SFL expands LNG-powered fleet

Diverse vessel operator SFL Corp Ltd has reported stable financial results for Q2 2024, demonstrating the company’s commitment to its growth strategy across key sectors. The company announced a net profit of US$20.6M, marking a consistent performance in a challenging market.

SFL also declared its 82nd consecutive quarterly dividend of US$0.27 per share. The quarter saw SFL receiving charter hire revenue of US$198.8M, bolstered by a US$4.4M profit share.

Chief executive Ole B Hjertaker noted, "This quarter, we successfully added more than US$2Bn to our charter backlog through a combination of new vessel acquisitions and extensions of existing charters, bringing our total backlog to nearly US$5Bn."

A major highlight for SFL during Q2 2024 was its expansion into LNG dual-fuel power for its expanding fleet. The company took delivery of the 2022-built LNG dual-fuel chemical tanker SFL Aruba, which is controlled by Stolt Tankers.

Mr Hjertaker stressed the company’s dedication to environmentally sustainable operations, stating, "With the delivery of these vessels, we will have 11 LNG dual-fuel vessels, demonstrating our commitment to assets with a lower carbon footprint."

SFL continued to add to its tanker fleet with the delivery of 2024-built LR2 product tanker SFL Tucana in June 2024. Two additional tankers are expected to be delivered by the end of 2024.

The tanker fleet contributed US$30.0M in charter hire during the second quarter, underscoring its importance within SFL’s diversified portfolio.

The newly delivered vessels are on long-term charters, which Mr Hjertaker noted in the results conference call would "enhance our cash flow visibility and solidify our position in the energy transport sector."

The dry bulk sector also performed well for SFL in Q2 2024.

The company’s fleet of 15 dry bulk carriers generated approximately US$23.4M in gross charter hire, with a portion of this revenue coming from profit-sharing arrangements related to the eight Capesize vessels on long-term charters. Additionally, the remaining seven vessels, which operate in the spot and short-term charter markets, earned US$8.2M during the quarter.

SFL chief operating officer Trym Otter Sjolie highlighted the operational efficiency achieved, stating, "Our overall fleet utilisation in Q2 was 97.6%, despite some vessels undergoing drydocking."

SFL has also placed an order for five new LNG dual-fuel 16,800-TEU container vessels, with deliveries expected in 2028.

In its forward-looking statements, the company said it is poised to continue its investments in modern, fuel-efficient vessels, particularly in LNG dual-fuel powered vessels.