HAMILTON, Bermuda - SFL Corporation Ltd. (NYSE: NYSE:SFL), a global maritime company, has announced plans to expand its fleet with the addition of five new 16,800 TEU container vessels, each equipped with LNG dual-fuel propulsion. The construction of these vessels, with delivery scheduled for 2028, represents an investment of approximately $1 billion. These ships are designed to optimize fuel efficiency and cargo capacity.
Upon delivery, the vessels will be placed on a minimum 10-year time charter to a leading liner company, contributing roughly $1.2 billion to SFL's charter backlog. The agreement includes options for a two-year charter extension and purchase options at the end of the 10th and 12th year, along with a profit share feature.
Ole B. Hjertaker, CEO of SFL Management AS, stated, "This marks another accretive milestone investment for SFL and will add five large container vessels to our fleet." He highlighted the company's commitment to investing in assets with a reduced carbon footprint and the importance of long-term charters for financial visibility.
SFL's strategic move to acquire these vessels aligns with its track record of consistent growth and dividend payments since its initial public offering in 2004. The company's diverse fleet includes tankers, bulkers, container vessels, car carriers, and offshore drilling rigs.
The information provided in this article is based on a press release statement from SFL Corporation Ltd.
In other recent news, SFL Corporation has reported robust results for Q1 2024, with total charter revenues reaching $236 million, a 13% increase from the previous quarter. The company's EBITDA equivalent cash flow rose to approximately $152 million, and net income was reported at around $45 million, or $0.36 per share. SFL Corporation also announced a hike in its quarterly dividend to $0.27 per share and highlighted a significant charter backlog valued at approximately $3.6 billion.
In addition to these financial results, the company also disclosed recent acquisitions of three new LR2 product tankers, two dual-fuel chemical carriers, and extended charters with Maersk Line. The company's commitment to sustainability was also evident with a $150 million sustainability-linked bond loan.
Furthermore, the company's future outlook includes a focus on increasing dividends over time, exploring investment opportunities, and seeking long-term employment opportunities in the tanker market with robust counterparties.
InvestingPro Insights
In light of SFL Corporation Ltd.'s recent announcement to expand its fleet, the company's financial health and market performance are of particular interest to investors. With a market capitalization of $1.74 billion and an adjusted P/E ratio over the last twelve months as of Q1 2024 standing at 14.92, SFL appears to be trading at a reasonable earnings valuation. The company's gross profit margin during the same period is impressive at 61.87%, reflecting its ability to efficiently manage costs relative to revenue.
Investors may also take note of SFL's long-standing consistency in dividend payments, having maintained them for 21 consecutive years, with a notable dividend yield of 7.8% as of the latest data. This commitment to shareholder returns, combined with a 59.75% price total return over the past year, suggests a robust financial position and a potentially attractive investment profile for dividend-seeking shareholders.
However, it's important to consider that two analysts have recently revised their earnings expectations downwards for the upcoming period. This is a crucial point for investors to monitor, as future earnings performance can significantly impact the stock's value. For more insights and analysis, investors can find additional InvestingPro Tips on the company's profile at https://www.investing.com/pro/SFL. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking more valuable investment tips and data.
With SFL's strategy of investing in environmentally sustainable assets and securing long-term charters, these financial metrics and insights can help investors better understand the company's potential in a changing economic landscape.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.