SFL Corp’s profit increased in the third quarter as its backlog provided a steady cash flow.
The John Fredriksen-backed company’s net income was $44.5m compared with $20.6m in the second quarter.
Chief executive Ole Hjertaker said: “Over the last decade, SFL has transformed from a vessel financing provider to a maritime infrastructure company, with the vast majority of assets on long-term time charters to end users.
“As part of this transformation, SFL has taken major steps to renew the fleet with modern high-efficiency vessels, including multiple vessels with dual-fuel propulsion on the water and further newbuilds on order.”
The New York-listed shipowner has taken delivery of two newbuilding 115,000-dwt LR2 product tankers, the SFL Taurus in August and the SFL Tigris in October.
Both vessels are on a five-year time charter to an energy and commodities company.
It also took delivery of the LNG dual-fuel 33,000-dwt chemical tankers SFL Aruba (built 2022) and SFL Bonaire (built 2023) in August.
Both tankers are employed by affiliates of Stolt Tankers.
One vessel began a fixed-rate time charter and the other is employed in a pool with similar-size vessels serving a portfolio of industrial freight volume contracts.
Hjertaker added: “The strength of our operating platform is illustrated by our ability to execute multiple repeat transactions with industry-leading counterparties, and we have added more than $2bn to our backlog so far this year.
“Our fixed-rate charter backlog now stands at approximately $4.7bn, of which two-thirds are to customers with investment-grade rating, providing excellent cash flow visibility.”
The backlog at the end of the second quarter was $4.9bn. The weighted remaining charter term is 6.7 years.
The board declared a cash dividend of $0.27 per share, the 83rd consecutive quarterly payout.
After the end of the quarter, the company agreed to sell the 1,700-teu container vessel Green Ace (built 2005) for about $10.8m net, with expected delivery in December.
The vessel is debt free, and a gain of about $5m is expected to be recorded in the fourth quarter.
SFL has a container fleet of 39 vessels, including five vessels on order.
During the quarter, SFL concluded refinancings relating to existing vessels of about $706m.
It also concluded financings related to newly acquired vessels of about $244m.
The company also raised NOK 750m ($67.4m) through a five-year bond in the Nordic high-yield market to refinance a NOK 600m 2025 bond loan.
Through the combination of debt financing for 23 new and existing vessels, bond issuance and equity offering, the company raised more than $1.1bn of new capital in the quarter.
SFL said growth remained on the radar and it would continuously evaluate potential transactions that we believe will be accretive to earnings.
It said business combinations, the acquisition of vessels or related businesses, the expansion of operations, repayment of existing debt, share repurchases, short-term investments and other equity or debt offerings were all possible avenues.
