SFL Corp. Ltd. Q1 FY2025 earnings call

• Announced 85th dividend, returned >$2.8B to shareholders over 85 quarters, repurchased $10M shares. - Diversified fleet of 79 assets, sold Supramax, Asian Ace container ship, another Supramax in process. Golden Ocean bought 8 cape-sized bulk carriers, expected delivery in July. Charter backlog $4.2B, >2/3 to investment-grade customers. - Invested in fleet renewal, technology, and upgrades. 95% charter revenues from time charters. 98.6% utilization (adjusted) of shipping fleet, 99.8% excluding drilling. - IMO and EU emissions regulations drive fleet upgrades; US tariffs on Chinese-built/operated ships affect ~27 vessels, fees passed to charters.

SFL reported revenues of $193 million this quarter with an EBITDA equivalent cash flow of $116 million. Over 12 months, EBITDA equivalent was $545 million. The first quarter had a net loss of $32 million or $0.24 cents per share. Product segments: Dry bulk vessels - 7 vessels (57,000-82,000 DWT) were on long-term charters then spot market, one sold, another agreed to sell. Container ships - Dominated backlog at 67%, charter revenues from container fleet ~$85M including profit share. Car carriers - ~25M in gross charter hire, slightly down due to dry docking. Drilling rigs - Linus rig earned $20.3M in Q1, Hercules idle with $2M equipment rental income and ~$6M OpEx.

• Deals depend on right opportunities, not programmatic; expect stability/predictability to lead to more transactions. - Hercules rig uncertain on employment, kept warm stacked with upgrades; no specific timing on new contracts. - Container ship upgrade remaining CapEx ~$18M incurred in Q2/Q3, covered by charter rate increases.

• Impacted by spot market conditions, tariffs, and oil price volatility. - Uncertainty around Hercules rig return to service affecting cash flow. - Stricter emissions regulations and trade tariffs impact operating costs and trading patterns.

Q: Color on vessel and rig operating expenses, dry dockings, and Hercules OpEx A: Trym Sjølie discussed busy dry dock schedule in Q1/Q2, tapering off later. Ole Hjertaker mentioned Hercules stacked, warm stacking costs ~$80k/day, upgrades ongoing but no specific timing on new contracts.

Q: Upgrade costs for Hercules, cadence of container ship upgrades A: Ole Hjertaker detailed upgrades to Hercules (flooring, drilling control system, electrical systems) costing ~$7-8M. Trym Sjølie said container ship upgrade costs ~$18M incurred in Q2/Q3, covered by charter rate increases.

Q: Dividend, long-term distribution potential, share repurchases A: Ole Hjertaker explained dividend based on sustainable cash flow, balance between dividends, share repurchases, and long-term distribution potential.

Q: Impact of US tariffs on 27 affected vessels A: Ole Hjertaker discussed ~27 vessels affected, fees passed to charters, early stages of understanding practical implementation.