US-listed shipowner SFL Corp has revealed a busy first quarter included new financing of more than $1bn.
But the John Fredriksen-backed sale-and-leaseback specialist also logged a much lower profit as revenue fell.
Net earnings were $6.3m to 31 March, against $48.4m in the fourth quarter of 2022.
The company was hit by one-off items, including a $7.2m mark-to-market decline in equity investments and swaps relating to repurchased bonds, as well as ship impairments of $7.4m.
Revenue fell from $198m to $173m.
Chief executive Ole Hjertaker said the result was also impacted by the scheduled special survey for the drilling rig Hercules, which incurred significant costs and no revenue in the quarter.
But new deals for the rig and two car carriers should contribute “substantial earnings” from the third quarter.
“The quarter was busy with more than $1bn in new financings, including our newbuild dual-fuel car carrier programme, the convertible notes and refinancing of our drilling rigs,” Hjertaker said.
“With this, virtually all our near-term financing requirements and capital expenditure have been completed at very attractive terms.”
In January, a new $150m sustainability-linked bond was sold, with a coupon of 8.875% and maturity in 2027.
SFL Corp also arranged multiple vessel financings, including four Japanese operating leases with call options for newbuilds worth a combined $300m.
These deals were combined with $46m of pre-delivery funding.
Suezmax financing fixed
Long-term funding worth $145m was also secured by four suezmaxes and, in April, two more Japanese lease transactions worth $83m were carried out for a container ship and a car carrier.
“The financings are on very attractive fixed-rate terms, and maturity matches the long-term chartering contracts,” SFL Corp said. “These transactions will have a net positive cash flow effect of more than $80m in the second quarter, as the vessels were debt-free.”
Finally, SFL Corp refinanced the Hercules and another rig — the Linus — in two separate loan facilities totalling $300m.
The newbuilding and capital expenditure programme is now fully financed.
SFL has also authorised the buyback of $100m of its shares.
The shipowner had $185m in cash and cash equivalents as of March.
The estimated fixed-rate charter backlog from the company’s fleet of 74 wholly or partly owned vessels and newbuildings under construction was $3.7bn.
