: Thank you both and our next question Gregory Lewis with <unk> Your question.
Carnival: Okay.
Ole Bjarte Hjertaker: Just kind of curious how the board may be thinking about this, realizing that, you know, it was good to see, but, you know, just in looking at something like backlog, that backlog looks like it was up more than, you know, roughly 10% sequentially. So just kind of, you know, any kind of color you can give it to show how you're thinking about the dividend, just realizing that it looks like, you know, that there is real depth in the long-term charter market for a lot of your assets. Thank you, Greg. It's actually here already.
Gregory Robert Lewis: Thank you for taking my questions.
Gregory Robert Lewis: Yeah.
Gregory Robert Lewis: Can you talk.
Gregory Robert Lewis: Okay.
Speaker Change #241: How we should be thinking about the dividend.
Speaker Change #241: <unk>.
Speaker Change #249: Returning cash to shareholders.
Speaker Change #241: Yes.
Speaker Change #244: And three consecutive increases.
Speaker Change #247: Clearly as we look at.
Speaker Change #241: Cash.
Speaker Change #245: Netting the.
Speaker Change #245: Yes definitely.
Speaker Change #248: Did you increase that.
Ole Bjarte Hjertaker: Yeah, it's a good observation. It was a very solid quarter, with increased net income. So that's, of course, good. We have more contract backlog being added. I think from the board's perspective, you know, taking a view quarter by quarter on something is long term and sustainable over time. And, you know, increasing the dividend now, as I say, for at least three consecutive quarters, taking that step by step. So I think that's the approach for now, being kind of somewhat conservative, realizing there's a lot of capacity.
Speaker Change #245: Did anything more.
Speaker Change #245: Just kind of curious how may be thinking about this realizing that it was.
Speaker Change #245: Good to see.
Speaker Change #252: And looking at something like backlog.
Speaker Change #246: Backlog it looks like it was up mid morning roughly.
Speaker Change #251: Roughly 10%.
Speaker Change #246: Sequentially.
Speaker Change #246: So just kind of an iconic.
Speaker Change #246: Thank you, David and just realizing that it looks like the dairy.
Speaker Change #246: Real depth and a long term charter market for a lot of your assets.
Speaker Change #246: Thank you.
David: Yes, yes observation.
Speaker Change #246: Solid quarter.
Ole Bjarte Hjertaker: I would say at the same time, there are also kind of significant investment opportunities in the market to further grow the company and kind of increase the dividend over time. So you don't have to kind of see the totality of how much you increase the dividend quarter by quarter.
Speaker Change #246: Okay.
Speaker Change #246: Net income.
Speaker Change #246: Good.
Speaker Change #246: More contract backlog being added.
The board: I think from the board's perspective, taking.
Speaker Change #259: Taking a view quarter by quarter on something you said.
The board: Long term and sustainable over time.
Speaker Change #261: <unk> been increasing the dividend now is to say get at least three consecutive quarters, taking that step.
Ole Bjarte Hjertaker: Okay. And then I was hoping for some, you know, more color on the Hercules. I mean, that rig is obviously moving to Canada. I believe there's some options on the back of the firm work. How do we, when does the customer have to exercise those options? And really, what I'm wondering is, you know, I'm kind of curious about the time frame around that, simply because, you know, there's going to be obviously multiple opportunities to fix that rig for work, you know, and realizing customer windows for drilling rigs right now is becoming a little more urgent.
Kevin: So I think Kevin.
Kevin: That's it for now.
Kevin: So most of it.
Kevin: We have set ourselves.
Kevin: Both.
Speaker Change #260: Of kind of capacity.
Kevin: I would say at the San Dimas and I'll say.
Ken: Thanks, Ken.
Kevin: <unk>.
Ken: In the market to grow the NIM.
Ole Bjarte Hjertaker: So I'm kind of curious about that. Yeah, so the drilling scope in Canada is two wells with some testing opportunities around it. The reason why we cannot be too specific about the exact number of days is simply that, you know, it all depends on drilling efficiency, which is a combination of, of course, the way the rig is handling the whole drilling operation up on the drilling floor, you could say, but also is linked to the rock down where the rig is actually drilling.
Ken: In this dividend over time, so not to.
Ken: Okay.
Ken: He's a top tier.
Ken: Okay.
He: <unk> increased the dividend quarter by quarter.
Speaker Change #254: Okay, and then I was hoping for some.
Speaker Change #254: More color on that.
Speaker Change #254: I mean that obviously mobile and Canada, I believe theres some options.
Speaker Change #268: Back off.
Speaker Change #254: Mark.
Mark: How we how and when does the cost tomorrow to exercise those options.
Mark: And really what I'm wondering is.
Mark: Curious on the time frame around that simply because.
Mark: There's going to be obviously multiple opportunities statistics that rig.
Mark: Sure.
Speaker Change #268: And realizing customer windows.
Speaker Change #257: Four drilling rigs right now is a little more urgency so.
Speaker Change #257: And kind of curious around that.
Speaker Change #257: Yes.
Speaker Change #258: The drilling.
Speaker Change #258: Two wells.
Speaker Change #270: With some interesting opportunity around it.
Ole Bjarte Hjertaker: So, we have to be a little bit vague in terms of the exact scope and time it will take. We expect the rig to be employed for, for, you know, definitely for the third quarter and, and probably for, for a good chunk into the fourth quarter, probably most of the fourth quarter. But, but still, you know, we cannot be 100% specific.
Speaker Change #271: The reason why we cannot be too specific on X number of basis.
Speaker Change #271: Okay.
Speaker Change #272: And so the drilling efficiency, which is a combination of of course.
Regus: The way the Regus.
Ole Bjarte Hjertaker: That said, as you have pointed out, I mean, yes, there are other drilling opportunities. I mean, the rig has been, you know, very successful when it was drilling in Canada for Exxon, it went to, to Namibia, drilled two wells for Gulf, and was a major success for Gulf. I think they've found more than, you know, they estimated to more than 10 billion barrels of oil. It's massive.
Regus: <unk> is handling the portion on the drilling side, but also a link to that.
Speaker Change #258: Tom.
Tom Nielsen: Where the where the rig is actually.
Tom Nielsen: So it's.
Tom Nielsen: We have to be a little bit vague in terms of the exact.
Tom Nielsen: Scope and time it will take we expect the rig to be in place for four <unk> for the third quarter and probably for a good chunk into the fourth quarter, probably most of the fourth quarter, but still.
Ole Bjarte Hjertaker: So, we, of course, are very happy with, with, with, sort of assisting and having the equipment that helped them do that. And, of course, that we think will, will, hopefully, also trigger more drilling activity in that area. This rig has the capability to drill also in benign water, but we believe that given that it has the capacity to drill wells in sort of an ultra-harsh environment, very deep water, it's winterized, so it has a lot of features that we believe very few other rigs have and very few rigs that are available from late 2024 and into 2025.
Speaker Change #264: We cannot be 100% subsidiaries.
Speaker Change #273: And as you have pointed out I mean, yes, there are other drilling opportunities I mean the rate.
Ben: Ben was very successful whether it was selling in Canada for axon.
Ben: Sure.
Speaker Change #279: <unk> drilled two wells.
Ben: Major successful golf I think more than the estimated to more than $10 billion barrel of oil it's massive.
Speaker Change #264: So we of course are very happy with.
Speaker Change #267: With being sort of being saying equip.
Ole Bjarte Hjertaker: So we are naturally monitoring this market closely but can only really comment and be specific when we have secured additional work for the rig. Okay, great. And then I did want to squeeze another question in just around, you know, around the, you know, acquisition opportunities that you were able to take advantage of in the tanker market earlier this year. It's interesting, right?
Speaker Change #266: Equipment that help them, let them do that and of course that we think will win.
Speaker Change #276: Hopefully trigger more drilling activity also in that area.
Speaker Change #276: The rig.
Speaker Change #266: Capability.
Speaker Change #265: And benign.
Speaker Change #283: We believe that given us.
Speaker Change #265: Okay.
Speaker Change #278: To drill a well and sort of ultra harsh environment very popular it's winterized. So it has a lot of features that we believe very few other agencies have been very few rates.
Ole Bjarte Hjertaker: Like, we've kind of gone through a period where, you know, on the container market, there are always opportunities, or maybe not always, but more often than not, there are opportunities for long-term contracts. You know, as you guys, as the company, look kind of at the landscape in the tanker market, which, you know, the last couple years have been more short-term in nature. You know, are we really seeing increasing depth in the term charter market for tankers?
Speaker Change #265: Billable late 'twenty four and into 2025. So we are naturally monitoring this market closely.
Speaker Change #286: Can only really comment and be specific.
Speaker Change #265: When has occurred.
Speaker Change #281: She worked for rate.
Ole Bjarte Hjertaker: And really, you know, I think the question that I'm getting from some investors is, could we see, is one of these kind of one offs, or is there going to be, should we be surprised if we continue to see, you know, and not necessarily from SFL, but just real, like, long term charters returning to the tanker market? If you look at the, call it regular, call it crude oil tanker market and product tanker market, that market is dominated by more sport oriented players who do voyage shutters, you know, we have players like Frontline on the crude oil side, you have Scorpio tankers on the product side, and you know, and other players in the various segments, who are more active and who do more sort of day to day, you know, movement of oil, we're picking up one oil here and another cargo there, typically.
Speaker Change #281: Okay, Great and then and then one for Scott.
Speaker Change #281: Okay.
Speaker Change #281: Yes.
Scott: Acquisition opportunities that you werent able to take advantage of in the tanker market.
Scott: Earlier this year.
Scott: It's interesting right like what kind of gone through a period, where it seems like.
Speaker Change #285: Contain market, there is always opportunities or maybe not all.
Speaker Change #287: Moral and then there are opportunities are long term contracts.
Speaker Change #282: As the company looks candidates.
Speaker Change #265: Escape.
Speaker Change #265: Okay.
Speaker Change #265: Which.
Speaker Change #275: And the last couple of years has been more short term in nature.
Speaker Change #275: Yes.
Speaker Change #290: <unk> really seen increasing depths in the time charter market.
Bankers: Bankers and reality.
Speaker Change #289: I think question that I'm getting from some investors is could we see.
Speaker Change #292: When these kind of one offs or is there is there going to be what should we be surprised if we continue to see.
Mastec: Necessarily for Mastec.
Speaker Change #280: But just real like <unk>.
Speaker Change #280: Long term charters returning to the tanker market.
Mastec: If you look at the call it regular call it crude oil tanker market product tanker market that market is dominated by more.
Ole Bjarte Hjertaker: So what we have been looking for is opportunities to do more long-term work with very strong counterparties and effectively contribute to and be part of a logistics chain rather than a speculative owner of an asset. I think the chemical market is also a good example of this; it has more, you know, it has more resemblance to a liner type market than, you know, a spot traded tanker market, where we have logistics operations and moving sometimes very complex mixes of cargo on one vessel at a time, going from various terminals and going more in a system.
Speaker Change #280: Sure.
Speaker Change #280: Yes.
Frontline: Frontline on route.
Speaker Change #298: For pure tankers in the product.
Speaker Change #294: The placement of our segments, we were more active than we do more sort of day to day movement of oil picking up on oil here and another car there.
Speaker Change #300: So we'll be looking for.
Speaker Change #296: But you need to do more long term employment with.
Speaker Change #305: With very strong counterparties.
Ole Bjarte Hjertaker: So we're quite excited about that, dealing with it with salt. Also, because there are market leaders in that segment. And we are, you know, in a way also participating a bit in the market there, given that we have one in a pool with other similar-type vessels. So it's a market we are definitely looking at; we are, you know, evaluating opportunities there. But you know, we are segment agnostics; it's all about finding the right type of asset, a strong enough counterparty, and the right structure of the deal that makes sense for us and that we think can effectively contribute to boost the dividend capacity. Because that's our ultimate objective here: how do we build long-term sustainable dividends.
Speaker Change #303: And effectively contributed part of LGD six chain more than a trap owner.
Speaker Change #296: Sure.
Speaker Change #302: The chemical market is a good example of it.
Speaker Change #302: Poor.
Speaker Change #304: It is more <unk> related to <unk>.
Speaker Change #304: Mark.
Speaker Change #296: Dan.
Mark: Upgrade that tanker market.
Mark: We have logistics operations.
Mark: Some are very complex.
Mark: Horrible onboard bass.
Mark: Go.
Mark: <unk>.
Mark: And going forward.
Speaker Change #288: So are we.
Speaker Change #308: Got it.
Mark: Yeah.
Mark: Sure.
Mark: So Martin Peterson talked about.
Ole Bjarte Hjertaker: And we believe both these deals, these those deals that we have announced are doing that. And, of course, we are also very happy with the multiple extensions and also the long, really new charter with Maersk on vessels that have been on charter to Maersk for several years already, at high rates that we believe are, you know, reflecting, you know, one, that the market is quite robust. And two, these vessels are doing a really good service for Maersk.
Mark: No.
Martin Peterson: Participating builds a model there to that.
Martin Peterson: The pool.
Speaker Change #309: With other similar type.
Speaker Change #311: So we are definitely.
Speaker Change #312: Let's say looking out we are.
Speaker Change #311: Hollywood.
Speaker Change #309: Sure.
Speaker Change #314: We are agnostic.
Speaker Change #314: Yes.
Speaker Change #293: Asset a strong enough counterparty and the right structure of the deal.
Speaker Change #295: Let me think can effectively contribute to boost the dividend assets because that's our ultimate objective here is how do we build long term sustainable.
Ole Bjarte Hjertaker: And that is, you know, we pride ourselves on being someone we believe in at premium operations on the vessels. We try to focus on, you know, optimizing fuel consumption, which is helping both us in terms of reducing emissions that also helps the customer, of course, in both reducing emissions and reducing fuel costs in logistics. So, you know, that's also something we where we believe there could be further opportunities, you know, going forward.
Speaker Change #295: And it will be both east deals. These deals that have announced is doing that and of course also very happy that with the multiple expansion and also the long it redo charter with Maersk on the.
Speaker Change #295: Our vessels that have been on charter to Maersk for several years already at high rates.
Speaker Change #295: We believe.
Speaker Change #295: Reflecting on.
Speaker Change #295: No.
Speaker Change #295: The market is.
Unknown Executive: Perfect. Very helpful. Thank you very much. Thank you. Thank you. For those of you who are following this presentation through Zoom, please use the raise hand function under reactions to ask a question. As there are no further questions from the audience, I would like to thank everyone for participating in this conference call. If you have any follow-up questions for management, there are contact details in the press release, or you can get in touch with us through the contact pages on our website, www.sflcorp.com. Thank you. (inaudible]...
Speaker Change #295: It is quite robust.
Speaker Change #316: Vessels are doing really good service from us.
Speaker Change #295: And.
Speaker Change #299: That is we pride ourselves.
Speaker Change #307: Being someone we believe add premium operation.
Speaker Change #301: We try to focus on optimizing fuel consumption.
Speaker Change #317: Which is helping mobilize.
Speaker Change #306: In terms of reducing emissions. It also helps the customer of course in both reducing emissions and reducing fuel cost and the logistics. So that's all something weak where we believe there could be further opportunities.
Speaker Change #306: Going forward.
Speaker Change #306: Super helpful. Thank you very much.
Speaker Change #306: Yes.
Speaker Change #306: Thank you.
Speaker Change #318: For those of you who are following this presentation presume. Please use the function of reactions to ask a question.
Speaker Change #319: There are no further questions from the audience I would like to thank everyone for participating in this conference call.
Speaker Change #313: You have any further.
Speaker Change #320: Any follow up questions.
Congress pictures: They are called like the press release, we can get in touch with us through the Congress pictures on page <unk>.
Congress pictures: WWE W. S.
Congress pictures: Dot com. Thank you.
Congress pictures: Yeah.
Congress pictures: Okay.
Congress pictures: [music].
Congress pictures: Okay.
Congress pictures: Okay.
Congress pictures: Okay.
Congress pictures: Yeah.
Congress pictures: Yes.
Congress pictures: Okay.
Congress pictures: Okay.
Congress pictures: Okay.
Congress pictures: Yeah.
Congress pictures: Yes.
Congress pictures: Okay.
Congress pictures: Okay.
Congress pictures: Okay.
Congress pictures: Okay.